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Steel Industry (Closure Review)

Volume 885: debated on Tuesday 4 February 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.

I will, with permission, Mr. Speaker, make a statement about the steel review.

On 23rd May I reported to the House the procedures we had agreed, with those concerned, for conducting the review of the proposed closures of steelworks, which we had promised in the Labour Party's "Programme for Britain: 1973". My right hon. and noble Friend the Minister of State, Lord Beswick, undertook that review, and has now made an interim report, copies of which were made available to hon. and right hon. Members this morning, and I am circulating it in the Official Report. This report represents the first results of the most extensive and open examination of the plans of a public corporation that has taken place, requiring it to justify its proposals in detail in the light of its social responsibilities. The Government have accepted the conclusions in Lord Beswick's report, and hope they will also be acceptable to those who work in the steel industry and to the House.

We have carefully re-examined the capacity target of the corporation, set out in the previous Government's paper on BSC development strategy, about which many of my hon. Friends have been concerned. In the light of the review, the corporation proposes to accelerate its development strategy so as to achieve a capacity of 37 million tonnes a year in the early 1980s. This is as rapid an expansion as can be realistically expected in current conditions.

The plants covered by the interim report are East Moors, Hartlepool iron and steelmaking, Cleveland ironmaking, Shelton, Shotton and Ebbw Vale. Nothing announced today will pre-empt the decisions still to be taken on the BSC's proposals for Scotland or other cases still under review. For East Moors, we have secured the deferment of the closure by four years to not earlier than January 1980. At Hartlepool, the closure of iron and steelmaking will be deferred by at least two years until 1978. At Cleveland, the closure dates proposed by the BSC will be adhered to because the alternative employment is readily available at the BSC plants close by. As to Shelton, a new steel plant will be erected which will save about 800 jobs. The proposed closure at Shotton will be deferred at least until 1980–81, while further study is undertaken of the economics of modernised steelmaking there. At Ebbw Vale, we have accepted the BSC proposals for the closure of iron and steelmaking and, ultimately, of the hot mill. Production at the hot mill, as elsewhere, will be maintained until adequate supplies of replacement steel become available from other plants.

This review has therefore saved some 13,500 jobs for from two to four years or more at East Moors, Hartlepool and Shotton and has permanently saved the jobs of about 800 men at Shelton. Of the plants reviewed, the only closure now imminent is ironmaking and some of the steelmaking at Ebbw Vale. Discussions with the chairman of the corporation about the detailed phasing of redundancies and the provision of new jobs have already begun.

It is the Government's policy to ensure that resources are available to assist the provision of new employment and to improve infrastructure in the areas affected. We have also decided to ask the corporation to accept a special responsibility both in the phasing of redundancies and, to as great an extent as possible, for the provision of new job opportunities in steel-related and other projects. This latter concept, which I hope the House will welcome, needs to be examined and discussed more fully, but it could introduce a new dimension into redundancy problems in the public sector.

I am sure the House will welcome the announcement of the new developments at Shelton and Shotton. The House will remember that these were foreshadowed in paragraphs 57 and 49 of the Conservative White Paper "British Steel Corporation: Ten Year Development Strategy".

Will the Secretary of State confirm that full development at Port Talbot will not be delayed until the final decision about Shotton is taken, and will he say how many jobs will become redundant within the British Steel Corporation over the next five years?

The Secretary of State claims that the review has saved 13,500 jobs for between two and four years. That will cost the BSC at least £120 million. How will that be reflected in the accounts of the corporation, or does the right hon. Gentleman intend to give the BSC specific compensation for it?

The right hon. Gentleman claims that the corporation proposes to accelerate its programme to 37 million tonnes by the early 1980s. How can he claim that that is an acceleration when in paragraph 19(b) of the Conservative White Paper on the subject the corporation sets out a strategy for 36 million to 38 million tonnes by the first half of the 1980s, which was accepted in paragraph 29?

I will try to deal with the questions raised by the hon. Gentleman, and I am grateful to him for saying that he is glad to see that some jobs will be saved as a result of the review.

