HC Deb 04 July 1991 vol 194 cc460-502

Motion made, and Question proposed, That a further sum, not exceeding £81,404,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1992 for expenditure by the Department of Trade and Industry on regional developments grants, regional selective assistance, selective assistance to individual industries and firms, UK contributions arising from its commitments under the International Natural Rubber Agreement, a strategic mineral stockpile, support for the film, aerospace and shipbuilding industries, assistance to redundant steel workers, and other payments.—[Mr. Allan Stewart.]

Mr. Speaker

With this it will be convenient also to discuss the second estimate on the Order Paper—class XV, vote 3— That a further sum, not exceeding £421,137,000, and including a Supplementary Sum of £161,194,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1992 for expenditure by the Scottish Office Industry Department on Scottish Enterprise and Highlands and Islands Enterprise; on regional enterprise grants; on technical and vocational education; on the promotion of tourism; on financial assistance to the electricity industry and local enterprise companies; on residual expenditure for the Scottish Development Agency and the Highlands and Islands Development Board; on roads and certain associated services, including the acquisition of land, lighting, road safety and related services; on assistance to local transport; on support for transport services in the highlands and islands; on piers and harbours, and on certain other transport services and grants; and on other sundry services in connection with trade and industry, etc.

Mr. Jim Sillars (Glasgow, Govan)

On a point of order, Mr. Speaker. Can you tell us whether the Secretary of State for Scotland will be present for the debate? The right hon. Gentleman has figured prominently north of the border on the steel debate in Scotland, not only in the Scottish press but also on Scottish television, which, unfortunately, is not beamed into your office. He has been at the centre of Government activity. Can you tell us whether he is at a garden party at Holyrood house this afternoon, or is likely to be able to attend the debate in which it is extremely important that he participates?

As you know, Mr. Speaker, from my intervention during business questions, we do not have a Select Committee on Scottish Affairs, which means that Scottish Members have only a limited ability rigorously to pursue and examine the Scottish Office and its performance. It would be a disgrace and an insult to the Scottish people if the Secretary of State for Scotland was not present this afternoon to participate in the debate and to answer the highly pertinent questions that we want to put to him.

Mr. Speaker

I have responsibility for what happens in the Chamber, but it would be placing a heavy responsibility upon the Speaker if he had to know what right hon. and hon. Members do when they are outside the House. I have no idea where the Secretary of State is.

Sir Hector Monro (Dumfries)

Further to that point of order, Mr. Speaker. Is it not wrong for a party that operates by leaks and smears to criticise my right hon. Friend the Secretary of State for Scotland who is carrying out the full responsibilities of that position by attending Her Majesty the Queen at Holyrood palace?

Mr. Speaker

I do not want to be drawn into that argument, but some functions are not by invitation, but by command.

Dr. Jeremy Bray (Motherwell, South)

On a point of order, Mr. Speaker.

Mr. Speaker

Order. There is nothing more that I can say about the matter.

Dr. Bray

It was the responsibility of the Government to arrange the business for today, and they did so in the full knowledge that the Secretary of State for Scotland would not be present. Was it a ruse to excuse him from the debate?

Mr. Speaker

How on earth would I know something like that?

4.40 pm
Mr. Robin Maxwell-Hyslop (Tiverton)

I am sure that the whole House hoped that the Chairman of the Select Committee on Trade and Industry—my hon. Friend the Member for Hastings and Rye (Mr. Warren)—could have been here today, as he chaired the Committee during its inquiry into the closure of the hot wide strip mill at Ravenscraig. Unfortunately, my hon. Friend has not been able to attend the House for a month because of ill health, although we hope that he will be back shortly. The members of the Committee called me to the Chair as acting Chairman in my hon. Friend's absence, and it is in that capacity that I sought to catch your eye, Mr. Speaker.

The history of the Select Committee's interest in the steel industry goes back to the original Nationalised Industries Committee, which used to take a great interest, on behalf of the House, in many factors—both internal as well as external—affecting the health of the steel industry in the United Kingdom. When the departmentally-related Select Committees were established in 1980 in their present form, the then nationalised British Steel fell within the remit of the Select Committee on Trade and Industry.

The industry does not function in unfettered competition; it is subject to the articles and supervision of the European Coal and Steel Community, which has its own competition regulations. Technically, therefore, the Directorate-General of the European Commission does not have formal jurisdiction over the steel industry within the EEC. It was necessary to mention that because I shall shortly be referring to a document that has emanated from the Directorate-General for Competition in the EEC.

With the worldwide collapse—not just in Europe and the United Kingdom—in demand for steel products of every sort, the European Coal and Steel Community has made many provisions that differ from the strict competition requirements of the EEC, and require us to avoid gross over-capacity and to attempt to have, within the countries of the EEC, orderly industries rather than industries in competitive chaos.

On 16 May 1990, British Steel announced the planned closure of the hot wide strip mill at Ravenscraig, with the loss of 770 jobs. There was a further announcement on 8 November 1990 of plans to close the steel works and tube mill at Clydesdale early in 1991, with the loss of a further 1,200 jobs. It was in that context, rather than just as an inquiry that was not especially timely, that the Select Committee focused its attention not only on the internal position within British Steel—now, of course, in the private sector—as a whole, but on certain concentrated aspects.

The first was the effect on the local and more widespread economy of Scotland, in which the plant is located. For the very reason that was mentioned earlier—that there is no Select Committee considering Scottish affairs—the Trade and Industry Select Committee felt obliged to mount an inquiry into the consequences of the projected closure on the local and more widespread economy of Scotland—which, of course, is outside the fiduciary duties of the directors of British Steel, but is wholly within the remit of the Select Committee.

Secondly, we were concerned about the employment implications for those who had previously been employed in Ravenscraig and Clydesdale. That matter can fall within the fiduciary responsibilities of the directors of a public company. It is not a requirement, but modern company law enables it to do so. Therefore, it is not an irrelevant consideration either for the directors of British Steel or for the Select Committee.

We needed to examine the reasons why British Steel took that management decision and what alternative arrangements could have been made, given the market—as British Steel saw it—for the products produced both in Ravenscraig and Clydesdale and also in British Steel plants elsewhere in the United Kingdom. We were also concerned whether reduction in capacity at those plants in Scotland would produce a restriction in effective competition, which would enable British Steel to increase its prices in a way that it would not otherwise have been able to do. That is a fair statement of the framework in which the Committee conducted its investigations, which were not wholly located in Committee Room 15 at the Palace of Westminster.

The Committee visited not only Ravenscraig, but the British Steel site in south Wales which, in the plan given in evidence to the Committee by British Steel, was where it intended to concentrate production after the closure of Ravenscraig. We visited both sites, rather than simply taking verbal and written evidence at the House of Commons. Of course, it is often the case that the taking of evidence itself is an important service to the House of Commons, and the Select Committee on Procedure has often emphasised that. Sometimes, it is not the actual production of the report that is crucial, but the illumination of relevant factors through the taking of evidence in public—[Interruption.] Does my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) have a problem?

Mr. Michael Brown (Brigg and Cleethorpes)

I apologise to my hon. Friend.

Mr. Maxwell-Hyslop

The collecting of written evidence, which is released both to the House and in the public sphere, is of great service to the House. I mention that because the hot wide strip mill at Ravenscraig was closed on 12 February 1991, whereas the Committee did not conclude its report until a week later, on 20 February. That was not due to any lassitude by the Committee, but because there was an exchange of correspondence with the EEC. We were awaiting evidence from that source, as well as taking evidence in the United Kingdom. We were not masters of our timetable.

The production of the report, although it came nine days after the actual closure, did not mean that the inquiry and the production of the report were a waste of time. They illuminated issues that were and are of great importance. I shall not attempt to summarise the entire report; I trust that hon. Members who are interested in the subject will have read it for themselves. I am glad to see that many hon. Members are present for this debate who were not members of the Select Committee.

The Procedure Committee, in its recent report on our Select Committees, emphasised that debates on Select Committee reports were not just events produced for the benefit of the members of the Select Committees concerned. The Committee reports to the House, and it is to enable the House to debate the issue constructively that is the prime service of the Select Committee.

Let me turn to the conclusions on page xvii—

Mr. Tom Clarke (Monklands, West)

Before he does so, will the hon. Gentleman note the comment in paragraph 20, on page ix— The Clydesdale and Imperial Works have been losing money for the last six years"? Special factors apply to Clydesdale; I am sure that my hon. Friends will mention them. It is not true, however, that Imperial—which is quite separate—was losing money. Is it not rather a pity that the report did not give the details?

Mr. Maxwell-Hyslop

That may well be a point that the hon. Gentleman will wish to develop if he catches your eye, Madam Deputy Speaker, but I suspect that, in the time allocated for this debate—and there are two debates this afternoon—the House would not wish me to monopolise more than a comparatively limited part of it.

I want in particular to refer to No. 2 in our summary of recommendations, which states: We recommend that the competition case on the closure of Ravenscraig should be further examined by the relevant authorities in the European Community. We said that for a number of reasons, to some of which I have already alluded, because of the general supervision of the Competition Commission over the whole of productive industry. There are many other parts of productive industry in this country potentially affected by changes in the supply of steel which do not themselves come under the competition provisions of the European Coal and Steel Community. That is why we were interested in learning the views of the Competition Commission as well as those of the European Coal and Steel Community.

So was the Scottish Steel Campaign Trust, which wrote to the competition directorate of the European Commission. The Committee was sent a copy of the official reply from the Community, and it is to that that I now wish to refer. Before this debate, I sent the Clerk of the House, for laying on the Table, copies of this correspondence, because it is never fair to the House just to quote selected portions of a document unless other hon. Members can have the opportunity of reading the whole of it for themselves.

The Competition Commission's initial paragraph makes clear its lack of actual jurisdiction. It says: You will, of course, be aware that the Commission is under no legal obligation under the ECSC competition rules to state its position or to examine complaints such as the one you have made. Nevertheless in view of your members' responsibilities as public authorities and as representatives of the workers, the Commission is willing, as a matter of courtesy, to indicate how it sees the case. This letter deals with your complaint dated 26 October 1990 concerning the closure of the hot wide strip mill at British Steel's Ravenscraig works. When we now come on to what was actually said in the letter—which extends to 59 paragraphs—there are, I think, five which draw together the strands of its conclusions. I start with paragraph 48, which states: The complainant has alleged that the failure to make the mill available to competitors, or to mothball it until such time as the steelworks is closed and then to offer the entire package to a competitor, is an abuse of a dominant position. This could be true only in very exceptional circumstances if this was the only practicable way that a competitor could enter the market. According to paragraph 49, This is not so. Many competitors are already present in the United Kingdom either as direct sellers or as stockholders. These competitors can easily increase production or sales at any time. As they are already present on the market they face no barriers to entry. That was the focus of the response from the Competition Commission on the question of whether British Steel should have offered the plant, which was redundant for its purposes, for sale to other competitors, and whether it was, in a sense, put in a position to manipulate market prices by its reduction in local capacity.

Paragraph 52 states: The refusal by BS to offer the Ravenscraig mill for sale or to mothball it pending an offer to sell it with the steelworks is not therefore an abuse of dominant position. Let me turn now to paragraph 59, the last paragraph before the conclusion, which says: The complainants claim that the closure of the hot wide strip mill will inevitably lead to the closure of the remainder of the Ravenscraig complex and of the Dalzell plate mill. The Commission takes no view on this contention, but considers that even if this total closure comes about it is unlikely that there would be an infringement of the ECSC competition rules, and in particular of Article 66(7) ECSC, as BS is not dominant in the relevant market. Lastly, the conclusion—paragraph 60—states: The Commission regrets to inform you that it can see no grounds on which to sustain your complaint. I read that out for two reasons: first, because that response was not in the possession of the Committee when we finalised our report, and secondly because it is clearly relevant to the conclusions that the Committee drew in the absence of that information.

Mr. Alex Salmond (Banff and Buchan)

The hon. Gentleman's views on the further reference to the European authorities is well known following the vote that took place in the Committee. Does he not recall, however, that, in his evidence to the Committee, Sir Robert Scholey, British Steel's chairman, claimed that the European Commission would exert some blocking power on the sale of the Scottish steel industry? He said, in fact, that "it would have them jumping out of their skins".

Is it not the case that both the letter from the Commission and the Committee's own further investigations proved that that was not true, and that, whether knowingly or unknowingly, the chairman of British Steel had attempted to mislead the Select Committee?

Mr. Maxwell-Hyslop

The words with which I started my quotation give the Commission's own views on that. Those words can speak for themselves; they do not need me to speak for them. I am not authorised to speak on behalf of the European Commission. Nor am I authorised to speak on behalf of British Steel. But I do think that this letter makes an additional contribution to our debate today.

The other paper which is relevant to today's debate is, of course, the Government's response to our recommendations, which was published on 22 May by this Committee. We published reports and observations by the Government on the second report of the Trade and Industry Committee. So I think that that completes the papers which the House needs to consider in order to form an important judgment on this now irreversible series of events.

Madam Deputy Speaker (Miss Betty Boothroyd)

Order. Before I call another hon. Member, I should say that Mr. Speaker has asked me to make a strong plea for short speeches. This debate must finish at 7.36 pm and a tremendous number of hon. Members wish to speak.

