HC Deb 17 January 1996 vol 269 cc736-7
15. Mr. Barry Jones

To ask the President of the Board of Trade what special measures he proposes to assist the United Kingdom steel industry; and if he will make a statement. [7903]

Mr. Eggar

My Department is working with the industry on a number of initiatives aimed at improving further the competitiveness of an industry, the performance of which since privatisation has been among the world's best.

Mr. Jones

In view of the wretched trade figures, why do the Government not give priority to steel exports, and specifically manufactured goods? Does the right hon. Gentleman accept that the steel industry and, specifically, steel workers have made a great contribution to Britain's enterprise, ensuring productivity, flexibility and profitability? Why does not the Minister, on the Government's behalf, acknowledge the great sacrifices made by steel communities in terms of redundancies and closures and acknowledge that the industry needs more Government support with exports?

Mr. Eggar

The lesson of the past 20 years in the steel industry is that when the state owns it and intervenes it is a blinking disaster, but that when it goes into the private sector after privatisation it is extremely successful. Let me spell it out for the hon. Gentleman. Between 1975 and 1985, every individual in this country subsidised British Steel to the tune of £135. Since privatisation in 1986, British Steel has contributed £220 million in corporation tax to the Exchequer. Privatised British Steel has been a success; state-owned British Steel was a disaster.

Mr. Michael Brown

To underline what my right hon. Friend has said, may I inform him that, on Monday, I visited Humber power station, which is under construction in my constituency? Will he note that that gas-fired power station was given the go-ahead by Her Majesty's Government and that every piece of steel that I saw there had been produced by British Steel, Scunthorpe? Is not the answer to the question of the hon. Member for Alyn and Deeside (Mr. Jones) that we must ensure that there are customers such as Humber Power, which buys steel because of its price and quality?

Mr. Eggar

I absolutely agree with my hon. Friend. The changes that have been made to the previously state-owned sector have turned around what was a serious position for the providers of our infrastructure, electricity and gas. From lagging behind the rest of the world in efficiency, they have become world leaders. That has benefited the British steel industry and British industry as a whole because it has reduced energy costs overall.

Mr. Hardy

Does the Minister understand that part of the cost and loss of the nationalised industry was due to the investment decisions of Lord Walker and a former Conservative Government, who instructed it to pursue a policy investment that would realise a 30 million tonne a year capacity?

Will the right hon. Gentleman focus his mind on the serious problem that steel production may be moving down from the top of the cycle—he must realise that it is a cyclical industry—and accept that it is therefore imperative that the Government prevent our European neighbours from continuing the unfair trading practices that they enjoyed for several years until the cycle improved?

Mr. Eggar

The hon. Gentleman is rewriting history with his view of the investment pattern of British Steel. I find it surprising that the hon. Gentleman, who knows a great deal about the industry, has not welcomed British Steel's investment announcement of another £65 million for the Llanwern mill. He has also not welcomed the fact that British Steel used to take 13 man hours to produce a tonne of liquid steel, whereas now it takes only four man hours. That is the scale of achievement by a privatised British Steel and the hon. Gentleman should pay tribute to it.