Orders of the Day — Steel Industry

– in the House of Commons at 4:42 pm on 7th November 1979.

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Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East 4:42 pm, 7th November 1979

Before this important debate commences, I make it clear that Mr. Speaker has selected the amendment standing in the name of the Prime Minister.

Last week the House agreed to a number of changes in the form in which Questions are put on motions and amendments on Supply days. The purpose of the changes was to enable a vote to take place on the substance of an Opposition motion rather than, as hitherto, on the substance of a Government amendment.

Under the new procedure, when the Opposition motion and the Government amendment have been moved, I shall propose the Question "That the original words stand part of the Question". On that Question the remainder of the debate will take place, and at 10 o'clock it will be put to the House for a vote if desired. If that Question is negatived and the motion is thus defeated, the next Question to be proposed by the Chair will be "That the proposed words be there added"—in other words, that the Government amendment be made. If the Government amendment is carried, there will be no further vote on the main Question or on the main Question as amended.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford 4:49 pm, 7th November 1979

I beg to move, That this House, noting the restrictions placed upon the British steel industry by Her Majesty's Government's pursuit of an unrealistic financial policy deadline, which also ignores unfair competition from European industries using heavily subsidised coking coal, condemns that policy which will do irreparable damage to the essential steelmaking interests of Great Britain. The debate is the third in a trilogy of vital debates that have gone right into the heart of the Secretary of State's responsibilities in the Department of Industry. We started with shipbuilding on Thursday. Yesterday we debated the National Enterprise Board and, to some extent, regional affairs, and today we are debating steel. It seems right and appropriate that we should be doing so. As I said in the debate on shipbuilding, there is a linking factor between all these debates, namely, the interlocking need of British industry to work together and the duty that the Department of Industry and the Secretary of State have to ensure that it is profitable and well run.

Nothing is so linked to other industries as steel supply. Therefore, the House must ask two questions. Do we want a British steel industry? If we do, what should we be doing to preserve it? The first question seems at first sight to be rhetorical. Every hon. Member would, of course, say "Yes", and so would the Secretary of State. However, his actions and his attitude seem to be the absolute reverse of that proposition. For example, let us consider his precondition for the steel industry—that it should break even in March 1980. His attitude is not that of a man who wishes to see a viable British steel industry but rather that of an inflexible suburban bank manager to the head of a local firm who says that he would quite like the firm to succeed if it can repay its overdraft, as overdrafts should be repaid, overnight and immediately. Perhaps the demand in this case is not for immediate repayment, but by March 1980. If the BSC does not do that, it is too bad. It is threatened with the most terrible consequences if it cannot break even by March 1980.

I made my next point some months ago, and the more I look at it the more certain it seems to be. The BSC can break even by March 1980 only if it closes one or more of its major works. We should forget about the other closures that are imminent or being considered. It is true that an industry can be made to break even, if that is the test, and it is the test, more or less, in the Prime Minister's amendment. On that test, one would not need until March 1980. I could do it in three weeks, and the Secretary of State could do it in two. We would need only to close it down and its accounts would then perfectly balance and it would have broken even.

However, is that what we really want to do with the steel industry? The essential difference is between the attitude of a Tory Government, with their suburban bank manager attitude to life, and what a Labour Government believe in. The Labour Government were told some time ago by the chairman of the BSC that he expected or hoped that the Corporation would break even by March 1980. We replied that we were very interested to hear it, and wished him good luck if he could do it, provided the steel was produced. The important factor, however, was that the steel should be produced and the industry kept going. The test was not whether the overdraft could be repaid immediately.

The implications of a break-even by March 1980 are terrifying. They involve further massive areas of Britain's industrial heartland being laid to waste in the 1980s. As a society we have to resolve one perennial and fundamental contradiction. It is most difficult, but it must be resolved. On the one hand is the need of British industry for a massive re-equipment and a strong market, and on the other the irrelevance represented by an orthodox, knee-jerk reaction of closures and cutbacks.

An overall plan, a British plan for British industry, is needed. One of the things that distress me about the Secretary of State's attitude to industry is his mysterious ability to compartmentalise everything. He sees industry in unrelated sections—shipbuilding, the Post Office, steel and so on. Nothing is related. There is no great plan, except, of course, the plan of the market place, whatever "market place" may mean, because the market place has been subjected to direction throughout history. There never has been absolute laissez-faire. The Secretary of State would do well to serve a term, as I did, in the Ministry of Agriculture. He would find that there never has been a free market in agriculture since the Bronze Age. It has been subsidised for that length of time. One can never have an unsubsidised, undirected system of industry. Of course, one can try, and it was tried in the 1930s.

Steel is the raw material of British industry. Perhaps the Secretary of State sees for British industry a different role from that envisaged for it by my right hon. Friends and myself. I have said that the Secretary of State sees industry as being compartmentalised, but he has told us that he would not be prepared to run British industry. He says that his only duty is to make the economic conditions in which industry can run itself.

What future does the right hon. Gentleman expect the British steel industry to have in the 1980s? I put a point to him yesterday, but neither he nor the Minister of State replied to it. Perhaps now, after 24 hours, they may be in a position to do so. There has been a report that forecasts have been made by the Treasury of industrial production between now and 1983 for particular sectors of British industry. Will the Secretary of State publish the forecasts that his Department is providing as part of the Government's industrial assessment system, and which his officials are alleged to be currently discussing with invited representatives of British employers? Will he confirm that his Department is expecting production in the three big steel-consuming sectors of motor vehicles, mechanical engineering, and metal goods to fall by over 20 per cent. by 1983?

If that is to be the future for British manufacturing and the steel industry, the cuts in public spending recently announced will be only the first bitter instalment of a frightening bill which the British people must pay for voting Tory last May. Announcements of further redundancies across the breadth of British industry will come thick and fast. Perhaps it is appropriate that this should be the basis given to us by a Tory Party so long dominated by the interests of financial capital, a basis that tells us that we can expect announcements and closures with the effortless regularity of a banker's standing order.

What should we be doing about steel? It is about time we began to grasp this nettle hard. First, we must reconsider our attitude to Europe and to trade with Europe. A new situation has arisen. I advise the right hon. Gentleman to spend a short apprenticeship in the Ministry of Agriculture. He would find it wonderfully clarifying. I spent three years there, and it taught me a great deal. It is now beginning to teach the Minister of Agriculture a trick or two—and, I hope, a lesson or two as well. We have seen the attitude of the other members of the EEC when their essential national interests are concerned. We have seen it with regard to French lamb. That is not one of the most vital things, but it gives us a clue to what is happening.

The French attitude to lamb is somewhat the reverse of a normal public attitude in an EEC member State. The public attitude of members of the EEC differs totally from their private actions when their own interests are concerned. We have to take that into account if we are to be left with any British industry.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

As an indication of the gravity of the point that my right hon. Friend is making about the importation of steel, in the port of Hartlepool, steel was brought in recently by a ship bearing a West German flag from a steel producer in Eastern Europe with a Common Market licence. Does not that seem crazy?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I am grateful to my hon. Friend for his remarks. A few weeks ago I took part in a programme called "Eurofrauds". I feel that it could be an introduction to a subsequent programme called "Son of Eurofrauds".

Let us take the matter from the particular to the general. The United Kingdom exported 1 million tons more than it imported from the EEC up to 31 December 1972. On 1 January 1973 we joined the Common Market. Over the last two years, we imported 1 million tons more from the EEC than we exported to it. In other words, 20 per cent. of our domestic used steel comes from abroad.

Last year, NEDO looked at the import penetration of stainless steel bars. It identified one important factor as being sales by European companies at below production costs. That is what British Steel has to compete with, and that is one reason for its lack of success.

Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex

I realise that the right hon. Gentleman has always been fervently anti-Common Market. However, in relation to the statistics that he has provided, does he not believe that some of the faults lie with BSC itself rather than with steel producers in other European countries? Will he confirm what his predecessors in office accepted, that the price stability scheme introduced by Commissioner Davignon has been of considerable assistance to British Steel? Without it, BSC would be in a worse plight today. That fact was spelt out in the previous Government's document "British Steel Corporation: The Road to Viability."

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

If I relate that to the sort of steel that we are discussing, the answer is "No". In general terms, the Davignon proposal was of benefit. What was the proposal? I am glad to see that the hon. Member for Mid-Sussex (Mr. Renton) is with me—dawn is approaching. The proposal was a measure of protection. It stopped import penetration into the EEC. I suggest that we go one stage further.

The main threat to our steel industry comes not from outside Europe—certainly not after the Davignon proposal—but from inside Europe. Since joining the EEC, British industries using steel have lost their market share at home and abroad to their foreign rivals. As with the motor industry, multinational companies have supplied the United Kingdom market from plant abroad. The cost of that to British Steel is 2 million tons in lost production. The hon. Gentleman should remember that when he places too much blame on BSC.

The import of cars alone is equivalent to an additional 1 million tons of steel. On 31 December 1972, 27 per cent, of our new cars were imported—we made 73 per cent. of our own cars. Today, the proportion is 55 per cent., and 38 per cent. of those come from the EEC. The same course is now being followed with trucks and other commercial vehicles.

One reason for the increase of imports in foreign steel is the subsidies that are given by EEC members to their companies. That is particularly true with coking coal.

Photo of Mr Robert Ellis Mr Robert Ellis , Wrexham

To look beyond the EEC. does not my right hon. Friend believe that an important question that we should ask is why, from 1950 to 1973, before we entered the EEC, our steel production fell from 27 million tons to 25 million tons and yet Japanese steel production rose from 2 million tons to 90 million tons?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

The Japanese bought the know-how from other countries and decided to concentrate on the items which they could produce. They found that they could make electronics and steel and they produced them. They went right at it—with investment.

We need to use high-quality coking coal, not just to improve the quality of steel production but for the safety of those who produce steel. The problem is that that is expensive. We compete with other countries which produce their steel with highly subsidised coking coal. What can BSC do? No wonder it is in difficulties and looks around saying "If the Government do not help, what can be done? Go abroad". Its plight can be well understood.

The Federal Republic of Germany subsidises its coking coal 12 times as much as we subsidise coking coal. In France, the proportion is 15 times as much and in Belgium 25 times as much. That has an additional effect. Not only is our steel more expensive because we import EEC coking coal but we have to look around to buy coking coal from abroad. There is a dual effect of steel and other imports.

Photo of Sir Anthony Meyer Sir Anthony Meyer , Flint West

Is the right hon. Gentleman suggesting that BSC, making a loss at the rate of £400 million per year paid for by the taxpayer, is not also being subsidised?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I shall return to the subject of BSC. I should like to come to that point later in my speech. I shall not avoid it but I shall meet it head on, if the hon. Gentleman will give me a little time to do so.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

No. that is not the middle stump. Obviously, the hon. Gentleman has not played cricket in years. Indeed, he does not look like a cricketer to me.

We have to restrain import penetration and we should ensure that the Commission does not get its own way. In the previous Government my right hon. Friend the Member for Chesterfield (Mr. Varley), the then Secretary of State, spent much time opposing the Commission on some of its more outrageous pro-mainland activities. That is not a matter at which the right hon. Gentleman and his colleagues seem to be good. They seem to be good at going to Brussels and saying "Yes" to everything.

Apart from the question of the EEC, we should ask ourselves what we should be doing to preserve the steel industry. One matter is clear: we should abandon the date of 1980.

Photo of Mr Don Concannon Mr Don Concannon , Mansfield

Does my right hon. Friend agree that what he said about the coal industry means that we will have a problem, with closure of some coal mines, if we continue to import coal?

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

Of course, there will be a problem with the coal industry. It is not only a question of our steel industry contracting. We are having to buy not only steel cheaper from abroad but coking coal from abroad. Therefore, we should abandon the date of March 1980.

Here I want to meet what the hon. Member for Flint, West (Sir A. Meyer) said. Of course, there will be losses; I accept that. However, can the hon. Gentleman accept this, as apparently he represents a constituency in which steel is produced at the moment? When we deal with and remodel an industry such as steel, how long is the process of remodelling? Is it six months until March 1980, or is it more like 10 years? If it is 10 years—I suggest that is what it is—we must be prepared to accept that there will be losses, as we go along, until we reach viability. A moment ago I spoke about the Japanese. They were prepared to make losses for seven years until they had one of the most powerful steel industries in the world.

Let us be under no illusions about the matter. I am not convinced that the Secretary of State gives a damn about the steel industry. It is up to him to convince me. If we want a steel industry, we must be prepared to pay for it.

Photo of Sir Anthony Meyer Sir Anthony Meyer , Flint West

The answer to the right hon. Gentleman's question is the time necessary to provide the investment. The answer is not endless prevarications and delays in the hope of buying votes in a place such as Shotton.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

Of course, the answer is not endless prevarication. In 1973, when the Conservative Government considered the future of steel, they put a 10-year development plan on it. It was a lousy plan—but that is another matter.

I referred to the first step that must be taken. The second is financial support and maintenance of employment and output. Here is the way in which we may run the steel industry at sensible levels that are agreed between all the parties involved—the Government, the British Steel Corporation and the steel committee of the TUC. They must work together. It will not be an open-ended cheque. It will be a firm, viable undertaking, as the level of output will be agreed and realistic. That is what should be done. The third step is to preserve a substantial iron and steel manufacturing industry on a basis which will enable it to take advantage when the upturn in the market comes—for it will come. The Government are playing for total suicide—not for the upturn that, as I say, will come.

I said that we should restrain the growth of imports. However, there is one important matter that I must accept. In the natural sequence of events there must be closures. I accept that. It is regrettable, but there it is. It must be accepted if there is to be a viable scheme. When there is a closure, we must always consult the unions and the men who work on the shop floor. I do not mean the type of consultation of which the Government are so fond, namely, telling people and saying that that is consultation. I mean real working together and negotiation. That is what the Labour Government believed in, and that is what they did.

This is what is happening now under the tutelage, the aegis, the goatskin of the right hon. Gentleman. The British Steel Corporation calls the unions together and tells them what is happening in Corby and Shotton. It does not negotiate with them. The unions have the facts, the figures and a strong case. Is anything done by the BSC, under the right hon. Gentleman's diktat, to listen to them, to discuss with them, to see whether they may be right? Nothing is done about that.

We have heard about Corby and Shotton. A few weeks ago my hon. Friend the Member for Flint, East (Mr. Jones) made an eloquent speech. He fought an extremely good fight—and rightly—for his people at Shotton. Meanwhile, we are told that the Corby closures will start in six weeks. My hon. Friend made clear—the evidence is there—that the closure of Shotton was a firm breach of a promise given by what we thought was an honourable management supported, we hoped, by an honourable Government. No; it was a false undertaking. It was broken the moment the Government came to office. What will that attitude do for morale?

Corby has been described as a one-industry, one-employer and one-class town. Two-thirds of the men in Corby work for the British Steel Corporation. What will be the consequences if the closure, bringing with it nearly 6,000 redundancies, goes ahead without discussion, peremptorily on the say-so of the British Steel Corporation, forced to do that by the suburban-bank-manager attitude of the Secretary of State?

Unemployment in Corby is already 7 per cent. An independent study by the consultancy firm of Coopers and Lybrand showed that unemployment would still be 27 per cent. even after two years, if the BSC shuts the whole of its Corby works. However, we are told that the BSC will not close the whole of the works. It will not close the tube works. What confidence can Corby have in that? Those people can have no confidence in BSC's word after Shotton, nor any confidence in the Secretary of State.

Secretaries of State change. If they do not change—as in the case of this Secretary of State—they change their minds. Proposals have been aired for designating Corby as an assisted area to attract alternative jobs. The town's development corporation attracted six firms to Corby in the first half of this . A total of 180 jobs were created, of which 105 were for women. Having decided to cut Corby's throat, the Government said that they might be prepared to breathe new life into the town.

There is nothing new in that. What is proposed for Shotton and Corby is not new in history. We have seen it all before. We saw it in the 1930s. We saw it at Jarrow, where shipyards were closed and a steel plant was prevented from expanding. Jarrow was murdered. Ellen Wilkinson warned us what happened when the axe fell on a one-industry town: When the industry of a town has been killed it seems as difficult to apply artificial respiration as on a human corpse.… All the traditions of the area seem to cling to the dead industry. We need to be reminded of what happened to Jarrow. Efforts were made to attract new industry. A small furniture factory was set up. A couple of works were created to supply metal tubes and castings. Ironically the town's small steelworks was eventually stimulated by the rearmament programme. Special area status was granted. The Jarrow crusaders marched. However, after five years' efforts only 800 men and boys obtained jobs; 4,500 did not.

We must ensure that Jarrow never happens again. That is why the Opposition feel so strongly. We believe in steel. We believe that it is vital for our industries and our people. When the cold winds of Tory Government, with all their threats and malice, blow, it is our duty to resist. In that spirit, I call upon my right hon. and hon. Friends to support this motion in the Division Lobby.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

On a point of order, Mr. Deputy Speaker. My hon. Friend the Member for Flint, West (Sir A. Meyer) asked a question which the right hon. Gentleman said he would answer. He did not manage to give that answer. Perhaps he could give it to us now.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

Further to that so-called point of order, Mr. Deputy Speaker. I answered the question. When the hon. Gentleman wakes up and reads Hansard tomorrow, he will see it for himself.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Whether the question was answered or not, that was not a point of order.

Photo of Sir Anthony Meyer Sir Anthony Meyer , Flint West

I am grateful to my right hon. Friend for giving way. Since the Opposition will no doubt claim that they have turned out in force to defend the British steel industry, it might be worth pointing out that while the right hon. Member for Deptford (Mr. Silkin) was speaking, there were no more than 19 hon. Members present on the Labour Benches.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: believes that the future of the steel industry depends on much improved productivity, efficient use of costly investments, and an early return to profitability". The Opposition have chosen the subject for debate. As my hon. Friend the Mem- ber for Flint, West (Sir A. Meyer) has pointed out, they have mustered only a couple or three handfuls of hon. Members

Photo of Mr Donald Coleman Mr Donald Coleman , Neath

On a point of order, Mr. Deputy Speaker. Are you aware that the reason why my colleagues are away from here is that we are having to discuss the Rhodesia question, which that crowd on the Government Benches have brought through so quickly?

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Whether hon. Members are present or not present is not a point of order. It is not a matter for me.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

In choosing this subject, the Opposition have had to recognise, or should have had to recognise, that they were recently the party in Government. The difficult job of the right hon. Member for Deptford (Mr. Silkin), who opened the debate, has been to make a speech criticising the present Government's attitude to steel while detaching himself from the almost identical attitude to steel of his own Government. He carried out the task with a certain amount of dexterity.

As one would perhaps expect, the right hon. Gentleman concentrated on a few subjects, such as coking coal and imports. He accepted, towards the end of his speech, that when an industry, under the policies of both parties, in successive Governments, is given huge sums of money by the taxpayer with which to create new investment, it follows that there are bound to be some closures. But he did tell the House straightforwardly that during their whole period in office the recent Government, of which he was a member, were grappling with the problem of encouraging and stimulating the steel industry to become competitive and to take advantage of the new investment provided by the plans of both parties when in office.

From the right hon. Gentleman's speech one would not know of the series of crises that marked the period in office of the last Labour Government as they faced up, with increasing courage—I pay tribute to their courage—to the problems inherent in a vast investment programme and in making the steel industry competitive. The Labour Government, after shirking, flinching and shrinking from the social problems, accepted, towards the end of their period in office, that closures were inescapable if the new investment was to fulfil its purpose. In the end, the Labour Government had to cancel pledges given under the Beswick review to delay the closure of a number of steelworks. I shall not list them. The House will be familiar with a whole series of steel plants, reprieved for a stated period of years under the Beswick review when the Labour Government first came to office, which, in the event, were closed, with a massive loss of jobs. I understand that the figure was 25,000 jobs lost earlier than the Beswick report had pledged though later than originally planned.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

Does the right hon. Gentleman agree that during the period of the Labour Government no closure occurred without the agreement of the unions? Ebbw Vale is a good example of how the Government of the day put in new industry so that when steel jobs were lost work was available elsewhere. This was done by agreement. From what I have seen, the right hon. Gentleman proposes, in places like Corby, to act without any agreement, throwing people out of work and on to the dole without any alternative employment.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Governments want to get agreement for their policies. It is in a Government's own self-interest, if for no more civilised motive, to get agreement. The hon. Gentleman's party, when in Government, saw that the national interest, in the end, required decisions even when there was no agreement with the trade unions' steel committee.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

The right hon. Gentleman says "No" from a seated position and prepares to contradict me. On 15 January 1979, he said: Of course, we ask the British Steel Corporation to consult the Trades Union Congress steel committee and workers about potential closures. But we cannot allow even the TUC steel committee to have a veto over a closure if the British Steel Corporation regards that as being necessary, and provided that proper negotiation has taken place.".—[Official Report, 15 January 1979; Vol. 960, c. 1308.]

Photo of Gerald Kaufman Gerald Kaufman , Manchester Ardwick

The right hon. Gentleman has done me the courtesy of quot- ing my remarks, and has quoted me accurately, but the fact is that what we laid down to the British Steel Corporation, and what the right hon. Gentleman is now resiling from, was that no closure date for any steelworks should be set until the process of negotiation had been fully carried through. In every case, from Hartlepools to Shelton, that process of consultation was carried through. In no case, as my hon. Friend for Newham, North-East (Mr. Leighton) pointed out, did a closure take place without the agreement of the unions and the work force. In the case of Corby, the right hon. Gentleman is consenting to a closure date before the process of consultation has been properly carried through. In the case of Shotton, he is consenting to a closure when there is a specific pledge by the British Steel Corporation, endorsed by Government.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

The right hon. Member for Deptford says to his right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) "Well done", but the essential common ground between the two parties, one recently in Government and one now in Government, is that both Governments accept that the decision is for the British Steel Corporation. In the case of Corby, the consultations were started by the British Steel Corporation as early as February this year, before the election, and have continued until this autumn. The British Steel Corporation, which, as the management, has the final decision, decided that the consultations had been carried as far as practicable. It has made its decision. We accept that decision, because, like the previous Government, we leave these decisions to the management of BSC.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I understand the right hon. Gentleman's claim that he does not interfere in management. What is his view of a management that proposes to close a vital industry in a one-industry town on a particular date without negotiation when it is told that the facts and figures can be demonstrated to be false but does not even have the courtesy to examine those facts and figures with the people concerned?

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

I do not know to what extent there has been a technical dialogue during the consultations. I know, however, that the cost of maintaining the new works and the old works falls on the taxpayer. It is no kindness to struggle to defer the necessary increase in the competitiveness of the industry. The only result is to slim the industry even more than if change was accepted more quickly. The result of constant delays is to increase costs. The increased costs lose customers. The customers, once lost, do not quickly come back. The delay of the Beswick closures and the delay that the Opposition now seek to impose on the British Steel Corporation would produce a greater loss of jobs than accepting the closures at a time when the management wanted to carry them out.

Photo of Mr John Farr Mr John Farr , Harborough

Will my right hon. Friend confirm that if certain technical proposals were put to the chairman of the BSC to close Corby on notice of a few months without a proper answer and proper consideration being given to those proposals, that would be a policy that the Government could not support?

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Her Majesty's Government have two options: either to let the management manage or to seek to impose their own management judgment instead. I am no manager, and my right hon. Friends are not managers. We do not pretend to be. We are carrying on with the same management as was installed and supported by the previous Government. We are giving that management the same cash limits for the current year as were proposed by the last Government. We are carrying on with a process of consolidation and closure and of management prerogative to decide, as was carried out by the last Government. It ill befits the right hon. Member for Deptford to pretend that the policies that he is attacking under this Government are not identical to those followed by his Government.

