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Steel Industry (Investment)

Volume 890: debated on Monday 21 April 1975

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asked the Secretary of State for Industry if he will use the Industry Act 1972, or other means at his disposal, to ensure adequate investment in the special steels industry in Sheffield.

I am prepared to use the powers available to me to help desirable investment in the special steels industry in Sheffield, and I and my Department will study carefully any schemes submitted.

I am not quite certain whether my right hon. Friend qualifies as First Witch, Second Witch or Third Witch in the eyes of the ex-Leader of the Opposition. However, he can console himself with the reflection that all three witches prognosticated exactly what would happen—

Yes, Mr. Speaker. My question is this: is my right hon. Friend aware that Sheffield would welcome an assurance that we shall have adequate investment in the steel industry under the Industry Act or in some other way? Is he also aware that there was considerable resentment at the interference of the European Commission when the Jessel empire collapsed?

I am aware both of the feelings that my hon. Friend has expressed and of the anxieties which exist in Sheffield, and I hope that what I have been able to say will be some reassurance.

Will the right hon. Gentleman take this opportunity of confirming that the private special steel sector in Sheffield has an outstandingly good record, as to profit, employment and its general success in contributing to our economy? Will he confirm that the Government see this as a very important part of the steel industry and that he will, therefore, wish to leave it intact and untouched?

I said nothing critical of the private sector. There are no significant projects being examined from the private sector in Sheffield at present.

May I draw my right hon. Friend's attention to the fact that there are now reports that 10,000 people are to be laid off in the Welsh steel industry? How far is this difficulty related to the vast quantities of steel being imported into Britain from the Continent? Under the Common Market regulations, what, if anything, can my right hon. Friend do about this?

I understand the anxieties that my hon. Friend has expressed, but it really is another question.

How does the Secretary of State think that there will be any major investment projects coming forward in the steel sector when management see his ambiguous statements about the future of the industry? How can this help the present situation when management also sees the thoroughly unsatisfactory terms he has produced for the shipbuilding and aerospace industries? How can it give management in other industries which might be threatened any confidence to invest?

The hon. Gentleman knows that the problem of investment is difficult, and has been so under all Governments. Under his own Conservative Government there was a major collapse in investment. That is one reason, as the hon. Gentleman knows very well, why we are bringing forward proposals, through the NEB and planning agreements, and an amendment to the Industry Act, to increase investment by direct methods, because the private system for stimulating investment has not met the nation's requirements under any Government.


asked the Secretary of State for Industry for what purpose he wishes to control investment in the independent steel sector.

To ensure that future development of the United Kingdom steel industry as a whole is well-balanced and coherent.

Is the hon. Gentleman aware that last year the British Steel Corporation's production was 4 million tons below its rated capacity? We are moving into a period of serious recession in the demand for steel. In this situation, is it not madness to try to inhibit private investment, which will provide employment and help to provide steel which is still required in some sectors of our engineering industry?

We are not inhibiting investment; we are ensuring the proper overall use of scarce resources. In the instance of cosmex of which the hon. Gentleman will be aware, there were great difficulties, which neither the European Commission nor the Government, who viewed the future with concern, were able to unravel. That is why proper control over investment to ensure that scarce scrap is properly used is still necessary.

Will my hon. Friend give an assurance that the limited supplies of scrap will be used in new electric are furnaces in Scotland, and will he further assure us that the direct reduction plant needed to supply existing electric are furnaces in the private sector will also be placed in Scotland?

I should like to be able to give those assurances, but the point remains that under the European Communities Act we lost the power that was vested in the Government under Section 15 of the Iron and Steel Act 1967. That would have enabled me to give the assurance my hon. Friend wants, but I cannot now give it to him.

If the public sector is falling down on the job again, particularly on this vital question of investment, about which the Secretary of State has been saying it has a deplorable record, why should not the private sector be free to get on with the job?

We are not stopping the private sector from geting on with the job. What we are concerned to ensure, if we have the power, is a combination of the operations in the public and private sectors to the maximum national interest.