Gartcosh Steel Mill

Opposition Day – in the House of Commons at 4:37 pm on 23rd January 1986.

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Photo of Donald Dewar Donald Dewar , Glasgow Garscadden 4:39 pm, 23rd January 1986

I beg to move, That this House, recognising the fundamental importance of the steel industry to the economy of Scotland and the record of Gartcosh in the production of top quality strip steel for the British and European markets, calls on the Government to recognise that Ravenscraig and Gartcosh cannot be treated as separate entities, to extend the present guarantee given to Ravenscraig to Gartcosh and to halt the closure of the plant.

The debate is about the future of the cold rolling mill at Gartcosh, the jobs of 700 men, and the future of the village and a community. All hon. Members will accept that that is sufficient to justify concern, but the debate goes well beyond that. We are talking about the future of steel, both north and south of the border, Government attitudes to our industrial base in Scotland, and the Government's ability to comprehend, reflect and feel for opinion in Scotland. At the beginning we want to emphasise that we in the Labour party have a complete commitment to the continued operation of the five integrated steel plants at present being operated by British Steel. Ravenscraig is one of them, and it must have a secure future. That is essential and non-negotiable.

I know that the Secretary of State and his colleagues in the Department of Trade and Industry will say that the Government support the continuance of the five sites. However, the guarantee that has been offered is limited, qualified and inhibited. It has a three-year time limit running from April 1985. The continuance, stability and worth of that guarantee are essential. I am genuinely sorry that only one Conservative Back-Bench Member is present—the hon. Member for Dumfries (Sir H. Monro).

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The hon. Gentleman should appreciate and make clear to the House that few Scottish Members can take part in the debate because his colleagues in Committee on the Housing (Scotland) Bill have opposed a sittings motion which would have allowed the Committee to adjourn and Scottish Members serving on it to be present for the debate.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

There are not exactly 100 per cent. of Scottish Conservatives involved in that Committee. Moreover, I understand that there has been a disagreement between the usual channels. We requested that the Committee adjourn, but conditions were made which could not be agreed. Therefore, if we are to apportion blame in that petty fashion, we must bear in mind the two sides of the matter. What is important is what happens when we vote tonight. Then Conservative Members' interest in the matter will be assessed.

I am particularly interested in the three-year guarantee, and I hope that the Secretary of State will say something about his personal position on it. There have been changes in the formulation, and the words used have been varied. The phrase "at least", for example, has crept in on one or two occasions. The Secretary of State may be able to say a word or two about that, as a subsidiary theme.

We are worried because it is extremely easy to be cynical about that guarantee with its limitation and to argue that it suits British Steel. It allows some essential restructuring to take place, and at the end of three years the company will be able to strike out the strip mill and say, as it has said on many occasions, that in the circumstances two are better than three.

There is a suspicion in some quarters that the three-year guarantee suits the Government because it postpones the evil day of decision making until after the general election. The fears that I am reflecting have been reinforced by rumours about the Dalzell plate mill, and the failure in the past to invest in new coke oven capacity at Ravenscraig. It would be helpful if the Secretary of State could say something reassuring about the Dalzell plate mill, which is important for any future for Ravenscraig.

I wish to make it clear that my right hon. and hon. Friends and I certainly do not want to join the cynics. We want the guarantee to have worth, to hold, and to be extended permanently. We want to guard against the possibility of any future Government being presented with a virtual fait accompli, and a sharp and soulless accountant arguing that Ravenscraig's future cannot be on the agenda for management reasons.

The best way to lay those fears at rest is for the Government to give an unmistakable, unambiguous signal that they believe in the future of the Scottish steel industry, and in Ravenscraig. The way to do that is to intervene and reverse the decision to close the Gartcosh mill. That is essential, if uncertainty is to end.

We cannot separate Gartcosh from Ravenscraig, as the Government are suggesting, in support of British Steel. Gartcosh takes 25 per cent. of the total steel output and 31 per cent. of hot rolled coil. The plants are connected by industrial logic and political necessity. I shall refer to other pressing arguments, which the Secretary of State will know.

One is that Scotland's industrial prospects must depend to some extent on the existence of a steel industry that can flourish and serve our future manufacturing industry. Our anxiety about the loss of more than 160,000 manufacturing jobs since the Government came to power will be common to all hon. Members. Strip steel is basic to any hope of recovery.

It must be a disincentive to someone wishing to found manufacturing capacity to say "You are welcome, but you will have to bring your strip steel either from Europe or from the south of the United Kingdom. There is no capacity for producing it in Scotland." That will not appeal to an incoming industrialist, and it is not logical for British Steel. Presumably, the hot rolled coil from Ravenscraig will go south for finishing, involving transport costs, and anyone in Scotland who wishes to use strip steel will have to cart it back to Scotland. That is not sensible.

British Steel and United Kingdom industry as a whole will face problems with capacity if we lose Gartcosh. I recognise that these arguments are subjective, and I do not deny it. I recognise that there will always be two sides to the argument, but there seems to be a pressing and persuasive case that there could be a bottleneck in the production of fully-finished steel. We shall not have potential capacity.

We are constantly hearing talk about loading the remaining finishing mills to 95 per cent. capacity. That is open to grave doubt, given the testimony from Japanese and European experience. If, for example, Nissan coming to Washington in County Durham starts to increase demand for strip steel in the motor car industry, and if General Motors is successful in building up its United Kingdom content, there is a real danger that we shall not be able to meet that demand. In the end, exporters of steel to the United Kingdom will rejoice and gain advantage. That would not be in the national interest.

The Scottish Affairs Select Committee had an extremely useful session with Sir Robert Haslam and Mr. Scholey of British Steel. That point was put firmly to British Steel by the hon. Member for Strathkelvin and Bearsden (Mr. Hirst), who is unfortunately ill. Mr. Scholey said: Could I just add this: basically 30 per cent. of our production at this moment is export. We will be very happy to substitute some of that percentage for home-based business, whether it is through Nissan or whatever. In other words, he seemed cheerfully to assume that some export business could be dropped overboard to make room for any increase in domestic demand. That seems to bear out our worries. By implication he accepted that, without Gartcosh, there is a potential problem in terms of the capacity that will be left at the cold production end.

The same argument applies to the possible lost orders that will result from the closure. Anyone who has read the documents will know that British Steel has said that lost orders will not amount to more than 2,500 tonnes per annum, and that it hopes to overtake that. Gartcosh has an excellent record with Ford (United Kingdom), Ford (Germany), BMW and Austin Rover, and its customers are satisfied. With the closure of Gartcosh, through no fault of anyone, there will be a two or three-year period when strip steel will come through the ingot route, not through continuous casting, so British Steel must run the risk of a considerable dip in orders for strip steel. That will be a direct result of the mistaken decision to dispense with Gartcosh.

The signs are there for all to see. That case has been fiercely argued, not just by the stewards but by many other people with considerable experience of the steel industry. We know from leaked documents that there appears—I put it no higher than that, because I accept that documents can sometimes be misleading—to be a substantial downturn in orders from the domestic market for strip steel since the Gartcosh announcement was made. We know that Austin Rover, for example, is now sourcing from Belgium. It will be said that is merely a safety device to make sure Austin Rover is not dependent upon one supplier, but there seems to be a great deal of evidence that the order book will be at risk if we put ourselves in this uncertain position over the next two or three years.

The substantial downturn is not some sort of routine fluctuation. I am sorry to say that British Steel management makes that argument, but that is merely a determination to shuffle off awkward facts by a group of people hell bent on the closure of Gartcosh. I remind the Minister that the Steel Industry Management Association, in the introduction to its well argued and technical rebuttal of the case for closure, says: BSC may be significantly short of rolling capacity to produce even the modest tonnages which they forecast over the next five years. That is a risk we should not run, but it is a genuine risk. I know my view on that has support in all parts of the House, and I am grateful for that.

In accepting the argument for closure, Ministers are accepting British Steel's contentions, put firmly at meetings with my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), my hon. Friend the Member for Monklands, West (Mr. Clarke) and my hon. Friend the Member for Motherwell, South (Dr. Bray). It was put bluntly to us that British Steel does not see any recovery in demand in the foreseeable future. If the Government are prepared to accept that decision, they are stripping of all credibility the economic case that they will present at the next election. It is a desperate message of depression and recession if we accept that we are to get rid of Gartcosh because demand is not going to improve for such a basic commodity as strip steel. A great mistake is being made.

The Government are facing a key decision which will fundamentally influence how Scotland sees not just this Administration, but the system of government operated by the Conservative party. The tragedy and the mark of the Government is that they are full of inflexible obstinacy. I say with no great pleasure that we are left with the rather sick feeling that much of the talk about open-minded consideration of the evidence has been no more than a sham. I was genuinely disappointed when, within hours of his appointment to his present office, the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind) let it be known that there was unlikely to be any change in the Government's attitude. That gave the impression he would be no more than a spectator as the nails were hammered into Gartcosh's coffin.

No doubt the Government hope that they will get away with what is a sin of omission, that they will be able to sit tight and do nothing and let British Steel close the plant. In many ways Government policy is the root cause of the problem, and I do not mean that just in terms of the recession, the fall in demand, that they have created. I remember the first meeting that I and my hon. Friends had with Sir Robert Haslam and Mr. Bob Scholey. They went to great lengths to say, "We are trading profitably." They were ultimately persuaded to set a figure of about £11 million as the cost of keeping Gartcosh open, and that has subsequently been confirmed in evidence to the Select Committee.

They went on to say that that was incompatible with their policy, not because carrying that burden would stop them moving towards profitability—they were talking about a target of £200 million a year—but because that was an indadequate target, given their instructions that they were to prepare and drive towards privatisation of British Steel's mainstream activities. I fear that is one of the conditioning factors and one of the root causes of the present management's attitude. There is nothing in the subsequent record to rebut that presumption, and I am sure many of my hon. Friends hold that view as well.

The House will have to make its own judgment. It is extraordinary that the proposition to close Ravenscraig is a political one. We make no complaint about that—in fact, we applaud it—but to say the closure of Gartcosh is not a political decision is false. It is worthless, indefensible and inexplicable, because the Gartcosh closure is a policital decision. There is no doubt that the circumstances dictate that. Anyone who has lived in Scotland for the last two months will know that. If the right hon. and learned Gentleman does not know it, his unfortunate Back Benchers certainly do.

There is every reason for the Government to think again. There is evidence in plenty. The stewards have presented an unusually well informed case, but it may be that they are thought to be too parti pris—they have a vested interest in a certain decision.

I have referred to the Steel Industry Management Association document. The Scottish Trades Union Congress and a host of other organisations have all pointed to the dangers that I have tried to sketch.

We also have a report from a Select Committee that looked carefully and honestly at the evidence. I would never accuse the hon. Member for Stirling (Mr. Forsyth) of dishonesty, whatever else I might accuse him of. The Select Committee report recommends exactly the terms of the motion in the name of the Opposition. It is supported not only by Labour Members. but by the hon. Members for Cunninghame, North (Mr. Corrie), for Fife, North-East (Mr. Henderson), for Strathkelvin and Bearsden, for Dumfries (Sir H. Monro), and I think I am right in saying that the hon. Member or Renfrew, West and Inverclyde (Mrs. McCurley) wants to be associated with it. I understand that to be the position.

Photo of Mr Barry Henderson Mr Barry Henderson , North East Fife

I disagree with the hon. Gentleman's last comments.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I am staggered. I am sometimes accused of taking a somewhat oversimplistic view of life. I took the view that, because the hon. Gentleman had signed the report, I was able to claim that he supported its contents. I find that quite extraordinary. When we see the hon. Gentleman's name on a report, we shall have to ask him whether he meant to sign it or whether it was some sort of accident.

I press upon the Minister that there is convincing evidence. The Select Committee report was carried by hon. Members from both sides of the House, and I should not forget that a Liberal party member also signed the report. There is also Scottish public opinion, and that is not unimportant.

I am sure hon. Members will have seen the Systems 3 poll in the Glasgow Herald. It was taken at the beginning of January. Some 80 per cent. of the people polled said they thought Gartcosh should remain open and 3 per cent. backed the Government in thinking it should be closed. I recognise that the Government are probably depressed to know that their standings in the rating is 15 per cent—fourth place. The 3 per cent. figure in the poll should remind them that if they get things wrong, they will go even lower. No doubt they will try to discount it all with professional flair. I invite Ministers and their Back-Bench supporters to look at some of the small print in that poll. One of the questions was: If Gartcosh goes will Ravenscraig close in five years? Some 59 per cent. of the people polled thought that was very or quite likely and only 13 per cent. thought it was unlikely. Of the Tories polled, 53 per cent. were with the majority. People were asked: Under this Government does the steel industry have a future? The replies were yes, 9 per cent., no, 77 per cent. Even among committed Tories, 50 per cent. thought that under this Government the steel industry in Scotland had no future. They sadly accepted that this Administration will not or cannot do what needs to be done.