Photo of Mr Robert Ellis Mr Robert Ellis , Wrexham

Does the right hon. Gentleman agree that the alternatives facing the Government are not either to manage or to allow someone else to manage the industry but to allow the BSC to manage the industry and then themselves to consider the social consequences of that management?

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

The hon. Gentleman is absolutely right. I shall come to that part of the Government's responsibility in a few moments. First, I want to answer another point made by the right hon. Member for Deptford. He maintains that the difference between the present Government and the Labour Government is that this Government are behaving like suburban bank managers—he is being a bit superior and condescending towards those people—by imposing a date by which the BSC must reach profitability.

Even that is wrong, because this Government are doing no more than fulfilling what we thought was a commitment of the last Government.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

No doubt the commitment might have been departed from, but this is what my predecessor, the right hon. Member for Chesterfield (Mr. Varley), said on 22 May 1978: The BSC must get its finances straight as quickly as is practicable. My hon. Friend will know that in the last financial year BSC, in common with many comparable steel companies overseas, lost money. It lost £440 million. Part of the Government's policy is that the financial objectives of the BSC should be to break even by the financial year 1979–80."—[Official Report, 22 May 1978; Vol. 950, c. 1105.] We are now in the financial year 1979–80, and all that we are doing is asking the BSC to break even one year later—by the financial year 1980–81.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Does the right hon. Gentleman accept that that is not an instruction and that implied in the decision that he took earlier this year to impose these constraints on the BSC was an instruction that will lead to a great loss of jobs nationally?

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

I have respect for my predecessor. I presume that he meant what he said. I know that the chairman of the BSC planned and intended—and plans and intends, in the present tense as well as the past—to break even by the end of March 1980. That was the declared intention of the BSC board, encouraged and supported by the previous Government. We are adhering to that programme.

Of course we accept, as the hon. Member for Wrexham (Mr. Ellis) rightly pre-supposes, that when the management has made a decision it is for the Government to take account of the social consequences and to take what action they think fit in the light of them.

I have now to make a statement on the remedial measures that the Government propose in connection with the announcement by the BSC last Thursday of its decision to close iron and steel making at Corby.

In order to attract new employment for those affected by the steel closure, I intend, subject to the necessary approval of the European Commission—[HON. MEMBERS: "Shame."] Once again, we are carrying out the same policy as the previous Government, on which we expect an answer from the Commission within a matter of weeks—to make the Corby employment office area a development area. Firms there would then be eligible for the full range of regional incentives, including regional development grants on buildings, works, plant and machinery and regional selective financial assistance under section 7 of the Industry Act 1972. As a development area, Corby would be eligible for assistance from the European regional development fund towards infrastructure and industrial projects and, as a steel closure area, from proposed measures under the non-quota section of the fund and from the European Coal and Steel Community.

The Corby development corporation has a substantial advance factory programme in hand and is also making efforts to attract private development. The Secretary of State for the Environment—the Minister of State is on the Front Bench—is making funds available for infrastructure and consolidation for an additional 70 acres at Earlstrees industrial estate. The corporation is investigating the suitability of another 200–250 acres of land at Weldon, in the Corby employment office area.

It is proposed that the Commission for the New Towns will take over from the development corporation next year, when it would inherit its industrial assets and be given the resources necessary to continue site development work. The commission will be asked to devote priority to Corby within its responsibilities for other new towns. The commission is already participating in arrangements with the corporation and the local authorities to co-ordinate industrial development and promotion in Corby.

The Government have also announced recently that they are going ahead with the A1-M1 link along the route that can be completed most quickly. This means that firms in Corby will then have ready access to a high-quality trunk road connecting them to the industrial Midlands and the expanding East Coast ports.

All these measures, taken together with Corby's favourable location in the East Midlands should mean that the town will prove more attractive to private investors, and this will thus improve the employment prospects of those affected by the closure.

Photo of Mr Peter Fry Mr Peter Fry , Wellingborough

Will my right hon. Friend note that there will be much relief and satisfaction in Corby and Northamptonshire at the fact that the Government have made this announcement? It is the first time that concrete proposals have been brought forward by any Government to assist Corby. But will he point out to the other competing authorities nearby—Peterborough, Northampton, Daventry and other expanding towns—that there is a regional as well as a national obligation towards Corby? Will he ensure that his Department will watch closely applications for firms to move to other parts of Northamptonshire, and will efforts be made to aatract them to Corby, where the jobs are so badly needed?

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

I think that Corby has attractions, even without development area status, and that towns in the neighbourhood may themselves feel anxious about their capacity to attract investment with Corby now having been given, or about to be given, development area status—particularly since skilled labour may be released by the closure, and skilled labour is in scarce supply in many parts of the country.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

Is the right hon. Gentleman aware that for him to make a statement about improving infrastructure, giving incentives and using Government intervention, supposedly to help the people of Corby, is the height of hypocrisy when one considers that only three months ago he told the House and the nation that what this country needed was the dismantling of the regional aids and of Government intervention? Why should the people of Corby listen to him now?

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

The hon. Gentleman does me the compliment of attacking me almost as fiercely as he attacks his own side.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

And it paid dividends with that lot as well.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

The hon. Gentleman assumes that we are able to move straight away from the oversubsidised, overtaxed and overspent economy that has existed for some time. He seems to believe that we can move straight from an excessive level of Government intervention to no Government intervention. I never maintained that. I hold out the prospect of much less Government intervention, which will come by a transitional route.

The Government's regional policy, announced in our manifesto and carried through by me, is to reduce regional incentives by one-third. We do not intend to abolish them; we intend to take them away from areas where economic conditions do not justify them. We wish to concentrate them precisely on those areas where, if they have a value, they can be effective. That gives us the greatest scope and authority to use those incentives—for what they are worth—in an area such as Corby, where people will be released from their existing jobs.

Photo of Mr William Homewood Mr William Homewood , Kettering

What is the time scale for the provision of new jobs? The British Steel Corporation intends to close the Corby iron and steelworks in March next year and to pay off the money until November. There is no factory ready for occupation. It is estimated that it will be three and a half years before the first new jobs materialise. Does the Secretary of State really believe that the population of Corby, with 6,000 men out of work, will sit around waiting for him to bring in the jobs?

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Indeed, I do not. With other possibilities within reach, many people released from jobs in Corby will seek work elsewhere in the sub-region. Surely it is right to assume that. Firms and investors will find Corby an attractive place in which to invest. Places more remote from London may fear the competition that will come from Corby because of the labour force availability and because of its inherent attractions, quite apart from the incentives that will be provided.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

My right hon. Friend mentioned the M1-A1 link. Many people look upon Corby as being almost commercially inaccessible. How long will it be before this link road is in operation?

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

I cannot give my hon. Friend information on that today but I shall write to him.

The right hon. Member for Deptford accused me and the Government of compartmentalising our views on the economy. Could it not be that it is he who is doing that? He assumes that the Government can, if they wish, and without any ill consequences, continue a subsidy at a given level, or even expand it. The right hon. Gentleman surely knows that if the subsidy to BSC is not reduced the extra money has to come from elsewhere in the economy, thus destroying other jobs and prospects in industries in other parts of the country.

Continuing a subsidy at the present level is not without consequences. It is not without consequence to carry the costs of all the new steel investment, and Corby as well, on the backs of the taxpayers. The benefit to the country will come only when the steel industry subsidy can be reduced and when the industry can pay its own way. The Government propose that next year the steel industry will be helped by the taxpayer with capital investment and related costs. We rely upon the board of BSC to carry out its own proposals, approved by the last Government, to operate at a profit during the financial year 1980–81.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

Has the right hon. Gentleman got his arithmetic right? Has he worked out what it will cost the State in loss of tax revenue from the workers who, he says, will be released from employment? What will be the cost of paying those workers unemployment benefit? What will be the loss of rates to the local authorities? When the Minister has worked that out, he will find that he has not saved very much money at all. Would it not be far better to follow the Continental example? At Limburg, where the authorities proposed to shut down coal mines and steelworks, they waited until alternative jobs were available. Under these proposals the right hon. Gentleman will make no savings at all but merely cause human misery.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

The hon. Gentleman assumes that everyone who loses his job stays unemployed for ever. That is not the case. The average duration of unemployment in this country—though my figures may not be exact—is from 20 to 22 weeks. As the hon. Member for Kettering (Mr. Homewood) acknowledges, many people will find jobs within the travel-to-work area. Good luck to them.

Photo of Mr John Farr Mr John Farr , Harborough

It is obvious that my right hon. Friend is being sincere but also that he is not unaware of the situation at Corby in relation to the M1-A1. He said that he did not know how long it would take to build and suggested that the road would be ready fairly soon in order to help Corby. Is he aware that it will not be built before seven years have elapsed and that the Corby steelworks is due to close within seven months? It is really not fair to the House to suggest that the M1-A1 link can be any help before Corby is dead.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Does my hon. Friend not realise that the question of improved transport facilities for Corby will be another ingredient in the investment decision-making of those considering Corby? I make no further comment.

Complaints have been made by the steel unions about the safety of some of the coking coal provided by the National Coal Board. There is an awkward tussle between two great nationalised industries, with the taxpayer looking nervously at the consequences since they may well fall on his plate. I cannot give the House a certain answer about where the right decision lies. Discussions between the two nationalised industries continue, and it is correct to identify this issue as one between them.

I deal now with the underlying thesis of the speech by the right hon. Member for Deptford. He spoke as if it were possible for the Government, if only they have enough good will, to give a guarantee against unemployment to the people of this country; to guarantee a rising standard of living; to avoid closures and to avoid damage to the economic prospects in a particular town. The right hon. Gentleman spoke as though the conditions that prevailed at the time of Jarrow were still with us.

Surely he knows that his party presided over an enormous rise in unemployment. His party did not want a rise in unemployment. Did it lack heart because it presided over rising unemployment? Of course it did not. No one on the Government Benches would argue that Labour Members were lacking in sympathy because they presided over a dog in unemployment.

Employment cannot be guaranteed by the Government. Probably there was never a time when employment, let alone full employment, could be guaranteed by the Government. Surely we have learned from the experience of recent years that employment can be secured only by being competitive in the trading community and by good management co-operating with co-operative work forces to provide goods that consumers at home and abroad want to buy. Only on that basis, within a framework of laws, institutions and safety nets provided by the Government, can we hope to get back to anywhere near full employment. If the right hon. Gentleman pretends either to the House or to the country that it is open to the Government, simply because they care enough, to secure anything like full employment, he misleads himself and the people.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I asked the Secretary of State a question yesterday and again today. It is relevant to his argument. I asked him about the 20 per cent. reduction, in 1983, in vital parts of industry. Is that figure correct?

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

I do not know. I have seen the same reports as the right hon. Gentleman. I would not be a bit surprised if many jobs were in danger as a result of the indifference to unit labour costs by many work forces and the combination of inflation and lack of productivity and competitiveness. If work forces insist, through their unions, on being paid far more each year than the extra production that they create, inevitably there will be fewer jobs. Surely the right hon. Member for Deptford does not seek to make a political point about that. All hon. Members, whichever parties they represent, should be united in the view that it is madness, amounting to self-injury, to destroy jobs by wilful indifference to competitiveness.

I hope that the right hon. Gentleman will accept that in answer to his general question, since it is highly appropriate to the steel industry. Upon the competitiveness of the steel industry and the co-operation between management and work forces depend the security and standards of living associated with this industry

Photo of Mr Donald Coleman Mr Donald Coleman , Neath 5:53 pm, 7th November 1979

I declare an interest, in that I am a member of the Iron and Steel Trades Confederation—the principal union in the steel industry. I do not think that dancing will take place in the streets of Corby tonight as a result of the Secretary of State's announcement. However, I am sure that the people of Corby will ponder on what is to happen to them while they are waiting for the promised great things to happen. The calamity is about to descend upon the people of Corby—not in seven years' time, but now.

The debate takes place at a grave moment in the history of the British steel industry. The events of the last few days in Corby and London begin a sequence which, unhappily, is likely to continue at the meeting on Friday on the future of Shotton. These events have brought us to the stage where the ideas of the right hon. Member for Bournemouth, West (Sir J. Eden) and the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who suggest that bulk steelmaking in the United Kingdom should be abandoned, are a real possibility.

My purpose is to try to create an understanding of these events. The responsibility for the present crisis rests upon a truculent management in Grosvenor Place and the exponents of masterly inactivity in the Department of Industry who manage to do a great deal by doing nothing at all.

Let us consider first the British Steel Corporation management. About six weeks ago, at the first meeting with the TUC steel committee to discuss the future of Corby, the BSC management issued an ultimatum. It said that the union must produce alternatives for continuing steelmaking at Corby by 1 November. Imagine that! A management which has totally misread the market, and consequently has over-capitalised, proposes to take the axe to a thriving integrated business and gives the union six weeks in which to save it.

What did the steel unions do? In six weeks they asked more than 80 questions of the BSC, probing the figures. With that information, they produced an argu- ment that undermined the Corporation's case for ending steelmaking at Corby. The unions demonstrated that viable works were to be shut in favour of a leap in the dark. They showed that the best future for the commercial welded tubes business rested in an integrated Corby operation. The unions expressed the fear, which is clearly confirmed by the evidence, that shutting Corby was another step towards not a viable British Steel Corporation but a de-industrialised Britain evermore dependent upon imported manufactured goods.

The unions' arguments were forcefully expressed in documents and in words. At a meeting on 1 November the Corporation's negotiators took no notice of the unions' case. The expression "do not confuse us with the facts" sums up the Corporation's approach. The unions offered to participate in a joint working party to explore ways of lowering the costs of Corby, but the offer was spurned. In an intemperate mood, Mr. Scholey issued the closure notice to take effect from January, thus trampling on his own commitment to give a year's notice of a major closure. It ill-becomes "Black Bob", as he is known in the steel industry, to threaten the leaders of the trade unions because of the action that they are taking to combat the closure. Trade union leaders have always shown, and will continue to show, a responsibility in their dealings with this great industry.

The other head of the hydra is the Secretary of State for Industry. When the right hon. Gentleman arrived in his ministerial seat, he cast an unforgiving Gladstonian eye on the BSC. What did he see? He saw heavy productive industry. What did he think? He thought that that was bad. Furthermore, it was a nationalised industry, and that was even worse. However, there was some hope for it, because the BSC had delivered itself into his hands. It had imposed upon itself a commitment to reach break-even point on the current account by the end of the financial year. Anyone who knows anything about steel knows that that could not have been achieved.

With glee the right hon. Gentleman and his hon. Friends took BSC at its word. But the right hon. Gentleman did more than that. He imposed a rigorous regime of cash limits. How that is consistent with the Government's philosophy of non-interference has not been revealed. But the effect is clear. BSC feels emboldened to broach again the closure of the Shotton steelmaking plant, despite a previous promise by the chairman that the works were secure until 1982.

Further, in the discussions about Corby BSC stated that there was no money for modernising the steelworks. Both these plants could be viable, but it would appear that they are to close in pursuit of a mad objective.

The responsibility of the Government and the British Steel Corporation is to secure the maintenance of an adequate steelmaking capacity, fitting it to our consuming industries' needs. The fear of the Iron and Steel Trades Confederation is that the Government and BSC may abandon that responsibility. In the event of a surge in demand, there is a serious danger that BSC will not be able to cope, following the present closures. Someone will meet that demand and further ground will be lost to BSC.

Worse still, there seems to be a paralysis creeping over BSC's view of the market. The Corporation seems to be content with its market share at home and abroad, even though it provides little more than half of the steel sold in the United Kingdom. It reacts to a weakening of demand but does not appear to be energetically seeking a larger share of that demand. Recently a BSC manager told the Financ Times:We are chasing the market downwards. We have a management which appears to be unable to shake off its malaise. We have a Government who are steering towards a fall in output. The combination of those factors means for BSC, at best, a steady share of the falling home market and no progress on exports.

A third factor compounds the first two. It is that BSC will not retain, and has not retained, the share of the market that was held by works that have been closed. This means that BSC will not be able to load the large major works to optimum levels. It also means that its share of the market will fall further and that a case will be made for further closures. This situation cannot continue. We must retain a capacity to manufacture a full and extensive range of steel products. We must have flexible works which can adjust quickly and efficiently to demand fluctuations.

The ISTC executive fears that its efforts may all have been in vain. We want Teesside, Ravenscraig, Llanwern, Port Talbot and Scunthorpe to succeed, but that must not be at the cost of medium-size thriving operations elsewhere. There is room for both. The management of BSC refuses to recognise that, and the Government endorse its blindness. Reluctantly the unions have concluded that the responsibility abandoned by the Government and management has passed to them.

Right hon. and hon. Members will have read about proposals for industrial action tabled by the ISTC to the TUC steel committee. I trust that everyone has grasped the significance of this step. It is being taken by men who have always been renowned for the responsibility and integrity of their actions. It is intended to bring the industry and the Government to their senses. It is intended to focus public attention on what has been happening to our steel industry.

The steel unions insist that there should be a full and searching inquiry into the administration of BSC. Some attempt must be made, without preconceptions, to identify what has gone wrong. We can no longer tolerate communities of steel workers paying for the mistaken policies of management. The evidence is in the documentation that has been provided by the unions. There are questions that demand answers, and I shall put some of those questions to the House.

Is BSC's exclusive big plant strategy right? Is BSC too dependent upon imported ores from unstable sources for iron making? Has BSC the marketing ability to sell what it manufactures? What are the implications of BSC's pricing policy for its market shares? No further major steps should be taken within BSC until these and other issues have been thrashed out. The unions are willing to play their part, but there must be a commitment to serious discussions.

I conclude by bringing the following three points to the attention of the House. First, everyone concerned, especially the Government, should study the union's documents. Secondly, an inquiry should be established into the running and the record of BSC. Thirdly, I request the Government to announce now that they will take the pressure off the BSC to break even on the revenue account by March and say that they are prepared to fund sound investment projects at Corby and Shotton.

Some right hon. and hon. Members have experience and knowledge of what happened in the Rhondda and other valleys of South Wales during the days of depression. We know what happened in those communities. We know of the misery and hardship that was brought to them when industries upon which they depended closed and unemployment stalked those valleys. We do not want to see that happening in Shotton or Corby. That is why we raise these subjects with the Government and BSC today.

Several Hon. Members:

rose

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. Before I call the next speaker, I should tell the House that I fully appreciate that this debate is of great importance to many hon. Members, and that I have a long list of speakers. If hon. Members make speeches lasting half an hour, I shall be able to call very few.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford 6:08 pm, 7th November 1979

I wish to make some observations on this subject because my constituency adjoins Corby and some of my constituents work there, and because in my distant past I had some experience of steelmaking and other industries.

I was pleased that my right hon. Friend the Secretary of State announced that Corby would be given development area status. That in itself is a case for moving the deadline forward from 1981 and taking the pressure off. There is no prospect of development area status bringing any relief to Corby in months or even within a year. It will take a good deal longer than that.

My right hon. and hon. Friends may not appreciate the background. For many years Corby has been dominated by one industry. I mean "dominated", because the British Steel Corporation has not encouraged new industry to come to Corby. In many cases it has discouraged it, because new industry would have taken away from the corporation some of the skill that it required in the steelworks and plants.

The right hon. Member for Deptford (Mr. Silkin) said something about Jarrow. At the CBI conference yesterday, Sir John Methven said that we should get away from the complex about Jarrow. I was born and brought up in Jarrow, and I was not simply a spectator of what happened. My father was out of work for two and a half years in one stretch and was out of work after that on a number of occasions.

The right hon. Gentleman was right to say that the problem started because of the closure of a steelworks, followed by the closure of a shipyard. As we approached the war, and as the war began, the country needed the extra steel production, so the Government started up something which was not as big as the original plant but which was necessary to provide the tools of war. They also expanded the shipyard in the neighbouring town of Hebburn, which is really part of Jarrow, being only half a mile away.

I should be untrue to the whole of my background in politics if I did not warn the Government that, although some of us on the Conservative Benches realise that they have the job of trying to make British Steel a going concern and to balance its books reasonably, we believe that the question is "How quickly?" If a train has been running on the wrong lines for a while, it takes a little time to get it back on the right lines. Therefore, my hon. Friend the Minister should consult British Steel to see whether there is a better way.

My right hon. and hon. Friends cannot throw up their hands and say "This is a nationalised industry." They have an almost greater responsibility than if it were a private industry. They cannot say that the Government have nothing to do with it. They know very well that we cannot put down questions on some matters connected with nationalised industries. The Department has a day-to-day involvement in what is going on.

I want to try to be practical. There are three possibilities, or variants on them, that my hon. Friend the Minister might consider. First, there must of course be a cutback in production, but it could be carried out for part of the year. Between the wars the steel industry frequently did not operate for a month or two during the year. Although the people of Cor by would like to be in work all the time, my guess is that they would prefer to be in work for nine months of the year and out of work for three months than to be out of work for 12 months in the year. I ask my hon. Friend to consider that possibility and to seek agreement with the unions on it.

It will not help for the unions to indulge in militant strikes. Sensible discussions are required. The unions should base their strategy on achieving a compromise rather than on causing a clash.

The second possibility is to phase out production over four years instead of by 1981, with a reduction in output in each year until production ceases at the end of the fourth year, if it must cease.

The third possibility is a review of total steelmaking as between what will be produced at Redcar and what is likely to be produced at Corby while the recession lasts. I do not assume that the recession will last for ever, but I would rather there was a phasing out of Corby on the basis of lower production at Redcar than that production should be maximised at Redcar, resulting in a dead town overnight, with all the resultant social problems. I remind my right hon. Friend that those problems will have to be dealt with not by BSC but by him.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

The hon. Gentleman is developing a very thoughtful approach to a serious problem. As he has referred to the unions, will he be more emphatic by suggesting that it is important that their point of view about policy and production be taken more into account by BSC? In the past, BSC has made decisions before carrying out consultations.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

I am entirely in favour of the unions having discussions with the management over the whole matter, because there must be agreement. It is of no help if the unions are completely obstructive and give management the impression that they are not realistic. I hope that in any discussions they will be realistic.

The Government have increased their defence budget. We need strong forces and the hardware to back them. Last week we passed a Bill to increase by about £200 million the amount of money made available to British Shipbuilders. British Shipbuilders uses steel. In time of war, or the threat of war, we could not be sure of securing ships built abroad or built with foreign steel. We are an island, and we might not be able to get them or the steel here. We should need the maximum amount of hardware from our steel plants to support our forces.

Therefore, in deciding upon our steel production units it is sensible to take into account two matters. The first is the possibility that trade will improve and that we shall need rather more production than we are advised now. The second is that we should have a reservoir so that we may increase production if, unhappily, we find ourselves in a war situation such as I have described.

There is not a steel-producing country in the world that is not subsidising its steel production—not one outside Europe and not one inside Europe. I understand that over the past five years British Steel has had about £250 million in losses met by the Government. It is unrealistic to expect to turn that amount into a profit by 1981. Because of the social consequences, my right hon. and hon. Friends are not justified in sticking to that target.

We all want the losses of British Steel to be minimised. I want realism to go with that. I should like it recognised that we are facing foreign competition which is unlikely to be under the same pressures as British Steel. British Steel was put under some pressure by the Labour Government and is being put under a little more pressure by the Secretary of State.

