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Steel Industry (Productivity)

Volume 979: debated on Monday 25 February 1980

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asked the Secretary of State for Industry what is the current level of productivity in the British steel industry.

The latest available information indicates that productivity in the first 10 months of 1979 remained low compared with other major European countries.

I am grateful to my hon. Friend for that information. As the British Steel Corporation has made it clear that by improving productivity steel workers may earn substantial pay increases, does my hon. Friend not think that it is now time, as the steel strike enters its third month, for the BSC's offer to be put to steel workers in a ballot?

My hon. Friend is right to draw the attention of the House to the crucial argument about productivity. The issue of a ballot is for the BSC management to decide in consultation with the trade unions. We would welcome a move in that direction.

Does the hon. Gentleman appreciate that British steel workers are already the cheapest in Europe? When heavy redundancies are proposed in areas such as South Wales and other steel-making areas, the Government must appreciate that steel workers and the communities in which they live are not prepared to go back to the 1930s. Is that where the Secretary of State is trying to drive them?

The Government are fully aware of the issues that the hon. Gentleman raises. It is because of that that we have recently provided £48 million, which we hope will help to overcome the short-term problems. However, that will not overcome the problems of getting the industry right, and that process must go ahead.

Is my hon. Friend aware that demand for a ballot is growing in the public sector, reinforced by what has happened in the private sector, and that steel workers would like the opportunity of making plain their views? However much they may admire the moderation of Mr. Sirs, is my hon. Friend aware that they are not impressed by his competence?

I note what my hon. Friend says. This is an issue that must be settled between the management and the trade unions. The move towards a ballot is one that I am sure the House will wish to support.

Since the Minister is making comparisons with our European competitors, will he take two things into account? The first is that the sector working party which his right hon. Friend the Secretary of State commended said there was no real basis for a comparison of productivity with European competitors. Secondly, our European competitors are receiving subsidies, for example, on coking coal and also from the contributions that Britain has made to the European Coal and Steel Community which amount to over £60 million more than we have received from it.

I note the right hon. Gentleman's comments about what we have received from the Community. The Government will seek every opportunity to take advantage of whatever is made available and studies are in hand on that matter. On the question of comparisons, he should remember that the key statistic which was agreed by both the management and trade unions which were taking part in the exercise to which he refers showed that in man hours taken to produce one tonne of steel, the figure for BSC, regretfully, was between 70 per cent. and 100 per cent. greater than that of our major European competitors.

But that was only one factor out of many, as the hon. Gentleman knows. What was said at that time, as the hon. Gentleman also well knows, was that labour productivity in any event was only one out of a number of factors to be taken into consideration. However, I am not talking—[HON. MEMBERS: "Question".] I am not asking about the justice of contributions I am referring to the fact that there are subsidies to our competitors which affect our productivity. What will he and his colleagues do about that?

The right hon. Gentleman tends to flog a dead horse on this matter. The German industry has to pay for coking coal at world prices. The balance by which industries are supported differs from one country to another and no one can deny that our steel industry has been given massive support over recent years.