UK Steel Industry (Hansard, 19 December 2000)

§ The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)
My Lords, government Ministers and officials maintain close and regular contact with Corus on a number of issues and will continue to do so. The Government were deeply concerned by the job cuts announced by Corus earlier this year and they are playing their part in assisting the steelworkers affected by helping them to find new jobs. The Government are fully aware of Corus's announcement on 5th December that further restructuring was inevitable. Ministers are maintaining a close dialogue with the company and will continue to monitor the situation closely.

§ Lord Islwyn
My Lords, does the Minister appreciate that since British Steel merged with the Dutch concern Hoogvens about 14 months ago to form Corus there has not been much harmony or business success? Thousands of British Steel jobs have 632 already been lost, with not a single job loss in the Netherlands. That rationalisation to be nearer European markets is being carried out under the subterfuge that Britain is not in the euro. Does the Minister appreciate that steel has always been regarded as a basic industry of strategic importance to the nation? Does my noble friend also agree that if Corus closed the steelworks at Llanwern it would be little short of a national scandal?

§ Lord Sainsbury of Turville
My Lords, as far as I am aware the current problems of Corus have nothing to do with the fact that it joined the Dutch company a few years ago. There have been 680 redundancies in the Netherlands, although more have occurred in the UK, due to the structure of the plants in the two countries. Although the steel industry is going through a difficult period, it remains one of the most efficient in the world and is a key part of the British economy.

§ Lord Brookman
My Lords, I declare an interest as someone who for many years represented those whose jobs are currently at risk. Does my noble friend agree with me and Members of another place as well as trade unions that it is imperative that a round table conference be convened to thrash out a strategy to save both jobs and communities that are under threat? Does the Minister also agree that the items on that agenda should include electricity prices, the climate change levy and local rates which are a tremendous burden on the steel industry? Does my noble friend agree that that would be looked upon favourably by those whose jobs are currently threatened?

§ Lord Sainsbury of Turville
My Lords, the Secretary of State for Trade and Industry and the Prime Minister, who recently met MPs representing the steel group, are very well aware of the concerns of both the industry and its employees. I am not certain that a round table would contribute anything to the process. There have been detailed discussions about all the issues which have been raised: the climate levy, electricity prices and the euro. As I hope I indicated in my first Answer, government Ministers and the Prime Minister are very well aware of the serious situation in this industry.

§ Lord Elton
My Lords, can the Minister confirm or deny the allegation made in this Chamber about a fortnight ago that Railtrack is ordering replacement rail in lengths which cannot be produced in this country and, therefore, must be imported? Does that not bear on this situation?

§ Lord Sainsbury of Turville
My Lords, while everyone may have doubts about Railtrack's purchasing requirements, where it purchases its rail must be its decision. Presumably, Railtrack does that to obtain the highest quality and the best price.

§ Lord Ezra
My Lords, does the noble Lord agree that the steel sector is not the only part of manufacturing that is being assailed at the present time 633 and that the car industry and many others have been going through a very difficult period? Therefore, is it not appropriate that this House should look in greater depth at the whole manufacturing sector? If the usual channels agree, can that not be done by setting up a Select Committee?

§ Lord Sainsbury of Turville
My Lords, it is true that some parts of manufacturing industry are going through a difficult time, but other parts, which tend to be the higher value added sectors, are doing quite well. The most recent figures show that manufacturing output has increased. Manufacturing industry is a key part of our economy, and it is appropriate for this Chamber constantly to review its performance and what action should be taken upon it. I am sure that the usual channels will take that into account.

§ Lord Hoyle
My Lords, does my noble friend agree that he should not dismiss so lightly the idea of convening a round table conference on this vital industry? Will my noble friend undertake talks with the company about the fact that, surely, in future we should produce long, not short, rail?

§ Lord Sainsbury of Turville
My Lords, I shall pass on to the Secretary of State the view that there should be a round table conference. He has already considered the matter and does not believe that it would add to the current discussions. However, I shall ask my right honourable friend to reconsider the matter.

The Viscount of Oxfuird
My Lords, does the Minister accept that, as explained in The Times some months ago, in manufacturing a decline in the machine tool industry is the first indicator of a serious problem in steel consumption? The machine tool industry is the first to suffer at the hands of accountants in any company. Does the Minister agree that that area should be looked at very closely?

§ Lord Sainsbury of Turville
My Lords, it is already clear that in the past year or so there have been problems about the demand for steel, and that is part of the current troubles that face the steel industry. That situation is due in part to the low level of demand by some of the other industries which make great use of steel products.

§ Lord Stoddart of Swindon
My Lords, will my noble friend look closely at the suggestion of the noble Lord, Lord Ezra? Is it not a fact that manufacturing industry as a percentage of GDP has fallen from 32 per cent in 1973 to under 20 per cent today? Is the Minister also aware that in 1985 this House set up a Select Committee to look at the state of manufacturing industry, which has declined even further since then? Does my noble friend agree that it is about time another Select Committee considered what can be done to resuscitate that sector?

§ Lord Sainsbury of Turville
My Lords, the falling proportion of total GDP represented by 634 manufacturing industry is not only a problem for this country; it is a universal fact for all developed countries where there has been a consistent decline in manufacturing. There are good reasons for that. The two main ones are: first, increasing productivity of manufacturing; and, secondly, as people's incomes rise they spend proportionately less of it on physical goods. Therefore, in every country, including the most successful at manufacturing, there has been a decline. The situation in this country is not very different from that in every other developed country of the world.
We should continue to look at the position of manufacturing industry and what we can do to help, but it is quite wrong to think that there is something wrong about the proportion of manufacturing going down or that we are in some way in a different position from other developed countries.