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Steel Industry

Volume 84: debated on Wednesday 23 October 1985

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asked the Secretary of State for Trade and Industry what representations he has received on the British Steel Corporation's corporate plan; and if he will make a statement.


Taylor asked the Secretary of State for Trade and Industry if he will make a statement on the position of the steel industry.

The Secretary of State for Trade and Industry and President of the Board of Trade
(Mr. Leon Brittan)

A statement on the British Steel Corporation's corporate plan was made by my right hon. Friend on 7 August, copies of which have been placed in the Library.

I am grateful to my right hon. and learned Friend for his reply. I welcome the fact that Ravenscraig will continue to operate during the current operating period of the British Steel Corporation. Is my right hon. and learned Friend aware of the widespread concern about BSC's proposal to close Gartcosh, which is in Strathkelvin, and the fears of the impact of that closure upon the steel mill at Ravenscraig? Will he assure me that if evidence is brought before the current Select Committee investigation which suggests that the closure of Gartcosh will prejudice the future of Ravenscraig, he and his ministerial colleagues will ask BSC to review its closure decision?

I am aware of the anxieties and have seen two delegations about the matter. I do not believe that the Gartcosh proposal will in any way prejudice the future of Ravenscraig. I shall consider any evidence to the contrary, but the material that has been put before me by the delegations does not support that view.

My hon. Friend the Under-Secretary of State has revealed to me in a written answer that whereas British jobs in steel have been cut by more than half since 1980, other members of the European Community have not reduced theirs by more than one quarter. Therefore, will my right hon. and learned Friend pay serious attention to the views of the Select Committee on Trade and Industry, which last year, said that there should be no further steel closures in Britain until other members of the Common Market carried a fair share of the cuts in jobs and capacity?

We shall fight for the British steel industry in the Community, as elsewhere. The United Kingdom's share of closures., which removed 30 million tonnes of hot-rolled capacity throughout the Community, was about 5 million tonnes. As for the future, I believe that the decision relating to Alpha steel makes a significant contribution towards what is required in the Community.

Will the Secretary of State take this opportunity to congratulate the workers of Gartcosh on their splendid record in co-operating with every one of British Steel's plans for productivity, pricing, delivery dates and exports? Will he also, using his new broom, withdraw the threat to this plant and to this community, which has given so much to the steel industry and to the British manufacturing base?

As the hon. Gentleman knows, I am happy to pay tribute to the work force at Gartcosh. Nevertheless, I cannot forestall or change BSC's decision. I am satisfied that Ravenscraig's future is not imperilled by that decision.

Does the Secretary of State realise that his reply, combined with the attitude and policies of the BSC, constitutes an insult to the intelligence of the Scottish people? They believe that if Gartcosh is closed there will be a proposal in three years' time, after the next election, to close Ravenscraig and that our national industry is being sabotaged.

The hon. Gentleman has no basis for making such an allegation. In many countries there are integrated hot-strip mills which have no cold mills associated with them. If the hon. Gentleman looks at Nippon Steel's Oita works, Nishin Steel's Kure works and, above all, US Steel's Geneva works in America, which is 400 miles away from the nearest cold reduction mill in Pittsburg, he will realise that his assumption is wholly unfounded.

Does my right hon. and learned Friend agree that in 1981 the British Steel Corporation was a joke among the steel producers in Europe, but today it is one of the most productive steel producers, if not the most productive, in Europe? Its costs of producing steel are lower than in Japan as well as West Germany. Will my right hon. and learned Friend remind the House that where the world is awash with steel and the European steel industry is operating at only 65 per cent. of manned capacity, decisions such as those in relation to Gartcosh must be taken if the BSC is to remain viable and to be set on course for a £300 million profit?

I agree that the decisions announced in August are designed further to strengthen the progress of BSC. which has been considerable, as my hon. Friend said. In doing so, the corporation will protect and enhance the prospects for all working in steel.

In his early days in his new and important office, will the Secretary of State recognise that the British steel industry has been cut to the bone in terms of capacity? Will he urge his colleagues to make the strongest possible representations in the European Coal and Steel Community to increase the British quota? Will he also bear in mind that this country will not always be in a state of slump?

I can agree with a large part of what the hon. Gentleman said. We shall be asking for more quota. We have done so, and shall continue to do so.

I accept that the decision to close Gartcosh was taken by the BSC, and that it is right that a nationalised corporation should take its own decisions, but what does my right hon. and learned Friend propose to do about the 88 submissons made to him by the trade unions in favour of retaining Gartcosh? As far as Scottish Members are concerned, it is not yet a cut-and-dried decision.

I have met the trade unions concerned, which have elaborated their position to me. I have explained that the strategic decisions relating to the steel industry are taken by the Government, but the decision on Gartcosh is for the corporation.

Will the Secretary of State bear in mind that he need not accept every word that is uttered to him by BSC on this matter? The right hon. and learned Gentleman should recall that Ravenscraig was set up by a political decision of Harold Macmillan. Secondly, Gartcosh is seen by every Scottish Member, with the possible exception of one rather eccentric Member, as an essential feature of Scottish industrial life. Will the right hon. and learned Gentleman pay attention to the views of Scottish Members of Parliament, who know something about the matter?

Of course I want to consider carefully the views of Scottish Members of Parliament. It is precisely because I want to do so that I have seen two delegations on the matter. However, the fact is that Gartcosh takes 30 per cent. of Ravenscraig's hot mill output. Shotton already takes 25 per cent. and only 6 per cent. of Gartcosh's output goes direct to customers in Scotland. I sympathise with those working at Gartcosh, but I am determined not to undermine the future of Ravenscraig by giving currency or support to the view that the decision on Gartcosh has the implications for Ravenscraig that so many people have suggested.

I welcome the right hon. and learned Gentleman to the somewhat diminished Department of Trade and Industry. I thought that his right hon. Friend the Leader of the House was somewhat cruel on Monday when trying to justify the transfer of the Department of Employment and a considerable part of the right hon. and learned Gentleman's Department to a Minister in another place, who does not seem to bother to turn up. In trying to justify the transfer of the right hon. and learned Gentleman's duties, the Leader of the House said that it was important to have the right man in the job. May I say that it seems grotesque to the Opposition that, while the Germans are increasing subsidies to the steel industry, this Government are imposing further cuts? As a Welshman, I join my Scots colleagues in denouncing the Gartcosh closure. No one is taken in by the cynical decision to defer the Ravenscraig announcement until after the general election. We are all infuriated by the fact that the Gartcosh decision, plus the refusal to make appropriate investment in Ravenscraig, is a malevolent attempt by the Government to predetermine that Ravenscraig must close when the decision time comes.

I hope that if I ever have occasion to compliment and welcome the right hon. Gentleman, I shall do so in a less laboured way. The objectives of the United Kingdom Government in the European Community are for a highly restrictive regime for state aids to be applied by all countries. That is something that we shall pursue. The point that was made about investment in Ravenscraig is wrong. Since the announcement of which the right hon. Gentleman complained, the British Steel Corporation has announced investment of £15 million in Ravenscraig. That is an earnest of its intentions and sincerity about what was said in August about the future of Ravenscraig.

Order. I have allowed a long run on this important matter. We must now get on rather more rapidly.