As I said, and as is made clear in the statement I put in the Library this morning, the closure proposals for Shotton are not only deferred but under further consideration. The relationship between Shotton and Port Talbot is one of the factors which are bound to come up in the further discussions.

As to the number of jobs forecast in the industry, I am bound to be speaking to some extent approximately because all the figures I have announced today are dependent on factors which are not entirely within our control. We are thinking in terms of 195,000 jobs in the steel industry in the mid-1980s but, because of the investment that will back them, they will represent much more secure employment than there would be in an industry which was not modernised.

On the question of the cost of deferring the closures, the hon. Gentleman should recognise that if the closures had proceeded at the rate indicated by the Conservative Government the imports of steel to this country or the loss of exports would have been very costly on our balance of payments.

Finally, on the capacity limit, we made clear at the outset of our discussions with the BSC that we did not set a firm capacity limit on the upward end of the wedge that had been identified by the previous Government, and the figure of 37 million tonnes, which I announced this afternoon represents the fastest realistic rate of acceleration in present world conditions.

Does the Secretary of State realise that, while Labour Members welcome the announcement about Shotton and East Moors, the statement will cause anger and dismay to the people of Ebbw Vale and North Gwent, for whom it represents the unacceptable face of nationalisation? Does the Secretary of State realise that it will be a devastating body-blow for North Gwent, which is already reeling from the effect of 700 redundancies in the last two months? Will my right hon. Friend tell the House how many redundancies he foresees in Ebbw Vale by 1st July this year and how many jobs he sees lost to Ebbw Vale by January next year? Has his Department worked out the overall job shortfall during those two periods?

My hon. Friend authentically speaks for his own area, and I accept that the passion in his voice and question genuinely speaks for his own people. The Ebbw Vale decision is forced upon us partly by the limit of capacity and the state of the blast furnaces, and that position has made it exceptionally difficult for my noble Friend in undertaking his review. The Government are, as my hon. Friend will have read from the statement, taking special measures which include the announcement today of a £12·6 million programme of factory development, land clearance, water and sewerage. The chairman of the BSC is also making a statement today about jobs that will be available on a tide-over basis, and my hon. Friend should not forget that there is development in Ebbw Vale on the tinplate side.

I must not seek to conceal from the House that the Ebbw Vale problem, particularly in the interim, is one of legitimate concern to those who live there, to hon. Members who represent the area and to the House. But, as the statement happens to correspond with the publication of the Industry Bill, it will not have escaped the notice of my hon. Friend that the National Enterprise Board, with considerable resources at its disposal, will have as one of its prime concerns the creation of jobs in areas of unemployment.

May I take the opportunity of telling the right hon. Gentleman that there is great appreciation for the way in which Lord Beswick carried out his difficult task?

Is the Secretary of State aware that the initial feeling of relief in North Wales will shortly give way to the deep anxiety born of uncertainty? Is he satisfied that steelmaking can continue at Shotton until 1981 with the existing open-hearth furnaces? Is not a massive capital investment necessary now if steelmaking is to continue at Shotton for a further five years?

The hon. Gentleman will recall the proposed fate of Shotton under the Conservative White Paper. I am grateful to him for recognising that my noble Friend Lord Beswick, in considering carefully the proposals put forward by the Shotton workers, has come out with a solution that may prolong the uncertainty, but uncertainty may be better than a certain closure in an area with difficult prospects for new jobs and close to Merseyside, where the chronic problem of unemployment is of concern on many grounds.

We recognise that in coming forward with final conclusions about Shotton we have to take into account the point made by the hon. Gentleman about the demand for fresh investment and to set it against other similarly unresolved matters about investment elsewhere. I think that what I have been able to say will go some way to reassure the people at Shotton.

Will my right hon. Friend accept that the communities which will benefit from his announcement appreciate the urgency with which the noble Lord has carried out the review? Is my right hon. Friend aware that his announcement has brought substantial relief to Hartlepool? The considerable investment proposed for the tube mills is welcome. Nevertheless, the deferment of iron and steel production carries with it a degree of uncertainty, and uncertainty is not good for a plant unit of this size. Is my right hon. Friend's Department willing to receive further representations to enable a more permanent solution for Hartlepool to be reached?