These serious matters will have to be weighed. It may sound a little cynical to talk to politicians about politics, but it seems sensible to draw these matters to the attention of hon. Members. In this debate the Government have a last chance to draw back and take the right decision. The Gartcosh issue has united the whole of Scottish opinion. The Scottish Office is in danger of becoming an isolated, unrepresentative presence that will command no significant support even among the Government's own previous supporters.

The Government must reconsider. I ask the right hon. and learned Gentleman and his colleagues to do so this evening. I ask Conservative Members to vote for the moderate, sensible and united motion that stands in my name and the names of my right hon. and hon. Friends. I know that on the Conservative Benches there is a deal of private sympathy for the motion and for the steel workers. It is vital that that private sympathy should be translated in the Lobby into public commitment. If the Government do not respond, it will be a contemptible dereliction of duty. It will be a tragedy for the men and their families, of course, but it will be a threat to the future of the steel industry, born out of obstinacy and an insensitive disregard for the needs of Scotland.

5 pm

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I beg to move, 'to leave out from "House" to the end of the Question, and to add instead thereof, recognises the fundamental importance to Scotland and to the United Kingdom as a whole of the Government's and British Steel Corporation's aim of restoring the Corporation to financial self-sufficiency and sustained profitability; and endorses the Government's decision not to intervene in the Corporation's commercial decision to close the Gartcosh plant.'.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) and his hon. Friends would have us believe that they speak in the debate as champions of Gartcosh and of the steel industry in Scotland. I would have been prepared to pay more attention to that claim if their hon. Friends on the First Scottish Standing Committee considering the Housing (Scotland) Bill—[HON. MEMBERS: "Oh"]. If this is the crucial debate that the hon. Gentleman would have the House believe it is, it is less than credible that his hon. Friends should have precluded the adjournment of the Standing Committee. The fact is that no fewer than 19 Scottish Members out of 72 serve on that Committee, and they are precluded from attending the debate, or are forced to choose where their responsibilities lie. That is a disgraceful choice for them to be asked to make. It is Opposition Members who must take responsibility for that.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

May I ask the right hon. and learned Gentleman a simple question? Did his Whip offer an adjournment simpliciter, or did he put on ridiculous conditions about making progress?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The hon. Gentleman is well aware—[HON. MEMBERS: "Answer."]—that if he wants the House and the people of Scotland to believe that the Opposition attach the greatest importance to the debate, Opposition Members should have co-operated in enabling Scottish Members to attend the debate.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

May I give the right hon. and learned Gentleman an absolute promise now that if he wants to send a runner upstairs to instruct the Patronage Secretary's representative to move a simple motion to adjourn the Committee, we shall not oppose it?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

My hon. Friends have made it clear throughout today that they are anxious that all Scottish Members should be enabled to attend the debate. It has been the actions of the Opposition alone that have prevented that.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber

I am a member of the Standing Committee. At about 6 minutes to 1 o'clock a sittings motion was moved that the Committee should sit again at half-past 7 o'clock. Being a Scottish Member, the Secretary of State will know that when one is committed to travelling, that sort of warning is ridiculous. That is why the motion was talked out. I think that it would have been possible to have had a normal adjournment of the Committee.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The adjournment of the Committee would have been very much in the interests of this debate, and it could have happened if the Opposition had permitted it.

The hon. Member for Garscadden has said why he believes not only that Gartcosh should remain open, but that the Government should intervene. Let me make my position clear. In the short time that I have been Secretary of State for Scotland, I have received a number of requests from those interested in the matter to meet me and to discuss it. I have today seen the Scottish Trades Union Congress and other representatives. I have seen the Scottish Steel Industry Management Association. I have received representatives of the work force at Gartcosh, and I have met the hon. Member for Motherwell, South (Dr. Bray), who asked to see me last week. I listened with great care and enormous sympathy to what those people had to say, because all hon. Members on both sides of the House obviously share in the deep sympathy that is aroused when any plant is required to close, involving a loss of jobs.

No doubt the hon. Member for Garscadden would be the first to admit that the question to which the House has to address itself is not a simple and straightforward one as to whether the decision to close Gartcosh is a matter for management. Everyone would accept that in normal circumstances the future of a plant with 600 to 700 employees must be determined by management and that there is very little precedent for Government to intervene.

I remind Opposition Members that when the Glengarnock steel works closed under the Labour Government, that Government did not accept responsibility to intervene to prevent closure. They accepted that however regrettable, and however unfortunate, the closure might be, it could not be proper and right for the Government to intervene—

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

That was a different case.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

Of course that was a different case, because it was a different Government, therefore the hon. Gentleman comes to that conclusion. Of course he claims that the circumstances were different, because he is embarrassed to be reminded of that event. I am entitled to point out to the hon. Gentleman that the Labour Government were not in the habit of intervening when plants employing 600 to 700 people were proposed for closure by management. [Interruption.] I am prepared to reply to the debate, but only if I am given the opportunity to be heard. [Interruption.]

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. I am trying very hard to listen to the Secretary of State. I hope that hon. and right hon. Members will enable the House to listen to him.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I think the House will accept—certainly a Labour Government accepted—that the only proper basis on which the Government could have intervened to prevent the closure of the plant was if it could be established that the decision to close Gartcosh would pre-empt the future of Ravenscraig. That connection has to be established if it is to be suggested that it would have been proper for Government to intervene. Therefore, the remarks that I intend to make, and the points to which I intend to respond, will be concerned with the central question whether it has been established that the decision to sustain Ravenscraig has been pre-empted by the proposals for Gartcosh.

Photo of Dennis Canavan Dennis Canavan , Falkirk West

The Secretary of State will notice that there is a mention in the Opposition motion of both Gartcosh and Ravenscraig, but that there is no mention at all of Ravenscraig in the Prime Minister's amendment. It is a negative amendment, simply endorsing the closure of Gartcosh. Did the Secretary of State not fight within the Cabinet for the inclusion of a reference to Ravenscraig and the toughening up of the Government's commitment to Ravenscraig, or are we again lumbered with just another of Maggie's men of straw, like the Secretary of State's predecessor? Is it not time that Scotland had somebody to stand up and fight within the Cabinet for the rights of Scottish workers?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The hon. Gentleman will be aware that the Government amendment refers to the need and the desirability to achieve a viable steel industry for the country as a whole. The Government have already indicated the importance that they attach to Ravenscraig. I shall make some remarks on that during my speech if the hon. Gentleman will be so patient as to wait.

Photo of Mr Donald Stewart Mr Donald Stewart , Na h-Eileanan an Iar

The Secretary of State is making the case that the Government have no locus to interfere and that the decision must be one for management. How does he explain the Prime Minister's excuse for selling off the gas industry, which is that it would allow the industry to get away from Government interference? Does that not simply that the Government are able to interfere with a nationalised industry?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

Of course the Government can interfere. That is one reason why Ravenscraig is open today: A Conservative Government interfered to achieve that result. The question is not whether the Governmet have power to intervene, but what has been the view of successive Governments about the circumstances in which it is appropriate to intervene. Just as the Labour Government did not believe that the closure of Glengarnock should be prevented by them, so we do not believe that it would be appropriate to interfere with the decision of management on Gartcosh.

The crucial question is whether it can be substantiated that a decision on Gartcosh will pre-empt discussion on the future of Ravenscraig. A number of arguments have been put forward, and some of them have been made by the hon. Member for Garscadden.

I should like to comment briefly on some of the main points that have been made over the months by the hon. Gentleman.

It has been said, for example, that it would be unique in the Western world to have a hot strip plant that did not have a cold finishing facility adjacent to it. I appreciate that the hon. Gentleman did not say this, but he is aware that this argument has been put, and I feel it right to comment on it. It would not be unique. There are plants in Japan, France, Italy, Canada and the United States where the cold finishing facilities are many hundreds of miles away from the original plant, so that is not a significant consideration. Ravenscraig's situation would not be unique in any way.

It has been suggested on many occasions—indeed, it has been put to me at the meetings that I have had—that there are certain grades of steel that can be manufactured only at Gartcosh, and that if Gartcosh closes it will have profound implications for Ravenscraig. I have looked into this because it seems an important consideration, but I have been assured that that is simply not the case. There are no grades of steel produced at Gartcosh that cannot be produced at other cold finishing facilities elsewhere in the United Kingdom.

It is suggested that the profitability or competitiveness of Ravenscraig will be materially affected if its product has to be sent to Shotton for cold finishing purposes. On the face of it that may appear a persuasive argument, if the cold finishing facilities are some hundreds of miles away, but when we look slightly further into the steel industry in Scotland we find that this argument cannot be sustained. About 97 per cent. of the demand for cold finished steel in the United Kingdom does not arise in Scotland. Only 3 per cent. of the demand arises in Scotland itself. With regard to the ultimate destination of the product leaving Gartcosh, no less than 75 per cent. of it goes to customers south of Manchester. At the moment, only 25 per cent. of the product of Ravenscraig goes to Gartcosh. The rest does not, and has not done so in the past. That is an important consideration.

Photo of Gavin Strang Gavin Strang , Edinburgh East

The reason for that is that the Government have shut down so much of our manufacturing industry. It is important to retain the Gartcosh-Ravenscraig complex so that we will have that base for future investment in the manufacturing industry.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The hon. Gentleman knows perfectly well that at the moment only 65 per cent. of existing capacity in cold finished steel is utilised. He knows also that there is enormous over-capacity in this sector. If a vast proportion of the product of Gartcosh is being sold to customers in the United Kingdom south of Manchester, we must ask ourselves whether there will be any significant effect on the competitiveness of Ravenscraig if the cold finishing facilities at Shotton are used, as proposed by the British Steel Corporation.

Another argument that has been put, and may indeed have been put by the hon. Gentleman today, is that the customers of the British Steel Corporation will go elsewhere as a consequence of the Gartcosh closure. Neither the hon. Gentleman nor anyone else has produced evidence to support that assertion. On the contrary, Austin Rover, which is quoted as one of those companies which might, or would, go elsewhere, has, as I understand it, expressly denied any intention of doing so.

It is suggested that even in the period since the announcement was made the British Steel Corporation's market share has declined. There have been various reports in the press during the past week or so suggesting that this is happening. This is, indeed, correct. There has, regrettably, been a decline in the corporation's market share. If we look beyond the headlines and examine what has been taking place, we find that the recent decline has been not simply in those areas which concern Gartcosh but over a whole range of steel products. The decline has more to do with the exchange rate than with any other single factor. The British Steel Corporation has indicated that it believes that the decline is over and that there is likely to be an upturn in the next couple of weeks. We would all welcome that.

The arguments about customer disapproval or of a declining market share because of proposals involving Gartcosh, although undoubtedly put forward with great sincerity, have not been accompanied by hard evidence linking any trends or developments with any specific decision on Gartcosh.

Photo of Mr Richard Hickmet Mr Richard Hickmet , Glanford and Scunthorpe

On the question of the market share, is my right hon. and learned Friend aware that for every Japanese car imported into this country, 1 tonne of British steel is correspondingly unused; steel which could and very probably would be produced at these strip mills, of which Ravenscraig is one? Would the argument about market share not be reinforced if those who are concerned about the Scottish steel industry demanded that those who work in it should themselves buy British cars rather than Japanese ones?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

Sadly, my hon. Friend is correct. It is indeed the case that if the people of Scotland and of the United Kingdom as a whole had been interested in and willing to purchase motor vehicles manufactured in the United Kingdom, not only would the British steel industry and the Scottish steel industry be very much stronger, but Linwood might still be open today. That is a factor that we all should bear in mind, now and in the future.

One additional argument is used, most notably by the hon. Member for Motherwell, South. He has argued that the closure of Gartcosh could lead to a bottleneck, and that if the demand for steel products greatly exceeded what is currently predicted by the British Steel Corporation, Ravenscraig might not be able to be used to full capacity because there would be inadequate cold finishing facilities elsewhere to make use of that product. As a hypothesis or theory, there is logic in what the hon. Gentleman says. Where his argument falls down is that the hypothesis would be valid only if there was an expansion of demand far greater than anyone predicts or remotely contemplates at present. If there was a significant increase in demand, beyond that which the British Steel Corporation expects, it could be accommodated by Ravenscraig—and it would be very good for Ravenscraig if that were the case. If the predictions of level suggested by the hon. Gentleman are the basis on which the bottleneck theory is put forward, he must substantiate it by some credible evidence about where the demand will come from.

