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Part of Steel – in the House of Commons at 11:41 pm on 1st December 1982.

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Photo of Mr Alexander Fletcher Mr Alexander Fletcher , Edinburgh North 11:41 pm, 1st December 1982

This has been an important and civilised debate. We should practise more often the idea of breaking for dinner so that we can proceed more comfortably afterwards. Perhaps we should have more controversial debates of this nature on the motion for the Adjournment of the House. The debate has been constructive and orderly and hon. Members on both sides of the House have tried to be responsible and constructive, bearing in mind the fact that many hon. Members were facing considerable constituency pressures in making their arguments to the House. I am only sorry that time will not permit me to do justice to all of the speeches and comments that have been made.

The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) exercised a great deal of poetic licence in describing the speeches of some of my right hon. and hon. Friends. Nevertheless, the views of my right hon. and hon. Friends are on the record and that will speak for itself.

My hon. Friend the Minister of State said in his opening speech that the Government's purpose in holding the debate was two-fold. First, we thought it right, at this time of great anxiety and uncertainty about the future of the steel industry, that the House should have a proper chance to express its views before the Government take decisions on BSC's future strategy. The issues touch the livelihoods and prospects of many families in many parts of the country.

Secondly, we were concerned to generate as wide an understanding as possible, inside and outside the House, of the reasons which lie behind the present plight of the British steel industry. It really will not do to pretend, as some Opposition Members persist in doing, that the problems of the steel industry are superficial, that they lie at the door of this Government alone, and that there is some magic wand which we could wave if only we chose to do so.

The problems of the steel industry are international and deep-rooted. No area of the world is coming through unscathed. It is not the Government's intention on this occasion or any other to gloat over the misfortune of other countries, but we have to be alive to what is happening elsewhere if we are to understand our own position properly and find effective solutions.

In opening the debate, my hon. Friend the Minister of State sketched the international scene most effectively. My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) said that in a world in which 76 countries produced steel, compared with only 32 countries in 1950, no one should be surprised at the difficulties that the industry is facing in Europe, the United States of America and Japan. Much as all Governments would like to change the world for the benefit of their own countries, they have to be realistic. We cannot find a solution to the problems of the British steel industry by acting unilaterally. We have to act through international co-operation, and that means, first and foremost, working to restore market stability in the EC.

We cannot impose import controls, as some Opposition Members have suggested. One of the absurdities of that suggestion is that British Steel depends on imports for more than half of the basic raw materials that it uses to produce steel. The hon. Member for Bothwell (Mr. Hamilton) apologised to me for having to leave early. Along with other hon. Members, he pointed out that the British steel industry had made great efforts during the past three years to improve efficiency and productivity and to close down unwanted capacity—most of it obsolete.

However, the fact that we have already made progress does not mean that we can afford to sit back and do no more. What we must do, and are doing, is to make sure that others take the same medicine as we have taken in this country, particularly other countries in the EC. Again, my hon. Friend the Member for Hertfordshire, South-West and others referred to that. We also need to ensure that export markets for our steel remain open, for example, in the United States of America, and that imports do not come here at dumped prices. We have taken, and are taking, vigorous action through the Community to ensure greater stability in the market for steel.

My hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) said that the Government should take off their gloves now when dealing with the international community. That is precisely what we are doing. I say that both to my hon. Friend and to my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown). As far as steel is concerned the Community is acting very firmly, prodded on—where necessary—by my right hon. Friends. The right hon. Member for Salford, West (Mr. Orme) spelt out the major redundancies of recent months and accused the Government of complacency. With respect, the complacency that has affected our steel industry arose between 1974 and 1979. Indeed, many of my hon. Friends have mentioned that. At that time other EC countries such as Germany and France realised the difficulties that the world faced because of the oil crisis and took firm steps to sort out the problems of the steel industry. We sat and did virtually nothing for five years and that is why there has been such a dreadful catastrophe—that is not too strong a phrase to use—in too many parts of the country during the past three years. We have had to take the action that was so long delayed by the Labour Party.

