Steel Industry

Part of the debate – in the House of Commons at 12:00 am on 16 February 1970.

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Photo of Mr Donald Coleman Mr Donald Coleman , Neath 12:00, 16 February 1970

I wish at the outset to declare my interest in the steel industry. The hon. Member for New Forest (Mr. Patrick McNair-Wilson) said that he had at one time been employed in the industry. I, too, have been employed in it. Indeed, I am still a member of the British Iron, Steel and Kindred Trades Association, the trade union to which the overwhelming majority of people engaged in this great industry, in both the public and private sectors, belong.

I, too, had the privilege of serving on the Standing Committee which brought the major part of the British steel industry into public ownership. It is because of the qualifications that I have that I am jealous of the interests of this great industry. It is because of this jealousy that I venture into this debate.

Those engaged in the steel industry do not believe, nor do I believe, that it serves the interests of the industry to make it the object of the obvious propaganda that we have had from hon. Gentlemen opposite tonight. No one complains of a debate on the British steel industry but surely one can complain when the Opposition are so little concerned about the industry that they have failed to provide a whole Supply day. If they were really concerned, that is what they would have done. It will not go unnoticed outside by those who really have the interests of the industry at heart that, once again, we have had hon. Members opposite playing politics round the head of the most important British industry.

When we supported the Government's intention to bring a major portion of our steel industry into public ownership, hon. Member's opposite attacked us by saying, and they say it now, that we would ruin the industry by such a monstrous Measure. They said that production would fall and that, as a result, our steel industry would decline. It is interesting to note that in 1969 steel output was up by 2·2 per cent.; and that figures recently issued jointly by the British Steel Corporation and the British Independent Steel Producers Association show that United Kingdom crude steel production totalled 26,422,500 tons in 1969, an increase of 2 per cent., or about 560,000 tons, on 1968.

I turn to the output side, because it must be stated that these figures are about 1 million tons short of the level forecast about a year ago. It is claimed that the shortfall results from production losses during the year. This can only refer to loss of production through dis- putes in the industry, but comment from this side is necessary if we are to have a balanced consideration.

I point out in particular to those who have responsibility within the Corporation for labour relations that over many years the system of regulating those relations has been built up and worked with a degree of smoothness that would have benefited many other industries. We may not have always agreed with one another, but we always respected one another. I urge those now responsible to realise that steel industrial relations have been conducted at a fairly sophisticated level for a very long time, and have never been based on the law of the jungle.

Steel output in December averaged 520,300 tons a week on a seasonally adjusted basis. This was the highest output for six months, and showed an increase of 12,900 tons a week on the November figure. I refer especially to the fact that production in the South Wales steel plants showed a good recovery in December, because it is a real illustration of the contribution of the people of Wales to the wellbeing of the United Kingdom and in sharp contrast to the lunatic behaviour of a tiny minority of Welsh people who are bent on the destruction of the livelihood of the people of Wales and of the United Kingdom.

I turn to the question of the increases in steel prices. The Government's agreement to an average increase of 10 per cent. in steel prices from 28th January will mean that an extra £100 million in revenue will be available to the British Steel Corporation. That will enable the Corporation to meet the extra cost it has incurred over the past months, to pay off part of the deficit and show some return on the £700 million worth of public dividend capital with which the State financed the Corporation. It will also mean that the Corporation can get ahead with its modernisation programme which involves replacing uneconomic plant with new plant based upon the lastest manufacturing technology. This in turn will mean that redundancies can be kept to a minimum and that the future price of British steel is competitive in world markets because it is made in plants using modern techniques of production.

It is not only in Britain that there has been a demand for increased prices. Foreign steel makers have increased their revenues by increasing prices while British steel prices have been kept artificially low. Much of the increased revenue to foreign sources has been reinvested in order to increase production which, in turn, will lower prices in world markets. We must not prevent the British steel industry in these circumstances from increasing its own revenue which will enable it to match the investment of overseas steel manufacturers; otherwise, what will happen in time is that British steel will not be competitive with foreign steel.

Such a situation cannot and will not be in the interests of British steel workers and cannot be tolerated by them. We have seen the difficulties put on others of our basic industries through lower prices forced upon them as a means of subsidising other industries, which has meant that they have been unable to raise the necessary revenue to finance developments which ought to have been made, and I am thinking here particularly of the coal mining industry. There are people who have attacked the decision to increase prices on the ground that it will lose for us competitive gain for this country as a result of devaluation.

Even with a 10 per cent. increase in prices British steel prices are still 5 per cent. lower than those of our foreign competitors and therefore if it is held that this cost advantage to our industries will mean that they are not competitive then we should take a very close look at others of our manufacturing industries because there is surely something wrong with the efficiency of those industries if they cannot work on the basis of steel prices at this level.

Steel workers have long recognised that their interests are inseparable from the fortunes of their industry, and they will hold members of the Corporation entirely responsible if they fail to take advantage of the more favourable conditions under which they now operate—and so, too, will members of the party on this side of the House. But I feel that with an industry in public ownership there is much more likelihood of this industry being sensitive to the need to take the opportunities which are now becoming available to it as a result of increasing investment and better world conditions.