§ 6.9 p.m.
§ LORD DRUMALBYN
My Lords, I beg to move that this Bill be now read a second time. In whatever way your Lordships would like to see the steel industry organised, I think that this House will agree that this country should have a healthy and competitive steel industry. To achieve this, substantial investment is needed to replace old and inefficient plant. Moreover, the British Steel Corporation is currently facing heavy losses which it cannot hope to recoup in the immediate future. In addition to an accumulated loss of £40 million, the Corporation expects a loss of up to £100 million in the current financial year, before allowing for the effects of the present coal strike, and a similar loss in the next year. The purpose of this Bill, as explained in the Memorandum published as a White Paper on December 7, is to deal realistically with the financial position so that the Corporation may become profitable.
The Bill is part of the series of measures to streamline and modernise the steel industry described last year in the Statements which I repeated in your Lordships' House on April 27 and June 28. These related to the structure of the industry, as regards, first, the retention of responsibility within the Corporation for bulk iron and steel making, and, secondly, the boundary with the private sector. Discussions are in progress between the B.S.C. and private industry with the object of removing anomalies on the boundary between the public and private sectors—an object which is generally accepted as desirable—and also of introducing private capital into some of the B.S.C.'s ancillary and peripheral activities as I indicated in the Statement last June.
The Government also recognised the need to replace outdated plant which can no longer be operated competitively, and to make good the low level of past in 370 vestment. Here we are faced with the problem of deciding the future size of the industry and the long-term strategy that should be pursued, given the probable level of demand both in the United Kingdom and overseas. A comprehensive review of the industry was therefore begun last year, as announced by the Secretary of State in another place on March 18, 1971, and a Statement will be made very shortly. The result of the review will provide a background for considering any proposals put forward by the B.S.C. later this year for major new development at a "Brownfield" or "greenfield" site.
Your Lordships will be aware of the current world-wide recession in the demand for steel, which has caused a fall in the output of steel in all the major market economies and has increased the difficulty of estimating the future market for steel. Outside the Eastern bloc, steel production fell in 1971 to nearly 6 per cent. below the 1970 level. Output fell by 13 per cent. in the United Kingdom to 24 million tons, by 8 per cent. in the United States of America to 109 million tons, by 5 per cent. in the E.C.S C. to 103 million tons and by 5 per cent. in Japan to 89 million tons. In consequence all the main producers are reviewing their plans for expansion. For example, it is reported that in Japan the estimate of production of 160 million tons in 1975 was reduced by nearly one third. In the E.E.C., whereas it was at one time thought that production might be approaching 170 million tons in 1974, it is now thought more likely that in 1975 it will be less than 150 million tons. In the United States of America, expenditure on plant and equipment last year fell by 12 per cent.
In the light of this the future size of the United Kingdom industry will require careful consideration. In the meantime, steps have been taken to ensure that plans to modernise the industry are not held up.
Last June the Secretary of State authorised capital expenditure in 1971–72 at 371 the record level of £225 million at 1970–71 prices, equivalent to £242 million at 1971 Public Expenditure Survey prices, to enable the Corporation to proceed with the various projects it had decided on. That authorisation took account of the results of the first stage of the review covering B.S.C.'s financial position and investment needs in 1971–72. Last December capital expenditure in 1972–73 was approved at the even higher level of £265 million at 1971 Survey prices, including up to £10 million for minor projects brought forward to help in providing additional employment, much of it in areas of above-average unemployment. That approval is subject to a reservation in regard to about £25 million for certain major projects on which final decisions have not yet been made by B.S.C. or which might prejudice decisions on longterm strategy.
Meanwhile, we have to face a situation in which the Corporation is incurring heavy losses due to a number of factors. I have already referred to the world steel situation, which has, of course, affected the finances of B.S.C. and the steel producers in other countries. And the restraints imposed by successive Governments on steel prices must also be taken into account. Last April, as your Lordships will recall, the Iron and Steel Consumers' Council made a formal representation to the Secretary of State against the proposed 14 per cent. increase, recommending that the increase should be halved. As the Corporation subsequently adhered to the C.B.I. initiative on prices, it cannot increase its prices again until April, and then only by 5 per cent. It is too early to say what will happen after the period of the present C.B.I. initiative ends in July, but we can foresee that in accordance with our Treaty with the E.E.C. the Corporation will be operating from January 1973 under the pricing arrangements of the European Coal and Steel Community; this means that the power in the Iron and Steel Act 1967 under which the Secretary of State can make a direction on prices following a representation of the Iron and Steel Consumers' Council has to be repealed. There is in fact no prospect of recovering the losses in the foreseeable future. So to carry them forward in the accounts 372 would be pointless as well as discouraging to morale.
