On a point of order, Mr. Speaker. You will be aware that there was a fire this morning at Embankment Underground station. Given the sensitivity of the matter and the proximity to the King's Cross inquiry, would it be in order for the Secretary of State for Transport to make a statement in the House today on this important matter?

I have had no request for that.

On a point of order, Mr. Speaker. You will recall that last week the House attempted to give a Second Reading to a private Member's Bill—the Associated British Ports (No. 2) Bill. During that debate I asked the Minister for Public Transport whether the rumour that there had been a meeting between a member of his ministerial office and the promoter of the Bill was true. He said, as reported at column 397 of the Official Report , that, to his knowledge, there had been no such meeting.

It has come to light from a written parliamentary answer that I received last night that the Secretary of State for Transport had met the promoter of the Bill, the chairman of Associated British Ports, in February this year, at a time when many hon. Members had put a blocking motion on the Bill and were waiting to debate it. As the Minister for Public Transport promoted the Bill and asked us to support it last Wednesday, would it be in order for you to clarify the position about the meeting of the chairman of Associated British Ports and the Secretary of State? Is it right that such a meeting should take place when the House has yet to consider a private Bill? Is that private business, or is it another way of getting Government business through the back door?

I have no knowledge of meetings outside the House. I have seen the answer to that question and I think the whole House will agree that it is highly commendable for any Minister or Back Bencher who inadvertently says something to the House that turns out subsequently to be untrue to put it right, and the Minister for Public Transport has done that.

Further to the point of order raised by my hon. Friend the Member for Rother Valley (Mr. Barron), Mr. Speaker, in which he pointed out to the House that the Minister had stated in his reply that he had met someone connected with the promoters of the Associated British Ports (No. 2) Bill, would it be in order, as it used to be, for the Minister concerned to make a personal statement, instead of dealing with the matter by a written answer?

I think the whole House will agree that sometimes inadvertently things are stated in the House that turn out to be incorrect. I think that the Minister of State has taken the honourable and correct course in answering a question that was put down by the hon. Member for Rother Valley (Mr. Barron). I do not think that any point of order arises for me. I am not responsible for meetings that take place outside the House.

On a point of order, Mr. Speaker. In no sense do I question your selection of the hon. Members whom you call to ask questions, but would it be possible to explain the criteria on which you base that selection? I have tried kicking up a row to get called and I have tried behaving myself to get called. The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) stormed out on Thursday last week in a temper and returned today only to be called immediately. Perhaps I should storm out now and come back to be called.

Let me clarify the position. Bad behaviour certainly does not earn any good marks from the Chair. Today, we only—just—reached Question No. 4, and I seek to call hon. Members to put a question to the Prime Minister if they have not asked a question before.

I beg to move,

Dealing first with the 35-hour basic week, at present the average for people in manual occupations is 39 hours a week before overtime, and the average for people in non-manual occupations is 37 hours a week. I can see no reason for a difference between manual and non-manual occupations. A year ago last January legislation was introduced in Norway to reduce the working week of people in manual occupations by two and a half hours to bring their hours into line with those of non-manual workers.

If we add overtime to the basic working week, the figures are worse. It might surprise the House to know that the average working week has increased since 1983 because of the greater tendency of employers, instead of taking on additional workers, to require more and more overtime. There are also great pressures for overtime from people on low wages. I look for a substantial reduction in overtime. I tell my friends in the trade union movement that where they find large amounts of overtime being worked they should start negotiating a reduction in working hours and the employment of more people.

I have chosen a 35-hour week because it opens the exciting prospect of trade unionists being able to negotiate a four-day week for their members. This is happening in limited cases at present. Many people, given the choice of a five-day week of seven hours a day or a four-day week of nine hours or thereabouts a day, would opt for a four-day week. It would make great sense in terms of travel expenses and the wear and tear of commuting. It would lead to a substantial improvement in quality of life for many of our fellow citizens.

The second provision in the Bill is for six weeks' annual holiday. Most German workers get six weeks' annual leave, but in this country the norm is 22 days for people in manual occupations, which is just over four weeks. In recent years there have been moves in the annual pay round to improve holiday entitlements, but the very minimum that we should require is six weeks' holiday entitlement. This is strongly in line with what happens in many European countries and with the TUC campaign.

No doubt we will be told by employers that they cannot afford to grant such leave but, of course, they have said that in response to every improvement in people's working conditions, ever since we stopped sending children up chimneys. They said exactly the same thing when it was suggested that there should be equal pay for men and women. It is a simple statistical fact that an additional week's annual holiday would add no more than 2 per cent. to the annual wages bill of a company, and it is well within the capacity of most companies to meet that. Six weeks' holiday is a perfectly reasonable request.

Finally, I should like to deal with the matter of earlier retirement. My proposal is that men who want to do so should be allowed to retire at 60. We know that 676,000 men between the ages of 60 and 65 are at work. We also know, from repeated Treasury estimates, that it would cost £3 billion to achieve this reduction in the retirement age. I do not know how that calculation can be substantiated, when we realise that many of the vacancies created by those who would be offered a pension would be filled by people in the dole queue, with dependent relatives. Many people have written to me to say that they are 60 years of age and have already worked for 45 years in a heavy manual occupation. They say, "I think that that is long enough for anyone." I think so too. We should adopt the common sense approach and give early retirement to men who want it, because the vacancies thus created could be filled by people in the dole queue.

