§ 2.49 p.m.
§ Lord ORR-EWINGMy 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 what plans they have for improving productivity in the steel industry.
§ Lord WINTERBOTTOMMy Lords, the Government believe the main responsibility for improving productivity in both the public and private sectors of the United Kingdom steel industry rests with the managements and the workforces and their representatives concerned. Improvement of productivity is one of the objectives of the Industrial Strategy, and is being studied by the Iron and Steel Sector Working Party, on which both the public and private sectors of the industry and the trade unions are represented. The Government's recent White Paper British Steel Corporation: The Road to Viability recognised the need for very substantial improvements in management and manpower practices in the Corporation over the next few years to achieve viability through international competitiveness.
§ Lord ORR-EWINGMy Lords, is it not a fact that in January 1976 a joint committee of the BSC management and the TUC Steel Committee agreed to reduce the very serious overmanning in the 774 industry, so that it was internationally competitive? Did not this agreement result in the setting up of 100 productivity schemes? May we be told what has happened in the past two and a half years to reduce the overmanning and so make BSC internationally competitive? How many people have been made redundant and paid compensation?
§ Lord WINTERBOTTOMMy Lords, the noble Lord is quite right. A joint BSC-TUC Steel Committee statement recorded agreement on reductions in manpower where necessary to achieve international standards if the industry wants to be competitive in the 1980s and it set out the conditions under which they were to take place. Progress was held up under Phases I and II of the pay policy, when meantime payments could not be introduced. Since 1st August 1977 more than 100 self-financing productivity schemes involving a de-manning element have been proposed. Provided the current pay policy year's guidelines are observed, the introduction of these schemes is a matter for the British Steel Corporation and the unions.
§ Lord WYNNE-JONESMy Lords, can my noble friend say how many steel industries in the world are internationally competitive at the moment?
§ Lord WINTERBOTTOMMy Lords, I could give details of a table to the House, but it is fairly depressing. So far as I can find out, none is competitive.
§ Viscount TRENCHARDMy Lords, can the noble Lord tell us a little about the Government's and the Steel Corporation's diagnosis of the reasons for the increasingly poor productivity record of the Steel Corporation over the past 10 years in relation to our competitors abroad? Do they know what the main reasons are?
§ Lord WINTERBOTTOMMy Lords, 10 years is a long time. The Iron and Steel Sector Working Party plans to undertake a detailed comparative study of the efficiency of certain British Steel Corporation works, as well as similar works in Germany and the Netherlands. The terms of reference are:
to examine relevant variables in specific processes in matched pairs of steelworks in the 775 United Kingdom and Europe; to assess the reasons for differences in performance; and to report back to the Sector Working Party with proposals for action.This study will be carried out by a small team comprising trade unionists and British Steel Corporation management. I believe that that is a much more valid system of assessment than is jobbing back over 10 years, a period during which much has happened in the world outside.
§ Lord LEE of NEWTONMy Lords, is my noble friend aware that since nationalisation a huge amount of modernisation has taken place in the British Steel Industry? Taking that into account, can he say what level of production we should have had to endure had we not had nationalisation?
§ Lord WINTERBOTTOMMy Lords, this is one of those awful questions where one has to give what the alternatives would have been had we not taken certain action. What is interesting here is to compare two sets of figures of output per man and loss per tonne of liquid steel, which show that the losses seem to be equivalent to those of any major steel producing unit.
§ The Earl of LAUDERDALEMy Lords, can the noble Lord tell us how many redundancies have been effected in the steel industry in, say, the past year with a view to de-manning—to use his phrase—the industry?
§ Lord WINTERBOTTOMNo, my Lords; but if the noble Earl will table a Question I will answer it.
The Earl of SELKIRKMy Lords, can the noble Lord say whether he thinks that he will be able to sell the steel which is being made at present?
§ Lord WINTERBOTTOMMy Lords, part of the problem is that it is a very peculiar situation. Yes, most certainly we can sell the steel that we are making.
§ Lord ORR-EWINGMy Lords, does not the noble Lord agree that the Government cannot entirely opt out and leave this responsibility to the BSC and the trade unions? The BSC is at present losing over £450 million of taxpayers' 776 money every year. It is not right for a Government to leave the taxpayers in this parlous position. Something should be done to increase productivity, so that it does not take two Britons to produce the same amount of steel that one German can produce.
§ Lord WINTERBOTTOMMy Lords, the noble Lord is overstating the problem. The BSC is not losing over £450 million every year. This is a jeu d'esprit, if I may use a French expression. BSC expect to make a loss of about £175 million in the first half of the current year, without allowing for contingencies.
§ Lord GLENKINGLASMy Lords, does the noble Lord not remember that, as I recollect, every time a chairman of the steel industry has forecast a loss it has been doubled by the end of the year?
§ Lord WINTERBOTTOMNo, my Lords, I have a greater confidence than the noble Lord. I should like to make a point arising from what my noble friend mentioned earlier. If we take the actual loss per tonne on the international scale, we find that the French private sector lost £42 per tonne; the German public sector lost £26 per tonne; and the United Kingdom public sector lost £25 per tonne. We are not doing too badly in the international league of losses in what is a very difficult world situation.
§ Lord HAILSHAM of SAINT MARYLEBONEMy Lords, what about the Japanese private sector?
§ Lord WINTERBOTTOMMy Lords, that was a fast one.
§ Lord HANKEYMy Lords, if the Government were to lay on a supply of the escort vessels which the Navy need so desperately, would that not greatly help the steel industry? Would not some of the cost be off-set by the reduction in unemployment, by insurance, and other factors? Would not our status in NATO be greatly improved?
§ Lord WINTERBOTTOMThat is another question, my Lords.
§ The Earl of ONSLOWMy Lords, will the noble Lord please tell us how much how many Japs are being paid per week 777 to produce one tonne of steel, and will he compare that with how many British workers are being paid how much per week to produce one tonne of steel here?
§ Lord WINTERBOTTOMMy Lords, the noble Earl said either "chaps" or "Japs"—
§ The Earl of ONSLOWJaps.
§ Lord WINTERBOTTOMThe figures regarding Japs are not available, my Lords.
§ Lord DAVIES of LEEKMy Lords, is my noble friend aware that some of us consider that the questions which have been asked today are certainly inept? Is he further aware that unless we start studying the implications of the micro-circuitry of the electronic ship—which will put thousands and thousands out of work, unless we get a plan for the future—we shall be living and arming like Sparta?
§ The Earl of LAUDERDALEMy Lords, does the noble Lord agree that whatever else is inept, redundancy payment of £15,000 to £17,000 per head may very well be inept in view of the impact that that has on the economy elsewhere, particularly on the private sector?