5.2 pm

Mr. Donald Dewar (Glasgow, Garscadden)

May I start by congratulating and thanking the Select Committee for its efforts and careful consideration of the issues. The hon. Member for Tiverton (Mr. Maxwell-Hyslop) spoke with a certain precision and scholarly niceness, but that is far removed from the passion and red blood of the arguments in Scotland, where the steel industry's fate has caused great anxiety and understandable and justified bitterness.

I admire those who have conducted and maintained the campaign tirelessly, with impletion and dignity over a period of literally years. The work force and the stewards who represent them in Clydesdale, Ravenscraig and Dalzell have never flinched and have maintained their position with immense courage, determination and effectiveness.

I greatly regret that the Secretary of State for Scotland is not in the House today. It is now well known—almost notoriously well known—that he is in Edinburgh at a royal garden party. I recognise that he would normally be expected to keep such an engagement. However, the circumstances are exceptional and he should be here, accounting to hon. Members and the people of Scotland for his actions or lack of them.

Mr. Michael Brown

On a point of order, Madam Deputy Speaker. You will recall that the question of the whereabouts of my right hon. Friend the Secretary of State for Scotland was drawn to Mr. Speaker's attention at the beginning of this debate. Mr. Speaker said that if the Secretary of State was attending an engagement at the Palace or Holyrood house, it was a command from the sovereign.

Mr. Jimmy Hood (Clydesdale)

On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker

Order. The House is wasting precious time with these points of order. That is a debating point and has nothing whatever to do with the Chair.

Mr. Dewar

On Monday this week, Lanarkshire and Scotland suffered a severe blow as a result of the Dalzell announcement. There are questions about the extent: to which the Secretary of State was privy to British Steel's decision. There are severe doubts about the Government's commitment to rebuilding Lanarkshire's economy and whether promises of additional funding have been made in good faith. In his own interests, the Secretary of State should have been here to answer the charges that are being widely made about his competence and integrity.

On 26 June, the Secretary of State wrote to me refusing a meeting to discuss the steel industry and saying that there would be an opportunity, during the proposed estimates debate on steel, for Members to express their views on the Government's position in relation to the Scottish steel industry. I shall certainly make use of that opportunity, but, in the light of that letter, the Secretary of State's absence is extraordinary. He might have thought that he had a duty to listen and to learn. His behaviour can only reinforce fears about his ability to grasp the scale of Scotland's present problems.

It is a disease that has afflicted not only the Scottish Office. Although it is sad that the Secretary of State for Scotland is not present, it is compounded by the fact that the Secretary of State for Trade and Industry is not here either. After all, he is the Minister with direct responsibility for steel and his Department is very much involved in the estimates that we are discussing. Not only is neither Secretary of State present, but not even the Minister responsible for steel in the Department of Trade and Industry is here. It seems as though almost every Minister who should be here is absent without leave, which may be a measure of the embarrassment that they feel about what has been happening and the recent tragedies that have unfolded in the Scottish steel industry.

The tragedy has taken the form of a vendetta, ruthlessly conducted over many years by British Steel's top management. The evidence of malice has been persistent and unmistakable. The plants in many areas have had excellent records of productivity and the work force has shown a commitment to quality control. If, in some parts, there has been a shading of that performance in recent months, it is because of the persistent refusal in the past decade to give the plants and work force the tools and investment to carry out the job.

Some time ago, British Steel decided to concentrate on an even smaller number of sites. Scotland is not the only part of the United Kingdom to suffer and there will be other victims in the future if present policies are pursued. The obsession was reinforced by privatisation, and wider considerations of public interest were abandoned along with the work force which, in Clydesdale, Ravenscraig and Dalzell, have served the industry so well. Employees became no more than a disposable asset. Valid and well-founded technical and financial arguments were swept away, soon to be followed by the plants, simply because they did not fit into Sir Robert Scholey's grand design.

Mr. Phillip Oppenheim (Amber Valley)

Will the hon. Gentleman commit a possible future Labour Government to keeping the plants at Dalzell and Scunthorpe open? Would they intervene to keep them open? Yes or no?

Mr. Dewar

The answer is simply that the Government's sin is not that they have failed but that they have not tried. We have seen a dereliction of duty by the Government over a considerable period. For example, I gather from an interview of the Under-Secretary of State in The Scotsman today that British Steel is prepared to clear the sites of its former plants only in the most superficial fashion. It refuses even to deal with the central problems of subsidence and contamination. The cost to the public purse has been estimated at over £50 million. We have a company that is not afraid to act as an industrial vandal and the Government have stood by and watched it happen. They do not care that their policies add insult to injury. The Scottish Office has, once again, been left lamenting and empty handed.

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)

If the hon. Gentleman had been Secretary of State for Scotland for the past year, precisely what would he have done differently?

Mr. Dewar

We shall be saying a good deal about that. On the specific point with which I am dealing, I would have made it clear to British Steel that it could not simply nod an apology as it left and that it could not walk away without even clearing and preparing the sites that it was abandoning. I would not then lament the fact in a public interview in The Scotsman but apparently do nothing about it. I would not remain a member of a Government who, when hon. Members came to the Department of Trade and Industry worried about the loss of thousands of jobs, told those hon. Members that they were doing nothing and would do nothing because the Scottish Office had asked them to do nothing.

As long as I am in politics I shall remember the Secretary of State for Trade and Industry who is responsible for the steel industry getting the name "Ravenscraig" wrong. Perhaps it was an unfortunate slip of the tongue. He then told me that he would not be involved and saw no need to be involved. The difference between a Government who are committed to trying to save those jobs and who believe that the industry has a future and are prepared to use the influence, leverage and pressure of the Government to do something about it, and a Government who make a virtue of the fact that they are doing nothing is the difference between success and failure, between betrayal and a Government who know their duty.

On Monday, British Steel attempted to pronounce the death sentence on Dalzell, moving ruthlessly on from the destruction of Clydesdale and Ravenscraig. The timing and form of the announcement is of some interest. The Minister owes us an account of the Government's involvement because it has been alleged that, on 4 June, British Steel told Ministers that that would happen. The Government therefore collaborated with the company. If that is true, they were simply the passive recipients of unwelcome news, interested only in minimising the embarrassment to the Government and distancing the Secretary of State as best they could from the coming disaster.

It has already been mentioned by other hon. Members that the Prime Minister was writing to the Dalzell stewards on 4 June—the very day—[Interruption.]

Madam Deputy Speaker

Order. This is a serious debate, let us hear what the Opposition have to say about it.

Mr. Dewar

I hope that my colleagues will not be offended, but I must confess that the comings and goings of the hon. Member for Amber Valley (Mr. Oppenheim) are of limited interest.

Mr. Oppenheim

On a point of order, Madam Deputy Speaker. Surely it is reasonable for an hon. Member to walk out of the Chamber when, patently, he has not received an answer from the Opposition spokesman.

Madam Deputy Speaker

That is not a point of order for the Chair. There has been no breach of Standing Orders.

Mr. Dewar

Let me assure the hon. Member for Amber Valley—who I believe has finally left us—that I was making the point that I did not care whether he was here or there—he is usually both.

Mr. Irvine Patnick (Sheffield, Hallam)


Mr. Dewar

The Whip is mouthing "Cheap" at me. I think that he recognised the description—that is probably the trouble.

I should like to return to the serious points. The Prime Minister was writing to the Dalzell shop stewards on 4 June, the very day on which we understand—it is up to the Minister to confirm it—that the Secretary of State for Scotland learnt of the decision to close the plant. Many people will wonder if the letter was any more than a defensive device, written in the knowledge of what was coming. The Secretary of State is shaking his head—

Mr. Allan Stewart

The Parliamentary Under-Secretary.

Mr. Dewar

Ah, well, the Parliamentary Under-Secretary is shaking his head. He may be able to clear this up—we shall wait. I hope that he will give us some details. I recognise that his job is complex and difficult.

I was interested to read of the important concession made in an article in today's edition of The Scotsman, to which I have already referred. In it, the Parliamentary Under-Secretary, talking of the industrial mix of Scotland, said: In addition, there are situations when the Scottish Office has to know what is happening and liaise with Whitehall—an example of that would be Rosyth. I am glad that the Parliamentary Under-Secretary and, no doubt, the Secretary of State recognise that there are occasions when the Scottish Office has to know what is happening. I should have hoped that the Scottish Office would like to know what is happening most of the time, but that may be an optimistic assumption to make of the present incumbents.

There are also rumours circulating about imminent announcements involving Rosyth. If they are as advertised, any words about being in touch with what is happening and liaising with Whitehall in that connection may come back to haunt the Parliamentary Under-Secretary unless he can deliver in a way in which he has signally failed to do in the past for the steel industry in Scotland.

On 14 June, BBC Radio Scotland reported that the decision to close Dalzell had been taken and Ministers had been told of it. That was followed by fierce denials all round. It is typical. Throughout the proceedings, it seems that the Government have been more interested in saving face and manipulating the timetable for their own political purposes than in finding solutions to existing problems. That shabby episode does little for the confidence of those who hope for a little frankness in public affairs.

I now come to the substantive points. I believe that the Government lost the battle with British Steel at an early stage. It goes back to the days when the now Secretary of State for Transport was Secretary of State for Scotland and complacently told Scottish Members that privatisation was the best way of ensuring a secure future for the industry. The message was that British Steel always knew best.

The Government have never put British Steel under effective pressure. They have not acted with decision in the public interest. The Department of Trade and Industry did nothing and said nothing, claiming as its alibi that it had not been asked to help by the Scottish Office. We were left with the impression that the Secretary of State for Scotland was licensed by the Cabinet to make noises and protests as long as they were ineffective and as long as he did not embarrass his colleagues by asking them to join the fight. That is not the sort of service that we expect from a Government of the United Kingdom, and it is certainly not the sort of service and commitment that Scotland expects from a Secretary of State for Scotland.

There was a complacent acceptance of guarantees at the time of privatisation which turned out to be worthless. There has been a persistent refusal to recognise that the existence of the golden share—I concede that it has a limited remit—meant that the industry had a special standing and the Government had a special relationship with, and responsibility for, its fate.

The Secretary of State's casual admission to the Select Committee of the interests of prospective purchasers and the subsequent failure to act to allow them to pursue those interests seems lamentable. I stress that twice in recent months my hon. Friend the Member for Dunfermline, East (Mr. Brown) and I have made requests to both the Secretary of State for Trade and Industry and the Secretary of State for Scotland for meetings to discuss the future of the Scottish steel industry and the aftermath of the announcements that had then been made. On both occasions, both Secretaries of State replied that they would not have meetings with their opposite numbers because there was nothing to discuss.

I cannot remember any time in my career when, with a major industrial issue unresolved, with jobs and investments at stake and anxieties being expressed, a Secretary of State has refused point blank to discuss the matter or meet his opposite number because he felt that it was not necessary. Everyone in Scotland thought that the meeting was necessary. I do not belittle the fact that the problems are difficult to solve, particularly post-privatisation, but to say that there is no place for, and no point in, a meeting seems to be an insulting wish to save ministerial embarrassment at the expense of public interest and the parliamentary process.

What of the future? Steel making at Ravenscraig will continue at least until 1994. Plates will be produced at Dalzell until 1994 or perhaps as late as 1996. Are Ministers prepared to stand aside as spectators of the sad, dying decline of a great industry? The Government should be prepared, and Labour would be prepared, to look at new technology and to examine such options as thin slab casting. Ministers should be prepared to explore and push the Arthur D. Little options, not simply nod to them in passing. As I understood it, that was the view of the Select Committee, expressed in its conclusions and in the text of its report.

The Labour party has never accepted that the one plate mill strategy was inevitably right and the only way forward for the industry. What has happened this week fully justified our scepticism. I believe that, even now, there is a case for further investment in Dalzell and the introduction of accelerated cooling techniques. A strong financial case has been made for that investment, and the Government should not accept, as the Prime Minister has said, that the decision will be for British Steel to take on commercial considerations alone. There is a wider public interest which a wise Government would not ignore.

In its annual report, British Steel made it clear that a final decision on the Teesside investment would be taken only when the budget had been agreed and optimum financial and technical terms had been finalised. The stewards at Dalzell are rightly determined to argue the commercial case, despite British Steel's record of embittering indifference. Above all, Ministers should be pressing British Steel to offer their existing plants in Scotland for sale in the open market. The Government preach the gospel of competition, the spirit—

Mr. Richard Holt (Langbaugh)

It is the first time that the hon. Gentleman has mentioned Teesside, and there are no Labour Members representing Teesside present. Would a Labour Government stop investment in Teesside and so stop the joy and jobs which it has brought to my constituents in that hard-pressed part of the north-east of England simply because the hon. Member for Glasgow, Garscadden (Mr. Dewar) wears a Scottish hat and is not concerned with the whole country?

Mr. Dewar

No, and if the hon. Gentleman had listened to my arguments he would understand why. We welcome investment in the industry, and modernisation. Throughout the long, hard and sometimes depressing days of the campaign, the steel workers in Scotland have never cavilled about development in south Wales or the north of England or anywhere else. We still want a modern, competitive industry. What I have said—and I hold to this—is that we have consistently argued that the idea that one can concentrate on not just five integrated sites, but reduce it to two or three at the most—so that one concentrates and concentrates still further—is not necessarily the right formula for the industry. Of course, I welcome investment in Teesside, but I do not believe that that excludes investment in Dalzell or other parts of the industry.

