Orders of the Day — Steel Industry

– in the House of Commons at 12:00 am on 23rd May 1972.

Alert me about debates like this

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral 12:00 am, 23rd May 1972

Before calling upon the hon. Member for Chesterfield (Mr. Varley) to move the Motion, I want to inform the House that I have selected the Amendment in the name of the Prime Minister and the names of his right hon. Friends.

I want also to say something about the length of speeches. I should like to thank right hon. and hon. Members for their help yesterday. There were four Front Bench speakers, and they took less than 30 minutes each on average. I was, therefore, able to call 20 hon. Members from the back benches, and they averaged about 12½ minutes each.

I have a similar problem today. There is a very long list of hon. Members who wish to speak. I hope that there will be the same degree of co-operation and restraint. Even so, I am afraid that there may be some disappointments.

4.8 p.m.

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

I beg to move, That this House deplores the Government's statement on the steel industry of 8th May, 1972 which, providing no guarantee whatever of an expanding British steel industry, consequently creates further unnecessary uncertainty for the British Steel Corporation, arouses fears about employment prospects among the workers in the industry, and, necessitating as it will large-scale imports of steel in the future, involves hazards for the country's balance of payments. In moving the Motion, it is right to draw the attention of the House to the curious case of the Secretary of State who did not bark in the night. This is not the first debate that we have had in this Parliament about steel. The statement that we had on 8th May was not the first statement we had had about the steel industry. We had debates on 18th March. 24th May and 30th June, and the Secretary of State took part in all those debates. We had statements on steel on 5th April, 27th April and 28th June. The Secretary of State made all three statements. In the last of these statements on 28th June the Secretary of State confidently said, In due course I look forward to completing this series of announcements."—[OFFICIAL REPORT, 28th June, 1971; Vol. 820, c. 33.] The Secretary of State is responsible for the steel review. That has been made clear in this House. Yet, two weeks ago it was the Minister for Industry who was put up to make a statement which was harmful and damaging to the industry while the Secretary of State cowered behind him on the Front Bench.

Today we are informed that it is the Minister for Industry who will defend that statement, whilst once again the Secretary of State lurks behind him. [Interruption.] Yet it was the Secretary of State who so bravely proclaimed to the Scottish Tories in Perth recently that Ministers must stand up and be counted for their decisions. He also said that they should face the whistles and catcalls that result.

It does not take much courage to talk like that to docile Scottish Tories, but it is not good enough for the right hon. Gentleman not to have followed through all these things when he set them up. After all, the Secretary of State is responsible for the steel industry, and the powers of the Iron and Steel Act are vested in him.

The Secretary of State's discourtesy to this House would not be so bad if that statement of two weeks ago had in any way helped to lift the uncertainty that hangs over the future of the British steel industry. It would not have been so bad if the Secretary of State had come to the House and confirmed an expanding steel industry. But all we had on 8th May was a miserable apology for a statement which still leaves the whole situation in an unsatisfactory state. However, the review is not yet over. We are told in carefully chosen words that the Government are to continue to be closely involved in the strategic decisions of the continuing review. So, after two years of Conservative Government the steel industry has less of an assured future than it had when they came to power.

It is important to remember the principles upon which the Government were elected. Their 1970 election manifesto pledged: We will progressively reduce the involvement of the State in the nationalised industries, for example, in the steel industry…". In October, 1970, at the Conservative Party conference, the Secretary of State elaborated on this theme: a word about the nationalised industries.…Government must withdraw from its perpetual scrutiny and commentary upon the managements concerned—a process which undermines authority, constitutes a permanent alibi for inadequate performance and represents a serious inhibition to recruitment and the development of efficient management from within". But what has happened? The then Minister for Industry, now the Minister of Posts and Telecommunications, the right hon. Member for Bournemouth, West (Sir J. Eden), has continually and constantly interfered with the affairs of the British Steel Corporation. We all know what the Prime Minister did on that famous Friday afternoon when he interfered and instructed the Secretary of State to issue a general direction. The Government, instead of withdrawing from their perpetual scrutiny and commentary on the British Steel Corporation management, as the Secretary of State insisted they must, have continually imposed upon that management the constitutional monstrosity of the Joint Steering Group, about which I shall have something to say later.

The Joint Steering Group was composed of civil servants and the officials of the British Steel Corporation. Certainly the civil servants had no mandate to interfere with the British Steel Corporation, but they were interfering at the early stages in the day-to-day management decisions. They were acting on political criteria alien to the rôle of civil servants.

It was bad enough that the Corporation was subjected to that kind of political meddling, but far worse that the meddlers were not answerable to this House. If the Government are to go in for this kind of technique, this kind of joint steering group, this kind of operation, they should at least have put a Minister directly in charge as a member of the Joint Steering Group.

That is not all. The Minister told us that the Government have also had advice from external consultants Who were these external consultants? Can we be told whether they were British or foreign? How much were they paid? To what information were they given access? Why should those external consultants have available to them information which is being denied to the House of Commons?

The Joint Steering Group was, as we pointed out, an unacceptable device, but at least its members were public servants. So why should the livelihoods of British steel workers depend on the say-so of anonymous external consultants? We want to know who they were, where they came from, how much they were paid and what information they had. If they can have such information, the House of Commons should be able to have it. The Minister must give us this information.

Instead of being allowed to get on with the job of making, selling and exporting steel and providing assured employment for steel workers, the management of the British Steel Corporation has been reduced to a state of wimpering impotence. There is no doubt about that when one looks at what is being said. In 1972 the Corporation nervously welcomed the statement made by the Minister for Industry on 8th May which, at a maximum target range, gives the British Steel Corporation 7 million tons less than it targeted for in 1971 and is more likely to be 15 million tons below that target.

There is a frown on the brow of the Minister for Industry. If he looks at the statement made by the Secretary of State for Trade and Industry he will see that he publicly announced to the House that the British Steel Corporation's target in 1971 was 35 million tons by 1975 and 43 million tons by 1980. If the Secretary of State says that is wrong, then before this debate finishes I will show him that reference in HANSARD.

No wonder the Chairman of the British Steel Corporation, Lord Melchett, in a television interview with Kenneth Harris on Sunday night, complained about Government intervention, interference, investigation and endless questioning. No wonder he pleaded for an end to driving from the back seat.

In his statement two weeks ago the Minister for Industry talked about a production range by 1980 of between 28 million and 36 million tons. However, on the same day he gave the game away when, in answer to my right hon. Friend the Leader of the Opposition, he said: whether they go at the top or the bottom of the bracket will depend on what additional capacity is built, where it may be needed, and to what extent changes are needed in the present production plants."—[OFFICIAL REPORT, 8th May, 1972; Vol. 836, c. 919.] The Minister for Industry is admitting that the Government are targeting for 28 million tons, although anything which can be achieved over and above that figure would be nice. A figure of 28 million tons means no expansion. It has been pointed out already that the Corporation's existing capacity is around 27 million to 28 million tons, so the Government are budgeting for almost no growth at all. No wonder, that in the delicate language that the Government now use, it is said that the British Steel Corporation accepts—not agrees—their figures.

What they do not say is that Lord Melchett has publicly stated that the difference between the top and bottom range was affected by hopes for exports. Does that mean that the Government are writing off the British Steel Corporation as an expanding exporter? Are the Government saying they have no confidence in the Corporation having any export potential? Nor do the Government draw our attention to another ominous comment made by Lord Melchett about the review, when he said: If demand does grow faster than has been anticipated we could have a period of steel shortages. That is what the Chairman of the British Steel Corporation said.

So after all this interference and all these delays nobody—and that includes the Government and the BSC—has the faintest idea about the future size and structure of the BSC. The older constituent parts such as Irlam and Shelton and the Newport tube works are left in the dark about their prospects. We are told that their fate depends upon the Government's latest planning study; but surely we have a right to more information about this? My right hon. Friend the Member for Newton (Mr. Frederick Lee) will have something to say about Irlam if he catches your eye, Mr. Speaker, but there is concern about the future in all these areas.

I understand that the Minister for Industry has been meeting representatives of the Shelton workers, and I hope that today he will say something about the position there. But the Minister's meeting, highly welcome as it is, raises another question. Is the future of Irlam, Shelton and the Newport tube works being decided by the Government? Is that what meeting with the Shelton workers now means? If it does not mean that, what is the purpose of the meeting? Or can we have it confirmed that this is a matter for the Corporation? I think the Minister nodded a few moments ago to say that he has been meeting the Shelton workers. He may have been meeting other workers also.

Photo of Mr Roy Hughes Mr Roy Hughes , Newport (Monmouthshire/Gwent)

Workers at the tube works in Newport cannot understand why the works is to be closed down. It has been established for over 50 years, and throughout that period it has been highly profitable. It occupies a valuable site and has a very good industrial relations record. We cannot see any commercial reason why it should be closed.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

Order. I must warn hon. Members who intervene that they are prejudicing their chances of being called.

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

My hon. Friend the Member for Newport (Mr. Roy Hughes) is right. We want to know the answers because the Government have been blowing hot and cold on this matter. In debates they have been saying that these are matters for the BSC, but now the Minister has been meeting workers from one of the older plants and we want to know exactly what the Government's rôle is.

There are, however, more fundamental questions which need to be answered. Some careful students of the Minister's statement infer that saving the older works would, on the Government's own estimate of future capacity, leave hardly any scope for new projects. In his speech at Perth on 12th May the Secretary of State seemed very strongly to be ruling out hopes for a new green field works, as reported in the Financial Times on 13th May. The Minister himself pointedly, and probably provocatively in some senses, gave that impression two weeks ago. He said that major expansion projects such as a new green field site would rule out reprieve of the old works.

People in the old steel areas want to know what their future is. Have we got to the stage where it is a question of "either/or"? Has the squeeze been put on the Corporation to that extent? But the more fundamental question to which we need an answer is: what is happening about future expansion'?

The Economist called the Minister's statement a "steel contraction plan". Does that mean, for example, that the green field site, on which the development areas are banking so much, is no longer on? Have the Government ruled it out or is the real truth, which the Government are anxious to conceal, that the green field works will be on some foreign field? A senior executive of the Corporation has been quoted as describing a massive European steelmaking complex with BSC participation as 'very, very certain". We have all seen com'ments about that in the newspapers. So is that the plan? Is the plan not to export British steel, which would provide jobs at home, but to export instead steel employment prospects? I hope the Minister will be able to tell us, because this is absolutely crucial.

So the "steel contraction plan" seems to have ruled out to some extent a green field site in a development area. Can the Minister tell us whether the brown field site has been ruled out, too? I know my hon. Friends from the North-East are basing their hopes on expansion at a brown field site. Does it mean, as the Economist again speculates, that there will be room only for a couple of the currently fashionable mini-mills? Is that the Government's thinking, that it is no longer a question of a vast integrated complex but of building mini-mills? We are entitled to information about this because of the speculation that there has been about it.

The fact that these questions still have to be asked 14 months after the deep-seated review of the industry was first announced by the Secretary of State is a sign of the demoralised state of the industry under this Government. This demoralisation is not only confined to management in the BSC. It goes right through the industry. When the review was first mooted the Secretary of State for Trade and Industry assured the House and my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) that there would be discussions with the steel trade unions. But there has been none.

I have a letter from the TUC Steel Committee which states categorically that the Minister refused to be drawn into any discussion at all and that that meeting, described by the Minister on 8th May, which took place in March, did not clear the situation up at all. It is worse than that. The letter from the Secretary of the TUC Steel Committee referring to the meeting says: meetings with the former Minister for Industry were a waste of time as he refused to give any information, other than that publicly available, about the BSC's development on the pleas of either confidentiality or Parliamentary privilege". Why was the TUC denied information which was made widely available, I assume, to the Government's mysterious external consultants. Why are the external consultants immune from the pleas of confidentiality and parliamentary privilege which made the meetings with the TUC Steel Committee such a farce?

This is a disgraceful way in which to treat some of the most responsible men in the British trade union movement. It is certainly in direct contravention to the specific ministerial pledge and the pledge that was given by the Secretary of State to my hon. Friend the Member for Ebbw Vale? The steel trade unions have a fine record of co-operation with management, and, whatever the industry's future shape and size, it is certain that this co-operation will be needed more than ever in the future. But what a way to win it, treating the steel trade unions in the way the Government have treated them.

I hope the Minister for Industry can tell us that he will do something more positive by way of consultation than what has taken place so far. If not, I suppose that at some stage, if there is trouble in the steel industry involving the steel trade unions, we shall probably find that the Chancellor of the Exchequer will call a hurried meeting at the Conservative Central Office and talk about blackmail or something like that, and the Secretary of State for Employment will probably go to those mysterious creatures, the Tory trade unionists, and speak about wild talk.

If the Government cannot take the steel trade unions into their confidence about something as crucial as this, the seeds of tomorrow's industrial trouble are being sown today by the Government's aloof and uncaring attitude. The men in the steel industry have a right to know their employment prospects. It is already known that the Corporation's short-term rationalisation plans envisage a reduction of more than 50,000 by, I think, 1975. The workers have a right to know whether those who remain will be part of an expanding steel industry in which the job prospects are secure, or whether they will lose those job opportunities.

The Industry Bill which we debated yesterday will not be worth the paper it is written on if we are likely to take away the employment prospects which go with an expanding steel industry. As the Secretary of State continually tells us, 50 per cent. of the steel industry is located in the development areas, so if there is to be a rapid rundown, if there is not to be the expansion that everyone expected, not only will the Government have trouble with the steel unions but there will be difficulty in generating employment as the Government want to do under their Industry Bill.

Most of all, the steel workers need to be assured that there is sufficient steel-making capacity in this country or that if there is insufficient we shall not have to rely on imports, taking away their livelihood. If we are to achieve the sustained economic growth which everyone hopes will take place and which the Government have said will take place, the situation will be as the Economist describes it: … if the Government is right"— that is, on the steel contraction plans— BSC's future is one of a sharply decreasing share of both home and export markets. The slack would be taken up in the main by imports. That may well be what the Government want. The Minister of Posts and Telecommunications, when he was Minister for Industry, was once persuaded to that point of view, that it was not necessary to build industry. I marvel at the shortsightedness of the Government, first in so mismanaging the fuel policy that we have got into balance of payments difficulties on that front, with the growth of im- ported oil, and now in deliberately crippling the steel industry, again at the expense of the balance of payments.

The Cabinet must have discussed this increasingly difficult problem at Chequers yesterday. It is a pity the Secretary of State is not taking part in the debate, because he could tell us whether the Cabinet discussed the worsening balance of payments situation. It must have considered the depressing trade figures so far this year. It must be aware of the estimates that in the first few months we have a balance of payments deficit. The Government inherited a £600 million balance of payments surplus from the Labour Administration, and all that has been frittered away.

The Government's plans for the steel industry will make the balance of payments situation worse. It is calculated on the British Steel Corporation's export record that a capacity of 36 million tons will be needed if the Government achieve a 3½ per cent. growth rate in the economy. But in his Budget the Chancellor planned not for a 3½ per cent. growth rate but for a 5 per cent. growth rate, so how could the Minister for Industry have the nerve in his statement to talk about a more realistic approach? Will he clear up this matter once and for all by telling the House the Government's estimate of British steel consumption by 1980? Is it that their estimate is exactly the same as that of Lord Melchett and his team but that they have not the confidence in the Corporation or those who work in it? How much steel will need to be imported on a 5 per cent. growth rate, assuming only 30 million to 35 million tons produced? The Minister must have that figure. The Joint Steering Group had it, and presumably the external consultants have had it. Why cannot the House have this information?

In his speech to the Tory Party conference in 1970 the Secretary of State for Trade and Industry modestly said: I know my way around the industrial world, and I mean to put that knowledge to use. He has put that knowledge to use, and for the steel industry the result is the biggest shambles we have ever known. There is no clear plan. There is a 25 per cent. production range without realism or meaning. Anyone who says that it has meaning or realism must be living in cloud cuckoo-land. A modicum of certainty and optimism is necessary for the steel industry if only to face up to the challenges the Government keep telling us we shall have. But we have had no assurance about the job prospects, in a summer overshadowed by 900,000 unemployed. In an industry which should be equipping itself for a major exporting potential, we are faced with a Government quite happy to accept an accelerating rate of steel imports on an unprecedented scale. That is what the statement means.

The question goes much deeper than that. Do the Government really want a strong, thriving and expanding British steel industry, or do the decisions they have announced this month mean that they have, in effect, written off steel as a growth industry? It certainly looks like that to us. Have the Government lost hope and confidence in the steel industry, when countries on the continent of Europe are fostering efficient and profitable steel industries? What we want from the Government, though I do not think we shall have it today, is a message of confidence for the industry, its workers and management.

In that spirit, we have the right to ask for clear, urgent decisions. All the information that has been made available to the Joint Steering Group and the mysterious consultants should be made available to the House in the form of a White Paper. Why cannot we have the information? If the Government are saying with certainty that their plan is right, why do they not give us the information, so that we can make a judgment? The workers in the industry have a right to know what their future is being based on. Parliament has a right to know, since it is the ultimate authority.

We were promised honest and open government by the Prime Minister when he came to office. We have not had honesty with regard to the statement. It is because we have not had honesty and openness that we put down the Motion and shall divide the House tonight.

4.40 p.m.

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

I beg to move, in line 1, leave out from 'deplores' to the end of the Question and to add instead thereof 'welcomes the Government's statement of 8th May on the steel industry with the announcement of the continuing high momentum of investment as a major contribution to the flexible development of an efficient modern and profitable industry, thus able to provide greater security of employment and to make its full contribution to an expanding economy both regionally and nationally'. The hon. Member for Chesterfield (Mr. Varley) did less than justice to himself by the way in which he opened the debate. I can well understand why hon. Members opposite are afraid of their right hon. Friend standing behind their back—that is one of the hazards of the Labour Party. To have the support and comfort of my right hon. Friend behind me is something that I welcome.

The hon. Gentleman was critical of the Joint Steering Group being composed of officials and the British Steel Corporation. There was an outside representative, a deputy chairman of ICI. The group prepared a report, the outcome of which and the decisions upon which are the responsibility of Ministers. There is no ducking the responsibility for making the decisions on the advice obtained. The hon. Gentleman knows that Ministers in all Governments are constantly receiving advice, particularly through officials, and to suggest that my right hon. Friend and I are hiding behind such a report is an abuse of the situation.

Photo of Gerald Kaufman Gerald Kaufman , Manchester Ardwick

Mr. Gerald Kaufman (Manchester, Ardwick) rose——

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

The hon. Member for Chesterfield referred to the consultants. They were from the American part of McKinsey's. They were given no confidential information. They were appropriate to be consulted because the advice they tendered was on world trends in steel. I can think of nothing better than getting outside advice, detached from any parochial view which we may have in this country, by calling in a firm of outside consultants, able to view world trends and the particular position of the British Steel Corporation in order to get an overall pattern which could help the Joint Steering Group in preparing its report.

Photo of Mr Alexander Eadie Mr Alexander Eadie , Midlothian

Mr. Alex Eadie (Midlothian) rose——

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

No. Let me develop my case. The hon. Gentleman may well have an opportunity of catching the eye of the Chair. It may also be that, as usually happens, I shall come to the very point he wishes to raise.

The hon. Member for Chesterfield made some severe criticism about the relationship between Lord Melchett and the Government. He referred to the television interview on Sunday. It would have been fairer if he had pointed out that the interview was no less critical of the relationship between the Labour Government and the British Steel Corporation—if, indeed, there was any criticism in the interview.

The hon. Gentleman then suggested that there had been some divergence of view and that pressure had been applied for some months to persuade the Corporation and Lord Melchett to put in or to accept a figure which was not there. The hon. Gentleman should accept that, as I said on 8th May, this was an agreed report, in which the Corporation fully participated and the result of which it fully accepted. I said on 8th May, and I will repeat, that the Corporation was inclined to take the higher end of the bracket rather more than the other members of the Joint Steering Group. The hon. Gentleman should not try to fabricate or blow up this apparent division between the Government and the Corporation. It does no service to anyone. My experience, short as it has been, is that there is full understanding between the Corporation and the Government both on the objective and on the common approach. If the hon. Gentleman is anxious to promote the interests of the steel industry, it would be far better to encourage that approach rather than try to create divisions.

The hon. Gentleman referred to an apparent failure or unwillingness to see the TUC Steel Committee. My predecessor saw the committee, as he intended doing, on 29th March. But the hon. Gentleman would have been one of the first to object if the contents of the statement made on 9th May had been released or given to the committee on that earlier occasion. The committee was told on 29th March that my predecessor—I confirmed this when I succeeded him—would welcome a meeting with it as early as possible after the statement had been made to the House. I am hoping to arrange a meeting shortly. The committee knows that I wish to meet it, and I shall welcome the opportunity to do so at the earliest possible moment.

I had hoped that the hon. Gentleman would have made clear the grounds on which the Opposition have been launching their criticism. I had hoped that he might have said what the Opposition would like to have seen done. I hoped in vain, but perhaps those of my right hon. Friends with longer experience at the Box could have warned me that I was unlikely to hear from tthe Opposition a common view. I have been waiting to hear what the Opposition want. Do they want several brown field or green field sites, each with a capacity of 8 million to 10 million ingot tons per year? I understand that they do. Do they want to retain the heritage works, where much money has been and is now being spent? Of course they do.

What, then, of those works where the iron and steelmaking plant is reaching the end of its economic life? Do they believe that these should be closed or that such capacity should be replaced where it is? I understood the hon. Gentleman to say that he thought it should be replaced. If he did not, then some of his hon. Friends do, and he had better make clear where he stands.

The Opposition appear to have added up the potential capacity of these three courses—green fields, brown fields and heritage works and all existing plants—and to have arrived at a total annual production above the Joint Steering Group bracket. This, they say, must be the demand forecast and the Joint Steering Group must be wrong. What a way to run a business!

Photo of Sir John Morris Sir John Morris , Aberavon

The hon. Gentleman is challenging the Opposition to say what they really want? Would it not, then, be prudent of the Government to provide for the Opposition, the trade union movement and the country the basis upon which the Joint Steering Group reached its recommendations? On that basis we could have a proper and informed discussion.

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

If the right hon. Gentleman will wait, I shall come to the most important question of the basis upon which the demand has been forecast.

It would be so easy if all that an industry had to do was to calculate what it could make, given unlimited funds, with the assurance that its total production could then be profitably sold. Not one word has been said by the hon. Member for Chesterfield to show how he has assessed future demand, what method of forecasting he used, what world and domestic factors were taken into account. He merely assumed that the figures of the Joint Steering Group were wrong. His criticism is solely on the basis that the higher the demand he predicts the less does he have to reduce the realities and say to the House or his own back benchers that they cannot have green field or brown field sites and the heritage works and keep open and modernised all existing plants.

The Government with the Steel Corporation have had a more realistic approach. They have assessed within the Joint Steering Group the various factors at home and abroad that would affect demand up to 1980. They have had the advice of outside consultants on world steel trends. They have had within the Steering Group a great wealth of experience and information and have arrived at a wide bracket as a guide for capacity requirements up to 1980.

These are estimates, not targets, enabling the Corporation to examine alternative options most effectively to meet the possible demands within that bracket. These are guides to enable the maximum flexibility to be built into the plans. They are estimates, determined not by the wishes of the Government or the Corporation or the Opposition but by external factors over many of which they have little control. They have balanced such adverse factors as world overcapacity—for example, in Japan, and hon. Members will know the position there—against such favourable influences as the opportunities which Europe presents and our rate of economic growth.

The hon. Gentleman asked what would be the position about imports if the rate of economic growth is at the rate predicted by the Chancellor. The rate of economic growth taken in these predictions is consistent with medium-term estimates of 5 per cent. referred to in the Budget and in the longer-term is consistent with a growth of gross domestic product substantially higher than we have had on average since the war and much higher than in the last 10 years.

Many hon. Members will be aware that the growth of gross domestic product is not consistently reflected in the growth of demand for steel. Mature economies tend to be decreasingly steel-intensive. The rate of steel consumption per head appears to decline as a fraction of gross product when the latter passes 2,000 dollars per head per annum. For example, in the United Kingdom during the four years 1966–70 gross domestic product rose by 2·2 per cent. per annum yet the trend of steel consumption rose by 0·7 per cent. per annum. That proves the disparity between the two trends. A further factor that has been taken into account is the competition that must be increasingly expected during the later years of this decade from alternative materials——

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

The hon. Gentleman says "Ah". Perhaps he will wait to see what the alternatives are.

Competition must increasingly be expected from alternative materials such as plastic, aluminium and concrete.

The effect of our entry into Europe was a relevant consideration in the Steering Group and the Government agree with Lord Melchett on the positive benefits that will accrue to the industry from joining Europe. It will benefit from the wider market, the lowering of tariffs and the dynamic effect on steel consumers. This is well recognised by those who work in the industry. They have more confidence in their ability to match man for man, skill for skill and manager for manager their counterparts in Europe than appears to be apparent from the Opposition.

The success of the Corporation in securing the Mexican contract in the face of severe international competition is a measure of its technical ability. The Steering Group is one more stage in the logical development of a positive and constructive policy for the industry.

I have said that we put great emphasis on flexibility. The range of 28 million to 36 million ingot tons is not what we have decided capacity shall be in 1980, it is what the Corporation and the Government have decided together to take as the planning framework within which certain important decisions must be taken later this year.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

If I am anticipating what the hon. Gentleman is about to say, I apologise. Will he now tell us on the basis of what he has said, on the basis of the Government's calculations of what is to be the expansion of the national product, on the basis of the 28 million figure, the figure to which the Government are inclined, what is the estimate of steel imports by 1980 which was the question put by my hon. Friend? I hope that he will give a specific answer.

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

I am sorry that the hon. Gentleman was not listening earlier. I obviously did not make myself clear, but I did specifically say that the rate of growth taken into this was consistent with what the Chancellor said in his Budget Statement. I am sure the hon. Gentleman does not want me to repeat that. The second part of the question related to imports. Within the framework of 28 million to 36 million tons are a number of factors and a number of variable estimates about imports. The Corporation believes that they will be net gains. I will deal more fully with this in a few moments, and the hon. Gentleman can come back to me if I have not dealt with it to his satisfaction.

I said that the range is one which we decided. We did not decide what the investment ought to be in 1980; it is what we decided to take as the planning framework within which even more decisions were to be made.

It is the market, the demand for steel here, in Europe and overseas, and the price which the Corporation's efficiency allows it to charge which will determine sales. It is this factor, too, which will determine the level of its exports and the level of imports. Capacity plans and demand forecasts will be revised at least annually at the annual investment review, and if our estimates prove, as time goes on, to be too low there will be flexibility to adjust capacity upwards by accelerating investments whether in big schemes or mini-mills and if necessary holding back closures.