Much has been said about U-turns, but I am not asking for one. U-turns on motorways are dangerous. Governments from time to time must make S-bends, and I would like an S-bend on the Government's steel policy so that there is some give that would facilitate an agreement rather than "aggro" and indifference, with their consequences.

Photo of Mr David Watkins Mr David Watkins , Consett 6:21 pm, 7th November 1979

The hon. Member for Rutland and Stamford (Mr. Lewis) has made a thoughtful contribution to the debate and has rightly expressed the gravest misgivings about the Government's policies. He pointed out, quite rightly, that his constituency adjoins Corby. I assume that there are a number of people in his constituency who would be affected by the proposals for Corby. I believe that it was Dr. Johnson who said that nothing concentrates a man's mind so wonderfully as the knowledge that he is to be hanged in the morning. I hope that the hon. Gentleman will join us in the appropriate Lobby tonight and avoid that possibility.

The hon. Gentleman is right to criticise the Government's policy, because the sole criterion of that policy is that the steel industry must make profits quickly, regardless of the practicability of its doing so, regardless of the consequences for the industry, and regardless of the areas in which it is located.

The Secretary of State made play, as he was entitled to, of increases in unemployment during the period of the previous Labour Government. However, that Government, faced with a world steel crisis, tried to do something to alleviate the effect as much as possible. The opposite is now the case, as the Government are planning deliberately to increase unemployment. The Chief Secretary to the Treasury made that point plainly in the public expenditure statement that was laid before the House on Thursday 1 November. It is clear that the steel industry has been particularly selected as an area for massive redundancies, because there can be no other consequence from that policy. Already the consequences of the constraints placed upon the steel industry can be seen.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Why does the hon. Gentleman think that his Government and the present Government used so much taxpayers' money for new investment if it was not to get higher output per man? The consequence of that must be what his right hon. Friend the Member for Deptford (Mr. Silkin) calls "remodelling".

Photo of Mr David Watkins Mr David Watkins , Consett

I shall come to that later, but that is not the point that I have just made. I was trying to say that whereas the Labour Government recognised the need for modernisation and attempted to do something to alleviate the consequences of unemployment, this Government, by contrast, are deliberately planning to increase unemployment. That was demonstrated by the statement on public expenditure last Thursday.

The only way that the BSC can exist in the financial straitjacket imposed by the Government is by paying off more and more people. I warn the Government that anger and resentment are building up within the steel communities that could have the most explosive effects if they persist in their policies.

I took a deputation to meet the chairman and other executives of the British Steel Corporation on 30 October. That deputation comprised members and officers of Derwentside district council and Durham county council. The purpose of that meeting was to express grave concern about Consett. Consett is another of those one-industry towns, totally dependent on steel. We were told that Consett is not safe until it is profitable and that BSC can guarantee absolutely nothing. We were also told that we must talk about profitability and not about numbers employed. That is the effect of the Government's straitjacket into which BSC is being forced. What a message to take back to a works that has recently suffered 400 redundancies due to the shutdown of its plate mill and 1,500 steel redundancies in the last 18 months. Everything now indicates another 700 to 1,000 redundancies ahead unless there is a change of policy.

Returning to the remarks of the Secretary of State during his intervention, I accept that the world steel market is crucial to the situation in Britain. Neither the home nor the international outlook is good, and all the signs are that demand will decrease still further during the next two years. Inescapably, there must be some contraction in output because of that. If for no other reason than the neglect of generations of steel masters before nationalisation, there must be modernisation. Both those factors—the contracting market and the need for modernisation—mean that jobs are threatened. This is no time to reduce Government support for the industry. On the contrary, there is every conceivable reason for increasing that support, especially in those areas where the social consequences will be most serious.

Photo of Mr Barry Porter Mr Barry Porter , Bebington and Ellesmere Port

If it is so obvious that Government support should be increased, would someone care to explain—if not the hon. Gentleman, perhaps someone else at a later stage—why the previous Government did not increase their support? Why did that Government pursue exactly the same policy? There is no significant difference now.

Photo of Mr David Watkins Mr David Watkins , Consett

If the hon. Gentleman had listened to the debate, he would not have had to ask for explanations about issues that have already been explained on numerous occasions, including since he joined the House. Is the hon. Gentleman anxious to intervene again?

Photo of Mr Barry Porter Mr Barry Porter , Bebington and Ellesmere Port

No I shall return to that when I speak.

Photo of Mr David Watkins Mr David Watkins , Consett

I shall turn to the problem of introducing new industries into steel communities and speak first about BSC Industry Ltd.—the wholly owned subsidiary of the British Steel Corporation. The purpose of that company is to attract alternative employment into those areas most heavily hit by the contraction of the steel market. BSC Industry Ltd. was introduced into Consett by the Labour Government as part of their attempt to alleviate the situation. It is clear that the resources of BSC Industry Ltd. are insufficient to attract new industries on the scale needed. Without substantial Government funding to provide sites, buildings and infrastructure, BSC Industry Ltd. cannot do the job with the resources at its disposal. The company's budget for this financial year is £10 million for the whole of the country, and next year's budget is in doubt. If the Government's policies are any indication, that budget is likely to be cut rather than increased.

The Secretary of State announced with a muted flourish that Corby was to be made a development area, as if he had suddenly discovered a solution to the dangers facing that town. Consett has been a special development area for a number of years. Even the right hon. Gentleman has not dared to cancel that in his recent cutbacks. However, in that special development area, even with maximum possible assistance being made available, only about one new job has been created for every four lost. This is a measure of what the Secretary of State has announced for Corby. It is just a drop in the ocean. Far more is needed.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

My hon. Friend has raised an important matter. We have BSC Industry Ltd. in Hartlepool, and for two years we have had steel closures. The present level of male unemployment is 16 per cent., and the assistance has not produced the promised land. A factory was opened at a cost of £3·5 million two and a half years ago, but it closed. It had a second go recently, but that, too, fizzled out. This is what happens to promises of development after closures in my area. In a place like Corby, which is entirely dependent upon one industry, there will be much graver problems.

Photo of Mr David Watkins Mr David Watkins , Consett

My hon. Friend has emphasised my case. The total effect of the Government's policy, irrespective of the home and international market, will be to produce an ever-smaller steel industry with no prospects of resilience and with no alternatives in the steel areas.

In conclusion, I point out that sooner or later there will be an upturn in demand. I accept, realistically, that that upturn is likely to be later rather than sooner, but when it comes, as a consequence of the straitjacket into which it has been forced, the British steel industry will be so crippled that it will not be able to meet the required demand. Steel towns will be places of dereliction and the country will be dependent upon imports to a dangerous degree and at the mercy of steelmakers abroad, over whom we have no influence whatsoever.

Photo of Mr Patrick McNair-Wilson Mr Patrick McNair-Wilson , New Forest 6:33 pm, 7th November 1979

It is a pleasure to speak after the hon. Member for Consett (Mr. Watkins). He and I have spoken in many steel debates over the years. I should declare an interest, in that I am associated with a company making melting electrodes. Fortunately, this area of steel production—Sheffield Arcs—makes a jolly good profit. Therefore, it is not all gloom.

What worries me about the speeches that I have heard so far in this debate and about the Opposition motion is that hon. Members seem to be for ever looking for scapegoats in the steel industry. When I was in the Iron and Steel Federation in the early 1960s the great scapegoat was the private steelmaker. Yet, in 1964—my last year in the federation—the private steelmakers produced more bulk steel than has ever been produced by the nationalised steel business, despite the fact that we now have, as the Labour Party would say, "the commanding heights of the economy" in our grasp. Unfortunately, the steel industry is not among the commanding heights. It is an extremely vulnerable section of the British industrial scene.

It is no use hon. Members coming here and trying to beat the Government, management and the private steelmakers until they recognise that if there is no demand for our products there is no point in producing them. Even today we are stockpiling steel that we cannot sell.

There are four major problems facing the steel industry. I hope, equally, that there are four solutions. The first major problem concerns the new technology that we all saw in the first converter at Linz in 1948. This has transformed steelmaking in this country. Labour Members were as keen as the Tories were in demanding that we should invest in the new technology and that we should build giant plants equal to those of the Japanese and others. Investment came forward and the plants were built, but the sad fact is that they are now operating at only 67–70 per cent. of their capacity.

Surely it must be right to use that investment to the full. Inevitably that means that the older, uneconomic plants must be phased out. I am not hardhearted. I realise the problems. The solution is to buy out the people in the old plants. There is no way round it. I hope that at the Friday meeting at Shotton, and at the other meetings that will take place, this will be seen as the most sensible solution. Ageing plants should not be kept going, because they will make the rest of the industry uneconomic as well. Generous compensation should be given to those who have given their lives to the industry. We must recognise that the steel industry has changed its shape and technology and that it will require a different pattern of activity in the future.

Obviously we must spend money to provide different types of employment. In towns such as Consett, which I visited frequently in the early 1960s, life revolves around one industry. It does not make sense to promise those who are in uneconomic plants that there is any future there. That would be a grave disservice both to the industry and to those employed at these plants.

The second problem is the energy crisis, which came in 1973–74 and led to the recession. This led to the change of plans by the British Steel Corporation management. It is only fair to remind hon. Members that in the famous statement by the chairman of the Corporation about Shotton in 1977 he made the situation clear in his penultimate paragraph when he said: In view of our commercial objectives and of our proposal for the development of Port Talbot on the above basis, we have decided to remove any proposal or date for closure of iron and steelmaking at Shotton. As we know, the development of Port Talbot to a capacity of 6 million tonnes never went ahead. As a result, the £800 million that was to be spent was not so spent. Once that commitment disappeared, the promise about Shotton fell to the ground, because the two were interrelated.

We are talking about a much smaller market for steel. The British motor car business is declining. Shipbuilding and heavy engineering are declining, as is the building of pressure vessels. Therefore, we have a smaller home market to operate. Regrettably, the quality of some of the products is not as good as it should be. I am not suggesting that individuals in the industry are not doing their best, but we must face the facts. We must cosset and look after the existing customers if we want to ensure that the recession does not destroy the industry altogether. I am sure that the BSC can look after its customers and find new ones on the basis of operating the most modern and efficient equipment within the business.

The third problem is the cheap steel that is coming from the Far East and elsewhere. These are problems affecting us at a number of levels in the Western world, and they are not likely to go away.

The right hon. Member for Deptford (Mr. Silkin) could have been more generous in his remarks about the Davignon intervention, and might well have pointed out that as a result of Davignon and our membership of the EEC we have been able to restrict and attain quotas of imported steel from Korea, Japan and elsewhere.

Photo of Hon. John Silkin Hon. John Silkin , Lewisham, Deptford

I was not particularly generous, for the simple reason that I did not see the advantage to our country, under the Davignon plan, of preventing steel coming from Third world countries and then being deluged by European steel.

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

I am hardly surprised at the right hon. Gentleman's attitude to competition within the European Community, but I do not believe that he, in his heart of hearts, feels that living in protected markets, producing products that cannot compete with others, is the best way forward for Britain or her industry. We must make certain that our steel is every bit as good as anything that comes in from Germany or elsewhere, and I am certain that it can be.

The fourth problem that we face is that of rising costs. I will not go over the coking coal argument; we are all familiar with it from what we have seen in the press and heard from our friends in the industry. Price differentials are very steep. Beyond that, there is the worry about the long-term availability of the product. The industry must plan ahead. While I wish that the National Coal Board was able to provide a comparable product at the right price, I would be even happier if I felt that it could also provide it on a long-term basis. Whether we like it or not, the bulk of our good coking coal comes from Durham and South Wales and, unfortunately, it will be necessary to go deeper and deeper to get at it.

The NCB is trying to provide plans that will be available to the British Steel Corporation. I hope that a deal can be done. But we must recognise that if we are to operate big new investments for large blast furnaces, which are now becoming part of our steel industry, we need the highest possible quality of coking coal.

In the old days, with older furnaces, the steel industry could operate on a lower quality of coking coal. Now we need the medium-volatile coking coal, which I think is grade 301, to enable these furnaces to operate efficiently. We would be doing a disservice to those who work in the industry if we did not make sure that they got this type of coal.

Finally, having looked at the problems and the solutions—no doubt other hon. Members will find different ones—we must point out that the picture is not entirely black. Port Talbot went from loss to profit, the Sheffield electric arc business is doing well, and other areas of the steel industry are now showing profit. It has been said that the Corporation has no hope of meeting a break-even point. I do not think that it is a bad thing to be set a target in life. It is no bad thing to have one's sights set high. I am sure that the chairman of the Corporation and all those who work at every level in the steel industry will do their best to meet that target.

The fact is that we are to go on making steel in this country—bulk steel at that. We have a wonderful position in special steels, as many hon. Members know. The industry deserves our support and encouragement and we should not constantly rake over the ashes of an industrial past that many of us must recognise fills us all with shame.

What we must also recognise—my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) referred to this—is that we need an industry which can be sufficiently flexible to take up the challenge once the recession is over. Our steel industry can do that. It is running at only 67 per cent. capacity at present. We can take up the strain when it comes, but let us make certain that we have an industry that is efficient and that uses efficiently the massive investment that was given to it under the 1972 Act of a Conservative Government.

Photo of Mr William Homewood Mr William Homewood , Kettering 6:44 pm, 7th November 1979

I was pleased to hear the speech of the hon. Member for Rutland and Stamford (Mr. Lewis). His constituency is close to Corby and he is unable to divorce himself from what was indicated in the excellent speeches made on the steel industry, though they were not socially realistic in the context of Corby.

Since I came to this House, practically every word I have spoken has related to Corby. I do not apologise for my repetitiveness. It should not be boring, because almost every day the statistics given by local social services office are more appalling than those of the day before.

Last week, the local deputy director of social services was quoted in the local newspaper, under the heading Corby on the brink of disaster", as having said: We are prepared for disaster if the steel works close, for there will be a radical change in family life. We feel what is happening at the moment are symptoms of a depressed town and a lot of it comes from fears of unemployment that will bring pressures to families. He then listed Corby's current black problems. There are nearly 300 children in council care—25 per cent. of the county total. A quarter of the overdose victims admitted to Kettering general hospital are from Corby, which accounts for only one-fifth of that hospital's catchment area. On Monday, I had that figure updated. In October, 28 overdose cases were admitted from Corby, of which 20 involved people below the age of 25.

Corby has a higher incidence of mental breakdown than anywhere else in the county. The illegitimate birth rate of Corby is more than double that of neighbouring towns such as Kettering. Infant mortality is 50 per cent. higher than for the rest of the county and England and Wales. Twelve cases of child battering were reported during May and June of this year compared with two cases during the same period last year.

There was an increase of 400 per cent. over the last five years in the number of elderly people needing help. More people need psychiatric help than ever before. Over 100 Corby people were admitted to the mental hospitals in Northampton during the first nine months of this year. This is the effect of living in a town which has 7 per cent. unemployment and a massive cloud of uncertainty hanging over it owing to the threat of the closure of the iron and steelworks. Last Thursday that threat moved much closer. I listened to the Secretary of State and other hon. Members holding out the hope of getting Corby fairly quickly out of the mess that will come from the closure of the iron and steelworks. Let us look at the facts.

About 80 inquiries have been received by the various organisations from interested enterprises which have anticipated assisted area status in Corby. I estimate that it will take two and a half to three years for the infrastructure and the factories to be built. Of the 80 factories in the town, 64 will probably become enterprises.

I understand from the director of BSC Industry Ltd. that the average level of employment in each of the factories is 40 in those areas where the Corporation has assisted. Therefore, in four to five years there will be about 2,500 new jobs. Experience indicates that 25 per cent. of those jobs will be for females, which means that 1,800 new male jobs will be created in Corby, although the male unemployment level arising directly and indirectly from the closure of the iron and steelworks will be about 6,000.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

In view of the fact that my right hon. Friend has today given notice that Corby will now have development area status, does the hon. Gentleman believe that that will assist the problem and reduce the discrepancy between jobs that are lost and jobs that will be made available in the future?

Photo of Mr William Homewood Mr William Homewood , Kettering

I do not think so at all. Quite frankly, people who are interested in coming to the Midlands already understood that the Secretary of State would today announce assisted area status. In fact, when we met him before the recess the right hon. Gentleman told us that he would grant assisted area status when the closure was accepted. The situation may get better later on, but at the present time we are already in receipt of the maximum number of inquiries that are likely to accrue.

I am not ashamed to repeat what I have said before—that this House should have a special interest in Corby. I believe that Corby is a special case in regard to this House. In 1933, Stewarts and Lloyds created the iron and steel industry and the tube works in Corby on the basis of a £7 million low-interest loan. What would that be worth today? Therefore, the industry was the responsibility of this House. In 1951, this House made Corby a new town and provided all the facilities to attract the labour for the iron and steel industry. I recall that in the 1950s Stewards and Lloyds sent buses all over the country, along with recruitment officers, in order to attract labour to Corby. I can remember the management complaining that, although 200 people came, after three months only 20 took up permanent residence. Today, of course, it is the 180 who were lucky, because the 20 who remained will not be very lucky.

I insist that the provision of the money for the industry and the creation of new town status make Corby a responsibility of this House. In view of the Government's philosophy and policy, let us suppose that they still say "All right, that was our responsibility. We did it. But the suffering that will arise from the closure of the iron and steelworks is necessary, because only on that basis can we produce a situation within the steel industry and the country where on the basis of market forces and our monetarist policy we increase the standard of living of all the people." That circumstance is still not present in Corby. There is no gain to the public purse in closing the iron and steelworks.

Some people have argued that closure would cost more than keeping the works open. I take it that such people were prejudiced and adopted a partisan attitude. Yet within BSC's calculations only £40 million at best would be saved. In no way can that offset the cost of redundancy payments, social security payments and the losses to the district council in rate revenue, as well as all the other factors that will arise should the iron and steelworks close. Therefore, such conditions do not satisfy the Government's case, nor do they satisfy the social case advanced by Labour Members.

Photo of Sir Keith Joseph Sir Keith Joseph , Leeds North East

Is not the hon. Gentleman assuming in that calculation that the people released from the steelworks will remain permanently out of work and that no new establishments will be paying rates and employing them?

Photo of Mr William Homewood Mr William Homewood , Kettering

Can the right hon. Gentleman give me a guarantee that they will be employed? I believe that a lot of them will remain unemployed for a long time.

The right hon. Gentleman will have read the report of Coopers and Lybrand, which talks about an unemployment rate of 20 per cent. for two years should the whole undertaking be closed. Frankly, I believe that report to be optimistic. What the right hon. Gentleman does not understand is that 80 per cent. of the work force which will be thrown on to the labour market is unskilled in the context of anything other than the steel industry. Of course, the craftsmen will get jobs, but the vast majority of workers will not get jobs very quickly. Therefore, I believe that most of those people will be out of work for a long time.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I have seen that calculation as well. It was produced by some people from Cambridge university. Is it not the case that if the steelworks are closed at some stage—I believe that most hon. Members think that it is inevitable that they will be—the redundancy costs and loss of taxation will have to be met? Therefore, they virtually represent a capital cost of the closure and cannot be set against the revenue benefits of making steel more cheaply in other parts of the country. I am afraid that the calculation is an entirely bogus one. We know that there are severe problems—

Mr. Deputy Speaker (Mr. Bryant God-man Irvine):

Order. If the hon. Gentleman is intending to catch my eye at a later stage, he is not going about it the right way.

Photo of Mr William Homewood Mr William Homewood , Kettering

If the hon. Gentleman does, Mr. Deputy Speaker, he will not take long, because he has made his speech already.

I do not believe that the calculation is bogus. I do not accept either side of the argument about how much the closure will cost. Warwick university probably stretched it in one direction, and others have stretched it in the other direction. I take a basic view. Despite what the right hon. Gentleman said, I cannot see how the public sector borrowing requirement will benefit at all from Corby's closure. In fact, I think that it will be a net charge on the public purse rather than a net gain to it. The hon. Member for Northampton, North (Mr. Marlow) shakes his head, but if he goes into the figures I think that he will discover that what I have said is true.

The closure of the iron and steelworks does not satisfy the Government's criteria. If they think that it does, I suggest that they ask the BSC management to go over the figures again. It certainly does not satisfy the criteria of the Labour Opposition, because we regard the closure as an immoral and inhuman act. Whom does it satisfy? It simply satisfies the BSC management, which has indulged in a cover-up exercise. Frankly, the BSC management does not have the courage to admit—I do not know why, because if it did everyone would be sympathetic—that the 10-year strategy was a colossal blunder.

The management does not have the courage to admit that the closures cannot stop at Corby and Shotton. Hon. Members who are more far-sighted believe that we should look to the future, but even considering the present it will not be just Corby and Shotton. At least two other major plants will be involved which were created out of the "big is beautiful" philosophy. If BSC had the courage to say that, we should have more sympathy.

Mistakes get compounded when there is a cover-up, and that is what happened when Sir Charles Villiers gave an undertaking that BSC would break even in March 1980. BSC, the right hon. Gentleman and all hon. Members know that BSC has no chance of meeting that undertaking, and the two closures mooted will add to costs. The deficit will be larger than it need be.

My most serious contention is that, when it announced those closures, BSC knew that the trade union movement would be put in a situation where it had to respond to threats by direct action. The management deliberately provoked the confrontation to cover up the fact that the Corporation could not break even by 1980, and it wished to use the trade union movement as the scapegoat for that failure. There is no other reason for the desperate rush for closure at Shotton and Corby.

All that the trade unions proposed at Corby was the setting up of a working party. BSC gave the trade unions six weeks to come up with alternatives, and that was an impossible period. The trade unions came back and asked for six months and a working party to examine the position. The management simply sat in the room and refused to negotiate, although it went through the motions of sitting there for enough hours to give the impression of serious negotiations. The House should also remember that if BSC has its way Tory Members can build as many nuclear sites as they like but there will be no steel industry, which is especially important in the context of a security threat.

On the basis of the facts that I have stated—and they are facts—hon. Members should vote tonight in the Opposi- tion Lobby. The House should insist that there is an inquiry into the activities of BSC and the threat to Corby should be withdrawn while it takes place.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

This is not a Second Reading debate and there is no question of the 10-minute limit being imposed. However, there are at least 14 hon. Members who wish to catch the eye of the Chair, and the only way in which 14 speeches can be accommodated in two hours is by hon. Members exercising considerable restraint.

Photo of Mr Michael Brown Mr Michael Brown , Brigg and Scunthorpe 7:04 pm, 7th November 1979

I have so far spoken three times—for 10, eight and six minutes respectively. I shall try to speak for no longer that 10 minutes, although other hon. Members may be tempted to suggest that I speak for only four.

My hon. Friend the Member for New Forest (Mr. McNair-Wilson) made an important point about demand. There has been over-capacity in Europe and Japan. That goes back to 1973, at the time of the Middle East war. Demand has fallen—and demand is vitally important. Clearly, we can produce a commodity only as long as a demand for it exists. The world recession accounts for a major part of the decrease in demand, and I hope that that recession will come to an end in the not too distant future. It is right and proper that the British Steel Corporation should be in a position to take advantage of an upturn in the world market. However, we cannot blame all of BSC's problems on the world situation.

Hon. Members have mentioned two reasons for the decline in demand. First, there is the decline in demand for British products. We cannot isolate British Steel. British Leyland has also had difficulties. Other nationalised industries should play a part in assisting BSC. The British people will buy products made with British steel if they can obtain them. If British Leyland is unable to produce the goods because of industrial relations problems or other management problems, the British people will look elsewhere for their cars.