My Bill contains the enigmatic phrase, "and for connected purposes." I see this merely as a start. There are many other things in the best practice of good employers that we should seek to introduce. Increasingly, sabbatical years are being offered to workers in mid life, but that is much more in evidence abroad than it is here. I commend that practice. There is also increasing evidence that employers are having the sense to prepare people for retirement by putting them on a four-day week during the six months prior to retirement. That is another example of best practice which I strongly commend.

There is much humbug about the dignity of work and about the desirability of more people working longer hours. I have long been of the opinion that if work were such a splendid thing the rich would have kept more of it for themselves. The Bill offers the prospect of substantial improvement in the quality of life of many of our fellow citizens and the substantial possibility of creating jobs for those in the dole queues who are currently searching for work. It is an enlightened Bill and I hope that it is far-sighted. I commend it to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Bruce Grocott, Mr. Harry Cohen, Mr. Ron Davies, Mr. Don Dixon, Mr. John Garrett, Mr. Sean Hughes, Mr. James Lamond, Miss Joan Lestor, Mr. George Robertson, Mr. Jeff Rooker, Mr. Ernie Ross and Mr. Dennis Skinner.

Working Life (Reduction in Hours) Bill

Mr. Bruce Grocott accordingly presented a Bill to provide for a shorter working week, a shorter working year, earlier retirement and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 8 July and to be printed. [Bill 167].

I beg to move, That the clause be read a Second time.

With this it will be convenient to take the following amendments: No. 31, in clause 1, page 1, line 10, after 'section', insert '1(5A) and section'.

No. 32, in clause 1, page 2, line 11, at end insert—

The Bill comes back from Committee very much as it went in, with the Committee able to inform the House of little more about the plans of either the Government or of the British Steel Corporation for privatising the industry. However, if the industry is to be privatised, its future shape, size, efficiency and behaviour will be very much influenced by the form in which it is privatised.

The Government have gone to great lengths in other privatisations, notably of the electricity supply industry, which is the most obvious of natural monopolies, to break up an industry so that it embodies in its future structure a degree of competition. However, when the steel industry was last in private hands and consisted of 14 separate companies, it needed an act of nationalisation to create a rational structure of a single entity.

The behaviour of a private enterprise is, of course, guided principally by the purpose of maximising its worth to shareholders. The company is able to exploit every bit of market power that it can, within the law of the land. Indeed, it is expected to do so. It is by the Government ensuring that the rules of competition are made and observed that the profit-seeking behaviour of the company in the market place becomes such that the health of the whole community is maximised. The Government argue that with the wealth go employment and people's incomes, and I do not disagree with them on that. Those are the Government's principles and their rules.

The Government are now proposing to privatise the British Steel Corporation as a monopoly within the meaning of the Act. The Fair Trading Act 1973, in section 6(1) states:

Likewise, the chairman of the British Steel Corporation advocates spheres of influence within Europe to reduce the amount of steel crossing borders. Those monopolistic tendencies are inherent in the nature of the industry. There is already a case before the European Commission about the alleged restrictive practices of the steel industry in special steels. While steel is in the public sector, the industry is constrained in many ways. For example, there has been formidable competition between works simply to survive because the Government have prevented BSC from closing any major works so long as they have remained competitive. That was the clear policy of the Conservative Government in 1982 and 1985.

The chairman and customers may speak to Ministers and officials about competition from Europe, which is very important on the demand side. However, it is a fact of life in the works that it is not just the demand side that matters. That may affect the price, but the level of resources required to produce a tonne of steel are conditioned by the absolutely formidable competition between works in recent years simply to survive and to maintain that viability and profitability which, within the understanding and terms of reference given by the Government, it has been necessary to maintain to continue the Government's commitment. That balance between ensuring competition within the industry and maintaining its basic capacity intact and developing it has been highly successful and has produced what is now the most profitable industry in Europe. However, it is threatened by the complete change of regime that the Government are deliberately bringing about.

An example of competition between works working with formidable and, to many of my colleagues questionable, efficiency was shown during the miners' strike. With the support of the unions locally, inside and outside the steel industry, and with the collaboration of local leaders of the National Union of Mineworkers, it was understood that it was essential to keep ore and coal supplies going to the steel works. If supplies had been interrupted the steel works would have closed, perhaps for ever, because of the loss of the blast furnaces. Neither Ministers nor the top management of the British Steel Corporation had any part in the negotiations. Often they simply did not know what was going on. Indeed, the top management of BSC at Ravenscraig did its best to sabotage the agreement between the unions that kept the works going.

Another example of the way in which the monopolistic tendencies operate can be found in BSC's attitude towards technological innovation. The BSC has made good use of short-term process improvements of a kind which during my days at ICI we used to call "process investigation work". However, the corporation is cool to the point of hostility to major technological advance. It is a rough, tough industry and the Government are handing over to it a degree of monopoly power which in the past steel tycoons would have found quite unimaginable. The whole commodity steel capacity of this country is to be handed over to a single private company.

On 3 May in Committee I moved a new clause allowing the Secretary of State for Trade and Industry to privatise a part of BSC separately from the rest. The proposal came from people with a great deal of experience of the steel industry. A former works director at Ravenscraig put the suggestion to me in its most logically developed form, Motherwell district council had the proposal examined by the largest consulting firm in Scotland, and the accountants who worked on it were former BSC accountants.