Photo of Dr Jeremy Bray Dr Jeremy Bray , Motherwell South

Does the Secretary of State realise that the implication of what he has just said is that Ravenscraig should be closed?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

No, it is not, and I will tell the hon. Gentleman exactly why. It has been suggested by the hon. Member for Garscadden and others that the argument that Ravenscraig's future will be unaffected by the fate of Gartcosh is one in which no one apart from the British Steel Corporation and the Government believe. That is not correct. I put this to the House, and I believe it to be of considerable importance.

The House will be aware that the closure of Gartcosh is part of a wider strategy announced last August, the aim of which is to bring the British Steel Corporation to a level of profitability that will make it financially self-sufficient within the current planning period and with no more state aid after 1985. I am glad to be able to tell the House that the European Commission, not known for its softness in these matters, not known for its sympathy on these issues—[Interruption.] If the House, and in particular the right hon. Member for Glasgow, Govan (Mr. Milian), would care to listen, this is good news that I am able to give Opposition Members. They may wish to hear it. They may not like to hear good news about the Scottish steel industry, but they might at least be silent for a moment.

Photo of Mr Bruce Millan Mr Bruce Millan , Glasgow Govan

I am sorry that I put my name down to speak, because it means having to sit and listen to all this rubbish.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

Order. The right hon. Member for Glasgow, Govan (Mr. Milian) must not keep interrupting from a sedentary position. The House wants to listen to the Secretary of State.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

If the right hon. Gentleman, who was once the possessor of the office that I presently hold—

Photo of Mr John Maxton Mr John Maxton , Glasgow Cathcart

He was a lot better than the right hon. and learned Gentleman is.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

—had had to listen to seated interjections from someone who had been his predecessor as Secretary of State, I think that he would have taken a pretty dim view of the integrity and calibre of the person concerned. [Interruption.]

Photo of Mr Robert Maclennan Mr Robert Maclennan , Caithness and Sutherland

On a point of order, Mr. Deputy Speaker. Is it in order for the right hon. and learned Gentleman to cast reflections upon the integrity of another right hon. Gentleman?

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

The Secretary of State may have been discourteous, but he did not stray out of order.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I return to the point that I was trying to make, despite the interruptions from the Opposition. I am glad to be able to tell the House that the Commission, on advice from independent experts, accepted the viability plan based upon the agreed strategy, and that all the outstanding aid due to the British Steel Corporation was paid in December.

The Commission's advisers said, when endorsing the viability plan, that the assumptions used by the British Steel Corporation were reasonable and consistent with the Commission's criteria. It went on to say that the corporation would reach viability in 1987–88 by meeting the Commission's target profit. As to the forecast of sales, the Commission's independent consultants thought that any conservatism that there might be in domestic sales forecasts was more than offset by optimism over the projected level of export sales. The consultants significantly discounted the British Steel Corporation's overall sales forecasts to make allowances for this.

I hope that that disposes of the argument that the BSC has been unduly pessimistic. The point that I want to emphasise is that the viability plan which the Commission's independent experts has endorsed is based upon the continuation of all five British Steel Corporation integrated works and all the other features of the strategy that was announced last August.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

Of course I welcome good news, but I want to be sure what it is. It is not clear to me. Is the Secretary of State saying that Europe accepts the continuation of the five integrated steel plants until April 1988, but not beyond that, or is he saying something that would be very much more welcome—that the British Steel Corporation now accepts that it should retreat from its declaration that it wants to lose at least one of its strip mills.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I thank the hon. Gentleman for his acceptance of the fact that this represents good news. —[HON. MEMBERS: "Answer."] I have every intention of answering the hon. Gentleman's specific point. The Commission has said that the British Steel Corporation's strategy plan, announced last August, which involves the closure of Gartcosh, also involves the continuation of all five integrated plants. The Commission's view is that under this plan the British Steel Corporation will achieve viability. The Commission has concluded that it is a realistic strategy. It is well aware that the strategy involves the continuation of all five plants, including Ravenscraig. The Commission believes that that plan is realistic and that the corporation ought to be able to achieve viability by 1987–88. I welcome that. I know that my right hon. and hon. Friends welcome it. I should have thought that the Opposition would also welcome it.

Photo of Mr Jimmy Hamilton Mr Jimmy Hamilton , Motherwell North

Am I not right in thinking that as soon as the steel industry makes a £200 million profit it will be ripe for privatisation? In addition, in my constituency and in that of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) 460 men are being paid off on the steel tube producing side. That is also being prepared for privatisation. Is that not the Government's policy?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The Government's policy is that the British Steel Corporation should become viable. That was also the policy of the last Labour Government. It is an eminently sensible proposal. This policy is being pursued, not only by the British Government, but by the whole of the European Community. All member states are seeking to achieve viability for ther steel industries in a world in which, sadly, there has been very great over capacity.

Photo of Mr Richard Hickmet Mr Richard Hickmet , Glanford and Scunthorpe

Can my right hon. and learned Friend please explain to me why 140,000 people who worked for the British Steel Corporation should have been made redundant since 1980 or 1981 if those who are now working at Gartcosh continue to be employed? The viability of the British steel industry, which is now the most successful and efficient steel industry in Europe. is being threatened by inefficient and overmanned steel processes. Does not the survival of jobs in my constituency depend upon a viable British Steel Corporation as a national entity?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

My hon. Friend is correct when he says that it is essential that the British Steel Corporation should identify those markets where expansion is possible and where demand is likely to grow, and that it should concentrate upon responding effectively to those demands one is conscious of the fact that when a plant closes there are important social consequences for those concerned and for the areas in which they live. During the last two or three years the Government, both directly and indirectly, through the Scottish Development Agency, have made a significant contribution towards providing help for those areas that have been most affected by the decline in employment n the Scottish steel industry.

The Scottish Development Agency initiated the Motherwell and Coatbridge projects. During the last two or three years some £24 million has been invested by the Scottish Development Agency in these projects. In addition, and partly through the work of the Scottish Development Agency, a large amount of private capital investment has been attracted to these areas. There has been about £64 million of private investment in the Motherwell area and about £24 million of private investment in the Coatbridge area.

The British Steel Corporation proposes to invest £750,000 in assisting those areas that have been affected by the closure of steel plants. Over £5 million of European Community regional development fund assistance has been provided on the non-quota side to help Strathclyde. At the moment we are pressing the Commission for further help, which we hope will be concentrated more specifically in the areas primarily affected by the closure of Gartcosh.

Photo of Tom Clarke Tom Clarke , Monklands West

Does the right hon. and learned Gentleman recall that when the former Secretary of State for Scotland referred to the Coatbridge project—which was three weeks before the summer recess and four weeks before this announcement—I pointed out that the number of jobs that it was hoped would be achieved—800—was almost exactly the same as the number of jobs that might be lost at Gartcosh? Does the right hon. and learned Gentleman recall that the former Secretary of State said on that occasion that we should not assume that those jobs had already been lost?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

Yes, of course that is the case. However, the hon. Gentleman knows very well that the work done on these projects can be of enormous value. For example, I referred earlier to the closure of Glengarnock.

Photo of Tom Clarke Tom Clarke , Monklands West

It has already gone.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

The hon. Gentleman will alsp know that the work that has been done in that locality has created more jobs than were lost by the closure of the Glengarnock steel works under the last Labour Government.

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

Does my right hon. and learned Friend agree that the priority is to create new jobs, so that employment is available in that area? Is it not hypocritical and unfortunate that certain elements in the Labour party and the trade unions have chosen instead to concentrate upon media gimmicks and have refused to negotiate with the British Steel Corporation and others who are in a position to help them to create jobs in the community?

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

It must make sense for the Scottish Development Agency, the local authorities and others involved to co-ordinate their efforts to ensure the best prospect for new jobs. If there can be the same sort of success from efforts in Coatbridge, Motherwell and other areas affected by the closure as there was in Glengarnock from similar activities, that must be welcome to Opposition Members as well as to the Government.

I appreciate that those who have taken part in the campaign to save Gartcosh in the last few months will be sadly and bitterly disappointed, but I believe that a number of valuable developments have arisen out of the campaign in that period. I attach importance in particular to the clear and explicit statements which the British Steel Corporation has made on several occasions and to various people that it does not believe that the closure of Gartcosh will in any way affect the viability of Ravenscraig or determine the future of Ravenscraig. It is of great importance that these statements have been made in such explicit and unambiguous terms, because in any discussions that may take place in future it will be important for it to have been clearly established that in the view of the corporation nothing that has happened, or will happen, in regard to Gartcosh will have any effect on the future of Ravenscraig.

The hon. Member for Garscadden remarked at one stage that the reprieve, as I think he called it, for Ravenscraig announced last year was simply some device to tide the Government over until after the next general election.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

That was certainly the impression that I obtained from the hon. Gentleman. If he would like to tell us what he said, I should be happy to listen.

Photo of Donald Dewar Donald Dewar , Glasgow Garscadden

I said that there was a cynical view that that was the case. I specifically went on to say, with some emphasis, that I did not want to believe that. I still do not want to believe it. If the right hon. and learned Gentleman would say something apart from the fact that the European Community agrees with BSC about Gartcosh, and produce some good news about a guarantee to Ravenscraig workers, I should be delighted.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I hope that the hon. Gentleman will now acknowledge that the conclusions of the European Community are good news. [HON. MEMBERS: "Why?"] The reluctance of Opposition Members is extraordinary. The answer is that the European Community, unlike Opposition Members, is not taking part in a political campaign. It has no interest in endorsing a BSC strategy that involves the continuation of all five integrated plants unless it honestly believes that that is a viable strategy and one that can lead to profitability for the British Steel Corporation.

I welcome the hon. Gentleman's comment that he was referring only to cynics and that he was not seeking to suggest that the decision on Ravenscraig that was announced last year was simply some electoral device. I recollect that when the decision was announced in 1982 that Ravenscraig would not be permitted to close, the Labour party argued that that was a short-term reprieve, and that once the election was over Ravenscraig would be doomed. After the election was over and this Government were returned, the matter was considered again by BSC last year, and it made an announcement that Ravenscraig was to be saved for at least three years. Many Opposition Members repeated the same old hoary statement that this was simply an electoral device to tide the Government over until the next general election.

I say to Opposition Members and to the House that they should beware of the danger of creating a fundamental lack of confidence in the Scottish steel industry. Without any qualification, I say that I attach great importance to Ravenscraig and to the viability of the Scottish steel industry, which I want to see as a healthy and viable industry. I believe that the corporation can achieve viability with the continuation of all its five plants, including Ravenscraig, and I am delighted that the European Community has endorsed its judgment to that effect.

I invite the House to oppose the motion and to support the amendment.

Photo of Tom Clarke Tom Clarke , Monklands West 5:35 pm, 23rd January 1986

I say in all candour to the Secretary of State that his attempts to be convincing have failed entirely. I can give his words today no more credence than I gave to the words of his predecessor when he gave that assurance to me in the Scottish Grand Committee. The blandishments that he is offering to Lanarkshire, an area already suffering from high unemployment and which has totally unacceptable social conditions are, in the context of this debate, quite offensive. To tell us, in view of the devastation we have seen and are about to see if Gartcosh is closed, that the Government will help by way of the Scottish development agency and in other ways reminds me of the man who went along to Sweeney Todd and was assured by him that he was going to do him a favour by cutting his throat. I am afraid that such logic will not find much acceptance among the people of Lanarkshire.

We are seeing not just the collapse of the steel industry but a Government pledged, and in many cases elected, to help small businesses now presiding over the collapse of more small businesses than ever before. The Secretary of State must have known as he spoke that Plan-It Precision Engineering in my constituency has written to him only this week indicating that it will be losing a number of jobs if the plant goes. That firm is typical of the small businesses in Lanarkshire which are so dependent upon Gartcosh. The House will therefore not be surprised that in Scotland—and this is reflected in all political parties and expressed by people who are politically committed and those who are not—BSC's argument about Gartcosh and the clear-cut Government support for that decision are found to be entirely unacceptable.