The intention of both Government and Corporation is that B.S.C. should become profitable as quickly as possible. The Corporation have agreed that as a matter of policy their objective should be to earn a profit in 1973–74 and, so far as the inherent uncertainties of the steel industry permit, to maintain a reasonable profit thereafter. In order that the Corporation shall not be hampered in achieving this objective, and shall have an adequate operating reserve, Clause 1 provides for a reduction of up to £350 million in B.S.C.'s capital. First, this will enable the Corporation to write off the losses—estimated at up to £250 million—which it is expected to have incurred by March. 1973. Secondly, it will enable B.S.C. to have a reserve, as manufacturing industries normally do. This would be available to meet exceptional costs and other contingencies. It should subsequently be maintained at an appropriate level out of profits. The balance available for this purpose after writing off losses would be £100 million.
As the White Paper on the Bill makes clear, these proposals for the reconstruction of B.S.C.'s capital are based on professional advice. They will enable the Corporation's financial position to be put on a sound basis as soon as possible and in particular before entry into the European Coal and Steel Community, when the Corporation will need to meet competition from other European steel producers from a broadly comparable basis. Two hundred million pounds of the capital reduction would be made from the Corporation's public dividend capital of £700 million, and up to £150 million from outstanding long-term loans. It is appropriate that the reduction should apply to both dividend and loan capital.
I should emphasise that the Government will retain control of the application of the sums by which dividend and loan capital is reduced. A direction will be made under Section 17(4) of the Iron and Steel Act 1967 requiring the equivalent of the written off sums to be credited to the Corporation's general reserve and requiring that this money shall not be applied from the reserve in order to write off losses or for any other purpose, except in accordance with further directions. 373 The reduction in public dividend capital will have immediate effect. It will give the Corporation the benefit of a substantial reserve without delay and thus fulfil one of the main objectives of the Bill.
The timing and amount—up to the total of £150 million—of release from liability to repay long-term loans would be determined by the Secretary of State, with Treasury consent. As the White Paper makes clear, it is the intention, before agreeing to write off any part of the £150 million into reserve, to set in the spring of 1972 a financial objective which will take account both of the findings of the current review and the Corporation's next five years' financial and development forecast. The combination of a high rate of investment—made all the more necessary by low investment in earlier years—and a low rate of earnings has inevitably increased B.S.C.'s need for external finance.
Clause 1 therefore provides also for an increase in the Corporation's borrowing powers from their present limit of £650 million to £1,250 million. This raises the limit by £600 million, but the proposed release up to £150 million from existing indebtedness means that the maximum effective increase in borrowing will be up to £750 million. Outstanding borrowing from the National Loans Fund amounts to £358 million, in addition to temporary facilities guaranteed by the Treasury totalling £170 million—£528 million in all—and it is likely that the present limit of £650 million will be reached in the first part of 1972. The proposed new borrowing limit provides for what is likely to be required for fixed investment and working capital up to 1974, after taking account of the likely level of internal financing. It allows for the high levels of capital investment this year and next, most of which will have to be financed by borrowing, as well as for the investment of £255 million, based on B.S.C.'s own estimates, for which allowance is provisionally made for 1973–74 in the 1971 Survey of Public Expenditure. So the Government are likely to come to Parliament for increased borrowing powers in about two years or so from now, and there will be opportunity for further Parliamentary discussion then.
374 In short, Clause 1 represents a realistic approach to the current financial position and prospects of the British Steel Corporation. The purpose of Clause 2 is to ensure that the existing legislation is not interpreted in a way which would impose an unreasonable limitation on the commercial freedom of the Corporation in its efforts to achieve profitability and rationalise its structure. The clause makes it clear that B.S.C. is not bound to carry on iron and steel activities to a greater extent than it sees fit. Section 3(l)(a) of the 1967 Act could be interpreted as requiring B.S.C. to maintain the supply of every type of iron and steel product for which there is a demand irrespective of circumstances and without regard to its own interest. We believe, and the Corporation believes, that this is an unreasonable burden to place on an industry which is expected to achieve profitability as soon as possible. The effect of the clause is, however, only to clarify the duty to supply which still remains.