In reply to the examination made in the report initiated by Motherwell district council, the Government have offered only debating points. They have offered no detailed examination of or justification for alternative structures for the industry, including the single entity. The Government have not even been able to produce evidence that they ever seriously considered any alternative structure for the industry. Instead, they have been hiding in the most extraordinary way behind the skirts of Welsh trade unionists. That is not an entirely honourable course for Ministers to take. There is an understandable sentiment in Shotton and in south Wales about the future structure of the industry, but we are concerned with the survival of jobs in Scotland, not about the sentiment and trading relationships between particular works. Any Government worth their salt and taking a decent, economic and, in the last resort, human view of the position would not be swayed by inevitably short-term sentiments in an untried situation.

The Ravenscraig, Shotton and Dalzell proposal, by which Ravenscraig would be associated with the plants that it principally supplies as a separate trading entity, is not a solution that the Opposition would prefer. We would prefer the industry to remain in public hands. We would prefer the industry to continue operating and developing as efficiently as it has done up to the present. However, if the Government are to privatise the industry, to do so in the manner that they propose would subject neither the public interest nor the interest of Ravenscraig itself to a fair test of the market, which is a concept that Ministers espouse.

The decision to privatise it is also an extraordinary demonstration of Ministers' political and economic short-sightedness. The birds will come home to roost on this issue well within the lifetime of this Parliament. Indeed, it is likely that in the course of the next year the British Steel Corporation will announce the intended closure of the hot mill at Ravenscraig. At present, BSC needs all its liquid steel capacity. In my last discussion with the chairman of the British Steel Corporation, in the company of my hon. Friend, I heard him say so himself. However, he made it clear that his comments related to liquid steel capacity. It was clear also that he understood that we understood that the need for capacity did not relate to the mill. Indeed, the announcement by the Chancellor of the Duchy of Lancaster refers specifically to the fact that there is no expectation or likelihood of the hot mill at Ravenscraig remaining open beyond 1989.

The closure of the hot mill at Ravenscraig would seal the long-term future of the works, as it would reduce it to the position of being just a slab supplier. Also, any steel works has a limited life without the replacement and modernisation of coke ovens and the relining of blast furnaces, which wear out rapidly with time. Also needed is the modernisation of the mill control systems, finishing processes, and so on, which are necessary to maintain the competitiveness of the product compared with that available from other mills which have been modernised.

The most important current development in the area in which Ravenscraig is engaged is probably thin slab casting, but BSC is not proposing to install that process anywhere in the corporation. The new plant for continuous thin slab casting being installed in the United States has no parallel in this country. The reason is that BSC has cut back its own research and development by 40 per cent. in real terms since 1979. Although it is investigating new processes in a small way with heavy percentage grants from the European Steel Community, simply to keep employed the experts it has to maintain in different sections of steel processing, it has no serious expectation that its modest investment in research into new processes will lead to fresh investment.

The much-quoted remark made by Sir Robert Scholey,

Call for Sir William Rees-Mogg.

I am sure that I was not as explicit as my hon. Friend would be. However, that remark, much quoted within the British Steel Corporation, set the attitude for too much of BSC's management. It was echoed to me by Shotton shop stewards when I was discussing the possible developments there. Indeed, I hope that Sir Robert does not need a physicist to run any of his existing steel mills, but one certainly needs a physicist to design a sensible plant to replace one's present mills. That kind of person is not being recruited today. Of the 40 new graduates that BSC recruited into its research department last year, only two had first-class honours degrees of any kind—only two out of 40, for the whole of the commodity steel industry in this country. In those circumstances, there is no way in which an industry cultivating the kind of technological image which the British steel industry needs can remain technologically competitive.

Looking at the kind of competition that the Ravenscraig, Shotton and Dalzell group constitutes, there would be a strong incentive to develop the new materials and processes which would keep it technologically competitive. A competitive situation would be created which would not exist in the steel industry in the form proposed by the Government.

The Arthur Young report shows that, for a wide range of demand variations in the future, it would pay BSC progressively to close Ravenscraig; not to close it next year or the year after, but progressively to close it as new plant is rounded off elsewhere in the corporation and old plant fails to be modernised at Ravenscraig.

The Arthur Young report also shows that, even with the continued competitive pressures created by the formation of the Ravenscraig-Shotton-Dalzell group, its setting up would reduce BSC's profits, income and output, at least for a few years. That is why BSC is flatly opposed to the hiving off of the Ravenscraig-Shotton-Dalzell group.

The arguments are spelt out in detail in the Arthur Young report. They show that it is necessary to maintain the present pressures for competitive improvement for the extra capacity that would be achieved by keeping Ravenscraig operating, to build up the total profits, income and output from present BSC plants to as high a level, with Ravenscraig continuing to operate, as BSC would be able to achieve by the lazy man's way of simply closing Ravenscraig.

The short-term results of closing Ravenscraig would be a short-term improvement in BSC's profits, but with an immediate reduction of national income and national output and, within a short time, a reduction of total national profits from the present assets. It is a classic demonstration of the abuse of monopoly power.