The Secretary of State need not pretend that there is no responsibility on Government. On the day of the announcement the chairman of the Conservative party, the right hon. Member for Chingford (Mr. Tebbit), endorsed it, and was supported by the then Secretary of State who had the effrontery to say that this was good news for Scotland. What has been the response? Papers such as the Sunday Post, which is not exactly the Morning Star of Scottish journalism, told the Government on Sunday exactly what it thought. It published countless names of individuals in Gartcosh suffering from the decision.

Photo of Tom Clarke Tom Clarke , Monklands West

I shall not give way because I wish to be brief, and hon. Members are fully aware of the hon. Gentleman's eccentricities in these matters.

The fact is that the Secretary of State refused to address himself to the views of the Select Committee on Scottish Affairs, which of course has a Conservative majority. The Select Committee on Trade and Industry likewise expressed a view last year, having taken evidence from the British Steel Corporation, and the Secretary of State must surely be aware—if he is not, everybody else is—that BSC made it very clear then that it wanted to close one plant, and that that one plant is Ravenscraig. For the Secretary of State to say that, apart from British Steel, nobody takes that view, is a nonsense that nobody accepts.

I address myself to the very serious implications of the closure of Gartcosh even if there were not the overwhelming argument, which has clearly been sustained, about its relationship with Ravenscraig. Lord Young, one of the Secretary of State's colleagues in Cabinet, spoke in the other place a few weeks ago. He said: For many years Governments have told unions that the way to jobs is through the high quality of work and responsible pay claims … We know that we have to compete and innovate so that people choose to buy the goods which British labour has created. That means competition on quality, reliability, design and consumer appeal. And we have to compete on price, too."—[Official Report, House of Lords—13 November 1985; Vol. 468, c. 27677.] On every single one of those tests, Gartcosh should be surviving. The record of the men and women in the plant has been absolutely outstanding and the Secretary of State should have acknowledged that record instead of selling the Scottish steel industry and its workers short, in the way that he did.

I am not surprised, for, after all, the Secretary of State was in the Foreign Office as the Minister responsible for European affairs when decisions were taken about quotas that were absolutely tragic for the whole of the British steel industry, and especially, as we are now seeing, for Gartcosh and Ravenscraig.

The Secretary of State referred to orders in the debate. I have tried in my letters with Sir Robert Haslam and in my letter to the Secretary of State for Trade and Industry to obtain the facts. So far, I have not succeeded, so I ask the question again. Will the Minister of State, Department of Trade and Industry, who is to wind up, give us precise facts about orders lost to this country since the Gartcosh decision was announced? Will he confirm what everybody in British Steel knows, that imports have mounted since that decision? Will the Government stop trying to pretend to the House and the country that these things are not taking place? The situation will be exposed as easily as was that which led to the exposition that the House witnessed this afternoon. The Prime Minister was forced to make a statement in the light of events as they were uncovered. Events are being uncovered in this respect as well.

The Government know that Austin Rover is placing orders with a Belgian company but pretend that they do not; they know that the order books suggest that not only orders but jobs are being lost to Britain. Therefore, I am entitled, on behalf of the men and women of Gartcosh, to say that the workers' commitment to British ideals, industry and patriotism far exceeds those already established by British Steel and by a Tory Front Bench that appears to be determined to join in the cover up—a cover up that many people refuse to excuse.

What will all this mean to Lanarkshire, to my constituency and to those of my right hon. and hon. Friends in the west central belt of Scotland. Closure would add to the appalling unemployment figures. In Lanarkshire, there is over 20 per cent. unemployment. In the districts and villages around Gartcosh, Moodiesburn and Stepps, male unemployment is at 16·8 per cent.; in Easterhouse and Garthamlock, it is 36·1 per cent.; in Coatbridge it is 20·4 per cent.; and Motherwell 20·9 per cent. If the closure goes ahead, the village of Gartcosh will have 32 per cent. male unemployment. To add to that another 1,000 unemployed people, as has been suggested by the Government, when we already have some of the biggest social and industrial problems in Europe is utterly repugnant. We shall continue to expose it.

Why are the Government doing this? Why does this decision have the support of British Steel's propaganda machine? They tell us that it is because Gartcosh is costing £11·5 million a year, but it costs a great deal more than that to keep people unemployed. The reality is that the Government and the BSC are aiming at a £200 million profit next year and £300 million profit for the year after for one simple reason—to achieve privatisation. The price of that objective and obsession is far too high because it has to be paid in human terms.

In "The Deserted Village" one Oliver Goldsmith wrote: Ill fares the land, to hast'ning ills a prey,Where wealth accumulates, and men decay". If the Government continue to pursue their course on Gartcosh, may God forgive them because history will find it difficult so to do.

Photo of Mr Hector Monro Mr Hector Monro , Dumfries 5:46 pm, 23rd January 1986

I am glad to follow the hon. Member for Monklands, West (Mr. Clarke) because he has taken a prominent part in supporing the case of his constituency in the past year. My right hon. and learned Friend the Secretary of State made an impressive speech and I am sorry that in his first major debate on the Floor of the House I have, for the first and, I hope, last time., to disagree with him.

I have never been a great enthusiast of Select Committees and I think that everybody from the Whips Office downwards knows that. However much Select Committees inquire into Government activities, the reaction is the same. Little happens and nothing that is relative to the hard work put into the inquiries by the Select Committees. Nevertheless, in our detailed inquiry, we had one advantage over the Government because we were able to interview people in British Steel and the unions face to face, and that is valuable in evaluating the strength of the evidence.

Last month, a substantial majority of the Select Committee favoured the report that came to the conclusion that there was a link between Gartcosh and Ravenscraig and that it should be retained. Some time ago, the Macmillan Government invested massively in cars, trucks and tractors. The steel requirements were to be met from Ravenscraig, which became the symbol of a new dawn for heavy manufacturing in Scotland, to supersede the old heavy industries of shipbuilding, locomotive construction and heavy engineering.

The new industry had its ups and downs, but the Ravenscraig complex remains that great symbol—the manifestation of the Scottish steel industry. British Steel wanted to close Ravenscraig and of course Gartcosh in 1982. The plants were saved by my right hon. Friend the Member for Ayr (Mr. Younger) and the advice of the Select Committee. The complex worked through the miners' strike, with the workers showing great loyalty to their industry. Nevertheless, there was not a shred of evidence to show that BSC had changed its mind about the 1982 decision and would close Ravenscraig if the Government had not ordered otherwise.

In the summer of 1985, rumours were rife and widespread that Ravenscraig was threatened again. Many of us visited Ravenscraig and met shop stewards and the management. We saw the plant and its obvious need for investment, particularly in new coke ovens. I decided then, as did some of my hon. Friends, that the Ravenscraig complex must be retained and given new investment. It was very welcome news when, in August 1985, the Government announced that they had ordered BSC to retain Ravenscraig for at least three years, but I was horrified that the BSC could use its commercial judgment to close Gartcosh. I still find it difficult, despite what my right hon. Friend says about differentiating between political decisions at Ravenscraig and the commercial decision on Gartcosh.

How far can we go towards pruning Scottish steel? Do we stop at Gartcosh? What about Dalzell and the important plates for submarines? What about the whole complex of Ravenscraig? We have lost Glengarnock and now we have lost Clydesdale and Imperial, with a loss of 450 jobs on top of 700 at Gartcosh.

What about the repercussions? What about the suppliers? We hear of the thousands who will be affected by the closure of Gartcosh. For instance, the South of Scotland Electricity Board sells 61 million units of electricity worth £1·7 million to Gartcosh. We know that the SSEB is already overcapacity in power, so great difficulty lies ahead for the board if Gartcosh goes.

Will motor car manufacturers continue to take supplies from British Steel? We have heard from my right hon. Friend the Secretary of State about Austin Rover. The Select Committee did not have information on Austin Rover, BMW or Ford, and is still vague about what exactly Nissan will want, which may be crucial to the future of steel in Scotland.

The steel industry, in a way, is an indication of a nation's industrial virility, and Ravenscraig without Gartcosh must be much more vulnerable than it would be if the two were together.

I am very pleased that the Government, with British Steel, announced further investment for Ravenscraig—£10 million for a coal injection plant and £5 million for modifications to the No. 3 concast machine, plus silica welding of ovens. There seems to be some doubt, particularly on the shop floor, about whether in the long term this will be satisfactory.

I would be greatly encouraged to hear the Minister say that there is to be more investment in Ravenscraig. I certainly welcome the fact that British Steel Industries is bringing jobs to Scotland. I particularly welcome what it did in Glengarnock, but it has a great deal to do now in the Ravenscraig area. I feel that if Gartcosh closes and its fine workforce is disbanded, it will never reopen.

Tommy Brennan and his team have fought a good fight, and deserve a better result. I know that Ravenscraig steel will, instead of going to Gartcosh, travel the long road or rail journey to Shotton in North Wales. I am unimpressed with British Steel evidence about transport costing and assurances that Shotton will never be fully loaded by coated steel from other plants to the exclusion of Ravenscraig.

The Alphasteel concast machines will go to Llanwern to increase production there. Jolly good luck to the Welsh, except perhaps on the rugby field, but that is of no avail to the Scots, nor does it do them much good to know that the Alphasteel quota will be of more benefit to Lakenby than Ravenscraig.

I was most impressed by the evidence given by the Steel Industry Management Association. Who is right—the Government, British Steel, SIMA, the unions or the Select Committee? The crux is really in British Steel's forecast for future demand. It seems pessimistic in view of the expansion for which we hope. If the forecasts are wrong, it will be too late to save Gartcosh.

SIMA foresaw a grave risk, which I share. The Select Committee felt that the evidence of BSC was inconclusive. If the closure goes ahead it will be final. The saving of £11 million is seen to be crucial to British Steel, but the political and industrial implications are enormous. It may be the most expensive £11 million the Government will ever save. Many major decisions are based on judgment, and not strictly on an accountant's appraisal of a balance sheet. I doubt that we would be going ahead with the Channel tunnel if we looked only at facts and figures.

We need a high degree of vision. That is extremely important. The same is true of British Steel. We need a value judgment to be made on Ravenscraig's importance to Scotland and the United Kingdom. Ravenscraig and Gartcosh are, in my view, one and should be retained with its skilled force.

It is 21 years since I made my maiden speech on unemployment, particularly relative to Upper Nithsdale where it was, and is, very high. I have had a prime interest in unemployment ever since. I have always supported the Government and the Conservative party, but tonight I must protest that the Government have misjudged not only the industrial consequences but the political and social repercussions.

I support the Select Committee's recommendation but must. however reluctantly, vote against the Government.

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber 5:56 pm, 23rd January 1986

I congratulate the hon. Member for Dumfries (Sir H. Monro) on a cogent and brave speech. This is the most significant and specific debate we have had on Scottish economic matters for many years. If we are honest, we will admit that on many occasions the Chamber witnesses pyrotechnic displays of bogus indignation and spends its precious time indulging those who are more interested in scoring party points rather than in examining, because of its responsibilities, real problems in a thorough and fair way.

As a Scot and a democratic politician, I regret that the Government, having the responsibility for the Gartcosh closure, were unwilling to make time available to debate it, or the Select Committee's report on the closure, either on the Floor of the House or in the Scottish Grand Committee.

The Labour party motion is not partisan. It bases itself on the recommendation of the Select Committee on Scottish Affairs. This was a conclusion it found difficult to reach, as we all know, and I see no point in berating Conservative Members about this. It was hard for some of them, like the hon. Member for Dumfries, to make that recommendation. I do, however, seriously criticise and condemn the Government for their unwillingness to debate it. Not only the Select Committee but a huge majority, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) has said, will show the widest conceivable cross-section of Scottish opinion. Today, I heard that the Highland region meeting in Dingwall passed a motion in support of Gartcosh and wanted the matter to be debated. If Parliament is to be a place where issues of difference are genuinely argued through, that should have been done a long time ago, and not at the eleventh hour.

Whatever the colour of the ideological aims of a Government, if they call themselves democratic and fail to respond to the reasoned, logical and carefully documented unexaggerated approach that Tommy Brennan has made on behalf of the work force, they incite blind, angry, bitter and unyielding opposition and weaken the capacity of any future Government to solve difficult and stressful problems in a sensible way.

The Prime Minister, who gave much publicised tea to young unemployed people, is of course, an incredibly busy person—I am not saying this at all sarcastically—and is subject to a variety of unremitting stresses, but she was wrong, deeply wrong, to refuse to see Tommy Brennan and those who walked from Scotland to London to publicise their plight. As no one would debate the matter, it seemed the only way they could bring it to her attention.

This is not a light matter or another example of the special pleading to which all hon. Members are regularly subjected. It is a central question about the future shape of the Scottish economy.

