HL Deb 11 February 1981 vol 417 cc220-2

4.10 p.m.

The Earl of Gowrie

My Lords, I hope that it will be to the convenience of your Lordships if I now repeat a Statement, which has been made in another place by my honourable friend the Minister of State for Industry, on the British Steel Corporation's borrowing powers. My honourable friend's Statement reads as follows:

" With permission, I will make a Statement on the borrowing powers of BSC. I will be introducing today the Iron and Steel (Borrowing Powers) Bill 1981, which will increase the British Steel Corporation's borrowing powers by £500 million. This Bill will enable the corporation to continue in operation on reaching the current statutory limit of its existing borrowing powers in the course of the next few weeks.

" As the House will know, the Government received the British Steel Corporation's corporate plan shortly before Christmas. Decisions on the plan involve the consideration of very large sums of taxpayers' money, and will affect the position of a number of private sector companies whose areas of operation overlap those of the corporation. My right honourable friend will be making a further Statement to the House when the Government have reached their conclusion on the corporate plan. At that stage, as foreshadowed in the Queen's Speech, the Government will introduce a further Bill, which will deal with the future of the corporation and its financial reconstruction.

" In view of the urgency of the corporation's need of increased borrowings and the essentially interim nature of the Bill which I am introducing, I hope that the House will facilitate its swift passage ".

My Lords, that concludes my honourable friend's Statement.

Lord Beswick

My Lords, in thanking the noble Earl for repeating that Statement, I should like to make the obvious point that rather more had been expected. It is really a holding Statement. Can the noble Earl say anything about the timing of the major Statement on the Government's decisions on the corporate plan? Will the noble Earl make it absolutely clear that the delay in making the major policy Statement is not due to some discussion about the line between the private sector and the public sector? Judging by what one reads in the newspapers, it would seem that there has been quite an organised campaign to try to show that the BSC fight-back has damaged the private sector, whereas I hope the noble Earl will be able to confirm that in fact the fight has really been against the manufacturer of imported steel. I ask him in particular to confirm that the delay in making the policy Statement is not due to any fresh decision about the area which it had been intended to allocate to the public sector.

Baroness Seear

My Lords, we on these Benches also wish to thank the Minister for repeating the Statement. I am sure he will agree that it is so much an interim Statement, there is so little flesh on the bones, that it is virtually impossible to pick the bones with him. However, we are glad to hear that some further information will be forthcoming shortly. We must wish the MacGregor reorganisation well, and since this is part of that reorganisation, we therefore welcome it. But at the same time we very much hope that it means that there will be a limit to the additional amount of taxpayers' money going into this enormously loss-creating enterprise.

The Earl of Gowrie

My Lords, I am grateful to the noble Lord and the noble Baroness for the way in which they have received the Statement. The point made by the noble Baroness, with which I am altogether in agreement, illustrates—and aptly, in view of the speeches of the debate which the Statements have interrupted—how very large and very problematic are these structural shifts in high-employing industries and how the problems that they are causing, as well as the solutions to them, are not new.

With regard to the question put to me by the noble Lord, Lord Beswick, about when the decisions will be made on the corporate plan, as the Statement said, decisions on the plan involve very large sums of taxpayers' money, and of course they will also affect the position of the private sector steel companies. Those are both matters that we shall need to consider very carefully. So I cannot say to the noble Lord exactly when the announcement will be made and when the new overriding Bill will be published, but obviously we shall treat this matter as being of the greatest urgency.

Lord Beswick

My Lords, in the meantime, may I repeat the question that I put to the noble Earl? Will he make it absolutely clear that the efforts that are now being made by the British Steel Corporation to withstand the penetration of the foreign steel manufacturer are not damaging the private sector? Will the noble Earl say that, although there has been cost cutting by the British Steel Corporation, the private sector in fact now has a little more of the total British market than it had a year ago?

The Earl of Gowrie

My Lords, I think that that is really a matter for Mr. MacGregor; and the Government have every confidence in the management of British Steel. But as I have said, very large public concerns, in employment terms, financial terms, and economic policy terms, are involved here and that is why we need some time to consider them.

Lord Peart

My Lords, I should like to say to the noble Earl that, whatever emerges, there must be a prosperous steel industry. So far the Government have done irreparable harm all over. I am rather surprised at that. After all, from the point of view of defence—which is dear to the hearts of some noble Lords opposite—if we have a run-down of steel, thus affecting industries involved in defence, that would be a tragedy.

The Earl of Gowrie

My Lords, with the greatest respect I must repudiate unconditionally what the noble Lord has said. He is well aware that one of the reasons why steel is in deep trouble all over the Western industrialised nations is that it employs a great many people—a great many more people than its productivity or the new technology warrants. All over the Western world we are engaged in a structural alteration of the labour market which will be with us for 20 years, and it does no good to sling mud at one side or the other while we are caught in this situation.