We believe that this is the right course rather than, as the hon. Gentleman would have it, "building steelworks in the sky" on the basis of wishful thinking about sales, with all the penalties of under-utilisation, closure of existing major works, redundancies and so on that might follow if the sales estimates proved too high. It is now up to the Corporation to put forward its plans upon which it has been working while the Steering Group is proceeding to meet the estimated demands and building in the flexibility to take account of changes.

I cannot yet given any indication of what the strategic plan will be. It will be presented later in the year. The role of Government will then be to assess and approve it, keeping regional factors very much in mind.

Many hon. Members will I know be anxious about the effect on the works in their constituencies. I can fully appreciate the anxiety that there may be on the part of some of their constituents. My hon. Friend the Member for Manchester, Withington (Sir R. Cary) mentioned this yesterday, and, as the hon. Gentleman said, a number of hon. Members have seen me and have brought deputations to me from their local industries. I am sorry that I cannot today give hon. Members any answer, nor can I give the deputations any answer. Until the strategic plans are presented by the Corporation I cannot say what are its proposals for any of such plants. It is the role of Government to consider the overall plans when they are presented.

The hon. Gentleman appeared to criticise me for having seen his hon. Friends and my hon. Friends and for seeing deputations unless I was able to give them an answer. It is right when hon. Members have these anxieties and wish to present their case to a Minister with some responsibility that he should be prepared to see them personally. I made clear to each of these that I am not able to give them an answer but I have taken note of the points they make and will make sure that they are in the mind of the Corporation.

It has never been concealed that some reduction in employment will be necessary whatever capacity level is chosen. The object of much of the investment is to replace obsolete labour-intensive plants by the latest techniques.

This was accepted by the Opposition when in government. Indeed, the then Minister of Power, the right hon. Member for Barnsley (Mr. Mason), on the Second Reading of the Iron and Steel Bill on 8th May, 1969 said: … optimum use of the industry's resources must involve greater concentration than ever before on very large works exploiting the latest processes". Later in the same column he said: We all know that the concentration of the steel industry, like any other, can have social implications"—[OFFICIAL REPORT, 8th M3/, 1969; Vol. 783, c. 682.] This is common ground. What must be ensured is that BSC has full consultation with the unions and all involved—which it does—and that it makes fair arrangements for all those made redundant—which it does.

There will also be the additional benefit that will be available from the ECSC readaption arrangements, which we propose to negotiate for steel, as well as for coal. It is our own intention to see that those engaged in these industries get the advantages to which they are entitled as a result of the levy that the industry will pay. The Government will, as I have said, have regional factors much in mind in considering the overall investment plans of the BSC.

Let me remind the House of the traumatic experience that this industry went through due to the Labour Opposition.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

The hon. Gentleman said that he would allow me to raise again the matter of the estimated level of imports of the Government and the British Steel Corporation if he did not deal with it. He must understand that, in particular, those who work in the industry are faced with a very serious situation. The previous target of the Corporation was over 40 million tons. We now have a Government estimate of 28 million tons. We want to know how much of that estimate is steel imports.

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

I am sure that the hon. Gentleman would like to pick out one figure here and one figure there. The level of exports is no less important than the level of imports. The level of exports, and indeed the level of imports, will depend upon the achievement of an efficient industry and structure, and within the bracket of 28 million to 36 million tons there is flexibility to take account of the various levels of exports and imports.

Let me remind the House of the traumatic experience—[HON. MEMBERS: "Answer the question."]—which the industry went through due to the Labour Opposition. [HON. MEMBERS: "Come off it!"] The Opposition are critical of what the industry is doing. Therefore, I had better make clear the circumstances in which the industry has been placed largely as a consequence of the actions of the Labour Party.

Prior to 1964 the industry was subjected to threats by the Labour Party as to its future—stifling investment and modernisation. Between 1964 and 1967 it was left in a state of grave uncertainty as to how it was to be nationalised—and morale in the industry suffered severely. From 1967 to 1970 the consequence of nationalisation was low investment. The then Labour Government achieved their political aim of nationalising the industry but thereby throttled its plans for modernisation and expansion at a most critical period.

By contrast, let us look at the logical and businesslike approach that has since been applied by this Administration. First, there was a clear decision on the structure of the industry. This was followed by a financial review—the imposition of clear limits, which the Corporation has kept well within, and then by an Act to put its capital structure into a proper shape to face future competition. At the same time, we were making with the BSC the realistic assessment of future demand, to which I have referred. This will be followed by the major strategic decisions on the type and place of the capacity needed to meet such demand.

Throughout these processes the task of investment in modernisation has continued at high levels. Approved expenditure in 1971–72 was £242 million, in 1972–73, £265 million, and in 1973–74, 'on account' with more to follow, £200 million. These are all March, 1971, prices.

Contrast these with the comparable figures under Labour: 1967–68, £86 million; 1968–69, £83 million; 1969–70, for six months, £41 million. It is ironical that the Opposition, whose policies resulted in such low investment for this great industry, should now seek to censure the Government who have aproved investment at three times those levels. It is perhaps a fair comparison between the confidence we have in the industry, and those employed in it, and the consequences of the Opposition's policy.

Was not the steel industry called by the Leader of the Opposition one of the "commanding heights of the economy"? [HON. MEMBERS: "No."] I cannot believe that he would have missed that one. If he did, he seemed to have no head for heights when he reached the foothills.

The House will also know that, whatever the outcome of the strategic plan, it is envisaged that expenditure during the remainder of this decade will continue at what is, by any standards, a very high level. It is even more unreasonable that the Government should be accused of causing uncertainty by the party that left the industry in a state of suspense for some five years.

Earlier this month I visited the new Anchor Project with the Chairman of the BSC. The impressive progress being made there is a pointer to the exciting future that there is for this industry. It is also a tribute to the spirit and enterprise of those engaged in it—at all levels. I hope that I shall have the Opposition's support in saying that.

Steel is an industry the success of which is fundamental to our economy. My aim—and, of course, the aim of the Government—is to see that we have a strong, efficient and modern steel industry, one that will enable those in the United Kingdom who use its products to be able to compete with those from overseas, an industry that will be profitable, because without profit there cannot at the end of the day be either security for those engaged in the industry, prosperity in the regions, or the growth that the nation needs. My rôle is to see that, within the limits of my powers, the BSC and the private sector have the conditions to enable them to achieve these aims.

Hon. Members:

Hon. Members: Resign!

5.9 p.m.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

It was not good enough of the Minister for Industry to ignore the very pertinent questions put to him by my hon. Friends on the Front Bench. He told us that McKinsey had advised the Government on this matter. He must appreciate that advice which differs by 8 million tons in 28 million tons is not advice about an industry. It is like saying that it will either rain or go dark before morning. There just is not anything upon which we can calculate the effects.

By common consent on both sides of the House the consumers of steel in the last few years have been through an extremely difficult time. In consequence, the industry has not been producing to anything like capacity. Despite that, it is now running at 27 million tons. How does the hon. Gentleman expect my colleagues on this side of the House, or the nation, to believe that the Government are sincere in wanting to see a huge expansion of the economy when they tell us that a steel industry of the present size is all that will be required until 1980? We cannot begin to calculate the future of this vital industry, which is the genesis of so much other production, on that rather stupid figure. I am surprised that the firm of McKinsey should associate itself with a margin of 8 million tons which can only bring it to ridicule in the eyes of other advisers. We are entitled to expect far more from the hon. Gentleman in answer to the questions we have asked than we have heard so far.

Under what provisions of the Act has this review body been brought into existence? The powers of Governments over nationalised industries are limited. I had something to do with the Act and I know of no provision in it which gives the Government power to hold up planning in nationalised industries for the best part of two years while they play about with review bodies.

While all this is going on we are told that there is a shortage of capital. To take the first three years which the hon. Gentleman mentioned, how can the BSC begin investing in a big way when the planning has not even begun? During the Labour Administration there was no period when the BSC was starved for capital—and I challenge the hon. Gentleman on this. That is the answer to the comparison made by the hon. Gentleman of the amount of capital available under Labour and Conservative Governments.

The following words appear in the Amendment: …thus able to provide greater security of employment and to make its full contribution to an expanding economy both regionally and nationally. The North-West Region is being deliberately run down. Not one announcement of capital investment has been made. We have seen work go from Trafford Park and Openshaw, and my hon. and learned Friend the Member for Warrington (Mr. W. T. Williams) has seen work go from his area, and there has not been a single announcement of investment in the North-West. It may be that if the headquarters of certain divisions are in other parts of the country it is easier to take a long view in the North-West and decide to close down there.

In previous debates I have mentioned Irlam and the problems which arise in the North-West if Irlam goes. Since I last addressed the House, phase 1 of the Irlam Steel Works closure has taken place and 1,960 jobs have been lost. There were negotiations with the trade unions and the trade unions finally accepted this. It will be remembered that the reason given for the suggested closure of Irlam was obsolete equipment. This was decided without investigation. The system seems to be first to announce the closure and then do the investigating. Phase 2 of the Irlam Steel Works closure may come into operation next month when another 2,400 jobs will be lost. I am not asking for charity from Lord Melchett, the hon. Gentleman or anybody else.

We were told that Irlam would close on the basis of it being obsolete. We have accepted phase 1 of the closure and most of the obsolete plant has gone. Irlam is therefore now highly profitable. Irlam having accomplished that, the BSC has twisted the argument and has said that there is not enough raw material in the North-West. In other words, the steel scrap upon which the electric arcs are fed is now more important than the ores. We made investigations into that and we can provide every ounce of steel scrap that two electric arcs could consume in the Irlam Works. We are profitable whether or not we get electric arcs. The profitability is running at a rate of £1·3 million per annum. To that must be added the £1½ million profit from the rod mill, which is a modern mill. How is it possible to close down such a profitable venture? We have made an assessment of the requirements for new plant if we are to have electric arcs. To install two electric arcs would cost £5·14 million. The installation of those two electric arcs would mean a profitability of between £4½ million and £5 million per year.

What else must we do? We did not like it, but we accepted the phase 1 rundown of obsolete plant. Having got rid of that, we are now profitable, and we are fighting for the retention of the 2,400 jobs which will be lost under phase 2. I challenge contradiction either from the Government Bench or from Lord Melchett that we are now one of the most profitable adjuncts within the BSC. With two more electric arcs our profitability will be very much higher even than it is now.

Hon. Members who come from the North-West, irrespective of politics, are deeply concerned about this issue. I have never known an issue on which there was such unanimity on both sides of the House. We base ourselves not on sloppy sentimentality but on sheer economic facts. We just shall not be quiet if in June there is an announcement that phase 2 will be put into operation. We shall fight it. I have tried to show that on two of the main counts Irlam should live. We were once told that billets would be far more cheaply made at Scunthorpe than at Irlam.

We have gone into the matter in great detail. It means that first the steel scrap has to be dragged from the North-West over the Pennines to Scunthorpe to be made into billets which are then dragged back over the Pennines into Irlam. This is the economics of Bedlam. The Steel Corporation figures which were first issued tended to show a great cost difference in favour of Scunthorpe against what we could do at Irlam. Again, we have carried out a good deal of investigation. We estimate that, taking into account the cost of taking the scrap from the North-West to Scunthorpe and bringing back the billets—and it must be remembered that average capacity in the steel industry is about 70 per cent. not 100 per cent.—the cost of those billets from Scunthorpe would be £39.28 against the Irlam price of £37·22.

Photo of Mr Edward Griffiths Mr Edward Griffiths , Sheffield, Brightside

Would my right hon. Friend take it from me that the chances of scrap metal being taken from the North-West to Scunthorpe will be infinitesimal?

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

No, I will not take it from my hon. Friend. The BSC tried this on us and we made sure by approaching the scrap merchants. They have assured us that they can provide every ounce needed for the two electric arcs in Irlam and that that would be available to make the same kind of billet in Scunthorpe. I am arguing the economic case for Irlam and I shall continue to argue it. On any grounds we regard this as an economic proposition.

Unfortunately, in some ways we have been misled by the BSC. My colleagues in the trade unions in Irlam were told in discussions with Mr. Morley that no announcement would be made until June, 1972. In fact there have been many announcements concerning electric arcs going into some steel-making plants in Britain. My hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths) may like to know that one plant was resuscitated from the dead, although it will be a loss-maker for five years while we make profits. In these circumstances, we are entitled to say that Irlam must be kept alive.

During the recent coal strike the Irlam works was one of the few steel plants which could be kept at 100 per cent. capacity because ample electric supplies were available locally. In the last few months natural gas was piped to Irlam from the North Sea. There is not one count on which the BSC can point to any shortage of energy supply or raw materials, or any lack of profitability or men available to work—and these men have worked all their lives in this industry in Irlam. All these factors are present in Irlam.

Hon. Members on both sides of the House have met deputations made up of very fine men from the area, men who have been constructive and who have come to the House to discuss matters with us. The leaders of these deputations have got out extremely reliable figures and we have become completely convinced that it would be a great tragedy to lose steel-making capacity in the North-West. This would leave the area of the North-West, an area of enormous engineering production, without any of its raw material, with thou- sands of able steel-makers cooling their heels while billets are brought in over the Pennines. What kind of men do they think we are? I was once a shop steward and I doubt if I would have stood for this kind of thing.

The weakness of the situation is that the level has been allowed to fall from a figure of 42 million tons, which is what the British Steel Corporation should be able to produce. Once that sort of figure is achieved, all the theoretical questions about green field sites and brown field sites fall into place. I advocated a green field site within the 42 million ton figure—and why not? This will be done in competition with Japan, the United States and Germany, but it does not mean that we should close medium-sized firms. The large green field sites were to be used mainly for export orders, and one has them on estuaries and coasts. There has since been a great deal of thought about these matters and learned authors have expressed doubts about investing such large sums in these huge sites—and no doubt this is one of the arguments that is taking place in the review body.

We now face the "crunch". I wrote to Lord Melchett a month ago asking for a meeting with the Corporation, including Members on both sides of the House, one or two members of the Irlam Council and the Works Action Committee. I had an acknowledgment of my letter on 20th April and I heard nothing since. This is not the way to treat Members of this House. I do not doubt that, in view of what has been going on between the BSC and the Government, there are reasons for his not wishing to meet us, but I do not like being treated in this way, nor do my constituents in Irlam.

I believe we have made our case and I demand that the Irlam Works should be kept open.

5.29 p.m.

Photo of Sir Anthony Meyer Sir Anthony Meyer , Flintshire West

The right hon. Member for Newton (Mr. Frederick Lee) put forward a powerful plea on behalf of Irlam. However, the part of his speech which was most convincing was at odds with the main thesis which surrounded it—namely, a criticism of the Government's decision to go for a less ambitious target than that which the BSC was thought originally to be aiming at. This is the point to which I shall devote the first part of a brief speech.

I do not understand all the fuss which the Opposition are making over the steady sustainable expansion announced last week by my hon. Friend in his statement. I should have thought that the party opposite would have had painful memories of what is involved in proclaiming almost unattainable objectives as though they were firm elements of Government policy. I should have thought that merely to mention the two words "National Plan" would have induced right hon. and hon. Members opposite to take a rather more realistic look at the possibilities of industrial expansion for the future. Surely it is far better to aim at what we can be sure of achieving on the basis of a realistic estimate of what the British steel industry can accomplish.

If the consequences of aiming at a lower target are that we find ourselves in 10 years or so a net importer of steel, surely that is a better outcome than finding ourselves vainly seeking to export to a glutted world steel market steel production which we are sustaining with resources far better devoted to other more profitable uses. To talk as if the maintenance of a large steel industry, irrespective of the number of jobs that it provides, was the prime object of policy appears to me to be complete moonshine.

Whose interests are furthered by arguing for the creation of massive new projects involving thousands of well-paid jobs for workers as yet non-existent on sites as yet to be specified? As the debate goes on, I suspect that we shall find one hon. Member after another rising to argue the case, as the right hon. Member for Newtown has, for the retention and improvement of existing works, and that mere lip-service will be paid to the importance of creating some grandiose new project.

In practice, we all know that if the Government were to go for some grandiose green field site—I sometimes think that the expression "Elysian field" might be a more suitable title for such a project—its net effect over the years would be that it would become a prestige project, possibly a white elephant, and certainly one which would suck away available resources from existing projects, many of which need a further injection of capital to keep them viable. I for one will rejoice if it emerges eventually that the plan is to concentrate on improving existing plants rather than seeking to create a very large new one.

We have to face the fact that there may be certain existing plants which are so badly sited, so antiquated and with such a legacy of bad labour relations that it becomes necessary gradually to run them down. There may be such plants, though I am sure that none of us will name any——

Photo of Mr Donald Coleman Mr Donald Coleman , Neath

Is not the hon. Gentleman aware that the steel industry enjoys the finest industrial relations in the country?

Photo of Mr John Mendelson Mr John Mendelson , Penistone

What is this man talking about?

Photo of Sir Anthony Meyer Sir Anthony Meyer , Flintshire West

I am not sure that that intervention calls for any answer. I said that there may be such plants but that I doubted whether any of us would name them. I am saying that the vast majority of plants operating today are well placed to expand, and I have no doubt that our debate will demonstrate this, as the right hon. Member for Newton has done.

In practice, this kind of expansion is more likely to come about within the framework of the realistic objective set by the Government than in a more grandiose approach. I believe that we should invest in people and not in pipe dreams.

Among the plants which are best qualified to benefit from a realistic policy of sustainable expansion, none is better qualified than the Shotton works in East Flintshire. The North Wales TUC Advisory Committee recently commissioned a report by P. W. Roberts on the future of the Shotton plant and its relation to the economy of the North-West, Merseyside and North Wales. It is a very well argued and deeply thought out document, though I cannot pretend to agree with every word of it. It is based largely on the assessment for requiring a major new green field or brown field site and it is partly an argument for a vast expansion of Shotton within the context of the larger target which the Government have not accepted. But as one reads this very thorough and well-argued document, what emerges much more strongly than the argument for a new brown field site is the possibility, desirability, indeed the necessity for balanced expansion at Shot-ton itself within the context of the realistic approach which is advocated by the Government.

Productivity at Shotton is higher than the BSC national average, despite the fact that it is still requiring further investment on the steel-making side. If we can get that further investment, there is no doubt that Shotton will be able to exceed the average of the Strip Mills Division of the BSC. This high rate of productivity at Shotton is no flash in the pan. There has been a long record of profitable operation at this works dating back to the days before nationalisation.

I hope that other hon. Members will develop further the case for the expansion of Shotton——

Photo of Sir Anthony Meyer Sir Anthony Meyer , Flintshire West

It rests purely on arguments internal to the steel industry itself. But when other considerations are brought in the case becomes overwhelming. Yesterday, we debated the Government's Industry Bill. Had I succeeded in catching Mr. Speaker's eye in that debate I should have welcomed the proposals in that Bill. I believe that they are necessary. However the Bill does not constitute so sharp an instrument for bringing employment and prosperity to any region as that which is provided by the opportunity which is available through large investment in specific projects such as the Shotton works.

Once one accepts, as I do, the necessity for Government intervention to provide a high level of employment, the problem is how most effectively that intervention can be exercised. It seems to me that large investment in specific projects where the opportunity for it is available is the most effective way of doing it.

In 1970–71 the sum of £6·5 million has been spent on providing new coke ovens at Shotton. As the report says, if this is not the prelude to balanced expansion of the works as a whole it raises serious problems of public accountability. It has been calculated that for an investment of £50 million the works at Shotton could be expanded in such a way as to produce balanced expansion of the works—steel-making and finishing together—and that £50 million would include expenditure on an ore terminal at Birkenhead. That seems to be a cheap price to pay for a development which could produce balanced expansion throughout the whole area of Merseyside and North Wales and a spin-off in industrial employment in an area which is unhealthily vulnerable in that three employers alone dominate the scene in the provision of jobs in the area.

I hope that the realistic target which the Government have set indicates that they intend to concentrate on the development of that works which can be expanded profitably. On that ground, I heartily endorse the proposals which have been announced by the Government.

5.40 p.m.

Photo of Mr Gregor Mackenzie Mr Gregor Mackenzie , Rutherglen

If the speech of the hon. Member far Flint, West (Sir A. Meyer) is typical of the sort of speech that we are to hear from the Government benches, and if those are the kind of thoughts which are to influence the Government, it is a pretty bleak outlook for the steel industry in Scotland, Wales and, indeed, England.

I took strong exception—as I am sure many of my hon. Friends did—to the hon. Gentleman's comments about industrial relations in the steel industry. I come from a part of the world which has a record of industrial relations second to none. I know that my hon. Friends from Wales will want to deal with the points made by the hon. Gentleman in this respect, and I hope that they will have an opportunity to do so.

I now propose to do something which the hon. Gentleman says we ought not to do. I propose to make an appeal for the retention of steelworks in Scotland. The hon. Gentleman talked about hon. Members making a series of area speeches. In my view that is what Parliament is all about. I am here to speak for the 20,000-plus who work in steelworks in Scotland. It is my task to ensure that their jobs stay there and, indeed, increase in number over the years. I hope that the lion. Gentleman's speech will not influence the Government.

The Minister's speech today, and particularly the last few minutes of it, may have pleased his hon. Friends. It may be that his way of approaching these debates is to score points off the Opposition if that is possible. I remember the hon. Gentleman when he was on the back benches. He was an industrious supporter of his Front Bench. He made many debating points, and I am sure that that is what he regarded as his function as a back-bench supporter of his Government.

His speech today was not worthy of a Minister who is supposed to be concerned about the jobs of thousands of steelworkers. When we are fighting for jobs in the industry we do not want schoolboy debating speeches. We want serious speeches which provide answers to the questions being asked by the people in our constituencies. I am glad to see the Minister of State for Wales nodding agreement with my comment that the last part of his hon. Friend's speech——

Photo of Mr David Gibson-Watt Mr David Gibson-Watt , Hereford

I thought that my hon. Friend made an extremely good speech.

Photo of Mr Gregor Mackenzie Mr Gregor Mackenzie , Rutherglen

I hope that the Minister and the people of Wales will read it.

People in Scotland were particularly disappointed when the Minister made his statement in the House a few weeks ago. There were two reasons for our disappointment, and I make no apology, certainly not to the hon. Member for Flint, West, for saying so. We wanted to hear specifically what was to happen to the steelworks in our constituencies. It is not good enough for a Minister to stand at the Dispatch Box and say that matters relating to the areas which we represent are matters for the British Steel Corporation to decide, particularly when they relate to thousands of jobs in my constituency and in constituencies such as Motherwell, and others. We expect the Minister to take a hand with the British Steel Corporation in ensuring that regional considerations are borne in mind.

I was very disappointed when, some weeks ago, the Prime Minister wrote to me and said that the issues I had raised were matters of detail for decision by the British Steel Corporation. In my view these considerations ought to be fitted into the whole regional, economic and social planning of the Government. I see the British Steel Corporation as an important arm of the Government in this regard. One of the hopes that I had for the nationalisation of the industry was that the Government would use it to stimulate growth and provide employment in the constituencies. I hope, therefore, that the Minister will look seriously at what we are told are the BSC's hopes for the industry as a whole and will adopt the higher target which he mentioned rather than that which appears to be contemplated of 28 million tons.

One thing which concerns us in my part of the world is that we cannot plan ahead because we do not know whether we are to have a substantial green field development. Until such time as we know that the Government themselves and their executive arms in the county councils cannot plan ahead for the infrastructure that would be required.

I hope that when the Minister replies to the debate he will say something about Hunterston. My hon. Friend the Member for Chesterfield (Mr. Varley) said that a statement had been made by the Secretary of State for Trade and Industry to the Scottish Conservative Party Conference. What was important was that at a time when the Secretary of State was making his comments about Hunterston and the future of the Scottish steel industry the Prime Minister seemed to be saying something completely different, and that was naturally upsetting to those concerned with the future of Scottish steel.

We have been waiting a long time to know what is to happen at Hunterston. I remember taking part in a debate on this subject as long ago as. I think, 1968. We were told by the then Opposition that they had plans ready for when they became the Government and that they knew precisely what they would do in that event. That was said some years ago, and naturally the people in my part of the world want to know whether they are to have this development, and, if they are, how it will affect the Scottish steel industry in Lanarkshire and elsewhere.

I shall not rehearse all the arguments in favour of the Hunterston project. They have been rehearsed on numerous occasions in the House. Suffice it to say that we believe Hunterston could play an important part in the future development of the industry not only in Scotland, but in the United Kingdom as a whole. I say that bearing in mind that I represent a steel constituency. Over the years people have been aware that if they were fortunate enough to get the development at Hunterston it would involve their moving from Lanarkshire to jobs on the coast. They are conscious of that possible effect, and they are therefore anxious to discover what is to happen. They are concerned about the locational changes, but they believe that this development would be in the best interests of the industry as a whole.

How does the Minister see the future of the Lanarkshire steel industry? Notwithstanding any green field development that might take place, we want to know what is to be the future of Clydebridge and other Scottish steelworks. We have excellent steel rolling and finishing capacity. We have the men with the skills for steel making, and we have the capacity. We want to be assured that this capacity will be retained in Scotland and brought up to standard. We want to be assured, too, that steel will not be sent to Scotland from abroad or from the Midlands merely to be finished in Scottish steel mills.

I say that because not many months ago the iron works in my constituency were faced with the prospect of having iron brought up from the Midlands to be finished in Scotland. I know that my English colleagues will appreciate that such an arrangement can mean redundancy for hundreds of people in the iron works and so I objected strongly. We would like to be assured that we shall not find ourselves in a similar position with regard to steel making. If anyone in the BSC tries this on we shall object strongly.

A second assurance that I should like from the Minister is on a matter vital to the future of the constituency I represent. The Minister did not mention it today or in his previous statement. We should like to hear about how he sees the future of special steels. In my constituency and that of my hon. Friend the Member for Motherwell (Mr. Lawson) we have special steel plants, at Hallside and Craigneuk. If the Minister is concerned about them, I would mention that they are profitable. They have an excellent production record. The people employed there have made a substantial contribution to the economy of Lanarkshire over some years. But nothing has been said about them over the past few months by either the Minister or his colleagues. It is natural that we should like to have sorted out the rumours being floated around about closures.