If Ministers are not prepared to look more seriously at the Ravenscraig-Shotton-Dalzell proposals, it must be because they have been advised that BSC is only marginally viable and believe that it would be gravely threatened by the loss of profits from the Ravenscraig-Shotton-Dalzell group. The Arthur Young report looked at that, and my best advice is that that is not the case. The rest of BSC, just as the Ravenscraig-Shotton-Dalzell group, would be fully commercially viable. In all likelihood both parts of the corporation would develop further links.

BSC has already made it clear that it would look to European links, and no doubt Ravenscraig-Shotton-Dalzell would do likewise. It must be clear to Ministers that it simply is not possible to explore such a link without at least the Government's assent. It must also be clear to Ministers that their opposition effectively blocks any serious consideration of any international linkage for the parts of BSC that they are separating.

In response to the new clause that I moved in Committee, Ministers said that the Bill already allows them to sell the Ravenscraig-Shotton-Dalzell group separately, and I accept that that is so. There is nothing in the Bill, and there is nothing in the powers that the Secretary of State will have over the successor company, to prevent the Government's implementing the course proposed in the Arthur Young report—the setting up of a separate Ravenscraig-Shotton-Dalzell group. In new clause 1 we are asking Ministers properly to quantify the alternative option for the structure of the industry. They have not done that. I doubt whether they have done it for themselves. They have certainly not done it for the market place or for the House. It simply is not true that the new clause prejudices the commercial interests of BSC. It does in the narrow sense that BSC's profits would be less if Ravenscriag, Shotton and Dalzell were separately privatised. The Chancellor does not need his advisers to tell him that. He can work that out for himself. But that is not the commercial interest about which the Chancellor of the Duchy of Lancaster should be concerned. The commercial interest about which he should be concerned is the overall profits, output and income generated for Britain. It is those factors that he has in no way put before the House.

The viability of alternative options is not just a matter for study. Without financial backers prepared to go through with the deal, all the studies in the world would mean nothing. No financial backers can emerge if they are faced with Ministers' political hostility and statements in the House that the Government's intention is to privatise BSC as a single entity, with Ministers concealing the evidence on which any serious alternative proposal, which goes beyond the scope of the Arthur Young report, could be put forward.

I and my hon. Friends are not in the political point-scoring game. We recognise that the proposal that we put forward here is not an easy one for the Opposition. It is a marvellous opportunity to give Scotland a chance to help itself, to demonstrate its enterprise culture, but instead of that the Government are just giving Scotland a slap in the face.

If Ministers do not follow their own principles and give Ravenscraig a chance, I warn them, and the Prime Minister, in the words of Adam Smith—whom the right hon. Lady quoted in Perth last weekend—in his book "The Theory of Moral Sentiments", which preceded and laid the foundations of "The Wealth of Nations", where he said:

My Scottish colleagues and I are simply concerned with some 10,000 jobs in our constituencies. We shall fight all the way to preserve them. But we are also concerned with the survival of a substantial piece of viable industrial capital which, with a deteriorating balance of payments, Britain will continue to need.

We ask the Minister to think again, or at least to keep an open mind.

Opposition Members welcome the terms in which my hon. Friend the Member for Motherwell, South (Dr. Bray) has moved his new clause. All those who heard him speak during the Second Reading debate and, more particularly, in Committee will understand the depth of his expertise on and commitment to the future of the Scottish steel industry. We share his concern about the future of that industry, and in particular that of the Ravenscraig plant. We take on board the conclusions of the study that was commissioned by Motherwell district council, to which my hon. Friend referred. That study was carried out by Arthur Young, accountants. It concluded that 11,000 jobs would be at stake if Ravenscraig were to close, and that, of course, the immense contribution that Ravenscraig makes to the Scottish economy would also be lost. We are entitled to be concerned because of the political history of the issue.

We know that the Government have made earlier unavailing efforts to close Ravenscraig. We know that, on those occasions, their political nerve failed them, that leading members of the Cabinet threatened resignation if that step were taken, and that, faced with that pressure, the Government backed down. We conclude also that the Government remain, if not committed to, at least persuaded of, that course and that there is still in the Government's mind the possibility—indeed, the likelihood—that, in the interests of a privatised British steel industry, Ravenscraig might be closed.

Of course, in the present situation, our concern is greatly intensified. Throughout the debates on the privatisation of this great industry, it has been perfectly clear that one of the Government's overriding considerations has been to get the best possible price for the industry. It has been quite clear that the industry should be made to look as attractive as possible to potential private investors. For that reason, great emphasis has been placed on British Steel's admittedly short track record of profitability.

Most commentators agree that the price that will be obtained will largely be a function of the level of profitability, either current or expected. Most people believe that profits will have to be about 20 per cent. of the capital price paid. Any factor that either pushes up or pushes down the likely level of profitability becomes of intense interest to the Government, as it is quite clear that it will strongly influence market sentiment in terms of what the market is prepared to offer to British Steel.

The interesting aspect of the Arthur Young report is its conclusion that a privatised British Steel that decides to close Ravenscraig—although doing great damage to the overall viability of the British steel industry and to the national economic interest—and getting rid of a substantial body of costs could nevertheless increase profits by up to £100 million a year. Interestingly, to my knowledge, whenever that point is raised—it was frequently raised in Committee—no Conservative Member contested it.

