Steel Industry

Part of the debate – in the House of Commons at 7:57 pm on 17th January 1980.

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Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove and Redditch 7:57 pm, 17th January 1980

I follow the right hon. and learned Member for Aberavon (Mr. Morris) in expressing the hope that before the debate ends we shall have an indication from the Government of the way forward as they see it. I share the right hon. and learned Gentleman's view that the House was a little surprised when my right hon. Friend sat down without offering any thought about the next stage. I have difficulty in making my speech because I am looking forward to the speech of the Minister who will wind up the debate and, no doubt, complete the second half of the act.

My right hon. Friend got us off to a good start by pointing out the context in which the debate is taking place—the decline of demand for the market, the need to readjust the industry to that demand and the extent of the support that is required from the taxpayer. However, he did not even make a virtue of that necessity. He did not re-emphasise the Government's commitment to the industry. About£450 million of taxpayers' money has been allocated to support the industry in the next year. Therefore, presumably, my right hon. Friend does have an idea about the size of the industry. To many people in industry, the size of the manufacturing base that the Government envisage in the various industries is a crucial question.

My right hon. Friend has done a great service by creating a new atmosphere in the country, an atmosphere under which management is once more compelled to assume its responsibilities for managing its industries. I admire very much the way my right hon. Friend has sought to detach the Government from day-to-day interference in management decisions. He need not have any fear that he is weakening that stance or detracting from the credibility of the climate that he has successfully sought to create by admitting that the Government had some responsibilities in these matters—for example, for the appointment of the board of the British Steel Corporation. He must express a view as to whether he is satisfied with the manner in which members of the board carry out their duties, and if he expresses no view we must assume that he is satisfied.

We want an indication of how the Government see the next stage of the dispute developing. What steps are available to bring it to an end? This is a very serious matter for all industries that make use of steel stocks. These stocks, despite all the rumours, are not very high in many of our large manufacturing industries—quite apart from the smaller ones which cannot afford to stock up in any case.

There is great doubt about the actual strategy of the British Steel Corporation and a relevant reference has been made in this debate to the fact that we have landed ourselves with two huge modernised plants necessitating the closure of a lot of viable smaller plants in order to divert more work into these huge plants. Thereby we have lost flexibility, not only in the type and size of billets we produce but also in supplying customers in certain areas. Certainly we in the West Midlands have suffered from the disappearance of the Bilston works. Horror stories abound about the difficulties experienced as a result of shunting billets around the various works trying to get them milled down to the right size. The industry has got itself into an inflexible mould as a result of decisions taken by previous Governments.

There is also grave doubt about how much the expenses of that development should be visited upon the steel workers. I do not think that any attempt has been made so far by the Government to tackle that aspect. They have not explained how they see it, what proportion of the cost they feel should be allocated to that wrong decision, how the costs should be shared or by whom they should be borne. A Select Committee of this House has cast considerable doubt on the forecasting capabilities of the BSC.

Anyone who is faced with a contracting industry—unfortunately we have many such industries, including the motor car industry, in which I am vitally interested—needs some assurance of the basis and commitment of that industry. Is there a base and is there a commitment? When those questions have been answered, we can start to build. From all accounts the steel industry has a very constructive union that would wish to build from something, but people need to have confidence that there is a commitment before they commit themselves. My hon. Friend the Member for Rutland and Stamford (Mr. Lewis) referred to the need for leadership in this situation, and I hope that that is exactly what the Minister of State will provide when he replies, because it is necessary for the Government to state how they see the situation and the way in which it will develop.

There is another grey area about these figures. The hon. Member for Rochdale (Mr. Smith) made a valid point that the interest rates had increased recently and that the inflation rate was higher than at the time of the orginal decision regarding the allocation of money. Also, the fuel crisis has worsened. There are social costs involved in closures, and I wonder how these have been put into the balance sheets. I realise that that is far too complicated a matter for a winding-up speech, but someone must make the effort to explain to the people involved so that the situation can be understood, allegiance can be secured, and there will be a willingness to pick up tools again. This is a simple man management problem which we, as politicians, should understand.

Then there is the question of negotiations. It is quite right that the Government should not be involved in pay negotiations. I certainly would not wish to try to tell someone how to conduct such negotiations, but certainly there is a tradeoff between jobs and pay, which was the burden of the speech made by the right hon. Member for Down, South (Mr. Powell). There is a negotiation between pay and jobs, and I cannot understand how these two have become divorced. I cannot understand how the closures came through first and agreement was sought on those, and then suddenly, at a later stage, a pay negotiation was brought forward—at a level which I found incredible, even bearing in mind the fact that the corporation is bankrupt.

To my surprise, this Government raised benefits—almost a soon as they came into office—by a higher level than is now proposed for people who are actually in productive work. There is an expectation set in the cash limits for local government servants and civil servants that there should be an increase in the amount of money available of about 14 per cent. regardless of how it is divided between jobs. That emphasises what I have said. There is a negotiation there and these are jobs where, by definition, productivity is extremely hard to identify and measure, let alone secure. It is very difficult for a steel worker to understand how he should be initially offered so much less than people who are not necessarily contributing to the same extent. An attempt must be made to explain where the basis of negotiation lies. I hope that the winding-up speech will give an indication of how the Government see this.

I suggest that the foundation for the Goverment's approach to the next stage should be a clear statement of commitment, whatever size of industry is decided upon. Why does the Secretary of State not proclaim the fact that he has provided£450 million of taxpayers' money? That must have been done on some assumption. What was it? Let us say that we are trying to support people in difficult circumstances and help with readjustments. The Secretary of State must tackle the question of the management of the corporation and he must be seized of the need to link the negotiation on jobs with that on wages.

Finally, we all want to know the Government's reaction to some of the distasteful scenes associated with secondary picketing. Why has no action been taken? Please let us be positive and show that we understand the situation, that we have a commitment and that we are doing something about it.