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Steel Industry

Volume 979: debated on Monday 25 February 1980

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asked the Secretary of State for Industry, what proposals he has received from the British Steel Corporation for hiving off its major non-steel making activities.

Surely the Minister accepts that the Government have some responsibility for the affairs of the corporation? Does he agree that if the subsidiary activities of the BSC are hived off, the financial situation will worsen? If it is proper for private corporations to indulge in miscellaneous activities, why is it wrong for a public corporation to do so?

The BSC may have to sell some of its assets because it must behave as a private sector company would behave in that position. If it needs to finance its own expenditure or losses, it may have to sell assets.

Perhaps BSC will decide that it does not wish to continue production at Consett, for example. Will my hon. Friend do his best to ensure that, where private enterprise is prepared to buy and continue production, BSC will not be allowed to hinder such a sale?

The statutory position is that we cannot tell BSC to sell Consett or any other steel works. I am happy to give the assurance that Ministers will not stand in the way of the disposal of Con-sett to the private sector.

Is the Minister aware of any discussions between the British Steel Corporation and the private sector about the disposal of BSC's special steels activities? Does he agree that would have serious implications for British industry, including our defence industry? May we have an assurance that such sales will not be allowed to proceed?


asked the Secretary of State for Industry if he will make a statement on the steel dispute.

I have been keeping the House informed about the strike, and I shall be continuing to make statements as the need arises.

Does my right hon. Friend agree that the longer the strike goes on and the longer it takes to start the furnaces after the strike, the greater will be the import penetration immediately after the strike? Does my right hon. Friend agree that much of that import penetration will be maintained? As from today, what longer-term market share will the British Steel Corporation lose as a result of the strike and can the Secretary of State translate that into the number of jobs lost?

I agree that the longer the strike continues the greater will be the import penetration. I cannot begin to guess what effect the strike, let alone a longer strike, will have on the market share of the British Steel Corporation. I hope that the steel workers are alive to the dangers.

Does not the Secretary of State's non-intervention policy increasingly appear to be self-wounding, short-sighted and stiff-necked? Have not the cash limits already been exceeded by the cost of the strike? Does the right hon. Gentleman agree that he must intervene to safeguard the whole of the British economic base?

The cash limits for next year no doubt have been exceeded by the strike apart from other causes. That makes it essential for the British Steel Corporation to break even by all possible means. That includes disposals an attack on overheads and stocks and by every other means available to management as well as, of course, a further loss of jobs if that is necessary.

Is my right hon Friend aware that many BSC employees in my constituency, some of whom I saw on Saturday, do not wish to remain on strike and ask why they cannot be allowed to negotiate locally?

Many of us would prefer local negotiations to centralised negotiations. That is not a decision for Ministers. It is a decision for management and the unions which normally cooperate. I hope that my hon. Friend is right in thinking that many of the workers would prefer a different arrangement.

Since steel is central to all the core industries—shipbuilding, engineering, motor car and coal—is not the size of the the steel industry of vital importance? If that is so, why does the Secretary of State take as gospel the forecasts and objectives of the British Steel Corporation which has not exactly earned gold medals for forecasting in the past? Why does not the Secretary of State set up an independent inquiry into the proper size of the steel industry? In the meantime, why does he not abandon his rigid and disruptive rundown timetable?

Whatever the British Steel Corporation's record in forecasting it cannot conceivably be as bad as the forecasts of successive Governments who over-expanded the industry. The decline in demand for British steel is related to BSC prices and, alas, quality and delivery at a time when world demand for steel is at a record level. The right hon. Gentleman refers to core industries. A number of those to which he referred, including the car and shipbuilding industries, have declined. Their lower demand for British Steel Corporation supplies is caused by their failure to become competitive. The issues are related.

Will my right hon. Friend, either now or later, refer to the private steel industry, where workers have been called out although there is no dispute? Will he explain how they are affected and what are the prospects for those companies and the people who work in them?

A number of those who work in the private steel sector are well aware of the dangers to the companies for which they work and to their future jobs if they come out on strike. I hope that they will make their own decisions.

Bearing in mind the understandable and justifiable rejection by the steel unions of the original 2 per cent. offer and recognising that the strike could have been ended six weeks ago if the Minister had intervened at the 8 per cent. level, does he agree that he should now intervene before the bidding reaches a higher level?

The right hon. Gentleman is mis-stating the original offer, which I understand was 2 per cent. plus a substantial increase through higher productivity of about 10 per cent. The original offer was about 12 per cent.