The right hon. Member for Deptford (Mr. Silkin) mentioned unfair competition from the Common Market and coking coal subsidies. That was discussed at some length two weeks ago in a debate on EEC documents, and I shall be brief. The House and the country are now fully aware that some action is necessary. I apologise to hon. Members who represent coal mining constituencies, but the fact is that the National Coal Board has a responsibility—and coal miners have a responsibility to their fellow workers in the steel industry—to consider how the Board can reduce the price of its coking coal. The quality of British coking coal leaves a lot to be desired, and one cannot blame the British Steel Corporation for seeking the cheapest source for its energy supply. I sincerely hope that negotiations between the BSC and the National Coal Board will resolve the situation.

In addition to an amendment that I tabled to an early-day motion, there was an amendment tabled by the hon. Member for Redcar (Mr. Tinn), which I support. There is a clear responsibility on other nationalised industries to recognise the problems of BSC, particularly on the National Coal Board and British Leyland.

Having said that, I believe that the major problem that we have to consider is how long the British taxpayer can continue to subsidise an industry that is not making profits. Like the hon. Member for Kettering (Mr. Homewood), I represent a one-industry town, and I know that many Labour hon. Members represent similar constituencies. We do the British Steel Corporation and steelworkers in our constituencies a disservice if we delude them into thinking that the BSC can exist in the long term without making profits. I can say with my hand on my heart that I have never deceived the steelworkers in my constituency. I have always said that until they turn the figures from red to black there will inevitably be a question mark over their future. I want to make sure that that question mark is removed.

The central theme of the debate revolves around the closures of Shotton and Corby. I shall devote one or two moments to the comments made by my hon. Friend the Member for Rutland and Stamford (Mr. Lewis), who made a novel suggestion. However, I urge some caution. The problem about taking the advice of my hon. Friend is that if we encourage the high-cost new plants to operate below their capacity we shall build up a tremendous problem for the steel industry in future. No steelworker will forgive us if we fail to take the urgent steps that are necessary.

I was amazed by the remarks of the right hon. Member for Deptford. It seems that he has forgotten all the injunctions uttered by his right hon. Friend the Member for Chesterfield (Mr. Varley) when he was Secretary of State for Industry. I refer briefly to the document produced by the British Steel Corporation: "The Road to Viability". It stated that the Labour Government will give full, sustained and public support to the BSC in their efforts, including the steps needed to achieve much needed improved productivity in the Corporation, and will continue to promote this in their contacts both with the BSC management and with the TUC Steel Committee". The right hon. Member for Deptford gave me the impression that he had forgotten all that was written in that document.

It has been suggested that the Beswick delays have already cost the Corporation over £100 million a year. Steelworkers read the press and they know that they cannot make plans on a solid basis while the industry is propped up by taxpayers' funds. The major disease in the past has been that of delay. I pay tribute to my right hon. Friend for being prepared at this early stage in the Government's administration to consider seriously the future of the Corporation in an effort to assure ourselves of a viable steel industry in future. An uncompetitive enterprise or industry that does not survive on what the customer at home and abroad is willing to pay for its products is precarious and ill-rewarded.

I have always urged in my constituency, and I do so publicly in the House, that we blight the prospect for the steel industry and the massive investment that has been put into the high-cost plants in not only Scunthorpe but Redcar, Llanwern and Ravenscraig—the basis of the steel industry in future—if we continue to live in the late nineteenth century and early twentieth century. It is painful to have to say that. I recognise the sincerity of the hon. Members for Kettering and Flint, East (Mr. Jones). Of course, they have a duty to represent their constituents. However, the House has a wider duty to represent the whole of the steel industry and to ensure its future. That is why I feel able to support the Government's amendment to the Opposition motion.

I recognise, and steelworkers recognise, that viability is crucial for the future. I pay tribute to steelworkers and to the Iron and Steel Trades Confederation, which, traditionally, has been a realistic organisation. We owe a duty to steelworkers, who throughout the years have shown realism, to be realistic ourselves. It is with the hope that my right hon. Friend is anxious to ensure that the industry becomes profitable and is able to carry out its function in future that I am able to support him.

I urge my right hon. Friend to bear in mind that certain problems beset the Corporation subsequent to the target that he rightly set when the Government took office. He is not an ogre, as certain Labour Members have tried to portray him. Long before the general election he took the trouble to visit my constituency, with my right hon. Friend the Prime Minister. I know that he takes seriously the problems of the Corporation and does not duck them. However, there are problems faced by the Corporation. If it has difficulty in meeting its target, I feel that it will do its best, with good will on both sides. If there are difficulties, I am sure that my right hon. Friend will not merely allow the Corporation to be shut down.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

The right hon. Gentleman has said that he will do just that.

Photo of Mr Michael Brown Mr Michael Brown , Brigg and Scunthorpe

My right hon. Friend is a man of realism. I am sure that that is appreciated by the majority of hon. Members. I am confident that the Corporation will do its best. Of that I am convinced. I ask for an assurance that my right hon. Friend will take into account the outside factors that have subsequently intervened, such as industrial disputes beyond the Corporation.

I implore the Iron and Steel Trades Confederation, which is renowned for its traditional realism, to think carefully about the suggestion that has been made by Mr. Bill Sirs. Last year the dispute involving the Transport and General Workers' Union in my constituency cost about£13 million. The steelworkers regretted that dispute. I feel sure that steelworkers will regret any dispute that takes place beween now and the end of the present financial year.

Photo of Mr Edward Leadbitter Mr Edward Leadbitter , Hartlepool

The hon. Gentleman is talking about disputes. If we are to be realistic, we must accept that there is dispute and public concern. Will the hon. Gentleman address himself to that and ask his right hon. Friend to give us the full costs of closure, socially and financially—for example, the cost of unemployment benefit, the loss of rates, the loss of employment in the ancillary services and supply services, and the cost of unemployment as a whole?

Photo of Mr Michael Brown Mr Michael Brown , Brigg and Scunthorpe

The cost is the cost of the existence of the steel industry in future. We cannot continue to pretend that the Corporation can continue in the long term without making profits. I feel that with good will generally the Corporation's target can be met.

Photo of Mr Barry Jones Mr Barry Jones , Flint East 7:18 pm, 7th November 1979

I accept that the Secretary of State is not an ogre. However, as the head of a great steel industry he is a total disaster. I do not call him an ogre, but I describe him as a kind of Count Dracula. His leadership of the steel industry is as inappropriate as putting Count Dracula in charge of a local blood transfusion service. There is no doubt that his appointment is a bad one for the British steel industry.

I did not agree with much of what the hon. Member for Brigg and Scunthorpe (Mr. Brown) said, nor did I agree with some of the remarks of the hon. Member for New Forest (Mr. McNair-Wilson). The latter hon. Gentleman made an eloquent and informed speech. It was interesting that he was defensive in his remarks on the commanding heights. Aneurin Bevan once said that Remote control is the consequence of bigness, not of the nature of ownership. I took exception when the hon. Gentleman said that the men had to be bought out. They have not compaigned for eight years in Shotton and district to be bought out. On their behalf, I find that remark offensive. When the steel committee of the TUC goes to Steel House on Friday to meet the British Steel Corporation, it will not go there on its knees. That will certainly not be its approach with Mr. Bill Sirs leading it. It will not have buying out in mind.

Our steel industry is the bedrock of our economy. Nobody would deny that. There is a crisis of confidence in the industry that is largely of the Government's making. The Secretary of State pursues a highly controversial policy. The chairman of BSC is soon to leave. The work force is demoralised and angry, and their leaders moot a strike. Several steel communities move nearer to the brink of social and economic disaster. That is the background to the debate.

At the heart of the problems are the rigid cash limits. The policy of not funding BSC losses in 1980 means that the Corporation can move nearer to solvency only by closures. The "break even at all costs" policy is a foolish mirage. It will not be successful and will severely damage this seed corn industry. Hasty closures will guarantee more steel imports.

Is there an alternative explanation to the policy that is so rigidly adhered to by the Government? Is the policy designed entirely to secure early closures, in the knowledge that in the long term the policy is ruinous? When the closures are effected, the policy can be dumped. I disagree with that fundamental point of policy.

In the years that I have tried in the House to help the Shotton steelworkers, I have learnt that their leaders—both production and staff workers—are able men. All over Britain the steelworkers could make the industry a brilliant success. They could rescue the demoralised hulk of the Corporation. They should be given an ungrudging, decisive, meaningful and substantial role in the running of the industry. Ministers should seek to regain the confidence of the TUC steel committee. That means paying greater respect to the voice of experience in a cyclical and complicated industry. The Corporation should make greater efforts to tap the professional skills and insight of its middle management.

I sincerely hope that the Government will make even greater efforts to stem the damaging steel imports. We should fight for a bigger export market. We should not go for sudden closures. New plant and equipment should be run in very carefully. Some of the older plants could act as valuable balancing plants and an insurance against breakdown or delay as the newer plant comes on stream. The steel customers should receive a better deal. Perhaps we are neglecting them to some degree.

Largely speaking, North-East Wales and the North-West face the likelihood of becoming a steel desert—witness the closures at Irlam, Warrington, Workington and Mostyn, and, in the offing, if the Government and the Corporation have their way, at Shotton. Yet the North-West accounts for 8 per cent. of the United Kingdom domestic steel market. Within a 40-mile radius of Shotton there is an extremely heavy consumer presence. The North-West and the Midlands' markets are on Shotton's doorstep. Why obliterate an able producer and supplier? We have all heard of the domino effect.

Merseyside can ill afford the decimation of Deeside. My area must inevitably become a determined competitor with stricken Merseyside to obtain new jobs. I do not seek or wish for that. I fear that the legion of the Merseyside unemployed will be dealt a heavy blow for many years to come. The social consequences of putting so many so swiftly on the dole will damage the social fabric of the community that I represent.

In a modern industrial State, when was a proposal of that magnitude last performed? When were two such fearsome and awesome redundancy proposals as those at Shotton and Corby promulgated? These proposals are to be carried out at a time of widely forecast recession in the coming years. The Treasury Bench can say nothing that will alter the fact that at Shotton, Corby. Birkenhead, Liverpool and Greater Merseyside the outlook and the future hopes of the boys and girls leaving our comprehensive schools will be grim and miserable. Some will have to leave our areas to find work.

As a community, we face that with great sadness. We are not sure that the Treasury Bench is taking full account of that problem. I should like to see the door of No. 10 opened to a major deputation from Shotton. It has been officially predicted that in the late new year in the town of Flint the unemployment rate will rise as high as 31 per cent.

Photo of Mr Barry Jones Mr Barry Jones , Flint East

I have heard the ayatollah intervening in other hon. Members' speeches and conducting his university seminar as if we on the Labour Benches were some dull blockheads. We do not wish for any witless interventions from the Minister. Yesterday he caused offence in the House. We do not wish to be preached to by aristocratic dropouts on auto pilot. The hon. Gentleman should go away. He is not good enough to handle the problems. When did that bunch soil their hands?

Photo of Mr Michael Roberts Mr Michael Roberts , Cardiff North West

When did the Opposition last soil their hands?

Photo of Mr Barry Jones Mr Barry Jones , Flint East

I shall answer that a little later if the hon. Member for Cardiff, North-West (Mr. Roberts) wishes to raise his head above the parapets. The record of his right hon. Friend is not very good. We shall look to him for many new jobs in Wales in the next year.

Photo of Mr Barry Jones Mr Barry Jones , Flint East

The Minister of State has intervened almost a dozen times in the debate. He should allow me to complete my speech.

Photo of Hon. Adam Butler Hon. Adam Butler , Bosworth

Is the hon. Gentleman aware that the door of No. 10 has been opened to a deputation that has discussed Shotton? The Wales TUC presented its case in a more reasonable manner than the hon. Gentleman has done, and, therefore, was listened to better than he will be with the sort of langauge that he chooses to use.

Photo of Mr Barry Jones Mr Barry Jones , Flint East

When Members of the Wales TUC left No. 10 after an hour of discussion, the epithet in their minds and on their lips was "callous". They made that clear in a press statement. A deputation from Shotton should go to No. 10 to present the case at first hand.

The Government are now bleating and whinnying about the Corporation's losses. Let us put them into some perspective. Arbed of Luxembourg lost £6 a tonne last year. Klockner of Germany—the land of the economic miracle—lost £15 per tonne. The BSC lost £17 a tonne. Sacilor of France lost £18 per tonne. Cockerill of Belgium lost £20 a tonne and Italsider of Italy lost £21 per tonne. I conclude from those figures that the British industry and its work force are not pathetic figures, and I do not think that we should denigrate and downgrade them so much.

I see a deeply injurious situation arising with car imports. In 1970 Britain imported 157,000 cars. By 1978 the figure was 800,000. The figures show a decline of the United Kingdom car industry and point to a frightening decline in demand in Britain for strip steel. Perhaps it may be said that an import figure of 800,000 cars last year portends the possible polarisation of our steel industry.

If our car industry had done as well since the early 1960s as the French have done, it is conceivable that the demand for strip in Britain could have been 1 million tonnes higher today. I say that in the knowledge that Shotton produces about 1 million tonnes of strip a year. In 1973, when we imported 504,000 cars, the motor industry accounted for 14 per cent. of steel output.

I come next to the general subject of imports. Between 1972 and 1978 inclusive, the United Kingdom imported £5·2 billion worth of steel. Only last year we imported over £1 billion of steel and iron products. Figures such as those provided the reason for Roy Hodson writing in the Financial Times last year that imports were equivalent to the annual production of two works the size of Shotton. Foreign steel producers have found the United Kingdom a soft market for sheet steel sales and, of course, for motor cars, too.

By ending steelmaking at Shotton, the Corporation and the Government will be throwing out the baby with the bath water. Shotton has many satisfied longstanding foreign customers. Why slam the door on them? I do not believe, as some imply, that the steel workers are Luddites. They have made their sacrifices. Since 1970 106,000 jobs have disappeared in the industry. More than 61,000 of them were on the BSC employees' list. Steel workers throughout Britain are resentful. They know that the TUC's steel committee leader, Mr. Bill Sirs, has not had a fair deal. The same applies to the committee that he heads. It has not been listened to with care, and the Treasury Bench should reconsider its attitude on this point.

Even as it is at present constituted, I do not believe that the industry has to be so secretive, bureaucratic and autocratic. Those three vices have been part of the trouble. The board is currently besieged and embattled. It is under pressure from its work force and from its masters, the Ministers. It is a misfortune that the industry should be headed by the current Secretary of State. His medieval economic theories are ill suited to this complex and cyclical industry. If he is to stay in office—and I should prefer him out of it—he should come down from his ivory tower, put away his books, abandon his nostrums and show less tetchiness, arrogance and impatience. So far, his actions represent a depressing testimony to a blind and biased philosophy. In its own time, and very soon, it will be proved wrong.

Photo of Mr John Farr Mr John Farr , Harborough 7:35 pm, 7th November 1979

I support the Government amendment because it is impossible for the country to continue to fund successive annual British Steel losses of the magnitude that we have been seeing. Over the last four years the British Steel Corporation has produced an annual average loss of £268 million of taxpayers' money. No sensible Government can allow that to continue. I am sure that even if the Labour Government had still been in office they would have been just as concerned to tackle the problem as are my right hon. Friends.

The White Paper "British Steel Corporation: The Road to Viability" is illuminating on production levels. It says that in 1976 the BSC produced 100 tonnes of liquid steel per man. The figure in Germany was 150 tonnes, and in France 120 tonnes. Figures for 1978 were given by Sir Charles Villiers, who described BSC productivity as the lowest in the world. In Britain, it took 10·9 man-hours to produce a tonne of crude steel. In West Germany the figure was 5·9 man-hours and in France 6·4 man-hours. On the basis of these factors, any self-respecting Government have to take action.

I therefore express general agreement with a stringent policy, but I must record my disagreement in relation to Corby. I intervened twice when my right hon. Friend the Secretary of State was speaking. On 1 November the BSC announced its decision to close the iron and steel- making plant at Corby next March, with the loss of between 5,000 and 6,000 jobs—one in three of the working population. This brutal decision will kill the town. Even if it is granted development area status, five months is an impossibly short time in which to make plans to counter the sudden closure of steelmaking plant.

I am not sure what my right hon. Friend means by development area status. May we be told tonight what percentage of grant will be paid to industrialists who go to Corby? The House is well aware of the dramatic situation in the town. It was built for a steel company—Stewarts and Lloyds—in the centre of an iron ore field. Its population today is 52,000 and it has an integrated iron and steelworks and steel tube manufacturing works.

The town is in the centre of the local iron ore field. The hon. Member for Kettering (Mr. Homewood), among others, said that it is a town that is intensely dependent upon the iron and steel industry to enable it to continue to flourish. The vast majority of workers in Corby are employed in the iron and steelworks. If the decision is taken next spring to close down the steel-making capacity it will be a tragic blow.

Corby is more like an inner centre, as it is the centre of a group of new towns. Several hon. Members have emphasised that it is not just the fact of Corby's steel production closing and going to Redcar that should be borne in mind; the tremendous social cost and problems that will follow that move should also be considered. We should take into account the national cost of redundancy payments, retraining costs, unemployment benefits, social security payments, loss of tax revenue and health costs derived from the impact of redundancy as well as unemployed social services costs.

We should also take into account the extra balance of payments costs that will be involved with the importation of foreign iron ore in place of the domestic iron ore in the Corby area. Redcar is a coastal site and will have to import foreign coal, as opposed to Corby, which uses domestic coal. There are also additional transport costs for strip steel.

The BSC did not give proper consideration to several sensible alternative plans that were carefully drawn up. Two sets of plans were put forward. One advocated that Corby would be made viable after a certain period, with the investment of £31 million. Another set of plans questions the projected loss figures given by BSC as the reason for closing Corby. I have read those plans carefully and I am impressed by them. I was particularly impressed by the document produced by Dr. Bryer and Mr. Brignall, from Warwick university. I was also impressed by the document produced by the joint trade union policy group. I do not have time to elaborate upon those plans, but I feel that they did not receive sufficient attention. Serious questions that were brought up in the documents have not been answered by the BSC. Indeed, it appears that the BSC do not intend to answer them.

I hope that there is a chance that the BSC will look at the two papers, encouraged by my right hon. Friend the Secretary of State to do so. The promoters of the papers spent many weeks and months in Corby, and their valid points should be answered. More important, I hope that my right hon. Friend will interest himself in Corby. If the figures provided by Warwick university are incorrect—I do not believe that to be the case—and Corby is in a permanent loss-making position, there remain to be considered the social implications of phasing out steel production in Corby rather than ending it in a few weeks' time.

A team from Cambridge university calculated that while the BSC may save £12 per ton by closing Corby the taxpayer will have to pay £36 per ton, because of support that will have to be given to the social services. The team emphasised that such a course would cost the community dearly. I believe that my right hon. Friend is sincere when he says that the A1-M1 link will help. Those of us who have been associated with the plans for that road know that, although the go-ahead has been given, the building will not begin for seven years and will not be completed before eight years have elapsed. By the time Corby has a route to the coast, the East, the Midlands and the West, it will be too late to save the town.

If steel production in Corby is closed down, we should not cut it out next spring; we should phase it out after five or six years. That will give the link road a chance to bring in new industry from all over the country, so that Corby can make the gradual change in a humane and sensible manner.

Photo of Mr James Tinn Mr James Tinn , Teesside Redcar 7:46 pm, 7th November 1979

In the debate many harsh words have been said about the BSC—most of them justified. At the same time, it is right, representing Redcar as I do, to point out some of the successes of the nationalised industry. The level of its investment over the last few years has been far greater than in the rest of the European industry. It has been a phenomenal success. The bulk of industrial investment in the United Kingdom in the last few years has been by the BSC—much of that, I confess with pride, in my constituency. We should be honest and admit that we, too, underestimated the total output of the BSC that would be required. Many of us who have criticised the undershooting of its plans come within that category.

I believe that the investment in the coastal plant was right. In case I am accused of smugness, I remind the House that I said as much while the matter was still the subject of intense competition from Scotland, Wales and elsewhere in the United Kingdom. Inevitably, steel has to be internationally competitive. Our unit costs of production must be competitive with those abroad. However, that has been obtained at a heavy cost in terms of job loss both at the time and subsequently.

I remind the House that over the last decade no less than 10,000 jobs were lost on Teesside. In only one closure was there a massive and well-organised protest, and that was not in my constituency but across the river.

The Teesside workers recognised that modernisation was inevitable and that a price had to be paid for it. They paid the price before they got the new works. That is the best answer to any accusations that might still be heard that the steelworkers and their unions are Luddites. On the contrary, it is amazing to reflect how men's livelihoods and their children's future have been invested in the industry. I refer to the one-industry towns, or towns heavily dominated by steel, that agreed to the proposals. However, there are limits.

There is no soft option. The modern plants are on the ground. The heavy financial cost is part of the burden that the industry had to bear. Those heavy costs cannot be met by under-using the plant, understandable though the motives obviously are of those who see this as a possible easement of the position elsewhere. There is on us all—this applies especially to the Government and the leaders of the industry—the most massive moral obligation of the day to ease the impact and to do all we can to help those concerned. That should be done for humanity's sake. I do not belabour that argument, as it was made by hon. Members representing the constituencies most involved.

We must avoid an unbalanced industry. If the Government refuse to relax their posture about the break-even date of 30 March 1980, the plan will go, not as part of an inevitable long-term modernisation of the industry but as a consequence of a requirement that the British steel industry should out-perform every other steel industry in the world by early 1980. It is unreasonable to expect this industry to break even so soon. That is a shabby requirement. It is an unworthy debating technique simply to say that that figure was put previously by the BSC to the Labour Government and accepted then. Indeed it was, but that does not meet my point about the present situation. I have every confidence that had Labour still been in power that date would have been modified to ease the impact on those concerned and to avoid the risk of too drastic surgery on the industry.

The question of coking coal is connected with the new, massive 10,000-tonnes-a-day blast furnace at Redcar. I am also interested because of my background as a member of the National Union of Blastfurnacemen and because I was at one time a coke worker.

I support the part of the motion that calls for action on the unfair subsidisation of foreign coals. British coal should be able to compete fairly on price. I stand by that. However, I must sound a note of caution. Quality is not just a red herring that the BSC is running to obtain cheaper coal abroad. It is vitally important, especially in the new large blast furnaces. The coke going into those furnaces heats the burden and performs a chemical reaction as part of the smelting process. It has an important function in easing and supporting the heavy weight of the iron as it slowly comes down the furnace. That requires structural strength. In the larger, wider blast furnaces, carrying a heavier burden and a wider base, that becomes vital.

I have a report about an incident in Japan and on the damage that occurred to some furnaces. Much worse than that, there is a fearful risk to the men working at the bottom of those furnaces if things go wrong and the coke breaks away.

On an economic level, the question is not just one of subsidy, important though that is. I refer to the coking rate—the amount of coke used to smelt a tonne of iron. The United Kingdom rate is too high, at 590 kg per tonne of iron. That is 100 kg higher than in Germany, Holland or Italy. It is much higher than the Japanese rate, at 430 kg per tonne.

I argue for caution on the question of coking coal. The BSC must be the judge of what it needs. As a result of discussions with the National Coal Board, the BSC increased the amount of British coal it used from 25 per cent. to 45 per cent. That is an indication that the Corporation is not turning a deaf ear to the needs of the mining industry. Above all, the safety of the workers in the blast furnaces must be considered.

