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Steel Industry

Volume 12: debated on Monday 9 November 1981

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

I draw my hon. Friend's attention to the major speech that I made about the steel industry to the Conservative trade unionists' conference at Sheffield on Saturday, a copy of which has been placed in the Library.

Although it is splendid news that my right hon. Friend envisages a profitable steel industry after years of horrendous losses, can he assure the House that this will not be achieved by saddling British manufacturing industry with unreasonable prices or by reducing further Britain's percentage share of steel manufacturing capacity in Europe?

The chairman of the British Steel Corporation has made it clear that he wishes to stabilise steel making capacity at about 14·5 million tonnes a year. The corporate plan which he and his colleagues are preparing for presentation to me and my colleagues will be based on that as the central option.

My hon. Friend mentioned prices. He knows that it cannot be healthy for any steel industry—in Britain or elsewhere in Europe—if steel is sold at prices which do not allow a reasonable return to the manufacturers. I commend to my hon. Friend the measures which were taken through the European Coal and Steel Community last June to help to stabilise both prices and the market. That is one of the planks on which the recovery of the British Steel Corporation will be based.

Is the right hon. Gentleman aware that, rather than the prospect of a further 20,000 redundancies in the British Steel Corporation, the future and profitability of the corporation would be better guaranteed if projects, such as a gas-gathering pipeline, had been supported by the Government and if the Government ensured that the British Gas Corporation, for example, placed its orders for gas rigs for the Ruff field in British shipyards?

The figure for further reductions in manpower which the British Steel Corporation is discussing is not 20,000, but about 15,000. This is being pursued by the corporation at each plant through local negotiations and is a matter for the corporation.

As for the gas-gathering pipeline, I have no doubt that the private sector of the oil and gas industry will be able to make arrangements for the great bulk of the gas to come ashore and that this will ensure orders for steel. I am well aware of the importance that the British Steel Corporation attaches to these projects.

The last part of the hon. Gentleman's question should be addressed to my right hon. Friend the Secretary of State for Energy.

Will my right hon. Friend accept the congratulations of the House on his speech at Sheffield on Saturday? Will he take the opportunity to stress its theme to the dwindling number of my constituents who still believe that there is some money in the Treasury cupboard which can be chucked at the steel industry? Will my right hon. Friend especially remind the editor of the Scunthorpe Star that the work force of the British Steel Corporation can have a guaranteed future only if the corporation is made profitable and responds to the pressures of international competition, even though that gentleman continues to deceive himself into thinking that the old ways can still be pursued?

I am sure that my hon. Friend can deal firmly and effectively with the editor of the Scunthorpe Star. The contributions made to the debate about steel and other publicly owned industries by the Leader of the Opposition and his right hon. and hon. Friends show that the editor of the Scunthorpe Star is not alone in the delusion that there is a bottomless well in No. 11 Downing Street which can continue to pour out billions of pounds to support uneconomic projects. There is not, and it is time that everyone realised it.

Will the Secretary of State comment on the proposed Phoenix III involving the amalgamation of Johnson, Firth Brown and the British Steel Corporation works at the River Don? Will he ensure that on this occasion there is full consultation with the workers concerned, who apparently are threatened with massive redundancies if the scheme goes ahead?

Any arrangement between the British Steel Corporation and the private sector must be a matter for the corporation and the firms involved.