Orders of the Day — Iron and Steel (Amendment) Bill

Part of the debate – in the House of Commons at 12:00 am on 11th May 1978.

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Photo of Mr Edwin Wainwright Mr Edwin Wainwright , Dearne Valley 12:00 am, 11th May 1978

I listened intently to the speech of the hon. Member for Chichester (Mr. Nelson), but I was not sure which way he was going. He seemed at times to be supporting the nationalised industry to the hilt, but at others seemed to be criticising it unduly. I wonder why.

In the end he said that he would allow the industry to be run as a commercial enterprise but that a very tight hold should be kept on everything it did. That means that he has no faith in those who have been appointed to run the industry. I do not believe that we should take that attitude.

I have waited quite a while to take part in the debate and while I was listening to the other speeches, I thought that I had better disapear because so much criticism was levelled at the Sub-Committee and the way the industry is being run.

We have to look back at the history of the industry, not just to 1973–74, but to 1967 and earlier. Parliament has always had a strangehold on the industry and has always put restrictions on it. If it has not been run successfully, hon. Members have made a lot of criticisms. For at least three decades the steel industry has been, slowly but surely, not keeping pace with its international competitors. We all knew that, but we did not do a great deal about it.

The Sub-Committee considered the tonnages produced per year by each employee in this country and compared them with production in our competitor countries. We saw that there was a great difference. Our output was 118 tonnes, National Steel in the United States had a production of 280 tonnes, in Germany, Thyssen's production was 370 tonnes and Nippon Steel production was 520 tonnes per year. Why is that? The reason is that, even in 1967, experts said that the industry, which was being renationalised, needed at least £3,000 million. Because of the conflict between Governments, no one has been able to get down to producing a straightforward plan to bring the industry up to the level of its competitors.

The British industry has been starved of money and when the oil crisis and the world recession started, everyone looked for someone to blame and the BSC took the blame. Who could have foreseen those events in 1972—except the mining MPs who warned both Governments about the potential dangers in the sources of our oil? No one took any notice of us, but the crisis happened—though not in the way that we expected—and the shortages started.

At present Japan is spending £81,147 per employee per year. That compares with Britain's £13,943 per employee per year. Little wonder, therefore, that Britain's overall output is 34 per cent. of that of Japan's. When a group of us went to have a look at the Japanese system, we saw a vast difference in technology. The hon. Member for Chichester spoke about spending money in investment and the reduction in the number of jobs. That is true. Whenever one increases technology, the number of jobs is bound to go down unless one increases the markets. If we do not do so, we cannot compete in the international arena. That is one of the mistakes that we make.

I feel very sorry for some of the steel plants in this country. I saw the rundown which occurred in the coalmining industry and the effect that that had on districts and villages. If we develop our steel industry, particularly during the current recession, there is bound to be over-production. I have always agreed with the common sense view that it is no good producing anything unless we can sell it or consume it ourselves. But there is bound to be over-capacity because of the world recession. Even Japan has at least 30 million tonnes of extra capacity at present, but Japan will sell that if it is a question of maintaining her industries.

I expect that is the reason why there is talk of restriction of imports. Many of my hon. Friends are concerned about imports, but I have very great reservations. Being a market nation, I fear that if we close our borders too tightly, borders will be closed against us. As a result, certain markets will no longer be open to us and that factor must be taken into account.

We must continue our investment in the steel industry. I see my hon. Friends the Members for Sheffield, Heeley (Mr. Hooley), Rother Valley (Mr. Hardy) and Brigg and Scunthorpe (Mr. Ellis), all of whom have steel plants in their areas. Up to a certain point those plants were successful until the recession came. Although I feel proud of what has hapened in the Sheffield and Rotherham districts, there are some other areas about which one is deeply disturbed. My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) has Shelton in his constituency. I have met some of the work force from Shelton and I have a very high respect for them. They have fought very hard to keep their plant open. I am not quite sure whether they will succeed, but at the end of the day, unless we can produce steel for our own home consumption in competition with other nations, we shall lose out in manufacturing industry.

When we compare our manufacturing industry, and investments in it with overall figures, we lose out badly. That is something which we must always bear in mind. I recommend Conservative Members to have a look at the National Westminster Bank Quarterly Review. That shows that manufacturing industry—private enterprise—rather than the steel industry is letting us down with regard to investments. One has to bear that in mind. We must ensure that we reach a high standard of technology. But, unfortunately, when that occurs, especially during a recession, there is a great danger that the economy will be gravely affected and that jobs will become scarcer. On the other hand, if we do not do so, jobs will still be fewer and our standards will be lower.

It is no good people thinking that we can have a reasonable standard of living unless we produce the wealth of this nation. This is where the steel industry is one of the barometers of the economy. Steel gets involved in every other industry. There are very few industries which one can mention in which steel is not involved.

I warned the Sub-Committee that any recommendations which emerged would be dynamite because they would mean a reduction in manpower. But without that happening we shall not have a viable and efficient steel industry. I concede that some plants are making money at present. Four of my hon. Friends and two Conservative Members have spoken about them. They appear to blame the Sub-Committee for what has happened to the steel industry, but it was the Sub-Committee's job to look at the industry and to make certain recommendations about it.

When I read the Government's reply to those recommendations I was greatly pleased. Considering the furore which occurred when we last debated steel, I fully expected that Members of the Sub-Committee would get their throats cut. But I do not think that I can find much fault with the recommendations. One, of course, is in dispute. That is recommendation No. 30, mentioned by the hon. Member for Come Valley (Mr. Wainwright), which talks about the amount of money for investments and current expenditure. The Sub-Committee was deeply troubled about what would happen if the recession continued. Unless we continue the amount of money for those investments I am certain that we shall not succeed. That is the reason why that recommendation was made.

I do not know what other members of the Sub-Committee feel, but I stand by that recommendation. Unless the Government make certain that sufficient money will be given to capital investments, the industry will find that it will not be able to carry on with its current expenditure because the costs will be too high.

I know that some of my other hon. Friends, who are much more involved than I, wish to speak. But I should like to say a word about redundancies. There are bound to be redundancies. I have heard Conservative Members criticise the amount of money that would be involved in redundancy payments. During the depression I was out of work for a period. Everyone ought to realise what being out of work means. Everyone should realise what it means when a man who has been trained for only one job at the age of 15 or 16 suddenly discovers at the age of 40 or 45 that there is no more work. Yet we are told that £10,000, £13,000 or £14,000 is too much money. If any of us suddenly were placed in the same position, I wonder what he would say about the amount of money proposed for redundancy payments. I beg the Government, through the BSC, to be generous where redundancies have to occur. Of course, the best solution of all would be to supply jobs in these areas. If we could do that, we could lessen the impact of the blow.

I hope that the Minister will take note of what right hon. and hon. Members have said today. I have a great deal of sympathy with them because I know in my heart how they feel and how the people feel when their jobs are in jeopardy. If we cannot keep their steel plants open—and in my view we should give serious thought to the possibility of selling them—we should at least do more than we have in the past to bring new jobs to these areas. If we do not, we shall have failed our people.