I am particularly grateful to my hon. Friend for being generous about the review and the way it was conducted, because it has not met everyone's point of view.

The plate mill decision has been deferred. There will, however, be jobs at Redcar, Lackenby, while the pipe mill investment of, I think, £25 million will bring special employment prospects. Meanwhile, there is to be a deferment until 1978 of the closures that had been anticipated. I feel sure that the Steel Corporation, myself and my noble Friend would be ready to continue to develop the relationship of trust and confidence we sought to build up during the review.

Will the right hon. Gentleman give the House an assurance that these decisions will in no way prejudice the future and fullest development of the Scottish steel industry?

That is said both in the statement I have circulated and in the statement I made this afternoon. I am grateful to the right hon. Lady for giving me the opportunity of repeating that.

Will my right hon. Friend accept that it is clear that both he and the noble Lord have made a real effort to minimise redundancies arising from the steel programme? Is my right hon. Friend aware that the steel workers to whom I have spoken in Scotland accept his assurance that nothing said today will prejudice consideration of the future of the Scottish steel industry? Is he further aware that his request to the corporation to accept responsibility for the provision of new jobs to replace jobs lost in redundancies marks a major innovation for the public sector? Does he realise that we look forward to seeing how this policy will be worked out in a Scottish context?

I repeat what I said to the right hon. Member for Renfrewshire, East (Miss Harvie Anderson) about Scotland. My noble Friend will be visiting Scotland with the Prime Minister. He has done his first round of meetings carefully. We thought it right not to delay the interim statement until we had the whole picture, because it was not necessary and would have prolonged the uncertainty. As for the proposal made in my statement about the BSC assuming a wider responsibility, I am glad, but not surprised, that my hon. Friend has welcomed this, because he played a notable part in urging such a policy upon it. I hope that, having got so far, he will continue to press this and have it more fully examined.

Is the right hon. Gentleman aware that I welcome any extension of steelmaking in the capital city of Cardiff? Does he accept that, without significant investment, there is a danger that the East Moors work force will cease to be viable by 1980?

The East Moors position—and I acknowledged this in my statement—represents a deferment. The hon. Gentleman will know that the Government have also made Cardiff a development area and doubled the regional employment premium. This statement must not, therefore, be seen in isolation. The statement I have made about East Moors and its future is still, as with these other closures, subject to replacement capacity. I hope that the fact that about 4,600 people have been granted a further deferment will make the problems of adjustment, which I do not underestimate, at any rate easier.

Does the right hon. Gentleman agree that the greater proportion of his statement puts off closures for periods of two to four years, rather than cancelling them? Can he say whether during that period the Government are prepared to have consultations with all workers in the industry rather than the trade union movement in the industry, since it is a fact that the directors of the Steel Corporation refused to negotiate with the workers' committee at Shotton, as opposed to the trade union movement there—and I am prepared to produce letters from the corporation to that effect? Furthermore, if the Government are to consider possibilities for retraining in these places may I ask whether the right hon. Gentleman has considered the possibility of the corporation obtaining grants from the EEC to help towards that end?

The provision for such help is there; I introduced the order which made it possible. The hon. Gentleman is right in saying, and I made this clear, that one of the results of the review has been to produce deferments. Deferment is important in that it gives time to create new jobs. Nothing has done more damage to the reputation of any industry than the idea that men are in some sense disposable.

The hon. Gentleman has done less than justice to the way in which my noble Friend conducted the review. It is true that there were problems at an early stage between the Shotton or Shelton action committees and the British Steel Corporation. There were certain problems associated with linking these consultations with the trade union movement at official level. These problems were all overcome at the tripartite meetings we had at the beginning when it was agreed—my noble Friend followed this—that there would be tripartite discussions with the BSC and the TUC steel committee at national level and discussions with Members of Parliament at every level in every area. The action committees were specially marshalled together with local authorities so that any problem of dignity or propriety in a trade union sense was overcome to allow these action committees to play their proper part with the local authorities in whose area they operated. This is a remarkable example of flexibility in consultation.