The hon. Member for Garscadden has already made the basic case and, if I may say so without causing embarrassment to him, has made it very well. He has been supported most lucidly by the hon. Member for Monklands, West (Mr. Clarke).

One of the problems with being some way down the list of speakers is that what one wants to say has been said. I do not believe in wasting time on repetition and I know that many hon. Members want to speak. I shall therefore briefly repeat three arguments, all of which were repeatedly made by my hon. Friend the Member for Gordon (Mr. Bruce), who was the Liberal Member on the Select Committee on Scottish Affairs. I pay tribute to his dilegence.

First, this decision is wrong for the Government in their own terms—their own terms being the primacy of the free market—to make decisions about the future of a crucial part of a key industry on the basis not of profitability but of wholly unreal profit targets, artificially sought with a view to sale. Incidentally, the Scottish Development Agency and the Highlands and Islands Development Board happily breach the Government's terms on the primacy of the free market, and long may that happen. The Scottish Council (Development and Industry) hardly comprises a group of militants. It is certainly interested in industrial efficiency. It says that the desired surplus target—this has been mentioned by the hon. Member for Motherwell, North (Mr. Hamilton) of £200 million is 50 per cent. better than the best in the world and 100 per cent. better than the average. Gartcosh is the clear victim of ideological prejudice.

A couple of years ago, Members of the Liberal party met members of the BSC board. Plans were set out ard it was made clear that they were in response to the Government's wishes. We were told that BSC was on target. I said, "If that is possible for BSC as a state concern, why is it necessary to privatise? Has the steel industry not been an ideological football long enough?" I never received an adequate reply.

It is interesting that, at a time when one's door is continually battered down by people from Guinness, Argyll and Distillers, no one from BSC ever appears. Perhaps that is because increasingly people do not believe BSC, especially its denial of the inevitable, inextricable link between Gartcosh and Ravenscraig.

Secondly, the decision ignores future increased demand in the automobile industry. It proceeds on the assumption of no general economic recovery. It conceals the loss of markets at home and abroad. Those points have already been well made.

Photo of Mr Alexander Fletcher Mr Alexander Fletcher , Edinburgh Central

I am sure that the hon. Gentleman is aware that last year was yet another record year for car sales in the United Kingdom. The tragedy is that not enough of those cars were manufactured in the United Kingdom. Will the hon. Gentleman take that point into account?

Photo of Mr Russell Johnston Mr Russell Johnston , Inverness, Nairn and Lochaber

We know that soon more cars will be manufactured in the United Kingdom, as the hon. Member for Edinburgh, Central (Mr. Fletcher) wishes.

hirdly, the decision will have a domino effect—that American phrase which means that, if one thing falls down, many others fall as well. At a certain stage, a stand must be taken in the general débâcle. The domino effect, when applied to Gartcosh and Ravenscraig, is appalling. The decision will affect the profitability of British Rail in Scotland. It will have a direct effect on the capacity to survive of the two ports on the Clyde and the Forth. The decision is already having an effect. Polkemmet will not be reopened I believe that that it should be reopened. The decision will undermine a basic part of Scotland's manufacturing capacity.

The hon. Member for Glasgow, Garscadden (Mr. Dewer) said that this is a key decision, and how right he was. It demonstrates the Government's serious disinterest in the Scottish economy. As the hon. Member for Dumfries has said, there is a lack of vision. Not only the social consequences but the general consequences on the Scottish economy will be miserable, disruptive and expensive. No Scottish Government with economic powers would allow it.

We all know that ecomonic forecasting is chancey yet the Government, as the Secretary of State has stressed, have committed themselves to a three-year guarantee for Ravenscraig. As the motion says. the guarantee given to Ravenscraig must be extended to Gartcosh. When the former Secretary of State for Scotland made the pledge, everyone thought that it included Gartcosh. The present Secretary of State has accepted that the Government can intervene. Whether that has or has not been the practice of successive Governments has nothing to do with it.

The Secretary of State spoke with the aggression of the guilty. The Government can act if they wish. I ask them to do so. If they do not, their lack of foresight and commitment to Scotland will justly reap massive retribution at the next general election.

Photo of Mr Kenneth Warren Mr Kenneth Warren , Hastings and Rye 6:05 pm, 23rd January 1986

The Select Committee on Trade and Industry, of which I am Chairman, has had opportunities to look at the BSC's work. It has been a pleasure to note the way in which the corporation improved its profits over the past six months. I congratulate the management and the workers.

One of the most revealing features of the BSC—I speak personally on this point, not on behalf of the Select Committee—is the way in which the workers' devotion to their task has been increasing, especially in the three integrated steel plants at Port Talbot, Llanwern and Ravenscraig. The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) referred to the link between Ravenscraig and Gartcosh. When I looked at what was happening at Ravenscraig, I assumed that we were talking about Gartcosh as well. I had no doubt about that. Gartcosh is part of Ravenscraig's future. I am sure that my right hon. Friend the Secretary of State will correct me if I am wrong, but no such error was ever made apparent to me as a member of the Select Committee.

As a Conservative, I believe that we should look forward to the BSC moving towards privatisation. However, we are not debating that—we are debating whether organisations, such as those at Ravenscraig, including Gartcosh, could ever achieve what I understand are the requirements imposed on the BSC by the Government. What are those requirements? My understanding to about a first order of accuracy, is that the Government are looking for a profit of £300 million on £4 billion worth of sales. That sounds pretty good. I hope that BSC can achieve it. If it can, it will achieve something that its prime competitors in other parts of the world, like Nippon-Kolkan, Nippon-Steel and Thyssen are simply not able to achieve. Those competitors are turning over profits that are about a half or a third of those that the Government expect BSC to make if it is to be a saleable commodity. Surely, the BSC's strategy must be to produce those items that can be sold to make such a profit.

Ravenscraig and Gartcosh simply do not have that ability. Ravenscraig will remain open, as the Government have said. I trust that that is because it is the only plant at which the BSC produces steel for the Trident submarines. Gartcosh would be kept alive by producing high-volume, relatively low-profit steel for car manufacture. It is not in the BSC's interests to sell that plant because it does not provide the profits that the Government want BSC to make.

The hon. Member for Monklands, West (Mr. Clarke) asked about Nissan. Why is there silence about BSC's attempts to sell to Nissan? I am afraid that there is silence because of the nature of the product that must be made to produce the profit margins that the Government requires of BSC.

Photo of Mr Kenneth Warren Mr Kenneth Warren , Hastings and Rye

I am reluctant to allow interventions in what I regard as a Scottish debate, although I think that this is a United Kingdom question.

Photo of Mr Kenneth Warren Mr Kenneth Warren , Hastings and Rye

I hope that my hon. Friend will forgive me if I do not give way. I want to be as brief as possible and I am afraid that I am already taking a lot of time. Other hon. Members want to speak.

I hope that the Government will answer these questions. There is no doubt that output at Gartcosh is of high quality. One would not transport Gartcosh steel 340 miles to the gates of Port Talbot just to sell it to British Steel's plant if that were not the case. There is no question about the quality there. Llanwern and Port Talbot have their own cold mill. As I said, I have always regarded Gartcosh as part of the Ravenscraig complex. I am told by those who work at Gartcosh, although I would not expect them to say otherwise, that Shotton cannot match the quality of Gartcosh, so why transport the steel down there? The danger is that if the quality is not there, whatever Austin Rover says, it can go away tomorrow and will not come back. The point made by my hon. Friend the Member for Dumfries (Sir H. Monro) about a mill going away and no people being there to resurrect it is perfectly true. Once lost, skilled workers never return.

Over the past year the workers at Ravenscraig and Gartcosh have achieved 14 records unequalled in any other part of the United Kingdom and I praise them for that. The argument that we can do away with Gartcosh and load Shotton and the other mills implies a loading of those mills to 94 per cent. of their installed capacity. It is not possible to operate such mills at that level of capacity without them breaking down and the customers going away. One will never be first source. One might climb aboard a second or even third source. Loading to such a capacity simply is not realistic. There is no doubt about it. If one looks at the other European companies which are in direct competition with the BSC, the best they can usually achieve is 80 to 85 per cent. I am told that the Japanese who went to Ravenscraig and Gartcosh and looked around, no doubt with their canny eyes slanted on opportunity first and advice second, let on to the workers at Ravenscraig that if one loads over about 85 per cent., it costs an extra £1 million in maintenance costs for every 1 per cent. over 85. Bang goes all the savings. There has to be more logic.

If I am right in my information about the returns that British Steel is expected to provide, which I do not dispute as being fair and reasonable, there is no way that many parts of the BSC, including Gartcosh and Ravenscraig, can ever achieve those objectives. We must have a second look.

Photo of Mr David Lambie Mr David Lambie , Cunninghame South 6:12 pm, 23rd January 1986

The hon. Member for Hastings and Rye (Mr. Warren) reinforced my belief that if the people who will be voting at the end of the debate have listened to the arguments, not only during the debate but during the investigations of the two Select Committees, the result would be not different. So far, only the Secretary of State for Scotland has spoken against the motion. The Secretary of State made great play about the fact that Governments close steelworks. He mentioned the fact that the Labour Government had closed Glengarnock steelworks. I know that he is new to the job, but he should know that the Labour Government did not close Glengarnock. It was still there at the end of the Labour Government's turn of office. At that time we were hoping that by further investment and with the opening of the direct reduction plant at Hunterston we would have a new complex—the Glengarnock-Hunterston complex—again to make Ayrshire an important steel area in Scotland. Glengarnock steelworks was closed under this Government. The new Secretary of State must recognise that.

The Secretary of State made great play about the fact that the steelworks at Glengarnock was closed and that we are no longer a steel producing area. He also said that we have had help from the BSC and from the Scottish development agency and that all the problems have now been solved. It is correct to say that we have had help. Many of the buildings have been refurbished and repainted. The environment has been improved. We now have a loch and a recreation area where trees and grass are growing, but the unemployment rate today is double what it was when the steelworks was there.

Last week the hon. Member for Cunninghame, North (Mr. Corrie) took a deputation from Cunninghame district council to meet the Parliamentary Under-Secretary of State for Scotland, the hon. Member for Eastwood (Mr. Stewart). He was complaining about the economic situation in Glengarnock and was appealing for more Government aid. That aid has been refused by not only the Scottish Development Agency but the Industry Department for Scotland as well. I say to the hon. Member for Monklands, West (Mr. Clarke) that if he believes the arguments about closing the steelworks and allowing BSC Industries to come in, he should go to Glengarnock and see the unemployment in that area, which is still over 25 per cent. and growing every day. I know that the Secretary of State is new to the job, but I put it to him that the same arguments used for closing Gartcosh will be put in two years to close Ravenscraig.

In discussions about Scotland I often hear people say that Manchester and Birmingham are a long way off. They feel they cannot compete because of the distance between the Scottish production units and the markets. The British market is flooded with steel from 1,000 or 2,000 miles away and even from Japan, which is 7,000 miles away. There is no talk about distance there. It is a sorry day when we hear the new Secretary of State for Scotland using the old English argument that Scotland is on the periphery of the United Kingdom, is too far away from the golden triangle and can expect only the crumbs, green fields and trees and all the sporting and recreational activities that go with them. I do not mind that from an English Minister, but I object to that argument from the new Scottish Secretary of State.

Photo of Malcolm Rifkind Malcolm Rifkind Secretary of State for Scottish Office

I think that if the hon. Gentleman reflects on what he has just said he will realise that he is being unfair. I was making exactly the same point. The fact that Ravenscraig already sells much of its product to purchasers south of Manchester means that its competitiveness will not be affected by the fact that the cold finishing will take place at Shotton. I was agreeing with the hon. Gentleman and making the same observation.

Photo of Mr David Lambie Mr David Lambie , Cunninghame South

I thought that all the right hon. and learned Gentleman's arguments were in the opposite direction. He was not speaking about Ravenscraig, he was listing the reasons for closing Gartcosh. I put that to the right hon. and hon. Members who were present during his speech.

As Chairman of the Select Committee on Scottish Affairs I have a duty to put our recommendation on the record. Although it has been mentioned, no one has stated exactly what was finally recommended by an overwhelming majority: we are not convinced that Gartcosh and Ravenscraig can be treated as separate entities, as BSC asserts. We therefore recommend that any guarantee given to Ravenscraig be extended to include Gartcosh". That recommendation had all-party support. Only two hon. Members voted against the final report—the hon. Member for Tayside, North (Mr. Walker) and the hon. Member for Stirling (Mr. Forsyth). Those two hon. Members are completely discredited in Scotland and are completely out of touch not only with Labour party opinion in Scotland, but with Conservative opinion, as the hon. Member for Dumfries (Sir H. Munro) has just shown.