If the closure of Ravenscraig will produce an improvement of £100 million—at least in the short and accounting term in which the markets are likely to judge these matters—it becomes a matter of great interest to the Government. It might lead them to the conclusion that it will mean a £500 million increase in the price for which they might sell British Steel.

Those are the reasons that we fear that the Government have it in mind to sell British Steel, not only in its present monopoly form but with the right to close Ravenscraig. In other words, they cannot afford to sell British Steel if Ravenscraig and perhaps other parts of the corporation have already been divested and already exist and are able to trade independently. Quite clearly, that would substantially reduce the market value of British Steel. They are selling the right to close Ravenscraig.

That suits the Government from two viewpoints. First, as I have suggested, it might lead them to hope for a much better price on strictly commercial grounds. Secondly, it enables them also to argue that the political objective of which they have long been advocates—that is, the political objective of closing Ravenscraig, without the political odium that would normally go with that—could be achieved by shuffling off the responsibility and placing it in the hands of private owners.

It seems that the hon. Gentleman is walking around the periphery of the amendment and touching on various aspects of the Arthur Young report without coming to the point. I am interested to see where he is going. The point of the amendment is to press the case for British Steel being privatised as a single entity or remaining in state hands as a single entity. The hon. Member for Dagenham (Mr. Gould) disagrees with me on the main point and would like to see the company remain state owned. Will he say whether the Opposition say that BSC should remain a single entity? Does he support the arguments of his hon. Friend the Member for Motherwell, South (Dr. Bray)? [Interruption.] Of course I say "single entity". Do Opposition Members support the hon. Member for Motherwell, South, who thinks that it should not be a monopoly, as he put it, but should be fragmented?

4.15 pm

I am flattered that the Chancellor could not contain his impatience and was unwilling to wait for my speech to unfold. I am somewhat disturbed—it may have been a slip of the tongue or an oversight—that he managed comprehensively to express the thrust, sense and meaning of my hon. Friend's new clause in exactly the wrong direction. My hon. Friend's new clause is designed to open the possibility of the corporation being sold other than as a single entity.

That is what he said.

That is not what the Chancellor of the Duchy said. He may have intended to say that.

Of course we are extremely concerned about the Government's intentions, but having made the point in support of the real concern expressed by my hon. Friend the Member for Motherwell, South and other hon. Friends, particularly those representing Scottish interests, I invite the Chancellor's attention to the terms of my hon. Friend's new clause. It does riot press the Government to do anything but lay before Parliament, before the relevant date, a report setting out the arguments for one course as opposed to another. That proposal is extremely moderate and restrained. Therefore, it is extremely difficult to see why, for any reason, the Government could oppose it. We shall listen with great interest. After all, the Government have the power of disposal in these matters. I hope that they will enlighten us about their attitude to the new clause. It is their view that matters.

I am sorry to say that I have just heard a sotto voce comment from Conservative Benches to the effect that the Government are opposed to it. That increases my puzzlement. On what grounds could they be opposed to it? It is a permissive measure. It commits the Government to nothing except a procedural step. It is a time-limited provision. In other words, once the relevant date has passed, the provision loses its force and cannot be revived by a successor Government.

It is hard to see why the Government should be so nervous about such a provision. It is almost as though they are startled, frightened and shying away from ghosts and shadows. I fully appreciate that the history of the Committee proceedings shows how frightened they are of ghosts.

Shadows.

Exactly—shadow spokesmen, among others. It is extraordinary that the Government are not prepared simply to fulfil the limited obligation that would be imposed upon them by the new clause.

The Government are not prepared to accept the new clause, not because they are unwilling to go through this procedural step—they may be prepared to do so, although I am confident that so far they have not informed themselves on these matters—but because they are determined, according to their lights, not to give the wrong signals to the market. They are afraid that, if they accept the new clause and raise even the remotest glimmer of a possibility that the corporation will be divided into separate entities, it will affect its marketability. The Government are concerned, as they approach the market, to preserve the corporation's monopoly position. They do not want the slightest cloud of suspicion to sully that pristine position.

That is an extremely objectionable attitude for the Government to take. As the Chancellor of the Duchy of Lancaster and the Under-Secretary of State will confirm, we have written several times to ask for the evidence to which they have referred which has persuaded them that the corporation should be sold off as a single entity. We have been told that these are matters of commercial confidentiality. My hon. Friend the Member for Motherwell, South dealt more than adequately with that objection.

If the Government are not prepared—we think that they act on specious grounds—to tell us what advice they have received and from whom, and even if they say that they have little possibility of influencing these matters, they should give us some guidance as to their preferences on the shape that the industry should take under private ownership.

I hope that, at some stage, the hon. Gentleman will say what shape he would like the industry to be in. Given his distrust of monopoly—which we accept—and the strong possibility that the legislation will be passed, does he favour a Scottish steel company competing against an English steel company?

The hon. Gentleman must accept that his right hon. Friends are responsible for the legislation. This is not our Bill. As we have said, if this monopoly is to be maintained, it is clear that, on this and other grounds, the right answer for the British steel industry is for it to remain in public ownership. Let us be clear about that. Any other question is hypothetical. [Interruption.] That may not suit the Government.

Perhaps we would come up with a firm answer if Ministers assured us that, if the Opposition voted in favour of the Ravenscraig-Shotton-Dalzell solution, they would accept it. If Ministers merely say that they will pursue this for political purposes, to muddy the waters, they will be treated in Scotland with the scorn that they deserve.

