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Volume 927: debated on Monday 7 March 1977

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asked the Secretary of State for Industry at what proportion of capacity the British steel industry is currently operating; how this compares with the present position of other steel-producing countries in Western Europe;-and if he expects any early improvement in orders and production.

The British steel industry operated at about 75 per cent. capacity in 1976 compared with an estimate of 65 per cent. for the Six using ECSC definitions. Part of the difference was due to production for stock by the British industry, including counter-cyclical stockbuilding by BSC. I do not expect a signifi- cant upturn in demand before the third quarter of 1977.

I thank my hon. Friend for that information. Will he assure us that the policy of ingot stocking will be continued and that the maximum sustainable level of activity will be maintained, particularly by the Corporation's most profitable plant?

I can give my hon Friend the assurance that we regard the stockbuilding schemes that have taken place as having been extremely important in maintaining employment and making sure that industry is ready for the upturn when it comes. Regarding my hon. Friend's latter remarks, we have made quite clear that we cannot accept artificial restrictions on production, although we are very anxious to co-operate with the Commission in an anti-recession scheme which helps all European steel-making countries.

As the industry has a 25 per cent. under-used capacity, is not the Minister particularly concerned? What steps will he take to rectify the problem of the amount of imported steel that is being brought into Britain particularly to meet the demands of the car industry?

As the hon. Gentleman will know, we have taken steps to deal with special imports of certain steels, and we are watching that matter. At the same time, we know that the industry is not yet able to meet certain demands. It is obviously important to the maintenance of other sectors of the economy that the imports should take place. However, Sir Charles Villiers has made clear that he wishes to ensure that the import penetration of steel is reduced as rapidly as possible.