§ 4.12 p.m.
§ LORD DRUMALBYNMy Lords, with the permission of the House, I will repeat a Statement which is being made in another place by my right honourable friend the Secretary of State for Trade and Industry. It is as follows:
"The House will wish to know of the stage reached in my review of the existing and future structure of the British Steel Corporation; this has been carried out in parallel with the review of nationalised industry activities more generally which is still continuing.
"After a most careful examination with the Corporation, the private sector of the industry and other interests, we have decided, in view of the economies of scale of modern integrated steel works, to maintain within the Corporation the present responsibilities for bulk iron and steel making activities.
"The question of the future size of the industry is being considered within my current review of the Corporation's financial and development position. We shall continue to explore with the Corporation the scope for further progress towards greater efficiency and competitive discipline. This of course must be subject to the constraints of fair competition with the private sector and the need for a rapid improvement in the Corporation's financial position; it is also subject to the Government's overall policy for the economy.
"The nationalisation of the industry created a number of anomalies on the boundary between the Corporation and the private sector and we intend to pursue with them the extent to which these can be remedied. The Corporation also has interests in a wide range of diversified and ancillary activities. Now that we have taken the main decision on bulk steel making we will have urgent consultations on the future status of these activities, and on the scope for introducing private capital. Furthermore, we would welcome any new private sector steelworks developments and in this connection it would not normally be my intention to use my statutory powers of approval in any restrictive way.
1089 "The decision I have announced to-day will help to provide the industry with a greater sense of stability. I shall of course report back to the House when the further consultations I have referred to have been completed."
That is the end of the Statement, my Lords.
§ LORD SHACKLETONMy Lords, I do not wish to take up time. It is, I know, troublesome for the House to have these major Statements in the middle of an important debate. I am bound to say that I do not know whether to be relieved or alarmed by this Statement; whether it is equivalent to the Wasp helicopters—just something to keep people happy, and a retreat from the quite extraordinary doctrinaire approach of certain Conservative Ministers to the steel industry—I just do not know. I did not know that there was any proposal to break up or to alter the responsibilities for bulk iron and steel making activities. I find it slightly ludicrous that we even have to consider this, but this Government, apparently, are capable of considering anything.
The Statement referred to:
the boundary between the Corporation and the private sector",and to:a wide range of diversified and ancillary activities…Do these words mean that the Government have still not taken a decision with regard to special steels? In a way, it may be better not to ask the Government any questions and hope that, gradually, time and experience are beginning to teach them some sense.
§ LORD BYERSMy Lords, may I ask the noble Lord whether these decisions have the full support of the Board of the British Steel Corporation?
§ LORD DRUMALBYNMy Lords, the decision to keep the bulk steel-producing activities most certainly has the full support of the British Steel Corporation, and also, of course, the support of most outside opinion that has been consulted.
§ LORD BYERSMy Lords, I was asking the noble Lord about all the decisions; that is, to inquire into the "anomalies on the boundary" and the 1090 other aspects of the steel industry in this country.
§ LORD DRUMALBYNMy Lords, my right honourable friend is in very close touch with the Chairman. I do not think it would be possible to expect there to be complete agreement on these matters. But I should not anticipate that, once we have a real basis for stability in the future, and they know exactly where they stand, there would be any great difficulty about this.
I was surprised to hear from the noble Lord, Lord Shackleton, that he had never heard about any proposals for reorganising the restructuring the steel industry. After all, this has been a fairly contentious matter over a period of years. I would only say to him that this shows, on the contrary, just how undoctrinaire the Conservative Party is in regard to these matters. It has faced the situation it has found, which is one of declining profitability in the industry, a fairly serious plummeting of profitability; and it has decided that, in all the circumstances, it would be wrong to make any changes and that the best interests of the nation will be served by giving a firm base to the steel industry for moving forward in the future.
It is of course at the present time, as the Statement says, considering in the first place the financial position as the first phase of the general review that is going on, and after that it will consider the position on the fringes. I should perhaps add that there is nothing whatever to prevent the British Steel Corporation itself, now that this major decision has been made, from reviewing, together with the private interests, what would be the best forms of rationalisation to pursue in particular circumstances.
§ LORD SHACKLETONMy Lords, if the noble Lord makes provocative statements like this, he cannot expect to get on with the Industrial Relations Bill. What he needs to do is to allow the British Steel Corporation to get on with the job. Everybody acknowledges that they have a first-class management under Lord Melchett; that they have been carrying out a most comprehensive examination on rationalisation and what the Government have been doing is to hold it up. I do not want to prolong this discussion, but it is this kind of remark made by the noble Lord that worries me. I never 1091 dreamt that the Government were seriously considering breaking up the bulk steel manufacture side. I know that there was a lot of talk about it, but I never thought that they were considering this. I am even more appalled.
§ 4.20 p.m.
§ LORD DOUGLASS OF CLEVELANDMy Lords, I am extremely interested in this subject. When we came to discuss the Third London Airport there was commendation of opposition to the Roskill Report because of the effect of pollution of the atmosphere. I am not sure that the pollution of the atmosphere should come before the good of the workpeople of this country. If we are to have a system in which there is merely an economic consideration of all that is involved; and a town like Irlam, which depends completely on steel, is then to be closed down, I think economics have gone mad. I do not know whether the British Steel Corporation subscribe to this point of view or whether they want time to consider it. They have said that they want time to consider this particular question. I do not accept this position. The coal miners have made it very clear; they have for years fought against the closing down of pits, and this was opposed by the present Government when they were in Opposition. As a result, to-day we find ourselves short of fuel because of the wrong policy which has been adopted in the coal mines. I am afraid that because the steel industry, for which I—
§ LORD DOUGLASS OF CLEVELANDMy Lords, I will put it in a question then.
