Orders of the Day — Steel Industry

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

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Photo of Mr David Watkins Mr David Watkins , Consett 12:00 am, 23rd May 1972

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.