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British Steel

Volume 175: debated on Wednesday 4 July 1990

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To ask the Secretary of State for Scotland when he next intends to meet the chairman of British Steel to discuss the future of the Scottish steel industry; and if he will make a statement.

I would expect to meet the chairman of British Steel whenever appropriate. I have asked the Scottish Development Agency to carry out an analysis of the prospects for the steel industry in Scotland.

If the Secretary of State does not think that this is an appropriate time, he never will. When he meets the chairman of British Steel, will he inform him that the letter that he sent to the right hon. and learned Gentleman is not only an insult, but the biggest cover-up since Watergate? Did the right hon. learned Gentleman notice that it contained not only no guarantee for Ravenscraig beyond 1994, but no guarantee for the Clydesdale and Imperial works beyond the end of this week?

Will the Secretary of State give an undertaking that Scottish Office resources and the resources of the Department of Trade and Industry will be fully at the disposal of the SDA, and that its study will cover all three plants and be based not only on present market demand, but on the potential market demand for Scottish steel plant if the necessary investment that should have been made was made now?

The correspondence that I have had with Sir Robert Scholey was about Ravenscraig, so it is not surprising that there was no reference to Clydesdale or to other plants. I can confirm that the study that I have asked the SDA to carry out is not limited to any one company or plant; it is on the future prospects for the steel industry in Scotland as a whole.

May I thank my right hon. and learned Friend for his staunch efforts on behalf of British Steel? Does he accept that the letter from the chairman of British Steel is quite unacceptable and that we expect much better from the chairman and directors of British Steel in terms of looking after Scotland, the community and the work force? I hope that he will pursue the chairman for as long as necessary to obtain satisfactory answers.

I note my hon. Friend's remarks. We have told Sir Robert Scholey that we hope that he will reconsider his unwillingness to date to meet the representatives of the work force at Ravenscraig. It appears that it would be of mutual benefit not only for them to hear his point of view, but for Sir Robert to hear what they have to say about the plant in which they work.

Does the Secretary of State accept Sir Gordon Borrie's comment that he had hoped that the exchanges between the Government and the chairman of British Steel would have yielded information on whether a reference of that decision to the Monopolies and Mergers Commission was justified? As Sir Robert Scholey, not surprisingly, has not given that information, will the Secretary of State make it clear to British Steel that if it is not prepared to operate the plant in Scotland, the Government will invoke the Monopolies and Mergers Commission's powers to ensure that genuine competition operates, that Britain's trade interests are brought into effect and that, if necessary, the assets of British Steel in Scotland will be offered to somebody who is prepared to invest in the monopoly?

I am not certain that the hon. Gentleman has thought out the implications of what he said. Taken literally, it would imply that the Liberal Democrat party wishes to denationlise the assets of British Steel. The hon. Gentleman must appreciate that, as the Government do not own those assets—it is not Labour party policy to reacquire them—short of reacquisition there is no way in which a company can be obliged to dispose of its facilities.

On competition law, the hon. Gentleman must accept that it is for the Director General of Fair Trading to make a recommendation to Monopolies and Mergers Commission. That is the correct procedure of which, I think, the hon. Gentleman is well aware.

I congratulate my right hon. and learned Friend on his powerful fight for Scottish steel. Has he clarified whether, in the event of the Ravenscraig closure, British Steel would automatically offer the plant for sale at a negotiated price, or whether the chairman of British Steel would reserve the right not to sell the plant if he considered that a sale would be contrary to the commercial interests of British Steel?

The position of British Steel is as described in its prospectus, in which British Steel said that, in the event of there being no future requirements for its steel-making assets in Scotland, it would be prepared to make them available to an alternative private sector purchaser. Sir Robert said in his letter to me that British Steel intends to continue to honour that commitment.

Does the Secretary of State agree that British Steel's assumptions of the likely market demand for steel are far too pessimistic, given the expected increased demand in Europe and the need to roll back the formidable import penetration in our domestic market? There is great confusion about exactly what the Secretary of State is doing to test the assumptions and the rather doubtful theories that are included in Sir Robert Scholey's letters. Will the right hon. and learned Gentleman tell us specifically what steps he is taking? Does he remember that one of the things that might have been thought simple and that he urged on Sir Robert Scholey—the need for Sir Robert to meet the work force and explain the situation—is specifically repudiated in a letter on the basis that it undermines local management? Is the right hon. and learned Gentleman prepared to take such a brush-off?

I have already made it clear to Sir Robert that I feel that it is unfortunate that he is not prepared to meet his work force, and I have urged him to reconsider. In considering the prospects for the steel industry in Scotland, the SDA will wish to take account of any information on likely market trends that is available to it. We would expect that information to be taken into account when the SDA's analysis is prepared and presented.