Steel Industry (Hansard, 20 February 1991)

§ 17. Mr. Bill Walker
To ask the Secretary of State for Trade and Industry if he will make a statement on the profitability of the British steel industry.

§ Mr. Lilley
I have every confidence in the long-term prosperity of the British steel industry now that all of it is in the private sector and free from Government control.

§ Mr. Walker
I thank my right hon. Friend for that reply. Does he agree that the latest figures, which reveal that steel exports are increasing by about 9.5 per cent. and that imports are down by about 6.3 per cent., show clearly that the British steel industry—now privatised—is a guarantee of security in a difficult and troubled world? The failed policies of the Soviet Union and the rest of eastern Europe and those of the socialists on the Opposition Benches would guarantee the destruction of the industry and caused massive costs to the taxpayer in the past.

§ Mr. Lilley
My hon. Friend is absolutely right. When the previous Labour Government left office British Steel was losing about £1.7 billion a year; now it is making a profit of £700 million a year. If the company were still making a loss under state ownership, we should be bearing those losses: billions of pounds would have to be spent on it instead of on hospitals, schools and other services which we all want and need and which the Government should be financing.

§ Dr. Bray
Is the Secretary of State aware that British Steel is suffering a severe recession in orders as a result of the Government's incompetent economic policies? Is he aware that it is able to survive financially only because the Government wrote off all its debt on privatisation, thus leaving it free of debt at a time when its competitors in Europe are in very different financial circumstances?

§ Mr. Lilley
As my hon. Friend the Member for Tayside, North (Mr. Walker) pointed out, British Steel is boosting its exports in response to weaker home demand and is also displacing imports. That must be good news. Is the hon. Gentleman saying that we should take it back into state ownership? If so, is that the policy of the Labour party?

§ Mr. Oppenheim
Is my right hon. Friend aware that, at the end of the era in which politicians meddled and told it which plant it should keep open, British Steel was the world's biggest loss-maker and Britain had a chronic trade deficit in steel and iron products? Since then, British Steel has become the most profitable steel company in Europe and our trade deficit in those products has changed into a substantial surplus. The last thing that British Steel wants is to go back to the bad old days when politicians told it how to run its business.

§ Mr. Lilley
My hon. Friend is absolutely right and he makes his point extremely well. What is more, if we had a 273 state-owned, inefficient steel industry we should have to prop it up with protection and all steel-using industries would be forced to buy high-cost, inefficiently produced steel. That is very much what the Labour party seems to want.

§ Mr. Gordon Brown
Will the Secretary of State reply to two factual points? First, can he confirm that, in respect of the Ravenscraig strip mill, the Government's policy. as set out by the Secretary of State for Scotland, is that British Steel should review and reconsider its decision with a view to reversing it? Secondly, can he, as the Minister responsible for these matters, tell us what practical steps he has taken to implement that policy?

§ Mr. Lilley
I am always happy to put the hon. Member right on the facts. I entirely endorse the steps taken by my right hon. Friend the Secretary of State for Scotland.

§ Mr. Favell
My right hon. Friend is to be congratulated on setting his face firmly against protectionism. Britain's steel industry—indeed, all British industry—grew at a time when we believed in world free trade in not only manufactured goods but agricultural goods. May we have an assurance that my right hon. Friend will not allow the idiotic common agricultural policy to ruin the GATT talks?

§ Mr. Lilley
My hon. Friend is a great and forceful defender of free trade and I entirely endorse his remarks. We must try to ensure a speedy and successful conclusion to the GATT round. I welcome the news that talks are likely to resume today. We shall do everything in our power to ensure that the Community plays a constructive role on agriculture, as on all other matters, with a view to securing a successful outcome to the round.