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Steel Scrap

Volume 78: debated on Wednesday 1 May 1985

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asked the Secretary of State for Trade and Industry how many representations he has received about the export of steel scrap.

Since 1 January Department of Trade and Industry Ministers have received 54 letters and telexes about the export of steel scrap. I have also met delegations that have referred to this subject.

Is the Minister aware that in the first two months of this year scrap prices rose by over 40 per cent., largely because subsidised industrialists in other countries such as Spain are buying imported scrap at inflated prices and thereby pushing up the international market price? In view of the resulting threat to the British foundry industry, will the Government intervene now to deal with this, instead of tolerating a threat to foundry workers' jobs brought about by the Government's doctrinaire worship of free market forces?

I agree with the hon. Member that the Spanish subsidy is an important aspect of the problem. This is being raised through the EEC and is being studied, and we are seeing what can be done about it. However, I do not agree with the hon. Gentleman that the answer to the problem is to impose controls on the export of scrap. That would not be effective if it were carried out in one country alone. Other countries in the EEC are strongly opposed to scrap control. Secondly, we have to take account of the needs and interests of the steel scrap industry as well. It is an important industry here, employing 100,000 people and making exports of £300 million a year. We cannot just shift the burden of the problem from one sector to another.

Does my hon. Friend accept that part of the problem for the steel scrap industry is continuity, that many of the contracts entered into are long-term contracts, and that any suggestion of controls and turning the tap on and off would destroy confidence in the industry, the importance of which to the economy my hon. Friend has just outlined?

I agree with my hon. Friend. A point that I should perhaps have added to what the hon. Member for Falkirk, West (Mr. Canavan) said when he quoted the figures on prices, comparing the latest month's with January, is that the recent trend has been for quite a reduction in prices. In April, prices of the main grades were £65 a tonne compared with £85 a tonne in the previous month. We have to see what happens in the market, but those price increases are from a very low level and in real terms are not all that different from those obtaining in 1979.

As I am one of the 54 who have made representations to the Minister on behalf of a private enterprise firm in my constituency, will he appreciate that it is not sufficient to turn a blind eye to this situation, otherwise more firms will go the the wall, with consequent redundancies?

Of course we must not turn a blind eye to the situation, and the 54 representations ensure that we cannot do that. The hon. Gentleman must also look at the interests of the scrap industry. Just because one industry is facing a problem, we cannot shift the burden of that on to another industry. There may be a problem of price. There is not a problem of an overall shortage of scrap, and it is to a shortage that the provisions for controls within the ECSC treaty relate. There is not a shortage of scrap at present.

Does the Minister accept that as far as the special steels industry is concerned nationally, and certainly the special steels industry in my constituency, the problem continues to be grave? Would it not be wise for the British Government to recognise that the Spanish Government are serving the interests of Spain, and that it is about time that this Government began to serve the interests of Britain?

I have acknowledged that the Spanish problem is serious. That has to be examined in the context of Spain's accession to the EEC, and it is being examined. This matter was raised at the last Council of Steel Industry Ministers. We cannot impose controls unilaterally. The hon. Gentleman must recognise that there are other countries in Europe which are firmly opposed to the imposition of scrap controls. What would be the point of scrap controls imposed on one country if it exports to another country, which then exports out of the EEC? Such a gesture would make the hon. Gentleman feel better, but it would achieve nothing.