The second reason why we were disappointed in Lanarkshire, apart from the lack of detail, was the fact that the Government's objective in tonnage terms was far below that which we think is necessary to guarantee the future security of our steel works. I am glad to see in the Chamber the Under-Secretary of State for Home Affairs and Agriculture, Scottish Office. We have heard one of his colleagues speaking in terms of the future of Scottish steel being 4½ million tons by 1975 and obviously a very much greater figure by 1980. But with the figures of 28 million to 36 million tons being bandied about, the 4½ million tons by 1975 and more by 1980 seems a dim and distant prospect, especially if the industry's total capacity is to be as low as it is. This is something which ought to give all of us cause for concern, especially when we read today's edition of The Times and see reports of how Britain now stands compared with other countries in the league for steel production. What we in Scotland are asking for may seem fairly small beer, albeit it provides thousands of jobs which we want to keep.

Finally, we spent all of yesterday talking about regional development. I am not sure that the Industry Bill got the same kind of welcome from some of the Minister's hon. Friends at it received from my hon. Friends—especially as the hon. Member for Oswestry (Mr. Biffen) is in the Chamber. But my right hon. and hon. Friends gave a qualified welcome to that Bill about regional incentives. We shall have to wait to see how many jobs such Bills ultimately produce.

I am naturally anxious to encourage new jobs into Lanarkshire and Scotland. I said that in 1970 and I make no apology for repeating it. But, at the same time, I hope that the Government will appreciate that the men who have given their skills and talents over a long period to some of our older industries should not be neglected. It is all very well talking about electronics industries and all sorts of newer types of development; but there is no harm in doing for the steel industry what the Government have been obliged to do recently for shipbuilding. If that does not happen, there will be a poor outlook for Scottish steel workers.

I mention this not just because I represent a constituency which has many steel workers. I have a family interest in it, as have many of my hon. Friends. Many of us are sons or relatives of steel workers. My father-in-law worked in the steelworks from the age of 14 until he was declared redundant at the age of 55. He worked in one steelworks for 41 years. Pre-nationalisation, the works were closed. There was no golden handshake; nothing. He simply went out on the street at the age of 55. In Scotland at that time, pre-1964, just as today, trying to find a job was like looking for a needle in a haystack. It was a bleak outlook for him.

That is the sort of feeling that is gradually creeping into Scottish steel constituencies again. They have the depressing thought of not knowing their future. Nothing that the Minister has said today has given any confidence for the future. We in Scotland hope that the Minister will raise his sights a little, realise that there are great prospects for the steel industry and try to keep the targets as high as possible. We in Scotland want no more and no less than our full share in order that the men who have given their lives to the Steel Industry can have their just rewards.

5.55 p.m.

Photo of Sir Robert Cary Sir Robert Cary , Manchester, Withington

I shall be brief. I agree entirely with the hon. Member for Rutherglen (Mr. Gregor Mackenzie) that the main pre-occupation of backbenchers on both sides of the House is the future of steel plants within their areas. By that much, the debate is a regional debate.

I have listened sympathetically to what the hon. Member for Rutherglen has said about his beloved Lanarkshire. I, too, have the same pre-occupation in my county, Lancashire. Before I come to that matter, and in support of what was said by the right hon. Member for Newton (Mr. Frederick Lee), I should like to thank my hon. Friend the Minister for Industry for what he said today about a question I put to him during yesterday's debate. Although he was not in charge of yesterday's debate, it inspired him to give me a gentle answer today, in the hope that he can be more precise and profound in time to come. My hon. Friend the Minister gave a commendable performance at the Dispatch Box today in spite of jeers thrown at him from elsewhere, just as he was confident in the difficult task he had to discharge on 8th May. I wish him well for the future—but not in the hope that I can bribe him vis-à-vis Irlam.

All that has been said in the debate by the right hon. Member for Newton and on previous occasions when he has intervened so vigorously and forcibly in the interest of the Irlam steel plant, has been said also by my hon. Friend the Member for Stretford (Mr. Churchill), who is now even closer to that plant than I am. My association comes from pre-war days. I have almost a paternal affecting for the property.

I hope that something will transpire from this. My hon. Friend the Minister will understand that in spite of his opinion, which I appreciate, and his constant willingness to listen to the views of hon. Members on both sides of the House, I ask him to forgive us, in our turn, if there is much reiteration—what the late Aneurin Bevan used to call "acres of boredom". Therefore, I beg him to take under his wing as far as he can the whole problem of the regional impact of steel plants. I shall come to that point later.

In support of the right hon. Member for Newton, the campaign to save a part of Irlam is as vigorous as ever. The right hon. Member named only one part of it, which will employ, I hope, about 2,000 men. The site has many advantages. Raw materials are readily available, including scrap. There are no interest charges on Irlam and even for the electric arc furnaces such charges will be absolutely minimal.

I think I am right in saying that no other plant has such a wealth of raw materials and customer demand on its doorstep. That is important as it eliminates an immense amount of transport which is so costly. By the installation of two electronic arc furnaces at a cost of £5·14 million, profits at Irlam could range from £4·5 million to £5 million in one year. I ask the British Steel Corporation where within its responsibility can such a return be shown on a year's work?

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

When I spoke at Irlam a few months ago it was evident that the great majority of local people favour, as an alternative to closure, a scheme for hiving off the Irlam works and selling them back to private enterprise. That is a perfectly possible exercise. Why does not my Lord Melchett consider a proposition of that kind?

Photo of Sir Robert Cary Sir Robert Cary , Manchester, Withington

I am grateful to my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro). I had almost reached that point. Such a scheme would require the general support of all those who have some concern with Irlam, including, of course, the right hon. Member for Newton.

As my hon. Friend has pointed out, if a private person were allowed to raise the necessary capital and given the collateral indicated in paragraph 17 of the Industrial and Regional Development White Paper, one half of Irlam could survive employing 2,000 men, particularly if the wire works were transferred to its control. However, that would be a private operation and perhaps unacceptable both to the Government and the British Steel Corporation.

Photo of Sir Robert Cary Sir Robert Cary , Manchester, Withington

It may be. They have been known to refuse in the past. They have some capacity to refuse again, but I hope in this case they will not do so. However, if that is unacceptable, could Irlam be named as an integrated plant under the British Steel Corporation? That would ensure a working future for the surviving part of the plant which employs several thousand men. That again would be acceptable to the people of Irlam who would not be literally murdered but would suffer disastrously if the complete closure took place.

If those two paths are not followed in the immediate future—as the right hon. Gentleman the Member for Newton pointed out, the limiting date is somewhere in the middle of June, and it is desperately urgent—then the answer for Irlam may be rather sad and sinister.

What is happening in the world of steel and what is its future? On 8th May my hon. Friend talked about the completion of strategic planning, yet there seems to be some part to be played by the smaller units. Why is it that twenty years ago in strategic planning the United States went for the big units and are now—

Photo of Sir Robert Cary Sir Robert Cary , Manchester, Withington

Yes, they are breaking up the big units and fragmenting them throughout the length and breadth of their great continent. Are we to follow the United States and destroy so much that is good within our own contituency provinces only to see our successors trying to bring back that which we so thoughtlessly gave away?

The answer is obvious. The Government through the excellent measure they announced yesterday can do many salvage operations. Paragraph 17 in that White Paper is the answer. The Government can use their power both for coal and steel. I ask my hon. Friend to do what he can to salvage one part of the Irlam plant.

6.5 p.m.

Photo of Mr Roy Hughes Mr Roy Hughes , Newport (Monmouthshire/Gwent)

I admire the fight the hon. Member for Manchester, Withington (Sir R. Cary) and his other colleagues are putting up to retain the Irlam works. I much admire the way they put forward their case. I see nothing wrong in making a fight for works in one's own area.

We had the statement from the Minister for Industry of 8th May and I suppose that this debate is an inquest upon it. However, it was something of a non event despite a full month's delay.

The statement talked of investment development from 1970–71 to 1973–74. Of course, the period 1970–71 has gone past us by quite some time so that is nebulous in itself. The statement spoke of a £90 million investment at the Spencer Works at Llanwern. I give that example because those works are on my doorstep. I know too that the bulk of that investment was authorised by the Labour Government two and a half years ago. The increase is partly the result of inflation and partly the result of the hold-up by the Government of that major development scheme.

That illustrates the bogus pretentions of the Government's statement but it does not alter the fact that the Spencer Works is now at a distinct competitive disadvantage. The Spencer Works is not in a development area and the BSC has taken a decision to transport its iron ore from the terminal 60 miles away at Port Talbot. These great works should not be treated in this way. The Government should remove the development area anomaly in South-East Wales and make better arrangements with the co-operation of the BSC for its supply of iron ore at a much nearer location.

The statement speaks of a target range of between 28 million and 36 million ingot tons. That again is vague. It is certainly the height of irony to suggest that the BSC agrees with these target figures. What cannot be denied is that the BSC has been planning for some considerable time a target of 35 million tons by 1975 and over 40 million tons by 1981. Lord Melchett almost openly proclaimed, at least in a room in this House, some two years ago that these were the figures on which the Steel Corporation was working. Has Lord Melchett changed his mind, or has it been changed for him? Perhaps his views have been modified due to his allegiance to the EEC. I know that he has been resentful of Government interference in the affairs of the Steel Corporation. He has also complained, not without justification, if I may say so, about the lack of commercial freedom. The Steel Corporation has not been allowed to put up its prices when the markets have been buoyant and yet at the end of the day it has been expected to show a profit and reasonable results.

Lord Melchett in opting for the European Coal and Steel Community is exchanging a lion for a tiger. We already see in the statement the blighting hand of the EEC. It is difficult to understand the position of the steel workers' trade union. It was apparently in favour of British entry into the Common Market. In fact, it was one of the few British trade unions which took that decision. However, in view of what is now happening, it cannot say that it was not warned. It is now becoming obvious—speaking in language which the union will understand—that it has been sold a pup.

The setting of this low target of 28 million tons is an open invitation to our competitors to construct extra capacity and to ensure that our maximum target of 36 million tons is not reached. We could have a flood of continental imports and our own steel workers languishing on the dole.

The Guardian of 7th May, in an article by Victor Keegan, the Industrial Correspondent, pointed out that the previous day Lord Melchett had said that the statement of the Minister would make no difference to the plans of the Corporation to rationalise its labour force. That means that by 1975 the labour force will be cut by no fewer than 50,000 people.

What does this mean in steel areas like Scotland, Tees-side, Cumberland and Wales, all of which are already areas of high unemployment? Let us consider the position of the great Ebbw Vale steel works in Monmouthshire. I do not wish to transgress on the area so ably represented by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot)—I know how he has pursued the case for this steel works over the years —but if the investment earlier proposed for it does not go ahead there will be a catastrophic unemployment situation in North Monmouthshire.

Finally, I turn to the works to which I referred earlier when my hon. Friend the Member for Chesterfield (Mr. Varley) opened the debate, the tube works at Newport, which the Steel Corporation is proposing to close. I have already pointed out that it has been a highly profitable works over the years. It occupies an excellent site with easy access to the main motorways to the South-East and the Midlands, a main line railway station and some thriving docks. We are told that the proposed closure was a commercial decision by the British Steel Corporation. I find it difficult to believe that in view of the record of that works.

It has seemed to me for a very long time that the voice of Wales in the Cabinet is very muted. It also seems that the voice of Wales in the British Steel Corporation is not very strong. Why does not the Minister intervene to prevent this unjust closure? The Government say that it is the result of a commercial decision by the Corporation. We are not asking for charity. This works has fully justified its existence over many years. Surely the Government realise that they cannot go on putting people out of work. That is what the Industry Bill yesterday was all about.

6.14 p.m.

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

I have every sympathy with the views expressed by the hon. Member for Newport (Mr. Roy Hughes) and other hon. Members representing steel constituencies. It is natural that they should want to see a big development of plants in their areas. This is a wholly sensible point for them to put here today.

Everybody wants a strong steel industry, and in order to get it we must ask ourselves some pretty hard questions. In my few remarks I should like to face some of the facts which have to be faced if we are to achieve that situation. The first is that, whether we like it or not, the British Steel Corporation, unlike all the other nationalised industries, is not a public utility. It is a manufacturing industry subject to all the competition of imports and strictures which affect other manufacturing industries. Therefore, when we tend to discuss the British Steel Corporation as a nationalised industry, assuming it is a public utility rather like some of its colleagues, we are quite wrong.

The next point is that over the recent past three has been a world recession in steel. It is 9 per cent. down in Germany and the United States. In the papers today we will have seen the International Iron and Steel Institute showing a world growth which is beginning to turn the corner of about 2 to 2½ per cent. over 1971. However, it would be a rash person who was prepared to take those figures and say that they represent a great upswing in demand for steel. My hon. Friend the Minister for Industry in his excellent speech mentioned the alternative materials which are presenting themselves. We must take that comment into account, too.

The next point in looking at the problems of the British Steel Corporation is that it will always be subject to Government intervention. A simplistic view often expressed in this House when we talk about the nationalised industries is that at one moment we want them to operate as totally commercial enterprises and at the next moment, since they are nationalised, we have a debate to decide what they should be doing next. Looking at the series of debates which we have had on the coal and other industries, I am surprised that they have survived so long. The problem with a nationalised industry is that we have a permanent shareholders' meeting five days a week for six months of the year in London, S.W.1, deciding what should happen to that industry, and on top we have Ministers. Therefore, while Lord Melchett is right in his comments about wishing to see less Government intervention, the fact that it is a nationalised industry means that, however much he may wish to find himself in that situation, he never will, because nationalisation means Government interference whether we like it or not. I do not like it.

Another element is that even in this country the British Steel Corporation is not totally monopolistic. The British Iron and Steel Producers' Association represents a spur of competition.

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

But even in areas where the industry is in a totally commanding position, that position is eroded by another factor. For example, the British Steel Corporation is responsible for over 90 per cent. of the market in tinplate and heavy rails. Yet we find that the Corporation relies on three or four customers in those areas for its total sales. Therefore, its ability to be flexible in pricing, and so on, is largely removed.

I turn next to the problem of imports generally as they affect the industry. There has been a striking reduction in import restrictions for the British steel industry over the last 15 years. Now, with the Kennedy Round, we find ourselves with an 8 per cent. protection. That will disappear when we go into Europe. We will then have removed almost all the barriers which could protect British steel against imported steel. That situation has not happened suddenly. It has been happening over a period. I have the actual figures. In 1957 we had a 25 per cent. to 33 per cent. protection through tariffs. That is now down to 8 per cent., or one-quarter, after 15 years. When we go into Europe that 8 per cent. will disappear altogether.

Another effect of going into Europe will be that the British Steel Corporation will no longer be the predominant steel producer in a market in which it controls two-thirds of the supply. It will become merely a largish steel producer in competition with other groups of a very similar size. I can give an example of this. For 1980, BSC production has been predicted at between 28 million tons and 36 million tons. But Thyssen-Mannesman-Krupp, one of the big steel companies in Germany, has forecast production for that period of 30 million tons. So the British Steel Corporation has no special importance because of its size. It will be merely one of a number of big units in the European Communities.

I would like to leave that aspect for a moment and deal with one other point and then perhaps tie the two together. There is other competition apart from Europe. It is true that steel demand has been increasing over the past two decades by roughly 100 million tons every five years, and more recently it has increased faster. But more countries are making steel—not only the Europeans but many other countries. In 1938, 20 countries apart from the big producers—the United Kingdom, Japan, Germany, the USSR and so on—were producing steel finished products. This number rose by 1972 to 70 but the capacity, which is the worrying aspect, and which in 1956 was 40 million tons, increased by 1970 to 140 million tons.

So we are worried not only about competition from the giants. We know about them. More and more countries throughout the world are producing steel, however, and as a nation we will find it more and more difficult to sell into those markets because of the tough local competition on the one hand and the tariff barriers that will be put up by the small producers to protect their investment on the other hand. This sets the scene of the problems the BSC will have to face.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

Against the background of the hon. Member's thesis that there has to be Govern- ment intervention, and in view of his comments on competition, if I could show him a list of extensive closures of BSC plants in Wales, England and Scotland, earmarked for the period until 1978, would he indicate whether he agrees that steel constituency Members should get together and ask the Government to explain the list and also tackle the BSC, which has not denied its existence?

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

I am very sympathetic to that view and I know the hon. Gentleman's interest in the subject. We have discussed it before. There is a duty here to explain to the people in the industry what their future is. But I would not propose to go quite to the point the hon. Member has suggested. One of the reasons why the coal industry got into such trouble was the artificial targets which were set. The target started at 200 million tons a year and was gradually reduced. We could be in the same danger with the steel industry.

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

I do not want the lion. Member to intervene again unless he particularly wants to do so. I would agree that the steel workers have a right to know about their future.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepools, The

Will the hon. Member bear in mind what my right hon. Friend the Member for Newton (Mr. Frederick Lee) said about Irlam which, in the list to which I was referring, is set down for closure in 1974? In view of the arguments put forward in the House, the existence of the list and the numbers of people who will be put out of work, would not the hon. Member agree that it is Parliament's duty and the duty of hon. Members who represent steel constituencies to approach the Minister at the earliest opportunity to examine the list and to examine the forward planning of the Corporation?

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

I am not disputing that. We remember with the coal industry that those pits which were to be closed were on a graded basis, and discussion took place upon this. I have just made clear that I feel that workers in the industry have a right to know what their future will be.

The point I am making concerns the problems which the industry has to face, apart from the competition from the very small producers. Of course there are the intermediate producers which are not in the big league—countries like Sweden and Australia. Australia has some fairly large production and there are other countries whose competition will become stronger as time passes.

In this country we should be very careful before we set our sights upon a course which is merely following limply behind the Japanese towards great units. We have to bring many of our existing plants up to date. Irlam was mentioned a moment ago. The blast furnaces there were given to this country as reparations by the Germans after the last war, so a major investment operation is required on the existing plant.

There is one point I would make to the hon. Member for Chesterfield (Mr. Varley). When considering the investment programme of the Corporation he should realise that the Government are authorising three times more investment than the Labour Government authorised when they were in power. In 1968–69 they were spending £83 million but in 1971–72 we are spending £242 million. This is substantial investment and it is running at the highest level the industry has ever seen.

The target has been set at 28 to 36 million tons, but why has it been set out like this? The Benson Committee suggested a target for 1975 of 32 million tons. But since the time of the Benson Committee—and we have to face this fact—the question has arisen of our joining the EEC.

I believe that the benefits from joining the EEC will far outweigh the problems that will arise. One problem which arises, and it is no secret, is the rule of the ECSC that no enterprise shall possess more than 13 per cent. of any product which it may make or sell without reference to the Commission. We are already in a very difficult position because we are well over the top with tinplate production. The Commission will have the problem of pegging the tinplate production figure, but whether it is prepared to allow many new plant capacities to go on-stream is somewhat problematical. This could have a serious effect on Scotland. Hunterston has deep water and all the advantages one would expect from the classic green field site. But we could find ourselves in the situation that the British Steel Corporation as a single unit would be prevented from producing a lot more capacity because of the ECSC rule.

Would my hon. Friend the Minister consider that in Scotland we might have a BP kind of solution, or a private enterprise solution, perhaps based on the new direct reduction processes which are already in operation? The other day I went to Hamburg to see the Korf process and was happy to have with me the hon. Member for Chesterfield. We examined it and we had an interesting day. No one is suggesting that this is the whole answer. But we have natural gas flowing freely around the country and Scotland's whole future is changing as a result of the discovery of hydrocarbons, liquid and otherwise, off its shores. Even though the mini-mill is so named, its capacity of a million tons a year is not all that mini. That sort of operation could well make a great deal of sense. As the mills are entirely modular, other pieces could be added for more production if they were wanted. A BP solution for the Scottish steel industry based on that type of plant could be very interesting.

Photo of Mr George Lawson Mr George Lawson , Motherwell

As we have waited so long for a strategic plan, might we not have expected this kind of thing to be contained within the statement on a strategic plan?

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

I should not like to comment on the speech of my hon. Friend the Minister, which I thought was admirable, but I agree that this is something on which we should all inform ourselves. Most of us taking part in the debate have been in the industry, as I was, and we have the industry at heart. We should get the decision right and I agree that we want as much information as possible. I see from a report in The Times today that Lord Melchett himself says he is in favour of the establishment of the Corporation as a BP-type organisation, which might well fit in with what I was saying.

There are pessimists who believe that for a 10-or 15-year period we shall have substantial over-capacity in the steel industry throughout the world. That is a respectable view which is quite widely held. With over-capacity we should have all the problems that flow from it—belowcost pricing, cross dumping and all the mess we saw in the industry in the 1960s. I do not share that view, but I am sufficiently cautious to realise that we should be very silly to ignore it altogether. I believe that that view will be proved wrong. What we must have is a flexible industry able to take up the demand should it arise.

We must not go for size merely because other nations have been doing that. Very often their problems were different and they had to solve them in different ways. The Japanese industry is already not what it was. The Japanese economic miracle looks like being over. What we need is realism based upon a modern streamlined industry, with targets for production which do not go off into fantasy but which are achievable, so that ultimately we may have not only a good industry in this country but, as I am sure Lord Melchett wishes as much as any of us, a profitable industry serving Britain.

6.33 p.m.

Photo of Mr David Watkins Mr David Watkins , Consett

This is by no means the first time I have followed the hon. Member for New Forest (Mr. Patrick McNair-Wilson) in a debate on the steel industry. It is a pleasure to follow him because he speaks from some knowledge of the industry. The knowledge he has displayed this afternoon is in striking contrast to the lack of knowledge displayed in some of the speeches from other Conservative Members earlier in the debate.

But I found it rather depressing that the hon. Gentleman supported the Government as an advocate of a smaller and declining steel industry. One of the most depressing features of the statement of the Minister for Industry on 8th May, and of his stonewalling and rather uninspiring defence of that statement this afternoon, was that it indicated that we are back at the beginning of one of those cycles of decline in the steel industry which has been initiated in every period of Tory Government in modern times.

In the 1930s the industry refused to modernise and expand, preferring to carve up the market and engage in restrictive activities in a restricted market, a decision which had disastrous consequences for employment in the industry and the industry's long-term viability. It also resulted, on the outbreak of war only a few years later, a war which could be foreseen when that decision was taken, in the country's finding itself desperately short of steel in a national crisis.

In the post-war world exactly the same situation started again in the 1950s, after the denationalisation of the industry, when necessary investment for its modernisation and expansion was not undertaken. One of the results was that the oxygen process of steel-making, which had been pioneered in this country, was not developed here but was developed abroad. The British steel masters of those times did not want to know about it. They were not prepared to engage in the massive capital investment necessary to bring that system into general use in the steel plants of this country. That failure to develop the oxygen process on a massive scale in our steel industry, while the steel industries of other countries were doing so, was as great a scandal as the carve-up in the 1930s. It resulted in the British Steel Corporation's inheriting a backward industry.

Now we are depressingly back again at the beginning of the same sort of cycle. Instead of an ingot capacity of 42 million tons-plus by 1980, we shall clearly have a capacity of only 28 million tons, which is about the figure of the industry's capacity now. In terms of world steel production—and the steel industry is one of those which can only be set against the world background—that represents not a standstill but a decline.

The hon. Member for New Forest put his finger on a very important point when he spoke about the restrictions which will be placed upon our steel industry's production on Britain's entry into the European Economic Community, a point I made on one of the previous occasions when I followed him in a steel debate.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedford

Our entry into Europe would not preclude the BSC from taking a shareholding in, say, a company in France, and it could expand its capacity there. Therefore, it would no longer be just a matter of considering its activities in the United Kingdom.

Photo of Mr David Watkins Mr David Watkins , Consett

We have heard some astonishing statements in the debate. Now we are apparently being told that the British Steel Corporation should welcome the contraction of the industry in order that it can be expanded in France or Germany. I find that unacceptable—[Interruption.] However the hon. Gentleman quibbles about it, the fact remains that that was the point he made, but I should not spend too much time discussing his advocacy of that policy.

I turn to a regional aspect of the statement of 8th May, when the Minister for Industry said there would be £130 million of investment up to 1974 on South Teesside. I remind the Government that the regional group of the corporation is not South Teesside but Teesside and Workington and that it covers a considerably wider area than the statement appears to indicate. What will happen in the rest of the group? In particular I am concerned to know what will happen to the Consett iron and steel works in my constituency, a steel plant employing more than 6,000 people—7,000 in times of prosperity—and crucial to the prosperity not only of the town but a wider area of north-west County Durham.

The hon. Member for New Forest referred to the Benson Committe, set up in 1966 by the old British Iron and Steel Federation. It produced a report described as an alternative to nationalisation. It proposed to phase the Consett works completely out of existence. I am glad to see that I have the hon. Gentleman's agreement.

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

I am following the hon. Gentleman's remarks with interest. I remember the Consett works very well because a great deal of investment in Kaldo and LD converters was put in. It would be interesting to hear the hon. Gentleman telling us how viable he thinks Consett is in the light of all this new investment placed there.

Photo of Mr David Watkins Mr David Watkins , Consett

I am glad to say that the works is viable, much more viable than the Benson Committee expected. The report had the enthusiastic support of Conservative Members of the Standing Committee dealing with the Iron and Steel Act, 1967. The Benson Commitee recommended that there should be an ingot capacity of 35 million tons by 1975, not 28 million tons by 1980, as appears to be the recommendation of the joint steering group and of the secret and even more sinister external advisers who are apparently to run the industry from outside, having been appointed by the Secretary of State so to do.

Since the Government took office there has been a steady nibbling away of the ancillary departments at Consett. Morale has never been at such a low level in my constituency. There is little confidence in the long-term future because of the policy to which the industry as a whole is being subjected. I put it to the right hon. Gentleman strongly that the Government must announce today what part of the investment in the Teesside and Workington group is to be expended at Consett. I have good reason to believe that the expanding future of Consett is linked with the establishment of a brown field site on Teesside.

I want to conclude because other hon. Members are waiting to speak. I have pushed a constituency case, as so many other hon. Members have done, and I make no apology for doing so because, as one of my hon. Friends has observed, that is basically what we are sent here to do. In doing so, however, I recognise that the prosperity of all steel towns depends on the prosperity of the entire steel industry and that the prosperity of the steel industry itself depends upon the prosperity of the nation and of the national economy. But everything we have heard in the last two years from the Government suggests that the Secretary of State seems determined to preside over the liquidation of the United Kingdom steel industry. Everything we have heard from hon. Members opposite in this debate indicates that that is so. It is a depressing situation, one which could set works against works and region against region. The quicker such policies and such Ministers are replaced, the better it will be.