My hon. Friend points out that, having revealed informally that they are opposed to the new clause, Ministers are left with the difficulty of explaining how what is to all intents and purposes a monopoly should be handed over to private owners without any adequate protection against abuse of that monopoly power. Whenever we have raised this objection, in Committee and elsewhere, we have been left with the fatuous argument that British Steel is hardly to be regarded as a monopoly, since 40 per cent. of the domestic market is taken by imports. That certainly casts a novel light on the immense increase in import penetration under this Government across the board in manufactured goods.

We have always assumed that this might be something that the Government regretted and something that they recognised had a connection with the slumps in manufacturing output, manufacturing investment, manufacturing employment, our manufacturing trade deficit and the trade position generally. But not a bit of it; we now hear that the surging imports in steel and other industries are all part of a carefully structured strategy and that this is that very illusory creature—the Government's competition policy. We should be delighted to hear from the Chancellor of the Duchy of Lancaster, if he intervenes further in the debate, or from one of his ministerial colleagues, whether that is so.

Is 40 per cent. import penetration to be held up as an objective to be desired, supported and argued for on the ground that it imposes welcome competition on domestic suppliers? It is a fatuous argument because, even on British Steel's own terms, it is content to accept a monopoly in the parts of the market with which it is principally concerned and to leave it to the value of imports to make up supplies when and where there is a surge of demand which it is unwilling to meet.

We are left with a familiar situation. The language is that of liberalisation and competition and of subjecting, through the pressure of market forces, operations like this to all sorts of commercial pressures so that efficiency is improved. All that is a complete charade. It falls down because there is no liberalisation or competition and market forces are not suddenly being introduced. Indeed, the reverse applies. The purpose of this "privatisation", to give it its proper name, is carefully to preserve the monopoly in order to maximise the price which can be obtained for the industry.

We have seen this happen with British Telecom and many other privatisations. We are familiar with the gaping hole in the arguments. That does not stop us—perhaps optimism never quite dies—from looking in vain through the Bill for a sign that the Government are prepared to match, even with the smallest step, the rhetoric of their apparent commitment to liberalisation and competition.

Where is there in the Bill any measure to prevent a privatised steel company from abusing the monopoly power that it will be handed on a plate? What do the Government propose to do to prevent abuse of that power? Where is the "Ofsteel", an organisation like the one that the Government felt it necessary to introduce for British Telecom, in the form of Oftel? Where is the ombudsman, or some means by which steel consumers and customers can be protected? Where are the mechanisms to inhibit the abuse and exploitation of the monopoly position?

Is it not right that the mechanism to control the industry will exist in the form of foreign competition? Already parts of the project at Canary Wharf will he built and bought overseas. There is nothing in the Bill to prevent someone from buying steel from an outside producer.

I was under the illusion that the hon. Gentleman was present when I spoke on precisely that topic. Although he may have been here physically, I suspect that his mind had wandered elsewhere. I dealt at length—I felt extremely convincingly—with exactly that point. If the hon. Gentleman is advancing, yet again, the theory that a high level of foreign imports is the Government's competition policy and therefore to be much applauded, a great deal of what has happened to British industry and to our trade balance can be explained in those extraordinary and unsatisfactory terms.

I reiterate Labour's concern for the future of Ravenscraig. I make it clear, as I did on Second Reading and in Committee, that, if the Government intend to slide out from under any responsibility for Ravenscraig's future and respond to its closure by private owners—for the reasons outlined by Arthur Young—by saying, "It is now a commercial matter for the private owners and nothing to do with us," we shall not let them off the hook.

We put the Government on notice that they will be held politically responsible for the future of Ravenscraig. We are completely committed to that future. As my hon. Friend the Member for Motherwell, South has said, we intend to fight tooth and nail for as long as it takes to ensure that future. My hon. Friend's new clause gives the Chancellor of the Duchy, or his ministerial colleagues, a renewed opportunity to tell us that our fears are groundless. We shall be listening carefully, not for weasel words like "market forces" and "commercial considerations", but for a commitment to the future of Ravenscraig. It is an integral part of the sort of steel industry which the British economy desperately needs.

4.30 pm

We have listened many times to the hon. Member for Dagenham (Mr. Gould), but I wonder whether we have ever before heard him give such unconvincing and uncertain support as he has for the new clause moved by his hon. Friend the Member for Motherwell, South (Dr. Bray).

On the one hand, the hon. Member for Dagenham asked my right hon. and hon. Freinds to reiterate, to replicate or to demonstrate their anxiety for Ravenscraig. On the other hand, of course, he advocates all the usual arguments against monopoly. It is no wonder that the English Labour Front Bench is so uncertain about the policies for devolution advocated by the hon. Member for Glasgow, Garscadden (Mr. Dewar) and his hon. Friends. It is no wonder that the red rose of England is such an unsuitable symbol for the Labour party in Scotland, when we have that ambivalent approach advocated by the hon. Member for Glasgow, Cathcart (Mr. Maxton).

Perhaps the hon. Member could explain why the so-called red rose, as he calls it, managed to sweep Scotland in the general election.

