Steel Production

Oral Answers to Questions — Technology – in the House of Commons at 12:00 am on 1 December 1969.

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Photo of Mr Patrick McNair-Wilson Mr Patrick McNair-Wilson , New Forest 12:00, 1 December 1969

asked the Minister of Technology what is his estimate of the total cost and volume of steel orders placed abroad by the British Steel Corporation to offset their own shortfall of production this year.

Photo of Mr David Lane Mr David Lane , Cambridge

asked the Minister of Technology how much steel ouput has been lost because of industrial disputes so far this year, and with what effect on the British Steel Corporation's financial estimates.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

asked the Minister of Technology whether he will make a statement on steel production during the 12 months ended on the latest convenient date, compared with the two preceding years; what contribution the nationalised steel industry is making to the Government policy of imports substitution; and why steel imports are rising.

The Paymaster-General (Mr. HaroldLever):

Crude steel production in the United Kingdom in the year ending 30th September, 1969, was 26·6 million tons, compared with 25·1 million and 23·5 million respectively in the two previous years. B.S.C. put total losses of production this calendar year at about a million tons of crude steel, of which about 750,000 tons resulted from industrial disputes; these losses through industrial disputes are estimated to be equivalent to £40 million in turnover and perhaps £12 million in reduced profit. In order to meet rising demands from United Kingdom consumers and to minimise the reduction of exports they expect to import this calendar year about 860,000 product tons at a cost of some £37 million.

Photo of Mr Patrick McNair-Wilson Mr Patrick McNair-Wilson , New Forest

I thank the right hon. Gentleman for that answer, but is he not thoroughly disappointed by the inability of the British Steel Corporation to meet the production required by its own customers? Does he not realise that, unless its performance improves, we may well lose valuable export orders which have come to Britain in the past?

Mr. Lever:

I am sure the hon. Gentleman would wish to be fair and recognise that there has been a steady and substantial increase in production, although most unhappily last year we lost 1 million tons in the manner I have described.

Photo of Mr David Lane Mr David Lane , Cambridge

Bearing in mind the excellent record of industrial relations in the steel industry in the days of private enterprise, what steps are being taken to reverse the recent deterioration?

Mr. Lever:

The hon. Gentleman is implying too much from my reply in taking it to mean that there has been a change in the excellent industrial relations in the steel industry. The answer is that its relations are normally excellent and I am very hopeful that they will continue to be excellent but there can be occasional moments of emotional stress where difficulties arise.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

But industrial disputes apart, does not the answer mean that exports will continue to fall and imports will continue to rise, all of which must be anathema to the Government policy of import substitution? When will the Government support their own policy in the context of the steel industry?

Mr. Lever:

It is well to bear in mind that the increased imports of steel and the slight reduction in exports derive from the very considerable increase in the use of steel in total—that is to say, we have sacrificed some of our exports to meet the urgent needs of the home trade and there is a world boom at the moment in steel consumption.

Photo of Mr Ronald Atkins Mr Ronald Atkins , Preston North

Would not my right hon. Friend agree that the British Steel Corporation is doing precisely what other steel-producing countries are doing.

with the single exception of Japan since the Japanese steelmakers had the foresight, which has been lacking among British steelmakers, to produce sufficient capacity to meet future demands?

Mr. Lever:

It is well to take my hon. Friend's adult view that what happens today is not the result only of what has been done yesterday, but is the product of what has happened several years earlier. One must be fair and recognise that over a period of years there has been a certain general background disturbance in the steel industry politically.

Photo of Mr John Eden Mr John Eden , Bournemouth West

Does not the world boom make it all the more disappointing that British steel is not in a position to meet demands for exports? Would not the right hon. Gentleman agree that the gap should be closed by improving productivity and deliveries rather than by trying to raise prices at home?

Mr. Lever:

On the latter part of the question, the British steel industry is fully competitive in price with its European competitors and we will raise prices only so far as it is justified. Of course, we are anxious to increase productivity and over-all production to meet the boom, but the British experience is by no means unique.