HL Deb 05 November 1979 vol 402 cc681-92

6.53 p.m.

Lord CAMPBELL of CROY rose to ask Her Majesty's Government whether they will make a Statement about the serious situation facing the steel industry in Scotland which has arisen because of inability to use the iron ore terminal opened at Hunterston five months ago. The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I am asking the Government whether they will comment on the serious situation which has arisen in the main steel-making area in Scotland, that is Ravenscraig, at Motherwell. As part of modernisation and improving efficiency the iron ore terminal on the coast at Hunterston has been constructed. It was completed and formally opened five months ago, but it is still not in use. Iron ore has had to be brought up the Clyde in small vessels to general terminus quay, and it is estimated that about £1 million a week has been lost by the British Steel Corporation as a result. Fortuitously, the subject now being raised in this House is reaching a stage of positive progress, judging from the news over the weekend. The Minister who is replying this evening, my noble friend Lord Trenchard, may be able to inform us on the very latest developments. I do not press the Government to make a Statement this evening on this matter. I do recognise that there are still decisions to be taken. In particular, it seems the Government are being asked to designate Hunterston for the purposes of a dock labour scheme. So that large progress appears to have been made but a settlement has not yet been completed.

At the outset, my Lords, I must make it clear that it is my intention to avoid any interference in the dispute between the two large unions representing the transport and steel workers respectively which has unfortunately prevented the manning of the terminal, involving about 60 jobs, and so caused the delay. I am well aware of the case which each union has been defending; I am well aware of the principles they each seek to protect and the importance which they attach to them. I respect the purpose of both unions. I shall not be taking sides; indeed, I would find it very difficult to choose if I was compelled to.

What I aim to do tonight is to draw attention to the disproportionate amount of damage that can be done to our country's economy and to employment prospects by situations of this kind. We must surely find ways of solving these problems without severely wounding ourselves in the process, because with modernisation and technology, similar situations are likely to arise in the future, and in other industries besides the steel industry. Through one pair of eyes the circumstances at Hunterston can be seen simply as an extension of a salt water jetty to a steelworks. Through other eyes they may be seen as the beginnings of a port. The weekend news indicated that the TUC and the unions concerned worked for many hours on Saturday, the day before yesterday, and for all I know into the early hours of Sunday, to reach the basis of an agreement. These efforts are to be warmly applauded. It is in that spirit, I suggest, that such problems should be tackled in future, and I hope at an earlier stage.

In the present case, although the apparent deadlock has been reported from time to time during the last five months, too few members of the public seemed to be aware of how much was at risk; too few, certainly in Scotland, realised that the industrial projects at stake were ones which most of Scotland heard about at the times in the past when they were first considered. They were projects being pressed by the bodies representing industry in Scotland, by the trade unions in Scotland and by other bodies concerned with Scotland's economic wellbeing. Those projects had been in the headlines at those times.

My Lords, let us first consider Ravenscraig. In 1958, after weeks of controversy, campaigning and canvassing for competing sites in different parts of the United Kingdom, it was decided that a strip mill should be built at Motherwell. Many Scots had felt that this was important because industry in Scotland had during the controversy expressed strong views publicly on the need to retain substantial steel-making capacity in Scotland. The Scottish Trades Union Congress along with many other Scottish organisations, as I recall those days, were wholly in favour. There was a general welcome, therefore, in Scotland, in the headlines as much as anywhere else, for the decision when it was announced in 1958. I know that some people with special knowledge of the steel industry were less than enthusiastic with that decision and thought it was political. None the less Scotland was given the benefit of any doubts in that decision and there was much rejoicing North of the Border as a result.

Later, in 1972, when the reorganisation of the British steel industry had to be carried out, the special position of Ravenscraig was underlined publicly with great emphasis, and as a result it became one of the few centres selected for the concentrated modernisation of steel-making in the United Kingdom. Millions of pounds were allocated to its further development, again to the acclamation of the Press and public in Scotland. This is the same Ravenscraig, the very same steelworks, now dependent on the new ore terminal, and the same steelworks that has consequently been threatened by months of delay. Indeed, the British Steel Corporation announced a few weeks ago that it would soon have to suspend operations there if a settlement could not be reached. That would have meant 9,000 jobs directly threatened, and I am sure many too indirectly threatened in that area.

I turn to Hunterston. It became clear in the late 1960s that a terminal in the deep sheltered water there would improve Ravenscraig's efficiency. In particular it would make use of the trend to large ships, to ore carriers; and that trend has indeed continued since. Because it is in an area of considerable beauty and amenity in the Firth of Clyde, a public inquiry was held which included other proposals also for Hunterston.