I was just arguing the point that the red rose is not the most suitable symbol for a party that distrusts monopoly, but is unprepared to advocate devolution in Scottish industrial policy. Had the hon. Member for Cathcart believed that the red rose was a Scottish red rose, he would argue—as his colleagues have done on the privatisation of electricity—for a Scottish steel company that was prepared to take on an English steel company, a Welsh steel company or other regional divisions of British Steel. That was the lacuna in the speech of the hon. Member for Dagenham. There was a total absence of faith in the ability of the Scottish division of British Steel and of Ravenscraig to stand up to the forces of competition and the commercial play inside the domestic United Kingdom economy—let alone within the European Community.

This new clause is a Ravenscraig protection clause, but it is none the worse for that. If it is a clause simply to protect Ravenscraig, it might have been more honest if those hon. Members advocating it from the Opposition Benches had said, "We want to protect Ravenscraig for ever," or, "We want to protect it for 20 years, 40 years or 60 years." To dress it up in this special report, in terms of their distrust of monopoly and uncertainty whether the privatisation should be entire or partial, is completely bogus.

Of all the things that the Opposition could have argued this afternoon, they cannot argue that the Ministers have not taken seriously the arguments for preserving Ravenscraig. I am delighted to see the Minister of State, Scottish Office here. Since 1979, Ministers have done little else in the Scottish Office but take the arguments for Ravenscraig seriously. Had they not done so, had they absolved themselves of any social responsibility in that area of Scotland, Ravenscraig would have been closed some years ago.

The Scottish Office and Industry Ministers have bent over backwards seriously to consider the problems of Ravenscraig. This does not come easily from my lips, but they have taken a balanced approach to these matters. They have looked at all the social and economic consequences of closing such a large plant. They have looked at the dependence of the local economy upon it and they have drawn quite the opposite conclusion from that inferred by the hon. Member for Motherwell, South (Dr. Bray). The Scottish Office and the Department of Industry have protected Ravenscraig for nine years. Further, they laid out clearly before the House on Second Reading and in Committee the prospect of Ravenscraig surviving for some years ahead. The argument that the Scottish Office or the Industry Department have not taken Ravenscraig seriously does not stand up to serious examination.

Will the hon. Member accept that I largely agree with what he is saying about political decisions having kept Ravenscraig open? However, what he has not mentioned is that, for the past five years, Robert Scholey has been wanting to close it. Does the hon. Member expect Sir Robert to keep it open when he will no longer be subject to the scrutiny of a Minister in the Scottish Office and he can make up his own mind? What does the hon. Member expect the future of Ravenscraig to be with Sir Robert in charge?

That is an interesting intervention, which I shall answer. I have slightly more faith in the observation of the hon. Member for Motherwell, South in moving this new clause than in that of his hon. Friend the Member for Rotherham (Mr. Crowther). The hon. Member for Motherwell, South has assured us that Ravenscraig is "fully competitive". If Ravenscraig is fully competitive, I have no doubt that the markets, the future shareholders of the British Steel Corporation and the board of the British Steel Company plc will fully endorse the view of the hon. Member for Motherwell, South. There will probably be no question of Ravenscraig being closed.

It was as a north-east Member of Parliament that I first visited Ravenscraig and involved myself in these arguments. The hon. Member for Darlington (Mr. Fallon) has not understood the argument. While Ravenscraig is viable and is justified as contributing a net addition to the income of the country, BSC—when constituted as a private monopoly—would still find it in its interest to close Ravenscraig. That is a typical monopolistic action. If the hon. Member would like to see the figures spelt out in detail, I shall be happy to give him the Arthur Young report.

The market, the research analysts and those who follow steel pricing will be disappointed with that intervention, because they already see the faith of the hon. Member for Motherwell, South slipping a little. In his first speech, he said that Ravenscraig was "fully competitive". Now he says that Ravenscraig is viable— [Interruption.] He said "viable". He said that its retention is fully justified if one takes the longer-term view. The markets have heard that one before, and they will hear it again. However, "viable" and "fully justified" are not of course the same as "fully competitive".

The Ravenscraig-Shotton-Dalzell group would be fully profitable.

I am reassured. If the group were to be fully profitable, I see no reason for the markets that follow those matters, the investors in British Steel or the board to go to an annual general meeting or to the City proposing the closure of those plants. I am sure that the new reassurance from the hon. Member for Motherwell, South will be regarded as strongly as his original offering that Ravenscraig is "fully competitive".

Having dealt with the point about full competition, with the assistance of the hon. Member for Rotherham, I turn now to the suggestion of the hon. Member for Dagenham that the report might assist in some way and that the function that he suggested in new clause 3, which was not selected, might be attributed to the ombudsman. I refer to his complaint that no regulatory agency is to be set up. Of course I am concerned, as he is, that the British Steel Corporation should not exercise a monopoly. That is important for my constituency also. The British Steel Corporation has a half share in one of the major employers in Darlington. Therefore, I do not want it to abuse its monopoly position in the United Kingdom domestic market, any more than the hon. Gentleman does. However, I am not clear—I do not think that the hon. Gentleman's other new clause has been selected, so we will not be able to explore this point fully—exactly how the ombudsman or "Ofsteel" agency would cut across the normal rules of competition policy or the remit that the European Community has in that regard.

I am grateful to the hon. Gentleman for giving way, especially as I pay him the credit of knowing that he is one of the prime exponents and supporters of free markets and therefore, one assumes, of competition also. I take seriously his statement that he too is concerned about the abuse or potential abuse of monopoly by a privatised steel company, but what does he propose to do about that?