To return to my point about sale on the open market, the Secretary of State told the Select Committee that there had been "approaches from interested parties", but that they did not have the information to pursue matters. In that case the Government should have made sure that they were in a position at least to make their approach and to consider whether they could get to the stage of an offer. If British Steel is so certain that there is no case for a strip mill at Ravenscraig of for a plate mill at Dalzell, what risk does it run in testing the market? The only explanation is that it wants to knock out the capacity. I should not have thought that an attractive argument to a Government who preach the doctrine of competition.

What about the future? There have been many easy promises to rebuild Lanarkshire's industrial base. It is, of course, easier to make the commitment than to carry it out. Even if the Government have failed the steel industry it is important that people be convinced that a new and diversified economy is the long-term aim of the Government and that in the short term immediate steps are being taken to lay the foundations for that. Precious little, however, has happened so far. A working party has been set up. I have been told, I do not know whether accurately, that its chairman opened the first meeting by saying that the group should base its plans on the assumption that there would be no additional finance. Certainly, there does not seem to be enough money to measure up to the scale of the crisis.

The Prime Minister told the party faithful at Perth on 10 May: For too long the outdated face of Scottish industry turned opportunity away. Now people and businesses are voting for Scotland with their cash and with their feet. The Prime Minister's message has obviously not got through to Sir Robert Scholey. The Prime Minister did, however, recognise in the same speech that for all the progress since 1979, some parts of Scotland have managed these changes less easily than others. Lanarkshire is one. I think that that was a delicate reference to unemployment and to the closure of the steel industry.

The upshot was the offer of £15 million to green over the worst areas of industrial decline. There was something a touch patronising about that. The Labour party is not interested in greening over the memories of industrial decline. We want to put in its place viable industries that provide jobs and a high technology base for a work force with skill, commitment and a wish to earn their way.

Where is the £15 million? I asked the economic section of the Library to look into the matter. It told me that the money was not in the June supplementary estimates—so far, it appears to have had life only on the page of a party conference speech. That is rather curious; after all, the speech was made at the beginning of May and the estimates were for June. If the Government had been genuinely committed to finding even that limited additional money for Lanarkshire I should have expected it to appear in the June supplementary estimates. It may just be a little late and be on its way, but I should like an unambiguous answer from the Under-Secretary.

The Government have responded to the package unveiled by the working party, but I must protest that the small print makes depressing reading. The working party spoke of the need for spending between £200 million and £300 million and it required between £85 million and £110 million for immediate projects. Measured against that, the Government's response adds up to next to nothing.

Of course, large figures are bandied about, but most of them come from programmes already in being. The commissioning of a much-needed general hospital at Wishaw—awaited for many years—is hardly a tailor-made response to the crisis in the steel industry. The Government's efforts begin to fall apart on closer inspection. The A8 upgrading from Baillieston to Newhouse, on the stocks for years, is only to be the object of a further design study. At second glance that looks like a way of putting off the project. The additional money that the regional council will have to find as its contribution will merely be a factor for consideration in next year's revenue grant settlement.

The central plan for enterprise zone status is only to be considered by the Government against the background of its existing policy on Enterprise Zones and the cost which might be involved. Asked to explain what that meant the Minister protested: It means exactly what it says. That is the problem. It sounds like a further recipe for muddle and delay and it will probably end with a victory for the Treasury.

We are all uncomfortably aware that Scotland is not bouncing back towards economic recovery. We are plunging into recession. The Minister should look at the report just published by Cambridge Econometrics which gloomily states that the north-south divide is a permanent feature of the economic landscape and that when recovery ultimately comes growth in Scotland will be lower than in any other part of Britain.

Against that background the Government's performance is unconvincing and inadequate. The truly damaging charge is not that they have failed but that they did not even try. There has been no commitment, and no willingness to take the fight to British Steel, to challenge, to harry, to use with imagination the power and influence of the Government. The dreary story of political failure is bad enough. Far worse are its implications for the future of Lanarkshire and of its people, who have worked and delivered honourably in often difficult economic conditions over the years.

The Government's response does not begin to measure up to these people's needs, to reflect the respect that they have earned or to repay the debt of honour owed. British Steel has treated the industry and the people shabbily. That is a disgrace and a disappointment. It would be a tragedy in the fullest sense of the word if the Government now abdicated their responsibility.

5.25 pm
Sir Nicholas Fairbairn (Perth and Kinross)

I follow the speech by the hon. Member for Glasgow, Garscadden (Mr. Dewar) with some pleasure and with an apology. The hon. Gentleman said that he wanted a viable high-technology-based industry in Scotland. When I have finished speaking—I apologise for this—I shall have to leave for a meeting in which a huge investment in just such a base in Scotland is being prepared and discussed. We do not need any lessons, therefore, from Labour Members—

Mr. Menzies Campbell (Fife, North-East)

A champagne bottling plant?

Sir Nicholas Fairbairn

I am afraid that Highland Spring, based in my constituency, contains no wine—and it was I who brought the company there, since when it has employed a great many people.

When discussing the steel industry in Scotland we should remember how Ravenscraig came about in the first place. It was a political bribe to Scotland. I do not care what colour of Government put it there but it should have been a plant in Wales. The Government refused that idea and the Department responsible for industry at the time suggested throwing a sop to each Cerberus and giving Scotland a steel industry—in the wrong place, away from deep water, near which it would have been viable. Thus was Ravenscraig born. Like all similar industrial-political bribes for Scotland, it has paid a terrible penalty. Nevertheless, it became a source of employment, not just in the industry but for suppliers and shops. It sucked in people from England. So did Linwood which was a ridiculous industrial investment foisted on the place by a Government trying to buy votes in Scotland. Then there was Alcan—it was in the wrong place; Fort William pulp mill—also in the wrong place; likewise Bathgate.

Predictably, all these plants failed because they were installed not for commercial or industrial reasons but for political reasons. They sucked in enormous numbers of people, not from Scotland but from other parts of the United Kingdom. When the collapse came, created communities which were viable only on the basis of this great industrial investment were left with nothing to do. Ravenscraig was one of the most tragic of those. Hunterston is in deep water but it is in mothballs and shut. The most important factor in the production of steel is the cost of transport. Most viable steelworks are on the coast and that is why they remain viable.

Mr. Menzies Campbell

Will the hon. and learned Gentleman give way?

Sir Nicholas Fairbairn

No, I shall give way later.

Mr. Campbell

It is on this point.

Sir Nicholas Fairbairn

I did not think that Opposition Members understood my point.

We have a responsibility to be brave and it was cheap and stupid for the hon. Member for Garscadden to suggest that the Secretary of State was dependent on a sovereign. I am willing to bet 1,000p to a dime or a Scots penny that if roles had been the other way round the hon. Member for Garscadden would have been a collier, and would certainly not have been at Ravenscraig.

False political industrial developments should not be countenanced. There are tens of thousands more people employed in Scotland than when we took office, and that message should go out from the House.

Mr. Malcolm Bruce (Gordon)

Scotland's population is falling.

Sir Nicholas Fairbairn

That means that an even greater percentage of the population is employed. It is falling because the Liberal Democrats are not frightfully good at conceding anything. Scotland has 40 per cent. of inward investment and people there enjoy a quality of life better than that in any other part of Europe. That is why new companies can be persuaded to come to Scotland.

Dr. Norman A. Godman (Greenock and Port Glasgow)

This is a music hall turn.

Sir Nicholas Fairbairn

There is nothing wrong with the music hall. Greenock used to have music halls before the hon. Member represented it, but he is so boring that they have all closed.

Socialism did not invent the steel industry; it was invented by private enterprise. We cannot have industrial museums nor can we say that industries should be maintained simply because they have always been there. That is quite the wrong approach. The correct approach is new investment and new concepts. I am informed by those who claim to know that more than 80 per cent. of everything that hon. Members will use by the end of the century has still to be invented. That is the market that we must seek. Industrial dinosaurs must not be kept in being. Let us be inspired about getting investment into Scotland. I am trying to do something about that, and I hope that the Opposition are doing the same.

5.34 pm
Mr. Stan Crowther (Rotherham)

I shall not attempt to comment on the amusing and rather quaint speech by the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn). It is clear that he did not read our Select Committee report.

We should bear in mind that we are debating not only the steel industry in Scotland, but the industry throughout the United Kingdom. This is an opportune time to do that just three days after British Steel reported the most miserable year in living memory, a year in which output was significantly reduced and profits were down by 65 per cent. According to the newspapers, Sir Robert Scholey is to take a pay cut. We are not told the size of the cut or whether it will be 65 per cent. in line with the drop in profits. We shall wait and see.

The debate takes place one day after the latest OECD report makes crystal clear that the recession in Britain is far worse than in any other western country and that, in the main, it is due to Government policy. Ministers should accept that the recession is not an act of God but a result of their policies.

The recession is especially tragic for the steel communities which in the 1980s went through the most appalling social pain when plant after plant was closed and 120,000 jobs were destroyed—all in the interests of creating a greatly reduced industry that would be ripe for privatisation.

A vast investment of taxpayers' money led to huge increases in productivity in the remaining BSC plants arid one after another they entered the private sector. Those companies were Allied Steel and Wire, Sheffield Forgemasters, United Engineering Steels and, finally, British Steel plc.

Rotherham lost 10,000 jobs during that period of restructuring—a term invented by the European Commission which means closure. The community that I represent has not recovered from those job losses. Unemployment is still appallingly high in Rotherham. I am not speaking about the travel-to-work area which includes the constituency of my hon. Friend the Member for Wentworth (Mr. Hardy). In my constituency, almost 7,000 are out of work.

Conservative Members who have not seen such a process in their constituencies may not understand the terrible consequences and the distress, poverty, family strain and ill-health that unemployment brings. We are still suffering in Rotherham. In Rotherham, as in other steel areas, people thought that some good would come of all that pain. United Engineering Steels emerged as the biggest and, at that time, the most productive engineering steel maker in the European Community. We thought that that company, which had been slimmed down and was lean and fit—those were the expressions Ministers used in those days—could hold its own and beat any competitor in Europe. Unfortunately, we overlooked the Government's limitless capacity to get things wrong. These dedicated apostles of privatisation, the disciples of the free market, have not only left the steel industry to sink or swim but have done their best to push its head under water. An industry that was supposed to be leaner and fitter is now struggling to survive. It is still contracting. Almost every month more closures and more redundancies are announced.

The closure of Ravenscraig is an excellent illustration of the mess in which the industry finds itself. It is not good enough to say that the closure had to take place because of some surplus capacity in Europe. We went through all that in the 1980s. During that period there were so many closures and 120,000 jobs were lost. That happened because we were being pressed by the European Commission to reduce capacity because of a supposed surplus. It is no good saying now that there is a surplus and that the Ravenscraig hot mill must close.

There is no surplus capacity in Britain. How can anyone pretend that there is when 38 per cent. of the home market for these products is supplied by imports? How can it be claimed that there is surplus manufacturing capacity in Britain in the light of that level of imports?

When the Select Committee on Trade and Industry was conducting an inquiry into Ravenscraig, someone told us that Ravenscraig was too far from its customers in the vehicle industry. That is more or less the argument that was advanced by the hon. and learned Member for Perth and Kinross. How can that be justified when German manufacturers, for example, can get their products into the west midlands? It is nonsense to suggest that Ravenscraig is too far away from the industry that needs its products.

The House will have noticed that the Select Committee's report contains some fairly critical comments about Sir Robert Scholey. I feel that the criticism is not unfair. The most amazing fact to emerge, apart from the fact that Sir Robert had not been near the Ravenscraig works for five years, was that he refused to give the economic justification for closing the Ravenscraig hot mill not only to the shop stewards but to the Secretary of State for Scotland. That is what he told us. I think that all the members of the Select Committee found that astonishing.

The Select Committee's report contains certain criticisms of Bob Scholey but I do not blame him for the terrible difficulties that his company and others are facing. Instead, I blame the Government. A large part of the problem stems from the ridiculous exchange rates at which the Prime Minister, when Chancellor of the Exchequer, took us into the exchange rate mechanism. I spoke to many British manufacturers at the time, and almost all of them were in despair. They knew that their German competitors were rubbing their hands with glee.

Then there came another body blow, for United Engineering Steels and other large electricity users. My hon. Friend the Member for Wentworth referred to it when he spoke in the energy debate. All the steel that emerges from United Engineering Steels is produced through the electric-arc process, and it is the largest purchaser of electricity in the Yorkshire and Humberside region. It is having to cope with an increase in electricity prices of about 20 per cent. That is a direct consequence of the privatisation of the electricity industry.

If anyone doubts my assertion, I shall take a few moments to explain why I make it. When the electricity industry was being privatised, we were told that the outcome would be competition. It was said that privatisation would enable large users to shop around and buy their electricity from the best source that they could find. That has not been the outcome. There is a man who is known as the Director General of Electricity Supply, who is empowered to fix a limit in each region on the amount of electricity that can be bought directly from the generating companies, and in Yorkshire and Humberside the limit is 10 per cent. Therefore, United Engineering Steels cannot shop around and approach PowerGen, National Power and the Yorkshire regional company to see which organisation can offer the best price. The competition that we were promised has not appeared and there is not a free market.