6.44 p.m.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedford

I am glad to have the opportunity to follow the hon. Member for Consett (Mr. David Watkins), since he stated so many inaccuracies. We on this side have never contemplated liquidating the British steel industry, which we regard as of very great importance to the economy. He dismissed the argument about investment in France or elsewhere in Western Europe. Lord Melchett was not apposed to the idea when, fairly recently, two European companies got together, Royal Dutch Hoogovems NV, of Holland, and Hoesch AG, of Western Germany. They decided that a green field site was required and decided that it should be in Holland. The two companies merged. I understand that at the time Lord Melchett considered whether the British Steel Corporation should go in with them as well. That would not have meant a diminution of production here but it would have meant expansion in Europe, increased investment and therefore greater profitability.

Photo of Mr David Watkins Mr David Watkins , Consett

I must remind the hon. Gentleman that such proposals as may have been made in that direction —this comes back to the question of the industry being considered in a world context—was in relation to a British steel industry expanding and not declining. We are now faced with a declining industry.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedford

The essential factor to recognise is that it is no use producing steel if one cannot sell it. Our growth rate has been so low that we have been in great difficulties and we have not been able to market the steel we have been producing. Fortunately, the present Government have appreciated that fact. They realise that it is necessary to revise some of the longer term plans. If we consider the suggested target of 28 million tons, we should ask what the Opposition are suggesting. Is it the Melchett plan, or a higher figure?

After devising it and sending it to the Government, Lord Melchett accepted the Government's proposals. In other words, he has climbed down from the totality figure which, I understand, is being used by the Opposition as being the most credible. In other words, Lord Melchett has had a look at the world market. He has doubtless read the McKinsey Report, which has dealt with the world context, and has concluded that the appropriate target in the Joint Steering Group's Report would be suitable, either at the top end or at the lower end.

The Government have reached their conclusions on the same basis as other Governments. Japan had a target of 160 million tons per annum but revised it substantially downwards. The EEC's target for 1974 was 160 million tons now revised to 137 million to 148 million tons. This is a 15 per cent. reduction. It is interesting to note that the decline in the United Kingdom target is approximately 15 per cent. The European Economic Community's target is also down by about the same percentage.

I do not think that the Government could work a project of this nature without taking into account a little of our past history. Let us take the decade 1960 to 1970. The Conservative Government were in office four years and the Labour Government six. Crude steel output in the United Kingdom increased by only 3 million tons to 28 million tons; in the EEC the output jumped from 73 million tons to 109 million tons. Japan was a little more successful. Its output rose from 7 million tons in 1950 to 22 million tons in 1960, and to 94 million tons in 1970. In the United States, output rose from 92 million tons to 120 million tons over the decade.

Obviously, if we examine growth of this magnitude in other countries, we see that they have been lucky domestically because they have had faster expansion. They have been able to market their products domestically and in exports. But in the United Kingdom we have not had the economic expansion looked for—and six years of the decade were the responsibility of the Labour Government, who could not get either the steel industry or the economy working. Therefore, it is wise that we should not ordain at this time an over-capacity which could inevitably lead to more plant standing idle and to unemployment.

I sympathise with any man who has not got a job. I am one of the first to say that the Government are responsible for seeing that unemployment is reduced. So I am delighted with the new powers contained in the Industry Bill, but steel is of course, going through troublesome times and may be one of its beneficiaries.

I want to make one or two recommendations on the subject of a green field site, which is part of the programme we have not yet seen. I enjoin the Government not to go ahead with one. This is because a steel capacity of 36 million tons would not warrant a green field site. It would have a capacity of no less than 10 million tons or possibly, according to some current thinking, about 15 million tons. An output of 10 million tons is equal to a decade's growth in the United Kingdom.

The problem therefore becomes: how do we absorb it? If we cannot the problem remains. The capacity is there, money has been spent but the capacity is not used. We are contemplating a green field site, possibly at Hunterston but I have not a great deal of confidence in what is going on there. It could conceivably, however, be in Europe. Why are the Opposition so much against that? Could we not agree, on the same lines as the Dutch and the Germans, to have 50–50 participation between the Corporation and a French or Italian company? It could be extremely profitable.

Photo of Mr James Tinn Mr James Tinn , Cleveland

Would the hon. Gentleman accept that Teesside, which is one of the major possibilities for a brown field site, has 10,000 good reasons for not wanting that development to go to Holland or anywhere else, in the shape of unemployed steel workers waiting for work?

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedford

I appreciate this. Many people have the idea that we should simply build and engage labour but what happens when the production cannot be sold? How can the men be employed? The Government's policy has been to redeploy labour. It is important that we should not have unemployment, and it is certainly far too high at present. The Government are saying that we must be careful about this so that we get economic projects. We are being realistic when we say that the target must be between 28 million and 36 million tons.

Photo of Mr John Biffen Mr John Biffen , Oswestry

Before my hon. Friend leaves this fascinating part of his discourse about a scheme partly financed by British taxpayers and partly by overseas capital, can he tell the House whether he assumes that a substantial part of the output of that Continentally-sited steel works would come back to the United Kingdom?

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedford

I should have thought that a large part would not come back to the United Kingdom. We are meeting our own requirements. The new capacity from the green field site would be sold in Europe or the rest of the world. There would be no displacement of labour here. It would be a larger market for the BSC. It would have much greater scope and a good chance of being more profitable because of its multiple outlets.

I recently had the opportunity of going to Hamburg to look at one of the minimills at the Korf works. There can be direct production of steel by the utilisation of electric furnaces and pelletising by means of natural gas. It is essential, however, that there should be cheap electricity and gas. The Corporation is prepared to participate in mini-mills on a 50–50 basis. Finally, it is not much good producing additional capacity unless it is modern. Let us not add up all of the figures, old capacity plus new capacity, and say that it represents 42 million tons or something like that. Let us say that what we have is 28 million to 36 million tons of modern capacity. Then English steel will be competitive.

6.55 p.m.

Photo of Mr Edward Griffiths Mr Edward Griffiths , Sheffield, Brightside

The hon. Member for Manchester, Withington (Sir R. Cary) suggested that steel debates are opportunities when hon. Members should parade their local problems, be they at Irlam, Shelton or any other place. He thought it was right that the debate should not pass by without those of us who pride ourselves in coming from the industry and keeping a close general interest in it looking at the position and assessing just where the Corporation is going. He felt we should make our observations on last week's statement and say clearly and precisely where we think the Government's calculations are wrong, what we think capacity ought to be and what kind of picture we see emerging for 1980.

I want to look at the experience of the industry particularly in the last five years. One of the tragedies about our industry is that we do not seem to get new capacity coming on-stream until the demand is in the trough. I hope that sometime next year we will run into boom conditions. Capital expenditure for 1973–74 has been sanctioned but it will be too late for the Corporation to make maximum use of it in boom conditions. The Minister might care to look at the tying up of capacity demand and requirements.

The hon. Member for New Forest (Mr. Patrick McNair-Wilson) advocated less Government interference. I do not see why we cannot have this. Hon. Members opposite believe in it, I believe in it. The Under-Secretary of State believed in it when he was in opposition; the right hon. Member for Bournemouth, West (Sir J. Eden) accused us when we were in government of always having Ministers lurking over the shoulders of the Corporation and not allowing it to get on with the job.

We have a competent Chairman and we are paying substantial salaries to the executives of the Corporation, many of whom are steeped in the steel industry. We ought to let them get on and do a commercial job, run the Corporation and express their opinions and forecasts. One of the tragedies over the last few years, under both Governments, has been the refusal to allow the Corporation to charge the full price increases that it sought. No intelligent businessman prices himself out of the market and Lord Melchett and his advisers believed that they could have stood a substantial price increase. The Corporation's income over the last five years would have been substantially higher and it would not have been making its present losses if it had been allowed to make the kind of increases it had wished.

I am afraid we may begin to repeat our mistakes. It is because of regional and political pressures such as we have seen today and on other occasions that the Corporation is forced to make the wrong decision for short-term expediency resulting in long-term catastrophe. A classic illustration of this was when the Corporation wanted to build a large integrated steel plant. There were claims from Scotland and from South Wales. To try to satisfy both parties the plant was split, with half at Ravenscraig and the other half at Llanwern. Those plants will never fulfil as separate entities the hopes that people had for them had they been placed in the one location. Because of the appeals made in South Wales, Scotland, the North-East and elsewhere, we might be tempted to make the same mistakes.

We must decide whether the Corporation is to be charged with being profitable and commercial or whether it is to give secondary importance to that and meet the social consequences of the changes thrust upon the industry. If, because it is expedient in the short term to do so, we say "We know you want to close that plant because it is losing money hand over fist, but there is a demand for jobs in this area so you must keep it open", it is wrong to look at the balance sheet and say that it is losing money hand over fist. The two considerations should be separate. The commercial activities of the Corporation should be separated from the social responsibilities which come with changes.

The anger about the statement which the Minister for Industry made last week has now subsided a little but it was an insult to the House. How hon. Members on the Government side with any knowledge of or respect for the industry can, one after the other like parrots, congratulate the Minister on an objective appraisal of the industry I do not know. It is a question not so much of what the statement said, but of what it did not say. The Secretary of State said that the Joint Steering Committee would cover the following matters: the expansion of and consequent investment, by the Corporation at home, including the principle of a major new greenfield site; the means by which the Corporation will secure in the long term adequate supplies of ore and coking coal, with particular concern for the forecast short-fall of world supplies of the latter; the assessment of the desirability of undertaking a greater manufacturing operation at the source of raw material supply".—[OFFICIAL REPORT, 24th May, 1971; Vol. 818. c. 74.] and so on.

The statement consisted of one and a half pages of foolscap paper with, I suppose, two bits of information. The first was a confidence trick because there were listed five centres of steel production, and figures of capital investment, amounting to, I think, £570 million, were quoted. Anyone who took an interest in the industry knew that £440 million of that had already been announced. Therefore, the extra for 1973–74 amounted to only £130 million. It had been said earlier in the statement that the Government were putting in £200 million. Why could not it have told us what had happened to the other £70 million? We have been told on numerous occasions that about £70 million is to be invested in special steels in the Sheffield-Rotherham area between now and 1980. Could the difference between £200 million and £130 million, namely, £70 million, be designated for special steels between now and 1980? I should like to hear the Minister's view on that.

What about the capacity requirement for 1980—the 28 million to 36 million ingot tons? I agree with many people who have said that we should not plan on the basis that somebody thinks that, say, a 20 million ingot ton works should be put in the Outer Hebrides or somewhere else. There is no point in that kind of planning.

One yardstick for reaching a view about demand is the rate of growth. The growth stated by the Chancellor of the Exchequer in his Budget Statement of 1971–72 was 5 per cent. Lord Melchett's figure of 40 million ingot tons capacity was based on a growth rate of 41 per cent. The Government now say that the industry needs a capacity of only 28 million to 36 million tons. I contradict the Minister, because I believe that the steel requirement is a very good barometer of economic activity.

Therefore, we are under-utilising the capacity or the Chancellor's forecast of 5 per cent. growth is a little out and it should be 3 or 3½ per cent., or it is the Government's deliberate policy that by the 1980s we shall be importing large tonnages of steel.

Photo of Mr Trevor Skeet Mr Trevor Skeet , Bedford

Assume that a works had a capacity of 40 million tons but that only 60 per cent. of it was used. Would it not be totally uneconomic, because 40 per cent. would be lying idle?

Photo of Mr Edward Griffiths Mr Edward Griffiths , Sheffield, Brightside

That is a valid point. I would far rather that we had extra capacity available than that we should be in need of capacity when there was a demand at home and abroad and we had to buy from abroad.

The British Steel Corporation exports about 4 million ingot tons or the equivalent of finished products. If the industry has a capacity of 30 million tons, and assuming that the prediction of the Chancellor of the Exchequer is near the mark, from where is the extra steel to come for our manufacturers? Is it to come from the private sector? Will the Government say, "We propose to curtail the Corporation's output"? Will they say to the private sector, "Get your plants in now. There will be a big demand for your products by the 1980s?" Will they say to the Corporation, "We are not very optimistic about your export performance. We have no confidence that you will export satisfactorily. So, if this demand materialises, cut your exports and divert your production to the home market"?

If we achieve a growth rate of 4½ to 5 per cent., I predict that we shall be importing the equivalent of 7 million ingot tons plus of steel. If the balance of payments situation is strong and the economy is buoyant, we might just about be able to afford it. But if we run into trouble our industries will be short of materials and we shall run into balance of payments difficulty, with all that that involves.

I should now like to consider the question of our capacity by 1980. When all the investment now scheduled and sanctioned by the Government comes on stream by 1980, we shall have in quality capacity second to none in Europe and comparable with that of the Japanese. We shall have an efficient highly productive industry making 25 million ingot tons of low-cost competitive steel. Taking the Government's lower figure of 28 million tons, this means that there will be no expansion because by slight modification to the 25 million tons we get the 28 million tons. In addition, there is another 12 million tons of productive capacity scattered throughout the country in relatively inefficient works which are near to obsolescence and others that are based on hearth practices, which the Corporation is committed to terminate. So the Corporation must take out this 12 million ingot tons of capacity by 1980 so as not to dilute the profitability of the remainder.

I say to my hon. Friends and to hon. Gentlemen opposite who use these debates to press the case of a particular works that I wonder how the BSC is losing money. We hear from Irlam and other places how good the plants are and how much profit is being made, and yet from Monday to Friday of every week in this current year the Corporation is losing £2 million. Where is the money being lost if the plants that the champions are advocating are doing so well? If we took this view to its logical conclusion and told the Corporation to spend a bit of money on the obsolete plants the BSC for the next 25 years would be saddled with works which would barely break even and which would dilute the profits from other efficient works, and we should end up by taking the steel industry to the wall by the year 2000.

We must do a little bit of surgery now. The inefficient, obsolete plants must go, and we must build on the efficient plants. Everyone know where they are—Port Talbot, Llanwern, Scunthorpe, Teesside and Ravenscraig. These are the centres for bulk steel-making. That is the way we must go to build on the 25 million ingot tons.

I am not a great fan of mini-plants. There is a special case for electric arc plants which make special steels. That is the only way to make alloy steels, and it is right that electric arcs should be used in that context. I can understand direct reduction plants being used occasionally for particular reasons for the production of half a million to one million ingot tons a year. But from all the statistics I have been able to find, the bulk steel-making of between 8 million and 10 million ingot tons the direct reduction plant is not competitive with the BOS plant. As far as I can see, bulk steel-making will be based on BOS plants.

I will take the opportunity offered by the Minister of saying what I think should be done for the British Steel Corporation. First, we should get rid of the Joint Steering Committee. It is an insult to the Corporation and has served no useful purpose. If the document presented to the House by the hon. Gentleman is evidence of the Committee's activities, I humbly suggest that the Committee was redundant before it even started. It has made no intelligent contribution to the future of the steel industry during the 18 months in which it has been sitting. I endorse the view expressed on this side of the House that it was a time-wasting exercise to enable the Government to put off making a decision and telling the Corporation what to do. The Corporation should be given more freedom to make judgments and the Government should back its judgments. We need less Government interference. We must tell the Corporation to modify its estimates and to plan by 1980 a 40 million ingot ton capacity. The 25 million ingot ton capacity can be increased to 28 million by increased productivity, more efficiency costing, bulk buying and so on.

I recommend a brown field site on Teesside at Redcar with a capacity of between 8 million and 10 million ingot tons. That would give about 38 million ingot tons. I have no axe to grind—I am looking at the industry generally—and I would sanction the Anchor No. 2 scheme. That would give the 40 million ingot tons. Time is not on the side of the Corporation. With every delay there will be less opportunity for the Corporation to compete efficiently with its European competitors.

I started by saying that I came from the steel industry. I spent 17 years as a steel worker and I am here because I was in the steel industry. I am not sufficiently big-headed to say that whatever profession I had chosen I should have found my way to the House of Commons. I am proud to be here and to carry the flag, not for Sheffield which I might have done, but for the steel industry.

There are 250,000 families of steel workers throughout the length and breadth of the country. The men feel that they are the best steel workers in the world. Their craft has been handed down from father to son. I will fight any move by the Conservative Government or by a Labour Government to sell out this heritage of steel-making ability, either to the slant-eyed oriental gentleman in the Far East or to our Continental partners if we go into Europe.

I come from the biggest union in the industry, the Iron and Steel Trades Confederation. That union has passed resolutions to the effect that it will entertain no more closures and redundancies until such time as a sensible and adequate capital investment and expansion programme is undertaken by the Corporation and sanctioned by the Government.

I plead with the Government to tell the Corporation to adjust its capital investment and, in consultation with the trade unions, to take out all the obsolete and antiquated plants. We want a capacity of 40 million ingot tons. With a strong, virile, competitive steel industry Britain in the future will be freer and more independent.

7.17 p.m.

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

The hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths) has made a bold speech which contained one contradiction. In one breath he asked the Government to tell the British Steel Corporation to plan a capacity of 40 million ingot tons and in the next breath he asked for complete freedom for the BSC to exercise its own judgments.

I have listened to many debates on the steel industry, and I wonder whether the steel masters of today—namely, hon. Members in the House of Commons—will be condemned by history for making bigger mistakes than did those who ran the steel industry before 1967 and who were so criticised by hon. Members opposite at that time. We in the House of Commons are the steel masters now, whether we like it or not, because of the powers given to the Government in the 1967 Act. Those associated with the industry will judge for themselves whether this debate has been a great step forward in bringing about a viable steel industry within Europe in the years to come, which will be an asset to the nation, or whether the debate has been irrelevant and. perhaps, irresponsible.

My hon. Friend the Minister has been censured for not being all things to all people. He has been censured for not doing what Governments in my view should not be doing. As the hon. Member for Brightside said, he has been pressed to keep in being the very steel works that perhaps should be closed because of old equipment and poor productivity.

Over the years, particularly in the early 1960s, hon. Members on the Labour benches have been crying out for change. They have complained that the rate of change in the steel industry is too slow. Now we have seen change. We had to have nationalisation to bring about rationalisation. Change inevitably brings with it uncertainty. Therefore, it is surely a blatant contradiction by Labour Members to ask for change and then to complain about uncertainties, because the management of the BSC in the first place and the Government and the joint steering committee in the second place appear to advance only where the ground is firm. It is surely right that management should make decisions only when it is certain that the basis for them is right.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

May I intervene for one moment?

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

I hope the hon. Gentleman will allow me to make my speech, but if I upset him again I shall give way.

It is irrelevant whether a statement is made by the Secretary of State or by the Minister. I prefer the delegation which is indulged in by the present Government and I welcome the fact that my hon. Friend made his statement on 8th May as well as opening the debate.

As a result of nationalisation those who run the steel industry have always had the Treasury, at one time, Mintech and now have the Department of Trade and Industry breathing down their necks, with Parliament taking the industry up by the roots every few months, so that Parliament can debate how the industry has grown.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

The hon. Gentleman really has upset me now. A few moments ago he said that the Corporation and the industry must only advance when they they think they are on firm ground. Is he not aware—and I am sure that with his connections with the industry he is aware—that in February, 1971, Lord Melchett, the board and the corporation submitted a 10-year plan to the present Government setting out estimates of growth and development year by year, firmly worked out? Are not the Government now frustrating the aims of the Corporation by refusing to accept the Corporation's view about future developments in the next 10 years?

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

It was a mistake to give way to the hon. Gentleman because what he has said contradicts the impression I had gained. Perhaps we shall have clarification of this point when my hon. Friend replies to the debate.

I return to my introductory comments. The British Steel Corporation is undoubtedly big business. No consultant or merchant bank would have brought 14 large companies together in one go as was the case in 1967. The industry has a turnover of roughly £1,210 million with capital assets of £1,245 million. It is a huge industry which employs 250,000 people and has already had to cut back on jobs. According to the industry's annual report it has cut some 19,000 jobs, and the figure today may be even larger.

The complexities of the industry in terms of plant are enormous. Shortly after the General Election I was invited to visit the Special Steel Division headquarters at Topton Road in Sheffield and saw there the management services unit. There were various computer models to assess the different production techniques and cost factors. Since I live in the area, I cannot help hearing when a new model is tried. The various raw material prices and selling prices in terms of final product make it difficult to decide which particular capital investment should be made at one time.

My hon. Friend the Minister stated on 8th May that as a matter of urgency the Corporation expected to make a firm strategic recommendation later in the year, and I believe that the Corporation is still assessing and comparing one computer model and one project against another. Neither the Corporation nor the joint steering committee has yet made up its mind which way to go. Will the Minister confirm what the position now is?

What attitude should we adopt to today's debate? We are anxious, whatever steps are taken by the Minister on behalf of the Government, to have a viable, healthy steel industry—and I include the private as well as the public sector. Whether we like it or not, following the statement on 27th April we are committed to the fact that the bulk of the steel industry will remain within the public sector. I hope that in the years to come, perhaps following entry into the EEC, we do not find ourselves too rigidly committed to political dogma. If all the funds of BSC were no longer to come from the Treasury but were to come from outside, the autonomy which has been requested no doubt could be given to the industry and Lord Melchett has referred to a BP type of solution.

There is no doubt that the industry has been put in shackles by Government and Parliament from the time of the 1947 Act, and even prior to that. Since then we must remember that the Conservatives set up an Iron and Steel Board. The steel industry has had interference from Parliament for a very long time. Labour Members opposite are asking for the industry to be released from interference by the House of Commons, when this is, in fact the very intervention which has arisen from nationalisation of the industry in recent years.

The Minister has been criticised for a capital investment programme that is too low. He reminded us today that approval has been given for expenditure of £200 million in 1973–74 and this could give rise to a larger sum, comparable to the £265 million allocated for 1972–73. It was said in last year's annual report of the BSC that investment is now at the highest level since 1962.

There is a considerable lack of information on which to base a judgment on what is to happen to the industry. I hope that Lord Melchett will see fit to publish much more information in the annual report so that we may have the background on which to make a judgment.

The hon. Member for Brightside reiterated a view which he has put in the House on many occasions that he obviously supports the construction of new steel plant on green field and brown field sites. This is a matter we must consider.

What concerns me—and I raised this matter in a debate on 24th May last year—is that the most modern plants hope to achieve a productivity of 700 tons per man per year. Some of the better plants in the United States are producing 300 tons per man per year and elsewhere in the United States the average is about 200 tons per man per year. In this country the figure is about 100 to 125 tons per man per year.

It would be useful to have some information on the manning in the British steel industry not only in the period of 10 years to 1980 but so that we may have the picture at the turn of the century if we are to aim at a productivity which is comparable with that which obtains elsewhere in the world. If we do not achieve that sort of productivity and if our manufacturing costs do not come down, the markets mentioned by the hon. Member for Brightside and others will not be available because our costs of production will be too high when compared with the highly competitive production costs in Australia, South Africa and elsewhere, let alone competition from the European Community countries. It could well be that we have to face the possibility of primary production in the shape of billets coming in from these countries, because over the years their costs of manufacture have been well below ours. That is the reality we have to face.

The Anchor scheme costing £250 million which is now under way is a major scheme which I hope will give increased productivity to the Scunthorpe area. The consequences of that scheme, which is a first stage towards projects on brown field or green field sites, inevitably will mean that factories elsewhere will have to face the closures which have been put to us already in this debate. Are we in this House prepared to slow down those closures for social reasons and to pay the BSC a subsidy to keep these companies going for a few more years in order to make the change less sudden? Will this be the outcome of yesterday's debate?

I believe it is right that there should be pressure on my hon. Friend for the development of a larger unit which will be competitive with the one between Hoesch of Germany and the Dutch steel company Keninlikje Nederlandsch Hoogevens en Staalfabricken which I understand may have a capacity of 10 million tons. By being competitive we can keep a steel industry in this country. That is the problem that we have.

There has been considerable debate about the likely markets for steel. I will not discuss them in detail, because most of these points have been covered. But it seems that in the United States in recent years the demand for steel has been well below that envisaged, and in much the same way many countries with large factories find today that they are operating well under capacity.

My third point is to discuss the effect of British entry into Europe on our price levels. As a result of the CBI initiative and the Government statement, BSC prices were restricted some time ago. It was greatly resented. However, from 1st January onwards there will be a new situation and, according to a reply to a Parliamentary Question the basing points have been announced already. However it would be useful to know what is the current level of British steel prices compared with European prices. Are we below, slightly below, or are our prices already higher? If our prices were to be raised to a level at which they would be higher than European prices, imports would pour into the country. It is price levels based on costs of manufacture which determine which way trade goes.

The area which has been most affected by changes and the area causing most concern to me in this debate and those who work there is Sheffield. It was the home of steel. There were interventions in the debate a year ago when it was hoped that the whole of stainless steel manufacture would go into the public sector—and I was not over-enthusiastic about this. In answer to a Question which I asked only last week I was told that the final agreement between the BSC and Thomas Firth and John Brown Limited had been signed. In the May issue of Steel News reference was made to the setting up of a Stainless Flat Products Division consisting of three works, those being Panteg, Ford Lane, Stocksbridge, and Shepcote Lane, Sheffield. Mr. F. J. Feltoe has been appointed general manager. As a competitor, 20-odd years ago I was fortunate enough to witness and know about the original development at Shepcote Lane. This bold step forward in Sheffield made it possible for stainless steel coils to be made in this country. However the type of investment in Shepcote Lane will not be enough if Britain is to be competitive in stainless steel.

I hope that my hon. Friend will draw the attention of Lord Melchett to the dire straits in which Sheffield finds itself and that he will give favourable consideration to the possibility of erecting a stainless steel complex which is competitive with the best anywhere in the world.

My final point is to underline the inadequacy of a debate of this type to assess the various problems facing those running the steel industry, the steering group and my hon. Friend the Minister. The hon. Member for Chesterfield (Mr. Varley) described the steel industry as demoralised. I suggest that many of the difficulties referred to in the debate are but good reasons for never having nationalised steel in the first place. One of the purposes of nationalisation is the ownership by the people of the means of production, distribution and exchange and their supervision by the Government and Parliament. Are we to take it that right hon. and hon. Members opposite have had a change of heart and that they want that supervision to be taken away from Parliament and to go elsewhere?

This is a poor shareholders' meeting, and I doubt whether a Select Committee would be a better place in which to continue it. Perhaps a question and answer session with the Minister and Lord Melchett would be more productive. Unfortunately the outcome would not be published, but I see no way for hon. Members to obtain a better understanding of the problems facing the Minister of the day and the chairman of the industry. A few teach-ins and visits would be more productive than another debate such as this. What is certain is that the information available to us does not tell us the reasons why decisions are taken. For that reason it is difficult to comment wisely on the statement made on 8th May for instance. I hope that the Minister will try to rectify the position.