I am grateful to the hon. Gentleman; I share that concern. We have heard from my hon. Friend the Member for Stockton, South (Mr. Devlin) about the Canary Wharf development. One of the major fabricators in this country, Cleveland Bridge, in my constituency, has the contract for that development, but it must purchase the steel. Therefore, I am concerned that, when privatised, the British Steel Corporation may be able to abuse or to exploit its position in the United Kingdom market.

The point that I was putting to the hon. Member for Dagenham and that he was putting back to me was that I do not see how an ombudsman or an "Ofsteel" regulatory agency could necessarily have a stronger regulatory framework than the normal rules of competition policy or the supervision that the Commission exercises in that regard.

Again, I am grateful to the hon. Gentleman because he was honest enough to say that he had not answered my question. Between the question that he is putting to me and the question that I wish to put to him, it is fair to say that we are scrabbling around the margins of a situation that we do not wish to see arise. However, he and the Government, who are the supporters and sponsors of this Bill, are committed to the outcome, so he has to answer the question rather more pointedly than I do. I return to the question: what would he do to allay the fears that he has conceded he feels?

That is a fair question. All that I am saying is that new clause 3, which has been tabled by the hon. Gentleman, does not go anywhere near as far as we need to go. His regulatory body, which is not called "Ofsteel", but the Office of Fair Trade in Steel, would have, I understand, only a monitoring and reporting role. He does not envisage that office going any further than the present competition policy scrutiny arrangements allow. Therefore, we are entitled to ask how much further new clause 1 takes us. If it is his view that the monopoly aspect of a privatised British Steel Corporation should be of paramount concern to consumers and to industrial customers, he must come up with firmer regulatory arrangements than either his hon. Friend the Member for Motherwell, South or he himself has proposed.

In conclusion, arguments can be put forward against the privatisation of British Steel as a single entity and arrangements could be advanced by the Opposition for ensuring greater competition. However, the primary amendment or time of attack of this Report stage is this somewhat ambivalent new clause which seeks on the one hand to suggest that British Steel's monopoly is a threat, but on the other hand, and at the same time, requires an extraordinary and permanent degree of protection for one plant. I for one certainly oppose the new clause.

4.45 pm

I support the broad thrust of new clause 1. The reasons for this debate are, first, the way in which the privatisation is being brought forward and, secondly—this appeared not only on Second Reading but on Report—that the Government are anxious to get British Steel off the stocks while the books look acceptable and have not considered any option other than to sell it as a single entity.

Even if one brushes aside ideological and philosophical arguments, the thrust of the new clause is that, having decided that our steel industry was ready to be put into the private sector, any responsible Government would wish to look at every conceivable way in which that might be done so that they could pursue the best possible option. The House is entitled to conclude that the Government have not made any such attempts, but have simply said, "Heavens, we have a slippage in our privatisation programme. British Steel looks profitable. Let us flog it off as quickly as we can before we have even considered the best way to do it." The House is entitled to ask the Government to explain why they have not considered the options or, preferably, to say that they are prepared to consider the options and have decided on the particular course of action that is most appropriate, having presented the facts to the House.

Hon. Members representing Scotland are especially worried about the implications of the Bill for the future of Ravenscraig. In an intervention the hon. Member for Stockton, South (Mr. Devlin) told us that international competition would ensure that matters of choice and competition would be resolved. The hon. Gentleman proceeded to point to a location for the landing of foreign steel that is about as far away from the Scottish steelyards as one could get, in circumstances where the yards that manufacture steel for North sea oil production are reasonably expecting increased demand in the future and wish to look to a good quality competitive local supplier, which is what they have had in the past few years in Ravenscraig.

Another matter of concern, which has already been mentioned by the hon. Membr for Rotherham (Mr. Crowther), is that the British Steel Corporation has made little secret of the fact that it wishes to offload Ravenscraig. Indeed, if I am not mistaken, it attempted to present information that gave the impression that Ravenscraig was not viable, when in fact it was. The corporation loaded the accounts in a certain way to lead to that possible conclusion. That bears out the anxieties not only of Scottish Members, but of all Opposition Members.

The argument that was put forward by the hon. Member for Darlington (Mr. Fallon), that somehow the market is always right and that if an entity is profitable or viable it has nothing to fear, is naive. It is possible for those in an organisation to say, "We have four viable enterprises, but we could rationalise them into three viable enterprises." That may or may not make any difference other than one of managerial convenience. It may make a marginal improvement in efficiency, but it may not. However, the idea that because one of the enterprises is profitable such a decision would not be taken is foolhardy and is not borne out by the facts.

Ravenscraig is so crucial to the core of what is left of the Scottish industrial economy that its loss would he a damning blow. We should take on board the fact that we are talking about a Scottish economy which at the moment sustains over 5 million people and which, according to Government forecasts, will sustain only 4·8 million people in 12 years' time. Unless we can reinvigorate our whole economy we shall not be able to hold the population that we have, never mind add to it. It is really not credible to argue that if an entity as large as Ravenscraig were taken out there would be sufficient residual strength in the Scottish economy. Ravenscraig is crucial not just to the 5,400 people employed and the £300 million turnover that it represents, but to the whole Scottish industrial infrastructure.