The arrangement which used to be beneficial to large consumers of electricity, under which they could obtain a discount because they were huge purchasers, was abolished in April. As a result, the large consumers are suffering on two fronts. I explained that when I went with my hon. Friend the Member for Wentworth and members of the Iron and Steel Trades Confederation to meet the Under-Secretary of State for Energy. The hon. Member for Wells (Mr. Heathcoat-Amory) seemed to know nothing about the difficulties faced by consumers. He said that in any event it was nothing to do with him and that responsibility rested with the director general.

It is the habit of Ministers to push through the Government's policies, even though they are warned of the dangers by those who know something about the likely outcome of them, and then to leave others to pick up the pieces. Ministers cannot continue for ever to blame others. All the main steel-using industries—vehicles, shipbuilding, construction and machine tools—are in the doldrums as a result of the Government's policies. It is time that Ministers started to take a genuine interest in manufacturing industry and to stop saying that it is all someone else's fault when things go wrong. They have a duty to give the steel industry and steel-using industries a chance to compete on equal terms with foreign manufacturers. It is a chance that they have not given them so far.

Energy costs, interest rates and exchange rates militate against British manufacturers, and all these factors come within the realm of Government policies. If Ministers would only do their duty and give the steel industry and steel-using industries a fighting chance, I am convinced that our steel men could beat the competition anywhere else in the world.

5.46 pm
Sir Hector Monro (Dumfries)

I agree with some of the arguments advanced by the hon. Member for Rotherham (Mr. Crowther). He was, of course, a member of the Select Committee on Trade and Industry, and I know that he knows a great deal about the steel industry. His recounting of the repercussions of closures for his constituency highlight the problems that concern Lanarkshire today, and even more so in future. I thank the Select Committee on Trade and Industry—the Chairman is my hon. Friend the Member for Hastings and Rye (Mr. Warren), and my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), who presented the report, is a member of it—for producing the report. It seems that the theme throughout the report is the failure of British Steel to communicate with the Government, with its employees and with the Select Committee. It was wrong of British Steel to shelter behind commercial information or judgment and not to reveal the financial criteria that forced it to come to a conclusion that no one else could understand.

It was obvious from the start that British Steel had no interest in its Scottish base, but, as the hon. Member for Rotherham has said, there is a huge Scottish market. I think of the oil fields, steel fabricators, the construction industry and a thousand or more other users. It was wrong to concentrate on markets south of the border, on the continent or in other parts of the world. As the hon. Member for Rotherham has said, steel produced in Germany and in other parts of the continent is readily available in Scotland. Why cannot we produce steel profitably in Scotland? It has been wrong of British Steel to concentrate future developments in England and Wales to the detriment of the work force employed in Scotland.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) was right to talk about the responsible campaign that has been pursued on behalf of the industry's work force and its trade unions and by the Scottish Trades Union Congress. I found little in the Select Committee's report that substantiated, even under cross-examination, a good reason to close the steel industry in Scotland. That was brought out extremely well on pages 8 and 9 of the Iron and Steel Trades Confederation's publication, where the Select Committee's report is examined succinctly and concisely. It highlights British Steel's poor showing before the Select Committee, the lack of information, the way in which British Steel reneged on its promises on the sale of Ravenscraig and, as a side issue—something which is topical at present—the substantial increase in the salaries of British Steel directors despite the dwindling profits that were announced last week.

I would not like to be a prophet or to quote my own words, but during the Gartcosh debate on 23 January 1986, at column 485, I spoke of the link between the closure of Gartcosh and Ravenscraig, how Ravenscraig was a great symbol a manifestation of the Scottish steel industry, and how, if Gartcosh were closed, the fallout would be serious for the Scottish steel industry. We must remember that if it had not been for the effective work of my right hon. Friend the Member for Ayr (Mr. Younger), British Steel would have done its best to shut Ravenscraig in 1982.

In the Gartcosh debate, I also asked what would happen to Dalzell, Clydesdale and Imperial if the closure of Gartcosh was not stopped; what about the repercussions on local industry; what about the local suppliers, and so on. We have had a long time to think about what could happen once we accepted the closure of Gartcosh.

Mr. Tom Clarke

The hon. Gentleman knows that at the time, as the Member of Parliament representing Gartcosh, I was particularly grateful for his support. However, does he accept—I think that he will—that the problems of site clearance at Gartcosh and elsewhere underline how miserly and mean British Steel is being in the announcement that we read in The Scotsman this morning?

Sir Hector Monro

Yes, indeed. I have not finished with British Steel.

I also said that, in 1986, the South of Scotland electricity board received £1.7 million for the supply of power to the steel industry, and asked the House to consider what that could mean to the electricity industry in Scotland and the 1,400 suppliers to the steel industry in Lanarkshire, all of whom are now feeling the draught. I went on to say that the steel industry is, in a way, an indication of a nation's virility and that Ravenscraig without Gartcosh would be vulnerable. I protested. I felt that we had misjudged the industrial, political and social repercussions, and on that occasion I voted against the Government because I felt that we were giving the wrong signal to British Steel and to Scotland in general.

Let us look at what has happened during the past 13 months. I am highly critical of British Steel. It was announced that the hot strip mill was to close, with 770 unemployed. In November, the announcement was made about Clydesdale tube works. In February the reduction to the single blast furnace at Ravenscraig was announced. In June 1991, the Dalzell plate mill was closed. All that resulted in substantial unemployment.

That is a dreadful record for British Steel. Has it no responsibility to the nation or to its work force? Does it only have a responsibility to its shareholders? Great national institutions such as British Steel and ICI, or any other major company one can think of, have a wider responsibility than just to their shareholders. They have a duty to try to find a middle way forward to help when the situation is grave and difficult.

I know that boards, like the Cabinet, must have collective responsibility, but when one considers all the members of the British Steel board, I find it odd that none of them ever speaks out and questions what British Steel is doing. It is a great worry that a company of the importance of British Steel seems to have shied away from a fair introduction of capital to Scotland to enable some of the plants to remain open and for many of the employees to retain their jobs.

If that is to happen—I am highly critical of British Steel rather than anyone else—what shall we do now to help those in difficulty in Lanarkshire and those who will experience the knock-on effect of more closures? Will British Steel rethink? Having read Sir Robert Scholey's evidence to the Select Committee, I doubt whether he will. But let us check what he should be doing.

Will British Steel clear up the mess left behind by empty steel works? We believe strongly that the polluter must pay, as evidenced by the Environmental Protection Act 1990. Are we to hound British Steel to clear up the areas for which it has been responsible for generations? How shall we help the Lanarkshire development agency, now the local enterprise company, and Motherwell district council, all of which have put forward excellent papers?

I hope that, when my hon. Friend the Minister replies, he will be able to spell out—I am sure he will—the substantial sums of money that the Government and others are making available to help in the crisis. We should not look on it as less than a crisis for Lanarkshire during the next couple of years. I am glad that the Prime Minister and my right hon. Friend the Secretary of State have made announcements, following the work of the Lanarkshire working group and others involved. We must simply press ahead with urgency to lay the foundations for a renaissance of industry in the area.

I met the same problems in a much smaller way when the coal mines closed in Upper Nithsdale, which was then in my constituency, when unemployment soared to 30 per cent. and more. The only way back was to have advance factories ready and waiting for incoming employers. They do not want to be told that it will take a year to produce a factory: they want to move in next week if they possibly can. Therefore, I would like to hear that Enterprise Scotland or the local enterprise company will press on with preparations for advance factories suitably sited and landscaped.

Everyone wants a high standard of workplace in the future. People do not want to go to derelict sites; they want to go to new attractive sites. We have got to work fast on that. We do not want to start next year; we want the architectural plans under way now and through the planning committees by October, and action on site as soon as possible in the new year.

We want to see co-operation. I know that we will get it from the jobcentres. We must bring in Locate in Scotland and, all importantly—something which the Government are addressing as the highest priority—the economic climate of the country must be right, with continuing low inflation and a steady lowering of interest rates.

There is the great opportunity of a new freight terminal at Mossend. However, if that is to happen, the Government would have to put pressure on British Rail. I hope that the Minister will comment on that when he replies. It would produce many new jobs on a green-field site. I hope that my hon. Friend will say that discussions are under way with British Rail and that such a terminal will be encouraged.

The west coast route will lose a lot of steel traffic. Whenever I come to the House of Commons, I stand in Carlisle station and see trainload on trainload of coiled steel going through. That will stop, so let us get some other attraction to bring British Rail to Scotland with an additional freight facility which I am sure will be developed further when the channel tunnel is opened.

I am sure that my hon. Friend will spell out what help will be available. Today we want to leave a message for Lanarkshire and the whole of the area of Strathclyde, which has had such a terrible knock that, yes, we are determined to provide opportunities. Yes, we will fulfil that promise by providing adequate resources to create the right infrastructure, construct advance factories, and bring new employers to the area. If we have a sense of urgency, motivation and enthusiasm, we can work together in partnership to help that part of Scotland.

5.59 pm
Mr. Malcolm Bruce (Gordon)

I am grateful for the opportunity for this debate, and wholly accept the contention of the hon. Member for Rotherham (Mr. Crowther) that it concerns British Steel. However, that emphasises the sadness we feel that not only is the Secretary of State for Scotland absent from the debate but the Secretary of State for Trade and Industry—whose record in connection with the whole sorry story is abysmal. He has shown a determination to wash his hands of the entire situation.

I will not spend very much time analysing what has occurred, because it is more important to consider what we can do for the future of the steel industry and for the United Kingdom economy.

I contend—as I did at the time that British Steel was privatised—that the steel industry has suffered more than any other from ideological conflicts, having been kicked in and out of public ownership no fewer than four or, technically, five times. We argued that the Government should not privatise British Steel as a single entity but instead we have insisted on the creation of another company, with Scottish capacity as its nucleus.

At the time of privatisation, the hon. Member for Motherwell, South (Dr. Bray) tabled an amendment which, had it been adopted, might significantly have altered the future direction of the British steel industry, and that of Scotland in particular might today be in a much healthier state. No one can guarantee that, but such a policy would have created better opportunities.

Those of us who knew before privatisation and, at the time that it occurred, of Bob Scholey's attitude to Scottish steel knew that it was doomed from the moment that British Steel was put in the private sector with him as its chairman. There was no hope from then on. No one can tell me that we are talking about a rational, objective, analytical decision as to the best interests of British Steel and its shareholders, or of the national interest.

As a member of the Select Committee on Trade and Industry in the earlier part of this Parliament, I cross-examined Sir Bob Scholey, and came to know of the almost pathological response that he makes whenever Scotland and Scottish steel are mentioned. It is not a rational, lucid, or well-argued response, but sheer venom against everything that Scotland and Scottish steel stand for. We have a right to be bitter in the knowledge that the Government knowingly put British Steel into the hands of that man, for we in Scotland knew what would be the consequences of that decision, and attempted to prevent what was almost an inevitable disaster.

I note that the Secretary of State is absent because of his engagement at Buckingham palace with Her Majesty. Sir Bob Scholey seems to suggest that the entire steel strike originated at Ravenscraig—which was a disgraceful slur on its work force, given the contribution that it made to the turnround in British Steel's profits since privatisation. I gained the impression that it would be easier to persuade Attila the Hun to behave with decorum at a royal garden party than to persuade Sir Bob Scholey publicly to acknowledge the contribution made by Scottish steel workers to British steel's productivity, profitability, and his own salary—until it was cut as a result of this year's profits downturn.

A few months ago, I and a number of my hon. Friends met the Secretary of State for Trade and Industry to persuade him to accept his obligation, as a supposed promoter of competition, to intervene and to take action. His response was a caricature of what ought to take place in a constructive discussion between Members of Parliament and a Secretary of State for Trade and Industry who claims to be one of the leading thinkers of the free market. For about half an hour, we discussed the Secretary of State's responsibilities to promote steel competition, the importance of competition to British trade and the country's balance of payments, and the circumstances in which he felt that he had any responsibility to intervene, on the ground either of competition or the national interest.

It was impossible to persuade the right hon. Gentleman to confirm that there were any circumstances in which he would intervene. We asked him what he would do if British Steel's board decided that it was in the shareholders' best interest to shift all the company's production and investment capacity to South Korea, on the ground that it would be more profitable. The right hon. Gentleman said that was a hypothetical question, and one that he was not prepared to address. I hope that it remains a hypothetical question, but one cannot give any guarantee. The Secretary of State's ducking of that question implies that he acknowledges his responsibility, but is not prepared to accept it.

It is still appropriate and relevant to insist—and the Government still have the power to do this—that British Steel disposes of all its Scottish assets as a going concern; to at least attempt to establish whether there exists an alternative bidder who wants to move into the market. When I refer to all the company's assets, I specifically include Hunterston, which offers a long-term attraction as a steel plant that has yet to be developed. It is despicable that British Steel should be allowed to kick out a whole generation of steel workers, yet hang on to a prime plum, which, at some time in the future, it may make the subject of investment or disposal. There may be more alternative bidders now, though if the Government had taken action three or four years ago today's climate might be even more favourable.

The European Community and the treaty of Paris impose certain constraints, but I understand that the action I suggest is entirely within the Government's power and in no way incompatible with the treaty. The hon. Member for Amber Valley (Mr. Oppenheim) has left the Chamber, but I may say in response to his remarks that, in reality, the nationalisation of a steel industry or of any plant is irrelevant, because the treaty introduces specific limitations regardless of whether the concern is in the private or public sector. Those who suggest that nationalisation is the answer are being very misleading.