Photo of Sir Anthony Meyer Sir Anthony Meyer , Flint West 7:56 pm, 7th November 1979

The hon. Member for Redcar (Mr. Tinn) is fortunate in representing the location of one of the British Steel Corporation success stories. However, the tale I tell does not correspond with his. He referred to the extent to which the Germans subsidised their steel industry. That is true. If only we as a nation created as much wealth as the Germans, to subsidise our steel industry would be an option open to the Government. I wish that option were open. I should like the steel industry to be subsidised to ensure that there need be no job losses. Unfortunately, as a nation, we are not creating the wealth. We cannot impose this burden on the rest of our industry and our social services. That is why, with a few hesitations, I shall vote for the amendment to the motion.

I wanted to comment on the truly remarkable speech made by the hon. Member for Flint, East (Mr. Jones). However, in his absence from the Chamber, I shall refrain from doing so.

In a previous steel debate, after much consideration, I decided to vote against my Government and with the Opposition, but tonight I shall have little or no hesitation in voting with my Government.

I should still like to save steelmaking at Shotton if possible. I emphatically do not mean winning yet another reprieve for the industry. That is the worst of all worlds. I want to secure the investment of the tens of millions of pounds necessary for the modernisation of Shotton's hopelessly antiquated open-hearth furnaces. With that goes acceptance of the need for manning at the heavy end of Shotton at internationally competitive levels such as have already been achieved at the new coatings complex at Shotton.

The Opposition claim that they are fighting to retain steel making at Shotton. When they were in power, they delayed the closure proposals. Had the Labour Party won the last election, it might have continued delaying a decision. Certainly the endless stream of Labour Members of Parliament who yesterday went to meet the workers who came here from Shotton gave the impression that a Labour Government would have kept Shotton open. That is not true. Of course, they would have closed it.

The hon. Member for Flint, East is back in the Chamber. Perhaps I may revert to his speech, to which I listened with great attention. It was the kind of speech we have come to expect from him on this subject. If the Labour Government, of which he was so egregious a member, had put their money where their mouth was, Shotton would not be in peril today.

The hon. Gentleman has a great reputation, locally and nationally, for the fight that he has put up on behalf of his steelworker constituents. He would have added further to that reputation if, when Shotton's last chance of viability was removed by the rejection of the plan for tandem furnaces, he had said that he did not feel he could continue to be a member of the previous Government. Had the Labour Party won the election, it would have allowed the British Steel Corporation, in due course, to close down Shotton and Corby, as it allowed Shelton, Irlam, East Moors and Ebbw Vale to be closed, though it might have allowed the situation to drag on for a little longer.

I am not ready to take any lessons from the Opposition on this matter. Nor am I ready to take any lessons from the unions. The Iron and Steel Trades Confederation is one of the most moderate, sensible and constructive of trade unions, yet it allowed itself to be locked in combat with another union for six months at Hunterston in order to stop Ravenscraig operating fully as it was intended. This moderate, sensible and reasonable trade union has clung to manning levels and has resisted the transfer of men within steel works in such a way that it has gravely reduced the international effectiveness of the British steel industry.

The unions bear a heavy share of responsibility for the non-competitiveness of the steel industry and for the insecurity of jobs within it. To talk of strikes and overtime bans in protest against closures will do nothing to save a single job at Shotton. On the contrary, it will do much to discourage the provision of other worthwhile jobs for steel workers if closure, unfortunately, goes ahead. Like the hon. Member for Flint, East, I am sick with worry at the prospect facing the Shotton workers. I am even more worried by the prospects facing those who will have no right to take part in any ballot on whether to accept the Corporation's severance pay offer and the school leavers who will not be consulted but whose prospects of finding a decent job in their own home area will dwindle to disappearing point.

I shall hold the Government directly responsible for finding decent employment for these people. I shall expect from the Government a massive effort to bring aid to what would be a stricken area. Unless the Government demonstrate the will to make that massive effort, it will be much harder than it is tonight for me to support them in the Lobby. I still hope for a miracle to save Shotton. If the question before the House tonight was that the closure should not go ahead, it would be very hard for me to vote against it. If the question was that the necessary investment should take place in Shotton to modernise its steelmaking equipment, I should find it impossible to vote against. But those are not the issues on which we are voting. We are asked to reject a demand that the steel industry should cease to impose the crippling burden of its annual losses on the rest of British industry and on our social services. I cannot vote against that proposal.

I know that the British Steel Corporation will not break even next year. None of us expects that to happen. But, unless the BSC is told to start making an effort now, it will not do so, and the losses will pile up year after year. I shall be voting for the Government tonight with few hesitations, but on Friday I shall be praying for a miracle when the final decision on Shotton has to be taken.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central 8:05 pm, 7th November 1979

In view of the time available, I do not intend to deliver my prepared speech. Instead I will deal with some of the points raised in the debate. I want to try to outline the problem.

This debate is similar to many concerning the steel industry in which I have taken part during my nine years as a Member of Parliament. It is a re-run of similar debates that took place during the period of the Conservative Government from 1970 to 1974 when the late John Davies was Secretary of State for Trade and Industry and when BSC put forward its 10-year strategic plan for the steel industry. The plan contained the fist indication that the steelworks in the Garnock valley, in my constituency, was to close.

Since then, we have seen Governments change. The Labour Government, which took office in 1974, cancelled the 10-year strategic plan and announced a review of the whole situation. The job was given to Lord Beswick and there followed the subsequent Beswick report on which the Labour Government developed their policy. During that period, there was closure after closure. Five years ago there were 34 open-hearth furnaces in Scotland. Now there are none. The steelworkers co-operated in the closure of those furnaces. They knew that if the steel industry was to stay modern and viable the open-hearth method of making steel had to be dropped. There has been co-operation throughout my time as a Member of Parliament. Now we come to a re-run of debates on the steel industry that occurred during the period in office of the last Conservative Government.

I am glad to see that the hon. Member for New Forest (Mr. McNair-Wilson) has returned to the Chamber. His recommendation was that the problem would be solved by giving the boys the money. We have been giving the boys the money for nine years, but the problem is more intensive than ever. No person has a right to sell a job. Not only does that person sell his own job but he sells the jobs of the young people in schools, as the hon. Member for Flint, West (Sir A. Meyer) indicated. The Government are not selling jobs at Shotton and Corby. They are selling communities. Governments have no right to sell communities.

The workers at Corby are mainly of Scots descent. Forty years ago they sold their jobs, or, if they had no jobs, left the Motherwell area after being told that there was a secure job for life amid the bright lights and green pastures of the steel industry in Corby. Now, 4,000 or 5,000 of them will be out of a job. They are not responsible for this situation. Previous Governments and previous managements of the steel industry are responsible.

I believe that Governments and the management of the steel industry, whether private or public, have a responsibility to look after the interests of the steel communities. The hon. Member for New Forest argued that the workers should be given the money. In my area, where the open-heath furnaces were closed as part of the strategic plan under the Beswick report, because it was thought to be for the good of the valley, there is still 17 or 18 per cent. unemployment. Some of my hon. Friends are worried about 7 per cent. unemployment. I would regard 7 per cent. unemployment in my constituency as full employment. We have never been near that figure.

I am glad to see the Secretary of State for Scotland here. I give him credit for following the policies of the previous Labour Government. The BSC and other industries have co-operated in building up industry in my valley. A task force is operating and everything seems to be going well—but we still have 17 per cent. unemployment. The people in Shotton and Corby should not listen to those who ask them to sell their jobs on the promise that more jobs will be provided. I listened to the Secretary of State for Industry saying that today.

The problem is not that the BSC and the Government will not co-operate in attracting industry to the valley; it is that, around the valley, industries keep collapsing. On the outskirts of the valley, where people must move for jobs, Talbot at Linwood has just declared 1,500 redundancies; Singer at Clydebank has announced 3,000 redundancies Monsanto wants 800 redundancies; Skefco wants 600 redundancies. The Secretary of State knows about this as well as I do, because, apart from his office he has a constituency interest. There will be an announcement on Friday by Massey Ferguson which may mean the closure of the last combine harvester production unit in Britain, with a loss of 1,500 jobs.

We cannot solve the problem of the mining valleys when industry is collapsing around us. West Scotland is in danger of becoming an industrial desert.

I often agree, unfortunately, with the hon. Member for New Forest. The BSC conducted a massive investment programme, of £1½ billion, in the years 1975 to 1977. Last year, £500 million of new plant was commissioned—a tremendous record—but the new plant in which money has been invested has come on stream at a time when the world steel demand has fallen. We are in the deepest steel recession since 1962–63. Why should we change our plans in midstream? It is the Government's responsibility to sustain the BSC through this difficult period.

The picture is not altogether black. Last year the BSC's loss was £327 million, but two-thirds of that was for investment. Only a third was on the revenue account. The Government say that they will shoulder the investment burden, so why cannot they look after the other third over this difficult period? When the BSC is ready to stride forward into the future, why cannot the Government carry on the investments guaranteed under the Berwick review?

Some hon. Members have mentioned the trouble at Hunterston. No one can justify that. Sometimes my brothers do not adhere to the philosophy of the brotherhood of man. Burns's cry that man's inhumanity to manmakes countless thousands mourn is followed only on 25 January at Burns suppers and forgotten in Scotland for the rest of the year.

But the Hunterston dispute has been settled. We hope that the first ore carrier will be a lifeline not only for my rolling and finishing mills at Glengarnock but for Ravenscraig, which will be able to come on stream as one of the major steel producing units in the United Kingdom.

I am sorry that the Secretary of State for Industry is no longer here, but I am sure that these remarks will be passed on to him. About £100 million has been spent at Hunterston, yet an ore terminal, stock yards and two direct reduction plants which have not produced one pellet have gone into mothballs. Why do we not continue with the Beswick proposals and provide the two electric arc furnaces which would make Hunterston an integrated unit and guarantee my constituents employment in the rolling and finishing mills at Glengarnock?

The hon. Member for New Forest was right to praise the success of the electric arcs in the Sheffield area. Why is it only the private sector that has gone in for electric arcs?

Photo of Mr Stanley Crowther Mr Stanley Crowther , Rotherham

To get the record straight, it is not just the private sector. The BSC is successfully operating electric arc furnaces at the Rotherham works.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

That justifies my point, that not only private enterprise but the BSC, where it has them, is doing well with electric arc furnaces. Why should the Government stop the investment in the Hunterston area? Why lose £100 million? Why do they not justify that expense by allowing the BSC to build electric arc furnaces?

If that were done, we should have the basis for the Scottish steel industry that many of us have been looking for for years. We should then have two main centres at Hunterston and Ravenscraig, allied with my finishing mills at Glengarnock. That would create a viable Scottish steel industry and would be a basis for Scotland's future industrial development.

We have had closures in Scotland for nine years, and we are still having them. My hon. Friend the Member for Redcar (Mr. Tinn) said that he was proud to represent an area where the BSC was successful. Many of us have sat back after previous reviews and said "We are all right, boys. We do not need to worry about the rest of them. Our steel industry has been safeguarded."

After the Beswick review, I said to my people at Glengarnock "We are all right. They can close any other area, but the review says that steelmaking will stay in the Garnock valley." Yet two years later there was a new policy to close the steelworks or part of it.

I warn my hon. Friends in the more prosperous areas of BSC activities who think that they are safe now that their turn will be next. If we carry on with the policy of closures—we are talking about Corby, Shotton and some areas in Scotland—the next review will be whether Llanwern, Redcar or Ravenscraig should remain. If the Government's and the BSC's present policies of closure continue, one of those plants will have to go. The people of Scotland will say that Ravenscraig must stay; the people of Wales will say that Llanwern must stay; and the people of the North-East will say that Redcar must stay. But if we give way now, as we have unfortunately given way over the last 10 years, the BSC and the British steel industry will depend in future on two main units of production. I hope that one of them will be in Scotland, but that is again a selfish attitude. It will not solve the problem for those who are facing redundancy.

Therefore, let us be united. Let us stand together. Let us not boast that we are doing well. Let no one boast that his area is doing well, because his day is coming, just as our day came.

Photo of Mr Mark Wolfson Mr Mark Wolfson , Sevenoaks 8:20 pm, 7th November 1979

The British Steel Corporation faces an enormous challenge and a daunting task. That challenge, which has come in for much stick in this debate, is to achieve a secure future for the continued production of bulk steel in Britain. That security is at risk, and we are not talking of only 10,000 or 20,000 jobs. If bulk steel production does not become viable, 100,000 jobs could be in danger in the long term. The Corporation's task is to achieve a secure future through a profitable industry.

It is proper that the House should, as it has in the past, debate the steel industry, because its performance is crucial to our economy. It is a key industry, with a proud history and a troubled present. It has a future either of high technology, high production and high wages or inevitable and sad decline. We properly debate the industry's future here, but I suggest that Parliament attempts at its peril to run the steel industry. It is the height of arrogance to suggest that politicians and civil servants can manage the industry better than can BSC, whose job it is.

Steel has suffered more than its share of Government interference in management decisions. Successive Governments have been guilty of that. We must, therefore, learn our lesson and give BSC the freedom and the confidence to carry out its job, in consultation with workers in the industry. There have been grave mistakes, and BSC suffers from the worst of them. There was investment for an expected growth in world and home demand in the early '70s, but that growth never took place.

It is vital that the industry becomes competitive, and that means moving with the times. Much has been said about how much the industry has changed. Many on the Government Benches wish that further change could be avoided or was unnecessary. In a competitive world, however, there must be change. There is over-capacity in Europe but new capacity in Korea, South America and Japan. We must keep up with the times. If quality, price or delivery date is out of line, it is the customer who goes on strike. There is no future without customers.

Much of the debate, in and out of this House, has, not surprisingly, centred on the need to maintain production and jobs at all costs. Arguments to that end have been put for good and human reasons. The emphasis on job protection by trade unions and by the Labour Party stems from high ideals and a genuine concern for people, and that has been movingly and eloquently expressed today.

Does such a campaign—easy to mount in Opposition and hard to fulfil in Government—really help to find a long-term solution for this or any other industry? Are the interests of those working at Corby and Shotton, let alone those in other steel plants throughout the country, best served by an industry which is overmanned, unrationalised and still using uneconomic plant at taxpayers' expense? There can be no job security in such shaky circumstances. This is well understood by some trade union leaders as well as by BSC management.

The problems of British Leyland have been well publicised. Hector Smith, general secretary of the blastfurnacemen's union, made his plea to the workers of British Leyland, which is one of the major Edwardes plan to slim and restructure British Leyland which is one of the major customers of British Steel. He said: My plea to Leyland men is this. Back the plan, get Leyland competitive again, because if you don't you will be committing suicide, and the death of Leyland will be a devastating body blow to major suppliers like British Steel. He went on to say: It is not easy to accept rationalisation and reduced manning, in fact its bloody painful as we in the steel industry know only too well. We've shed tens of thousands of jobs in the last few years. And it is especially hard for trade unionists and trade union officials to accept these changes. Their role has traditionally been to defend jobs, but unions are gradually seeing the truth that there is no point in fighting for every job if the end result is no work for anyone.In BSC we are still demanning. My union now says to BSC 'You show us where we are overmanned on the blast furnaces or coke ovens, and we'll negotiate phasing out these jobs'.At the end of the day we shall have a leaner, tougher organisation of dedicated steel-men who, with some of the best kit in the world—like the 10,000 tonnes a day blast furnace at Redcar—will knock the hell out of our competitors. That from a trade union leader sounds to me not unlike the message of my right hon. Friend the Secretary of State, though it is perhaps phrased in more robust language. The Leyland men have voted. We all know that voting is the easiest part of the process. Working out the policy is much more difficult, but one key customer of the British Steel Corporation has taken the first step on the road to economic common sense.

For Hector Smith and other forward-looking trade union leaders in the steel industry, negotiations continue. It is right and proper to pay tribute in this House to the courage and dedication of such men. They and BSC have a common goal and interest, which is long-term profit and security. The acceptance of the necessary changes is not easy for individuals or their communities. No one should underestimate what is being asked of them. We have heard the details from hon. Members who are directly involved.

Let us make no mistake. The British Steel Corporation cares about communities. It has a target—to achieve viability. Governments of both parties have required such a target. That means closures, and we all know it. Each case requires negotiation, but a solution must be achieved. Surely at Shotton it is better to deal with the problem now and rebuild for the future than to continue in uncertainty and limbo for another seven years. Uncertainty can blight an area and the lives of all within it more seriously perhaps than can a closure. With no decisions and no settlement, there is nothing to look forward to.

After the closure, what will be left? At Shotton there will be 4,000 jobs instead of 10,000. At Corby there will be 5,000 jobs instead of 11,000. In other areas the numbers involved are smaller, but the movement will continue. I say to the Government that tomorrow's industry and tomorrow's world need considerable midwifery. I have no doubt that there is a role for the Government. The Opposition have suggested that Ministers are abdicating that role and that Government policies do not fulfil it. I contend the opposite. Our policy of aid to new industry is designed to concentrate on those areas of greater need and those industries of real potential. We shall use loans and grants as catalysts of change and not as props for continuing decay.

The steel industry must live within the market forces. Anything else is unrealistic. It requires great change. Many workers in the industry face sacrifice and disruption. However, there is no satisfactory alternative. Each plank in the Government's financial policy is designed to enable Britain to live within her means in the real world. The steel industry can be no exception. Those who manage that industry do not ask that it should be otherwise. The BSC asks two things of the Government. It asks for the freedom to manage its own affairs and for the support of the Government in the urgent creation of new jobs where demanning and closures are achieved. I support those objectives, and I look to Ministers to fulfil them.

Photo of Mr Patrick Duffy Mr Patrick Duffy , Sheffield, Attercliffe 8:32 pm, 7th November 1979

I shall confine my remarks to the Sheffield steel scene—both private and public. I shall be brief. The Sheffield economy is disproportionately dependent on steelmaking. As elsewhere local industry is experiencing a difficult time. Private steel is suffering from an average of 30 per cent. spare capacity, poor profitability, import penetration and rationalisation. Unemployment has increased, which is even more unacceptable and painful.

Unemployment in Sheffield's metal manufacturing in recent years has soared well above the national average. The BSC Sheffield division is now expected to reverse its current annual loss of £25·7 million, following a loss of £30·1 million in the previous year, and to break even by next March. With the worrying reports about the River Don works and demand for steel expected to decline even further, the outlook for steel in Sheffield causes much local anxiety. In association with employers and trade unions, the city council is initiating a study into special steels. The special steels sector has been seriously affected by import penetration. A further blow has been dealt by the removal of aid under the regional policy.

Against that background, I draw hon. Members' attention to the problems of special steels and the BSC's Sheffield division. Imports continue to cause serious problems to Sheffield. What is the current rate of import penetration?

Commissioner Davignon has recognised the problem and has promised continued efforts to find a solution. Can the Minister report progress? Common Market officials were asked in August to investigate claims that a huge shipment of cut-price special steel from Brazil was heading for the British market. Can the Minister comment on the outcome?

Can the Minister also say what progress the British Iron and Steel Producers Association—BISPA—has made, along with its European counterparts, in pressing for an extension of the Davignon surveillance from controlled and protected products into those which remain uncontrolled and unprotected?

I turn now from special steels to the BSC generally. The Corporation has lost—this figure has not been brought out so far in the debate—£1 billion in the past four trading years, while it has incurred a further £1 billion deficit by capital investment at the fastest rate in its history. Meanwhile, the capital spending is saddling British Steel with interest payments of more than £200 million a year. Every tonne of steel made is carrying a burden of £12 interest. If the interest component is deducted, it can be seen that BSC comes down to a relatively low rate of loss of £5 a tonne, which is a good performance by current European standards. But investments have been made and British Steel must try to pay for them.

Is it possible for the Government to give the BSC some relief by means of a capital reconstruction? I do not think that any hon. Member who has sat through this debate and is therefore interested in the subject—and I suspect that most hon. Members present are well informed about the industry—can doubt that such a reconstruction will happen one day. Let us not delay it unnecessarily. The benefit would be felt most now.

The Government should consider revaluing the Corporation's fixed assets on the basis that installed plant capacity is more than the BSC can "reasonably expect to utilise". Those are the words of Mr. Bob Scholey, the BSC's chief executive. Such Government support—it is not an unrealistic recommendation—for the Corporation's financial burden would be a great morale booster for the BSC's workers. As we have heard again and again from speakers on both sides of the House, BSC's workers are badly in need of such support now. Their morale must be at rock bottom.

My own Sheffield division is a case in point. There, the steelworks group made a profit of £9 million this year. But losses by other parts of the division, such as stainless steel, light products, forges and foundries, turned that profit into a total division loss of £25·7 million. It is resented locally that the capital expenditure that is helping to improve performance and the special efforts and achievements of managements and men have not been sufficiently recognised and appreciated. Such plants at River Don, Tinsley Park and Stocksbridge have been threatened with mothballing, or even closure.

Sir Charles Villiers is aware of the special difficulties of the River Don works, and he has indicated that he is impressed at the way in which both the trade unions and management at that works have cooperated in developing a business plan aimed at profitability. However, a question mark still hangs over this famous plant. Does it have a future?

Again, I ask the Minister whether he can offer any assurance about the future of this famous works. Can he confirm that the heavy forge development scheme will go ahead? That is a matter about which unions and men, not only at the River Don works but in the city generally, are anxious. It will take a little longer before the ambitious and technically highly successful stainless steel development at Tinsley Park and Shepcote Lane, in Attercliffe, achieve profitability. Like River Don, its contribution to the BSC is unique. Nowhere else in British steelmaking are those contributions duplicated. Both plants are indicted, because of their current and recent losses, but their essential and unique contribution is being overlooked.

Thanks to the £130 million investment at Tinsley Park, we can look forward to the elimination of most imported stainless cold-rolled strip, which reaped a United Kingdom market share of 60 per cent. It is not only capital expenditure that will restore the fortunes of BSC. The joint contribution of management and men is just as important. Perhaps that is the most important factor of all. Recent visits to Tinsley Park and Stocks-bridge with my hon. Friend the Member for Penistone (Mr. McKay) have left me in no doubt about the concern of management and trade union representatives. To come across such determination to succeed in the present climate of British steelmaking is welcome.

There has not been consistent operation at design levels at the Tinsley Park plant in the past, but that is improving. Both management and men are starting to make the plant grow. They are aware that if they can maintain that substantial improvement and achieve even greater efficiency of operation, there will be no question that their plant should be mothballed as was threatened two months ago.

That sense of partnership, dedication and commitment probably represents BSC's greatest asset—certainly in the Sheffield division. It is a precious and fleeting asset, as any business organisation knows. I appeal to the Minister and to his Front Bench colleagues not to jeopardise it.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North 8:42 pm, 7th November 1979

I am grateful to you, Mr. Speaker, for letting me catch your eye. I shall speak in support of the hon. Member for Kettering (Mr. Homewood) in view of the appalling problems faced by his constituency, particularly in Corby. I am a Northamptonshire Member and I have also worked in the iron and steelworks there that is threatened with closure.

Anyone who has worked in the steel industry will realise what a hard, dangerous and difficult job is done by the people working within it. There is a great interdependence between one worker and another, and one group of workers and another. As with the coal mines or even a ship of war, there is team spirit, group loyalty and esprit de corps in the industry. Therefore, when a closure is threatened, it is not the same as the closure of any other factory or plant. It causes far greater feeling and a greater sense of dislocation. I hope that the Government are aware of that.

Within the county of Northamptonshire, Corby was looked upon as a strange relation—the lodger that came and grew. It became the only part of the county, or perhaps of England, where a Scottish nationalist stood a good chance of being elected as a Member of Parliament. Recently we have come together, and we gladly accept Corby as a valuable and integral part of the county. If Corby is cut, Northamptonshire bleeds, and if Corby is hurt the county will cry.

