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British Steel

Volume 168: debated on Wednesday 28 February 1990

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To ask the Secretary of State for Scotland when he last met the chairman of British Steel; what issues were discussed; and when he next expects to meet him.

I last met the chairman of British Steel on 26 October 1989 when we discussed matters relevant to the steel industry in Scotland.

Is the right hon. and learned Gentleman actually telling us that despite the crisis that has hit confidence among steelworkers in Lanarkshire, he has made no attempt to hold a meeting with the chairman of British Steel? That is a disgrace. Will he seek an urgent meeting with the chairman and ask why, with a current capital investment programme of £397 million, not a brown penny has been directed to Lanarkshire? Will he also ask how it can be that over the next four years, with 46 rigs to be built for the North sea requiring a new steel demand of 740,000 tonnes, British Steel can continue to place a question mark over the steelworkers in Lanarkshire?

We have had continuing contact with British Steel since last October. The hon. Gentleman's question related to an actual meeting and I gave him the correct answer. On the more substantial part of his remarks, we all share his hope that British Steel will produce new investment for steel plants in Scotland. I hope that the hon. Gentleman and his hon. Friends will work closely with those at Ravenscraig rather than distancing themselves from the general view in Scotland that through co-operative efforts the best prospects can be achieved for the future well-being of the steel industry in Scotland. The hon. Gentleman knows that his party is out of kilter with Scottish opinion and that its short-sighted approach has found no favour with the work force at Ravenscraig.

Is the Secretary of State aware that an immediate decision is pending from British Steel on its plate strategy and especially on the future of the Dalziel plate mill? Is he further aware that the modernisation of that mill is the only fully viable route by which not only the future of platemaking can be pursued economically, but a long-term future secured for other developments at Ravenscraig?

I pay tribute to the hon. Gentleman's obvious interest in this matter. I agree that the decision in favour of a new plate mill at Dalziel would be of great benefit to the long-term interests of the steel industry in Scotland. We welcome the report produced by Glasgow university last week, which put forward a commercial and not an emotional argument on why there was a good case for that investment in Scotland. We hope that British Steel will scrutinise that report and reach a judgment based on the commercial criteria which can properly be applied to such issues.

Will my right hon. and learned Friend remind the hon. Member for Glasgow, Govan (Mr. Sillars), who believes in independence in Europe, that there is a European prohibition on state aid for primary steel making? Will he further confirm that British Steel has made it absolutely clear that in the event of its no longer wishing to operate Ravenscraig it will offer the plant for sale to another buyer?

It is certainly true that the European Community forbids any member Government or member state to give taxpayers' support to new investment in primary steel producing. My hon. Friend is also correct that when the industry was privatised British Steel made it clear that if at any time it had no further interest in its assets, particularly at Ravenscraig in Scotland, it would consider an alternative offer for the acquisition of those assets.

The Secretary of State has made it clear that he had a good deal of sympathy with the arguments in Glasgow university's report, which was prepared for the Strathclyde regional council, about the possibility of developing the plate mill at Dalziel. Will he say a little more about how he intends to progress that matter? The Minister of State was reported in the Scottish press on Tuesday as saying that

"he expected to be in contact with BS executives 'in due course'."
Does that mean that Ministers will be personally involved in those meetings? At what level of British Steel does he expect the meetings to take place? Can he also say something about the time scale because there is a worry that "in due course" may suggest an over-leisurely approach when in fact decisions by British Steel may be imminent. That is a matter of great urgency. I hope that the Secretary of State will be specific about what he intends to do.

I understand the force of the hon. Gentleman's question. We believe that it is important that British Steel should be aware of the Scottish Office view on these important matters. British Steel's future plate mill strategy is of importance to the Government. I certainly wish to ensure that, well before any decision is reached by British Steel, it has the views not only of the Glasgow university report but of everyone, including the Scottish Office, about the merits of the various options under consideration.