Mr. Sillars

Suppose the hon. Gentleman's hypothetical nightmare became a reality and we found ourselves talking, in the British context—never mind the Scottish context—about shifting all steel production from the United Kingdom to Korea. Would not public ownership prevent that hypothetical nightmare turning into reality? Right hon. and hon. Members can fulminate as much as they like, but the fact remains that we have no control over decision-making in respect of a privatised concern. However, if the steel industry were in public ownership, the situation would be entirely different.

Mr. Bruce

Not as much control as the hon. Gentleman pretends to the Scottish people. He cannot expect Scotland to be an independent sovereign state and a full participating member of the European Community, yet the only one not bound by the treaties that all its other member states have signed. The treaty of Paris is clearly restrictive. On occasions, the hon. Member for Glasgow, Govan (Mr. Sillars) has given the impression that massive investment could be channelled into Scotland's steel sector, regardless of profitability. I believe that that is possible, but the right way forward is to use existing competition policy, and that is entirely within the British Government's domestic power and in accord with the treaty of Paris.

Mr. Salmond

Will the hon. Gentleman allow me to intervene?

Mr. Bruce

I will not give way on the same point, which I have answered. Neither the hon. Member for Govan nor the hon. Member for Banff and Buchan (Mr. Salmond) should promise more than they can realistically deliver.

What of the consequences of British Steel's current decisions? The hon. Member for Rotherham made the pertinent point that the consequences of the contraction of Scotland's steel capacity will almost inevitably be a further loss of market share. That has been past experience. Our concern is that British Steel's reaction to a competitive squeeze will be to continue to contract so that it can make a profit from a smaller and smaller base. However, that strategy is devastatingly wrong for the national interest, and is likely to lead to a severe erosion of Britain's competitiveness and balance of payments.

Mr. Tim Devlin (Stockton, South)

I have listened with great interest to the hon. Gentleman, but surely he must realise that British Steel's productivity has soared and that it has invested a great deal in Teesside. I know that Scottish Opposition Members do not like British Steel's investment decisions. However, if there is new investment and if greater productivity is achieved, the industry is not necessarily contracting.

Mr. Bruce

The hon. Gentleman should look at British Steel's record. It has contracted substantially. It has given up its market share. That has been the standard pattern to date. Some of the steel capacity given up in Scotland has not been replaced elsewhere in terms of the quality of steel on offer. British Steel has made a conscious decision to give up markets. Therefore, the hon. Gentleman is not right. However, it is right to talk about the increase in productivity achieved by British Steel. The greatest increases were achieved in the Scottish steel plants, but little thanks they got for that from the management of British Steel.

The decisions that have already been taken for Lanarkshire have created a major and worsening crisis in Lanarkshire, not just in terms of blight, unemployment and devastation but in terms of community morale. Everything is on a downward spiral. There is lack of hope and no optimism. It is incumbent on the Government to recognise that the scale of resources that is necessary is of a very much larger order than anything that they have yet put forward. The local council estimates that it has 2,000 acres of derelict land and that it will cost £60 million to bring it back into alternative use. It also estimates that the total cost is likely to be about £200 to £300 million. The Government must say where that money is to come from and how it is to be channelled.

The Government seem determined to resolve the future of the new town development corporations in Scotland. It is generally accepted that they have made a great contribution to attracting investment to Scotland and to a style of development that has been extremely successful. Rather than that it should be dissipated, will the Minister consider the creation of a west of Scotland development corporation that could draw on the expertise of the new towns and, in co-operation with the local authorities, be provided with a real estate portfolio and a package of planning and development agreements that would enable it to attract substantial new industry that could bring new hope to the area?

The hon. Member for Dumfries (Sir H. Monro) implied that advance factories are necessary. I do not disagree with him, but in many cases custom-built factories for major new projects that can be built quickly on attractive green-field sites are required. We need to identify urgently attractive new sites and also provide for the rehabilitation of derelict land. We shall not succeed if we try to attract prime new investment on to derelict land. No one will wish to invest there. It has to be done in two phases. I hope that the Minister accepts that that is a constructive, sensible and timely proposal.

6.13 pm
Dr. Jeremy Bray (Motherwell, South)

In Motherwell, we are very conscious of the support that we have enjoyed in all parts of the House for the problems that the industry faces, as well as a readiness to address the problems that we shall face in the future as we enter a period of major industrial change. May I express the thanks of the steel workers and the people of Lanarkshire to the Trade and Industry Select Committee for both this and previous inquiries it has carried out into the affairs of the steel industry. In particular, I wish the Chairman of the Select Committee a speedy recovery from his incapacity.

I pay tribute to the trade union leaders of the Scottish steel plants—in particular to Mr. Tommy Brennan, the chairman of the Ravenscraig joint trade union committee until he was made redundant last Friday—for the magnificent fight that they have led for their industry. It has been, and it always will be, a privilege to work with them.

The effective decisions to close the Scottish steel industry—the Ravenscraig hot mill, the second blast furnace, the Dalzell plate mill, the Clydesdale tube works and, as we may yet learn, the Imperial works and the remaining plants operating at Ravenscraig—were effectively taken by Government Ministers when they decided to privatise British Steel as a monopoly steel producer in the United Kingdom. The Scottish plants were not allowed to compete, as they could have done, by allying them with other plants in a competitive United Kingdom steel industry. They could and should have been allowed to prove their mettle.

The hands that closed the plants were the hairy hands of British Steel, but the voice was that of the Tory Government. It is the Tory party that will long be remembered in Scotland as doing it out of its industrial heritage. The sorry tale of wilful misunderstanding, of deliberate myopia, of cultivated naivety on the part of Ministers is there in the record of Parliament for all to read.

The United Kingdom is now one of the highest priced steel markets in Europe, with cold rolled sheet steeling selling for $460 a tonne, compared with $436 in Belgium and $433 in France. That was reported in the Financial Times on Monday of this week. That price difference reflects closely the transport costs from the European Community, a premium that British Steel is able to charge because there is no competing producer in the United Kingdom. As reported today in the Financial Times, the European Commission has launched a probe into a suspected cartel of European Community steel producers that restricts the output of hot rolled coil, the biggest single element of which would be the closure of the Ravenscraig hot mill. As for loss of competition within the United Kingdom, we are already hearing complaints from British Steel management that the south Wales steel workers are taking advantage of the easing of competitive pressures from Ravenscraig to raise labour costs in south Wales. Surprise, surprise.

What I am concerned about, however, is not the dismal record of incompetence and betrayal by Ministers that has brought the steel industry in Scotland to its present sad state but where we go from here, if we are to rebuild an industrial base in the heart of Scotland.

As for the steel industry, phase 2 of the Arthur D. Little report, commissioned by the late-lamented Scottish Development Agency, confirmed, as I had suggested and as I have suggested for years, that the best option for Ravenscraig would be as a present generation thick slab producer, phasing into a coil and sheet producer by means of the new thin slab technology route. That would undercut, according to the figures in the Arthur D. Little report, Port Talbot and Llanwern. Without such a development, by the mid-1990s British Steel would be vulnerable to an electric arc mini-mill thin slab producer investing in the United Kingdom.

During the present recession, it is no use talking to British Steel about new technology, but its view in two years could be rather different, as British Steel pulls out of the recession under a new chairman. If British Steel management has an ounce of sense it will lash Black Bob Odysseus to the mast so that he will not follow the behest of the siren voices in the City luring him into the premature closure of what remains of Ravenscraig. That could close, for British Steel, a valuable route into new technology and put it at a serious competitive disadvantage. Furthermore, it would cost more money.

As for selling the hot mill to the Chinese, who are visiting Ravenscraig this weekend, there are components of the mill and its ancillary plant that could be used to save money in terms of building the new technology mill that would accompany thin slab casting. If the haste to sell the hot mill to the Chinese is an attempt to stop the development of a new technology mill, it will not work. That will not be the decisive factor.

Only this week, British Steel announced that it has taken the strategic decision to build a new plate mill on Teesside to replace the old Dalzell and Scunthorpe plate mills. I say to the hon. Member for Stockton, South (Mr. Devlin), who represents my former constituency on Teesside, that if I had £400 million to spend on Teesside—which is a long-suffering community—I would spend it not on a plate mill, but on new materials production, whether from British Steel or from ICI, and I would not put the money into obsolescent technology as British Steel proposes to do. Rather than replace—

Mr. Devlin

I am grateful to the hon. Gentleman. Although the debate centralises itself entirely on the steel industry, there is an immense amount of investment going on in a wide range of other industries, many of which were not there when he represented that part of the country. We must not look at this purely in isolation and say that Teesside is investing in old technology; it is very much investing in new technology.

Dr. Bray

I look forward to debating the economy of Teesside with the hon. Gentleman in the future, but I think that he is wrong in his analysis.

With retained profits in British Steel cut from £399 million last year to £18 million this year, and interest rates in the United Kingdom the second highest in the industrial world, I do not know where British Steel will get the extra £300 million that it will need for the more expensive option of building a new plate mill on Teesside, rather than developing the Dalzell mill.

British Steel says that it is thinking of customers well into the next century. By then, and before building a plate mill on Teesside with obsolescent technology, it may be induced to spell out its arithmetic to shareholders and investment analysts who, it seems to think, are as credulous as Tory Ministers. If shareholders are that dumb, a Labour Government will have to tighten up the competition and company rules to make management more accountable. In Scotland we are not convinced. We demand that British Steel justify its plate strategy because we believe that the answers will come out in support of the redevelopment of the Dalzell mill.

I will address myself to the hard competitive, commercial realities where the customer rules because that is the world in which my constituents have always lived and worked. If they had merely pleaded social need, the community would have been swept away many years ago. The House should not confuse a determination to perform with a blindness to social need or a lack of community loyalty. It is that that is demanding effective action now to allow Lanarkshire, and Motherwell in particular, to continue to earn its living as it has always done.

The closures that have already taken place in steel and the undoubted difficulties and uncertainty of saving anything that remains in the Scottish steel plants means that the Government must now act decisively to lay the foundations for a new industrial economy in Motherwell in particular, and in Lanarkshire in general. Of the 14,700 jobs in steel in the Motherwell district in 1974, only 1,500 will remain when already announced closures have taken effect. The remainder will go if the last blast furnace in Ravenscraig is closed in 1994, as foreshadowed by British Steel.

The measures announced by the Government to attract new industry are totally inadequate, and were in the pipeline long before the steel closures were announced. Even the location of the freight terminal for Scotland at Mossend is still in doubt. We need an enterprise zone in Motherwell and the redevelopment of the steel sites, which from past closures form a great gaping hole in the heart of Motherwell. As long as they are left as a wilderness of dereliction, any lesser development measures elsewhere will be ineffectively cosmetic.

The opportunity provided by the new electrified InterCity rail service starting next Monday between Glasgow and Edinburgh should be taken. The plans and investment were made long ago, and the service had already been commissioned. The trains will stop only in Motherwell, so the opportunity should be taken to turn Motherwell into the kind of business satellite to the Scottish city centres that Croydon is to London.

I welcome the tone of the contribution made by the hon. Member for Dumfries (Sir H. Monro) who urged the necessity and practicality of getting on with initiatives of real vision to create a new image for Motherwell. The main line between Glasgow, Edinburgh and London passes the steel sites where land has been in the ownership of the Scottish Development Agency for 10 years—throughout the lifetime of the Government—but nothing has been done about it. That land is available for a new main line station, which would be the only one in Scotland with ample car parking and development land adjacent to it.

The necessary design concept for a new millenium Motherwell new town on the former steel sites could be made the subject of a fully-fledged architectural competition. It would be a challenge to produce a design as civilised as Edinburgh new town, and as attractive to private development capital. In one sense, it would change the image of Motherwell. In another, it would confirm it as the contemporary industrial heart of Scotland, which has been demonstrated so magnificently in the fight for steel. That fight was not a fight for a smokestack industry. It was a fight for the industrial soul of a nation, reborn on the threshold of the new millenium. It is a fight that we shall win.

6.26 pm
Mr. Michael Brown (Brigg and Cleethorpes)

There is a sense of deja vu here today—[HON. MEMBERS: "You."] Indeed. I am speaking, and the hon. Member for Rotherham (Mr. Crowther) has spoken. My hon. Friend the Minister hopes to catch your eye later, Madam Deputy Speaker, and the hon. Member for Motherwell, South (Dr. Bray) has just spoken. All of us spoke in a debate on 16 December 1980. It is worth our while refreshing our memories about what we said then. It is just as well that few of us ever bother to take the trouble to find out what we said in this Chamber in a particular debate on a particular subject that crops up a decade later. However, I will remind the House of what some of us said then, because there are lessons today for the future of the Scottish steel industry which we can learn by looking back to 10 years ago.

The debate on 16 December 1980 arose because the then chairman of the British Steel Corporation, Mr. Ian MacGregor, laid before the Secretary of State, who presented it to Parliament, a restructuring plan for the steel industry. The House will recall that in those days my constituency was called Brigg and Scunthorpe, and included the town of Scunthorpe, which is now represented by the hon. Member for Glanford and Scunthorpe (Mr. Morley). In those days, one afternoon I received a telephone call from Mr. MacGregor to tell me that he would announce the following day redundancies totalling 4,100 in my constituency alone. Although a great deal of concern was shown about the MacGregor proposals by Opposition Front-Bench Members—and I am glad of that—and although they initiated a debate, when we talked about 4,100 redundancies in one town in England, there was not the type of concern that is being expressed today about Ravenscraig. Although I recognise that it is entirely right and proper for the House to devote itself today to the importance of Ravenscraig and its future, the size of the steel industry in Scunthorpe then was far greater than that in Ravenscraig today. I do not seem to recall receiving the same support when I advocated enterprise zones, development area status and the rest of it, which I fully acknowledge need to be considered in a debate such as this.