As a member of the Shelton Steelworks Action Committee for the past three years, five months and two days, may I thank my right hon. Friend for setting up this review? May I also congratulate him, as others have done by implication, on the choice of his noble Friend to undertake the details of the review? Is he aware that Lord Beswick combined, in the opinion of everyone who met him, a wonderful compassion and an analytical quality of mind that was most impressive? May I assure my right hon. Friend that we are grateful for this review and say that from Shelton we give the assurance that we will continue to be a highly profitable centre of strike-free production?

May I ask whether there is any time scale fixed for the investment in the new arc furnaces? Does my right hon. Friend agree that the quality of the work done by the Shelton Action Committee and others is impressive support for his thesis that it is time that workers played a much more active part in management?

I cannot answer the specific question about the timing of the electric arc furnaces. I will find out this afternoon and send a message to my hon. Friend. I am grateful to him for his tribute to my noble Friend, who has worked hard on this and has impressed everyone with whom he has dealt. If he were in my place now he would wish to express the words of appreciation I now express to the people at Shelton, Shotton and other places where the quality and constructive nature of their contributions to the future of the industry in which they work made a deep and lasting impression on those who met them, as I did during my years of opposition, when they came to the House. This certainly shows that we ought to be making greater use throughout industry of that constructive spirit wherever we can do so.

Order. This period is coming out of the time allotted to an important debate. I would ask hon. Members not to put questions which can be tabled in the ordinary way and, if they can, to refrain from general observations of a complimentary nature or otherwise.

Is the right hon. Gentleman aware that we on this side of the House give qualified welcome regarding Shotton and East Moors but view with dismay the future of Ebbw Vale? On East Moors and Shotton, will he say whether the Government will come to as early a decision as possible, and, in the interim, does he expect the work force to dwindle as difficulty in recruitment arises? In regard to Ebbw Vale, will he give an absolute assurance that the proposals made by the Welsh Council were taken into consideration and that they will be published in due course? Will he give an assurance that alternative jobs are now definitely on the cards and are not something at the end of a rather uncertain pipeline?

My right hon. Friend the Secretary of State for Wales says that the report to which the hon. Gentleman refers will be published. As for the position of East Moors and Shotton, the situation of the two cases is slightly different because Shotton is subject to further review, whereas in the case of East Moors we are discussing a deferment. I wish I could say—and no doubt this applies to every Minister—that every job that goes will be replaced by another job. That is not the case. I express, and I must repeat, that there is anxiety about the short-term position, even though the BSC and the Government have done everything they possibly can to meet the problems concerning the workers involved. We shall keep closely in touch with them during that period.

Does my right hon. Friend recall that on Teesside we have already suffered under the Conservative Government redundancies at least equal to most redundancies even foreshadowed in the previous proposals? In return for the acceptance by the workers on Teesside and their unions of those redundancies as part of the price of technological change, will he now give the go-ahead for full development at Redcar?

I cannot this afternoon go beyond what has been said about the Redcar developments which were announced some time ago. But I recognise that on Teesside, as in many other steel and heavy engineering areas, there has been a rundown over a period, and even with new job creation—and there are a large number of jobs for men in prospect in the area—this gives some people the feeling that we are running up a down escalator. But I assure my hon. Friend that what has been decided is designed to minimise loss of jobs, deferring where possible, and we are bringing in new instruments, including the National Enterprise Board, with these problems very much in mind.

What will be the cost to the taxpayer of the short-term deferment of the closures announced by the Secretary of State?

I cannot give the figure because the details of the Conservative Government's proposals for closures were themselves not realistic in the interests of the steel industry. The steel industry has not been producing steel at the rate required, and had these closures not been deferred there would have been a shortage of steel. Therefore, there is a gain to the economy as a whole by the measures which I have announced today. That factor also should be taken into account. We should also take into account the cost of paying people to do nothing, which does not make sense if one can possibly avoid it.

In arriving at the figure of 37 million tonnes for 1980, will the Secretary of State tell the House to what extent account was taken of the successful energy conservation campaign, which would ultimately have had an effect on the amount of shipping required, the size of motor vehicle, and the demand for plate, strip and sheet in the years that lie ahead?