I am afraid I have been on my feet too long——

Photo of Mr John Mendelson Mr John Mendelson , Penistone

That is the hon. Gentleman's best point so far.

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

Britain must have a viable steel industry which is competitive with the best in the world. The hard fact that we have to face is that many of our plants are too small and outdated.

The Government will have to review the increased productivity and the cheaper manufacturing costs arising from green field or brown field projects such as the Anchor project. But there comes a time when some of our smaller plants must be closed down. That is the time when all hon. Members feel bound to fight to keep in being plants which should be closed down, when they operate in their constituencies. That is the dilemma that Parliament faces regardless of whether steel is nationalised.

The national Press, including The Economist and the Metal Bulletin, have described my hon. Friend's statement as either a damp squib or a mouse. It is an interim statement only. The process of developing a corporate plan for a huge industry like the BSC must take time. I do not share the views embodied in the Opposition's Motion and I support the Amendment put forward by the Government which I shall vote for tonight.

7.47 p.m.

Photo of Mr John Forrester Mr John Forrester , Stoke-on-Trent North

I cannot possibly hope to match the detailed knowledge of the hon. Mem- ber for Sheffield, Hallam (Mr. J. H. Osborn) or that of my hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths). However I am fortified by the assurance of my hon. Friend that he will not explode if I make a constituency point in the course of my remarks, which I hope will be brief.

There seems to be no dispute between the two sides of the House about our need for a substantial modern steel industry as the basis of our economy. We appear to agree also that the industry must be competitive and must have the right quality, the right price and the consumer's interests at heart. I am one of those who believe that, with the right encouragement, the BSC is capable of achieving this.

A great many points have been made about investment in the industry, and I suppose many of us would be interested to know why private industry did not make investments in the period immediately preceding nationalisation. Certainly the announcement made by the Minister a fortnight ago was an encouraging first step, but he knows that we shall judge the Government's actions when we know what the complete package is to be.

It is this target of 28 million to 36 million tons which is depressing. This is the figure which has made the whole of the British steel industry despondent. It is well known that the Corporation wanted a higher figure and wanted to invest on that basis. I accept that forecasting is a hazardous business. One hon. Gentleman opposite talked in terms of the National Plan, but that was not exactly the most accurate document ever produced. This estimate of 28 million to 36 million is a wide range, and the figures themselves indicate that it is very much an imprecise science—one that seems to be more akin to guessology than technology. The Government must not be surprised if these figures invite the kind of criticism which they have attracted so far and will continue to do so in the future.

A fortnight ago, and again today, the Minister drew attention to the dangers of over-capacity in the industry and reminded us that this could have particularly serious effects on unemployment in areas which were particularly sensitive to it. It is true that if there is gross over-capacity unit costs of production, and so on are increased and the industry can price itself out of the market—we accept that—but I agree with what was said by my hon. Friend the Member for Brightside, that it is better to have some over-capacity which is an incentive to the industry to go out and compete with other countries which are major steel producers, rather than have under-capacity.

If there is an under-estimation, or if there is under-capacity, the effect on employment will be just as serious, but it will come sooner. It will mean that people are sacked immediately instead of at some future date, which the Minister perhaps suggested. Under-capacity could lead to complacency. It could leave us in the position that if there were an upturn in world demand we would not be in a position to meet it, or to meet any upturn of demand in the home market.

It is criminal to think that men will be condemned to the scrap heap on the basis of figures which seem to be nothing better than a guess by the Government, or by the consultants who advise them.

The greatest cause of dismay and frustration in the industry is the failure of the Government and the Corporation to publish the long-term strategic plan. I accept that the Corporation is perhaps primarily responsible for getting out the details and putting them before the Minister for his approval, and clearly the Minister has to weigh carefully all the consequences before approving or disapproving the Corporation's plan when it comes to him, but the men and women in the industry have been waiting for at least 18 months to know their fate, and now we are told that they are unlikely to know it before the late autumn at the earliest. In the meantime, there are rumours and inspired or uninspired leaks in the newspapers. Many of the detailed explanations which appear there seem to suggest that somebody somewhere knows precisely—or almost precisely—what is going to happen to the steel industry. The only people who do not really know what is to happen to them are those on the shop floor and they, surely, are the ones who should be the first to know.

The Government have to take a great share of the responsibility for the delay in producing this plan. Obviously the time which has been taken to arrive at the target has had some effect on this and has altered the time-scale which perhaps the Corporation once had, but my belief is that the Government have encouraged the delay in publishing the plan because this is clearly the wrong time, with the present economic climate of unemployment, to publish it. No doubt the Government hope that by November the economy will have upturned as a result of the Chancellor's measures and the unemployment figure will be lower than it is now—it has started to fall. It will then be much easier to publish and sell a plan which will put 40,000 steel men out of work than it would be now, with 1 million unemployed. This is a political decision which the Government are entitled to take into account, but the overriding consideration ought to be the relief of the stress under which men and women who work in the industry are living.

To make a constituency point, areas such as Stoke-on-Trent have gone through traumatic experiences with pit closures and the contraction of older industries, but in Stoke we are also faced with a declining labour force in the pottery industry, although the industry is maintaining its production, and perhaps even increasing it. This is a question of techniques, and so on.

If the Shelton Steelworks are closed, or partially closed, as appears possible, we shall be faced with the problem of another 2,000 to 3,500 unemployed. But it will not just be a loss of that number of jobs for the present working force. It will mean the loss of that number of job prospects for future generations, and this is the tragedy facing the old industrial areas unless new industries are invited in or are directed to them by the Government. In the past, certainly in North Staffordshire, it has been possible for many people made redundant to find employment in smaller industries and in service industries. Many have found jobs in pastures new and have left the area altogether, but the safety net into which these people have fallen in the past is wearing out.

We feel that any major closure of this kind could be a catastrophe for our area. It could turn North Staffordshire into a depressed state from which it will be very difficult for it to emerge. In yesterday's Bill the Government indicated their concern about the prospects facing development and depressed areas. They realise now that it is easier for an area to fall into poverty than it is to regenerate it and get it to climb back to prosperity.

Unprofitable mines were subsidised by the Government and given a life which was rather longer than expected in order to minimise the social consequences of closures in certain areas. It may be that at some time in the future the Government will consider doing that for some steel concerns. They may realise that it would pay them to inject money into an industry rather than face the cost of throwing thousands of people on to the dole. Shelton is not begging for charity. It is one of those profitable concerns which abound in the Corporation. It is crazy that the Government should be closing profitable concerns and trying to set up some pie in the sky projects which may, or may not, be profitable.

The Minister, his colleagues or the BSC have a tremendous responsibility here. They hold the future of thousands of men and women in the hands, and I am sure that when they make their decisions they will take into account all the social consequences and weigh them with the utmost care in order to ensure that the industry is run for the benefit of the work people in it and the country as a whole. Modernisation, rationalisation and profitability are gods to whom we must pay respect, but not at the expense of completely disregarding the poor mortal souls who work in these concerns or depend upon them.

In conclusion, Lord Melchett has said that the BSC will adopt the basing point pricing system if we enter the EEC. This gives some of us a little hope that thoughts on maxi-plants will not rule out consideration of establishing profitable mini-plants near to the sources of raw materials and within a reasonable distance of the consumers they serve. But the same thinking also raises the fear in many minds that the green fields of Normandy or, perhaps, Belgium or Kent may at some time appear more attractive or profitable than the green fields of Lincolnshire, Yorkshire or Staffordshire. The steel workers need assurances now that there will be jobs for them. Generous and thoughtful though the BSC may be, redundancy payments are not an attractive proposition any more to a man whose prospects of re-employment are practically nil.

7.50 p.m.

Photo of Mr Tom Normanton Mr Tom Normanton , Cheadle

I welcome the fact that the steel industry has been chosen by the Opposition for debate today. So far the debate has shown the keenness of both sides of the House to be constructive, perhaps to varying degrees, critical though the contributions have been. But there is and has been a wish to be constructive and to make useful recommendations and put forward good ideas. I regret deeply, however, that steel debates can so easily degenerate into what I can only regard as occasions which are good for party politics but bad for business. Fortunately, this is not one of those debates.

Criticisms there have been, and I am sure that they have been welcomed by my hon. Friend the Minister for Industry. Most of those have related to location, size, capacity and the question of the targets set by the Government for this important industry. Some of the targets which have been suggested can only be described as ranging from pie-in-the-sky at one end of the scale, to burying one's head in the sand, perhaps, at the other end. Probably all right hon. and hon. Members in the Chamber today will add their support to the call of my hon. Friend the Member for New Forest (Mr. Patrick McNair-Wilson) when he appealed for a sense of realism. What is realism within the context of the debate? It is a question of facing the economic and industrial facts of life. Surely that can be done only if the British Steel Corporation is made viable, if it is put in a position in which it can stand competition in the world as a whole and in the home market in particular.

Many ways of doing this can be put forward. But I question whether anyone, inside or outside the House, can possibly challenge the desirability, indeed, the absolute necessity, for the optimisation of throughput of the plants. If we are to achieve maximum viability we have to optimise both the throughputs, in terms of productive capacity, and the techniques available to an industry of this size by virtue of the scale of operation. We must also optimise the utilisation of capital. This must express itself in the lowest possible element of ultimate overhead costs when steel is made available to the consumer. We have also to optimise our utilisation of labour and, in doing so, give the certainty of continuity of good, well-paid employment to those who work in the industry.

We also have an opportunity to concentrate on optimising the market position by virtue of having a market which is not captive but which is at least reasonably close to productive plants. I venture to suggest that this is not a job for politicians. This is a job for men in industry and in business. In this case it is a job for men in the steel industry. That is my first point.

We as politicians do the greatest possible disservice if we pompously and conceitedly believe that we have it in our power to make detailed technical, commercial and economic judgments about the management of the British Steel Corporation. If the British Steel Corporation's plants are to operate to full capacity——

Photo of Mr George Lawson Mr George Lawson , Motherwell

Is the hon. Gentleman aware that a body set up representing the Government and the industry has been engaged, we understand, in a deep-seated, continuous study of the industry and its problems? We have had a statement on its findings. Are we not entitled to expect that that statement will contain some information?

Photo of Mr Tom Normanton Mr Tom Normanton , Cheadle

Yes, I would not question that. But would the hon. Gentleman care to continue? That discussion has taken place in collaboration with the steel industry, and I believe that out of that discussion came the statement from my hon. Friend on 8th May.

I would hope that the way in which we can help the steel industry best, and the BSC in particular, is to do what has been done now, that is, to arrive at an agreed level, a target if one cares to call it that, at which the industry believes it can run at optimum throughput, at maximum capacity, meeting as it will and taking into its calculations the home market, which must be its primary objective, and its long standing and, as it trusts and believes, longer lasting participation in world export markets.

Then we come to the question of the way in which the steel industry can and must ride the cyclical changes of trade in the world in which it operates. In this sense we in Britain are not excluded or isolated from this in any degree. Here my second point is that this gap can and must be filled—prudently, wisely and with the best interests of the industry in mind—by imports. It is nothing of which the British Steel Corporation or those who are employed in the industry need have fear, on one condition: that the British Steel Corporation engages in the closest possible collaboration with an extremely important component part of the engineering and trading community in this country. I refer to the steel stockists.

Photo of Gerald Kaufman Gerald Kaufman , Manchester Ardwick

Like myself, the hon. Gentleman is the representative of a greater Manchester constituency, and greater Manchester is very much affected by the Irlam problem. In advocating the importation of steel, would he say that Irlam ought to be allowed to provide for our markets before we start importing, as we very much need the employment thus provided in the greater Manchester area?

Photo of Mr Tom Normanton Mr Tom Normanton , Cheadle

In the short time available to me, I do not intend to get bogged down in detail, though I could do so. I could do so from a position of being well informed—not as a producer of steel, which I am not, but as a user of steel. This does not neutralise my particular point that the question of what happens at Irlam, or what happens at any particular plant, should not—except within the context of a point which I shall make shortly—be a matter for party politics. I fully recognise the justifiable right of any hon. Member to speak for the steel workers in his constituency.

I would do the same, to the maximum of my ability. But we are not talking of that. We are talking about the industry as a whole. I earnestly hope that the House will concentrate on the interests of the BSC as a whole rather than get bogged down—though emotionally inevitable—in individual consideration of plants. I do not cross swords with the hon. Member for Manchester, Ardwick (Mr. Kaufman). All I say is that this is not the occasion for that to take place. Therefore, I ask that the closest possible collaboration should be established with and demanded from the British Steel Corporation by my right hon. Friends on the Front Bench. There should be collaboration with the steel stockists as they have an expertise of considerable value not only to the Corporation as buyers but to the industry which the Corporation and in a sense ourselves serve.

The stockists have an expertise in market evaluation and service to the market both in quality and quantity. We would be doing a great disservice to our exporting and manufacturing engineering industry if we were to inhibit that section of industry. That section will be in the market to import from the Corporation and to trade in steel. That trade relationship between the Corporation and the stockists has to be carefully and sensitively handled. There may have to be an element of crystal ball gazing. It may be necessary to have a small co-ordinating group to ensure that there is a farsighted balancing of maximising throughput of the Corporation's plants and ensuring that there is no shortage of supply of appropriate qualities and quantities of steel to the users which this industry must serve.

I regret the way in which over some decades there has been repeated evidence of doctrinaire attitudes towards the steel industry. It could be said that this goes back not to the early days of nationalisation but to political considerations, whether they be doctrinaire or otherwise, which may well have handicapped or inhibited the industry for far longer than.

I earnestly hope that in considering the future rôle of the Corporation there should be no possibility of such doctrinaire views inhibiting the establishment of specialised steel production plants or the establishment of integrated production plants with other manufacturing processes not for market distribution and resale other than in a manufactured form.

I appeal to my right hon. Friend the Secretary of State and his colleagues on the Front Bench to give the maximum possible freedom and exercise of judgment to the Corporation but not necessarily or exclusively in formulating their plans, as I believe they must do so in collaboration with the Government. Once the Government have reached this point—and as I interpret my right hon. Friend's statement—it is in the implementing of these plans that absolute freedom should be given. The absolute freedom I want to see is one which could be socially painful, but if we are to impose upon the Corporation the inhibiting restriction of having to pay predominant attention to the social aspects of its policy we must be prepared to pay the price.

I strongly welcome the views along those lines from some hon. Gentlemen opposite. I should like to see the Corporation having absolute discretion to decide the location and size of their plants, the qualities of steel they are to process at those plants, the technical decisions that they might have to introduce and certainly any commercial policy. Having done that there will inevitably be social consequences which are matters for Parliament. That is where the nation comes in and takes over, having given to the steel makers the freedom to exercise their judgment and intelligence in optimising throughput and bringing their prices to the lowest possible level. In other words, to make the industry really competitive there will be a price to be paid. I suggest that that is not a matter we could deal with effectively or fruitfully in this debate. It will be a matter which will have to come before Parliament once the Corporation has been given that protection.

I welcome the statements made by my hon. Friends from the Front Bench as being realistic, having faced the facts of life as they see them today. They represent a sober assessment of the prospects for this industry. The rôle of the Government will be to provide the finance and to ensure that the policy is acceptable. Having decided that, the industry will he left to get on with the job.

8.6 p.m.

Photo of Mr Barry Jones Mr Barry Jones , Flintshire East

I am sorry that the hon. Member for West Flint (Sir A. Meyer) is not now in the Chamber. For most of the time we have managed to co-exist as sharing a representation for the County of Flint, but his speech this afternoon was not calculated to generally help the British Steel Corporation. He mentioned the word moonshine. I am inclined to say that I would describe his speech as moonshine. He implied that labour relations in Flintshire, in the Shotton plant, are not very good when I think that they are excellent. Generally speaking, his speech was the sort of speech somebody would make in the drawing room circumstances of the Forsyte Saga. It was not good enough.

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

In the absence of the hon. Member for Flint, West (Sir A. Meyer), may I say that I believe that he was misunderstood and has been misconstrued. I am sorry that he is not here now to put the record right concerning his reference to labour relations. When the hon. Gentleman reads the OFFICIAL REPORT tomorrow he will find that he has misunderstood what was said by my hon. Friend.

Photo of Mr Barry Jones Mr Barry Jones , Flintshire East

Being the son of a steel worker, the grandchild of a steel worker, and somebody who is intimately involved with the trade unions of East Flintshire's steel plants, I felt I had to speak as I did.

I still have the impression that the Corporation was dragged kicking and screaming into agreeing with the Government's doleful production targets for the 1980s and that the Corporation was sold down the river last year by the Government's negotiating teams during the frenzied scramble at Brussels over European entry. At one time I expect the steel masters of the Ruhr blanched at the prospect of a revitalised British Steel Corporation competing with them. However, I think they can start to count their profits again because the Tory Government has put a series of leeches upon the flanks of the Corporation. It is not possible now for the Corporation to adopt a totally new approach to the location of its plants throughout the country because there is a history of sheet making over many years. I also believe, to some extent in opposition to the hon. Member for Cheadle (Mr. Normanton) that social considerations should considerably modify the decisions reached by accountants and other abrasive and purely cost-effective professionals. There is not a site in the United Kingdom which combines the social, economic and physical requirements as stated by the theorists.

If we wish to be rational, the answer is to scrap all existing iron and steel plants and import billets and other semi-finished steels for rolling or re-rolling. That is social and economic nonsense and would also be political suicide, but if we wanted to carry it that far that would be the way to do it.

I believe that social considerations are highly important when deciding the future of the British steel industry. I suspect the prestige projects of green field and major brown field sites may not appear in Britain for perhaps a decade or so now. I believe in strong growth policies rather than the patch and mend policies. If we go for a careful and intelligent expansion of the majority of existing plants in the United Kingdom we will probably be on course for short and medium-term gains at minimal cost. These heritage expansions combine low costs with flexibility and are a good return on capital invested in the current situation.

Since the demand for sheet steel in car-hungry Britain is so large, I suggest the strip mill division of the Corporation should have the greatest priority. My prediction—albeit hazardous—is for major plant concentrations served by deep water terminals at, say, Swansea Bay, Mid-Lanarkshire, Teesside, Scunthorpe and possibly, I hope, Deeside. In my view the Corporation should go for maximum growth, but its investment programme should he tied to a strong Governmental regional aid programme.

I should like to conclude—I am not ashamed to do so—with a reference to my constituency. Shotton Steelworks is in North Wales—I sometimes get the impression that the House might think there is no steel industry in North Wales. It employs 13,000 people and produces a large proportion of our annual strip mill production. However, there are signs that within a decade Shotton could lose 6,000 jobs, because some bright spark at Grosvenor Place has convinced himself that it would be cheaper to transport molten metal 100 miles across the Pennines to Shotton for finishing processes. However, Shotton outstrips most steel plants in terms of profitability.

The Minister for Industry gave a courteous reception to a deputation which I took to his Department recently. I know he was impressed by the steel men who talked to him and by the points they made. I hope he will also be impressed by the shrewd and commercially viable plans which are proposed for the development of the Shotton works which will cost, I believe predictably, £50 million. Shotton will very soon need two BOS furnaces, continuous casting and an iron ore terminal at Birkenhead.

A point which I think I can emphasise is that currently at Shotton a £6½ million coke ovens project has been constructed. It would be wrong and very foolish if, having constructed that part of the works, there was then to be a sentence of death on the rest of the steel-making equipment there. That would then be a hopeless and foolish white elephant.

Shotton is the economic lynchpin for not only East Flintshire, but North-East Wales, parts of Cheshire and Merseyside. It is conceivable—I hope not—that Shotton could be the town that was murdered. However, I guess that the Shotton steel men would not take tamely a decision to run down the works, because they are men of character who would resist that sort of cutting of their throats.

On behalf of a whole community, I ask the Minister to give us good news and to say, for example, that he proposes an iron ore terminal at Birkenhead. Is the Minister aware that Shotton steelworks has the fastest-growing, hinterland demand of any strip mill in the United Kingdom? Is he aware that to reduce the numbers employed at the steelworks would be to destroy the growth potential that exists within the region I have described? Is he also aware that the steel mill at Shotton accounts for a third of all local jobs? I hope that he, or his right hon. Friend the Secretary of State for Wales, will visit the Shotton steelworks and look at the work being done there.

I have come to praise Shotton, not to bury it. I know that the British Steel Corporation will be hoping to make a profit next year. Shotton is currently making a profit. Therefore, it seems to me and to many steel workers inconceivable that its future should be in doubt.

My final question to the Minister for Industry is to ask whether he can confirm that profitability and viability are still among the Government's principal factors in deciding what to do in the steel industry.

8.15 p.m.

Photo of Mr John Sutcliffe Mr John Sutcliffe , Middlesbrough West

Mr. John Sutcliffe (Middlesbrough, West) rose——

Photo of Mr George Lawson Mr George Lawson , Motherwell

On a point of order, Mr. Deputy-Speaker. I have not seen the hon. Member for Middlesbrough, West (Mr. Sutcliffe) on the Government side at all today. I notice that he has been given a sheet of notes which he has been memorising or reading. I do not know whether he has any steel interests. In view of what Mr. Speaker said about the interests of hon. Members with steel constituencies, may I ask whether you, Mr. Deputy-Speaker, should be induced to aid and abet a practice which is definitely aimed at gagging hon. Members on this side of the House who have steel interests?

Photo of Mr Edward Mallalieu Mr Edward Mallalieu , Brigg

That is not a point of order, as the hon. Member well knows. He is taking up most valuable time in the debate which many hon. Members wish to occupy and use. Mr. Sutcliffe.

Photo of Mr George Lawson Mr George Lawson , Motherwell

Further to that point of order——

Photo of Mr Edward Mallalieu Mr Edward Mallalieu , Brigg

I have ruled that it is not a point of order.

Photo of Mr James Tinn Mr James Tinn , Cleveland

On a point of order——

Photo of Mr Edward Mallalieu Mr Edward Mallalieu , Brigg

Is this a new point of order?

Photo of Mr James Tinn Mr James Tinn , Cleveland

This is a new point of order, Mr. Deputy Speaker. I recall that in a previous Parliament Mr. Speaker ruled on several occasions when there was a strong predominance of Opposition Members wishing to speak and a great shortage of Government supporters—there could hardly be a greater shortage at the moment with only two hon. Gentlemen present on the Government side—that in such circumstances, instead of calling one for one, he occasionally called an additional speaker from the Opposition side. We, then on the Government side, rather resented it but perhaps there is something to be said for it.

Photo of Mr Edward Mallalieu Mr Edward Mallalieu , Brigg

It is true that there are occasions when, in the discretion of the Chair, immediate regularity is not followed. However, on this occasion I hope hon. Members will accept that occupants of the Chair do their best to be fair. Mr. Sutcliffe.

Photo of Mr George Lawson Mr George Lawson , Motherwell

On a point of order. You have talked about the discretion of the Chair, Mr. Deputy Speaker. This is precisely the point I am putting: that you are permitting the practices of the House to be abused in this sense when so many hon. Members with steel interests have been here all day.

Photo of Mr Edward Mallalieu Mr Edward Mallalieu , Brigg

I do not think so. If the hon. Member feels that I have been unfair, he has his remedy. I hope that on the whole hon. Members will regard the Chair as being completely impartial on all occasions.

Photo of Mr George Lawson Mr George Lawson , Motherwell

Not on this occasion.

Photo of Mr John Sutcliffe Mr John Sutcliffe , Middlesbrough West

I apologise to hon. Members that I was not in the House this afternoon and have not listened to the major part of the debate. [Interruption] As hon. Members know, from time to time Members are prevented from listening to debates in which they have a particular point to make.

I wish to be brief, and I mean that. Hon. Members may have read the correspondence on "Looking glass words" in The Times. Many of us start by saying that we intend to be brief and then tend to encroach upon eternity. I do not intend to do that.

I hope that hon. Gentlemen opposite will accept that I have an interest in steel. I represent part of Teesside. The hon. Member for Cleveland (Mr. Tinn) has Redcar in his constituency. All of us on Teesside are interested in the possibility—we hope the probability—of the British Steel Corporation investing in a brown field site, at any rate, in Redcar.

I wish to put a specific question on the subject of the British Steel Corporation's investment programme. The Corporation has what it calls certain strategic development options open to it in relation to whether its capital investment programme should include the brown field site I have just mentioned or, perhaps, a green field site—which now seems unlikelyx2014;and, generally, as to where its investment should go. One appreciates that the work involved in assessing major investment projects is inevitably complex and time-consuming, the studies involved, which may lead to the expenditure of large sums of public money, calling for the greatest care and thoroughness.

Is my hon. Friend the Minister for Industry satisfied that the Government have been receiving and are now receiving the information which they require in order to assess the British Steel Cor- poration's investment recommendations which they will receive in due course? Unlike my hon. Friend the Member for Cheadle (Mr. Normanton), although I agree when he recommends that the Corporation should have the greatest freedom in this matter, I recognise that on the question of the major capital programme for British steel the Government will have a large say not only on the social and regional costings but on production costings too.

For months now the British Steel Corporation will have been working on these costings and deciding its investment policy. If it is not making available to the Government now information on which such costings are based, the Government cannot hope to digest and analyse the immense amount of material which it will be necessary to consider on completion of the Corporation's study.

If, as I have good reason to suspect, the Government are not being fed with the material necessary for themselves to make a parallel study of the investment options, I take a gloomy view of their ability to check, assess and pronounce upon the Corporation's recommendations when they are received and to come to a decision on them before the end of this year.

This is a matter of concern to those of us who represent such an area as Teesside where, as the Minister knows, thousands of steel workers have been made redundant, some of them recently, many of them being older men who are not likely to find alternative employment and who are not easily adapted to retraining. For these men, if there is to be a brown field site—at Redcar we hope—an urgent Government decision on where it is to be is imperative.

I should greatly appreciate it if the Minister could tell us in replying to the debate to what extent information has been and is forthcoming from the British Steel Corporation, reassure me that a parallel study is being carried out, and state clearly that when the Corporation's recommendations are made a decision will not be delayed.

8.24 p.m.

Photo of Mr Thomas Williams Mr Thomas Williams , Warrington

The hon. Member for Middlesbrough, West (Mr. Sutcliffe) will, I know, forgive me if I do not pursue the matter which, coming in late as he did, he has just raised. I am sure he will understand the feelings of those of us who sit throughout a debate of this kind only to discover that at a very late stage an hon. Member comes in and addresses the Minister on a matter wholly outside the ambit of the debate which the House is conducting.