Mrs. Maria Fyfe (Glasgow, Maryhill)

Will the hon. Gentleman give way?

Mr. Brown

I think that it is only fair to the House if I press on. I am normally very generous about giving way, but I shall not do so on this occasion because I want to complete my speech fairly quickly.

I am sure that if the hon. Member for Glanford and Scunthorpe catches your eye, Madam Deputy Speaker, he will rightly and legitimately draw to the attention of the House British Steel's recent announcement about the plate mills in Dalzell and in Scunthorpe, the large town right on my constituency boundary. From the best of intentions, and for the best of reasons, the hon. Gentleman will want to submit to British Steel his case as to why the Scunthorpe mill should not be closed. Ten years ago, I was in exactly the same position that he is in today: I had to face the difficulty of representing a constituency in which large numbers of redundancies had been announced. I would caution him that, although the temptation simply to lobby the company concerned to protect and preserve those jobs is eminently understandable, that is too easy a road to take, and, rightly or wrongly, I resisted that temptation in 1980. In the 1983 general election, my constituency boundaries had changed, so I cannot honestly say that the views that I had expressed in the House were endorsed at that election. I can only point out that a Conservative Member was elected to Glanford and Scunthorpe at the 1983 general election.

I submit that we can do the industry a favour only if we ensure that at all times it answers to profit; that applies as much to the privatised steel industry in 1991 as it did to the nationalised steel industry in 1980. [HON. MEMBERS: "Oh!"] Oh yes. The industry should answer to profit generated as a result of the demand for its product. Opposition Members make noises, as if to suggest that that assertion is wrong. I remind them that the motion before the House in 1980, which they themselves tabled, mentioned the word "profit". They did not deny—my goodness, how could they deny—the importance of profit.

We must remember that, in 1980, the steel industry came to the House and the taxpayer to ask for £1.7 billion —that being the loss made in that year. The hon. Member for Rotherham sneeringly said that British Steel's recently produced figures showed a massive reduction in its profits. I remind the hon. Gentleman, who spoke in the debate on 16 December 1980, that we were then talking not about a reduction in profit but about the British Steel Corporation losing £50 million every single month of that year. That was the scale of the disaster. Everyone recognised then that, even though the industry was nationalised, its future would be secured only if we got rid of the begging-bowl approach.

It is only fair to draw to the attention of the House the memorandum submitted to the Select Committee on Trade and Industry by the chairman of British Steel which appears in the minutes of evidence. Much criticism has, in my view quite wrongly, fallen upon Sir Bob Scholey, who has done a great job in securing both the well-being of the steel industry in the 1980s and its future for the 1990s.

Mr. Adam Ingram (East Kilbride)

Will the hon. Gentleman give way?

Mr. Brown

No, I will not give way. I no longer represent a steel constituency, and it would not be fair for me to speak for too long. I want to press on because I want the hon. Member for Glanford and Scunthorpe, in particular, to have the opportunity to catch your eye, Mr. Deputy Speaker.

The memorandum submitted to the Select Committee by the chairman of British Steel states: The company … has clear legal and moral responsibilities towards our shareholders for the financial success of the business. That depends absolutely on maintaining international competitiveness. I emphasised this issue in my letter of 14th June to the Secretary of State for Scotland, which was made public, on the reasons for the Company's decision to close the Ravenscraig hot strip mill. I said on that occasion: 'I must first say, and formally, that we live in a highly competitive world in steel and there is a clear sensitivity both in terms of share prices and from the international competition standpoint that prevents British Steel as a private company from disclosing quantitative information relating to matters of a commercial nature, or which are profit-sensitive.' If we do not succeed in the increasingly competitive international market place we shall fail not only in our responsibilities towards our shareholders, but also towards our employees, for jobs depend totally on the maintenance of a viable business. That is the bottom line. Whether we are debating the British Steel Corporation in 1980 or British Steel plc in 1991, the only thing that matters is whether British Steel can sell its products and be internationally competitive.

Dr. Bray

Will the hon. Gentleman give way?

Mr. Browne

I am afraid that I will not give way. You know what I am like, Mr. Deputy Speaker: once I go down a highway or byway, I detain the House for a further 10 or 15 minutes, and I am determined not to do that.

I simply want to make this point to hon. Members who have the interests of Ravenscraig at heart, be they Conservative, Liberal or Labour. When I became a Member of Parliament, I represented a constituency in which 20,000 people worked in the steel industry. The Labour Government of 1978–79 could not defend the jobs—even by recourse to the taxpayer, the printing presses and massive public borrowing. Even they sacked 1,700 workers in 1979. It was Labour politicians—specifically the Secretary of State for Industry—who told British Steel that it would have to sack those people.

The hon. Member for Gordon (Mr. Bruce) was right in what he said about the role of the European Commission—whether British steel is in public or private hands. The restructuring that was necessary in 1980–81 was largely the result of the European Coal and Steel Community requirement of the time. From the point of view of policy, the Government recognised that they could not lose £50 million of taxpayers' money. Then, we had a secure future for the steel industry, but steel is always out there in the international marketplace; the industry is always vulnerable to imports, and the extent to which imports are coming into Britain has been mentioned. If the Government have a responsibility, it is to ensure that our products can compete in the international marketplace and that aim can be secured only if the relationship between the pound and other currencies is not allowed unduly to handicap British industry. That is code for expressing my views on the point that we have reached in the debate about European monetary union and the European monetary system.

If the Government are to assist the steel industry, they must examine once again the relationship between our currency and the German currency. That will give us the opportunity to ensure that our industry is competitive. But we cannot insulate the steel industry from the cold facts of international competition in 1991, any more than we could in 1980. By trying hard, for understandable constituency reasons, to protect, in the short term, part of the steel industry that is simply no longer viable, we shall do the industry a disservice in the long term. In essence, those are the words not of the hon. Member for Brigg and Cleethorpes in 1991 but of the hon. Member for Brigg and Scunthorpe in 1980. Those words are engraved on my heart. I remember Labour Members saying then, "You are not representing your constituency." They said that I should simply save an old out-of-date rundown plant. I refused to do that. However, a Conservative Member of Parliament was elected to represent the area at the following general election.

6.39 pm
Mr. Tom Clarke (Monklands, West)

Out of courtesy to my colleagues who are anxious to speak, I intend to be brief. I am particluarly grateful for the references to Gartcosh and to the lessons that we have tried to learn. I am also grateful for the references to the Imperial works, Airdrie, in the constituency of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) because many of my constituents work there. We are very concerned about the consequences of the closures and redundancies at Ravenscraig, Clydesdale and Dalzell and we want the lessons that we have tried to learn from Gartcosh to be relevant to this debate.

We are debating a Select Committee report that made seven recommendations. So far the Government have reluctantly accepted only one—that we should have a debate on the subject today.

We should remind the Government that the consequences of their obsession with privatisation has meant devastation in Monklands and in Strathkelvin. That obsession has cost us much in human terms throughout Lanarkshire and certainly in Motherwell, as the moving speech of my hon. Friend the Member for Motherwell, South (Dr. Bray) testified. In the light of the Select Committee's report, we are entitled to say that the Government cannot simply abdicate their responsibilities. In the absence of the Secretary of State, I shall raise several points with the Minister in the hope that he will respond to them.

My right hon. and learned Friend the Member for Monklands, East and I believe that the hundreds of people struggling at the Imperial works, as so many did in Ravenscraig and Dalzell, should make their contribution to the steel industry. Their commitment to the industry should not be taken lightly. British Steel is not terribly forthcoming about its accounts and is worried about the £15 million allocated for exceptional items. Does that mean redundancies? What role does British Steel have for Imperial?

The import of tubes into Scotland for the North sea is scandalous. The hon. Member for Brigg and Cleethorpes (Mr. Brown) cannot disguise the anger of many people in Scotland. British Steel is prepared to import 70 per cent of its pipes from Japan, Germany, Italy and France when our people are desperately keen to make a contribution. No one can deny our balance of payments problems, but those imports amount to a £67 million a year loss to the balance of payments. Where is the sense in that? Where is the sense in allowing a small minority of people the right to take decisions that are so crucial to all our people, not just to the shareholders? British Steel is taking decisions which mean that British men, mills and machinery will stand idle. British Steel will not accept the consequences of the decisions that it has taken in Lanarkshire.

What is the answer to what has happened at Gartcosh? The decision was taken more than five years ago. Some people thought at the time that the Freightliner site, which we support today for Mossend, might have been given to Gartcosh and Coatbridge. That has not happened. We have great hopes for the paper recycling plant, as the Minister is aware, but we should see a great deal more energy from Scottish Enterprise to ensure that that becomes a reality.

The announcement—in so far as it was an announcement—in today's Scotsman about site clearance is of the utmost importance to Monklands and Strathkelvin. It seems that the steel masters settled in Lanarkshire, made profits and then disappeared, leaving our local councils and communities with enormous problems especially with regard to site dereliction.

More than 85 per cent. of the derelict land in Lanarkshire is in my district. Twelve per cent. of Monklands is derelict. We cannot deal with such problems on our own. It is profoundly unacceptable, if not immoral, for British Steel to make the kind of statementhat it made this morning. We demand regeneration and British Steel should believe that it has a contribution to make, as should the Government.

The Prime Minister made what he described as a major statement in Perth. The working party estimates that £300 million will be required for the regeneration of Lanarkshire. Only £120 million has been provided so far and most of that has already been allocated—even before we learnt of the Dalzell closure.

We in Lanarkshire, in Monklands and in Strathkelvin, believe that we still have a contribution to make to the economy of Scotland and that no one has the right to prevent us from making that contribution. The spectre of unemployment, deprivation and poverty in Lanarkshire is completely unacceptable. I received a letter recently from a doctor in one of our local health centres. The Minister should be aware of the concerns in Lanarkshire. The doctor wrote: The answer to heart disease"— which, incidentally, in Monklands is 3 per cent. above the United Kingdom average— will not lie with doctors and drugs but with proper public health policy on unemployment, poor housing and the lifestyle of poverty. Nowhere in the Government's approach so far, including their disgraceful and lukewarm response to the Select Committee's report and their influence on the Lanarkshire working party, have they been prepared to accept the consequences of their free market decisions. Because of that, our determination to fight for what remains of the steel industry and to fight for Lanarkshire and Scotland will remain and will be increasingly apparent.

6.48 pm
Mr. Alex Salmond (Banff and Buchan)

The Secretary of State for Scotland is seeking refuge in Holyrood palace, but he sent along some court jesters to hold the fort, including the hon. Member for Brigg and Cleethorpes (Mr. Brown) and the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn). When the full extent of the Secretary of State's involvement in recent closure decisions in Scottish steel becomes known, he will be seeking refuge in Edinburgh castle, not Holyrood palace. I suspect a tapestry of deceit with regard to Scottish steel from the Conservative party stretching up to and including the Prime Minister's office.

If the hon. Member for Brigg and Cleethorpes wants to consider the real pattern of developments in British Steel throughout the 1980s, he need look no further than table 1 of the Select Committee report which charts the investment pattern year after year, throughout the 1980s, when tens of millions, indeed hundreds of millions, of pounds were sent to Teesside, Lackenby, Llanwern and Port Talbot while the Scottish plants were starved of investment.

We have had three Secretaries of State for Scotland during that period—

Mr. Devlin


Mr. Salmond

No, I shall not give way to the hon. Gentleman, who has only just come into the Chamber.

There have been three Secretaries of State for Scotland in that period and each has failed the Scottish people. The right hon. Member for Ayr (Mr. Younger) intervened in the early 1980s and received some plaudits in Scotland for, as he put it, "saving Ravenscraig". However, he failed to change British Steel's investment pattern, thus leaving Ravenscraig exposed and vulnerable as the decade wore on.

This time last year, the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind) was engaged in a public dispute with Robert Scholey, the chairman of British Steel, and was asking for explanations about why the strip mill was to close. However, despite the warnings that were given by hon. Members of all parties about the consequences of delivering unfettered the Scottish steel plants into the hands of their enemies—as a result of privatisation—it was the same right hon. and learned Gentleman who refused to alter the terms of the privatisation to give the Scottish industry even a chance of success in the future. That position was not argued only by the Scottish National party, the Liberal Democrats or by some Labour Members; it was argued also by non-political bodies such as the Scottish Council (Development and Industry). The writing was clearly on the wall when British Steel was delivered into the private hands of an anti-Scottish management.

It is ironic to look back to the speeches that were made by Conservatives, including the Minister responsible for industry in Scotland, arguing that privatisation would strengthen Ravenscraig within British Steel. What empty rhetoric that now looks. What of the seven-year production pledge that was much vaunted as secure during the privatisation? At best, it is meaningless and, at worst, it has given the Scottish steel industry a defined time scale for its death sentence.