To show deep feeling is in Scotland about the closure of Gartcosh, the officials of the Conservative and Unionist Association in Cunninghame, South have stated that they will resign on 31 March if Gartcosh is closed and that they will not put up a candidate against me in the next general election. I am happy about that, as long as they vote for me as well as not put up a candidate.

On 7 August 1985 the closure of the Gartcosh mill was announced. It was unfortunate that the previous Secretary of State for Scotland hailed that decision as a victory for Scotland because he said that it guaranteed the future for Ravenscraig. I could have accepted that if I had not known the people in the BSC with whom I have been dealing during my period as a Member of Parliament.

Chairmen of the BSC come and go. Even Ministers come and go, and now they are coming and going with greater regularity than ever. As a Member of Parliament, I have seen many chairmen in my time, but unfortunately Bob Scholey, now the chairman-elect of BSC, is still there. He is the man with the power, and he now has greater power than ever before.

Photo of Mr David Lambie Mr David Lambie , Cunninghame South

No one wonders he is called Black Bob. He is a very strong and opinionated man, but, to be fair to him, he believes in what he is trying to do.

At the instigation of Mr. Scholey in 1982, the BSC tried to close Ravenscraig. At that time, the Select Committee investigated the decision with—I say this openly—the full co-operation of the then Secretary of State for Scotland, the right hon. Member for Ayr (Mr. Younger). At that time we were afraid that the BSC would get the Government's permission to close not only Ravenscraig but other integrated steel works in the United Kingdom. When the Select Committee made recommendations against BSC's intention to close Ravenscraig, we got full support from the Secretary of State. In fact, he used the recommendations of the Select Committee to fight in the Cabinet Sub-Committee and the Cabinet itself; in fact, to fight our corner for the future of Ravenscraig. That is why I am disappointed to hear the present Secretary of State say tonight that when he had the opportunity to fight his corner in the Cabinet for the nearly unanimous recommendation of the Select Committee to retain Gartcosh, he did not take it. In fact, he did the opposite.

The right hon. and learned Gentleman made a serious error in his first statement as Secretary of State, when, instead of saying that he would wait to receive the report and read the evidence of the Select Committee before making up his mind on how he should react to BSC's proposal, he stated clearly that he accepted it hook, line and sinker and that the Government would not interfere with the corporation's decision. I am afraid that, unlike the previous Secretary of State, the new Secretary of State has shown himself to be a yes man, at the beginning, not the end, of his career. Because of the circumstances facing the Government upon his appointment, he was afraid to rock the boat. He thought that they were in enough trouble.

I do not accept the evidence that was given to the Select Committee by the BSC, not because of the details about the number of tonnes, the costs and the mileage, but because I know the people with whom I am dealing in the BSC. Mr. Bob Scholey and Mr. Jake Stewart, the two most important men in the BSC, have told me privately and publicly that it is and has been their intention to close Ravenscraig, and not even to stop at Ravenscraig but to close other integrated steel works in the United Kingdom.

In spite of the assurances that the Committee received, I still believe that the figures show that since the decision to close Gartcosh was announced there has been a downturn in BSC's steel production and a tremendous increase in imports. As Mr. Scholey told the Select Committee, the BSC is no longer a British company and can no longer be thought of in that context. It is now a European company and must behave like one. It must consider not only Scottish but British interests. It must submerge our interests beneath those of the whole of the European steel industry. Capacity must be reduced, and even Ravenscraig must go, according to Mr. Scholey. I believe that the BSC will demand that the Government close Ravenscraig well before the three-year guarantee is up.

Whoever controls the order book of BSC controls the future of individual plants. Even now orders are being diverted from both Gartcosh and Ravenscraig. Once one takes orders away from a plant, the overheads remain the same and the plant's viability is in question. Most Scottish Members will have received a statement from the joint co-ordinating committee of Dalzell steelworks, which states: We are convinced that the BSC have made their plans years ahead with the ultimate aim to close Ravenscraig and Dalzell works.The Corporation could not afford to close Ravenscraig or Dalzell at the moment because of purely business reasons but if the plans for the Scunthorpe complex go through they could close both Ravenscraig and Dalzell without any loss of business".

The joint co-ordinating committee is correct. The shop stewards committee of Ravenscraig and Gartcosh is correct. I believe that the Government and the BSC intend to close not only Gartcosh but Dalzell and, finally, Ravenscraig. That is why I hope that enough Conservative Members will vote with us, even if we do not win, to give the Government a fright and make even this Secretary of State, this failure who now holds that office, stand up and fight his corner in the Cabinet for Scottish interests, as he is supposed to do.

Photo of Mr Alexander Fletcher Mr Alexander Fletcher , Edinburgh Central 6:27 pm, 23rd January 1986

This is the first opportunity that I have had to take part in the long-running debate on Gartcosh. I know that the hon. Member for Cunninghame, South (Mr. Lambie), as Chairman of the Scottish Select Committee, has spent much time considering the connection between Gartcosh and Ravenscraig, and trying to save jobs at Gartcosh.

It is no comfort that we have been here before, at Linwood, Invergordon, and various shipyards and other steelworks in Scotland, when we have faced such problems. I have seen at first hand the worry and desperation of managers and workers as they search for yet another lifeline to try to save their factory and prevent its closure. Contrary to what is said by Opposition Members, Ministers and officials also search hard for ways of averting closures. A great deal of time is spent seeking new owners, new markets or new finance to prevent such closures, but at the end of the day factories that cannot be made viable cannot be saved, no matter how generous Governments may be with taxpayers' money.

Linwood, Bathgate and Invergordon closed not because Governments of both parties refused money, but because they could not compete in their markets. Steelworks have not closed because Governments have refused finance. Literally thousands of millions of pounds have been poured into the BSC, yet under Labour and Conservative Governments many thousands of jobs have been lost—more than half the work force. That is the context in which we should be viewing the problem of Gartcosh.

Labour Members choose to ignore the facts and in particular they ignore what is happening in the international steel markets. World demand is flat, not expanding. World capacity, however, has considerably increased in recent years, not least as less developed countries become self-sufficient in steel. Steel is also being substituted by other products, not just in motor car manufacture, which is important, but in other industries. It is absurd for Opposition Members to try to suggest that if, perchance, they were in Government there would be a return to building as many ships, motor cars at Linwood or other vehicles at Bathgate, as would justify the expansion or continuation of steelworks which are not viable today.

British Steel's task is to maximise its share of a rather static market and to do that against strong competition in Europe. The corporation's survival depends on its ability to compete. It is our job to take a realistic view of how best the BSC can compete in world markets.

I know that the Labour party may seek some short term advantage in ignoring such matters. Its protests are loud and it loves protest rallies. Frankly, Labour has nothing to offer the steel industry in Scotland but marches, parades and speeches at rallies. To that extent the Labour party is not just misleading itself but is misleading workers in Scotland.

Photo of Mr Hugh McCartney Mr Hugh McCartney , Clydebank and Milngavie

Is the hon. Gentleman trying to suggest that the only protests against the closure of Gartcosh and the potential closure of Ravenscraig are coming from the Opposition Benches? The hon. Gentleman's hon. Friend who is sitting beside him, the hon. Member for Dumfries (Sir H. Monro), and others including the Church of Scotland, every local authority in Scotland and the mass of the Scottish people, are objecting to the Government's proposals. Why does the hon. Gentleman claim that it is just the Opposition who are protesting?

Photo of Mr Alexander Fletcher Mr Alexander Fletcher , Edinburgh Central

My point is that the Opposition do nothing but protest, march and make speeches. My hon. Friend the Member for Dumfries (Sir H. Monro) considers the matter in a much more intellectual manner than any Opposition Member.

My right hon. Friend the Secretary of State has provided welcome and independent information supporting the Government's policy of maintaining five major steel plants in the United Kingdom. He has also confirmed the Government's commitment to Ravenscraig. That is welcomed on this side of the House, but not by the Opposition. These two pronouncements provide cautious hope for the future, but the only long-term guarantee is the continued ability of the BSC in Scotland to win orders and be viable, just like any other industry.

I well understand the feelings of the workers at Gartcosh and their families. I am aware that none of the facts about world markets can bring satisfaction to them today. There is much to be done by the BSC and BSC Industries to assist the Gartcosh work force and to help in the area generally. Other hon. Members referred to that today.

The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) referred to the need for the BSC to explain itself and speak up for Scotland—at least I believe that that was the gist of his speech. I agree with him on that point. I told the chairman of the BSC that the corporation is too silent and leaves too much of its case to be presented by others.

For example, I was asked to do a radio programme at the week-end with Mr. Brennan and the hon. member for Cunninghame, South (Mr. Lambie), I asked who was to represent the BSC on the programme and was told that nobody would. The BSC had, however, made a statement. I said that if BSC was not going to speak on the radio and defend a decision that is essentially its own, I could see no reason to do that for the corporation.

I conclude by once again asking the BSC to make its case, to contribute to the debate in Scotland and, above all, to make clear what the future of the workers and their families at Gartcosh will be.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East 6:37 pm, 23rd January 1986

This debate is probably as important for the future of Scotland and the Scottish economy as it is for Gartcosh and the workers at Gartcosh. I have rarely encountered an issue that has so united the Scottish people. The Scots feel very strongly on this issue, and many believe that they have been abandoned within the British state.

The results of an opinion poll in the Glasgow Herald are significant and bear out what was generally believed. The STUC sent a letter to the Prime Minister stating that as a result of that poll 80 per cent. of the Scottish people wish Gartcosh to be retained. The poll showed that 64 per cent. of Conservatives, 83 per cent. of Labour supporters, 91 per cent. of the Scottish National party, and 86 per cent. of the alliance, all voted in favour of retaining Gartcosh. That is clear recognition that Gartcosh has a Scottish context and is extremely important.

There may well be complex arguments about the future of the Scottish steel industry within the British context. The hon. Member for Glanford and Scunthorpe (Mr. Hickmet) mentioned that earlier, but that point was properly exploded by the measured, useful and helpful contribution of the hon. Member for Hastings and Rye (Mr. Warren) on the basis of his experience in the Select Committee on Trade and Industry. He was able to relate the benefits of retaining Gartcosh as part of the Ravenscraig complex.

Photo of Mr Richard Hickmet Mr Richard Hickmet , Glanford and Scunthorpe

The position of the British Steel Corporation cannot be looked at in isolation in Scotland. The whole of the corporation must be examined as a viable national entity. With great respect to the hon. Member for Dundee, East (Mr. Wilson), constituencies such as mine have suffered a great deal because of the cutback by British Steel. Of course, the Scots are not prepared to bite the bullet in the same way as we are.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

We are fighting for the retention of the Scottish steel industry, and it is of no value to us if there remains a British steel industry, but none in Scotland. It is our duty as Scottish Members of Parliament to stand up for our steel industry. If, perhaps, the hon. Gentleman had been more effective in his duties, he might still have one in his constituency. We do not accept the hon. Gentleman's defeatism about the future of the steel industry, either in Scotland or in the United Kingdom.

We also do not accept the British Steel Corporation's word on these matters. The hon. Member for Edinburgh, Central (Mr. Fletcher) put his finger on the matter when he said that the BSC was not prepared to come out and defend its decision. All the evidence that we have received shows that Gartcosh is an essential part of the complex at Ravenscraig, and if that complex is closed the death knell of Ravenscraig is assured.

I believe that it is the long-term policy of BSC to extinguish the Ravenscraig strip mill and all its ancillary mills. I have no doubt at all about that. That message can be seen in the attacks being made on the other mills, on Clydesdale and Dalzell, and particularly in the threatened cutbacks in capacity at Ravenscraig.

Steelworkers have told me that the management of the BSC is anti-Scottish. They say that the management does not want a steel industry in Scotland and prefers to concentrate and consolidate in South Wales arid Lackenby.

There is no future for the Scottish steel industry if we allow Gartcosh to close. The former Secretary of State for Scotland caved in in the Cabinet. I am afraid to say that the new Secretary of State has not directed his mind towards the importance of the issue. He does not appear to have seriously gone to the Cabinet to ask for a rethink.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

No, I shall not give way. Time is short and I wish to make my points briefly. The new Secretary of State should have gone to the Cabinet and had the matter reviewed.