Photo of Mr John Sutcliffe Mr John Sutcliffe , Middlesbrough West

Mr. Sutcliffe indicated dissent

Photo of Mr Thomas Williams Mr Thomas Williams , Warrington

Perhaps the hon. Gentleman will listen a moment. The reality is that the Minister's statement on 8th May, in so far as it meant anything, meant that there is to be no brown field and no green field scheme in the coming years.

Having delayed so long, the Minister, in making what one might almost call his non-statement, did little more than tell us in effect that the Government, having twisted the British Steel Corporation's arm, intend to ensure that over the next four years at least and possibly over the next 10 years there will be no increase whatever in the industry's productivity.

We are already producing 27 million or 28 million ingot tons. The Government have said that the proposal for the next 10 years shall be for a figure between 28 million and 36 million ingot tons. My hon. Friend the Member for Chesterfield (Mr. Varley) said that the reality of the matter was that the 36 million represented the optimistic view of the British Steel Corporation and the 28 million was the more realistic view of the Government. The Minister for Industry made no attempt to deny that. Therefore, one can only conclude that his statement is to be regarded as of greater interest not for what he said but for what he did not say.

The hon. Member for Sheffield, Hallam (Mr. J. H. Osborn), albeit unwittingly, put his finger on the point which is the real question at issue between the parties in this debate, for he said that the reasons for the Government's policy decisions in this matter have not been declared to us. The Minister has persisted in refusing to give information about the Government's proposals over the next 10 years for the industry. We have waited a long time for evidence from the Government of the strategic plan, and they are refusing to tell us. Neither in the statement of 8th May nor in his speech today did the Minister tell us the Government's intentions for the industry's future. He did not illuminate the path ahead by a single candlepower.

As has been rightly stated in the Motion put down by the Opposition the result has done a great deal to demoralise the industry, for it is very troubled and distressed about its future. Surely the industry is entitled to be told, whether the news be good or bad, about the matters on which the Government are determined. At the moment the position appears to be that the Government are saying "We will, over the next 10 years, have a steel industry which will produce 28 million ingot tons and we may have an industry which will produce 36 million ingot tons but we will not declare the reasons for that decision and nor will we say how that production is to be distributed over the country".

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

Just so that I can clear the point which the hon. and learned Member is making, is he saying that it is for the Government and not for the British Steel Corporation to submit plans about where the industry should be distributed and where the plants should be built?

Photo of Mr Thomas Williams Mr Thomas Williams , Warrington

I am not precisely saying that, although I am not saying anything very different from it. The Government have set up the Joint Steering Committee which consists of members of the Government, advisers to the industry and members of the industry. The Committee presented to the House on 8th May through the Minister's mouth a statement on the industry's future, but a statement which gave no information. It gave a variant of as much as 8 million tons in steel production, and in my submission it would have been right for the Minister to have said what was the long-term plan for the industry. The workers in the industry are entitled to that and in failing to provide it he is failing in one of the cardinal duties of his office.

The results of it are to be seen in the industry itself. I do not wish to make particular constituency points except as an illustrator of perhaps what is a microcosm of the state of the whole industry. The position in my constituency is that because of the Government's failure or the failure of the Steel Corporation to make plain what is the long-term future, the whole of the town is buzzing with rumour. We already have over us the shadow of the closure of Irlam. People come to me continually and say that they are threatened with redundancies. They are subject to redundancies but no explanations are given them and there is short-time working. There are closures such as in Dallam. And yet in the face of these happenings no attempt is made to explain to those people who are the backbone of the industry what is proposed or what is intended for the future of the Warrington plant.

All this has given rise to a situation which in Warrington at least is entirely without parallel in a town with over a hundred years connection with the steel industry.

We have a situation in industrial relations in Warrington which is completely different from anything that has been known in the town before. I have a letter which was written by 250 of the people who are working in the Rylands White Cross plant in Warrington who say that they are now in a situation in which the maintenance workers are outside the plant and can see their own staff clerks doing their work. As a result this is causing people who have worked together for nearly a lifetime to become bitter enemies. The letter says: We have had the police brought about our necks with fantastic stories of violence and intimidation, and hence a deterioration of the situation and industrial relations hitting an all time low. What most of us cannot get over is the reluctance of top level management to discuss anything with us. For instance, management have never seen our representatives and it is impossible for us to know what is going on within the industry in our own town". It finishes by saying Is this good industrial relations? I use that only as an example, and accept that it is an extreme example. But where no attempt is made to explain to the people most vitally affected what is the long-term project and what their future is, it is to be expected that industrial relations will increasingly deteriorate.

In 1971 we were already talking about 40 million tons in 10 years, when we were even then producing 27 million tons. Now the Steering Committee report talks about production limited to 36 million tons at the very outside, though one of my hon. Friends has given a lower figure as being that which the Government regard as the more realistic. Whatever else it means, that does not fit into the Government's continuing assertion that they are determined to achieve a dynamic growth in our economy. Even allowing for the decrease in the intensity of steel user, our entry into the Common Market demands that an honest estimate be given of the steel needs of British producers during the late 1970s and early 1980s.

We are given the feeling that, in reality, what underlies the Government's refusal to state their strategic plan is that they have made a plan, perhaps as a result of their discussions within the Steering Committee, which they are not yet prepared to declare to the country. The industry's anxieties, particularly in the regions, including the North-West, arises from the fact that the Common Market Commission in 1970 announced that the accepted standards of production by any one national group should be 12 per cent. to 13 per cent. of the total output, to avoid distorting the pattern written into the Treaty of Paris which gave rise to the European Steel and Coal Community. The Government's failure to discuss with the trade unions must also underline the suspicion that has already been voiced that the Government's real intention is to run the industry down so that it can come within the standard limit of production laid down by the Commission, and for that purpose they are prepared, if need be, to sacrifice the regions. In order to satisfy that demand, should steel production in this country fall below the needs of industry and the economy generally, they are prepared and willing to buy steel from overseas producers.

If these things are true—and in view of the Government's unwillingness to be more forthcoming in these matters it seems that it is true—it is not surprising that there is unease throughout the industry, from Lord Melchett down to the people who work on the shop floor. It bodes ill not only for the steel industry, but for the whole country if this is typical and representative of the Government's incompetence. If the way in which they have left the industry demoralised and distressed is a picture of the way in which the Government handle their business, it is a grim portent, not only for them, but for us all.

8.39 p.m.

Photo of Mr George Lawson Mr George Lawson , Motherwell

I might have been content, though not happy, if after 18 months, during which there has been a deep-seated, long-continuing study by experts in the steel industry and experts in finance and administration, we could have heard from the Government spokesman an indication that at least the problems raised so often on both sides of the House had been examined, and were being examined, and that attempts were being made to right the industry. I should have been ready to accept it if the Minister had said on behalf of the Government that some of the problems were problems they had not yet been able to answer.

Instead, the Minister gave us a statement which does not even throw us back to the position which existed after nationalisation. The development proposals for the industry after nationalisation were virtually the same as those contained in the Minister's statement today, certainly so far as Ravenscraig is concerned. We were told after nationalisation that there was to be a development of Ravenscraig to the extent of £50 million to £60 million. Today the figure is given as £55 million. Thus if we compare the value of the two proposed developments in real terms there is actually a reduction as compared with the earlier figure. But even accepting that there has been no such reduction, there certainly is to be no expansion on the earlier figure. Apart from certain modifications, today's plan is no more than was announced some years ago.

I appreciate the vast problems which face the nationalised steel industry. All manner of rumours have been current about a vast 8 million to 10 million ton steel complex green field site development. My hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths) knows more about the industry than I do, but I would doubt whether even he could be sure that such a development, perhaps costing £1,500 million, is wise. The same is true of many other people who know a great deal about the industry.

But this is surely the sort of question which the joint steering group, with all its expertise, was supposed to be looking at. What did it come up with, however? Nothing, as far as one can see. It did not come up with an answer. From a variety of sources we have suggestions for very much smaller works, viable with an output of 500,000 tons to 1 million tons. My hon. Friend the Member for Brightside has his doubts about that. One is always ready to listen to him on this matter, but I am not prepared to say that he can tell us the answer either.

These questions must be answered. The joint steering group was supposed to answer them. It would have been better if we had had a statement from the Minister that these were matters which must be studied by the Government and that they had not yet been resolved—that we had to decide in terms of having either efficient, smaller units, ensuring a continuance of the industry much as it is now, or a green field or brown field site such as that which has been suggested for Tees-side.

If any area is to produce 8 million tons of steel, a lot of other areas will be involved. We have to be dealt with honestly. I recognise that the industry has to find some answer, because otherwise we shall be worse off. We are getting 28 million tons, not 36 million tons. That is the gag. We were all convinced, not from our own findings but from the kind of evidence we have been given by Lord Melchett and others, that the industry was not being brought up to 40 millions tons plus. There was no green field site development.

My hon. Friends and I are prepared to judge the arguments but we are being insulted. All that we have been told is: After careful review, the Group, which as the House will recall, included representatives both of Government Departments and of the British Steel Corporation, has reached the conclusion that the British Steel Corporation should, by 1980, aim at an increase in its capacity to a level within the range of 28 million to 36 million ingot tons."—[OFFICIAL REPORT, 8th May, 1972; Vol. 836, c. 909.] It is to aim at the 28-million ton figure eight years from now.

The nation is being insulted to be told this. Let us recognise the difficulties and explain them. Let us say we cannot answer these questions at this stage. We must look after our respective interests, and my hat is certainly in the ring if the interests of Scotland are to be sacrificed on the basis of chance with no knowledge of what is happening. I am not arguing about green fields but the position in Scotland is that we have a lopsided industry with a great deal of outmoded steel-making capacity.

We have something like 34 open hearth furnaces and the experts agree that that type of furnace is now out. While we have a bad mix in terms of steel-making capacity we are well equipped with finishing capacity. Our great fear in Scotland—and it is a fear in the other areas too—is that we will be confronted by a decision of the Corporation to bring up, perhaps from Lakenby or Scunthorpe, something like half a million tons of crude steel or slab steel to be rolled and finished in the Scottish mills. We know what would happen then. Very quickly we would find that when the mills needed replacing they would be replaced in the South and the Scottish industry would be virtually eliminated. There would be bits and pieces here and there but it would be virtually eliminated. What I and my hon. Friends say is that at this stage the crucial point is that where steel-making capacity goes out in Scotland it must be replaced in Scotland with at least as much as went out. There can be no thought of our taking imports from the South. That could only be temporary and would destroy us.

I am not begging for an area which is crippled or which cannot make a great contribution to the nation. I have supported entry into Europe. I still support entry into Europe. One of my arguments for entry is that we in this industrial belt of Scotland are well located for export purposes. We are between the Atlantic and the North Sea. We can reach easily into the well-populated centres of Northern Europe and across the Atlantic. It is significant that the one product, apart from whisky, whose export has been increasing in leaps and bounds from the Clyde port is steel and iron production. There has been a considerable increase even in the last year, which has not been a good year for steel production.

This area is capable of considerable development. It has much to contribute. The Government would greatly lessen the hostility of some of my hon. Friends to entry to Europe if they would agree with my view about the ports on both sides of this industrial belt. This short stretch of country, less than 40 miles across in places, is one of the best areas we have.

The hon. Member for New Forest (Mr. Patrick McNair-Wilson) said that the Government were being realists and facing facts in talking in terms of a steel output of 28 million tons. He talked in terms which suggested that Britain could not possibly face the competition of Germany or of other European countries or Japan. I do not agree. I see no reason why we in Britain cannot produce steel as well and as cheaply as Germany can. Germany has many disadvantages which we do not have. It has to bring in the bulk of its material from around the world. That applies to most European countries. We have advantages in this respect over those European countries.

This very cautious, facing-the-facts line and not taking a decision until one is absolutely certain, coming from Tory businessmen, astonishes me. I thought there was supposed to be a readiness among businessmen to take calculated risks. We have not had a murmur about calculated risks from hon. Members opposite tonight. We have not heard a word about boldness. Yet we are as capable as any other people. That is the spirit I want to see engendered.

If Scotland loses steel capacity, it must be replaced. We must have new capacity to ensure that our part of the industry is as efficient as that in any other part of Britain or, we hope, in any other part of the world.

8.55 p.m.

Photo of Mr Donald Coleman Mr Donald Coleman , Neath

My hon. Friend the Member for Motherwell (Mr. Lawson) has rightly stressed the importance of bringing to the notice of the House the needs of the steel localities. Had I sufficient time I could speak at length of the apprehensions and worries of the steel workers in Port Talbot which lies in the constituency of my right hon. Friend the Member for Aberavon (Mr. John Morris). People living in my constituency and in the constituencies of my hon. Friends the Members for Ogmore (Mr. Padley) and Swansea, East (Mr. McBride) are also employed in the Port Talbot works. In recent long and searching discussions the steel workers of Port Talbot told us of their apprehensions and concerns about the future.

The Motion before the House deplores the Government's performance in respect of the steel industry, which gives no guarantee that the British steel industry will expand. It says that uncertainty is created within the BSC, that fears are aroused about the employment prospects of workers in the industry and, because of all this, the Government are placing in jeopardy our balance of payments position. As a member of the largest trade union in the industry—the Iron and Steel Trades Confederation—I speak for the workers in that industry and of their fears, apprehensions and frustrations.

From the moment the Government came into office the steel industry found itself in the grip of uncertainty. First there were the fears which arose from the Selsdon Park exercise which was engaged in by the Conservative Party. When the Conservative Party came to an understanding that the steel industry would remain in public ownership it perpetrated upon the industry other causes for uncertainty. There was the hiving-off idea, which is still being pursued but does not placate the bold, free entrepreneurs on the Government benches. Other action was required and the BSC was refused the price increase which was so vital to it.

After all this agony came the decision to probe the industry through the setting up of the joint steering committee, a device which has meant more delay and more uncertainty for those who manage the industry and those who work in it. This has led to a spate of rumours and speculation which has done the industry more harm than good.

A lot has been said in the debate today about green field and brown field sites. Much of this talk is alien to the people who understand what goes on in steel plants and what is required from the steel industry. A recent statement from the Minister about levels of expenditure brought glee and congratulations from hon. Gentlemen on the Government side of the House, but at the end of the day in the 1980s the industry will have a capacity of only one million tons a year more than it has now. In other words the industry will he running like the devil only to keep up with itself. I ask the Minister whether this is part of the price that has to be paid as a result of the Common Market negotiations of the Chancellor of the Duchy of Lancaster. That is a question which is being asked in the British steel industry.

As has been reiterated throughout the debate, we ask the Government to get off the back of the British Steel Corporation and allow it to do the job for which it was set up, which is to run the steel industry for the nation.

9.0 p.m.

Photo of Sir John Morris Sir John Morris , Aberavon

It is beyond dispute that we are now discussing the fate and prosperity not only of the 250,000 men employed in the industry, but also of all those who are dependent upon them, the greengrocer and the candlestick-maker, since these are closely knit comumnities. I have the honour to represent one of those communities, and I know how closely the people there are watching the Government's announcements and our deliberations here today.

My hon. Friends and hon. Gentlemen opposite have every right to be anxious and to demand much greater detail than has been forthcoming either today or in the Minister's earlier statement. There has been concern about Irlam and about Consett. There has been demand for more details by my hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) and the hon. Member for Stoke-on-Trent, North (Mr. Forrester) and a number of my hon. Friends have expressed their concern about Shelton. Anxieties have been expressed by the two hon. Members for both parts of Flintshire and also by my hon. Friend the Member for Warrington (Mr. W. T. Williams). Had my hon. Friend the Member for Midlothian (Mr. Eadie) and others of my hon. Friends, who have been anxious to take part in this debate, been given the opportunity to do so, they would have sought to discover from the Minister something which they have every right to know—and which they have not been told either in this debate or in the Minister's statement the other day—namely, what lies in store for the industry.

Since 18th June, 1970, the industry has been bedevilled by Government intervention. Our great hope was that the long delayed announcement would mark the end of the road of Government intervention in the way in which it has been practised in the last two years and that the curtain would some down on that stage. But it was not to be, as we discovered from the Minister only a week or so ago.

The whole story began with the Secretary of State's famous speech at the Tory Party Conference in 1970 when he told the delegates of the doctrine of disengagement in the industry, as in everything else, and in particular in the steel industry. That was sweet music to the delegates. The whole of yesterday's debate perhaps gave a clue to the success in other fields but certainly as regards the steel industry the story of disengagement was a complete fiction from start to finish We have not had disengagement, but rather a series of studies one after the other—at least four and maybe more, if one includes the pricing exercise of the Common Market.

First, we had the urgent and immediate concern about current projects when everything stopped and then there was a period of "go" and a great deal of additional expense. Secondly, there was denationalisation, hiving off, the BP exercise and all that, as a result of which the Secretary of State came to the House and disclosed the concern of his supporters that the bulk of steel, despite the protests of all those who had fought against public ownership of the industry, would remain in the hands of the nation.

Then last year we had the price squabble when the Secretary of State got Lord Melchett, just like the Duke of York, to march his troops up the hill, then told him to put up the price and, when he did so, the Prime Minister told him he could not do so and eventually he was allowed only half. Is that a policy of disengagement?

Lastly, we had the Joint Steering Group. From this we undoubtedly had great expectations, but like many such expectations they were not forthcoming. We were told about this first on 18th March last year when the Secretary of State confided to the House that he had arranged for what he called a very "deep-seated review." Indeed by 24th May he was able to give in the House some details of that deep-seated review.

The right hon. Gentleman said first of all that the long-term review would be "difficult, ambitious and complex". Secondly, he said that it would require a "very great effort". He was confident that he would have the results by the end of the year. The right hon. Gentleman is a wonderful man for providing us with apt descriptions of what he thinks is going on. He said that it would be a "mammoth task to perform".

Then we had the details, looking at expansion at home, including the principle of a major new green field site, the provision of supplies to the Corporation of raw materials, the assessment of the desirability of producing some part of the article elsewhere, and then he said that the study would deal with the "manpower consequences" of alternative solutions. No wonder hon. Members on all sides of the House were anxious. There was no mention in the Minister's statement of anything to do with a great part of these aims, and certainly as regards manpower consequences we had not one word either in the Minister's statement last week or in the debate today. Those were the great expectations, and it is not surprising that those of us who are concerned passionately with the steel industry are deeply disappointed with the statement. We regard the Minister's statement last week as pitifully inadequate.

The position is summed up by the Financial Times: The Government's review of the British Steel Corporation's future development strategy has produced a very small mouse after so long a period of gestation.…It is difficult to see what the joint review has really achieved. That is the condemnation of what we were told by the Minister a week ago last Monday. He has not added one word to the position in today's debate. Perhaps it would be unkind to compare the description by the Financial Times with what the small boy said when he discovered that the emperor had no clothes. That is the situation, and these are the missing links about which we are entitled to be told.

Where is the issue of the green field site canvassed in the course of the Minister's short statement? So far as we know, we cannot have expectations either of a green field site, a brown field site or, as the Economist put it, even a sky blue pink site from his statement. Yet the right hon. Gentleman is able to say that no decision has yet been made about a brown field or a green field site. If he believes that, he will believe anything. On the basis of the assessments which have been made by the Minister of a broad strategy aiming to produce between 28 million ingot tons and 36 million ingot tons by 1980, it is clear that a green field site is out of the window.

Where is the evidence that this has been a difficult, ambitious and complex task? All we have is a statement which has appeared after all these months of waiting—we were promised a statement at the end of the year and we have had to wait until May—from which it is clear that all the major decisions have been shelved and that the Government have prolonged the uncertainty.

In passing, I want to comment on the way the statement has been drafted, because I do not give any marks to whoever was responsible. First, we have the mention of the approval of the current year's financial investment. That does not come from the joint steering committee. It is past history. Then we have the mention of the provisional approval of £200 million for 1973–74.

The claim was made during the debate about how much better this was than in our term of office. I had a small part to play in the early days of preparing for public ownership. Anyone with any knowledge of the industry knows that after 1967 it began from scratch. It began on the basis of no corporate plan to invest. As my right hon. Friend the Member for Newton (Mr. Frederick Lee) said, there has never been any suggestion that in the years after 1967, while we were still in office, this great industry was at any time starved of capital. Today is the first time that we have heard it, and this is perhaps a cliché to bolster the Government's case for what they are seeking to do.

Let us for a moment examine this figure of £200 million for 1973–74. I welcome this provisional approval. I represent one of the constituencies which are mentioned. It was said by the late Iain Macleod on one occasion that the Minister was posing as Santa Claus and one should never shoot Santa Claus, even if he had only one leg. We have to examine the body of this Santa Claus.

We have here a figure of £200 million for 1973–74. Of that, £80 million has already been approved. That is the figure which I have received from the Corporation, which means that there is only £120 million of new money not approved.

Photo of Mr Thomas Boardman Mr Thomas Boardman , Leicester South West

I made it clear this afternoon, as it was made clear in the statement, that this was approval on account.

Photo of Sir John Morris Sir John Morris , Aberavon

The hon. Gentleman has misunderstood me. I am not saying that this is anything more than approval on account, but I am going on to say that of this approval on account of £200 million, £80 million has already been approved and the only additional money is £120 million. When the Minister reads my statement he will realise that there is no disparity between what I have said and the position of the corporation. The Government should not try to mislead the House as they have sought to do in this statement.

Let me go on as quickly as I can—[HON. MEMBERS: "Hear, hear."] The Minister is not anxious for me to deal with a prospectus which is not wholly fair and frank. He will be told about these matters in a moment. For some reason or other we have been told where the major investment is taking place, not for the future, but going right back to 1970, and the figures range from those for 1970 to those for 1974. The figures for three of those years are for past expenditure, and the figure for only one year represents expenditure for the future. The total sum is £570 million.

Pangs of jealousy were felt in many parts of the country on learning of some of the places listed as receiving assistance, but let me examine some of the figures. For Llanwern there is a total of £90 million, but of that £80 million has already been approved, which means that there is only £10 million of new money to come. We are very much better off at Port Talbot. Perhaps this is due to the efforts of the local authorities, the works council and my colleagues in the House. Of the total of £45 million, £20 million has already been approved, which means that £25 million is new money.

We were envious of the total of £250 million for Scunthorpe, but of that sum £240 million—all but £10 million—has already been approved. Of the £130 million for South Teesside, half has been approved. Of the £55 million for Ravenscraig, £30 million has been approved. In the provincial Press those totals caught the headlines, but in the cold glare of day they sound very different from what the Minister sought to put before the House. We are told that the Minister has a great deal of financial expertise and a knowledge of the finance of industry. But I hope very much that when he next has the privilege of making such a statement, he will consider whether it is this kind of prospectus that he would put forward for private industry. Has there here been an attempt, unwittingly perhaps—I may be too charitable—to try to baffle the steel industry and the constituencies?

My quarrel with the report is what is contained in three or four lines. All the information that we have is that the Joint Steering Group has come to the conclusion—and this is approved by the Government—that the industry should by 1980 aim at an increase in its capacity to a level within the range of 28 million to 36 million ingot tons. In the Minister's statement, the one handed out, we are told that the British Steel Corporation agrees with that. But it was only after the Minister was questioned that he thought it fit and right to put the gloss on the statement he had made, the only statement of his original remarks, by saying that the Corporation veered towards the top end of the bracket, but that it accepted the forecast that has been put forward. Only then did he think fit to add that. What does the House think of this poor, veering Corporation, punch-drunk after the exhortations of study after study, and grasping this lifeline like a condemned criminal reprieved on condition that he serves a light sentence?

On 19th March of this year, weeks before the Minister's statement, we were warned by the Sunday Times: The possibility of a zero growth steel industry for Britain is the shock proposal which Industrial Secretary John Davies will put before the Commons within the next few days. That newspaper was wrong. We did not have it in the next few days but had to wait almost two months, and the Secretary of State did not come to the House to make the statement. If I may coin a phrase, he ducked it. He has also ducked today's debate. He is the man responsible for setting up the Joint Steering Group. It is he who should be answering the debate tonight.

The Sunday Times anticipated that The bottom of the range will be close to the 30 million ton mark, representing barely any increase at all from present day capacity. The Sunday Times was far too optimistic, because the figure at the bottom of the range is 28 million tons. So far as it can be ascertained—there is no fine art in this—present capacity is about 27 million tons. We are told that is all right because this is a realistic assessment. Is it not better to be realistic and, as my hon. Friend the Member for Flint, East (Mr. Barry Jones) said, better to aim for a realistic assessment?

But what confidence can the House have in an estimate which has a range of 25 per cent., with the bottom end a mere 28 million tons, and this to be achieved over a period of eight years from now? That is merely 1 million tons from the present capacity of the industry. The top of the range is only 25 per cent. higher. What confidence can there be about that? If we were told how the Steering Group achieved this basis, perhaps we could have had a much better and more informed discussion today, but we have been denied that information. All we are told is contained in the bare lines in the Minister's statement, which are not even sentences.

Much more important than our deliberations is that the prolongation of this uncertainty will cause the good will of the steel workers—they are the most important people of all—to be put at risk, and any trust that remains will certainly be at risk. Those workers have experience of redundancy after redundancy over the years. They know that in the years that lie ahead there are yet more redundancies to come. It makes their future so much easier when they know, first, that there is an efficient and proper policy to bring new and vital industry to those areas and, second, that if redundancies are to take place they will take place against a background of rapid and substantial expansion. In that atmosphere it is so much easier to persuade any workforce that there is a credible policy which can carry the confidence of the workers.

It is perhaps a trite saying that the industry has had a cyclical pattern, but over the years all of us who have taken part in debates—in my case over the last 13 years—have experienced, discussed and debated this matter. It was the Secretary of State who said on 24th May, 1971, that the industry moved in rather large bounds. Unfortunately they are not always bounds forward but are bounds in the same place. They share some of the characteristics of a rocking horse; there is the illusion of movement but not real advance. There should be the confidence to invest in the national interest if the industry is to meet the inevitable demands of the future—we are told there will be demands and dynamism after our entry to Europe—and the industry should be prepared for whatever situation may arise.

Recent years are littered with examples of the part that iron and steel imports have played in every balance of payments crisis. In 1955 our deficit on current account was £313 million and iron and steel imports were £99 million. In 1960 the deficit was £255 million and imports were £101 million. In 1964 the deficit was £376 million and imports were £106 million. In 1967 there was a £298 million deficit and imports were £120 million. That is the past situation and I am confident that it will be repeated time after time. A lesson we should have learned is that the imports of iron and steel products in crisis years have amounted to one-third to one-half of the balance of payments deficit current account. These are articles which are produced in this country. Imports in 1955–56, 1960 and 1964 contained between £40 million and £80 million of what could be called extra steel blooms, billets, bars and notably sheet to supplement domestic capacity. Those are the lessons that I thought we had learned from the past.