The clause also removes any doubt there may be about B.S.C.'s freedom to dispose of any iron and steel assets that it does not wish to retain. This could help to preserve jobs that might otherwise be lost where the Corporation's only other course would be to close down the concern. There is a power of disposal in Section 2(4) of the 1967 Act. This power is qualified in that it can only be exercised if, in the Corporation's opinion, it would facilitate the proper carrying on of the Corporation's iron and steel activities. Taken in conjunction with Section 3(1)(a), this qualification might be interpreted as limiting the Corporation's power to dispose of iron and steel assets. There is, of course, no doubt about its ability to dispose of assets which are not used for or in connection with iron and steel production. The clause therefore clarifies the Corporation's freedom to dispose of iron and steel assets and interests in pursuance of the Statement on June 28. It does not give the Government power to direct the disposal of iron and steel assets.
My Lords, this Bill takes steps that are most necessary if B.S.C. is to be put on a sound footing and to become profitable, as we intend. But to make it possible for them to do so, we must ensure on the one hand that it is not hampered 375 by the burden of past losses or by unreasonable restraints on its commerri;g1 freedom, and on the other that it has the finance necessary for modernisation. These are the objectives of this Bill, which I commend with confidence to your Lordships. I beg to move.
§ Moved, That the Bill be now read 2a. —(Lord Drumalbyn.)
§ 6.24 p.m.
§ LORD DELACOURT-SMITH
My Lords, we are grateful to the noble Lord for the way in which he has explained the provisions of this Bill. It deals of course with an industry and a public corporation of the greatest importance for the economic health of this country. Although it is a small Bill it is an important one, and it embodies in its general provisions arrangements which we on this side of the House are not disposed to challenge. It proposes a capital reconstruction, and the extension of borrowing powers, which we regard as appropriate.
The noble Lord, in introducing the Bill, very naturally and properly made reference to some of the general factors which at the moment have influenced the financial and economic position of the Steel Corporation. I should like, in just a few minutes, to refer to some of those factors for which the Government have a degree of responsibility and which have played their part in producing the current position of the Steel Corporation from which this Bill, in so large a part, derives. I am bound to observe that the Government have not really kept their pre-Election promise to reduce the involvement of the State in the nationalised industries, in which connection they particularly referred to the steel industry. Perhaps the undertaking was in somewhat ambiguous terms, but I think it was generally taken as meaning that the Conservative Party, if elected as Government, would reduce the interference in the way in which the nationalised industries conducted their day-to-day affairs and would leave the Boards charged with their administration free to use their commercial judgment.
I do not think it can be denied that, in the case of the steel industry there has been a good deal of interference and intervention by the Ministers concerned. 376 Nor can it be denied that some of the Ministers concerned particularly with the steel industry are among those who, by their previous declarations—and declarations made before they became Ministers—had shown themselves to be possessed of a rather marked doctrinaire hostility to nationalisation and nationalised industries. This is a factor that inevitably makes us on this side of the House a little suspicious when we look at the terms of Clause 2 of the Bill now before us, particularly when we bear in mind some of the actions of the Government in respect of other spheres of nationalised industry where they have in one way or another insisted upon the disposal of public assets.
Clause 2 was put to us in a very persuasive way by the noble Lord, Lord Drumalbyn. He emphasised that it was intended merely to clarify the position so far as the responsibility for supply was concerned, and to clarify the entitlement of the British Steel Corporation to dispose of iron and steel assets if the Corporation believed that such a step was appropriate for them to take. That of course, so far as it goes, is fair enough. But I hope the noble Lord will be able to give us an assurance that no kind of pressure, direct or indirect, will be placed by the Government upon the British Steel Corporation in any way to act under this clause against its own judgment, and that we may be firmly assured that this is solely a question of enabling the Steel Corporation to use the commercial judgment of the Board concerned with running it.
There are some factors which have contributed to the situation in which this capital reconstruction of the Corporation has become advisable, and they are factors for which the Government have a very substantial degree of responsibility. The noble Lord has referred to the fall in the demand for steel in the current year, and the consequent reduction in production. Of course this cannot be dissociated from the effect which the policies of the Government have had upon the general level of economic activity. A higher level of economic activity stimulated by wiser Government policies would have maintained the demand for steel and so enabled the Corporation to maintain its production.