The right hon. Member for Salford, West blamed steel imports for the problem, but that flies in the face of the statements made by the chairman of the BSC. He has made it clear that the loss of export markets is one of the most serious problems facing the industry. My right hon. Friend the Member for Taunton (Mr. du Cann) spoke for and of the private sector. He asked that the future capacity cuts should take place in Europe. We very much agree with that and have not hesitated to make that clear to the Commission. My right hon. Friend and some of my hon. Friends emphasised the dificulties that the private sector faces. It is extremely difficult for private-sector companies to compete with nationalised industries. If nationalised industries have not got a monopoly of the domestic market, they usually have a near monopoly. That is why we have pursued legislation to privatise more and more of our nationalised industries. My right hon. Friend also said that no more subsidies should be given to the nationalised industry. As he will know, the EC requires that State aid should end by 1985. That is the objective of the Community and the Government.

The right hon. Member for Stockton (Mr. Rodgers) mentioned the performance of Redcar and asked for a general moratorium on closures and redundancies for 18 months. He estimated the cost at £800 million. However, the threat to our steel industry has not arisen from a shortage of public funds. Some might argue to the contrary, that public funds have been made too freely available for too long. That has been the basic problem that our steel industry, particularly the private sector, has had to face. That problem has arisen because our industry has been too slow even to start catching up with the productivity of our competitors. Need I remind the right hon. Gentleman that he was a member of a Government who closed their eyes to the problems of the industry? He said that we have been slow off our mark in tackling the problems, but we have been like greased lightning compared to the Labour Party when faced with such difficulties.

My hon. Friend the Member for Dudley, West (Mr. Blackburn) spoke with great feeling and authority about his constituency. He spoke sincerely on behalf of his constituents. It is not surprising that, because of his conviction, they give him every support in his efforts to look after their interests. My hon. Friend has had meetings with my right hon. Friend the Secretary of State for Industry. A great effort was made to retain a private steel industry. Every effort was made to ensure that the phoenix operation should succeed. Unfortunately, it did not. I would not wish to say anything to discourage my hon. Friend in his efforts to revive the possibility of a private sector steel operation in his constituency. I am sorry that I cannot say anything to encourage him, but I am sure that he has sufficient determination to ensure that every effort is made to succeed.

My hon. Friends the Members for Edinburgh, South (Mr. Ancram) and Flint, West (Sir A. Meyer) and the hon. Member for Stirling, Falkirk and Grangemouth referred to Ravenscraig. My right hon. Friend the Secretary of State for Scotland and I are exceedingly concerned about the future of that plant. We recognise that it has disadvantages, but, as Mr. MacGregor made clear during his visit to Glasgow last Friday, it also has important advantage.

Ravenscraig's main disadvantage is its location, particularly in relation to its ore terminal. We cannot move Hunterston to Motherwell, but I am glad to say that British Rail and the local BSC management are taking a fresh look at charges for the movement of iron ore. I hope that that will lead to an early reduction in Ravenscraig's costs.

Ravenscraig has, in recent years, lost a good deal of its market for strip products in Scotland, but it would be wrong to regard the plant as serving only the Scottish market. It also serves markets throughout the North of England. For example, a significant proportion of its output goes to the Ford plant at Halewood. Nearly 70 per cent. of its output goes to markets in Scotland and the North of England, which the plant is well placed to serve.

During the past year or two, Ravenscraig's productivity record has been compared unfavourably with that at the other strip mills at Llanwern and Port Talbot. However, it is important to recognise that the "slimline" process was introduced later at Ravenscraig and that earlier this year, when loading was still satisfactory, as the hon. Member for Motherwell and Wishaw (Dr. Bray) mentioned, the plant achieved productivity levels that matched those of the plants in South Wales.