Many statistics have been put before us. As with lies, damned lies and statistics, they can be made to prove anything, but some, particularly those put forward by Cambridge university, contain flaws. They take account of the cost of closure, unemployment benefit and revenue that will be lost. If there is a closure, these costs wil arise anyhow. Therefore, they cannot be put against the revenue savings in making steel in a more efficient plant elsewhere in the country. They are a capital cost of closure and they must be looked at in that light. To make a calculation and put it on one side and then put the revenue savings on the other is a mathematical and accounting illogicality.

I have been in touch with the British Steel Corporation about the costs of closure and the savings that could be made. In my view, by moving steel production elsewhere we would be able to save nationally £30 a ton or £20 million a year. I am not saying that I am necessarily right, but it looks to me as if the die is cast. It is a question not whether steelmaking at Corby finishes, but when; it is not why it should finish but how. Tragedy has been defined as a very beautiful woman who grows fat at the ankles. Corby would never claim to be Miss Universe but at present the town is threatened with a double masectomy. This is a great tragedy.

We must all be highly sensitive to the problems that Corby faces. We must all do all that we can to ease the transition problems and try to persuade the town that it faces not so much a problem but an opportunity.

Having heard my right hon. Friend the Secretary of State today, I wonder whether the Government realise the size of Corby's problem. Governments in the past have encouraged the expansion of Corby. They encouraged the setting up of a new town and encouraged people to come to it, mainly from Scotland. The country, through this industry and the great steelworks which has been at Corby for many years, has benefited. There is now an absolute duty on the Government and the country to do everything to help Corby in its hour of need.

If possible and where possible, the closures should be phased or delayed while other jobs come in and training takes place. There is an awful prospect, which has been outlined by the hon. Member for Kettering, of a gap between jobs required and jobs available. I urge the Government to phase where possible and to help where possible.

I turn to the question of roads. I asked my right hon. Friend earlier when he thought the A1-M1 link would be available. At present Corby is commercially inaccessible by road. We must bring viable roads into the Corby area as a priority. Perhaps we could get funds from Europe for this purpose, and we must press on faster than would normally be expected.

When and if the steelworks close, there will be a massive loss in rateable value to the county of Northamptonshire. There will also be an increased demand on the services of the county. Under the normal terms of the needs element of the rate support grant, it takes two years for this to work through the system. If there is a closure at Corby, I ask my right hon. Friends to make sure that this deficit is made up at the same time as the closure takes place. Why should people who are already suffering have to wait another two years to get the money to help them in their trials and tribulations?

We have heard today that development area status will be given to Corby. Labour Members have said that they do not think that this will make a great deal of difference. I do not know what the Government have in mind, but if development area status is not sufficient to help this stricken area I ask them to search their consciences and bring further measures forward.

My final plea is to the trade unions in the steel industry. This is a terrible time for them. They must feel devastation and resentment. The Government, members of the Conservative Party, the British Steel Corporation and the chairman, Sir Charles Villiers, are not evil men. We are all trying at present to do what we think is right and best for the country.

There is talk of industrial disruption, go-slows, overtime bans, and so on. I ask those involved to think hard before taking such action. I ask them to do so for the sake of the country, their industry, those who will lose wages, and the people of Shotton and Corby. If we have disruption in those towns and in the industry, it will be disastrous. One has only to look at Liverpool. Who would invest money in Liverpool, with its present reputation? For goodness sake, let us not have disruption and turmoil in Corby and Shotton. That would destroy the very jobs that we are trying to bring to those areas.

Photo of Mr Barry Porter Mr Barry Porter , Bebington and Ellesmere Port

Like other hon. Members who represent the Liverpool area, I take grave exception to my hon. Friend's remark about it. It can only harm the prospects of Liverpool. I hope that my hon. Friend will see fit to give way and withdraw it.

Photo of Mr Tony Marlow Mr Tony Marlow , Northampton North

I have finished what I had to say.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington 8:50 pm, 7th November 1979

Thank you, Mr. Deputy Speaker, for calling me in this debate. I believe that, once again, my time has been severely cut.

Before making my speech, I should like to say a few words about the speeches of other hon. Members. It was with great interest that many of us listened to the bleating—and it is bleating—of some Government supporters. I shall watch with great interest tonight in the Opposition Lobby to see with whom those hon. Members vote, particularly the hon. Member for Northampton, North (Mr. Marlow), who made a fairly impassioned speech on behalf of constituents in his region. I shall also watch closely the hon. Member for Harborough (Mr. Farr), whose speech I shall remember for its passion for many years. They are supporters of a Government seeking to slash expenditure and place before the country and the House the need to make cuts in moneys available to the British Steel Corporation.

My constituency is Workington, and for many years it has been a major centre for the production of steel products. Whereas in many parts of the country a dark cloud hangs over the industry, that is not so in Workington. We look forward to a good and profitable future. Indeed, at the moment, Workington, with its steel exports, stands at the forefront of BSC. There are orders for Nigeria, for the Boston Main railway company and the mass transit railway system in the United States, for Kenya railways, and for railway construction between Damascus and Mecca in the Middle East.

Our record in exports is first-class. It was with sadness that I heard of the reports that stem from other parts of the Corporation. Now, and over the last few years, a depression has developed in the steel industry in Workington. It was perhaps aggravated this morning by the leak in The Guardian of the possible cutback in rail facilities in areas surrounding my constituency. The depression stems from the inability of BSC to take a firm and early decision on the coke investment programme for its plant at Mossbay in Workington. While that decision is outstanding, there is great disquiet and concern in Workington. We hope that within the next few weeks BSC will understand the position and take the decision that is so vital to the future of its activities in Workington.

As a result of coke-oven investment, we shall see the restoration of the morale that has been slipping over the last few years in Workington. It will certainly lead to an increase in morale in the coal mines in the constituency of my hon. Friend the Member for Whitehaven (Dr. Cunningham), where investment in coke-oven facilities will ensure an adequate and real future for workers in that industry. Of course, there is the added benefit of the spin-off in the local economy. When one creates investment in a given area and ensures support for the future of its industry, local tradesmen and local people generally look forward with confidence and one sees a general revitalisation in all areas of trade.

I now turn to the national issue. Here I express my great respect for my hon. Friends the Members for Flint, East (Mr. Jones) and for Kettering (Mr. Homewood) because of the way in which repeatedly during the five months that I have been here they have stated their case on behalf of their constituents. The speech of my hon. Friend the Member for Flint, East was one of the finest speeches that I have heard in the House. It was a speech of passion. If only the young men from Flint who came to see me yesterday had been able to hear that speech, they would be very proud of their Member of Parliament.

If there have been difficult years for the BSC and its workers, it is interesting to note the response of Conservatives. Last year the Iron and Steel (Amendment) Bill came before the House and every Conservative Member voted against it, including the right hon. Lady the Prime Minister and all those hon. Members who have spoken so passionately against the motion. Some months prior to that a Private Member's Bill sponsored by the hon. Member for Eastbourne (Mr. Gow) was introduced with the aim of denationalising the industry. All this has occurred at a time when, between 1973 and 1978, 25,000 jobs were lost in the industry, thus generating a great feeling of insecurity. This has taken place at a time of international recession, when people realised that unless the Government were willing to back industry and take real action the situation would only deteriorate further.

Now we have a Secretary of State for Industry who has set such unrealistic limits that every hon. Member—including Conservative Members—is aware that it is impractical for them to be realised. Indeed, some interesting debates will develop next April on the limits for the next year of the BSC's operations. It was misleading for the Secretary of State today to tell us that the Government were not directly interfering in the management of the BSC. They are. By interfering with the amount of money that is available to fund the running costs of the industry, they are placing their imprint firmly on the future policies of the Corporation and how they affect the closures in the constituencies that have been represented in the debate.

It is in that climate that the unions are now pressed to respond. They are demanding a national overtime ban. Here I refer to a newspaper report from my own constituency—a profitable sector. Under the heading "Doomsday warning for steel", BSC Cumbria chief, Mr. Langton Highton, said: Workington's massive British Steel operation faces total collapse if workers back new strike calls. That is the response of management, not so much to the workers and the initiative that they are seeking to take but to the attitude adopted by the Secretary of State for Industry inasmuch as it is he who is provoking the industrial actions that will almost inevitably take place.

There are other actions that I believe should be taken. There is a crying need for an inquiry into the whole future of the BSC. Indeed, a special examination should be made of the whole question of imports. The latest import statistics show, as my hon. Friend the Member for Flint, East so accurately pointed out, that we are now importing in excess of £1 billion worth of steel each year. That is an unacceptable level of steel imports when the industry is clearly in recession and jobs are vital.

If the problem of imports cannot be resolved by an initiative of the Secretary of State, the trade unions will have only one option—to take direct action and, after great consideration, consultation and discussion within the movement, selectively to blockade the import of those steel products that are destroying the jobs of their brethren in the British steel industry.

9 pm

Photo of Dr John Blackburn Dr John Blackburn , Dudley West

We have heard much about Corby, Shotton and Redcar, and this is one of the rare occasions when there is no pleasure in debate. Our hearts will be heavy when we go through the Lobbies to meet the people from the steelworks because we know the problems that they face.

Although we have spoken of Corby, Redcar and Shotton, I have a political and moral responsibility to speak on behalf of my constituency, the northern end of which has been ravaged with unemployment as a result of the closure of the Bilston steelworks. I am not surprised to see the hon. Member for Wolverhampton, South-East (Mr. Edwards) here tonight, and I commend him for the battle that he fought on behalf of those fine men from the Bilston steelworks. Members of the Christian faith would say that Good Friday was a sad day, but it was a sad day for the hon. Member for Wolverhampton, South-East and myself when the steelworks were finally closed.

In the centre of my constituency is a steelworks that is threatened with closure,—Cookley. Between 800 and 1,000 jobs are involved.

Time is limited and I am grateful to the Opposition Front Bench for giving me the opportunity to address the House.

There was a forceful speech from the hon. Member for Redcar (Mr. Tinn). He said that there had been mistakes, and that is certainly true. The mistakes of the British Steel Corporation have been reflected in the most tragic of all terms—by unemployment for many of the fine steelworkers that we unitedly represent. Worse than that, however, there has been apathy. It is even more tragic that no remedial measures were taken to stop the slide of the market share of the British Steel Corporation.

We have heard that £1 billion of steel is imported, and no one can condone that. It should have been a challenge to the British Steel Corporation to go out and capture that market and keep it within the country.

I am not ashamed to say that to me the word "profit" is not obscene. I bear in mind the facilities that came to Stewarts and Lloyds because it was producing profits. There is one thing worse than not making profits, and that is to have no industry, no job and no employment.

We are here not to hold an inquest but to grasp constructive opportunities so that matters may be put right. The British Steel Corporation has failed to respond quickly to changes even though it is running at only 70 per cent. of its capacity.

There is a good dialogue between the unions and management, and I commend Mr. Sirs. However, no matter how long management talks with unions, and no matter how much they get it right, it will not produce an order. The only way in which the British Steel Corporation will improve its performance is by implementing a vigorous marketing and sales policy to ensure that there are no competitors from overseas who use Britain as a soft touch or a dumping ground for subsidised steel.

If we are to adopt that policy, we must have utter reliability in the product, in its performance and in its delivery. It is not the Government's job to run Britain's steel industry, nor was it the job of the Opposition when they were in office. There is no one in the House capable of running the industry. We are not trained to do it. We do not have the gift or the talent to do it. It is the job of the board of the Corporation to run the industry.

We have large furnaces. We have a large investment programme. That has already been spelt out clearly. The workers in the steel industry, the nation generally and taxpayers especially are entitled to say, not in the short term but in the long term, "We want to see a tremendous improvement in the productivity and performance of the industry." The Government's amendment states: the future of the steel industry depends on much improved productivity, efficient use of costly investments and an early return to profitability. It is clear that we face a challenge.

I am sufficiently old-fashioned to believe that it is much better to work within the bounds of arithmetic and not to indulge in fancy. I have a mandate to speak on behalf of the constituency that sent me to this place. On behalf of the steel workers who are now redundant in the northern end of my constituency and those who are to become redundant in the centre of my constituency, I say to the Government that their amendment sets out the only constructive way to secure all the things that we want from a viable British steel industry.

Photo of Mr Stanley Crowther Mr Stanley Crowther , Rotherham 9:10 pm, 7th November 1979

I listened with great sadness to the Secretary of State. He has made it crystal clear that his prejudices and dedication to the free market ideology have completely blinded him to the reality of the position in the steel industry.

At a time when every advanced industrial nation is experiencing a major recession in the demand for steel, he is saying to the BSC "Sink or swim. By next April the lifeline will be withdrawn, whatever the world trading conditions." But the industry was brought into public ownership to enable the necessary investment to be pumped in. That is bigotry of the worst possible sort. It is nonsense for the Secretary of State to pretend that he is following the policy of the previous Labour Government. That is what he appears to be saying. It is absolutely wrong and is a slur upon the previous Labour Government's policy. At no time did that Labour Government ever say to the BSC "If you are not able to meet your target of breaking even by April 1980, we will pull out all our assistance."

With respect to the hon. Member for Brigg and Scunthorpe (Mr. Brown), he cut a slightly pathetic figure. He pleaded with his right hon. Friend to tell him that he did not really mean all that he had said. The Secretary of State has made it crystal clear over and over again that he is cutting the lifeline to BSC if it does not match up to its target.

We are not saying that no further rationalisation can take place in the steel industry. We all accept that more changes have to take place. No one is saying that every mill, melting shop or department of every works that exists will continue to exist, or even that every job that exists must remain for ever.

Conservative Members have attempted to pretend that there is no difference between the two sides of the House, but there is an essential difference. We have always maintained that changes must take place in an orderly way and in agreement with the trade unions. Despite the allegations made, I think, by the hon. Member for Flint, West (Sir A. Meyer), the industry's trade unions have a long record of realism and responsibility.

Changes should take place as part of a comprehensive and vigorous policy of regional development. That has not happened in the past. Matters tend to move in a piecemeal manner. Unless a scheme is developed under which jobs that are lost in the old traditional industries are replaced with new jobs, we will be constantly up against that problem.

History has shown that the old idea of relying on financial incentive to private enterprise for that purpose provides perhaps half an answer, but little more and certainly not the full answer. The remedial measures described by the Secretary of State in respect of Corby are pie in the sky. Many of his hon. Friends acknowledged that during the debate.

I do not wish to reopen yesterday's debate on the Industry Bill, but the emasculation of the NEB is relevant in this context. I was one of those who saw in the NEB the best hope for real future public involvement in the rejuvenation of those regions where the traditional industries are no longer able to provide all the jobs that are needed. The disastrous consequences of massive redundancies for places such as Corby and Shotton have been adequately described.

When 10,000 jobs are lost at a stroke, the impact is much greater than when 10,000 jobs are lost over a number of years, as has happened at Redcar and Rotherham. The net effect is the same. Those jobs have still gone. Until some sensible regional policy is developed, we will always be up against that problem. The jobs are not there for the younger generation. However long it takes to lose them, the jobs are still being lost. We must look seriously at the enormous social cost.

We in Rotherham have certainly developed a productive and profitable steelworks, but it has cost us a great deal in social terms. I have little confidence that the Government will be able to provide any kind of solution to deal with the regional problem or with the internal problems of the steel industry. I hope that the industry can survive the coming years of Toryism, but I doubt it.

Photo of Dr Jack Cunningham Dr Jack Cunningham Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Industry) 9:15 pm, 7th November 1979

I am pleased that I conceded some extra time for Back Bench speakers. First, I am practising what I preached in voting for shorter speeches. Second, it enabled my hon. Friend and constituency neighbour the Member for Workington (Mr. Campbell-Savours) to make an effective speech on behalf of his constituency and mine. Finally, it gives me the opportunity to express a large measure of agreement with my hon. Friend the Member for Rotherham (Mr. Crowther). Bearing all that in mind, I hope that hon. Members will forgive me for not referring to their speeches. I have heard them all with the exception of part of that of the hon. Member for Harborough (Mr. Farr).

The interesting factor about the debate is that the questions and the real issues have in the main been raised by my right hon. Friend the Member for Deptford (Mr. Silkin) and by Government and Opposition Back Benchers. They certainly were not raised in any measure by the Secretary of State for Industry. He maintained his stance, which is nothing new to us. He gave no answers to questions. His attitude was the same—based on cash limits. We know it well. It is rather like the attitude of the Chief Secretary to the Treasury in his statement last week. The Secretary of State is effectively planning unemployment as part of his approach to the British Steel Corporation.

The right hon. Gentleman claimed that the attitude that he now adopts and the policy that he is pursuing are almost identical to those of the last Labour Government. We categorically reject that assertion. He has absolutely no ground for making that statement. He can confirm what I am saying simply by reading Labour's White Paper of March 1978. There it was made clear that there would be no unilateral or enforced closures of steelworks. The White Paper did not endorse the proposal of the chairman of the BSC to break even by March next year. I shall return to that point in a moment, but that statement is turning out to be one of the rashest by any chairman of a nationalised industry in this country for many years.

It was also evident that the Secretary of State's speech left many of his supporters uneasy. The hon. Member for Harborough expressed his unease, as did the hon. Member for Rutland and Stamford (Mr. Lewis) and other Conservative Back Benchers. The Secretary of State announced a decision on special remedial measures for Corby, which indicates that my hon. Friend the Member for Kettering (Mr. Homewood) has virtually no chance of winning the tremendous battle that he and his colleagues in that area have maintained for the Corby steelworks.

I can tell the Minister of State that it is not credible to suppose that the measures announced today can have the slightest effect on the catastrophic employment and social impact of closure at Corby. Every right hon. and hon. Member knows that that is so. The situation is in no sense satisfactory. There is not sufficient time or money, and the Government know that as well as we do. It is all about public expenditure. It comes ill from the Secretary of State to talk about what he proposes in Corby in terms of public expenditure when his case rests on the fact that public expenditure should be reduced and how quickly the new terms for that reduction can be brought about. In his usual economic, tutorial manner, he sounded like an old, cracked, gramophone record, playing the same old tune.

Worst of all, the right hon Gentleman said not one word about the future of the British steel industry. He said something about taxpayers not wanting to bear the burden of propping up steelmaking losses. He knows as well as we do that in one way or another the taxpayer will carry the burden. For many reasons, we believe that taxpayers would rather carry the burden of keeping people in jobs than on the dole. That is what the Secretary of State has in store for them. Development area status will not begin to tackle the problems of Corby. Indeed, in my constituency in 1968 the Millom ironworks were closed down in similar circumstances. It is an isolated community and 30 per cent. of the people were put on the dole at short notice. Anyone who visits that town will see that it has not recovered—11 years later. The Government know that to be the case. For Millom in 1968 read Corby—probably Shotton, too—in 1979.

There was a lack of urgency in what the Secretary of State said about the size of the problems and the Government's will to tackle them. He said that their attitude is the same as the previous Government's. Where is the urgency that was displayed at the closure of Ebbw Vale, East Moors or Rutherglen, the constituency of my right hon. Friend the Member for Rutherglen, (Mr. MacKenzie)? There is a great difference in commitment and determination to tackle the problems.

The hon. Members for Harborough and for Rutland and Stamford expressed their considerable unease at the proposals. I congratulate them, and I invite them to express it more formidably by joining us in the Lobby tonight.

My hon. Friend the Member for Neath (Mr. Coleman) expressed with great force the difficult position in which the unions in the steel industry have been placed by the Government's policies. I shall return to that matter. My hon. Friend the Member for Consett (Mr. Watkins) made the same point. I know his constituency well. I live on its edge. I worked there as a trade union officer many years ago. The matter was also raised yesterday by councils from Deeside and Clwyd—Conservative almost to a man. They came to lobby Parliament to make clear the distaste with which they view their Government's policies.

My hon. Friend the Member for Kettering made the point that BSC (Industry) Ltd. industry does not have the capacity or the financial resources to tackle the financial problems which will be faced in Corby. If the Minister wishes to display any urgency, he should insist that the BSC pays attention to that matter. In a moving speech, my hon. Friend the Member for Kettering said that, faced with what has happened at Corby, the unions in the industry are left with no choice. They have no confidence in the Government and little or no confidence in the management of the BSC.

The same point was made by my hon. Friend the Member for Central Ayrshire (Mr. Lambie). It is interesting to hear Conservative Members talking about the need for increased productivity. My hon. Friend pointed out that there have been closures for 10 years in the steel industry, yet we are still told that what we need are more closures to solve the problems.

Last year alone, 17,000 jobs in the steel industry were lost. Apparently that did not solve the problem. That leads most, if not all, members of the Opposition to conclude that closures are not the answer. I should have thought that that was a fairly obvious conclusion for the Government as well.

My hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) referred to the same problems in the private sector of the steel industry. Surprise, surprise—the private sector is in difficulties too. The Secretary of State has been silent on that aspect of the problem of the steel industry. I agree with my hon. Friend's reference to the need to consider the financing of the British Steel Corporation. Almost every speaker made special pleas or asked for assurances, whether from the unions, the work force or Ministers. I support those requests. However, I think that our worst fears will be fulfilled, as the requests appeared to fall on deaf ears.

If we need a steel industry—that was the central question asked by my right hon. Friend in moving the motion—we must support it. There is no other way in the present circumstances. We must be prepared to pay the price if we want an effective industry not only in terms of bulk capacity but with sufficient flexibility to produce special products and meet market demands and challenges at home and abroad. That situation will not obtain if the Government's policies are pursued in the present direction.

If the Government amendment were an addition to our motion, I do not think that many members of the Opposition would object. We recognise that reliability, profitability and the improvements in productivity to which it refers are necessary. Of course that is so. However, they will not happen in the short term and certainly not as a result of Government policies. Where is the evidence to support any argument that their approach—I would not dignify it with the word "policy"—will bring us to the situation described in the amendment?

We are now talking about closing effective steel-making capacity. It is by no means agreed that there is hopelessly inefficient or unusable capacity either at Shotton or Corby. What is more important is that we are not talking just about Shotton and Corby. In a previous debate on this subject—on the EEC documents—we received no ministerial assurances about further closures or about protecting regional aid to industry.

The chairman of the British Steel Corporation, in his famous statement and pledge on Shotton, said: We shall want Shotton steelmaking for many years to come. The Shotton option remains open for technological progress, new commercial requirements. He added: This plan is commercial, practical and prudent. Those are the words of the chairman of the BSC—the man to whom the Secretary of State is apparently happy to leave the running of the Corporation. If he is happy with the judgment of the chairman, why does he not accept that statement about the situation at Shotton?

The Corby case was effectively put by the unions involved in the industry. They made clear their belief that a decision to close Corby, apart from all the social consequences to the community, would adversely influence the balance of payments by increasing opportunities for imports and add to rather than reduce the overall level of any Exchequer contribution required for the industry. They pointed out that those are not the ends—if, indeed, there are any ends—towards which productive capacity should be withdrawn and communities sacrificed.

There is a very good argument in favour—

Photo of Dr Jack Cunningham Dr Jack Cunningham Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Industry)

I am not giving way. I have already conceded a lot of time and the hon. Gentleman was one of the beneficiaries.

The Corby case and the Shotton case stand on their merits. It has been made clear by my hon. Friend the Member for Rotherham that in his area and in areas such as Sheffield the old plants, the work force and the unions, given confident management and investment to support their case, can re-establish themselves in world markets and compete on the same terms as their competitors and win back business for this country. That is the way in which we should approach the problems that we face in our industries. We should not be abandoning them to the hopelessly antiquated attitude of the Secretary of State for Industry.