THE LORD PRIVY SEAL (EARL JELLICOE)My Lords, I hesitate to interrupt the noble Lord, Lord Douglass of Cleveland, because I know of his deep interest in this matter; but I think it would be more in accordance with our normal rules if he were to put a question, fairly shortly, to my noble friend.
§ LORD DOUGLASS OF CLEVELANDMy Lords, if the effect on the members of my union in the steel industry were going to be short I could probably put a short question. But if the ethics of 1092 the House demand that the question be short, well let it be short. Is it the intention of this Government to assert an economic fact by the establishment of particularly large sections of the steel industry and to ignore the effect upon the men who work in that industry, simply for the sake of getting some results at the end of the day which may be economic but will have no regard whatever for the men in the industry? If this is the intention of the Government will they say so now; or will they give some indication that they are prepared to consider the effect of this action on the men who have given such loyal service in the steel industry, with little complaint, over many years.
§ LORD DRUMALBYNMy Lords, obviously the future of the steel industry must depend upon its remaining competitive and economic. This point was well recognised in the statement made in January, 1969, as to the policy on production and redundancies at that time. That policy has awaited decisions on the structure of the industry but it cannot be held up indefinitely. We all very much deplore the fact that this policy may mean redundancies in certain sectors, as it has done in the coal industry, but I am afraid this is an absolutely inescapable economic fact.
§ LORD DOUGLASS OF CLEVELANDMy Lords, may I follow this up with a supplementary question? Does this mean that the Government are reconciled to the fact that Irlam shall be without an industry, with all the consequences that that implies?
§ LORD DRUMALBYNMy Lords, this is a matter which is currently being discussed by the British Steel Corporation itself in relation to the rationalisation of the wire side of the industry. I am afraid that is all I can tell the noble Lord at the present time. It is essentially a matter for the British Steel Corporation.
§ LORD BERNSTEINMy Lords, will the withholding of money from the British Steel Corporation be considered an unfair industrial practice under the new Bill?
§ THE EARL OF LAUDERDALEMy Lords, may I ask the noble Lord whether we may take it that the decision to protect the bulk steel-making operations of the B.S.C., and at the same time to welcome 1093 private enterprise proposals will mean that, should there be a shortage of capital for major developments, the Government would welcome European capital?
§ LORD DRUMALBYNMy Lords, may I answer the first question? I took a little time to try to digest the purport of it. Of course a great deal of new investment in the steel industry is recognised to be necessary, and I am afraid that it is not a question of withholding Government money: the likelihood is that a great deal of Government money will require to be supplied in order to make this investment possible. This is the sort of thing that is being considered in the financial part of the review that I have mentioned.
So far as my noble friend's question is concerned, I think perhaps this is looking a little too far into the future. Whether there should be private participation, and if so what form it should take, must I think wait a little in order that we can get steel on an even keel again, if I may put it that way. It is unlikely that, with the steel industry in its present position, it would attract private capital, as my right honourable friend said.
§ THE EARL OF LAUDERDALEMy Lords, can the noble Lord assure us that the Government's mind is not closed to the possibility of European capital being welcomed in the British steel industry, not least so that we do not contract out of steel exports and also so as not to miss out on an opportunity for functional co-operation with Europe?
§ LORD DRUMALBYNMy Lords, I am sure that the Government's mind is not closed to this possibility, but as I have said I think perhaps it is a little premature to discuss it.
§ LORD LEATHERLANDMy Lords, do I gather from that reply that the Government think it might be a good idea to allow Krupps to take over the British steel industry?
§ LORD DRUMALBYNNo, my Lords.
§ LORD DOUGLASS OF CLEVELANDMy Lords, may I ask a further question? I have mentioned Irlam as an example of a town being completely shut down. I think I should say that the whole of 1094 Scotland is apprehensive as to what is going to happen. Is there any intention on the part of the Corporation or the Government to ensure that Scotland has a steel complex, or are they writing Scotland off as well as Irlam?
§ LORD DRUMALBYNMy Lords, I am today making a Statement about the structure of the steel industry and I would prefer not to be drawn into discussing the future. Now that the structure has been settled these will be matters for consideration, and of course they will be examined with the usual sympathy that every Government exercise in regard to the provision of new employment and so forth.
§ LORD DOUGLASS OF CLEVELANDMy Lords, I feel that I ought to thank the noble Lord for that reply, but surely it is inadequate. Some five years ago consideration was given to the construction of the steel industry and its structure. When the Corporation took over it was bothered about the structure and changed its mind on the subject on a number of occasions. In my view, we have a right to know what the Corporation has in mind with regard to the structure of the industry and its effect on Scotland, and I think we should have a long forthright statement on this question.
§ LORD SHACKLETONMy Lords, I wonder whether it would help your Lordships if we were to consider having a debate on this subject? Our Standing Orders do not permit a question to be debated without notice. Clearly my noble friend Lord Douglass and the noble Earl, Lord Lauderdale, and others have important matters to raise. There is deep concern, and this Statement does not alleviate it. I am not suggesting any particular time for the debate, but it is quite clear that this is a matter we should discuss.
EARL JELLICOEMy Lords, I am grateful to the noble Lord the Leader of the Opposition. There is always some difficulty when Statements of this magnitude are repeated in your Lordships' House, not least Statements which are of personal concern to noble Lords (of whom there are now many) who have a deep knowledge and a deep involvement in many of the issues now coming before us. We then face this difficulty of time and of our normal procedures. I think this 1095 is one of those occasions, and I should be quite willing if discussions through the normal channels could be pursued as to how this matter, which is clearly of great national importance, could be debated in your Lordships' House.