377 A second factor has been the interference of the Government in the pricing proposals of the British Steel Corporation. For myself, I do not see anything objectionable, in principle, in a Government's making a decision of this sort which interferes in the pricing policy of a nationalised industry. We know that in this case the Government compelled the British Steel Corporation to halve the price advance which it thought it was appropriate to seek. As I said, I have no objection, in principle, to such action as that, provided it is clearly recognised by the Government for what it is—an act of subsidy to British industry as a whole, by enabling British industry to secure its steel at a price lower than that which the Steel Corporation thinks it is economically and financially justifiable to charge. If such a Government action is seen and avowed as an act of public subsidy to industry in general, then we know exactly where we are.
But what is objectionable is a situation in which the Government claim, as some Ministers have appeared to me to do, to know the British Steel Corporation's business better than the Corporation itself knows its own business, and to have argued that to seek so substantial a price increase was not in the Steel Corporation's own interest. Secondly, I think we should avoid the objectionable situation in which the Government, having held back the price increase sought by a nationalised industry in order to give a subsidy to industry in general, then turn the deficit which results from that into a basis for criticising the nationalised industry itself, or for allowing their supporters to criticise that industry. Whatever may be said, there can be no doubt that the decision, whether it was right or wrong, whether it was justified on the right grounds or on the wrong grounds, was a decision by the Government which materially contributed to the present financial position of the Steel Corporation.
Thirdly, the British Steel Corporation has been adversely affected by the change from investment grants to investment allowances, as I think is made clear in the latest Report of the Steel Corporation for the year 1970–71, where, referring to this matter, the Corporation state that it will not benefit substantially from the proposed changes in the method of cal 378 culating allowances on capital expenditure in replacement of investment grants, and will suffer considerable reduction in cash flow. Here, again, one may debate at some length the relative advantages of the two systems, but what is not open to serious debate is that this change in fiscal policy in regard to assistance for investment has operated adversely in the case of the British Steel Corporation. I am bound to say, and we must all recognise this, that the problems of the steel industry and of the Corporation will be increased—to what extent we cannot at the moment say—by the present grave industrial crisis which has been produced by the lack of foresight and the lack of leadership which the Government have shown.
This brief debate, like the somewhat longer debate which immediately preceded it, is perhaps also overshadowed by the question of entry into the E.E.C. I am not to-night going to press the noble Lord to try to develop at any length the implications of entry into the E.E.C. for the British Steel Corporation. This is a topic to which we shall probably return on a number of occasions, when in due course your Lordships' House is considering the whole legislative process which—I am inclined to borrow a phrase used earlier by the noble Earl, Lord Shannon—it is possible may arise, dependent upon certain eventualities later this evening. But, certainly, whatever may be the future relations between the United Kingdom and the countries of Europe, the health and well-being of the steel industry will remain of very great importance indeed for the whole United Kingdom economy, and it may well be that on some later occasion we shall wish to pursue this matter and seek a broader discussion of the problems of the industry. But we should not regard it as appropriate to seek such a wide discussion at the present time and on the present Bill, the general purposes of which, as I have indicated, we on this side support.
§ 6.36 p.m.
§ LORD DAVIES OF LEEK
My Lords, it is not my intention at this hour to keep the House very late, but I wish to take about four minutes of your Lordships' time to stress two or three vital points in relation to this small Bill. Despite 379 the fact that it is a small Bill, its repercussions can be very extensive. Those of us who were bred and born on the Welsh hills had a peculiar kind of life at one time. Those of us who were small farmers may have had miners and steelworkers on our farms, and, anywhere between the Brecon Beacons and Swansea an old shepherd might be working on the mountains on a Welsh farm, like Under Milkwood, when suddenly the entire farm would be lit up by the opening of the mighty furnaces in the Welsh steelworks. The poetry and magic of that when we were youngsters was something that used to attract us. We were very proud of the people who worked in the mills, as well as of those on the hills and on the farms.
In those days, private enterprise was quite an easy thing to go along with. To-day, the lesson of public ownership is hitting us more and more. Here we see both Labour and Conservative Governments perpetually forced to come to the country and say that for public ownership of the mines, of steel and of all these other enterprises we must get more money. We have had an admission tonight that throughout the world, even in the countries that are in the front of private enterprise, even in countries such as Japan who believe in the apotheosis of private enterprise, there are slumps and terrific drops in steel output. The fact is that the day has ended when, all the time, we can make steel, coal, gas, electricity and these vital shock absorbers in modern productive forces a subject of perpetual Party differences at every General Election. The steel industry needs equanimity and a certain long period of transition. Here I know what I am talking about.