Elsewhere in Europe, far less efficient plant remains in production, protected by Governments, and elsewhere in the EEC, in spite of the Davignon measures and in spite of the Vouel measures, which we opposed strongly for so long in Government, the industry is subsidised. But this Government are apparently prepared to see our industry, with better capacity, in many circumstances, go to the wall. That is not a credible situation. It is not a creditable situation. It is another reason why we have no confidence in the Government's approach to the problems of the steel industry.

Where is the logic? What end is this approach meant to achieve for Britain or the British steel industry? The demand to break even by March next year is not based on any long-thought-out economic approach to the British Steel Corporation. It is almost plucked out of the air by the chairman. It does not have any credible economic basis, given the facts that surround the British Steel Corporation. Unfortunately, the chairman's rashness is now being used to throttle the industry. It may be used to throttle him before much longer. We shall see.

What will happen after 1980? That is another question to which the Secretary of State paid no attention. What will be the situation in 1981 if the Corporation still is not breaking even? Will there be more closures? Will there, perhaps, be a major and modern steelworks closed? That would be the next and only option left to the Corporation if its present policy is pursued. No one believes that the target is credible. No one believes, either in this House or outside, in the industry, in the press or anywhere, that this target will be achieved. If it is achieved, its effect could only be catastrophic for the long-term position of the British Steel Corporation and the many tens of thousands of people whose futures are bound up in it. It would lead to further de-industrialisation.

This approach can result only in the most serious uncertainty in areas such as Consett, Workington, South Wales and elsewhere. It is no wonder that the unions have now reached what is almost breaking point. They have seen what has happened at Shotton. They have seen a pledge about the discussion of closures at Corby dwindle from two years to one year, then to six months, and now to six weeks. This is absolutely unacceptable. What will happen to the size and capacity of British Steel if this policy is continued? It is no wonder that, against this background, the unions have made clear that they cannot go on co-operating with the right hon. Gentleman and his Government.

We are discussing not just the present closure proposals but the credibility of the BSC management to sustain an effective and co-ordinated industry. That is the problem, as my hon. Friend the Member for Central Ayrshire made clear. In the midst of the deepest world recession in steel demand for 40 years, the Government respond to the problems with policies of 40 years ago—closure after closure, with the downward spiral into further unemployment.

At a time when it is operating nowhere in the world—not in America, not in Japan or Europe—the Government place their faith in the market economy. That approach would be anathema to us in reasonable circumstances, but when market forces are operating nowhere they are even more bound to fail if invoked in our domestic industries. So dogmatic a course is bound to lead, as it has done, to the unions expressing no confidence.

We talk about competition and productivity. As has been made clear, France loses £32 per tonne of steel, Italy £21 and Belgium £20. The British steel industry loses £17 a tonne, and without loan charges the loss is only £5. That is not evidence that our workers cannot compete with their counterparts in other countries. We reject the accusation that this problem can be laid at the door of the unions.

The Government's own Back Benchers have made it clear that they do not like this policy. I emphasise that we do not like it much, either. Tory Back Benchers have shown more concern than the Secretary of State and no doubt more than the Minister of State will show.

To someone of extreme views—the Secretary of State's views are extreme; they are not moderate, especially in circumstances such as these—balance sheets are apparently more important than jobs; financial rectitude is the goal at any cost, regardless of the price in terms of unemployment; tax cuts are more important than the job opportunities and careers of young people in areas of already high unemployment; public expenditure reductions at the cost of whole industrial communities are the order of the day.

We cannot accept this. The complete absence of any policy content in the Secretary of State's speech—he apparently could not be bothered about the future of the industry and its workers—is the best justification for our motion.

Photo of Hon. Adam Butler Hon. Adam Butler , Bosworth 9:38 pm, 7th November 1979

Like the hon. Member for Whitehaven (Dr. Cunningham), I shall not be able to deal with all the points raised. We shall try to write to hon. Members if I do not cover their questions.

One of the extraordinary assertions by the hon. Member for Whitehaven was that the Government were in no way following the Labour Government's policy towards the steel industry. An unbiased observer of recent history could not possibly agree with that. To a large degree, there has been a common approach to the industry.

Photo of Hon. Adam Butler Hon. Adam Butler , Bosworth

Let me go on. Would the Opposition agree on a determination to see an efficient and profitable industry? Would they agree that a reduction in productive capacity was necessary to achieve such an industry? There is ample evidence to support this conclusion for anyone who is unbiased. Because some hon. Members were not here at the beginning of the debate, I shall give some of that ample evidence.

The White Paper of March 1978 read: The Government's present view is that further rationalisation will be necessary in future … To achieve financial viability it is necessary for capacity to move more into line with demand. That would be a clear statement even today. The White Paper went on: The Corporation is suffering from substantial over-capacity now. This is likely to persist over the next few years There is a realisation that something had to be done to meet that. Or let us take the much-quoted remark of the right hon. Member for Chesterfield (Mr. Varley). He set what most of us would have taken to be a firm financial target. It was considerably tighter in time scale than that proposed by my right hon. Friend.

According to the target set by the right hon. Member for Chesterfield, the Corporation was supposed to break even during 1979–80, which is not the target set by my right hon. Friend. I do not know what a target is if it is incorrect to believe that a target was set when the right hon. Gentleman stated: Part of the Government policy is that the financial objectives of the BSC should be to break even by the financial year 1979–80."—[Official Report, 22 May 1978; Vol. 950, c. 1105–6.] The problem was that it was not looked upon as any kind of target. British Steel did not think that it was necessary to meet that target. Due to the weakness and lack of determination shown by the right hon. Gentleman and his Government, BSC took not the slightest notice of that target, nor of the words used by him in this House. If that statement did not set a target, there is mention of it again in the public expenditure White Paper as late as January of this year. The White Paper states: The Corporation are aiming to operate at a break-even basis by March 1980. The Government are giving full support to the Corporation in their efforts. There, surely, is a commonality—though of words only—on the part of the Labour Party. We have both words and intention on the Government Benches.

Photo of Dr Jack Cunningham Dr Jack Cunningham Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Industry)

The hon. Gentleman cannot claim that the Labour Secretary of State made a statement similar to that made by his right hon. Friend in July of this year about the future financing of the British Steel Corporation.

Photo of Hon. Adam Butler Hon. Adam Butler , Bosworth

It would be difficult to read much difference into the statement of my right hon. Friend from those that I have just quoted. If those statements are now being totally denied by the Opposition, right hon, and hon. Gentlemen are renouncing all responsibility for their time in Government. Regretful as they were, the previous Administration presided over closures which involved the loss of 25,000 jobs during their last two years of office. That was not a deliberate policy. It was necessitated by the circumstances. I ask, therefore, whether the Labour Party believes that closures are necessary or whether it is now renouncing its seemingly responsible attitude of that period.

Governments of both parties share something else in common. They have presided over, and acquiesced in, some highly optimistic forecasts of demand. Against those forecasts, successive Governments have provided thousands of millions of pounds of taxpayers' money to enlarge and modernise productive capacity.

Both parties, therefore, are to some extent responsible for the present overcapacity in the steel industry. If we are all responsible for the overcapacity, we are also responsible for some thoroughly modern plant with a potential for low-cost, high-quality output.

I have been worried during the debate about right hon. and hon. Members' encouragement of obstruction and disruptive action. It is a gross disservice, as at least two of my hon. Friends said, to those who are directly affected by closures to raise their expectations. It does no good to them and no good to the prospects of those at other plants to encourage industrial action. If prolonged for any time, industrial action will put at risk the whole steel industry.

The debate does not turn on whether there should be closure and restructuring. The previous Administration accepted the necessity for that. The debate turns on the need for an early return to profitability. That will come from improved productivity and the efficient use of costly investments. It will not come from the continuation of plants which are actually or potentially loss makers. There is justification for keeping plants open only in two circumstances: if there are no worthwhile alternatives, and if there has not been full consultation.

In the case of Corby it is not true to say that there were only six weeks of consultation. Discussions about the future of Corby began under the Labour Administration in February 1979. The consultations have occupied more time than has been taken in connection with any other closure. With reluctance, the chairman had to inform the trade unions at the final meeting that there were no workable alternatives.

The only other reason for keeping open loss-making plants is if there is a massive increase in demand round the corner and a seller's market, instead of a buyer's market, develops, with prices to match. Then plants with out-of-date capacity have a chance of being economic. There is no indication of that occurring for some years. An increase in demand to take up 40 or 50 per cent, more of British Steel Corporation output is needed. There is no indication that that will happen.

It is certain that the latest modern plant in BSC is among the best in Europe, and we should be proud of it. If such plant is not run at capacity, it will continue to lose money. Ravenscraig has a highly developed plant whch is operating at about three-quarters capacity. It is not possible to make profit out of a capital-intensive plant which is running at three-quarters capacity.

Redcar, of which the hon. Member for Redcar (Mr. Tinn) spoke so proudly, must have a massive output if it is to run efficiently, let alone at a profit. Such plants must be run at or near full capacity. They should then be in the position to supply the finishing ends at Corby and Shotton. That will be to the benefit of those who work at those plants because full capacity means more jobs and job security in the future.

The Government's responsibility is to look after the public's money. The hon. Member for Workington (Mr. Campbell-Savours) believes that they have no such responsibility, but certainly where a management decides to close plants the Government have a responsibility with regard to the social consequences. There are fears and worries, which have been expressed as eloquently by my hon. Friends as by Labour Members.

The Government must act. My right hon. Friend announced a very good package of aid, giving development area status, with its 15 per cent, grant on buildings and plant, eligibility for assistance under section 7, funds from Europe, and, particularly, increased factory building. I understand that, for example—[Interruption.] Labour Members might like to listen, because they claim that there is nothing in the package. If they do not take the steel industry's future as seriously as I do, they can go on chatting among themselves. This Government take the industry very seriously and are trying to do something about its future.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

They are trying to kill it.

Photo of Hon. Adam Butler Hon. Adam Butler , Bosworth

I was about to say that the Earlstree industrial estate has a potential of nearly 4,000 jobs over the next few years. There is a further estate of 50 acres available, and a feasibility study is looking into the potential of a further 250 acres.

Apart from that, Corby does have attractions. The nearest assisted area to London must be attractive to investors. Therefore, we believe that the package announced by my right hon. Friend will be of real help.

If the decision to close Shotton is confirmed, my right hon. Friend the Secretary of State for Wales will make an announcement about what the Government can do to help,

Various hon. Members spoke about the threat of imports, particularly from the Common Market. Imports of steel into this country have not varied in their proportion for four or five years. Secondly, we export more steel than we import. If we impose the sort of barriers that were requested by some Labour Members, the barriers will go up against our exports.

There was also a reference to the performance of steel companies in Europe. In fact, the Luxembourg, Dutch and German steel industries will break even or be profitable this year. Evidence of this is the fact that some people are now showing increasing reluctance to renew the Davignon measures when they run out, because they believe that they can compete without protection against the outside world.

Because of the present condition of our industry, it is the Government's intention to press for the renewal of those measures. As I have said, there are others who have found it possible to compete in the world, and to get themselves into an efficient state, who will be arguing in the other direction.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

They have done it with Government aid.

Photo of Hon. Adam Butler Hon. Adam Butler , Bosworth

The right hon. Member for Deptford (Mr. Silkin) said that British Steel was losing a significant proportion of its output because of the import of foreign cars. He produced some telling figures. What he did not add was the reason why there was such an import of cars from the Community. It is not that wages are lower there. I do not think that he was asserting that. I do not think that he was asserting that the cars were heavily subsidised, because I do not think that coking coal is used for cars. What matters is the reason why those cars are being bought. The British public exercises its choice and prefers foreign cars in terms of price, delivery, quality or some other reason. That is a useful illustration because that is the way in which British Steel can increase its sales and production and thereby provide the jobs that we want.

A simple example is that, thanks to an inter-union dispute, the Hunterston terminal has not yet been used since it was opened five or six months ago. That has cost British Steel a large amount of money, and that must affect its prices and the quality of its output. It has particularly affected the output of Ravenscraig. It is intended that Ravenscraig should supply Shotton. If good-quality steel could be produced there, the result would be good-quality motor cars. If steel is produced at Ravenscraig and if that plant's capacity is used to the full, that will bring down the price. Then at least there is a better chance of having a better-quality and a better-priced British motor car. Only then will the imports become fewer.

Photo of Mr George Grant Mr George Grant , Morpeth

Before the Minister leaves the question of the competitiveness of EEC steel industries, will he tell the House by how much the German steel industry is subsidised by virtue of the subsidy on coking coal?

Photo of Hon. Adam Butler Hon. Adam Butler , Bosworth

The difference in price between imported coking coal from Australia and other places and that produced by the National Coal Board is about £10 a tonne. That is pretty significant. As the hon. Member knows as well as I do, the other problem in connection with British-produced coking coal is that it is not as good quality as the imported material. High-quality coking coal is particularly necessary for the operation of such plants as Redcar.

Our amendment refers to the need to improve productivity, make use of costly investments and achieve profitabiilty as rapidly as possible. The interests of all those who work in the industry depend on reaching those targets, particularly that of profitability. I believe that the unions and their members know this. I urge them most carefully not to take any action that will put that future at risk as it will only do harm to their own members.

Government policy is and will continue to be to bring about a proud and healthy steel industry. We are determined to achieve this. But we are also determined to help those who suffer from the closures which continuing overcapacity and uneconomic facilities make essential. Therefore, I ask my right hon. and hon. Friends to reject the Opposition motion and to support our amendment.

Photo of Dennis Canavan Dennis Canavan , Stirlingshire West 9:59 pm, 7th November 1979

That was one of the most deplorable speeches that I have heard in this House. If this is the justification for the Government's industrial strategy, particularly for the steel industry, the House has no choice but to vote against it. The Minister tonight has insulted us—

Photo of Mr John Evans Mr John Evans , Newton

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 original words stand part of the Question:—

The House divided: Ayes 248, Noes 307.

Division No. 95]AYES[10 pm
Abse, LeoCook, Robin F.Field, Frank
Adams, AllenCowans, HarryFitch, Alan
Allaun, FrankCraigen, J. M. (Glasgow, Maryhill)Flannery, Martin
Alton, DavidCrowther, J. S.Fletcher, L. R. (Ilkeston)
Anderson, DonaldCryer, BobFletcher, Ted (Darlington)
Archer, Rt Hon PeterCunliffe, LawrenceFord, Ben
Armstrong, Rt Hon ErnestCunningham, George (Islington S)Forrester, John
Ashley, Rt Hon JackCunningham, Dr John (Whitehaven)Foster, Derek
Ashton, JoeDalyell, TamFoulkes, George
Barnett, Guy (Greenwich)Davidson, ArthurFraser, John (Lambeth, Norwood)
Barnett, Rt Hon Joel (Heywood)Davies, Rt Hon Denzil (Lianelli)Freeson, Rt Hon Reginald
Beith, A. J.Davies, Ifor (Gower)Freud, Clement
Bennett, Andrew (Stockport N)Davis, Clinton (Hackney Central)Garrett, John (Norwich S)
Bidwell, SydneyDavis, Terry (B'rm'ham, Stechford)Garrett, W. E. (Wallsend)
Booth, Rt Hon AlbertDeakins, EricGeorge, Bruce
Boothroyd, Miss BettyDean, Joseph (Leeds West)Gilbert, Rt Hon Dr John
Bottomley, Rt Hon Arthur (M'brough)Dempsey, JamesGinsburg, David
Bradley, TomDewar, DonaldGourlay, Harry
Bray, Dr JeremyDixon, DonaldGrant, George (Morpeth)
Brown, Hugh D. (Provan)Dobson, FrankGrant, John (Islington C)
Brown, Robert C. (Newcastle W)Dormand, JackHamilton, James (Bothwell)
Brown, Ronald W. (Hackney S)Douglas, DickHamilton, W. W. (Central Fife)
Brown, Ron (Edinburgh, Leith)Douglas-Mann, BruceHarrison, Rt Hon Walter
Buchan, NormanDubs, AlfredHart, Rt Hon Dame Judith
Callaghan, Rt Hon J. (Cardiff SE)Duffy, A. E. P.Hattersley, Rt Hon Roy
Callaghan, Jim (Middleton & P)Dunn, James A. (Liverpool, Kirkdale)Haynes, Frank
Campbell, IanDunnett, JackHealey, Rt Hon Denis
Campbell-Savours, DaleDunwoody, Mrs GwynethHeffer, Eric S.
Canavan, DennisEadie, AlexHogg, Norman (E Dunbartonshire)
Cant, R. B.Eastham, KenHolland, Stuart (L'beth, Vauxhall)
Carmichael, NeilEdwards, Robert (Wolv SE)Home Robertson, John
Cartwright, JohnEllis, Raymond (NE Derbyshire)Homewood, William
Clark, David (South Shields)Ellis, Tom (Wrexham)Hooley, Frank
Cocks, Rt Hon Michael (Bristol S)English, MichaelHoram, John
Cohen, StanleyEnnals, Rt Hon DavidHowell, Rt Hon Denis (B'ham, Sm H)
Coleman, DonaldEvans, Ioan (Aberdare)Huckfield, Les
Concannon, Rt Hon J. D.Evans, John (Newton)Hughes, Mark (Durham)
Conlan, BernardEwing, HarryHughes, Robert (Aberdeen North)
Hughes, Roy (Newport)Morris, Rt Hon Charles (Openshaw)Skinner, Dennis
Janner, Hon GrevilleMorris, Rt Hon John (Aberavon)Smith, Cyril (Rochdale)
Jay, Rt Hon DouglasMorton, BarrySnape, Peter
John, BrynmorMoyle, Rt Hon RolandSoley, Clive
Johnson, James (Hull West)Mulley, Rt Hon FrederickSpearing, Nigel
Johnson, Walter (Derby South)Newens, StanleySpriggs, Leslie
Johnston, Russell (Inverness)Oakes, Rt Hon GordonStallard, A. W.
Jones, Barry (East Flint)O'Halloran, MichaelStewart, Rt Hon Donald (W Isles)
Jones, Dan (Burnley)O'Neill, MartinStoddart, David
Kaufman, Rt Hon GeraldOrme, Rt Hon StanleyStott, Roger
Kilroy-Silk, RobertOwen, Rt Hon Dr DavidStrang, Gavin
Kinnock, NeilPalmer, ArthurStraw, Jack
Lambie, DavidPark, GeorgeSummerskill, Hon Dr Shirley
Lamborn, HarryParker, JohnTaylor, Mrs Ann (Bolton West)
Lamond, JamesParry, RobertThomas, Jeffrey (Abertillery)
Leadbitter, TedPavitt, LaurieThomas, Mike (Newcastle East)
Leighton, RonaldPendry, TomThomas, Dr Roger Carmarthen)
Lestor, Miss Joan (Eton & Slough)Penhaligon, DavidThorne, Stan (Preston South)
Lewis, Ron (Carlisle)Powell, Raymond (Ogmore)Tilley, John
Litherland, RobertPrescott, JohnTorney, Tom
Lofthouse, GeoffreyPrice, Christopher (Lewisham West)Urwin, Rt Hon Tom
Lyon, Alexander (York)Race, RegVarley, Rt Hon Eric G.
Mabon, Rt Hon Dr J. DicksonRadice, GilesWainwright, Edwin (Dearne Valley)
McCartney, HughRees, Rt Hon Merlyn (Leeds South)Walker, Rt Hon Harold (Doncaster)
McDonald, Dr OonaghRichardson, Miss JoWatkins, David
McGuire, Michael (Ince)Roberts, Albert (Normanton)Weetch, Ken
McKay, Allen (Penistone)Roberts, Allan (Bootle)Wellbeloved, James
McKelvey, WilliamRoberts, Ernest (Hackney North)Welsh, Michael
MacKenzie, Rt Hon GregorRoberts, Gwilym (Cannock)White, Frank R. (Bury & Radcliffe)
Maclennan, RobertRobertson, GeorgeWhite, James (Glasgow, Pollok)
McNally, ThomasRobinson, Geoffrey (Coventry NW)Whitlock, William
Magee, BryanRodgers, Rt Hon WilliamWilley, Rt Hon Frederick
Marks, KennethRooker, J. W.Williams, Rt Hon Alan (Swansea W)
Marshall, David (Gl'sgow,Shettles'n)Roper, JohnWilliams, Sir Thomas (Warrington)
Marshall, Dr Edmund (Goole)Ross, Ernest (Dundee West)Wilson, Gordon (Dundee East)
Marshall, Jim (Leicester South)Rowlands, TedWilson, Rt Hon Sir Harold (Huyton)
Mason, Rt Hon RoyRyman, JohnWilson, William (Coventry SE)
Maxton, JohnSandelson, NevilleWinnick, David
Maynard, Miss JoanSever, JohnWoolmer, Kenneth
Meacher, MichaelSheerman, BarryWrigglesworth, Ian
Mellish, Rt Hon RobertSheldon, Rt Hon Robert (A'ton-u-L)Wright, Sheila
Mikardo, IanShore, Rt Hon Peter (Step and Pop)Young, David (Bolton East)
Millan, Rt Hon BruceShort, Mrs Renée
Mitchell, Austin (Grimsby)Silkin, Rt Hon John (Deptford)TELLERS FOR THE AYES:
Mitchell, R. C. (Soton, Itchen)Silkin, Rt Hon S.C. (Dulwich)Mr. James Tinn and
Morris, Rt Hon Alfred (Wythenshawe)Silverman, JuliusMr. Ted Graham.
NOES
Adley, RobertBrown, Michael (Brigg & Sc'thorpe)Dunn, Robert (Dartford)
Aitken, JonathanBrowne, John (Winchester)Durant, Tony
Alexander, RichardBruce-Gardyne, JohnDykes, Hugh
Amery, Rt Hon JulianBryan, Sir PaulEden, Rt Hon Sir John
Ancram, MichaelBuck, AntonyEdwards, Rt Hon N. (Pembroke)
Arnold, TomBudgen, NickEggar, Timothy
Aspinwall, JackBulmer, EsmondElliott, Sir William
Atkins, Rt Hon H. (Spelthorne)Burden, F. A.Emery, Peter
Atkins, Robert (Preston North)Butcher, JohnEyre, Reginald
Atkinson, David (Bournemouth, East)Butler, Hon AdamFairbairn, Nicholas
Baker, Kenneth (St. Marylebone)Cadbury, JocelynFairgrieve, Russell
Baker, Nicholas (North Dorset)Carlisle, John (Luton West)Faith, Mrs Sheila
Banks, RobertCarlisle, Kenneth (Lincoln)Farr, John
Beaumont-Dark, AnthonyCarlisle, Rt Hon Mark (Runcorn)Fell, Anthony
Bell, RonaldChalker, Mrs LyndaFenner, Mrs Peggy
Bendall, VivianChannon, PaulFinsberg, Geoffrey
Benyon, Thomas (Abingdon)Chapman, SydneyFisher, Sir Nigel
Benyon, W. (Buckingham)Clark, Hon Alan (Plymouth, Sutton)Fletcher, Alexander (Edinburgh N)
Best, KeithClark, Dr William (Croydon South)Fookes, Miss Janet
Bevan, David GilroyClarke, Kenneth (Rushcliffe)Forman, Nigel
Biffen, Rt Hon JohnClegg, WalterFowler, Rt Hon Norman
Biggs-Davison, JohnCockeram, EricFox, Marcus
Blackburn, JohnColvin, MichaelFraser, Rt Hon H. (Stafford & St)
Body, RichardCope, JohnFraser, Peter (South Angus)
Bonsor, Sir NicholasCormack, PatrickFry, Peter
Boscawen, Hon RobertCorrie, JohnGalbraith, Hon T. G. D.
Bottomley, Peter (Woolwich West)Costain, A. P.Gardiner, George (Reigate)
Bowden, AndrewCranborne, ViscountGardner, Edward (South Fylde)
Boyson, Dr RhodesCritchley, JulianGarel-Jones, Tristan
Braine, Sir BernardCrouch, DavidGilmour, Rt Hon Sir Ian
Bright, GrahamDean, Paul (North Somerset)Goodhew, Victor
Brinton, TimDickens, GeoffreyGoodlad, Alastair
Brittan, LeonDorrell, StephenGorst, John
Brocklebank-Fowler, ChristopherDouglas-Hamilton, Lord JamesGow, Ian
Brooke, Hon PeterDover, DenshoreGower, Sir Raymond
Brotherton, Michaeldu Cann, Rt Hon EdwardGray, Hamish
Greenway, HarryMarland, PaulSainsbury, Hon Timothy
Grieve, PercyMarlow, TonySt. John-Stevas, Rt Hon Norman
Griffiths, Eldon (Bury St Edmunds)Marshall, Michael (Arundel)Scott, Nicholas
Griffiths, Peter (Portsmouth N)Marten, Neil (Banbury)Shaw, Gies (Pudsey)
Grist, IanMates, MichaelShaw, Michael (Scarborough)
Grylls, MichaelMather, CarolShelton, William (Streatham)
Gummer, John SelwynMaude, Rt Hon AngusShepherd, Colin (Hereford)
Hamilton, Hon Archie (Eps'm&Ew'll)Mawby, RayShepherd, Richard (Aldridge-Br'hills)
Hamilton, Michael (Salisbury)Mawhinney, Dr BrianShersby, Michael
Hampson, Dr KeithMaxwell-Hyslop, RobinSilvester, Fred
Hannam, JohnMayhew, PatrickSims, Roger
Haselhurst, AlanMellor, DavidSkeet, T. H. H.
Hastings, StephenMeyer, Sir AnthonySmith, Dudley (War. and Leam'ton)
Havers, Rt Hon Sir MichaelMiller, Hal (Bromsgrove & Redditch)Speed, Keith
Hawksley, WarrenMills, Iain (Meriden)Speller, Tony
Hayhoe, BarneyMills, Peter (West Devon)Spence, John
Heath, Rt Hon EdwardMiscampbell, NormanSproat, Iain
Heddle, JohnMoate, RogerSquire, Robin
Henderson, BarryMolyneaux, JamesStanbrook, Ivor
Heseltine, Rt Hon MichaelMonro, HectorStanley, John
Hicks, RobertMontgomery, FergusSteen, Anthony
Higgins, Rt Hon Terence L.Moore, JohnStevens, Martin
Hill, JamesMorris, Michael (Northampton, Sth)Stewart, Ian (Hitchin)
Holland, Philip (Carlton)Morrison, Hon Charles (Devizes)Stewart, John (East Renfrewshire)
Hooson, TomMorrison, Hon Peter (City of Chester)Stokes, John
Howe, Rt Hon Sir GeoffreyMudd, DavidStradling Thomas, J.
Howell, Rt Hon David (Guildford)Murphy, ChristopherTapsell, Peter
Howell, Ralph (North Norfolk)Myles, DavidTaylor, Robert (Croydon NW)
Hunt, David (Wirral)Neale, GerrardTebbit, Norman
Hunt, John (Ravensbourne)Needham, RichardTemple-Morris, Peter
Hurd, Hon DouglasNelson, AnthonyThomas, Rt Hon Peter (Hendon S)
Irving, Charles (Cheltenham)Neubert, MichaelThompson, Donald
Jenkin, Rt Hon PatrickNewton, TonyThorne, Neil (Ilford South)
Jessel, TobyOppenheim, Rt Hon Mrs SallyThornton, Malcolm
Johnson Smith, GeoffreyOsborn, JohnTownend, John (Bridlington)
Jopling, Rt Hon Michaelpage, John (Harrow, West)
Joseph, Rt Hon Sir KeithPage, Rt Hon R. Graham (Crosby)Townsend, Cyril D. (Bexleyheath)
Kaberry, Sir DonaldParkinson, CecilTrippier, David
Kershaw, AnthonyParris, MatthewTrotter, Neville
Kilfedder, James A.Patten, Christopher (Bath)van Straubenzee, W. R.
Kimball, Marcuspatten, John (Oxford)Vaughan, Dr Gerard
Knight, Mrs JillPattie, GeoffreyViggers, Peter
Knox, DavidPawsey, JamesWaddington, David
Lamont, NormanPercival, Sir IanWakeham, John
Lang, IanPeyton, Rt Hon JohnWaldegrave, Hon. William
Langford-Holt, Sir JohnPink, R. BonnerWalker, Rt Hon Peter (Worcester)
Latham, MichaelPollock, AlexanderWalker, Bill (Perth & E Perthshire)
Lawrence IvanPorter, GeorgeWalker-Smith, Rt Hon Sir Derek
Lawson, NigelPowell, Rt Hon J. Enoch (S Down)Wall, Patrick
Lee, JohnPrentice, Rt Hon RegWaller, Gary
Lester, Jim (Beeston)price, David (Eastleigh)Walters, Dennis
Lewis, Kenneth (Rutland)prior, Rt Hon JamesWard, John
Lloyd, Ian (Havant & Waterloo)Proctor, K. HarveyWatson, John
Lloyd, Peter (Fareham)Pym, Rt Hon FrancisWells, John (Maidstone)
Loveridge, JohnRaison, TimothyWells, Bowen (Hert'rd & Stev'nage)
Luce, RichardRathbone, TimWheeler, John
Lyell, NicholasRees, peter (Dover and Deal)Whitney, Raymond
McAdden, Sir StephenRees-Davies, W. R.Wickenden, Keith
McCrindle, RobertRenton, TimWilkinson, John
McCusker, H.Rhodes James, RobertWilliams, Delwyn (Montgomery)
Macfarlane, NeilRidley, Hon NicholasWinterton, Nicholas
MacGregor, JohnRifkind, MalcolmWolfson, Mark
MacKay, John (Argyll)Rippon, Rt Hon GeoffreyYoung, Sir George (Acton)
McNair-Wilson, Michael (Newbury)Roberts, Michael (Cardiff NW)Younger, Rt Hon George
McNair-Wilson, Patrick (New Forest)Roberts, Wyn (Conway)
McQuarrie, AlbertRoss, Wm. (Londonderry)TELLERS FOR THE NOES:
Madel, DavidRost, PeterMr. Spencer Le Marchaot and
Major, JohnRoyle, Sir AnthonyMr. Anthony Berry.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments).

