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Steel Industry

Volume 978: debated on Monday 4 February 1980

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

(by private notice) asked the Secretary of State for Industry whether he will make a statement on the effects of the extended dispute in the steel industry.

The employees of the private steel companies have now been brought into the steel dispute, although they have no quarrel with their employers. The loss of business arising from this action, and from the continuing dispute in BSC, is putting steel firms and the jobs in them at risk.

So far steel users generally have been little affected by the dispute, but production and employment will be threatened on a much wider scale if and when steel supplies run out. It is in the interest of all who depend upon steel for their livelihood that the BSC and the unions should end this self-destructive dispute quickly on terms which the industry can afford.

Will the right hon. Gentleman indicate the value of lost production to date? He said that it is little. However, I observed a report in the weekend press which suggested that there was a conspiracy of silence between the CBI and the BSC as to the damage that had been done.

Is it not a fact that it is the Government's refusal to intervene—andespecially the inaction and complacency of the right hon. Gentleman—that has led us into a strike that is coming to its sixth week? Is not the real problem in the contraction of the British steel industry caused by the contraction of British manufacturing industry? Has that contraction not been accelerated by the Government's economic policies and by their failure to protect the industries that are at greatest risk? Is it not true that by cutting the economy the right hon. Gentleman and his colleagues are successfully cutting the British steel industry's throat?

I am unable to give a precise answer about the loss of production. From such figures that have been published, the quantity of production appears to have been very little down—about 1 per cent. in the third week of the strike. The real damage cannot be measured in lost production only, serious though that is. The real damage is to confidence and to future orders for British steel.

The right hon. Gentleman's second question showed that, once again, he has flinched from putting what he really means. He has asked me to intervene when what he really means—I do not know why he does not say so openly—is that he wishes to Government to find more money from the long-suffering taxpayer. [HON. MEMBERS: "Yes."] Hon. Members may say "Yes", but most taxpayers have smaller earnings than the £112 per week average earnings of a steel worker.

It remains true that it is not in the interests of the taxpayers, the steel workers or the country as a whole that the taxpayer should, once again, pay money that the workers can earn by the higher productivity that is available. It is deeply in the interests of the steel workers to become internationally competitive. It serves those workers very ill when Opposition Members reject that basic argument.

The right hon. Gentleman charges the Government, after nine months in office, with bringing about the contraction of British manufacturing industry that was manifest during the five years of the previous Labour Administration. It is true that one of the factors reducing the demand for British steel has been the fall in demand of British steel-using industries. That is deeply tragic.

The right hon. Gentleman is quite wrong to say that I have not said openly what I believe—I have said it in debate after debate—and that proves that he does not listen, any more than he listens—[Interruption.] If the hon. Member for St. Marylebone (Mr. Baker) will read the reports in Hansard of the last few debates he will find it at the beginning.

The right hon. Gentleman does not listen, any more than he has listened to those European competitors he praises so much or to Commissioner Vredeling, none of whom can understand what his rigid timetable is meant to achieve.

Does my right hon. Friend agree that, following the decision by the House of Lords on Friday, which reversed the decision of the Court of Appeal, the law on secondary picket- ing is in a state of considerable confusion?

Will the Government take an early opportunity to clarify the law and to narrow the range of trade union immunities, especially the immunity enjoyed against an action by an employer in a trade dispute when that employer is not involved in the dispute?

It appears deplorable to many that the law should allow the private steel sector, where there is no quarrel or dispute between employers and employees, to be brought into the BSC dispute. However, my hon. Friend's question is one for my right hon. Friend the Secretary of State for Employment.

Has the Secretary of State studied the reports on the success of the French steel industry following the restructuring carried out and back by the Government in 1978? Does not the right hon. Gentleman think that there are lessons to be learnt from that?

Is the right hon. Gentleman aware that there is a growing feeling among the public, including among the employers in the private steel industry, that the Government's steadfast refusal to take any action smacks not so much of the principles of Toryism as of the principles of anarchy?

The right hon. Gentleman is one of those who think that the long-suffering taxpayers—who number most wage earners among them—should be asked to make good earnings that the steel workers could make good for themselves.

It is true that a number of foreign steel industries, especially the Germans and the Dutch, but also the French, have either turned from loss to profit over the past two years, or are well on their way to doing so, by their own efforts and despite the difficulties facing steel industries.

Order. We are dealing with a reply to a private notice question, not a statement. It is an extension of Question Time. I am prepared to call another three hon. Members from each side of the House.

Does my right hon. Friend accept that there is considerable pressure from workers and trade unionists in the West Country—whose average earnings are £60 to £80 per week—that no further Government subsidy should be paid to the steel industry that would enable steel workers to receive wages financed by the taxpayer that are higher than those that can be earned in the West Country?

I am sure that no one grudges higher earnings to the steel workers, but many people realise that the steel workers can earn more and need not, therefore, turn to the taxpayer.

