HC Deb 06 May 1999 vol 330 cc1079-80
10. Mr. Denis MacShane (Rotherham)

What assessment he has made of the effect of the current value of sterling on the UK steel industry. [82367]

The Minister for Energy and Industry (Mr. John Battle)

Our Government have had frequent discussions with the steel industry, both management and trade unions, on the export difficulties arising from the current value of sterling. Notwithstanding current problems, the UK steel industry achieved exports of nearly £3.2 billion in 1998 while addressing underlying long-term competitiveness issues. That is a significant achievement in the circumstances.

Mr. MacShane

I am grateful to my hon. Friend for recording that success story, but the steel industry has suffered from two huge problems: first, the high rate of sterling inherited from the previous Government and, secondly, the fanatical anti-manufacturing culture of the Tory years. However, is he aware of some little rays of sunshine on the horizon? First, in its estimate for the end of the year, Goldman Sachs predicts the pound coming down significantly against the euro, which is good news for steel, although my hon. Friend should spend his wage-frozen salary on holidays abroad now, rather than wait for a weaker pound in nine months' time. Secondly, in Asia, prices are being posted higher and order books are picking up.

Will my hon. Friend consider three specific issues? First, will he ask the Chancellor of the Exchequer to put somebody from manufacturing on the Monetary Policy Committee? Secondly, will he look harder and faster at excessive electricity prices? There is no doubt that we need harmonisation with Europe on that matter, because we need lower electricity prices. Thirdly, will he agree to meet representatives of the industry to discuss those problems in the near future?

Mr. Battle

My hon. Friend champions the steel industry at every opportunity and he should be applauded for doing so. The message from the Government is loud and clear: we positively support manufacturing and we shall do what we can to ensure that there is an economic climate of support for manufacturing. To achieve lower electricity prices and to ensure that heavy industrial users of energy are not unfairly priced out is precisely the purpose of the reform of the energy pool electricity trading arrangements. That is why we are working on that project, and I am glad to report that the work is going well. I shall be happy to meet John Bryant, the new chief executive officer of British Steel—indeed, I hope to meet him soon—and I shall continue to hold frequent discussions with the steel industry.

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