It is the same with the military. When there are changes in Defence policy every three or four years, no sound Defence policy can be built up. No sound public enterprise can be built up if, every three or four years, there is likely to be a change of approach when a new Government comes in. Never mind the beautiful logarithmic scales and graphs of the professors of economics, which I used to try to understand; and never mind the slide rules which they use to come to wonderful theoretical answers. We often 380 forget that those who make steel, cut coal or produce animals on the farm are people, but we are now forced in 20th century economics—and this happens even in America—to subsidise mines and steel, and hidden subsidies exist throughout the entire world of private enterprise. In other words, far from the old Labour and Socialist approach being dead, the truth more and more is that in certain large enterprises its philosophy is proving itself. Therefore, all I am saying is this. Is it not time that, constructively, we got down to looking at industries such as these?
That brings me to my last two points. In Clause 2 there is the right to dispose of assets. But if the boys who deal in bulls on the Stock Exchange are looking around and buying they may think that this part of the steel industry is right for private enterprise; and one of the dangers that we may have here if we do not have Government control and if we do not watch what is taking place is that the richer pieces of our public enterprise in steel could be sold off to private enterprise. We saw the same, pathetic thing, on a very small scale, in Carlisle. There, the pubs were successful financially, and so the Government sold them to the brewers because they could make a bit of profit. In other words, I hope that both Conservative and Labour Governments—and I think this is dawning on the world—will realise that in the case of these mighty industries (even shipbuilding is too big now for Cunard to raise capital) we have reached a new era in man's progress by way of production. In that era, whatever scoffing took place 20, 30 or 40 years ago, public ownership has a rightful place. Once we acknowledge that, it should be left, without doctrinaire approaches by both sides of the House, while we are trying to build up an economy which can stand the shocks of the 20th century.
§ 6.42 p.m.
§ LORD ROBERTHALL
My Lords, I apologise for speaking at this late hour. I had not intended to speak, and had not put my name down, but in his speech the noble Lord, Lord Drumalbyn, referred to a matter of great interest to me and I want to make just two very short points. He said, I think, that a 381 review is now being made of the future of the steel industry, and that a Statement is to be expected fairly soon. The two points that I want to make are, first, that it is to be hoped that the B.S.C. will be put in a position to go on with its planning as soon as possible. As of course everyone knows, the heavy plant industry in this country is at present very under-utilised, so that in real terms it would be very cheap to undertake the investment now, and it would contribute towards getting us out of our severe recession, which I think is deplored in all parts of both this House and another place.
The second point is that in discussing this review the noble Lord called attention to the very low level of steel consumption both in this country and all over the industrial world; and the noble Lord, Lord Delacourt-Smith, rubbed in a little the point about this country. I am sure that the Minister and his advisers are well aware that all over the industrial world at the present time there is a recession. It is an almost unique position. We are not the only country that is experiencing something we have not had in the post-war period; and we have not had a recession all over the place. My point is simply this. The Minister said that this low level of demand was being taken into account in future planning. It would be very unwise, I think, to carry out any future planning on the basis that anything like the present world level of steel consumption is going to be normal. It seems an obvious point, and I am sure that it has not escaped the Minister. But it is so important that I hope I may be forgiven for making it. Otherwise, I support the Bill.
§ 6.45 p.m.
§ LORD DRUMALBYN
My Lords, I am grateful for what noble Lords have said. If I may start by replying straightaway to the noble Lord, Lord Roberthall, I would thank him for his intervention. As I said, the purpose of the review is to establish the background against which particular proposals can be considered. He has taken the point that that background should not assume that the low level of world investment will continue. My Lords, this is not the intention. But one has to take account of the fact that so many nations, in estimating their steel 382 production for the future, had taken an extremely optimistic line; and probably the end result should lie somewhere between the two. The noble Lord also said that it would be cheap to make investment now. As I said in my opening remarks, the level of investment going on this year is higher than it has ever been before, and it will be higher again next year. I am sure that he will believe me when I say that these points have been very carefully taken into account.