I said that the target at the highest rate of acceleration was realistic in certain circumstances, but the hon. Gentleman will know that I am not, and am not purporting to be, the management of the BSC. There are many variables, such as the development of North Sea oil, energy conservation and the effect of the level of world trade on domestic and international markets for steel. The BSC board must take account of those matters as best it can.

The right hon. Gentleman made a statement about the deferment of closures in at least six areas of the steel industry. This has been essentially a social statement. Will he say what is the view of the British Steel Corporation about deferment of an economic regeneration in the steel industry?

With respect to the hon. Gentleman, he has got it all absolutely wrong. The fact is that we have managed to combine a deferment of closures with an equal development of BSC investment strategy, which has not been delayed in any sense. What is remarkable about my noble Friend's achievement is that he has been able to authorise the developments of coke ovens at Port Talbot and Redcar without its affecting his capacity to look at these particular closures. Therefore, although we have had to balance the long-term investment and expansion needs of the industry with social responsibilities, my noble Friend has found a solution that meets the needs of both. That is the achievement of the review.

No matter what assurances are given in the House today, is my right hon. Friend aware that nobody in Scotland will accept that the changes which are proposed today will have other than a detrimental effect on the future of the Scottish steel industry? Today's statement in the present political climate in Scotland is a political diaster.

My hon. Friend says that nobody in Scotland will accept it, but it depends on what he and other hon. Friends say in Scotland. If he and other of my hon. Friends leave the House today and say that what has been done will pre-empt the Scottish closure review, he will be accidentally misleading his fellow Scots, because my noble Friend who undertook the review did so against exactly the same background of initial cynicism that this was just a public relations exercise. I heard that said by many people in the first few weeks. It was not the case. The review I have announced today was not a public relations exercise. Hon. Members, such as my hon. Friend the Member for Flint, East (Mr. Jones), the Under-Secretary of State for Wales, and other Ministers, who have not been able to make public comment inside or outside the Government, have made powerful arguments that have been reflected in the review. What is thought in Scotland tomorrow may depend more on what my hon. Friend the hon. Member for Central Ayrshire (Mr. Lambie) says than on what I myself say.

In that case will the right hon. Gentleman reconcile the assurances about the Scottish steel industry which he gave to the hon. Member for Motherwell and Wishaw (Dr. Bray) and the right hon. Member for Renfrewshire, East (Miss Harvie Anderson) with the statement made to me in a letter by his right hon. Friend the Prime Minister, in which the Prime Minister said that he accepted that redundancies in the Scottish steel industry were inevitable?

Nobody, least of all I myself, has ever said that as a result of revised strategy one can avoid some change in the structure of industry. [Interruption.] We have never said that one can modernise a steel industry which had been denied investment which it needed for years without some human consequences. What we have to do is to reconcile the need for a go-ahead modernised steel industry with a proper sense of social responsibility and the development of instruments which should allow people to find other work. We shall do that in Scotland as we shall do it in England and Wales.

Will the Secretary of State accept that it is not sufficient to say that the Scottish steel industry is being considered? Will he accept that what is needed in Scotland is an integrated steel industry which does not merely form a part of the BSC but is geared to needs of Scotland itself?

I accept—I know enough about Scotland to know—that these feelings are acutely held by the Scots, and particularly by Scottish steelworkers. It would be a great tragedy if Scottish steelworkers were pitted against English and Welsh steelworkers. In the long run the future of those who work in the steel industry in Scotland, Wales and England and their security depend on a modernised steel industry. I believe that what we are seeking to achieve will combine all this with a proper interest in a vigorous modernised industry in Scotland.

The right hon. Gentleman said that 13,500 jobs were to be saved. Will he give the House his revised estimate of redundancies in the next five years? On the general question of redundancies, will he take the opportunity to pay tribute to the BSC management, which throughout the original proposals and these proposals have put forward views which it thought were in the best interests of all its work force in the long term? Finally, will he confirm that the BSC has already been carrying out considerable work on site clearance and other activities which provide opportunities for commercial interests to offer alternative employment opportunities? Is not the right hon. Gentleman's reference to Government initiatives in this matter a public relations exercise?