I do not intend to go over the ground that has been covered about the importance of Gartcosh and its efficiency. I was prepared to believe the Scottish steel industry managers when they came to us with their thick volume of evidence about the slumping export orders and the rise in imports. They gave us their views on what was happening from the information that they had from within the corporation.

The Government are not prepared to listen, even when the arguments are overwhelming and the evidence is clear that BSC will lose its market share of cold rolled steel to the continent. They prefer to do nothing. It is an insult to our intelligence to maintain that Ravenscraig has a future beyond three years. The EEC might be prepared to give some assurances, but it does not run the steel industry. The BSC runs it. From the information that we have had from the hon. Member for Cunninghame, South (Mr. Lambie) it would seem that the BSC has no faith in the survival of the Ravenscraig complex.

If Gartcosh closes, it will be much more difficult to regenerate the Scottish economy. I do not believe that the political map of Scotland can remain the same after that betrayal. The attack on Gartcosh and the Prime Minister's contemptuous refusal to meet the marchers shows that Scotland has no future within the Union, and the Union is rapidly turning sour within Scotland.

The House, likewise, has not covered itself with glory. If the vote tonight goes against Gartcosh because of hon. Members who have not listened to the arguments, in future no one in Scotland will be able to look to the House for protection. The Select Committee on Scottish Affairs failed to give a lead and to use its proper political skills to get out its report initially. The debate is one week too late.

We should consider the parliamentary Labour party's role. I regard it as disgraceful that, in pursuit of political opportunism, it abandoned the debate on Gartcosh as the campaign was reaching a peak. It did not just let down the marchers and the STUC lobby. It clearly signalled to the Government that, in United Kingdom terms, the Scottish steel industry was a minor matter.

It is hardly surprising that the Industry Department for Scotland and Scottish Office Ministers who had been let off the hook rushed to issue a statement announcing Gartcosh's sentence of death. If the Labour party is not prepared to accept responsibility for that, the onus remains on it, with all its parliamentary strength in Scotland, to show how it intends to use that strength. I had a dusty refusal from the shadow Secretary of State for Scotland to a proposal that I made about the leaders of the Scottish political parties. It is up to the Labour party to come forward with initiatives to try and save Gartcosh.

I do not regard the fight as over. It is not final. If the work force decides to occupy the mill and fight the closure, it will have my party's support. Tonight's decision is, in many ways, more important than Gartcosh, because the House is on trial. If it betrays Scotland and lets Scotland down, Ministers will find that they have started a crossing of the Rubicon that will take Scotland to independence.

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling 6:42 pm, 23rd January 1986

If anyone were to seek to betray Scotland, it would be someone who criticised the conduct of the Select Committee on Scottish Affairs whilst refusing to serve on it. The Committee looks after Scotland's interests. The hon. Member for Dundee, East (Mr. Wilson) has a cheek when he metes out such criticism, although I agree with his criticism of the Labour party which, when it had the opportunity to find a bigger stick in Westland with which to beat the Government, cancelled the debate last week and this week prolonged the statement with its endless questions so that we had less time to discuss this subject.

With the Gartcosh mill, we are dealing with a tragic closure of a plant which is out of date, which makes a product which is in surplus, which needs £20 million investing in it and which has a product which is still subject to European quotas. Thanks to the efforts of my right hon. Friends, Shotton products are no longer subject to European quotas. Opposition Members ask us to accept the Gartcosh mill as Ravenscraig's lifeline. Ravenscraig's lifeline will turn into a noose.

Ravenscraig serves the most efficient mill in Europe, and 70 per cent of its poducts go to Shotton. Shotton makes a product which is in high demand—coated sheet. Hon. Members keep mentioning Japanese motor cars. The first lesson to be learnt about Japanese motor car manufacturers is that their cars last longer because they use coated steel. Gartcosh cannot produce coated steel; Shotton can. Ravenscraig, supplying Shotton, will be moving its product into a growth market instead of into an out-of-date mill.

The case which has been put is that there will be greatluy increased demand and work for Gartcosh, which is not operating to capacity. At the same time, we are told that demand is reducing. People must make up their minds. The International Iron and Steel Institute agrees that the world economy would have to grow by 3 per cent. every year to maintain the present level of demand, never mind increase it.

I understand the feeling in Scotland, but Opposition Members would serve their constituencies a great deal better if they were more honest and told their constituents that, whichever party was in power, Gartcosh would close. If there were a Labour Government now, Gartcosh would close.

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

Yes, it would, because all EEC Governments agreed to end subsidies to their steel industries from the end of last year. Every member of the Community must submit its steel industry corporate plan for scrutiny by the Commission. If the Commission is not satisfied that it is viable, it will not accept it. I am no interventionalist, but the Government's genius is shown by the fact that they managed to put together a viable scheme which maintained Ravenscraig as an operating plant. That is remarkable.

My right hon. and learned Friend has told us what the EEC has to say about Ravenscraig's future. That is good news. The Commission also said that, on any assessment, BSC's assessment of likely sales stretched the limit of credibility. Far from having a pessimistic BSC, the Government and BSC are working hand in hand to save the maximum number of jobs and maintain a viable steel industry that can generate resources for investment to secure long-term employment. What is wrong with that? There is nothing wrong with it. Opposition Members are using the closure of Gartcosh as a stick with which to beat the Government and they deserve the Scottish people's complete contempt for doing so.

There is one other argument which has not been put forward. It relates to the customers. The customers also employ. people. Metal Box, Tube Investments and all the so-called domino industries employ people. What will happen to them? What did those industries say to the Select Committee? With one voice, they said that if BSC were not allowed to get down its costs and bring its overcapacity into line with demand they would pay more for their basic products, which were on average, 40 per cent. of their final product costs. That meant that they would lose market share in the struggle to sell their product overseas, which would mean that jobs would be lost.

Those people who say that they stand against Gartcosh's closure because they are worried about unemployment are hypocrites. They seek to tie Scotland to an industry without a future and to a position where it cannot produce high quality steel at the lowest possible cost, and thereby will put more people out of work.

The most offensive charge made during this hysterical debate was that made by irresponsible newspapers such as the Glasgow Herald which did not put both sides of the argument. The most damning charge made was that those of us who are struggling to see a viable and competitive steel industry in Scotland are anti-Scottish. There is nothing anti-Scottish about the closure of Gartcosh. Six major closures are going on south of the border now in the steel industry to meet the same EEC plan from which Scotland is benefiting. Two of those plants are twice the size of Gartcosh and I challenge the hon. Member for Glasgow, Garscadden (Mr. Dewar) to tell us their names.

The Scottish economy is booming. We are now the second most prosperous region of the United Kingdom. We are growing in manufacturing output at twice the rate of the national average. All that Opposition Members can do is to offer Scotland a future which has more to do with our industrial past. Instead of embracing change and facing the challenge of the future, they go for the soft option. We can all say to our constituents that we are in favour of keeping open Gartcosh, but if we want to serve Scotland and our constituents we must face up to the truth and offer some genuine solutions.

Photo of Dr Jeremy Bray Dr Jeremy Bray , Motherwell South

It is not worth answering the misinformed bigotry of the hon. Member for Stirling (Mr. Forsyth). I find it difficult to speak of the social consequences of the closure of Gartcosh and the threat of closure to Ravenscraig in my constituency, which would destroy the community. It would cause misery to many good friends.

The financial objective of the British Steel Corporation, which is required by the Government and by the European Commission, has been accepted by the corporation. The financial objective is that the BSC should be viable—that profits should be at a level which give a reasonable rate of return on the capital employed after depreciation and interest. The BSC has adopted a milestone on the "road to viability", so called by the corporation. The corporation calls it "financial self-sufficiency", that is, sufficient profits to cover interest costs, capital expenditure roughly equivalent to depreciation, and increases in working capital, but giving no return on equity.

This milestone of financial self-sufficiency is not sufficient to achieve the viability that the Government are demanding. It is, as BSC has said in its additional memorandum—which the Secretary of State has still not digested— only a step on the road to viability". As the hon. Member for Hastings and Rye (Mr. Warren) said, further milestones and higher profits will be needed.

In the BSC's memorandum, under a paragraph headed, Why a cold mill closure is sufficient to meet current objectives and should not be deferred it says: the required profit for self-sufficiency".— that is the first milestone— can just be reached provided all actions identified".— that is including the closure of Gartcosh— are vigorously pursued.

There will be further milestones, and to reach them further action will be required. This points to the inevitability, in the BSC's view, of the closure of Ravenscraig. The Government have not had the courage to spell that out.

I put forward three propositions of increasing seriousness for Ravenscraig. On the BSC's forecasts, the profits of the BSC will be higher without Ravenscraig. The arguments which the BSC has put forward for the closure of Gartcosh would also justify the closure of Ravenscraig. On the BSC's forecasts, not only could Gartcosh be closed without physically reducing finished steel deliveries, but Ravenscraig could also be closed when current investments at Llanwern and Port Talbot are complete.

The first two propositions depend upon the BSC's forecasts, but the third does not. Without Gartcosh there is no level of demand at which Ravenscraig could be viable, since the finishing mill capacity of the BSC could be almost fully loaded without Ravenscraig. What the Secretary of State said, put at its kindest, is that the BSC will be able to afford the charity of keeping Ravenscraig open. Steel workers know better than to rely on BSC charity.

If Ravenscraig has a future—as I firmly believe it has—it must be by the BSC winning a bigger share of a bigger United Kingdom market, and a bigger share of the European market for finished steel. With Gartcosh, Port Talbot and Llanwern fully loaded, 60 per cent. of Ravenscraig's output could go to the BSC finishing mills. Without Gartcosh, only 20 per cent. can go to the BSC finishing mills. On the BSC's criteria there is no way in which that can be sufficient to make Ravenscraig viable, whatever the level of demand. If the BSC were honest it would say that that is true, but it is irrelevant. It says that Ravenscraig has no future, with or without Gartcosh, because there will not be sufficient demand.

The BSC's abject surrender in the European Community—accepting an increase from only 65·4 per cent. to only 68·4 per cent. of the United Kingdom cold strip market, when the United Kingdom motor industry is only supplying 30 per cent. of the value added in United Kingdom car registrations—is pathetic. It amounts to an acceptance of no recovery in British manufacturing despite the prospect of falling north sea oil revenues.

The sheer incompetence of the Department of Trade and Industry's Ministers and officials, and of the BSC, in representing British steel interests in the European Community is unbelievable. At the suggestion of Mr. Scholey, who expected their commendation, I saw Mr.. Cadieux, the chairman of the EC steel task force at the Commission, and his officials. I made sure that Mr. Denham, the BSC head of corporate planning and market forecasting, accompanied me.

The critical question is British cost competitiveness. EC officials talked of the sterling-deutschmark exchange rate as an irrelevance. The EC officials were talking like second-rate Chicago undergraduates who would never make the graduate school. They were like the Chancellor at his most porcine in 1980–81, when he was pursuing monetary targets regardless of the exchange rate, which he said had no relevance to Britain's underlying competitiveness. MM. Cadieux, the gentlemen who the Secretary of State has been quoting this afternoon, and who had the responsibility for testing the BSC's future viability, had not asked the Directorate-Generals II, he did not ask Dr. André Louis Dramais, who prepared the economic forecast on which the EC strategic document was based, for an assessment of the effect of a shift in the deutschmark-sterling exchange rate in favour of the United Kingdom. Dr. Dramais confirmed the obvious to me—that it would increase United Kingdom exports and industrial production, and so United Kingdom steel production.

Neither the BSC nor the DTI Ministers and their officials have sought any exploration in the EC of the effects of a restored industrial competitiveness in the United Kingdom. The Minister of State, when I saw him with his officials, was not able to produce a shred of evidence in that direction, whether as a result of falling North sea oil revenue, changed monetary objectives, or improved industrial efficiency.

Hon. Members who saw the magnificent presentation by Austin Rover today of new technology cannot doubt that things are happening in the British steel-consuming industries. The Government, however, have accepted the failure of their own economic and industrial policy. An industrial recovery with proper co-ordination between economic and industrial policy, never mind the further benefits of a degree of international co-operation if it can be achieved, would produce substantial increases in demand for steel which this Government do not bother to investigate.

I believe that the possibility of recovery justifies the rentention of Ravenscraig. If it does it justifies still more the retention of Gartcosh, because without Gartcosh it is difficult to see how Ravenscraig can be retained whatever the level of demand. The incompetence and the scabrous evasions of the BSC, of Ministers at the Department of Trade and Industry and the Scottish office, have been highlighted by contrast with the remarkable campaign fought for the retention of Gartcosh by Gartcosh and Ravenscraig shop stewards. For the BSC and Ministers to throw away such quality of leadership, wantonly and carelessly by their managerial and political evasions and incompetence, is outrageous.

