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British Steel Corporation

Volume 975: debated on Monday 10 December 1979

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asked the Secretary of State for Industry when he expects to meet the board of the British Steel Corporation.

I have no plans at present to do so, but I meet the chairman and board members when necessary.

Will my right hon. Friend, as a matter of urgency, write to the board of the British Steel Corporation and commend the work that has been done by the staff side, trade unions and management at the Round Oak steelworks in my constituency? Will he also commend the manner in which 800 jobs are being shed to maintain steel-working on the site, where it has taken place for the past 200 years?

I am sure that all concerned will read the comments of my hon. Friend with gratification.

When the right hon. Gentleman next speaks to the chairman of the British Steel Corporation will he refer him to the letter sent to him by the hon. Member for Both well asking that the Clydale works at Mossend get the multi-pass mill? Will he bear in mind that if the works does not get the mill it will mean the demise of Clydale within the next six years, which in turn will mean another 2,000 jobs lost in the steel industry?

I am sure that the chairman and the management of the British Steel Corporation take all such matters seriously into account.

Will my right hon. Friend seek an early meeting with the chairman of British Steel to ask him how much progress the corporation is making in cutting some of its bureaucratic, top-heavy management, and to ask whether it will seriously consider off-loading to the private sector some of the plants that it cannot run profitably?

I regret that I have so often to say to hon. Members on both sides of the House that a proposition is for the management of British Steel. Once again, I have to tell my hon. Friend that if British Steel is not already well aware of the argument that he is advancing, I am sure that it will be made so by his remarks today.

Has the right hon. Gentleman heard from the board of the British Steel Corporation of the widespread resentment in the industry over the ruthless and ferocious way in which he is applying his financial policies?

The hon. Gentleman and the House must recognise that the market for steel has been much reduced, and that within that market competitiveness is the only way to preserve jobs and to be viable. The board of the corporation recognises that it is facing a falling market, and it is seeking to be competitive.

I accept my right hon. Friend's desire to ensure that the target that he set the British Steel Corporation earlier this year is met, but does he recognise that, following the publication last week of the half-yearly figures, it is clear that the corporation will not be able to meet the target within the time set? Does he accept that if we are to have a viable steel industry in future there will have to be more time for the corporation to meet his directive?

The Government are already planning to provide the corporation with no less than £450 million of the taxpayers' money for the next financial year. We adhere to the proposition that we shall not fund losses during the next financial year. The corporation has confirmed its intention to break even next year. It finds it essential to do so because the market has fallen so sharply.

Will the right hon. Gentleman say whether he proposes to allow BSC to default on the payment of wages and other bills after the end of March?

Some months ago I told the British Steel Corporation board that I did not expect it to get into a position in which it ran out of funds next year. It has had ample warning of the need so to arrange its affairs that the contingency foreseen by the hon. Gentleman does not occur.

Does my right hon. Friend remember the remark attributed to the previous chairman of the BSC, Sir Monty Finniston, that he could make all the steel needed in Britain, competitively, but with a work force of 50,000 men? Are not many of the troubles of the present chairman due to the insistence of the previous Labour Government in keeping overmanned marginal steelworks going because they were located in Labour constituencies?

I think that misplaced—be it kindness, or timidity—has, by preventing adjustment when the market was better, succeeded in forcing upon the British steel industry far sharper cuts than might have been necessary.

Does not the right hon. Gentleman realise that, if he were right in that, it would apply to the private sector of the steel industry, which is in just as much trouble as the public sector, if not worse? But is not the real reason the fact that competition from other countries, particularly in Europe, is coming in on a subsidised and unfair basis? In the light of that, how can he possibly expect viability by March 1980?

I do not think that the right hon. Gentleman's main proposition is true.