The Reporter—and I should explain that that is the name given North of the Border to the official who is an Inspector in England and Wales—submitted his recommendation in 1970. In December of that year the Secretary of State, acting within the strict requirements of the Planning Acts, accepted the Reporter's recommendation that the ore terminal could go ahead. There were, as I have mentioned, local objections to any indus- trial development at that location, which were understandable. But the decision received a wide welcome in Scotland as again providing another opportunity for the modernisation of a flourishing Scottish steel industry with the good effects expected for the users of steel and other industries in Scotland. The Reporter had recommended that the ore terminal go ahead, although he did recommend against certain other proposals at the inquiry.

There is in Scotland a particular organisation which works to achieve the best economic conditions; I refer to the Scottish Council for Industry and Development. Membership includes industrialists, businessmen, trade unionists and university staff. The Scottish Council had been advocating use of this deep water resource and was understandably pleased with the decisions being taken.

Earlier in 1970 a report had been published, which the Scottish Council had commissioned, under the supervision of Sir William Lithgow, of the shipbuilding firm Scott, Lithgow, and Professor Nicoll of Strathclyde University. That report was called Oceanspan and it presented a development strategy for increasing the maritime resources of Scotland, especially where deep-water berthing was possible. It rightly caught the imagination of many in Scotland nine years ago, in addition to those concerned with trade and industry in their daily lives. The Hunterston ore terminal project fitted neatly into that strategy.

I am very glad that the noble Lord, Lord Lee of Newton, with all his experience, is to speak after me. I know that at least two noble Lords on the Labour Benches would have been here and would probably have contributed from their participation and interest in these matters in the past. Unfortunately, they cannot be available in London today. I hope that the five months' delay really is now at an end and that it has not mortally wounded the Ravenscraig steelworks. I applaud again the special efforts made in the last few days by the TUC, and I should like to give encouragement to all who are still engaged in getting the ore terminal manned and in action as soon as possible.

I have reminded the House that the projects at Ravenscraig and Hunterston have been regarded in the past as important at the times when they were being decided upon. It should accordingly be appreciated how much has been at risk during these last five months. If anything is to be gained from this sad experience, let it be a determination to settle these matters in good time before new plant or new methods come into operation in similar circumstances, when they occur in other places in our country.

7.6 p.m.

Lord LEE of NEWTON

My Lords, I know that we all join the noble Lord, Lord Campbell of Croy, in hoping that this long delay is now coming to an end. I do not disagree with most of what the noble Lord has said to us. He has concentrated on Scottish steel, but it is true to say that throughout the world steel industries are in dire trouble. Indeed, if that which the economists tell us comes about and we are going into an even deeper recession, those steel industries will be among the first to feel the effects of such a recession.

Indeed, when one looks at the situation in Scotland, there are very few industries that are not in trouble and that is most disappointing when one thinks of the huge sums which have been invested in Scotland as a result of development area policy. One wonders what would have happened there if those sums had not been invested in years gone by.

The noble Lord reminded us that this is essentially a demarcation dispute. They are always an extremely difficult type of dispute for us to cope with. In recent years we have managed to eliminate a great many of them. The noble Lord knows as well as I the situation of the shipbuilding industry—an industry which at one time used to have a great number of "who drills the hole?" type of disputes. The reason we very rarely hear of any demarcation disputes now in that industry, is that the two principal unions managed to amalgamate and we do not find demarcation disputes existing within one union—at least, not as a rule. That was a great advance in eliminating demarcation disputes in the shipbuilding industry.

I am glad that the noble Lord did not blame altogether the two unions concerned in the Hunterston dispute. I think he said that if he had to take a decision as to where to lay the blame he would not know which to choose—and nor would I. That is common ground. The last thing that I hope any of us would charge them with is either having a type of Luddite mentality or simply being bloody-minded.

It is the case that the steel industry has a very good record indeed as regards the solution to the problems of that industry. The Iron and Steel Trades Confederation can be very proud of its record, especially when we look at the problems that it has had in the last few years, and the problems which face it now.

The trouble is that there is no way in which we can solve this problem by amalgamation. We have here one union which is concerned specifically with the steel industry.

The other union is a general workers' union which spreads over a great many of our industries. There is no basis upon which we can solve that. Indeed, I think I have said a few times in this House that we suffer from the fact that we pioneered trade unionism in Britain. The modern concept of how to solve many of these problems is by industrial unionism in which we have one union for one industry. It is ironic when we think of the fact that the most strike-free industries in Europe are to be found in Germany and that it was the TUC which did the groundwork to put that country on its feet as regards trade unionism. If we could start from scratch, we would do precisely the same as they do.

