British Steel Corporation

Part of the debate – in the House of Commons at 12:00 am on 9th March 1978.

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Photo of Mr Edward Heath Mr Edward Heath , Bexley Sidcup 12:00 am, 9th March 1978

I said that the House should support the Committee in the exercise of its powers. That is quite different. I believe that when the Chairman of the Committee wants the documents, he should be supported in getting them.

I return to the nature of the economic crisis. It is very clearly discernible by looking at the graph of steel production. When the oil crisis hit the world in the autumn of 1973, the world was deprived of a massive amount of purchasing power. That is still the great economic danger facing the world.

The graph shows that in 1950 world steel consumption was 150 million tons. At the end of 1973 it was 450 million tons. It then immediately dropped—not over a period of recession, but immediately—by 80 million tons. That shows the impact of the oil crisis on the rest of the world. It has continued for these four years.

The point I wish to make—particularly in view of the fact that I understand that the Prime Minister is to meet the German Chancellor on Sunday evening—is that until the world leaders recognise this fact and agree, by force of necessity, to act together to deal with it, we shall remain in this situation of world-wide mass unemployment. It follows that if that is to remain the situation, steel production will be damaged permanently by at least this amount. If that is to remain so, our projections for our own steel production must take account of it.

If, on the other hand, the world leaders reach an economic solution to this problem, we can again hope for an expanding world economy and can look forward to a future for our own steel production which would be much brighter than it is at present. When we come to our own problems, what we decide today must depend on whether the world leaders will deal with the worldwide economic problems in order to give the world an expanding economy again from which this country can take advantage. We must put ourselves and our steel industry in a position to take advantage of that situation. That is the crux of the matter.

I wish to make another point with regard to the history of steel from 1950, and not from 1967 as the Select Committee did. The figures illustrate quite clearly that in 1950 the United Kingdom produced 16·6 million tonnes of steel. In 1977 we produced 20·4 million tonnes, an increase of 23 per cent. over 27 years. The only other country near that level of increase was the United States. In 1950 the United States produced 87·8 million tonnes and in 1977, 113·1 million tonnes, an increase of 29 per cent. over 27 years. The United Kingdom has a State-owned industry and the United States is the greatest free enterprise country in the world. Both are at the bottom of the league table for meeting world demand in steel consumption over the last 27 years.

But let us look at the other countries. In 1950 Italy was producing 2·4 million tonnes. In 1977 it produced 23·3 million tonnes, an increase of 870 per cent. That was under a plan organised and backed financially by the Government. France produced 10–6 million tonnes in 1950 and 22·1 million tonnes in 1977, an increase of 108 per cent. That was backed by a plan introduced by Jean Monet and financed, where necessary, by State banking. In 1950 West Germany produced 12·1 million tonnes rising to 39 million tonnes in 1977, an increase of 222 per cent. It did so with the help of the Marshall Plan. We then come to Japan. In 1950 Japan produced 4.8 million tonnes and in 1977 102·4 million tonnes an increase of 2,030 per cent. It did so under a system in which steel production is private enterprise but backed by an industrial bank and the central banking system. [HON. MEMBERS: "The Government."] It is not entirely the Government. It is backed by a central system.

The point I wish to make is two-fold. First, with an increase in world consumption in 27 years from 150 million tonnes to 450 million tonnes, the United Kingdom has been able to increase its production by less than 4 million tonnes as its share of that world increase of 300 million tonnes. The United States has not done very much better. Yet the other countries have all had massive increases in production.

What we ought to be asking ourselves is not whether we should continue the argument about private ownership and State ownership. Rather, we should ask how we are to ensure that we manage what we have got and how we can get a larger share of the world market that is available.