Many strictures have been said about the joint steering group. My right hon. Friend the Member for Newton asked on what basis it had been set up. Other hon. Members have commented that it is a constitutional monstrosity. However, there are respectable precedents for having a body of this kind. I had the privilege of chairing one of these steering groups for the railway industry. We set out our conclusions in 60 pages or more in a White Paper which was placed before the House and was debated. The whole exercise was chaired by a Minister.

There are good reasons from time to time for carrying out such an exercise where there is serious concern within the industry, where there is need by a Government Department to know the condition of the patient and perhaps the need to weedle the industry to accept particular medicine from a Government. But if there is to be this departure from responsibilities it must be on a temporary basis, and the sooner this kind of machinery is out of the hair of the British Steel Corporation the better.

Those responsible for the industry and the Statute—I checked it this afternoon to refamiliarise myself with the details of the Act—are the industry and, charged with specific responsibilities delineated in the Act, the Minister. With a body of this kind in existence year after year, we blur the edges of responsibility, we fudge the responsibilities, and there is an alibi for both sides if anything turns out contrary to expectations.

On 24th May the Secretary of State said: I am anxious to disengage from excessive involvement in the management problems of the Corporation."—[OFFICIAL REPORT, 24th May, 1971; Vol. 818, c. 76.] Then on 16th December, 1971, the Under-Secretary of State, who is no longer a member of the Government, said: By definition, if the report is in my right hon. Friend's hands, the work of the steering group comes to an end and there is no change from the original position."—[OFFICIAL REPORT, 16th December, 1971; Vol. 828, c. 973.] There it is. I hope that from the Under-Secretary's speech tonight will emerge a firm, clear and unequivocal statement about when this joint steering group is coming to an end. I think we are entitled to know.

I again quote from the Financial Times: It is at this stage that the joint review, instead of being a relatively harmless exercise, could become positively harmful to the industry. What are the real reasons for the necessary investment being denied to the industry? There is no time to go into Lord Melchett's plans, but the Sunday Times said "Government slashes Melchett's plans." Indeed, it perhaps stems from the article in the Economist which suggested that it would be so much better to import from a lower-wage country like Japan rather than produce in the United Kingdom. We know that expenditure on the public sector is contrary to the whole philosophy of the Government.

Lastly, the reason why the stop date on any determination by the Government is 1974 may be the possibility of our entry into the Common Market. We know that the Steel Corporation's production is 50 per cent. more than that of its nearest EEC producer. The point was put last year in an official answer by the Commission to a Dutch Member of Parliament stating that State monopolies are incompatible with the goals of the Common Market and should be modified. We have been told time after time by the Chancellor of the Duchy of Lancaster that the size and status of the steel industry is not in question. It is very much above the 13 per cent. size advocated by the ECSC. Whatever may be the position about the present size and status of the industry, we want to know about the future. Is it because there is a bar to future investment that the Government cannot give any definite announcement to the House that they are in a position to give approval to what will be needed after 1974? I remind the House—this may be the real truth why there is a stop date in 1974—of the document of 4th May of the Common Market in which it was said that The British Government's existing powers to control BSC investment programmes will"— after entry into the Common Market— be subject to the overriding authority of the Community. That is perhaps the real reason why the Government are unable to tell us anything about what will happen after 1974.

The Government have lost the opportunity of ending uncertainty, of giving a message of confidence to the steel communities and of protecting the future trading position of this country. The industry's management and work force have a proud record and a high degree of partnership and skill. As one hon. Member has said, time is not on the Corporation's side.

We are wholly dissatisfied with the mouse which emerged from the Minister's statement last Monday and with his pathetic speech today. I invite my right hon. and hon. Friends to vote for the Motion.

9.30 p.m.

Photo of Sir Peter Emery Sir Peter Emery , Honiton

I am sure that in the minds of all right hon. and hon. Members who have been here, this will be regarded as having been an interesting and useful debate. Obviously, the subject has been of considerable concern to those hon. Members who have taken part, and it is of no less concern to the tens of thousands of people whose daily lives are intimately tied to or allied with our great steel industry.

I shall deal, first, with the major points which have been raised, and thereafter I shall regard it as my duty to turn to the many individual issues raised by hon. Members with constituency interests. Before going further, however, I must make it patently clear, so that there may be no doubt in anyone's mind, that the Government want, and will do all in their power to achieve, a strong, profitable and internationally competitive steel industry. How this could ever be in question is beyond me. I reaffirm the Government's support for our steel industry at the start of my speech only because of the many doubts which have been raised by hon. Members opposite, to no benefit of the industry itself, which, if allowed to go unanswered, would be damaging to our long-term interest in the production of iron and steel.

I regard it as one of my main duties—I know that this is the view also of my hon. Friend the Minister for Industry—to do everything within my power to work for the successful modernisation of the iron and steel industry within the United Kingdom, an industry which, whether or not it be the springboard, is certainly a vital support of our economic growth, an industry which is able to hold its own and be competitive within world markets, an industry which is strong and economically viable.

One of the cornerstones, I accept at once, is investment—the level of modernisation and the ability of the industry to produce steel products at prices and in quantities which will meet and beat European and international competition. We come here to the first enigma: how do we predict the future level of demand, since investment in new plant, whether green field, brown field or heritage expansion, will be a drudge to the industry if the products do not meet the demands of the market? Thus, the relationship between investment and demand is of the first importance.

In this context, I find some of the comments of hon. Members opposite difficult to follow. They criticise the decisions of the Joint Steering Group in the range band 28–36 million tons. But if one were setting out from scratch to prepare a forecast for the industry, where would one look for advice? Obviously, one would go to the British Steel Corporation. One might call in consultants to review the overall market demand as it may be in the rest of the world. One would want information from industry, and also from the Treasury in considering the economic climate for overall industrial expansion. Moreover, one would probably want the views of the sponsoring Ministry.

That is precisely what happened through the creation and work of the Joint Steering Group. I find the attitude of the right hon. Member for Aberavon (Mr. John Morris) very strange when he says that advice, unless it comes from a committee chaired by a Minister, is not acceptable. In most places outside the House, advice from a source not chaired by a Minister would be much more acceptable to many people. [Interruption.] It is all very well for the Opposition Front Bench to say that this was not said, but great play was made of the point and the right hon. Gentleman said that it was fudging the responsibility to take such advice if it came from a source which was not chaired by a Minister. I do not take that view.

I will come specifically to the position which concerned the publication of the report. The hon. Member for Chesterfield (Mr. Varley) stressed this issue and a number of other hon. Members have also referred to it. It is important for us to realise that the Joint Steering Group report is confidential advice to Ministers. There are two reasons why it is not in the interests of the industry to publish the report. Hon. Members opposite may scoff but let them listen to the reasons and judge for themselves.

Photo of Sir Peter Emery Sir Peter Emery , Honiton

May I finish my statement and then I will be delighted to give way. The report contains such material of a commercial confidential nature that publication would damage the commercial interests of the Corporation by revealing plans and expectations to competitors. It is important that Ministers must retain the right to receive the most confidenial information from experts with no punches pulled and with no fear of subsequent publication. [Interruption.]

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

We are asking for the figures about imports in particular and about other matters that were available to the Joint Steering Group, which we wanted made available to the House of Commons. We were given an absolute pledge by the Secretary of State that the Joint Steering Group would be brought to an end. The right hon. Gentleman wanted it brought to an end. Will he tell us, since he is apparently jeering at the views of the Opposition on this matter, whether the Corporation is in favour of the Joint Steering Group being brought to an end?

Photo of Sir Peter Emery Sir Peter Emery , Honiton

The Joint Steering Group was set up to do a specific job and when that job was completed it finished. It has now been stood down absolutely and completely.

Photo of Sir John Morris Sir John Morris , Aberavon

That is not what the Minister said.

Photo of Sir Peter Emery Sir Peter Emery , Honiton

It is exactly what my hon. Friend said. It is quite clear that the British Steel Corporation co-operated in the work of the Group and was happy to co-operate on it. The Corporation agreed on the ratio of ingot steel production.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

Let us get this absolutely clear so that there is no doubt. Has the Joint Steering Group come to an end completely? That is what the Minister has just said. Will there be no intervention from that group? Is that the message we can give to the Steel Corporation on this matter? Is that what the Under-Secretary is saying?

Photo of Sir Peter Emery Sir Peter Emery , Honiton

The hon. Gentleman is obviously unwilling to listen to what I said. The answers to the three questions he put to me are "Yes, yes, yes". There is no doubt in anybody's mind, least of all the Corporation's mind, that the Joint Steering Group was not to continue afterwards. The Corporation participated in it and was there all the time. The idea that the BSC was ranged on one side and the Joint Steering Group was ranged on the other is absolutely untrue.

Photo of Sir John Morris Sir John Morris , Aberavon

We should clarify the situation. We are now told that the Joint Steering Group has come to an end. If that is the case, why could not the Minister say so when he made his statement on Monday, because he was asked and he replied: The hon. Gentleman asked whether the Joint Steering Group was now set down. As I said in my statement, we are now waiting for the British Steel Corporation to bring forward its strategic plans …."—[OFFICIAL REPORT, 8th May, 1972; Vol. 836, c. 911–2.] Why could he not say so on Monday?

Photo of Sir Peter Emery Sir Peter Emery , Honiton

He is quite able to give whatever answer he wishes to the question. The important matter is what will happen as a result of the Joint Steering Group. There is nothing in the statement to deny what I said, as the right hon. Gentleman suggested from a sedentary position. That is absolutely untrue.

I wish to deal next with the point about flexibility within the forecast figures. The hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths) made a well-thought-out and reasonable speech. I do not say that I agree with it all, but it was the only speech from the Opposition that tried to look at the whole situation and judge it from the point of view of the steel industry as a whole. The hon. Gentleman expressed concern about flexibility within the general levels that have been set. Some people have suggested that if the aims of my right hon. Friend the Chancellor's Budget come to fruition, which we now see an indication of, the JSG will in the figures that it has given understood what in fact might be necessary. I want to make it quite clear that within the range of figures announced there is a flexibility within the short term to deal with long-term forecasting. If it becomes apparent that demands will rise very much above the levels which we see this year, the flexibility exists within the industry—[Interruption.] It may be of no interest to Labour hon. Members, but it is of concern to British industry, which wants to know what the long-term situation is.

I turn to another matter raised by Labour hon. Members, the question of consultation with the TUC. It is stating the obvious to stress that Ministers attach major importance to consultation with unions on Government policy for steel. The BSC of course keeps in close touch with the unions on planning issues, as on other matters. The TUC Steel Committee was specially set up to facilitate such consultation with all the unions concerned. My right hon. Friend the previous Minister for Industry met the TUC Steel Committee on 29th March and explained that he would welcome consultation with it after the statement of the JSG had been made. He said that the statement would be of a general character and would in no way pre-empt useful consultation. I cannot believe that any hon. Member would have considered it right for the Government to disclose the JSG statement to anyone before it was disclosed on the Floor of the House.

I turn next to a number of regional matters. I wish to deal specifically with some points raised by a number of Scottish hon. Members, and first the overall study the Corporation is carrying out orientated towards Scotland. The Corporation has made it clear that it will undertake to discuss the whole situation with the Scottish TUC. The BSC developments in Scotland at Ravenscraig and Clydesdale obviously ensure a continuing rule for Scottish steel. One-eighth of the 1972–73 improved investment programme, totalling £265 million, is being made in Scotland.

No one wants to hide the other side of the coin. It is true that closures will be associated with the programme, as older, uneconomic plant falls into disuse. But this is no different than anywhere else in the United Kingdom.

The hon. Member for Rutherglen (Mr. Gregor Mackenzie) asked questions particularly relating to his interest in Hunterston. I accept the problem of delay in local authority planning procedures. It should be remembered that in January the Corporation announced plans for its ore terminal at Hunterston, at an estimated cost of £26 million. Initially, this will handle ships of up to 250,000 tons but may be extended to handle ships of up to 350,000 tons. The first stage development will include a berth and jetty with unloading equipment, capable of handling 6,000 tons of ore an hour, and the adjacent stockyards will have a capacity of 1 million tons. The terminal in the first instance will serve the Corporation's works in Scotland but there is no reason to believe that it will not be able to serve the Corporation's works in other parts of the United Kingdom as well as it comes further into operation. Further possible investment in Hunterston is specifically a matter for the Corporation.

A major conflict in the debate has been between the Opposition Front Bench and hon. Members on the back benches opposite. The Opposition Front Bench want the Government not to interfere with the Corporation, questioning what we are doing in carrying out the Joint Steering Group's report. But a number of hon. Members opposite have demanded that the Government should insist——

Photo of Sir Peter Emery Sir Peter Emery , Honiton

The hon. Member for Ebbw Vale (Mr. Michael Foot) was not here, so I wish to the devil that he would not say, "Don't be silly". If he had attended the debate, that sort of interjection might have been more reasonable.

A number of hon. Members opposite have demanded that the Government should interfere in order to look after investment interests in their own areas. I can understand their views. It is important to get the situation in Wales clear. The hon. Member for Newport (Mr. Roy Hughes) was concerned about the possibility that the deep dock at Newport would not now go forward. He condemned the Government or somebody for not allowing this. But I heard no objection from the right hon. Member for Aberavon about this and no complaint that Port Talbot should be the centre for ore shipments by Llanwern works. At Llanwern, the situation is such that the shipment of ore from Port Talbot is likely to bring about a saving of about £4 million to Llanwern works by the modernised process.

I was intrigued to be told by the hon. Member for Chesterfield about despondency within the industry. I was at Llanwern on Friday and went through the plant. The trade union representatives were kind enough to have tea with me. [Interruption.] I have no doubt that they would have liked something stronger, as I would have. In the 45 minute conversation I had with them, there was not the slightest sign of despondency among the workers at the old Spencer Works. For the hon. Member for Chesterfield to suggest despondency is not facing the facts.

In dealing with the problems of Newport, the hon. Member for Newport is specifically concerned about the possibility that over 1.000 jobs may be lost. I tell him that I fully understand the strength of local opinion, voiced by him and others, about the Newport Tube Works. Strong representations have been made to the Corporation and I know that hon. Members have been associated with them.

The genuine willingness of the Corporation to consult on these matters is proved by the striking fact that the Corporation has deferred the closure for six months to investigate the possibilities of alternative employment being more readily available. It would be wrong of the Government to interfere in these decisions of the Corporation and this is underlined by the actions of the Opposition when they were in Government in nationalising the industry. This is a major rationalisation project which the management of the company wishes to carry through.

I turn now to the question raised by the hon. Member for Flint, East (Mr. Barry Jones) and my hon. Friend the Member for Flint, West (Sir A. Meyer). The hon. Member has led a deputation to the Minister of State urging that the Corporation's replacement investment in iron and steel-making should be at Shot-ton. The reasonable and well-argued case put forward by my right hon. Friend is fully understood. I must point out that there is currently an investment of £25 million of new work already allocated to Shotton and any increase on this investment must be a matter for decision by the Corporation.

I come now to the point raised by my hon. Friend the Member for Manchester, Withington (Sir R. Cary) and the right hon. Member for Newton (Mr. Frederick Lee). All those who heard my hon. Friend will have been struck by the almost paternal protection and affection which he expressed for his area. The economic argument mounted by the right hon. Gentleman obviously impressed the House. There is the widest concern following the part closure of the Irlam works and the issue is being considered by the Corporation.The withdrawal of the proposal to close the remainder of the works in 1973 is welcomed by all, as is the decision to discuss alternatives with the trade unions, including sale to the private sector.

I understand that there has been a full exchange of information and I feel sure that the Corporation is aware of the concern and anxiety and will make its decisions as soon as it can. We in the Department will make sure that everything will be done to bring these decisions forward as quickly as possible.

The hon. Member for Stoke-on-Trent, North (Mr. Forrester) referred to the Shelton works. This has been of concern to many people and the reasoned case for new investment is fully understood by the Corporation.

The decision about individual works must, however, rest with the Corporation, as the Opposition Front Bench wants. It is of the greatest importance that people should realise that when the overall investment decisions are made and the long term interests of the industry are decided, the Government will and must take into account the regional, social and employment problems involved.

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

What about the balance of payments problem, which figures in our Motion? The Government may say that they cannot publish the Joint Steering Group's report because of commercial confidences, but, assuming the Chancellor of the Exchequer's 5 per cent. growth rate over the next few years, surely they can say what the amount of steel imports will be by 1980.

Photo of Sir Peter Emery Sir Peter Emery , Honiton

The Corporation—and it is frank and open about this matter—believes that the opportunities available to the British steel industry are such that it is confident that the amount of exports which it will make will be greater than the amount of imports. This is of major importance, and I should like to back it up by giving the investment situation.

For the medium term, we have indicated, without commitment, in the White

Paper on public expenditure that the scale of expenditure envisaged up to 1975 and 1976 is £255 million at March, 1971, prices. In the long term, we envisage expenditure continuing during the 1970s at a high level, within the range of £200 million to £280 million, again at March, 1971 prices. Therefore, regardless of where capacity lies or whether there is a new major development, we are continuing with the sort of high level of expenditure which was never experienced when the Labour Party was in power.

I should put on the record the exact investment position at standard 1971 prices. It was £86 million in 1967–68, £83 million in 1968–69 and, because of alteration in the accounting period, in the six months from 1969 to 1970 it was £41 million. In the next 12 months it was £152 million. Therefore, the total over the whole period was only £362 million at the standard rate. Since the Conservative Party has been in power, the figures have been £242 million, £265 million and a provisional figure now of over £200 million. Compared with the figure of £362 million over four years while the Labour Party was in office, the figure today is £707 million.

This is the sort of thing that has been entirely neglected by the Opposition during the debate. The Opposition have been trying to ignore the situation because they are ashamed of what they were able to achieve for the steel industry while they were in office. Right hon. and hon. Members opposite are the sort of people who, when their arguments are weak, talk louder with their tongue in their cheek, as they have done today.

Photo of Mr Walter Harrison Mr Walter Harrison , Wakefield

Mr. Walter Harrison (Wakefield) rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put,put and agreed to.

Question put accordingly, That the Amendment be made:—

The House divided: Ayes 299. Noes 264.