My Lords, perhaps it may be a little more difficult for noble Lords opposite to take my word for things quite so much, and I fully understand their suspicions in these regards. But there was a certain contradiction that I detected between what was said from the Front and from the second Benches. I say straightaway to the noble Lord, Lord Davies of Leek, that of course we fully appreciate the need to get down and look at industry—and that is precisely what we have been doing. After all, we are dealing with an industry which, as the noble Lord, Lord Delacourt-Smith, said, is of tremendous importance to this country; where the amounts involved in investment are so great every year; and when all this money is in fact borrowed from the Government at the present time—we may have an injection of private capital later, at an appropriate time, and this may be a very good thing—it really is up to the Government to look very carefully indeed at the prospects for the future. When the Steel Corporation itself decides, in the light of this review, what the investment levels should be, it is the duty of the Government to consider the proposals very carefully before giving their consent. This is part of the duty of the Government. No one will disagree that this is the proper function of the Government; and it is a function which they are by Statute obliged to carry out. So I hope the noble Lord, Lord Delacourt-Smith, will not feel that in this Bill, at any rate, there is any implication of unnecessary intervention of any kind. I hope that is so, because I firmly believe that it is so myself: that the Government are only doing their duty in this Bill, and that the House would not expect them to abstain from this kind of very careful examination.
The noble Lord, Lord Delacourt-Smith, said that he did not disagree with 383 interference by the Government in pricing proposals. Nor should he, my Lords, because of course this is precisely what the Labour Government, our predecessors, did. The extent of the interference was quite considerable. I believe that it had an effect of some £50 million to £80 million. But he says that the interference must be clearly in the British Steel Corporation's own interest. Is that right?
§ LORD DELACOURT-SMITH
My Lords, perhaps I may clarify the point. The point I was seeking to make was that I had no objection if the Government wished to interfere with price policy, but if they wish to deny the British Steel Corporation the full extent of a price increase that it seeks, they should make it clear that by holding back the price advances they are in fact providing a subsidy to industry generally; and that if they are doing that they should not pretend to know the B.S.C.'s business better than does the B.S.C. Neither should they use the deficit, inevitably consequential on their own actions, as some kind of criticism of the industry.
§ LORD DRUMALBYN
Did the noble Lord say "Touché"? I would say, "Badly missed!"—because the Government have certainly never done this. The noble Lord seems to think that we can muzzle our supporters. I do not think that he can muzzle his supporters, either. Criticisms may arise of this kind—
§ LORD DELACOURT-SMITH
My Lords, I am not for a moment asking the noble Lord to seek to muzzle his supporters. I am asking only that he and his Ministerial colleagues should perhaps sometimes defend the nationalised industries rather more vigorously against their supporters.
§ LORD DRUMALBYN
My Lords, the noble Lord does not know what goes on—I trust he does not—in the Committees of the Conservative Party; but he has quite a good point. The fact remains that the cut in proposed prices was done on the recommendation of the Consumer Council. It was they who suggested that the prices should be 384 halved. The consequences are plain to see. The Government accepted that recommendation because they regard as one of their first duties the containment of inflation. I think that that is quite fair. I do not think one need conceal that in any way. I hope the noble Lord will accept it.
The noble Lord then went on to investment allowances. Of course, it is true that if you make a loss you do not get the benefits of investment allowances. But one of the purposes of the Bill is to ensure that the British Steel Corporation will become profitable. When they become profitable they will then be able to write off the investment allowances against what they have spent. This is the long view. I agree that in the meantime the cash flow is reduced; but again this is one of the things this Bill is helping with.
The other point the noble Lord made was that to some extent the present plight of the British Steel Corporation cannot be dissociated from Government policies. Once again one of the main objectives was to keep down the rate of inflation.
Also I think one has to bear in mind that the level of investment has not been held back, so far as we are concerned, in the steel industry. So far as the investment programme is concerned, it has been allowed to continue. I take the point of Lord Davies of Leek that this should not in any way be a Party political matter; and I do not think it was. One must realise that when such an enormous organisation as the B.S.C. is taking over, it takes them some time to try to get their plans right because—and he is right—these plans take a long time to mature. It could be four years from the time the scheme is conceived to the time when it is completed; and after that its effects run for at least another 20 years.
I am glad that the noble Lord welcomed this. I understand his suspicions. I can assure him that they are not justified in the case of Clause 2 any more than they are in that of Clause I. So far as the capital of the British Steel Corporation is concerned, the B.S.C. itself was in full agreement; so far as the restructuring of the industry was concerned, the negotiations for restructuring are entirely in their hands. With those assurances I hope that noble Lords will be 385 prepared to give a Second Reading to this Bill.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.