I am sorry that the hon. Gentleman spoilt his supplementary question, for I certainly agree with him in paying tribute to the BSC. The board's members put forward the management point of view as to what they thought should be done. I have never criticised them, and never complained that they put their views. But where so many jobs are at stake and where an industry's future is under discussion, the accountability to Parliament and to Members of Parliament of those who work in the industry is right and proper.

I cannot forecast the exact pattern of employment, because this is an interim report. It hinges on other matters which are not yet absolutely resolved. But the hon. Gentleman would be doing a grave disservice, even to the steel industry, if he were to imply that what has been announced today is the result merely of a public relations exercise. That is not true, as the figures show. Very large numbers of jobs are being kept open long enough, at any rate, to ensure that alternative job opportunities can be created, and some reversal of existing policy has been brought about.

I call the hon. Member for Henley (Mr. Heseltine) a second time, reluctantly, for one question.

Mr. Speaker, the question has been asked three times but it has not yet been answered: how many jobs are to be lost in the British steel industry over the next five years?

I have answered the question many times. This is an interim report. I cannot answer questions about the next five years until the review is completed and until the Scottish position has been examined, as I have said many times.

Following is the report:

STEEL CLOSURE REVIEW:

Interim Report by Lord Beswick, Minister of State, Department of Industry

In statements on 23rd May the Secretary of State for Industry and I announced the procedures we had agreed with the British Steel Corporation and the TUC Steel Committee for conducting the review of the proposed closures of steelworks which we had promised in the Labour Party's Programme for Britain: 1973.

2. Last year we accepted the Corporation's proposals for Stanton and Irlam as their arrangements for closure were already very far advanced. At Workington, with the closure of Bessemer steelmaking, the Corporation gave me assurances that the plant had a long-term future as one of their major centres of rail-making and that the coke ovens would be fully maintained pending decisions on their long-term future.

3. I have now completed my review of the Corporation's proposed closures of Ebbw Vale, East Moors, Hartlepool iron and steelmaking, Cleveland ironmaking and Shelton, but have decided that further study is needed of the proposed closure at Shotton. My review has not covered Bilston since the Corporation have put forward no proposals for closure there. Consultations on the BSC's development strategy in Scotland and their proposals for Hartlepool and Consett plate mills continue. The workforces concerned rightly wish to have further opportunity to present alternative proposals and this will take more time. To reduce uncertainty as much as possible I make this report to Parliament on the position now reached. Nothing announced today will adversely affect the review of the BSC's proposals for Scotland or of unfinished cases elsewhere.

4. In each case covered by the Report, I have held tripartite meetings with the BSC and the TUC Steel Industry Consultative Committee together with local representatives of the workers from each plant. I have met with the constituency Members of Parliament, with local authorities and other interested parties, and have visited each plant and had further discussions with the workers involved. I have been given every help and assistance by the Corporation, and I have been immensely pressed by the positive and constructive attitude of management, trade unions and indeed workers at all levels.

5. The review has been principally concerned to help the development of a successful and expanding steel industry, essential for the country as a whole and for all those who work in the steel industry, both providing the best prospects of long term employment for steelworkers and reducing to a minimum the disturbance to the life and livelihood of steelworkers and their communities.

6. We have considered the BSC's capacity "target" announced in the Command Paper 5226 of February 1973 to see if a higher target would help to save more of the plants the BSC propose to close. That target was equivalent to 35 to 37 million tonnes of liquid steel (after adjustment for developments in 1973). The Corporation now propose to accelerate their development strategy and to achieve 37 million tonnes a year in the early 1980s. Our present conclusion is that this is as high as can be realistically expected given the market possibilities and the time inevitably taken in planning and construction.

7. We have already agreed that the Corporation should go ahead with the £210 million Redcar IIB iron and steelmaking project, and we have welcomed BSC's plans for expanding stainless steel capacity at a cost of some £60 million. My report today will enable the BSC to proceed with the proposed expansion of billet making at Normanby Park and Consett. The Corporation submitted to us very recently a proposal for the construction of new coke ovens and coal-handling plant at Port Talbot at a cost of £64 million. We have now agreed to this. The Corporation have just submitted proposals for further expansion at Port Talbot, and these will be urgently examined. There is no doubt that further substantial investment at Port Talbot will be needed.