Division No. 190.]AYES[10.0 p.m.
Adley, RobertAstor, JohnBarber, Rt. Hn. Anthony
Alison, Michael (Barkston Ash)Atkins, HumphreyBatsford, Brian
Allason, James (Hemel Hempstead)Awdry, DanielBeamish, Col. Sir Tufton
Amery, Rt. Hn. JulianBaker, Kenneth (St. Marylebone)Bell, Ronald
Archer, Jeffrey (Louth)Balniel, LordBennett, Dr. Reginald (Gosport)
Benvon, W.Griffiths, Eldon (Bury St. Edmunds)Miscampbell, Norman
Berry, Hn. AnthonyGrylls, MichaelMitchell, Lt.-Col. C. (Aberdeenshire, W)
Biffen, JohnGummer, J. SelwynMitchell, David (Basingstoke)
Blaker, PeterGurden, HaroldMoate, Roger
Boardman, Tom (Leicester, S.W.)Hall, John (Wycombe)Molyneaux, James
Body, RichardHall-Davis, A. G. F.Money, Ernle
Boscawen, RobertHamilton, Michael (Salisbury)Monks, Mrs. Connie
Bossom, Sir CliveHannam, John (Exeter)Monro, Hector
Bowden, AndrewHarrison, Brian (Maldon)Montgomery, Fergus
Braine, BernardHarrison, Col. Sir Harwood (Eye)More, Jasper
Bray, RonaldHaselhurst, AlanMorgan, Geraint (Denbigh)
Brewis, JohnHastings, StephenMorgan-Giles, Rear-Adm.
Brinton, Sir TattonHavers, MichaelMorrison, Charles
Brocklebank-Fowler, ChristopherHawkins, PaulMudd, David
Brown, Sir Edward (Bath)Hayhoe, BarneyMurton, Oscar
Bruce-Gardyne, J.Heath, Rt. Hn. EdwardNabarro, Sir Gerald
Bryan, PaulHeseltine, MichaelNeave, Airey
Buchanan-Smith, Alick (Angus, N&M)Hicks, RobertNicholls, Sir Harmar
Buck, AntonyHiggins, Terence L.Noble, Rt. Hn. Michael
Bullus, Sir EricHiley, JosephNormanton, Tom
Burden, F. A.Hill, John E. B. (Norfolk, S.)Nott, John
Butler, Adam (Bosworth)Hill, James (Southampton, Test)Onslow, Cranley
Campbell, Rt. Hn. G. (Moray & Nairn)Holland, PhilipOppenheim, Mrs. Sally
Carlisle, MarkHolt, Miss MaryOsborn, John
Carr, Rt. Hn. RobertHordern, PeterOwen, Idris (Stockport, N.)
Cary, Sir RobertHornby, RichardPage, Graham (Crosby)
Channon, PaulHowe, Hn. Sir Geoffrey (Reigate)Page, John (Harrow, W.)
Chapman, SydneyHowell, Ralph (Norfolk, N.)Parkinson, Cecil
Chataway, Rt. Hn. ChristopherHunt, JohnPercival, Ian
Churchill, W. S.Hutchison, Michael ClarkPeyton, Rt. Hn. John
Clark, William (Surrey, E.)Iremonger, T. L.Pike, Miss Mervyn
Clarke, Kenneth (Rushcliffe)Irvine, Bryant Godman (Rye)Pink, R. Bonner
Cockeram, EricJames, DavidPowell, Rt. Hn. J. Enoch
Cooke, RobertJenkins, Patrick (Woodford)Price, David (Eastleigh)
Coombs, DerekJennings, J. C. (Burton)Proudfoot, Wilfred
Cooper, A. E.Jessel, TobyPym, Rt. Hn. Francis
Cordle, JohnJohnson Smith, G. (E. Grinstead)Quennell, Miss J. M.
Corfield, Rt. Hn. FrederickJones, Arthur (Northants, S.)Raison, Timothy
Cormack, PatrickJopling, MichaelRamsden, Rt. Hn. James
Costain, A. P.Joseph, Rt. Hn. Sir KeithRawlinson, Rt. Hn. Sir Peter
Critchley, JulianKaberry, Sir DonaldRedmond, Robert
Crouch, DavidKellett-Bowman, Mrs. ElaineReed, Laurance (Bolton, E.)
Crowder, F. P.Kershaw, AnthonyRees, Peter (Dover)
Davies, Rt. Hn. John (Knutsford)Kilfedder, JamesRees-Davies, W. R.
d'Avigdor-Goldsmid, Maj.-Gen. JamesKimbell, MarcusRenton, Rt. Hn. Sir David
Dean, PaulKing, Evelyn (Dorset, S.)Rhys Williams, Sir Brandon
Deedes, Rt. Hn. W. F.King, Tom (Bridgwater)Ridley, Hn. Nicholas
Digby, Simon WingfieldKinsey, J. R.Ridsdale, Julian
Dixon, PiersKirk, PeterRippon, Rt. Hn. Geoffrey
Dodds-Parker, DouglasKitson, TimothyRoberts, Michael (Cardiff, N.)
Drayson, G. B.Knight, Mrs. JillRoberts, Wyn (Conway)
du Cann, Rt. Hn. EdwardKnox, DavidRodgers, Sir John (Sevenoaks)
Eden, Sir JohnLambton LordRossi, Hugh (Hornsey)
Edwards, Nicholas (Pembroke)Lamont, NormanRost, Peter
Elliot, Capt. Walter (Carshalton)Lane, DavidRoyle, Anthony
Elliot, R. W. (N'c'tle-upon-Tyne, N.)
Langford-Holt, Sir JohnRussell, Sir Ronald
Emery, PeterLegge-Bourke, Sir HarrySt. John-Stevas, Norman
Eyre, ReginaldLe Marchant, SpencerSandys, Rt. Hn. D.
Farr, JohnLewis, Kenneth (Rutland)Scott, Nicholas
Fell, AnthonyLloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)Sharples, Richard
Fenner, Mrs. PeggyLloyd, Ian (P'tsm'th, Langstone)Shaw, Michael (Sc'b'gh & Whitby)
Fidler, MichaelLongden, GilbertShelton, William (Clapham)
Finsberg, Geoffrey (Hampstead)Loveridge, JohnSimeons, Charles
Fisher, Nigel (Surbiton)Luce, R. N.Sinclair, Sir George
Fletcher-Cooke, CharlesMcAdden, Sir StephenSkeet, T. H. H.
Fookes, Miss JanetMacArthur, IanSmith Dudley (W'wick & L'mington)
Fortescue, TimMcCrindle, R. A.Soref, Harold
Foster, Sir JohnMcLaren, MartinSpeed, Keith
Fowler, NormanMaclean, Sir FitzroySpence, John
Fox, MarcusMacmillan, Maurice (Farnham)Sproat, Iain
Fraser, Rt. Hn. Hugh (St'fford & Stone)
Fry, PeterMcNair-Wilson, MichaelStainton, Keith
Gardner, EdwardMcNair-Wilson, Patrick(NewForest)Stanbrook, Ivor
Gibson-Watt, DavidMaddan, MartinStewart-Smith, Geoffrey (Belper)
Gilmour, Ian (Norfolk, C.)Madel, DavidStodart, Anthony (Edinburgh, W.)
Gilmour, Sir John (Fife, E.)Marples, Rt. Hn. ErnestStoddart- Scott, Col. Sir M.
Glyn, Dr. AlanMarten, NeilStokes, John
Goodhart, PhilipMather, CarolStuttaford, Dr. Tom
Goodhew, VictorMaude, AngusSutcliffe, John
Gorst JohnMaudling, Rt. Hn. ReginaldTapsell, Peter
Gower, RaymondMawby, RayTaylor, Sir Charles (Eastbourne)
Grant, Anthony (Harrow. C.)Maxwell-Hyslop, R. J.Taylor, Edward M. (G'gow, Cathcart)
Gray, HamishMeyer, Sir AnthonyTaylor, Frank (Moss Side)
Green, AlanMills, Peter (Torrington)Tebbit, Norman
Grieve, PercyMills, Stratton (Belfast, N.)Temple, John M.
Thatcher, Rt. Hn. Mrs. MargaretWaddington, DavidWolrige-Gordon, Patrick
Thomas, John Stradling (Monmouth)Walker, Rt. Hn. Peter (Worcester)Wood, Rt. Hn. Richard
Thomas, Rt. Hn. Peter (Hendon, S.)Walker-Smith, Rt. Hn. Sir DerekWoodhouse, Hn. Christopher
Thompson, Sir Richard (Croydon, S.)Wall, PatrickWoodnutt, Mark
Tilney, JohnWalters, DennisWorsley, Marcus
Trafford, Dr. AnthonyWard, Dame IreneWylie, Rt. Hn. N. R.
Trew, PeterWarren, KennethYounger, Hn. George
Tugendhat, ChristopherWells, John (Maidstone)
Turton, Sir RobinWhite, Roger (Gravesend)TELLERS FOR THE AYES:
van Straubenzee, W. R.Wiggin, JerryMr. Bernard Weatherill and
Vaughan, Dr. GerardWilkinson, JohnMr. Walter Clegg.
Vickers, Dame JoanWinterton, Nicholas
NOES
Abse, LeoEdwards, Robert (Bliston)Lawson, George
Albu, AustenEdwards, William (Merioneth)Leadbitter, Ted
Allaun, Frank (Salford, E.)Ellis, TomLee, Rt. Hn. Frederick
Allen, ScholefieldEnglish, MichaelLeonard, Dick
Archer, Peter (Rowley Regis)Evans, FredLestor, Miss Joan
Armstrong, ErnestFaulds, AndrewLever, Rt. Hn. Harold
Ashley, JackFernyhough, Rt. Hn. E.Lipton, Marcus
Ashton, JoeFisher, Mrs. Doris (B'ham, Ladywood)Lomas, Kenneth
Atkinson, NormanFitch, Alan (Wigan)Loughlin, Charles
Bagier, Gordon A. T.Fletcher, Raymond (Ilkeston)Lyon, Alexander W. (York)
Barnes, MichaelFletcher, Ted (Darlington)Lyons, Edward (Bradford, E.)
Barnett, Guy (Greenwich)Foley, MauriceMcBride, Neil
Barnett, Joel (Heywood and Royton)Foot, MichaelMcCartney, Hugh
Baxter, WilliamFord, BenMcElhone, Frank
Benn, Rt. Hn. Anthony WedgwoodForrester, JohnMcGuire, Michael
Bennett, James (Glasgow, Bridgeton)Fraser, John (Norwood)Mackenzie, Gregor
Bidwell, SydneyFreeson, ReginaldMackie, John
Bishop, E. S.Galpern, Sir MyerMackintosh, John P.
Blenkinsop, ArthurGarrett, W. E.Maclennan, Robert
Boardman, H. (Leigh)Gilbert, Dr. JohnMcMillan, Tom (Glasgow, C.)
Booth, AlbertGinsburg, David (Dewsbury)McNamara, J. Kevin
Bottomley, Rt. Hn. ArthurGordon Walker, Rt. Hn. P. C.Mahon, Simon (Bootle)
Bradley, TomGrant, George (Morpeth)Mallalieu, J. P. W. (Huddersfield, E.)
Brown, Bob (N'c'tle-upon-Tyne, W.)Grant. John D. (Islington, E.)Marks, Kenneth
Brown, Hugh D. (G'gow, Provan)Griffiths, Eddie (Brightside)Marquand, David
Brown, Ronald (Shoreditch & F'bury)Griffiths, Will (Exchange)Marsden, F.
Buchan, NormanGrimond, Rt. Hn. J.Marshall, Dr. Edmund
Buchanan, Richard (G'gow, Sp'burn)Hamilton, William (Fife, W.)Mason, Rt. Hn. Roy
Butler, Mrs. Joyce (Wood Green)Hamling, WilliamMayhew, Christopher
Callaghan, Rt. Hn. JamesHannan, William (G'gow, Maryhill)Meacher, Michael
Campbell, I. (Dunbartonshire, W.)Hardy, PeterMellish, Rt. Hn. Robert
Cant, R. B.Harper, JosephMendelson, John
Carmichael, NeilHarrison, Walter (Wakefield)Mikardo, Ian
Carter, Ray (Birmingh'm, Northfield)Hart, Rt. Hn. JudithMillan, Bruce
Carter-Jones, Lewis (Eccles)Hattersley, RoyMiller, Dr. M. S.
Castle, Rt. Hn. BarbaraHealey, Rt. Hn. DenisMilne, Edward
Clark, David (Colne Valley)Heffer, Eric S.Mitchell, R. C. (S'hampton, Itchen)
Cocks, Michael (Bristol, S.)Hilton, W. S.Molloy, William
Cohen, StanleyHooson, EmlynMorgan, Elystan (Cardiganshire)
Coleman, DonaldHoram, JohnMorris, Alfred (Wythenshawe)
Concannon, J. D.Houghton, Rt. Hn. DouglasMorris, Rt. Hn. John (Aberavon)
Conlan, BernardHowell, Denis (Small Heath)Moyle, Roland
Corbet, Mrs. FredaHuckfield, LeslieMulley, Rt. Hn. Frederick
Cox, Thomas (Wandsworth, C.)Hughes, Rt. Hn. Cledwyn (Anglesey)Murray, Ronald King
Crawshaw, RichardHughes, Mark (Durham)Oakes, Gordon
Cronin, JohnHughes, Robert (Aberdeen, N.)O'Halloran, Michael
Crosland, Rt. Hn. AnthonyHughes, Roy (Newport)Oram, Bert
Cunningham, G. (Islington, S.W.)Hunter, AdamOrbach, Maurice
Dalyell, TamIrvine, Rt. Hn. Sir Arthur (Edge Hill)Orme, Stanley
Darling, Rt. Hn. GeorgeJanner, GrevilleOswald, Thomas
Davidson, ArthurJay, Rt. Hn. DouglasPadley, Walter
Davies, Denzil (Llanelly)Jeger, Mrs. LenaPaget, R. T.
Davies, Ifor (Gower)Jenkins, Hugh (Putney)Palmer, Arthur
Davis, Clinton, (Hackney, C)Jenkins, Rt. Hn. Roy (Stechford)Pannell, Rt. Hn. Charles
Davis, Terry (Bromsgrove)John, BrynmorParry, Robert (Liverpool, Exchange)
Deakins, EricJohnson, Carol (Lewisham, S.)Pavitt, Laurie
de Freitas, Rt. Hn. Sir GeoffreyJohnson, James (K'ston-on-Hull, W.)Peart, Rt. Hn. Fred
Dell, Rt. Hn. EdmundJohnston, Russell (Inverness)Pendry, Tom
Dempsey, JamesJones, Barry (Flint, E.)Pentland, Norman
Doig, PeterJones, Dan (Burnley)Perry, Ernest G.
Dormand, J. D.Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)Prentice, Rt. Hn. Reg.
Douglas, Dick (Stirlingshire, E.)Jones, Gwynoro (Carmarthen)Prescott, John
Douglas-Mann, BruceJones, T. Alec (Rhondda, W.)Price, J. T. (Westhoughton)
Driberg, TomKaufman, GeraldPrice, William (Rugby)
Duffy, A. E. P.Kinnock, NeilProbert, Arthur
Dunn, James A.Lambie, DavidRankin, John
Dunnett, JackLamborn, HarryReed, D. (Sedgefield)
Eadie, AlexLamond, JamesRees, Merlyn (Leeds, E.)
Edelman, MauriceLatham, ArthurRhodes, Geoffrey
Roberts, Albert (Normanton)Spriggs, LeslieWallace, George
Roberts, Rt. Hn. Goronwy (Caernarvon)Stallard, A. W.Watkins, David
Robertson, John (Paisley)Steel, DavidWeitzman, David
Roderick, Caerwyn E. (Br'c'n & R'tlnor)Stewart. Rt. Hn. Michael (Fulham)Wellbeloved, James
Rodgers, William (Stockton-on-Tees)Stoddart, David (Swindon)Wells, William (Walsall, N.)
Roper, JohnStonehouse, Rt. Hn. JohnWhite, James (Glasgow, Pollok)
Rose, Paul B.Strang, GavinWhitehead, Phillip
Ross, Rt. Hn. William (Kilmarnock)Strauss, Rt. Hn. G. R.Whitlock, William
Rowlands, TedSummerskill, Hn. Dr. ShirleyWilley, Rt. Hn. Frederick
Sandelson, NevilleSwain, ThomasWilliams, Alan (Swansea, W.)
Sheldon, Robert (Ashton-under-Lyne)Taverne, DickWilliams. Mrs. Shirley (Hitchin)
Shore, Rt. Hn. Peter (Stepney)Thomas, Rt. Hn. George (Cardiff, W.)Williams, W. T. (Warrington)
Short, Rt. Hn. Edward (N'c'tle-u-Tyne)Thomson, Rt. Hn. G. (Dundee. E.)Wilson, Alexander (Hamilton)
Silkin, Rt. Hn. John (Deptford)Tinn, JamesWilson, William (Coventry. S.)
Silkin, Hn. S. C. (Dulwich)Tomney, FrankWoof, Robert
Sillars, JamesTorney, Tom
Silverman, JuliusTuck, RaphaelTELLERS FOR THE NOES:
Skinner, DennisUrwin, T. W.Mr. James Hamilton and
Small, WilliamVarley, Eric G.Mr John Goldins.
Smith, John (Lanarkshire, N.)Wainwright, Edwin
Spearing, NigelWalker, Harold (Doncaster)

Question accordingly agreed to

Main Question, as amended, put:—

The House Divided: Ayes 296, Noes 263.

Division No. 191.1AYES[10.12 p.m.]
Adley, RobertCrouch, DavidHastings, Stephen
Alison, Michael (Barkston Ash)Crowder, F. P.Havers, Michael
Allason, James (Hemel Hempstead)Davies, Rt. Hn. John (Knutsford)Hawkins, Paul
Amery, Rl. Hn. Juliand'Avigdor-Goldsmid, Maj.-Gen. JamesHayhoe, Barney
Archer, Jeffrey (Louth)Dean, PaulHeath, Rt. Hn. Edward
Astor, JohnDeedes, Rt. Hn. W. F.Heseltine, Michael
Atkins, HumphreyDigby, Simon WingfleldHicks, Robert
Awdry, DanielDixon, PiersHiggins, Terence L.
Baker, Kenneth (St. Marylebone)Dodds-Farker, DouglasHiley, Joseph
Balniel, LordDrayson, G. B.Hill, John E. B. (Norfolk, S.)
Barber, Rt. Hn. Anthonydu Cann, Rt. Hn. EdwardHill, James (Southampton. Test)
Batsford, BrianEden, Sir JohnHolland, Philip
Beamish, Col. Sir TuftonEdwards, Nicholas (Pembroke)Holt, Miss Mary
Bell, RonaldElliot, Capt. Walter (Carshalton)Hornby, Richard
Bennett, Dr. Reginald (Gosport)Elliott, R. W. (N'c'tle-upon-Tyne, N.)Howe, Hn. Sir Geoffrey (Reigate)
Benyon, W.Emery, PeterHowell, Ralph (Norfolk, N.)
Berry, Hn. AnthonyEyre, ReginaldHunt, John
Biffen, JohnFarr, JohnHutchison, Michael Clark
Blaker, PeterFell, AnthonyIremonger, T. L.
Boardman, Tom (Leicester, S.W.)Fenner, Mrs. PeggyIrvine, Bryant Godman (Rye)
Body, RichardFidler, MichaelJames, David
Boscawen, RobertFinsberg, Geoffrey (Hampstead)Jenkin, Patrick (Woodford)
Bossom, Sir CliveFisher, Nigel (Surbiton)Jennings, J. C. (Burton)
Bowden, AndrewFletcher-Cooke, CharlesJessel, Toby
Braine, BernardFookes, Miss JanetJohnson Smith G. (E. Grinstead)
Bray, RonaldFortescue, TimJopling, Michael
Brewis, JohnFoster, Sir JohnJoseph, Rt. Hn. Sir Keith
Brinton, Sir TattonFowler, NormanKaberry, Sir Donald
Brocklebank-Fowler, ChristopherFox, MarcusKellett-Bowman, Mrs Elaine
Brown, Sir Edward (Bath)Fraser, Rt. Hn. Hugh (St'fford & Stone)Kershaw Anthony
Bruce-Gardyne, J.Fry, PeterKilfedder, James
Bryan, PaulGardner, EdwardKimball Marcus
Buchanan-Smith, Alick (Angus, N&M)Gibson-Watt, DavidKing, Evelyn (Dorset, S.)
Buck, AntonyGilmour, Ian (Norfolk, C.)King, Tom (Bridgwater)
Bullus, Sir EricGilmour, Sir John (Fife. E.)Kinsey, J. R.
Burden, F. A.Glyn, Dr. AlanKirk, Peter
Butler, Adam (Bosworth)Goodhart, PhilipKitson, Timothy
Campbell, Rt. Hn. G. (Moray&Nairn)Goodhew, VictorKnight, Mrs. Jill
Carlisle, MarkGorst, JohnKnox, David
Carr, Rt. Hn. RobertGower, RaymondLambton, Lord
Cary, Sir RobertGrant, Anthony (Harrow, C.)Lamont, Norman
Channon, PaulGray, HamishLane, David
Chapman, SydneyGreen, AlanLangford-Holt, Sir John
Chataway, Rt. Hn. ChristopherGrieve, PercyLegge-Bourke, Sir Harry
Churchill, W. S.Griffiths, Eldon (Bury St. Edmunds)Le Marchant, Spencer
Clark, William (Surrey, E.)Grylls, MichaelLewis, Kenneth (Rutland)
Clarke, Kenneth (Rushcliffe)Gummer, J. SelwynLloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Cockeram, EricGurden, HaroldLloyd, Ian (P'tsm'th, Langstone)
Cooke, RobertHall, John (Wycombe)Longden, Gilbert
Coombs, DerekHall-Davis, A. G. F.Loveridge, John
Cooper, A. E.Hamilton, Michael (Salisbury)Luce, R. N.
Cordle, JohnHannam, John (Exeter)McAdden, Sir Stephen
Corfield, Rt. Hn. FrederickHarrison, Brian (Maldon)MacArthur, Ian
Cormack, PatrickHarrison, Col. Sir Harwood (Eye)McCrindle, R. A.
Costain, A. P.Haselhurst, AlanMcLaren, Martin
Maclean, Sir FitzroyPike, Miss MervynStokes, John
Macmillan, Maurice (Farnham)Pink, R. BonnerStuttaford, Dr. Tom
McNair-Wilson, MichaelPowell, Rt. Hn. J. EnochSutcliffe, John
McNair-Wilson, Patrick (New Forest)Price, David (Eastleigh)Tapsell, Peter
Maddan, MartinProudfoot, WilfredTaylor, Sir Charles (Eastbourne)
Madel, DavidPym, Rt. Hn. FrancisTaylor, Edward M. (G'gow,Cathcart)
Marples, Rt. Hn. ErnestQuennell, Miss J. M.Taylor, Frank (Moss Side)
Marten, NeilRaison, TimothyTebbit, Norman
Mather, CarolRamsden, Rt. Hn. JamesTemple, John M.
Maude, AngusRawlinson, Rt. Hn. Sir PeterThatcher, Rt. Hn. Mrs. Margaret
Maudling, Rt. Hn. ReginaldRedmond, RobertThomas, John Stradling (Monmouth)
Mawby, RayReed, Laurance (Bolton, E.)Thomas, Rt. Hn. Peter (Hendon, S.)
Maxwell-Hyslop, R. J.Rees, Peter (Dover)Thompson, Sir Richard (Croydon, S.)
Meyer, Sir AnthonyRees-Davies, W. R.Tilney, John
Mills, Peter (Torrington)Renton, Rt. Hn. Sir DavidTrafford, Dr. Anthony
Mills, Stratton (Belfast, N.)Rhys Williams, Sir BrandonTrew, Peter
Miscampbell, NormanRidley, Hn. NicholasTugendhat, Christopher
Mitchell, Lt.-Col. C. (Aberdeenshire, W.)Ridsdale, JulianTurton, Rt. Hn. Sir Robin
Mitchell, David (Basingstoke)Rippon, Rt. Hn. Geoffreyvan Straubenzee, W. R.
Moate, RogerRoberts, Michael (Cardiff, N.)Vaughan, Dr. Gerard
Money, ErnleRoberts, Wyn (Conway)Vickers, Dame Joan
Monks, Mrs. ConnieRodgers, Sir John (Sevenoaks)Waddington, David
Monro, HectorRossi, Hugh (Hornsey)Walker, Rt. Hn. Peter (Worcester)
Montgomery, FergusRost, PeterWalker-Smith, Rt. Hn. Sir Derek
More, JasperRoyle, AnthonyWall, Patrick
Morgan, Geraint (Denbigh)Russell, Sir RonaldWalters, Dennis
Morgan-Giles, Rear-Adm.St. John-Stevas, NormanWard, Dame Irene
Morrison, CharlesSandys, Rt. Hn. D.Warren, Kenneth
Mudd, DavidScott, NicholasWells, John (Maidstone)
Murton, OscarSharpies, RichardWhite, Roger (Gravesend)
Nabarro, Sir GeraldShaw, Michael (Sc'b'gh & Whitby)Wiggin, Jerry
Neave, AireyShelton, William (Clapham)Wilkinson, John
Nicholls, Sir HarmarSimeons, CharlesWinterton, Nicholas
Noble, Rt. Hn. MichaelSinclair, Sir GeorgeWolrige-Gordon, Patrick
Normanton, TomSkeet, T. H. H.Wood, Rt. Hn. Richard
Nott, JohnSmith, Dudley (W'wick & L'mington)Woodhouse, Hn. Christopher
Onslow, CranleySoref, HaroldWoodnutt, Mark
Oppenheim, Mrs. SallySpeed, KeithWorsley, Marcus
Osborn, JohnSpence, JohnWylie, Rt. Hn. N. R.
Owen, Idris (Stockport, N.)Sproat, IainYounger, Hn. George
Page, Graham (Crosby)Stainton, Keith
Page, John (Harrow, W.)Stanbrook, IvorTELLERS FOR THE AYES:
Parkinson, CecilStewart-Smith, Geoffrey (Belper)Mr. Bernard Weatherill and
Percival, IanStodart, Anthony (Edinburgh, W.)Mr. Walter Clegg.
Peyton, Rt. Hn. JohnStoddart-Scott, Col. Sir M.
NOES
Abse, LeoClark, David (Colne Valley)Ellis, Tom
Albu, AustenCocks, Michael (Bristol, S.)English, Michael
Allaun, Frank (Salford, E.)Cohen, StanleyEvans, Fred
Allen, ScholefieldColeman, DonaldFaulds, Andrew
Archer, Peter (Rowley Regis)Concannon, J. D.Fernyhough, Rt. Hn. E.
Armstrong, ErnestConlan, BernardFisher,Mrs. Doris(B'ham,Ladywood)
Ashley, JackCorbet, Mrs. FredaFitch, Alan (Wigan)
Ashton, JoeCox, Thomas (Wandsworth, C.)Fletcher, Raymond (llkeston)
Atkinson, NormanCrawshaw, RichardFletcher, Ted (Darlington)
Bagier, Gordon A. T.Cronln, JohnFoley, Maurice
Barnes, MichaelCrosland, Rt. Hn. AnthonyFoot, Michael
Barnett, Guy (Greenwich)Cunningham, G. (Islington, S.W.)Ford, Ben
Barnett, Joel (Heywood and Royton)Dalyell, TarnForrester, John
Baxter, WilliamDarling, Rt. Hn. GeorgeFraser, John (Norwood)
Benn, Rt. Hn. Anthony WedgwoodDavidson, ArthurFreeson, Reginald
Bennett, James (Glasgow, Bridgeton)Davies, Denzil (Llanelly)Galpern, Sir Myer
Bidwell, SydneyDavies, Ifor (Gower)Garrett, W. E.
Bishop, E. S.Davis, Clinton (Hackney, C.)Gilbert, Dr. John
Blenkinsop, ArthurDavis, Terry (Bromsgrove)Ginsburg, David (Dewsbury)
Boardman, H. (Leigh)Deakins, EricGordon Walker, Rt. Hn. P. C.
Booth, Albertde Freitas, Rt. Hn. Sir GeoffreyGrant, George (Morpeth)
Bradley, TomDell, Rt. Hn. EdmundGrant, John D. (Islington, E.)
Brown, Bob (N'c'tle-upon-Tyne,W.)Dempsey, JamesGriffiths, Eddie (Brightside)
Brown, Hugh D. (G'gow, Provan)Doig, PeterGriffiths, Will (Exchange)
Brown, Ronald (Shoreditch & F'bury)Dormand, J. D.Grimond, Rt. Hn. J.
Buchan, NormanDouglas, Dick (Stirlingshire, E.)Hamilton, William (Fife, W.)
Buchanan, Richard (G'gow, Sp'burn)Douglas-Mann, BruceHamling, William
Butler, Mrs. Joyce (Wood Green)Driberg, TomHannan, William (G'gow, Maryhill)
Callaghan, Rt. Hn. JamesDuffy, A. E. P.Hardy, Peter
Campbell, I (Dunbartonshire, W.)Dunn, James A.Harper, Joseph
Cant, R. B.Dunnett, JackHarrison, Walter (Wakefield)
Carmichael, NellEadie, AlexHart, Rt. Hn. Judith
Carter, Ray (Birmingham, Northfield)Edelman, MauriceHattersley, Roy
Carter-Jones, Lewis (Eccles)Edwards, Robert (Bilston)Healey, Rt. Hn. Denis
Castle, Rt. Hn. BarbaraEdwards, William (Merioneth)Heffer, Eric S.
Hilton, W. S.Marks, KennethRowlands, Ted
Hooson, EmlynMarquand, DavidSandelson, Neville
Horam, JohnMarsden, F.Sheldon, Robert (Ashton-under-Lyne)
Houghton, Rt. Hn. DouglasMarshall, Dr. EdmundShore, Rt. Hn. Peter (Stepney)
Howell, Denis (Small Heath)Mason, Rt. Hn. RoyShort, Rt. Hn. Edward (N'c'tle-u-Tyne)
Huckfield, LeslieMayhew, ChristopherSilkin, Rt. Hn. John (Deptford)
Hughes, Rt. Hn. Cledwyn (Anglesey)Meacher, MichaelSilkin, Hn. S. C. (Dulwich)
Hughes, Mark (Durham)Mellish, Rt. Hn. RobertSillars, James
Hughes, Robert (Aberdeen, N.)Mendelson, JohnSilverman, Julius
Hughes, Roy (Newport)Mikardo, IanSkinner, Dennis
Hunter, AdamMillan, BruceSmall, William
Irvine, Rt. Hn. Sir Arthur (Edge Hill)Miller, Dr. M. S.Smith, John (Lanarkshire, N.)
Janner, GrevilleMilne, EdwardSpearing, Nigel
Jay, Rt. Hn. DouglasMitchell, R. C. (S'hampton, Itchen)Spriggs, Leslie
Jeger, Mrs. LenaMolloy, WilliamStallard, A. W.
Jenkins, Hugh (Putney)Morgan, Elystan (Cardiganshire)Steel, David
Jenkins, Rt. Hn. Roy (Stechford)Morris, Alfred (Wythenshawe)Stewart, Rt. Hn. Michael (Fulham)
John, BrynmorMorris, Rt. Hn. John (Aberavon)Stoddart, David (Swindon)
Johnson, Carol (Lewisham, S.)Moyle, RolandStonehouse, Rt. Hn. John
Johnson, James (K'ston-on-Hull, W.)Mulley, Rt. Hn. FrederickStrang, Gavin
Johnston, Russell (Inverness)Murray, Ronald KingStrauss, Rt. Hn. G. R.
Jones, Barry (Flint, E.)Oakes, GordonSummerskill, Hn. Dr. Shirley
Jones, Dan (Burnley)O'Halloran, MichaelSwain, Thomas
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)Oram, BertTaverne, Dick
Jones, Gwynoro (Carmarthen)Orbach, MauriceThomas, Rt. Hn. George (Cardiff, W.)
Jones, T. Alec (Rhondda, W.)Orbach, MauriceThomson, Rt. Hn. G (Dundee, E.)
Kaufman, GeraldOrme, StanleyThomson, Rt. Hn. G. (Dundee, E.)
Kinnock, NeilOswald, ThomasTinn, James
Lambie, DavidPadley, WalterTomney, Frank
Lamborn, HarryPaget, R. T.Torney, Tom
Lamond, JamesPalmer, ArthurTuck, Raphael
Latham, ArthurPannell, Rt. Hn. CharlesUrwin, T. W.
Lawson, GeorgeParry, Robert (Liverpool, Exchange)Varley, Eric G.
Leadbitter, TedPavitt, LaurieWainwright, Edwin
Lee. Rt. Hn. FrederickPeart, Rt. Hn. FredWalker, Harold (Doncaster)
Leonard, DickPendry, TomWallace, George
Lestor, Miss JoanPentland, NormanWatklns, David
Lever, Rt. Hn. HaroldPerry, Ernest G.Weitzman, David
Lipton, MarcusPrentice, Rt. Hn. Reg.Wellbeloved, James
Lomas, KennethPrescott, JohnWells, William (Walsall, N.)
Loughlin, CharlesPrice, J. T. (Westhoughton)White, James (Glasgow, Pollok)
Lyon, Alexander W. (York)Price, William (Rugby)Whitehead, Phillip
Lyons, Edward (Bradlord, E.)Probert, ArthurWhitlock, William
McBride, NeilRankin, JohnWilley, Rt. Hn. Frederick
McCartney, HughReed, D. (Sedgefield)Williams, Alan (Swansea, W.)
McElhone, FrankRees, Merlyn (Leeds, S.)Williams, Mrs. Shirley (Hitchin)
McGuire, MichaelRhodes, GeoffreyWilliams, W. T. (Warrington)
Mackenzie, GregorRoberts, Albert (Normanton)Wilson, Alexander (Hamilton)
Mackie, JohnRoberts, Rt. Hn. Goronwy (Caernarvon)Wilson, William (Coventry, S.)
Mackintosh, John P.Robertson, John (Paisley)Woof, Robert
Maclennan, RobertRoderick, Caerwyn E. (Br'c'n & R'dnor)
McMillan, Tom (Glasgow, C.)Rodgers, William (Stockton-on-Tees)TELLERS FOR THE NOES:
McNamara, J. KevinRoper, JohnMr. James Hamilton and
Mahon, Simon (Bootle)Rose, Paul B.Mr. John Golding.
Mallalieu, J. P. W. (Huddersfield, E.)Ross. Rt. Hn. William (Kilmarnock)

Question accordingly agreed to.

Resolved

That this House welcomes the Government's statement of 8th May on the steel industry with the announcement of the continuing high momentum of investment as a major contribution to the flexible development of an efficient modern and profitable industry, thus able to provide greater security of employment and to make its full contribution to an expanding economy both regionally and nationally.