§ 2.56 p.m.
§ THE EARL OF LAUDERDALEMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether, in reviewing the investment programme of the British Steel Corporation, they have based their studies on an annual growth rate for the United Kingdom economy, as forecast by the Organisation for Economic Co-operation and Development in 1970, at 3.2 per cent. or as forecast in the United Kingdom Financial Statement and Budget Report 1972–73, at 5 per cent.
§ LORD DRUMALBYNMy Lords, as announced by my honourable friend the Minister for Industry in another place on Monday, the Government and the British Steel Corporation have accepted the conclusion of the recent review that in planning its investment programme the B.S.C. should aim at a productive capacity in the range 28 to 36 million ingot tons by 1980. The underlying assumptions made about demand for steel are consistent in the medium term with the 5 per cent. growth of gross domestic product referred to in the Budget; and in the longer term they are consistent with a rate of growth of gross domestic product substantially higher than we have had since the war. There will of course be some flexibility in the Corporation's programme to vary the timing of expansion of its capacity.
§ THE EARL OF LAUDERDALEMy Lords, in thanking the noble Lord for that reply, may I ask him whether he does not consider it a euphemism to say that the B.S.C. have agreed, when the British Government are both banker and shareholders and therefore the B.S.C. have to do as they are told? Secondly, may I ask the noble Lord whether he would agree that each 1 per cent. of extra national growth means about an extra 7 million tons annual capacity? If that is so, the upper limit supposedly agreed, or imposed, is not consistent with the 5 per cent. growth rate.
§ Lord DRUMALBYNMy Lords, on the first point, the British Steel Corporation have of course been members of the Joint Steering Group and agreement was readied on their conclusions. On the second point, it is generally recognised that the rate of steel growth will not be as fast as the rate of gross domestic product as a whole either in this country or in other countries, and a growth rate of 5 per cent, in the medium term is not inconsistent with a growth rate of, say, 3½ per cent, for steel.
§ THE EARL OF LAUDERDALEMy Lords, further to that reply, may I ask my noble friend whether he will say that the idea of the balancing of an extra 1 per cent. a year growth rate with 7 million tons a year extra steel capacity is right or wrong?
§ LORD DRUMALBYNMy Lords, I am afraid that I am not a computer. or even very skilled at mathematics. May I take that away and study it?
§ THE EARL OF LAUDERDALEMy Lords, may I ask my noble friend whether he will be so kind as to do that? May I also ask him whether he will not agree that for many years the steel industry has suffered under-investment, and that it now requires to catch up if we are to match our competitors in the Europe of my noble friend's desire?
§ LORD DRUMALBYNYes, my Lords, but I think that the Government's plans take this into account. After all, last year there was an allocation for investment of £242 million; this year £265 million, and the following year and up to 1975/76 the average amount of investment available will be £255 million.
§ THE EARL OF LAUDERDALEMy Lords, without wishing to prolong this discussion unduly, may I ask my noble friend whether he would agree that those figures are quite small compared to the sort of figure of £1,000 million required for a major new steel plant?
§ LORD DRUMALBYNMy Lords, the figures may be quite small, but they are very much in excess of what has been invested in the industry for over ten years, and I should not have thought that they were inconsiderable in relation to future investment.