However disreputable the performance of the two previous Secretaries of State for Scotland, they cannot match that of the present Secretary of State. The involvement of the right hon. Member for Ayr was short-term and superficial. The right hon. and learned Member for Pentlands went through the motions and played for time, without having any real effect. However, the right hon. Member for Galloway and Upper Nithsdale (Mr. Lang) has been engaged in a cynical game of publicly supporting the steel industry while privately capitulating in his meetings with British Steel.

As time is short, I shall give only two examples of the performance of that right hon. Gentleman, who is absent from the Chamber this evening. Page XIV of the Select Committee's report refers to "uncertainty" in British Steel's evidence about why it was refusing to sell the Scottish plant. At one point, it was said that British Steel would not sell the plant because nobody wanted it, but at another point the evidence suggests that British Steel would not sell the plant because nobody wanted it, but at another point the evidence suggests that British Steel would not sell the plant because that would be detrimental to its interests, implying that if any other company had been able to buy it would lose in competition to that entrant company. However, the reason on which British Steel settled was that the Commission would stop such a sale. As Robert Scholey put it, the Commission would be jumping out of its skin if British Steel tried to sell Ravenscraig or the other Scottish plants.

The Select Committee dismissed that evidence because of letters to the contrary from the Commission. The Secretary of State for Scotland had even more insight into the evidence because on 25 March he met Sir Leon Brittan, the European Commissioner, and was told not only that the European Commission would not stop the sale of Ravenscraig, but that Robert Scholey himself knew that he had "gone too far" when he appeared before the Select Committee. In other words, the Secretary of State had been told that the chairman of British Steel had acknowledged that his evidence misled the Committee.

One might think that, having been given that information, the Secretary of State for Scotland would return to Scotland, hold a press conference, summon the chairman of British Steel—or be summoned by him—or demand that Robert Scholey be recalled to the Select Committee, but the Secretary of State said nothing for four weeks until the evidence was made public—just as he has said nothing in the past four weeks since he has known about the closure of the Dalzell plate mill.

We now move on to a new phase, in which the Minister responsible for industry in Scotland is very much involved. In April, the Minister released a Scottish Office document supporting the case for investment in Dalzell. That was done with full knowledge of its public implications. If there was any doubt about that, The Sunday Times in Scotland—

Mr. Allan Stewart

It was done specifically in response to a request from the trade unions.

Mr. Salmond

It was done to nail the Minister's flag to the mast of supporting the Dalzell investment. If that was to have any effect, it should have been backed by other action. If there was any doubt about that, The Sunday Times in Scotland, which is hardly a paper against the Conservative interest, could have told the Government about it at the time because it argued: Unless there is a break with precedent, the Scholey formula of solemnly taking arguments into account, weighing them in the balance, finding them wanting and then failing to say why, will rule the day. The Minister must have known that his gesture would have no effect unless it was backed by some other action that would put pressure on British Steel.

On 4 June the Secretary of State for Scotland had a private meeting with Bob Scholey. As the right hon. Gentleman is not in his place, we cannot question him about exactly what was said, but I can tell the House his response according to a Scottish Office briefing on the meeting. When told of the closure of the Dalzell plate mill, against the advice of the Scottish Office which was submitted to British Steel, the Secretary of State said: You know my view that the management of British Steel is entirely a matter for you, subject of course to competition law". The right hon. Gentleman did not even follow the performance of his predecessor by questioning the decision and arguing that more information should come to light. At that meeting the right hon. Gentleman immediately accepted British Steel's decision. That was on the very same day as the Prime Minister wrote to the Dalzell shop stewards stating his "full support": The trade union paper, 'The Mill, The Skill, and the Will' and the Scottish Office paper on the single plate strategy demonstrate that the case merits careful appraisal by l3ritish Steel. Perhaps the Minister will tell us more, but we are expected to believe that, having capitulated immediately to British Steel's decision, the Secretary of State for Scotland ran to No. 10 Downing street but was too late to stop the post, which meant that that public endorsement was sent to the Dalzell shop stewards.

Mr. Dewar

The hon. Gentleman's quotation from the Prime Minister's letter gives a rather misleading impression of what the Prime Minister actually said. He certainly referred to "The Mill, the Skill and the Will" and to the Scottish Office paper on a single plate strategy, but he said: It demonstrates the case merits careful appraisal by British Steel along with any other options the company may be considering.

Mr. Salmond

I am grateful to the hon. Gentleman. My point is that the letter was designed to give public support to the Dalzell shop stewards. A full two weeks later, on 19 June—that is two weeks after the Secretary of State for Scotland and the Prime Minister knew about British Steel's decision—on a public platform with the Dalzell shop stewards, the president of the Conservative and Unionist Association argued: Major's backing of the view is something which I really do not believe that British Steel can afford to ignore. The public impression was clear—that the Prime Minister's involvement and support would be decisive in helping the Dalzell shop stewards' . case. Privately, however, at his meeting with Bob Scholey, the Secretary of State for Scotland immediately capitulated to British Steel's decision without any questioning or argument, merely saying that it was "entirely a matter" for the company. That is the extent of the Conservative party's treatment of Scotland. The Government publicly support the workers north of the border, while privately selling them down the river in London. That is the Conservative party's position on the Scottish steel industry. It is little wonder that the Secretary of State was prudent enough to remain at a garden party this evening.

I contest the opinion of the hon. Member for Tiverton (Mr. Maxwell-Hyslop) that the position is irreversible and that nothing can be done. It is apposite to do so because the many positive and fruitful ideas that have been produced this evening depend on some action being taken to release those assets from the maw and the grip of British Steel. Having given his endorsement to the Dalzell shop stewards, is not the Prime Minister honour-bound to act to secure the release of those assets and allow someone else to run them properly? Is he not honour-bound to follow up his words with actions and stop that exercise of monopoly power?

The Labour party is also on the spot. Earlier, the hon. Member for Gordon (Mr. Bruce) argued that public ownership was not an option under the treaty of Paris. He then went against his own argument by saying that Scottish steel was profitable and productive, which means that it would not be a problem under the terms of the treaty of Paris. If we are to exercise any influence in the decision-making of British Steel, there must be a threat that, unless it stops destroying its Scottish plants, something will be done.

One would have thought that the Labour party would have argued the case for public investment in an industry that is too important to be left in the hands of someone like Robert Scholey. However, the Labour party has made no attempt to examine the issues, and it has not said what it will do if there is a change of Government. Both Ravenscraig and Dalzell are profitable and productive. Even the Scottish Office Minister believes that British Steel would save £300 million by adopting the Dalzell option. That is the figure given in the Scottish Office paper. British Steel owns the assets, but it has no arbitrary authority over them. They were created within the public sector. Billions of pounds of debt were written off before the company went into the private sector. Does British Steel have the right to destroy those assets, despite their production potential?

There is a vital difference between the current closure plans and those that have gone before: a general election will intervene before the closures take effect. There is a clear realisation of the process of destruction in which British Steel has engaged in Scotland. One immediate reaction to the news last Tuesday came from Bishop Joseph Devine of Motherwell, who said on BBC television: It is quite appalling what has happened here, as one is seeing the systematic dismantling of steel making in Scotland. Why British Steel can still continue to be called British Steel escapes me. It's clearly now English Steel. The Glasgow Evening Times said: The politicians, charged with the responsibility of protecting the people of Lanarkshire, have miserably failed them. Margaret Thatcher, George Younger, Malcolm Rifkind, and now John Major and Ian Lang are on that roll of infamy. Labour's heirarchy are no better. Neil Kinnock even yesterday still couldn't bring himself to back Dalzell because he knows every steel job lost in Scotland —his political power base—is a job safe in Wales or Teesside. With friends like these, who needs enemies? They are all guilty of watching a crime against the nation being perpetrated—and doing nothing to stop it. There will be an opportunity at the general election to change the political climate and environment that have allowed British Steel to destroy its Scottish industry. I believe that the Scottish people will take that opportunity.

7.3 pm

Mr. Elliot Morley (Glanford and Scunthorpe)

This debate is supposed to be about the future of the steel industry; it is supposed to be an opportunity to think about where the industry is going. It is fortunate—or, perhaps, unfortunate—that it coincides with the publication of British Steel's annual report, which casts doubt on the future of the two plate mills at Dalzell and Scunthorpe.

I wish to correct a couple of points made by the hon. Member for Brigg and Cleethorpes (Mr. Brown). Although I was not in the House in 1980, I have read the Hansard report of the debate at that time on a motion about the indifference shown towards Britain's manufacturing base, the decline of its industrial base, and the loss of jobs and investment. That motion is as relevant today as it was in 1980 because the Government are still indifferent towards our manufacturing base. That is shown by their attitude towards British Steel.

I do not argue for the retention of the Scunthorpe plate mill. It would make no sense to argue for a plate mill that is becoming obsolescent, that will not be able to meet the new quality standards that will be dictated in European markets, and that cannot embrace the new thin plate technology. Of course, I want the new plate mill investment to come to Scunthorpe, which has a very strong social and economic case for it, but I will not attack other parts of the country where jobs will be affected. I will not be caught up in the divisiveness that the Government often encourage. I believe that the work forces of all the existing steel plants in the country have made enormous sacrifices through increased productivity. All of them are in profit, and all deserve consideration.

As hon. Members would expect, I want to make the case for Scunthorpe. As the hon. Member for Brigg and Cleethorpes said, Scunthorpe has had enormous job losses since the early 1980s, when about 20,000 people were employed in the steel industry. The figure is now down to 7,500. In addition to the 500 job losses that will occur if the plate mill closes, it has been announced that some 800 other jobs are to go. There will also be job losses in craft restructuring.

Since the privatisation of British Steel, it has been difficult to obtain information about its plans. I do not criticise the local works manager, who has been helpful. We have a good relationship and we meet regularly. All Members of Parliament have connections with local industry, so we have an idea of what is happening and of the trends. For some months it has been clear that Teesside has been the favoured site for a plate mill, if that investment is confirmed. It is worth emphasising that the report says that any plans for a plate mill will have to be confirmed. Given the economic climate, I suspect that it could be many years before a start is made on a new plate mill at Teesside, yet both Scunthorpe and Dalzell face closure.

This debate should be about more than Scunthorpe and Dalzell; it should be about British Steel and its future plans. Together with other Labour Members, I strongly opposed privatisation. What have the public—the taxpayers and the local workers—got out of privatisation? Certainly, those who were encouraged to buy shares did not get a great deal because the shares have done very little. I accept that, at the time, it was pointed out that the steel industry is cyclical and prone to booms and slumps. There was tremendous investment in the industry when it was in public ownership, yet when it was privatised debts of almost £5 billion were written off. It was virtually given away, with the benefit of all the public expenditure. Because of that, I believe that the Government have the right to ask British Steel about its plans. They have the right to ask British Steel to show some consideration for the work forces and communities, such as mine in Scunthorpe, who paid for that productivity with their jobs, sometimes with their health, and sometimes even with their lives.

In the end, the judgment on where British Steel is going depends on its investment programme and policy. I find it strange that investment in the Scunthorpe works has been concentrated on the heavy end—the production of liquid steel. Indeed, because of the relining and rebuilding of two of the four blast furnaces, with the rebuilding of a third to come, Scunthorpe is capable of producing an additional 10,000 tonnes of liquid steel.

However, if Scunthorpe loses its plate mill, it will also lose the demand for 14,000 tonnes of liquid steel. We have a steelworks with the capacity for a new plate mill that could be left with an excess capacity of 24,000 tonnes. Where is that excess capacity to go? It cannot go to Teesside; Teesside has an existing commitment relating not only to output of liquid steel for its own use, but to output for the use of other steel works.

As some hon. Members have pointed out, British Steel has a tendency to retrench—to slim down, and to attempt to maximise output while returning to the minimum plant size. Of course, British Steel must operate in a commercial market place, both domestically and abroad. If it slims down and retrenches too much, however, how will it meet demand when it increases, as we hope that it will? Will not imports undermine its market share?

Let me ask two questions. First, will the Minister assure the House that the Government will use what influence they have—I accept that that influence has diminished considerably since privatisation—to press British Steel to ensure that investment is increased, especially "upstream" investment in plants such as the one at Scunthorpe? The history of steel privatisation is not good. When it was first privatised, very little investment went into the plants; the new owners substituted a coat of paint for the purchase of new plant, equipment and technology. Such investment is vital if we are to have a viable steel industry, and to meet strategic and economic needs.

My second point is this. Towns such as Scunthorpe have received some help because of the drastic job losses that they have experienced. Although that help is much appreciated, I emphasise that the Government have a responsibility: ultimately, the downturn in demand is due to their mismanagement of the economy, and their engineering of two recessions in the past decade. They have a duty to help Glanford and Scunthorpe, and other towns in the same position. Local authorities in such towns have had considerable success in attracting new industry and investment; but we are competing increasingly with other parts of the country—and, indeed, with other parts of Europe.

Areas such as Glanford and Scunthorpe have a great deal to offer. My local work force has proved its commitment to British Steel in terms of efficiency. The fact that the Scunthorpe plant holds the national steel production record is a source of great pride to a work force that has devoted so much time and energy to improving productivity. That plant deserves some consideration from British Steel; and, at this time of increasing unemployment, I believe that the Government should give my constituency a degree of priority by means of DTI grants and by working with the local councils that are doing so much to promote Scunthorpe and widen its employment base.

Several Hon. Members


Mr. Deputy Speaker (Sir Paul Dean)

I call Mr. Allan Stewart.