It is also the case that if we look at the problems of these two unions, we find that both the steelworkers and the dockers have lost a vast number of jobs in the last few years. That is quite inevitable with the march of progress. But when one looks at why they are so keen about this kind of issue, one must look first at the fact that both of them have seen their numbers diminish rapidly and that in Scotland as a whole, and certainly in the Clyde area, there is precious little alternative if one loses one's job in one's industry. It is a very great problem for people who see their jobs in danger of disappearing and who know perfectly well that, if they are one of the unlucky ones, there is not much hope of getting another.

The noble Lord, Lord Campbell of Croy, mentioned the activities of the TUC Steel Committee. I join with the noble Lord in congratulating that committee upon the work it has done. I shall not go into all the details, because it is fairly well known that it wants to allocate certain types of jobs to the dockers and certain types of jobs at Hunterston to the steelworkers. I know that this will present the Government with certain problems, including the problem of scheduling and those connected with the Dock Work Regulation Act.

As I understand it, there are fears that if the Government agree to the kind of thing which the TUC are suggesting, other ports may well ask for the same facilities. I hope that the Government will not allow that to prevent a settlement being reached at Hunterston. The noble Lord, Lord Campbell of Croy, gave a graphic description of what will happen if we do not reach a settlement now. Ravenscraig itself is in danger; 9,000 jobs could go. I do not want to go into the history of Ravenscraig and whether or not it should ever have been built; as the noble Lord knows, the experts in steel differed on that. That is water under the bridge. Nine thousand jobs are in danger there. Because of the problems in the steel industry, particularly at Corby, where some 6,000 people are threatened with redundancy, the Iron and Steel Trades Confederation is thinking in terms of taking industrial action. If that industrial action comes about—and I hope it will not—it will certainly affect the future of Ravenscraig.

I have a feeling that the British Steel Corporation is trying to progress too rapidly. I had a great deal to do with the creation of that British steel agency and I know perfectly well how keen it is to become viable. But to believe that, at a time of world recession, when orders are not available, you can have a huge industry and that you can say, "Next year we must break even on profitability", is the wrong approach by the BSC. Indeed, if the Government are saying to the BSC that they must break even next year, the Government are also wrong.

The alternatives to the kind of settlement which we are discussing at Hunterston, and therefore at Ravenscraig, are too shocking to allow us to play about with small issues. The people of Scotland are entitled to feel that, now that the TUC have found some means of a solution to the Hunterston issue, the Government must not stand on ceremony and must not argue about whether or not the dockers will be registered. To me that would be very wrong indeed.

I, therefore, join the noble Lord in hoping that we are at the end of what has been a very difficult issue indeed. The noble Lord told us that we must find a way to solve these disputes before they hurt us so badly, and I join with him in that. I have suggested that where there is this kind of dispute and there is a possibility of amalgamation of the unions, that is the answer. I have tried to point out that that solution is not available at Hunterston. Therefore, we must consider that the solutions which have been successful in other areas and industries are not available there. I hope that the noble Viscount, Lord Trenchard, will inform his right honourable friend that we in this House are extremely concerned about the future of Hunterston, that we want the unions concerned to reach agreement, and that we do not want to see a huge capital investment wasted as it has been wasted so far. We cannot see any future in using the old methods of bringing in ores, with the huge on-cost that that means when it is handled. That is no good. If we are to live in this world, we must use modern methods. As I have tried to point out, the trade unions concerned have in many respects met that position. I appeal to the noble Viscount to ask the Government not to stand on what I consider to be comparatively minor issues as against the huge problem which faces the people of Scotland. If his right honourable friend has not yet taken a decision on this, I hope he will tell him that this House is of the opinion that he should agree to the settlement proposed by the TUC.

7.17 p.m.

The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard)

My Lords, I welcome the opportunity provided by my noble friend Lord Campbell of Croy to say a few words on the very difficult position of the Scottish steel industry. I am afraid that I shall not satisfy either him or the noble Lord, Lord Lee of Newton, in the amount that I am able to say at the moment in relation to the proposed settlement which the TUC negotiated. I appreciate all that they have both said about the appalling consequences of the current situation and the hope that they have both expressed that the current situation may be nearly at an end.