The House divided: Ayes 313, Noes 242.

Division No. 96]AYES[10.15 pm
Adley, RobertDykes, HughKimball, Marcus
Aitken, JonathanEden, Rt Hon Sir JohnKnight, Mrs Jill
Alexander, RichardEdwards, Rt Hon N. (Pembroke)Knox, David
Alton, DavidEggar, TimothyLamont, Norman
Amery, Rt Hon JulianElliott, Sir WilliamLang, Ian
Ancram, MichaelEmery, PeterLangford-Holt, Sir John
Arnold, TomEyre, ReginaldLatham, Michael
Aspinwall, JackFairbairn, NicholasLawrence Ivan
Atkins, Rt Hon H. (Spelthorne)Fairgrieve, RussellLawson, Nigel
Atkins, Robert (Preston North)Faith, Mrs SheilaLee, John
Atkinson, David (Bournemouth, East)Farr, JohnLester, Jim (Beeston)
Baker, Kenneth (St. Marylebone)Fell, AnthonyLewis, Kenneth (Rutland)
Baker, Nicholas (North Dorset)Fenner, Mrs PeggyLloyd, Ian (Havant & Waterloo)
Banks, RobertFinsberg, GeoffreyLloyd, Peter (Fareham)
Beaumont-Dark, AnthonyFisher, Sir NigelLoveridge, John
Beith, A. J.Fletcher, Alexander (Edinburgh N)Luce, Richard
Bell, RonaldFookes, Miss JanetLyell, Nicholas
Bendall, VivianForman, NigelMcAdden, Sir Stephen
Benyon, Thomas (Abingdon)Fowler, Rt Hon NormanMcCrindle, Robert
Benyon, W. (Buckingham)Fox, MarcusMcCusker, H.
Best, KeithFraser, Rt Hon H. (Stafford & St)Macfarlane, Neil
Bevan, David GilroyFraser, Peter (South Angus)MacGregor, John
Biffen, Rt Hon JohnFreud, ClementMacKay, John (Argyll)
Biggs-Davison, JohnFry, PeterMcNair-Wilson, Michael (Newbury)
Blackburn, JohnGalbraith, Hon T. G. D.McNair-Wilson, Patrick (New Forest)
Body, RichardGardiner, George (Reigate)McQuarrie, Albert
Bonsor, Sir NicholasGardner, Edward (South Fylde)Madel, David
Boscawen, Hon RobertGarel-Jones, TristanMajor, John
Bottomley, Peter (Woolwich West)Gilmour, Rt Hon Sir IanMarland, Paul
Bowden, AndrewGoodhew, VictorMarlow, Tony
Boyson, Dr RhodesGoodlad, AlastairMarshall, Michael (Arundel)
Braine, Sir BernardGorst, JohnMarten, Neil (Banbury)
Bright, GrahamGow, IanMates, Michael
Brinton, TimGower, Sir RaymondMather, Carol
Brittan, LeonGray, HamishMaude, Rt Hon Angus
Brocklebank-Fowler, ChristopherGreenway, HarryMawby, Ray
Brooke, Hon PeterGrieve, PercyMawhinney, Dr Brian
Brotherlon, MichaelGriffiths, Eldon (Bury St Edmunds)Maxwell-Hyslop, Robin
Brown, Michael (Brigg & Sc'thorpe)Griffiths, Peter (Portsmouth N)Mayhew, Patrick
Browne, John (Winchester)Grist, IanMellor, David
Bruce-Gardyne, JohnGrylls, MichaelMeyer, Sir Anthony
Bryan, Sir PaulGummer, John SelwynMiller, Hal (Bromsgrove & Redditch)
Buck, AntonyHamilton, Hon Archie (Eps'm&Ew'll)Mills, Iain (Meriden)
Budgen, NickHamilton, Michael (Salisbury)Mills, peter (West Devon)
Bulmer, EsmondHampson, Dr KeithMiscampbell, Norman
Burden, F. A.Hannam, JohnMoate, Roger
Butcher, JohnHaselhurst, AlanMolyneaux, James
Butler, Hon AdamHastings, StephenMonro, Hector
Cadbury, JocelynHavers, Rt Hon Sir MichaelMontgomery, Fergus
Carlisle, John (Luton West)Hawksley, WarrenMoore, John
Carlisle, Kenneth (Lincoln)Hayhoe, BarneyMorris, Michael (Northampton, Sth)
Carlisle, Rt Hon Mark (Runcorn)Heath, Rt Hon EdwardMorrison, Hon Charles (Devizes)
Chalker, Mrs LyndaHeddle, JohnMorrison, Hon Peter (City of Chester)
Channon, PaulHenderson, BarryMudd, David
Chapman, SydneyHeseltine, Rt Hon MichaelMurphy, Christopher
Clark, Hon Alan (Plymouth, Sutton)Hicks, RobertMyles, David
Clark, Dr William (Croydon South)Higgins, Rt Hon Terence L.Neale, Gerrard
Clarke, Kenneth (Rushcliffe)Hill, JamesNeedham, Richard
Clegg, WalterHolland, Philip (Carlton)Nelson, Anthony
Cockeram, EricHooson, TomNeubert, Michael
Colvin, MichaelHowe, Rt Hon Sir GeoffreyNewton, Tony
Cope, JohnHowell, Rt Hon David (Guildford)Oppenheim, Rt Hon Mrs Sally
Cormack, PatrickHowell, Ralph (North Norfolk)Osborn, John
Corrie, JohnHunt, David (Wirral)page, John (Harrow, West)
Costain, A. P.Hunt, John (Ravensbourne)Page, Rt Hon R. Graham (Crosby)
Cranborne, ViscountHurd, Hon DouglasParkinson, Cecil
Critchley, JulianIrving, Charles (Cheltenham)Parris, Matthew
Crouch, DavidJenkin, Rt Hon PatrickPatten, Christopher (Bath)
Dean, Paul (North Somerset)Jessel, Tobypatten, John (Oxford)
Dickens, GeoffreyJohnson Smith, GeoffreyPattie, Geoffrey
Dorrell, StephenJohnston, Russell (Inverness)Pawsey, Jamas
Douglas-Hamilton, Lord JamesJopling, Rt Hon MichaelPenhaligon, David
Dover, DenshoreJoseph, Rt Hon Sir KeithPercival, Sir Ian
du Cann, Rt Hon EdwardKaberry, Sir DonaldPeyton, Rt Hon John
Dunn, Robert (Dartford)Kershaw, AnthonyPink, R. Bonner
Durant, TonyKilfedder, James A.Pollock, Alexander
Porter, GeorgeSilvester, Fredvan Straubenzee, W. R.
Powell, Rt Hon J. Enoch (S Down)Sims, RogerVaughan, Dr Gerard
Prentice, Rt Hon RegSkeet, T. H. H.Viggers, peter
Price, David (Eastleigh)Smith, Cyril (Rochdale)Waddington, David
Prior, Rt Hon JamesSmith, Dudley (War. and Leam'ton)Wakeham, John
Proctor, K. HarveySpeed, KeithWaldegrave, Hon. William
Pym, Rt Hon FrancisSpeller, TonyWalker, Rt Hon peter (Worcester)
Raison, TimothySpence, JohnWalker, Bill (Perth & E Perthshire)
Rathbone, TimSproat, IainWalker-Smith, Rt Hon Sir Derek
Rees, Peter (Dover and Deal)Squire, RobinWall, Patrick
Rees-Davies, W. R.Stanbrook, IvorWaller, Gary
Renton, TimStanley, JohnWalters, Dennis
Rhodes James, RobertSteen, AnthonyWard, John
Ridley, Hon NicholasStevens, MartinWatson, John
Rifkind, MalcolmStewart, Ian (Hitchin)Wells, John (Maidstone)
Rippon, Rt Hon GeoffreyStewart, John (East Renfrewshire)Wells, Bowen (Hert'rd & Stev'nage)
Roberts, Michael (Cardiff NW)Stokes, JohnWheeler, John
Roberts, Wyn (Conway)Stradling Thomas, J.Whitney, Raymond
Ross, Wm. (Londonderry)Tapsell, PeterWickenden, Keith
Rost, PeterTaylor, Robert (Croydon NW)Wilkinson, John
Royle, Sir AnthonyTebbit, NormanWilliams, Delwyn (Montgomery)
Sainsbury, Hon TimothyTemple-Morris, PeterWinterton, Nicholas
St. John-Stevas, Rt Hon NormanThomas, Rt Hon Peter (Hendon S)Wolfson, Mark
Scott, NicholasThompson, DonaldYoung, Sir George (Acton)
Shaw, Gies (Pudsey)Thorne, Neil (Ilford South)Younger, Rt Hon George
Shaw, Michael (Scarborough)Thornton, Malcolm
Shelton, William (Streatham)Townend, John (Bridlington)TELLERS FOR THE AYES:
Shepherd, Colin (Hereford)Townsend, Cyril D. (Bexleyheath)Mr. Spencer Le Marchant and
Shepherd, Richard (Aldridge-Br'hills)Trippier, DavidMr. Anthony Berry.
Shersby, MichaelTrotter, Neville
NOES
Abse, LeoDempsey, JamesHome Robertson, John
Adams, AllenDewar, DonaldHomewood, William
Allaun, FrankDixon, DonaldHooley, Frank
Anderson, DonaldDobson, FrankHoram, John
Archer, Rt Hon PeterDormand, JackHowell, Rt Hon Denis (B'ham, Sm H)
Armstrong, Rt Hon ErnestDouglas, DickHuckfield, Les
Ashley, Rt Hon JackDouglas-Mann, BruceHughes, Mark (Durham)
Ashton, JoeDubs, AlfredHughes, Robert (Aberdeen North)
Barnett, Guy (Greenwich)Duffy, A. E. P.Hughes, Roy (Newport)
Barnett, Rt Hon Joel (Heywood)Dunn, James A. (Liverpool, Kirkdale)Janner, Hon Greville
Bennett, Andrew (Stockport N)Dunnelt, JackJay, Rt Hon Douglas
Bidwell, SydneyDunwoody, Mrs GwynethJohn, Brynmor
Booth, Rt Hon AlbertEadie, AlexJohnson, James (Hull West)
Boothroyd, Miss BettyEastham, KenJohnson, Walter (Derby South)
Bottomley, Rt Hon Arthur (M'brough)Edwards, Robert (Wolv SE)Jones, Barry (East Flint)
Bradley, TomEllis, Raymond (NE Derbyshire)Jones, Dan (Burnley)
Bray, Dr JeremyEllis, Tom (Wrexham)Kaufman, Rt Hon Gerald
Brown, Hugh D. (Provan)English, MichaelKilroy-Silk, Robert
Brown, Robert C. (Newcastle W)Ennals, Rt Hon DavidKinnock, Neil
Brown, Ronald W. (Hackney S)Evans, Ioan (Aberdare)Lambie, David
Brown, Ron (Edinburgh, Leith)Evans, John (Newton)Lamborn, Harry
Buchan, NormanEwing, HarryLamond, James
Callaghan, Rt Hon J. (Cardiff SE)Field, FrankLeadbitter, Ted
Callaghan, Jim (Middleton & P)Fitch, AlanLeighton, Ronald
Campbell, IanFlannery, MartinLestor, Miss Joan (Elton & Slough)
Campbell-Savours, DaleFletcher, L. R. (Ilkeston)Lewis, Ron (Carlisle)
Canavan, DennisFletcher, Ted (Darlington)Litherland, Robert
Cant, R. B.Ford, BenLofthouse, Geoffrey
Carmichael, NeilForrester, JohnLyon, Alexander (York)
Cartwright, JohnFoster, DerekMabon, Rt Hon Dr J. Dickson
Clark, David (South Shields)Foulkes, GeorgeMcCartney, Hugh
Cocks, Rt Hon Michael (Bristol S)Fraser, John (Lambeth, Norwood)McDonald, Dr Oonagh
Cohen, StanleyFreeson, Rt Hon ReginaldMcGuire, Michael (Ince)
Coleman, DonaldGarrett, John (Norwich S)McKay, Allen (Penistone)
Concannon, Rt Hon J. D.Garrett, W. E. (Wallsend)McKelvey, William
Conlan, BernardGeorge, BruceMacKenzie, Rt Hon Gregor
Cook, Robin F.Gilbert, Rt Hon Dr JohnMaclennan, Robert
Cowans, HarryGinsburg, DavidMcNally, Thomas
Craigen, J. M. (Glasgow, Maryhill)Gourlay, HarryMagee, Bryan
Crowther, J. S.Graham, TedMarks, Kenneth
Cryer, BobGrant, George (Morpeth)Marshall, David (Gl'sgow, Shettles'n)
Cunliffe, LawrenceGrant, John (Islington C)Marshall, Dr Edmund (Goole)
Cunningham, George (Islington S)Hamilton, James (Bothwell)Marshall, Jim (Leicester South)
Cunningham, Dr John (Whitehaven)Hamilton, W. W. (Central Fife)Mason, Rt Hon Roy
Dalyell, TamHarrison, Rt Hon WalterMaxton, John
Davidson, ArthurHart, Rt Hon Dame JudithMaynard, Miss Joan
Davies, Rt Hon Denzil (Lianelli)Hattersley, Rt Hon RoyMeacher, Michael
Davies, Ifor (Gower)Haynes, FrankMellish, Rt Hon Robert
Davis, Clinton (Hackney Central)Healey, Rt Hon DenisMikardo, Ian
Davis, Terry (B'rm'ham, Stechford)Heffer, Eric S.Millan, Rt Hon Bruce
Deakins, EricHogg, Norman (E Dunbartonshire)Mitchell, Austin (Grimsby)
Dean, Joseph (Leeds West)Holland, Stuart (L'beth, Vauxhall)Mitchell, R. C. (Soton, Itchen)
Morris, Rt Hon Alfred (Wythenshawe)Rodgers, Rt Hon WilliamThomas, Dr Roger (Carmarthen)
Morris, Rt Hon Charles (Openshaw)Rooker, J. W.Thorne, Stan (Preston South)
Morris, Rt Hon John (Aberavon)Roper, JohnTilley, John
Moyle, Rt Hon RolandRoss, Ernest (Dundee West)Torney, Tom
Mulley, Rt Hon FrederickRowlands, TedUrwin, Rt Hon Tom
Newens, StanleyRyman, JohnVarley, Rt Hon Eric G.
Oakes, Rt Hon GordonSandelson, NevilleWainwright, Edwin (Dearne Valley)
O'Halloran, MichaelSever, JohnWalker, Rt Hon Harold (Doncaster)
O'Neill, MartinSheerman, BarryWatkins, David
Orme, Rt Hon StanleySheldon, Rt Hon Robert (A'ton-u-L)Weetch, Ken
Owen, Rt Hon Dr DavidShore, Rt Hon peter (Step and Pop)Wellbeloved, James
Palmer, ArthurShort, Mrs RenéeWelsh, Michael
Park, GeorgeSilkin, Rt Hon John (Deptford)White, Frank R. (Bury & Radcliffe)
Parker, JohnSilkin, Rt Hon S.C. (Dulwich)White, James (Glasgow, Pollok)
Parry, RobertSilverman, JuliusWhitlock, William
Pavitt, LaurieSkinner, DennisWilley, Rt Hon Frederick
Pendry, TomSnape, PeterWilliams, Rt Hon Alan (Swansea W)
Powell, Raymond (Ogmore)Soley, CliveWilliams, Sir Thomas (Warrington)
Prescott, JohnSpearing, NigelWilson, Gordon (Dundee East)
Price, Christopher (Lewisham West)Spriggs, LeslieWilson, Rt Hon Sir Harold (Huyton)
Race, RegStallard, A. W.Wilson, William (Coventry SE)
Radice, GilesStewart, Rt Hon Donald (W Isles)Winnick, David
Rees, Rt Hon Merlyn (Leeds South)Stoddart, DavidWoolmer, Kenneth
Richardson, Miss JoStott, RogerWrigglesworth, Ian
Roberts, Albert (Normanton)Strang, GavinWright, Sheila
Roberts, Allan (Bootle)Straw, JackYoung, David (Bolton East)
Roberts, Ernest (Hackney North)Summerskill, Hon Dr Shirley
Roberts, Gwilym (Cannock)Taylor, Mrs Ann (Bolton West)TELLERS FOR THE NOES:
Robertson, GeorgeThomas, Jeffrey (Abertillery)Mr. George Morton and
Robinson, Geoffrey (Coventry NW)Thomas, Mike (Newcastle East)Mr. James Tinn.

Question accordingly agreed to.

Mr. SPEAKER forthwith declared the main Question, as amended, to be agreed to, pursuant to Standing Order No. 18 (Business of Supply).

Resolved,That this House believes that the future of the steel industry depends on much improved productivity, efficient use of costly investments, and an early return to profitability.