Dr. John Reid (Motherwell, North)

On a point of order, Mr. Deputy Speaker. Can you explain how it is in order, in a debate that is primarily concerned with the Clydesdale tube works and the Ravenscraig plant, for the Member of Parliament representing the area involved not to be able to catch your eye?

Mr. Deputy Speaker

I realise that the hon. Gentleman is one of a number who have been disappointed this evening. I can only regret that. This is a short debate and, unfortunately, some of the speeches have been too long.

Dr. Reid


Mr. Deputy Speaker

Order. I have dealt with the hon. Gentleman's point of order. I suggest that he may find it fruitful to intervene on the Minister's speech.

Dr. Reid

Further to that point of order, Mr. Deputy Speaker—

Mr. Deputy Speaker

Order. We are wasting time. I call the Under-Secretary of State for Scotland.

Dr. Reid

Further to that point of order, Mr. Deputy Speaker. I have no doubt that the Parliamentary Under-Secretary of State will give way, as he has always been generous in that regard, but I do not wish to intervene on his speech. I did not ask about other hon. Members who might want to speak; I asked a specific question. How can it be in order for a debate to be held on the subject of the Clydesdale tube works without the local Member of Parliament being able to catch your eye?

Mr. Deputy Speaker

I can add nothing to what I have already said.

7.15 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)

I confirm that I shall be glad to give way to the hon. Member for Motherwell, North (Dr. Reid) if he wishes to intervene at an appropriate point.

I welcome the opportunity to explain the Government's position on the steel industry, particularly in Scotland, and on the measures for the regeneration of Lanarkshire. First, let me pay tribute to the work of the Select Committee on Trade and Industry in investigating the closures in the Scottish steel industry. The House is agreed that the Committee has carried out a thorough investigation, which has given us all a better insight into the background and implications of those closures. Let me also join other hon. Members in wishing my hon. Friend the Member for Hastings and Rye (Mr. Warren) a speedy return to good health and the House.

My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) rightly set the debate in the framework of the European Coal and Steel Community provisions. He was right to emphasise that not only the Committee's conclusion but the very process of taking evidence, has been illuminating. I shall refer later to what was said by another Committee member, the hon. Member for Rotherham (Mr. Crowther).

A number of hon. Members who have spoken, including the hon. Members for Motherwell, South (Dr. Bray), for Glanford and Scunthorpe (Mr. Morley) and for Monklands, West (Mr. Clarke), represent communities that are directly affected by the plant closures. It was a pity that the hon. Member for Glasgow, Garscadden (Mr. Dewar)—somewhat uncharacteristically—began by criticising my right hon. Friend the Secretary of State for being absent. Surely he knows that the arrangement has always been for the Secretary of State for Scotland to accompany Her Majesty on official visits to Scotland—just as the Secretary of State for Wales accompanies her in Wales and the Secretary of State for Defence accompanies her on visits to defence establishments.

I address the hon. Member for Garscadden more in sorrow than in anger. However, I entirely reject the allegations of collusion and ill faith made, on the basis of no evidence, by the hon. Member for Banff and Buchan (Mr. Salmond). Such allegations by the Scottish National party highlight the difference between its attitude to Scotland's steel problems and that of the Labour party. My impression is that Labour Members have been concerned primarily with jobs, while SNP Members, all too often, have been concerned primarily with headlines.

Mr. Salmond

Was the Minister present at the meeting on 4 June between the Secretary of State for Scotland and the chairman of British Steel? Is it true that, in response to the announcement of the Dalzell closure, the Secretary of State said: You know my view that the management of British Steel is entirely a matter for you, subject of course to competition law"?

Mr. Stewart

I certainly confirm that I was present at that meeting. Over a long period, the Scottish Office has asked British Steel to consider Dalzell's case, and we presented a paper to British Steel arguing that case. The hon. Member for Banff and Buchan alleged that there was some kind of collusion or ill faith in my decision to publish that Scottish Office document. I published it in response to a specific request by the Dalzell trade unions. I held no press conference about it but gave the document to the trade unions so that they could use it as they wished. Therefore, I hope that the hon. Gentleman will withdraw his allegations.

Hon. Members


Mr. Salmond

Will the Minister give way?

Mr. Stewart

Does the hon. Gentleman withdraw his allegations? I shall not give way—the hon. Gentleman can simply say, "Yes."

Mr. Salmond

Will the Minister answer my second question?

Mr. Stewart

I shall answer it if the hon. Gentleman will give me a moment to do so.

At that meeting with the chairman of British Steel and some of his colleagues, we were told, in total commercial confidentiality, of the decision in relation to Dalzell. We pointed out that we had argued Dalzell's case over a long period, and we expressed extreme disappointment at the news that had been brought to us. We asked for confirmation that the board had fully considered the Scottish Office document, and we were assured that it had carefully considered every option and had come to the conclusion to invest on Teesside.

If the hon. Member for Banff and Buchan is suggesting that we should, somehow, have released that information to the public, that would have been a breach of faith and trust. As for his allegation about the president of the Scottish Conservative and Unionist Association and subsequent statements, he was not at that meeting.

Mr. Salmond

On a point of order, Mr. Deputy Speaker. I have specifically asked the Minister twice about the response to Bob Scholey's news—is it correct?

Mr. Deputy Speaker

That is not a point of order for the Chair.

Mr. Stewart

I have already answered that point, Mr. Deputy Speaker.

Although no one doubts that the concern of the hon. Member for Garscadden is genuine, when I asked him what he would have done differently in the past year had he been Secretary of State for Scotland, his reply was not convincing. The essence of his reply was that he would have resigned.

Dr. Reid

I shall go back on my word and take the opportunity to intervene on the Minister. The position has been made absolutely clear by my hon. Friends the Members for Dunfermline, East (Mr. Brown) and for Glasgow, Garscadden (Mr. Dewar) on numerous occasions. First, there would have been an interventionist Department of Trade and Industry. Secondly, there would have been a strengthened Monopolies and Mergers Commission, to which British Steel would have been taken. Thirdly, there would have been joint ventures with British Steel in new technology, which are legal under both treaties in Europe. Fourthly, research assistance would have been channelled to British Steel in terms of moneys for research and development. Again, that would have been legal under European legislation. I give the Minister merely four or five measures that a Labour Government would have taken in the past two years for Ravenscraig and Clydesdale.

The great tragedy is that Bob Scholey is well aware of what a Labour Government would do had the plants remained. With the prospect of a Labour Government, he has run his timetable one to two years ahead and ordered an army with a scorched earth policy to remove the hot strip mill and the steel works at Clydesdale, so that none of that can be done in a year's time.

Mr. Stewart

Who would have funded that plan? The Government could not have done so because state aid for steel is closely circumscribed by European Community coal and steel regulations. If the hon. Gentleman is saying that a Labour Government would direct the steel industry and force it to invest against its commercial judgment, he should tell the right hon. and learned Member for Monklands, East (Mr. Smith) that that will be Labour's policy, so that he can make it clear to the City.

Dr. Reid

Will the Minister give way?

Mr. Stewart

No, I must get on with the general debate.

Scotland's steel industry has a long and honourable history. Together with other traditional industries such as shipbuilding and coal mining, it has attracted a deep attachment from the Scottish people. Hon. Members on both sides of the House have emphasised that the workers in the industry have served it well, and it is a matter of deep regret that they do not face a more promising future. However, the factors shaping that future do not lie entirely within the control of the company or the Government. International competition grows ever more intensive. In his positive speech, my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) put the matter properly into perspective.

It is true that, since 1981, employment in British Steel and ECSC products has dropped by 45 per cent. But there has been an equivalent drop of 52 per cent. in France, 57 per cent. in Spain and 42 per cent. in the European Community generally. The whole industry has had to readjust to changing circumstances.

Mr. Dewar

Will the Minister give way?

Mr. Stewart

The hon. Gentleman will forgive me, but I should like to make a little more progress.

I emphasise the importance of the point made by my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown). British Steel has been transformed from a company that made a loss of nearly £5 million of taxpayers' money a day into a profitable company. Its productivity has also been transformed. It must be right to allow British Steel to compete and to continue to put poor productivity and the subsidies of the past behind it.

Mr. Dewar

Will the Secretary of State explain his policy of asking help from other parts of the Government? I was at a meeting at which the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), when Secretary of State for Trade and Industry, said that his Department was making no efforts to help the campaign to save the Scottish steel industry because it had not been asked to do so by the Scottish Office. It is difficult to understand why, if the Scottish Office is as committed to the campaign as the Minister says, the Department of Trade and Industry—which is responsible for steel—was not being involved in the campaign because the Scottish Office had not specifically asked for its help.

Mr. Stewart

I assure the hon. Gentleman that the policies, statements and representations made by my right hon. Friend and successive Secretaries of State have had the full support of the whole Government.

My hon. Friend the Member for Dumfries (Sir H. Monro) was right to emphasise that the work force, faced with the proposal to close the hot strip mill, were entitled to as full an explanation as possible of the basis for that decision. My right hon. Friend and I have continually urged British Steel to release as much information as possible about the company's position, consistent with the need to safeguard commercially sensitive information. We have continually urged British Steel to consider fully and carefully any potential opportunities that might be identified in relation to their Scottish assets.

The European Community's regional policy and how it relates to the sale of the hot strip mill has been discussed. I would tell the hon. Member for Banff and Buchan that on 25 March Sir Leon Brittan told my right hon. Friend the Secretary of State that Sir Robert Scholey had wrongly told the Select Committee that the Commission would object to the sale of the strip mill. The Secretary of State had written to Sir Robert Scholey on 20 March stating: You suggested earlier that the European Commission would object to that prospect"— the sale of the hot strip mill— but I now understand that this is unlikely. He then went on to ask the chairman of British Steel to reconsider his position in relation to the strip mill.

With regard to the plate strategy, I accept the deep sense of disappointment in Lanarkshire and Scunthorpe at British Steel's announcement on 1 July that the company was to invest in new plate facilities at Teesside. However, my hon. Friend the Member for Brigg and Cleethorpes was right to say, first, that the rest of that plant did not depend on the plate mill, so there was no reason why the rest of the plant should be affected significantly by the closure of the plate mill; secondly, and more importantly, on the need to be positive. The creation of new jobs requires the development of new products, processes and markets. During the past decade, Scunthorpe has shown just how successfully diversification can be put into practice.

Mr. Menzies Campbell

Will the Minister give way?

Mr. Stewart

No, I do not have time.

I shall turn briefly to the Larnarkshire working group and the remedial measures that have been announced. I believe that those measures have received a good response in Lanarkshire, and that there is a spirit of co-operation and a willingness to try to ensure that they succeed.

I shall outline some of the figures that make up the £120 million which has been mentioned. Some £36 million was the initial allocation of Scottish Enterprise to the Lanarkshire development agency—as recently announced. I thought that the hon. Member for Gordon (Mr. Bruce) made a positive suggestion in relation to the future role of the expertise that has been built up in East Kilbride development corporation, which we are examining. East Kilbride has £26 million. We can add the £28 million from the Department of Trade and Industry, through the iron and steel employees re-adaptation benefit scheme.

Some £5 million extra was given by the Scottish Development Agency for sites purchased in 1991—a point made by my hon. Friend the Member for Dumfries. There is also the £15 million announced by the Prime Minister, and the £5 million allocated to Scottish Enterprise for Lanarkshire in 1991–92. Again, picking up the point made by my hon. Friend the Member for Dumfries, there was £4 million for the Lanarkshire development agency for extra training and associated expenses, and the £4 million in extra capital consents to local authorities for factory building.

This is what has been announced so far, and it constitutes a substantial commitment to Lanarkshire. The Secretary of State has made it absolutely clear that Lanarkshire will continue to have a high priority in future public expenditure decisions. We have commissioned a study on the upgrading of the A8 and have undertaken to consider the case for an enterprise zone. We have given a commitment to a new hospital. I believe that there will be a positive response from Lanarkshire to those positive proposals.

Mr. George Robertson (Hamilton)

Not enough.

Mr. Stewart

The hon. Gentleman suggests that that is not enough, but it is a substantial commitment. I noticed that the Opposition did not promise any extra money under a Labour Government.

7.33 pm
Mr. Maxwell-Hyslop

This debate on the whole of the United Kingdom steel industry was triggered by the Select Committee's report. It is clearly a debate that will not conclude tonight, because the events with which it is concerned will not be concluded tonight. The evidence we took only little more than half a year ago about the projections for steel consumption in western Europe in particular have already been vitiated, and it looks as though the costs of reunifying eastern with west Germany will push interest rates still higher, or at least prevent them from falling as we would have wished. Therefore, the problems facing the management of every form of steel production and steel processing plant in western Europe will come under greater pressure. They will not be relieved of difficult decisions by an unexpected improvement in the demand for steel and steel products throughout western Europe.

The present afflictions that are hitting the rest of the world and the political uncertainties now in many of the export markets—Yugoslavia is merely one case in point—are likely to lead to further postponements of investment in the steel industry in particular, because the demand for some of its products is likely to be postponed.

I imagine that the House will want to return to the extremely important subject of what continues to be one of the United Kingdom's most important industries.

The debate was concluded, and the Question necessary to dispose of the proceedings was deferred, pursuant to paragraph (4) of Standing Order No. 52 (Consideration of estimates).

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