STEELWORKS CLOSURES REVIEW (Hansard, 19 February 1975)

§ Lord LEE of NEWTON
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick)
My Lords, the British Steel Corporation gave no estimate of increased costs to their ten-year strategy as a result of the Closure Review. Most of the plants given an extended operating life as agreed with the BSC were profitable. Moreover, the steel these plants can now produce will be needed until new development becomes fully effective. There might well be cost penalties if we were to delay the introduction of new plant in order to reprieve older works, but that is not our intention. However, the time taken to bring large new plants into full operation was one of the factors which lead me to recommend deferment of some closure plans.

§ Lord LEE of NEWTON
My Lords, I thank the noble Lord for that reply. Can he give any estimate of the basis upon which the iron and steel consumers have stated that this Review will mean an increase of from 20 per cent. in the price of steel, or say why the official spokesman for the Opposition in another place stated that it is a strategy of holding up the investment programme? Also, can the noble Lord estimate the cost that was incurred when the last Government put a stranglehold on the BSC's development programme while they waited for advice from an American firm which they had employed on this subject?

§ Lord BESWICK
My Lords, I have no idea at all where the Chairman of the Consumers' Council obtained that figure. I am quite sure that the Chairman of the British Steel Corporation, from whom I received absolutely uninhibited co-operation and to whom I have paid my thanks and respects, would have given some figure during our discussions if any such figure was in his mind. I 280 am seeing the Chairman of the Consumers' Council about this matter in due course. As to the second part of my noble friend's question, it is a fact that the delay in the original agreement of the ten-year strategy no doubt added to costs.

§ Lord ROCHESTER
My Lords, is the noble Lord aware that, shortly after he announced in this House the result of the Interim Closure Review, the Chairman of the British Steel Corporation was reported to have said that it would have been much better for those employed in the outdated steel works to be found more fruitful employment elsewhere?

§ Lord BESWICK
My Lords, I understand that the Chairman of the British Steel Corporation made a number of comments. What I have said reflects the views that were given by him during the course of the long discussions we had. I again pay my tribute to him for the co-operation which he is giving us towards finding other jobs for those who will inevitably be displaced.

§ Lord DAVIES of LEEK
My Lords, will my noble friend make it absolutely clear that in the City of Stoke-on-Trent, part of which I had the honour to represent for 25 years, we appreciate the craftsmanship of the workers at the steel works at Shelton Bar; and that by keeping it open we have an economic plant where the workers are of the top type who will not let the Government down but will economically produce steel for the future?

§ Lord BESWICK
My Lords, I am grateful for what my noble friend said. I read criticism, again, that the decision about Shelton was facing backwards and leading to an uneconomic operation; whereas, in fact, the recommendation for a modern electric are furnace, plus the enthusiasm of the workers concerned, will undoubtedly give a most successful and profitable operation.

§ Lord DOUGLASS of CLEVELAND
My Lords, my noble friend spoke about closing down profitable plants. Is there any sense in closing down a works such as Shotton which has made a profit all the time I have known it, and which has paid wages and given conditions equal to any in the industry, on the basis of the argument that only coastal plants can 281 be profitable in the future. Will my noble friend indicate whether the coastal plant at Llanwern has ever made a profit in the decade during which it has been in operation, and whether there is any sense in investing more and more money in a plant of that character and closing down a plant like Shotton, where profits have been demonstrably good in the past and, so far as one can see, will be good in the future?
If I may ask a supplementary question, in Germany they obviously have the problem that they do not have any deep water ports for the importation of iron ore. Therefore, they are importing via Amsterdam where they are pelletising. Is it not possibe—

§ Lord DOUGLASS of CLEVELAND
My Lords, I will come to the question; I always do! Is it not possible for a pelletising process to be introduced in this country along the lines of the process introduced in Amsterdam, in order that the social upheaval occasioned by the closing down of these plants may be avoided in this country? If I may add a further supplementary question—

§ Lord DOUGLASS of CLEVELAND
My Lords, my difficulty is that if I ask a question in this House to which the Opposition object, they always shout, "Order, order"and pay little attention to the arguments which I am putting forward.

§ The LORD PRIVY SEAL (LORD SHEPHERD)
My Lords, my noble friend has given me the opportunity to intervene. This is not a time for argument; it is a time for putting Questions. Noble Lords opposite were restive; equally, I think that they might have been restive on an earlier occasion this afternoon. A degree of latitude was then given. Perhaps my noble friend has now gone slightly beyond the latitude that was previously extended to one noble Lord. I wonder whether my noble friend will allow my noble friend Lord Beswick to answer the question. If he thinks it is necessary to do so, he may then put a short supplementary question.

§ Lord BESWICK
My Lords, my noble friend, with his great experience, is quite right. There have been industrial difficul- 282 ties at Llanwern which have made it impossible to exploit the full potential of that works. As I have stated, the economics of the Shotton operation are now being considered more carefully, and we shall certainly bear in mind what my noble friend has had to say. So far as the direct reduction pelletising plant is concerned, this possibility was in our minds when the British Steel Corporation agreed to the Shelton Bar electric arc furnace. Undoubtedly this furnace will make possible the more economic use of scrap.

§ Lord DOUGLASS of CLEVELAND
My Lords, may I follow the noble Lord's Answer with a supplementary question. I bow always to the directions of the Leader of the House, and if he tells me to do so I shall sit down. According to information which has been supplied by the Chairman of the British Steel Corporation, labour relations in the iron and steel industry are deteriorating rapidly. If one had watched what is happening—

§ Lord DOUGLASS of CLEVELAND
My Lords, I shall come to the question. Noble Lords opposite should not jump up too quickly. If noble Lords had watched the television programme last night on what is happening in Ebbw Vale, they would have seen the purport of my question.

§ Lord SHEPHERD
My Lords, I must say to my noble friend that he is going a little too far. May I ask him to put his question in an interrogative form and then my noble friend will be able to answer it.

§ Lord DOUGLASS of CLEVELAND
My Lords, I shall now put my question very precisely. After the television programme last night on what is happening in Ebbw Vale, is my noble friend aware that much is left to be desired in terms of labour relations in the iron and steel industry?

§ Lord BESWICK
My Lords, I am sure that improvements can be made. Undoubtedly, in dehumanised large works such as Llanwern, new techniques are 283 necessary, and the British Steel Corporation are trying to develop these techniques. So far as the television programme about Llanwern is concerned, although I did not see it I am told that it was entirely one-sided and did not give a true picture of the situation there.