8. In the case of East Moors, I have looked carefully at the various proposals ably put forward by the workforce as a means of saving the plant by modernisation. After making every allowance for transport costs, other advantages of close proximity to customers, the effects of the rescheduling of Cardiff as a development area, and the benefits offered by the submerged injection process, we have reluctantly concluded that significant investment cannot be justified. However, in the light of the review, the BSC now propose that the closure, initially set for not earlier than January 1976, should be deferred until not earlier than January 1980. Even this must remain subject to the proviso that adequate supplies of steel of the right qualities are available then from BSC developments elsewhere for processing by GKN in Cardiff in conjunction with the 400,000 tonnes per annum electric arc plant which GKN are now building there. Meanwhile, the deferment we have sought will give us more time to work out new plans for alternative employment.

9. At Hartlepool, BSC now accept that, in the light of the review, the closure of iron and steelmaking, initially set for 1975–76, be deferred at least until 1978. We cannot justify major new investment in steelmaking at Hartlepool, but steelmaking there will continue for at least two extra years and any closure then would still be subject to the proviso that adequate replacement iron and steel are available by then from Redcar/Lackenby.

10. About 24,000 jobs in steel will still remain in the Cleveland area. BSC propose to invest some £25 million in developing the two existing pipe mills at Hartlepool so as to produce a greater range of pipes and also higher specifications to meet North Sea oil requirements. This should provide some 200–250 new job opportunities. The deferment now agreed will provide more time to work out new plans for alternative employment. The Corporation's own plans provide for substantial recruitment at South Teesside in the next four years. The Government will study urgently how the daily travel facilities from Hartlepool to Redcar can be improved so as to facilitate Hartlepool steelworkers taking up employment at Redcar.

11. BSC propose to close some old iron-making plant at the Cleveland works over the period 1975–78 but there will be every opportunity for workers at the plant to take up employment at BSC Redcar and on that basis the proposals are acceptable.

12. On Shelton, BSC have reconsidered their plans in the light of all the representations made during the course of the review. The Corporation now propose to construct an electric arc steelmaking plant with a capacity of up to 350,000 tonnes a year to replace the existing iron and steelmaking plant. This will feed the existing continuous-casting plant; will ensure a long term future for steelmaking at Shelton; will preserve approximately 800 jobs which would otherwise have been lost; and, I am confident, will be welcomed by the workforce and the local authorities.

13. In the case of Shotton, I have carefully considered the BSC proposals in the light of the informed and thoroughly documented representations made by the workers, local authorities and other interested parties. At Shotton as at other traditional steelmaking centres there is a valuable heritage of a skilled and loyal workforce, and potential for development there must if at all possible be utilised. I consider that further study is needed of the economics of modernised steelmaking at Shotton and its implications for BSC's proposals elsewhere and this study has now been put in hand. The Corporation have meanwhile agreed to defer their proposed date for the closure of iron and steelmaking to 1980–81. In the meantime work is going ahead on developing the finishing plant at Shotton. A highly modern cold-reduction mill is now commissioned there, and work is under way on a £30 million coating complex. Further expansion in finishing is now being studied.

14. My review has convinced me that we cannot justify large new investment in iron and steelmaking at Ebbw Vale. Representatives of the workforce there put their case with as much force and skill and determination as the spokesmen of the other plants, and it is doubtless these qualities and the great tradition of steelmaking at Ebbw Vale which has kept the plant operating a decade beyond what might have been considered viable. But the limited capacity of the plant itself compels me to conclude that we must accept the closure dates of 1975–77 proposed by the BSC for different sections of iron and steelmaking there. The hot mill must also close eventually, but the closure date now proposed by BSC for 1978–79 must be dependent on adequate supplies of hot rolled coil for processing at Ebbw Vale becoming clearly available from other plants. Ebbw Vale is already an important tinplate works and the Corporation are committed to a programme of far reaching modernisation. Work is under way on a £40 million development scheme, and the Corporation plan to follow this as soon as possible with a second stage development, incorporating modern cold reduction facilities, to cost at least £30 million. These projects, together with developments at the Corporation's other Welsh tinplate works, should ensure for the Principality a position of pre-eminence in the world's tinplate industry.

