HL Deb 05 March 1980 vol 406 cc251-6

2.47 p.m.


My 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 has been the cost to the British taxpayer of the losses of the British Steel Corporation in each of the last five years.


My Lords, the British Steel Corporation's trading results since the financial year 1974–75 have been as follows: 1974–75 £73 million profit;1975–76 £255 million loss: 1976-77 £95 million loss;1977–78 £443 million loss;1978–79 £309 million loss.

In their interim statement for the half year ending 30th September 1979, BSC recorded further losses of £145.6 million and expected losses in the second half of the current financial year to exceed those in the first half. Over the period as a whole the Government have provided BSC with some £3,800 million to finance both expenditure on capital account and the revenue deficits.


My Lords, while thanking the noble Viscount for that reply, is it not a fact that in the last five years each tax-paying family in the land has provided £190 towards subsidising BSC? Does not this make it all the more urgent that we should get a settlement and increase productivity, so that it no longer needs three men to produce a ton of steel in this country whereas it takes one man to do the same in the most competitive countries like Japan and the USA?


My Lords, I agree with my noble friend. The figure he quotes is approximately correct. As high as £200 has been mentioned as the cost to the average family over the period. The productivity statistics which my noble friend quoted, are perhaps those compared with the most efficient countries like Japan and the USA;but the productivity is nowhere near in line with major European countries either.


My Lords, may I put this to the Minister: While we all know that the Conservative Party's heart bleeds for the taxpayer, we have never heard any sympathy for the thousands of men who are now put out of work. In fact they have a new euphemism for unemployment;they call it redundancies. The latest word is "wastage".

Several noble Lords: Speech!


My Lords, it is not a speech: it is a question. What does the Minister think about comparing those two matters?


My Lords, as regards the question of the noble Baroness, Lady Gaitskell, I think that my right honourable friend in the other place and I in this place have on many occasions, since the unfortunate strike took place, not only asked that the whole House should support the earliest possible end to the strike, but have pointed out that, if we had extra money which we could raise from the taxpayer for this purpose, or if we felt it desirable to siphon it from other more desirable purposes, it would not be a kindness to the average worker in the British Steel Corporation. In view of the equipment which they now have it is an absolute necessity, for the continued employment of those who remain in British Steel, that the industry becomes competitive without delay rather than avoiding the issue any longer.


My Lords, can my noble friend give us any news as regards the EEC saying two days ago that it might be able to help to provide a solution to the strike?


My Lords, I have up to date information on the subject. I would remind the House that on 13th February I gave details of the very large amounts of money, under all the European schemes, which this country has obtained to help alleviate the problems of steel closures. There is a proposed possible new scheme which would come under new social measures from the Social Fund which might provide in the first year of operation £20 million. My right honourable friend and co-Minister was in Brussels yesterday to explore the degree to which that extra money would be forthcoming and would be able to help in the re-adaptation, and the measures necessary to try to soften the blow of the loss of steel jobs. It is not money which can in any way help as regards the British Steel Corporation's finances and what it can afford in its pay offer.


My Lords, can my noble friend confirm that investment in new plant and equipment necessary for the competitive state of the British industry inevitably leads to fewer jobs for the same quantity of production? Does he agree that that is also experienced by our competitors abroad, but that most of them, unfortunately, have been able to tackle their difficult problems of redundancy sooner and more realistically than we have done in this country? Moreover, will my noble friend confirm, in relation to what the noble Baroness, Lady Gaitskell, said, that, if we had started sooner, most, if not all, of the redundancies might have been voluntary rather than compulsory and associated with large payments?


My Lords, I think that if we had moved more determinately sooner, in accordance with the targets set by the Secretary of State for Industry in the previous Administration, it is indeed possible that our share of a depressed world market for steel products might be higher by now and more jobs might be able to be retained.


My Lords, does it not follow that the primary responsibility for solving this problem rests with ourselves and not with the EEC?


My Lords, that is absolutely correct, and I hope that both the size of the figures and the purpose of the fund which has been much reported in the media, will make clear that the noble Lord is completely correct.


My Lords, will the noble Viscount bear in mind that when noble Lords talk about our competitors in Europe, many of those competitors have subsidised coal, and indeed, are subsidised considerably? We are not comparing like with like.


My Lords, the question of the subsidies for coking coal in European countries has been well examined and I have explained it in this House on a previous occasion. Those subsidies do not in any way remove the overall truth that we are simply not competitive and that that is the major reason for the problem.


My Lords, will my noble friend indicate what amount of the large total figure which he gave represents payment to compensate for the operating deficit of the industry, and what proportion that amount is of the total earnings of the industry for that period?


My Lords, I cannot give the detailed figures for which my noble friend has asked, but I shall let him have them.


My Lords, would the noble Viscount he good enough to explain this conundrum: He has told the House that the Government want the industry to become more competitive, which means, of course, increased production;but at the same time he tells us that we have depressed markets. In view of the Government's policy, will he be good enough to tell us what is to happen to the steel which is to be produced as a result of the improvement in our competitiveness? Is it the case that we eat it, or do we drop it into the Atlantic?


My Lords, the noble Lord asked precisely the same question on a previous occasion and I shall give him, as far as I can remember it precisely the same answer. There is no question but that an improvement in productivity—one must say an overdue improvement in productivity at this time—will result (indeed British Steel's plan does result) in fewer people being employed in order to meet the market. But, as soon as British Steel becomes competitive the chances of increasing its share of the world steel market, where we have lost our share, become immediately real, and from then on I would very much hope that the plant which British Steel proposes keeping in operation will enable more people to be taken on again. There is also the fact that the market has been depressed.


My Lords, is my noble friend aware that many people will share the concern of the noble Baroness, Lady Gaitskell, for those who will be made redundant;and for that same reason will he make certain that no part of the £460 million allocated as redundancy compensation for those unfortunate people, is frittered away by using it as bribe money to call off the strike?


My Lords, the Government have been consistently firm about the figures concerned, and for 1980–81 the cash limit of £450 million, which includes both capital and redundancy payments, will be used for those purposes and for no others.


My Lords, as the original Question dealt with the cost to the taxpayer, will the noble Viscount tell the House the cost to the taxpayer of what is now fast becoming the longest stoppage post-war;and will he indicate when the Government will have the courage and the decency to intervene in order to stop what is something completely damaging to the whole of our industry?


My Lords, the noble Lord assumes that the cost of the present strike, which is undoubtedly bound to be very real at the moment to the British Steel Corporation, will be borne by the taxpayers. It is the Government's view that the extra costs of the strike at the current time will merely result in a need for British Steel to take the same actions as any other private corporation, and to ensure that the extra costs are met by a reduction of stocks, by (if necessary) disposal of assets, and—I hope not, but if necessary—by the loss of even more jobs. Therefore, I hope the House will join in asking that without delay the two parties should get together and resolve this dispute in the way which is perfectly possible, bearing in mind the amount of money that has been put into this industry.