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British Steel Corporation

Volume 977: debated on Monday 28 January 1980

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2.

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

In view of the meeting that the right hon. Gentleman held with steel union leaders on 19 January, and the statement that he made following that meeting, will he make it clear, next time he meets the chairman of the BSC, that he utterly rejects Lord Denning's judgment that the steel workers are involved in a political strike against the Government?

The hon. Gentleman knows that Ministers must not comment on judicial decisions.

Is my right hon. Friend aware that the longer the hope persists, fostered by articles in the responsible press, that the Government will in some way provide more money to enable some sort of solution to be achieved, the longer the strike will continue?

I agree with my hon. Friend. It is unreasonable to expect the taxpayer to find more money to supplement the earnings of the steelworkers when opportunities are on offer for them to increase their earnings.

Will the right hon. Gentleman insist that Sir Charles Villiers should uprate the 15 million tons per annum production target for BSC steel, on the ground of strategic necessity for the country?

I should hesitate to challenge BSC's estimate of the demand for its product. That estimate is made after taking into account the quality of the product, its price and its delivery against that which is offered by powerful competitors all over the world.

If my right hon. Friend cannot comment on Lord Denning's judgment, perhaps he will comment on the remarks of Mr. Bill Sirs, arising out of that judgment. Mr. Sirs said that he believes that Parliament has to deal with secondary picketing in the context of the Employment Bill, notwithstanding the fact that the Opposition and the TUC have said that they do not want the Bill.

As my hon. Friend knows, that is a question for my right hon. Friend the Secretary of State for Employment.

Has the Secretary of State received from the British Steel Corporation an estimate of its borrowing require- ment under the policies that the Government have set for it for next year? In particular, has he heard the widely circulated report that the borrowing of BSC next year is likely to be about £900 million, and not £450 million? Does not that make nonsense of the Government's stance?

If the BSC management decides that the external finance limit, the cash limit, is in danger, it is its duty to tell me so. It has not done so up till now. Whatever the pressure upon the cash limit, it would still be unfair to ask the taxpayer to find even more money to supplement the earnings of the steel workers.

Since the Secretary of State and the chairman of the British Steel Corporation are agreed that 60,000 men in the steel industry, and consequentially others in the coal industry, are to lose their jobs by the autumn, what estimate has the right hon. Gentleman made of the cost of that to the community, and what plans has he for alter native employment?

It is not primarily the chairman of the British Steel Corporation—let alone I—who is making these decisions. They are consequential upon the demand for British Steel's products. It is idle to expect the corporation to manufacture at a profit steel that nobody will buy. The cost of reduced employment cannot be estimated without assumptions about how many will be out of work and for how long. The Government accept the obligation to try to meet the social implications of rapid employment changes.

3.

asked the Secretary of State for Industry what was the loss per man employed by the British Steel Corporation in the year to March 1979.

In the year to March 1979 the loss per man employed by the British Steel Corporation was £1,660. It is estimated that for the year to March 1980 this will rise to over £1,800.

Is not that figure one further strong reason why the hard-pressed British taxpayer should not be asked to make further subsidies to those working in the steel industry?

My hon. Friend makes a fair point. We can play around with numbers as much as we like, but the extent to which this amount of public money has gone to the steel industry is clear from the figures for which my hon. Friend has called today.

Is it not misleading to speak of the loss per man, as if the men themselves were in some way responsible for the losses? Will the Minister tell the House how much of the loss incurred in the year in question was due to investment decisions by the board which proved, in retrospect, to have been expensive mistakes?

The hon. Gentleman knows that that is an impossible estimate to make. As I said earlier, however much we like to play around with the numbers, the fact cannot be challenged that the industry has received substantial assistance from the taxpayer. There comes a time when we have to cry "Halt".

To what extent does each week of the strike reduce the funds available for any wage settlement? What is my hon. Friend's estimate of the weekly cash flow drain of such a strike?

What my hon. Friend says in that sense is correct. Clearly this is a cash drain on the corporation. The present estimate is that the cost of the strike is about £10 million a week.

Does the Minister agree that, in the present situation, as we see it, it would be better to use EEC money to fund the redundancies that are expected, and to use the money that the Government have for redundancies to help the steel workers?

Wherever there is an opportunity to use EEC funding for redundancies, we shall take it. But, as the hon. Gentleman is fully aware, these things need to be looked at on a case by case basis.

Is it not extraordinary that Labour Members never cease to knock the EEC, except when they want money from the EEC to bail out British companies? Does my hon. Friend agree that this is a good example of where the EEC could help with substantial amounts of money?

My hon. Friend's enthusiasm for these matters is well known, but it is fair comment to say that this is one area in which all hon. Members recognise that there is a job to be done and that the Community can help in this difficult situation.

Since figures are available—the hon. Gentleman's Department has given them over the past five years and they represent 73 per cent. towards investment and only 27 per cent. towards labour—would not a more realistic question be what is the loss per chairman, rather than what is the loss per man?

The right hon. Gentleman has indicated the danger of playing around with selective statistics. As to the loss per chairman, the right hon. Gentleman has played his part. We have played ours.