15. Since the closure is imminent in iron and steelmaking at Ebbw Vale, it should be possible for both the Government and the Corporation to concentrate immediate efforts here to secure the establishment of more diversified employment alongside the development of the tinplate complex. Discussions with the Chairman of the Corporation about detailed phasing of redundancies and the provision of new jobs have already begun. In Ebbw Vale as elsewhere, of course, the services of the Manpower Services Commission and its agencies will be available and eager to help. However, the Ebbw Vale decision creates a situation which will demand the fullest co-operation of the Corporation with the Government to demonstrate that this challenge to our ability to combine social responsibility with the modernisation programme will be properly met. Special provision is to be made by the Corporation for alternative employment at the plant itself during these critical twelve months ahead, but the responsibility of the Corporation to give direct assistance with the provision of new jobs, including direct participation in individual projects, will be a continuing one. In addition the Government will play its part by putting into effect other measures to assist in the provision of new employment and to improve infrastructure. £12·6 million will be spent on factory building, clearance of derelict land, water and sewerage schemes and assistance to local authorities for the preparation of industrial sites.

16. It is the policy of the Government to ensure that everything possible is done to pro-

Cases considered

Number of job opportunities involved

Original proposed date of closure

Outcome

Shotton (Iron and steelmaking and hot rolling).6,000Phased closure 1976–78Further study needed of economics of new steel plant. Meanwhile BSC defer their proposed closure date to 1980–81. Development of finishing plant, saving 500 jobs or more.
Shelton (Iron and steelmaking)1,7001976New electric arc plant to be built with saving of approximately 800 jobs.
East Moors (Total plant closure)4,700Not before January 1976Closure deferred to not before January 1980.
Ebbw Vale (Blast furnaces, steel plant and slabbing mill).3,3001975–77BSC proposal agreed. Further development of tin plating.
Ebbw Vale (Hot strip mill)1,3001978–79Closure to be dependent on adequate supplies becoming clearly available from elsewhere.
Hartlepool (Coke ovens, sinter plant, blast furnaces, steel plant and slabbing mill).2,8001975–76Closure deferred to 1978 at earliest, Pipe mills to be developed.
South Teesside—Cleveland Works(Coke ovens, sinter plant and blast furnace).1,4001975–78No change to BSC proposals given new job opportunities at Redcar.

vide alternative employment in areas affected. We have also decided to ask the Corporation to accept a special responsibility both in the phasing of redundancies and, to as great an extent as possible, for the provision of new job opportunities in steel-related and other projects. This latter concept, which we hope Parliament will welcome, needs to be examined and discussed more fully but it could introduce a new dimension into redundancy problems in the public sector.

17. The Government have, of course, been considering other measures to assist the provision of new employment and to improve infrastructure in the areas affected. Much has been done, or is already in hand, including the generous use of selective assistance under Section 7 of the Industry Act, factory building, derelict land clearance, road schemes and accelerated clearance of unfit housing. Further measures which we are considering include site and factory provision in all areas, help to local authorities in site preparation, improved roads, and assistance with water and sewerage schemes. The deferments in proposed closure dates will provide more time for this work to be done.

18. This interim report on the Government's review of the BSC strategy will, I hope, be acceptable to those who work in the industry and to Parliament. It represents the first results of the most extensive and open examination of the plans for a Public Corporation, requiring it to justify its proposals in detail in the light of its social responsibilites. The outcome, so far, preserves some 13,500 jobs for two to four years or more through deferments of proposed closures at East Moors, Hartlepool and Shotton, saves approximately 800 jobs permanently at Shelton and leaves the future of steelmaking at Shotton for further consideration. Moreover, the rôle of the BSC in creating new job opportunities to replace jobs to be phased out constitutes an important development in thinking about the rôle of public enterprise.