Surely the right hon. Gentleman is aware that a considerable proportion of the money involved in BSC's financial difficulties comes from the interest payments on debt incurred as part of the modernisation programme in constituencies such as my own—a modernisation programme towards which the steel workers have made their own contribution, with over 10,000 jobs lost in my area, and more in other parts of the country. Is it not right that the community should make its contribution by easing the burden of these repayments? Such an action could produce a settlement of this damaging strike.

The interest payments are less, proportionately, in the case of British Steel than in the case of practically all its European competitors. The last £1,500 million invested by the taxpayer in the British Steel Corporation pays no interest at all; it is public dividend capital.

Since there still appear to be some lingering feelings in both the private sector and elsewhere that the Government can be coerced into intervening, will my right hon. Friend categorically and unequivocally state that the Government will not intervene, will not usurp the management function, and will not provide any more money?

I am grateful to my hon. Friend for giving me the chance to say again that, despite the disagreement of the right hon. Member for Deptford (Mr Silkin), it is deeply in the interests of the steel workers that they should become more competitive. In that way their jobs can be saved. In that way they can earn more and have secure employment. Further rescue by the taxpayer will not help them.

It is not clear that the responsibility for the lay-offs that will inevitably come will lie with the Government in refusing to lift a finger to bring about conciliation between the two sides, as well as with the Government's attitude in supporting the employers in refusing to make a sensible offer? If the allegations of telephone tapping at strike headquarters are true, should not these be looked into immediately by the Home Secretary?

Is it not possible for the hon. Gentleman to see that if the steel workers do not co-operate in increasing their competitiveness they will find themselves yet further behind their rivals, who are accelerating way ahead of us in increasing productivity? It is not in the interests of the steel workers to be lulled into ignoring their own self-interest in higher competitiveness.

Is not my right hon. Friend aware that this strike has now moved on? There is the odour now of a politically motivated strike? I feel quite sure that my right hon. Friend and his right hon. Friends will do all they can to protect the employers, the employees and the public, who are not engaged in this dispute, by introducing the relevant legislation at the earliest possible moment.

Questions about legislation on that subject are for my right hon. Friend the Secretary of State for Employment.

Will the Secretary of State answer a very simple question? For how long do the Secretary of State and the Prime Minister intend to maintain their stance of non-intervention and allow industry to bleed to death?

We hope that the management and unions will soon be negotiating very seriously, and with good results.

The Secretary of State said a moment ago that the future of the steel industry lay entirely in the hands of the steel workers. Is he not ignoring two facts? The first is that that they have themselves consented, over the past two years, to reductions of 35,000 in their work force. If he does not think that that is working for productivity, I do not know what it is. Secondly, is not the real issue the demand for steel? Is not the fundamental point that the Government's policy is destroying manufacturing industry, and hence destroying the demand for steel?

I do not think that I used the words that the right hon. Gentleman says that I used, but certainly the demand for steel is not, in general, a problem. The demand for British steel from the British Steel Corporation is the problem. The demand for steel last year was at record levels in the world as a whole. We failed to hold our share of the market, partly because, as the right hon. Gentleman correctly says, our own steel-using industries have not been doing well, but also because our prices — and, to some extent, I fear, our quality and our delivery — have not been such as to hold our customers at home and abroad. There are large users of steel in this country who have despaired of getting the quality and the delivery that they need, and have therefore turned to overseas sources. I must include both management and workers in the responsibility for that.

On a point of order, Mr. Speaker. May I suggest to you, Sir, that the Prime Minister, in a reply that she gave last week, on the question of EEC steel, to my right hon. and learned Friend the Member for Aberavon (Mr. Morris), seriously misled the House? My right hon. and learned Friend's question quite clearly related to the criticism that Commissioner Vredeling has expressed of the failure of the Government to apply for part of the £70 million that was earmarked in the Community budget for this purpose. When the Prime Minister replied, she led the House to believe — and the Official Report confirms it — that the Government have made applications for steel aid of this kind. That is not so, and I now have a letter from the Under-Secretary of State for Employment which spells out very clearly that the Government have taken a conscious decision not to apply for that aid. In view of that fact, I suggest that the right hon. Lady owes the House an apology.

Further to the point of order, Mr. Speaker. The hon. Gentleman is, wittingly or unwittingly, misstating the facts. My hon. Friend the Under-Secretary of State for Employment is discussing applications that might become relevant under a scheme that has not yet been adopted. If the hon. Gentleman wishes to discuss that scheme, I can tell him that only one of the EEC partners is in favour of it, and that we are one of the majority of the partners who are against the scheme. The scheme is not in action; it has not been agreed. It therefore does not represent money that is available for us to apply for. The hon. Gentleman is on a bad point.

Further to the point of order, Mr. Speaker. My point of order concerned the Prime Minister's answer. If what the right hon. Gentleman has said was the case, we should have been told so at Question Time last week. We should not have had to drag it from a reluctant Government in this way.

Order. I have told the House on previous occasions that hon. Members cannot expect me to rule on points of order relating to whether the content of a Minister's reply is satisfactory or—to use an old parliamentary expression—is misleading the House. It is not within my domain to rule in that way, and the House should bear it in mind.