All I can say at this stage is that I welcome the agreement reached between the TGWU and the ISTC on Saturday under TUC auspices about manning arrangements at the terminal. This is, of course, the issue which has so far stood in the way of bringing the terminal into operation. As has been said, the General Secretary of the TUC has written to the Secretary of State for Employment setting out that agreement and asking him to confirm that it is his intention to initiate the appropriate procedures for Hunterston to be designated a steel port. I understand that Mr. Prior started a meeting with the trade unions concerned at 6 p.m. tonight, so the noble Lord will appreciate that my right honourable friend has not delayed in any way in trying to settle this issue. I have to point out, as indeed the noble Lord, Lord Lee of Newton, recognised, that this designation, or proposed designation, of Hunterston as a scheme port raises some wider issues, and I believe that he recognised that. I have to say to him that I feel he may have swept them slightly on one side. I do not in any way want to intimate by saying that that my right honourable friend may not be able to reach a method of accepting, or accepting in some form, the TUC agreement; but I do not think you can totally sweep issues which affect another major troubled area in our economy on one side and say, "Don't let this issue be affected by detail". I hope that we will now see a settlement of this vexed issue, but do not let us underestimate some of the wider issues that the settlement now proposed involves.

I understand only too well the feelings of all those who have worked long and hard to try to design a new future for a major Scottish steel industry. My noble friend has outlined very clearly the steps, starting in 1958 which led to the creation of the over £200 million Ravenscraig investment which doubles their capacity for steelmaking, or the nearly £100 million investment in the Hunterston terminal, which is essential to its use. I think perhaps he has not mentioned his own important part in those many negotiations and discussions in the past.

He drew my attention to the Clyde Port Authority Bill in 1973. I became aware on reading it of the enormous strength of the environmental case. As a boy I used to collect mussels and unsuspecting limpets off the rocks at Fairlie, so I well understand the feelings of the environmental lobby about the development of Hunterston. However, all that was overcome with the support of all the parties, which my noble friend has mentioned. Or we hope it has been overcome, because for six months, as has been said, the whole of this grand design has been held up. As has also been said, and as was said by British Steel Corporation in a Press notice recently, the cause does not lie in any dispute between BSC and its employees; it lies in an inter-union dispute between the members of the Iron and Steel Trades Confederation and the Transport and General Workers concerning the arrangements for manning some 60 jobs at the terminal.

I am informed that British Steel explored all possible ways of preventing this dispute affecting the Ravenscraig situation, but they came to a conclusion—and nobody has been able to suggest any other adequate conclusion—that neither in cost nor in quality, nor in quantity, because Ravenscraig was designed to double production in Scotland, was there any way that they could keep Ravenscraig going past the end of November if the Hunterston situation is not solved. So we hope very much tonight that all is not still at risk.

Like my noble friend, and like the noble Lord, Lord Lee, I do not wish to go into the rights or wrongs of the dispute of the two parties. Furthermore, I think I understand from my industrial background the important humane points that the noble Lord, Lord Lee, made, particularly about the problems of declining industries. But I have to ask him and the House: can we, in our present economic situation, afford these kinds of demarcation disputes affecting 60 people and lasting for so long? One has to say to him that whatever the difficulties of organisation, this surely had to be solved earlier.

He has mentioned the crisis facing the steel industry. I recently returned from Germany, and while he is of course right that there are major problems for steel production the world over, the situation, due now to the fast adoption of new methods in Germany, is picking up faster there than in this country. How can we strengthen the appeal not only to those involved in this dispute, which may, we hope, be over very soon, that in the country's present condition we really cannot afford losses which the Scottish division of British Steel had in 1978–79 of £83 million, and £20.8 million in the first quarter of this year? What the figure will prove to be—my noble friend has suggested £1 million a week as being lost—in the second and third quarters we have yet to see, with some degree of horror.

My Lords, I hope you will not feel that I am being controversial in an area where we need to appeal to people's better nature about the overriding needs to face up to the economic facts of life, but I think I have to take the opportunity to say that the Government have been accused of excessive cuts, which, as we have sought to point out, are not really cuts but an effort to stabilise as a whole the public sector until the retracting wealth-creating sector stops retracting and starts to increase again. We have been criticised for undermining a compassionate and caring society with these cuts, and with other measures, to try to stabilise the total expenditure in the public sector. How much compassion and care could have been provided with the extra public money that has had to be found in these last six months! A policy of caring and compassion exercised by a bankrupt State, which is what we were heading for, is I believe about as useful for those in need of compassion and care as—and with the need to observe the decorum of this House I must use a Latin term—a sparrow's passing flatus; I understand that is the medical description for the noisy puff of wind that a sparrow which has eaten too much might emit.

In terms of whatever is necessary to prevent this kind of thing either continuing or occurring at any other time, can we ask people really to understand the basic connection between the adopting of new and efficient techniques in industry, whatever the problems of a human nature, and our ability to improve what have become very inadequate social services generally?

Again, I wish to thank the two noble Lords who have contributed to this discussion and echo with them the hope that very soon we shall see Hunterston and Ravenscraig in full and more economic production.