British Steel Corporation (Chairman)

Part of the debate – in the House of Commons at 7:55 pm on 15 May 1980.

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Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam 7:55, 15 May 1980

We must consider the fact that the British Steel Corporation has been losing almost £1 million a day. This is a great challenge to everyone in the industry.

In another place Lord Trenchard had to explain the virtues of Mr. MacGregor, after Lord Bruce of Donington had ridiculed the appointment. The right hon. Member for Deptford asked who had been approached and who had been turned down. I think that this is the most deplorable example of the difficulties of running any State industry. We have mentioned that the British Steel Corporation loses £1 million a day. In his statements on 1 May and subsequently the Secretary of State gave the terms of the appointment. Of course, there is the figure of £1,150,000. Depending on the outcome, one could call this a bonus payment for success, part of which is a transfer fee. Against that, hon. Members must look to the future of British Steel bulk steel, and to what is happening in the world.

There has been much press comment on my right hon. Friend's decision. In The Times on 12 May, Catherine Gunn pointed out that top industrial salaries in the United Kingdom could be £100,000 a year. The United States list of companies paying high salaries included Metro-Goldwyn-Mayer, Mobil, McGraw-Edison, Revlon and Hughes Tool. They all provide good salaries, with the chance of top directors participating in the capital structure of the companies.

Reference has been made to Mr. Robert Atkinson, who took a pay cut to become the head of a nationalised industry. Many people have claimed that my right hon. Friend's appointment of Mr. MacGregor was an extraordinary political decision, but a decision had to be made. I was in Sheffield when my right hon. Friend made his decision. It stunned those in both the public and the private sectors, because it was an unusual if not extraordinary decision. I found it difficult to defend the decision, but we have to bear in mind that the total sum involved is only two days' losses of the BSC. I do not resent reward, because whoever takes the job under my right hon. Friend will have a difficult and unenviable task.

I have spent two days this week at the annual meeting of the Metals Society, at a conference of metallurgists, managers and leaders of steel industries throughout the world. I spent more time there than usual because I wanted to sense what is going on in other countries. Last year's president was a Dutchman. The current president, an Australian, was a professor at Sheffield University and is Goldsmith Professor at the Department of Metallurgy, Cambridge, which is where I gained my degree. The department course at the metallurgical department taught me to look out for the sources of materials for all metal industries, including the steel industry, and I could well have gone into mining.

At the Metals Society I had conversations with the heads of steel industries in Japan, Hungary and Yugoslavia, and even with a delegation from China which visited Sheffield this week. There is a company called Climax Molybdenum, one of the biggest suppliers of molybdenum to British Steel. It is part of AMAX. Mr. MacGregor has done much to bring together Climax Molybdenum and the American Metals Company.

I took the precaution of speaking to those in the BSC, mainly the technological management. They realised that a decision had been made and I sensed that they wanted it to work and rather resented the fact that I, for example, had a right to question the decision. The message that I received was " The decision has been made, give it a chance." If hon. Members spoke to the managements in the steel factories in their constituencies they would find the same reaction.

If my right hon. Friend and Ian MacGregor can pull the BSC round and bring in some of the changes that are necessary, a sore for our country could become something of which we are proud.

The right hon. Member for Deptford spoke about the world-wide dimension and referred to Lord Trenchard's speech in another place. In the past two days I have learnt of new steel plants going up in Yugoslavia, Algeria, Mexico, Venezuela and Brazil. The iron ore and the cheap materials are to be found in some of the Latin American countries. I remember making a speech, as a Conservative candidate, saying " Wealth is where wealth is." I could go into the history of why the steel industry moved to Sheffield. The raw materials were there a century and a half ago, but that is not so true now.

I have been concerned with materials through the parliamentary and scientific committee. A number of members of that committee attended a meeting in November, organised by the Metals Society and the Institute of Mining Metallurgy to take a look at the resources for the metal and engineering industries, including the steel industry.

What could the future of the BSC be? It could be that more of the industry, particularly in Sheffield, will, as the hon. Member for Sheffield, Heeley (Mr. Hooley) suggested, move into stainless steel and special steel, but one of the great difficulties of the steel industry has been to secure supplies of raw materials. We have discussed cobalt. That has been dealt with by AMAX, as have molybdenum and tungsten.

There are huge operations throughout the world. I see that AMAX is even the owner of the Selibi-Phikwe mine in Botswana, which I, with one or two Labour Members, have visited.

Therefore, the perspective of the British steel industry and the individual units within it is to be aware of where the materials come from. Mr. MacGregor is one of those who have lived with that perspective.

The cost may be high and the reward for Mr. MacGregor, if he succeeds, may be heavy, but, in spite of criticism from many of my friends outside, I congratulate my right hon. Friend the Secretary of State for being courageous and taking a chance. I wish to back it.