Photo of Alan Williams Alan Williams , Swansea West 6:59 pm, 23rd January 1986

With a view to keeping within the time limit, I hope that hon. Members will forgive me if I show some discourtesy and do not give way.

I should like to examine two propositions. The first is that the impending closure of Gartcosh is not, as the hon. Member for Edinburgh, Central (Mr. Fletcher) suggested, the inevitable consequence of a world recession but a direct consequence of the Government's policies combined with an extrapolation of those failures into BSC's projections. The second is that, consequent upon the closure of Gartcosh, when taken in conjunction with the Government's obsession with privatisation, the closure of Revenscraig becomes virtually inevitable if another Conservative Government come to office.

It is important to remember certain background factors about Gartcosh. According to evidence from BSC, 70 per cent. of its sales are made in the United Kingdom and 30 per cent. are made abroad and are mainly unprofitable but just help with overheads. During the past 25 years, the sale of steel in the United Kingdom has had a nearly perfect correlation with the level of manufacturing output. During the past 10 years, the sale of cold-rolled plate and sheet—and therefore the products of Gartcosh—has had an even more perfect correlation with the level of manufacturing output.

The future of the steel industry as a whole, and of Gartcosh in particular, is inextricably linked with the activity of manufacturing industry in the United Kingdom. Ian MacGregor emphasised that at a meeting of the all-party minerals group on 19 January 1983 when he said: Two thirds of steel goes into capital goods. It directly reflects manufacturing investment. I argue that it is the collapse of manufacturing investment and manufacturing production that has imposed the death sentence which the Government are now trying to execute on Gartcosh.

If we consider what has happened in manufacturing investment and manufacturing production since 1979, we begin to understand the Gartcosh predicament. Manufacturing investment has fallen year by year. In 1983 it was 33 per cent. below the level that the Government inherited. Even this year it is 20 per cent. below what the Government inherited and it is only as high as the manufacturing investment which the country enjoyed a quarter of a century ago. Britain has lost more than £10 billion of manufacturing investment through failing to sustain the level of investment which the Government inherited. The House should remember what Ian MacGregor said—two thirds of steel sales are directly related to manufacturing investment.

The hon. Member for Edinburgh, Central mentioned the level of world trade and tried to perpetuate the idea that all this is the result of a world recession, but that also does not bear analysis. From 1979 to the end of last year, world trade in manufactures increased by 27 per cent. We do not have even static manufacturing output. Output has fallen back below the 1979 level and below the level of the three-day week in the last days of the Heath Administration, so much so that the chairman of ICI says that 30 per cent. of his customers have disappeared. It is much the same for BSC: about 30 per cent. of its customers have disappeared because of Government policy.

Concurrently with cutting investment and output of manufactures, the Government have increased manufactured imports—steel on wheels—by 45 per cent. The failure of Gartcosh, as they see it, is the consequence not of a world recession but of policy failures, imposed on the country by a series of deflationary budgets, six years of high interest rates leading to six years of high sterling, which has meant that our goods have been too dear and foreign goods have been too cheap. BSC has based its projections on the assumption that the failures of the past six years are to be the pattern of the next 10. That is why we believe that if only we return to the levels attained when Labour left office the future of the steel industry will be substantially different. As it is, we are discussing the possible closure of Gartcosh as a direct result of the Government's commitment to monetarism. When the Gartcosh site is levelled, a headstone should be put there reading, "1986: Gartcosh—victim of an experiment that failed."

The Secretary of State tried to pretend that there were no consequences for Ravenscraig. We should bear it in mind that Ravenscraig will be judged not just in the context of what happens with Gartcosh but in conjunction with that other arm of Government policy—privatisation of the steel industry. The House should remember that Gartcosh takes 25 per cent. of Ravenscraig's production.

Robert Haslam told the all-party minerals group on 12 December 1984 that his remit was to prepare steel for privatisation, including, if possible, the central core—the strip mill—of the steel industry. He said that, to achieve that, he had to make a surplus of £300 million which could be obtained only if one of the great integrated steelworks was closed. That was contained in options advice that he put to the Government. The Government say that they guarantee Ravenscraig until 1988 and that after that it will be judged on its merits. I am a cynic and I note that that happens to be just the other side of a general election. I cannot help asking what the assurances are worth.

The chairman who gave the assurances how now gone. The Secretary of State for Scotland who gave assurances has now gone. The Secretary of State for Trade and Industry who gave assurances has now gone. I noticed that the new Secretary of State for Scotland did not lay his dead body on the line assuring Ravenscraig's future. There was no suggestion from him that he will take the chance of resigning if Ravenscraig is closed, as we all know that it will if these policies are implemented.

As for the assurances of the present Secretary of State for Trade and Industry, well, what are they worth after the events of the past week? A new phrase has been coined—once Brittan, twice shy—for promises from that source. The Opposition are not willing to risk the jobs of Scottish steel workers for an IOU written in invisible ink by the right hon. and learned Gentleman.

BSC says that Ravenscraig will not suffer from the closure of Gartcosh because it will rearrange its overheads and it will be part of a profit centre in a division rather than an individual profit centre. Such arguments are valid only until privatisation, but what then? It is not enough to make a profit of £300 million. There must be enough headroom to make a profit that can be distributed to the shareholders as well. If it is sold as a single entity, BSC will, before sale, close one of the great integrated plants to maximise the sale price or, at sale, private owners will close one of the plants to maximise profits. If the strip division is sold as separate plants, each plant will become a profit centre. BSC might try to maximise sale return by closing one in advance to remove surplus capacity, but, once they become independent profit centres, each and every plant—and all of them are nearer to the markets than Ravenscraig—will be competing and exploiting their market advantage.

Photo of Alan Williams Alan Williams , Swansea West

I have already said that I cannot give way because I have so little time.

In the context of profit maximisation, which would inevitably follow privatisation, Ravenscraig would operate major disadvantages. It would have lost its 25 per cent. Gartcosh sale, it would have had no serious investment in the years immediately before privatisation, it would incur higher transport costs, other plants nearer the markets would have surplus capacity and be fighting to win them, it would have lost the largesse of BSC accountants spreading its overheads in the BSC structure and it would have to face hard-headed accountants from the private sector. On 23 October 1985, Robert Haslam said: I think if you looked at it with private sector eyes, as I do, then you would see that nobody would maintain the kind of product portfolio we have at the present time. Listen to this: We do that deliberately to assist these mills … Nobody in private industry could maintain the present product portfolio we have. That is the future that is being offered in conjunction with the closure of the main mark3et for Ravenscraig. That is why it is time that the Government stopped trying to deceive the Scottish people.

The problem is not only Gartcosh or even Ravenscraig. If the Government's policy is implemented and Gartcosh and Ravenscraig go, what else goes with them? What chance will Scotland have of attracting substantial new industry, when it has no steel making capacity?

Ravenscraig is saved only until a general election, and then it will be saved only if the Tories fail at that general election. I say to Scottish Tory Members that tomorrow the whole of Scotland will be watching to see which way they vote tonight. If they are not seen to have voted to save Scottish jobs, when the time comes, they will lose theirs.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester 7:10 pm, 23rd January 1986

My right hon. and learned Friend the Secretary of State for Scotland said in his opening speech that the debate was bound to be contentious. As some hon. Members know, I was in Scotland when the announcement was made about the proposed closure of Gartcosh. In my original incarnation as Minister of State, Department of Employment I saw the matter unfold. I was moved to my current responsibilities and it was the first issue to which I was asked to address myself. Of course, I am aware that the loss of 550 jobs at Gartcosh and one or two more, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) pointed out, is a matter that should be taken extremely seriously. It would be easier to avoid the decision, but if I did so that would be cynical, because it would be a decision taken for purely political purposes. Sometimes, however unpleasant or unpopular, or whatever the political consequences we must take those decisions. If there is over-capacity, as there is in the steel industry not only in Scotland and England, but in Europe, some action must be taken.

The debate has centred on two distinct, but closely intertwined themes. The first is how the British Steel Corporation is managed and how it relates to the Government. The second is how the proposed closure of Gartcosh fits into the agreed strategy. I hope that on the first point-setting aside privatisation of which I am in favour—the aim of a profitable competitive steel industry would be common ground. My hon. Friend the Member for Stirling (Mr. Forsyth) made that point perfectly. In distinct terms, he said that a profitable and competitive steel industry ensures more jobs.

In 1979–80 the BSC had a loss of about £1·25 billion as a result of written down over capacity, the steel strike, and overmanning. We have come a long way since then. In the first half of the current financial year the corporation made an operating profit, which reflects extremely well on the management and on the work force. During that time there were continuous and serious difficulties in Europe. However, there is still some way to go before the corporation can stand on its own two feet, service its borrowings, provide the necessary capital expenditure and provide a return on the millions of pounds that the taxpayer has put into it.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

I have a time constraint and, like the right hon. Member for Swansea, West, I wish to finish my remarks as quickly as possible.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

There is nothing ideological about wanting to get the corporation onto a sound financial basis. Other countries with Socialist Governments are doing the same. To achieve that aim one agrees a strategy, appoints the board and lets it manage. Last August's strategy was agreed and announced against that background. The retention of Ravenscraig was agreed by the board for the foreseeable future—three years.

As my right hon. and learned Friend the Secretary of State for Scotland said, that strategy has been examined in great detail by the Commission with advice from independent experts. They have confirmed that, with five integrated plants, including Ravenscraig, and taking account of the other features of the strategy, including the closure of the Alphasteel hot strip mill and Gartcosh and assuming reasonable stability in the steel market, the BSC can achieve full viability within that period. The strategy has, therefore, allowed not only the remaining Government finance required by the BSC to be paid under Community law, which is important, but has laid down the path towards full viability, which the Government regard as necessary.

At the same time we must recognise that the corporation has little room for manoeuvre. Profits are hard to come by in the steel industry. Within the agreed strategy, therefore, what might be quite minor savings, as the Chairman of the Select Committee pointed out, such as those arising from the Gartcosh closure, assume a considerable importance.

If the Government were to prevent the BSC from implementing the closure, without some strategic reason for intervening, how could the BSC confidently implement the other measures, which, together with Gartcosh, will make the difference between success and failure? I assure Opposition Members, who have made the reasonable point that this is a Scottish matter, that the same is happening in other parts of the United Kingdom. Monks Hall and Jarrow have been closed. There have been cuts at Rotherham and, in Scotland, at Clydesdale, and the significant closure of Tinsley park. The decision is in no sense an anti-Scottish manoeuvre.

I hope that we shall not continue to hear the argument that Ravenscraig cannot succeed. As a hon. Member who does not represent a Scottish seat but who has Scottish connections, it depressed me to hear on several occasions the way in which the Opposition talk down Scotland. Scotland's opportunities in industrial terms are there for all to see.

Question put, That the original words stand part of the Question:

The House divided:Ayes 197, Noes 258

Division No. 46][7.18 pm
AYES
Adams, Allen (Paisley N)Freud, Clement
Alton, DavidGarrett, W. E.
Anderson, DonaldGeorge, Bruce
Archer, Rt Hon PeterGilbert, Rt Hon Dr John
Ashdown, PaddyGodman, Dr Norman
Ashton, JoeGould, Bryan
Atkinson, N. (Tottenham)Hamilton, James (M'well N)
Bagier, Gordon A. T.Hamilton, W. W. (Fife Central)
Barnett, GuyHancock, Michael
Barron, KevinHarman, Ms Harriet
Beckett, Mrs MargaretHarrison, Rt Hon Walter
Beith, A. J.Hart, Rt Hon Dame Judith
Benn, Rt Hon TonyHaynes, Frank
Bennett, A. (Dent'n & Red'sh)Heffer, Eric S.
Bermingham, GeraldHolland, Stuart (Vauxhall)
Bidwell, SydneyHome Robertson, John
Blair, AnthonyHowell, Rt Hon D. (S'heath)
Boothroyd, Miss BettyHoyle, Douglas
Boyes, RolandHughes, Dr Mark (Durham)
Bray, Dr JeremyHughes, Robert (Aberdeen N)
Brown, Gordon (D'f'mline E)Hughes, Roy (Newport East)
Brown, Hugh D. (Provan)Hughes, Simon (Southwark)
Brown, N. (N'c'tle-u-Tyne E)Janner, Hon Greville
Brown, R. (N'c'tle-u-Tyne N)Jenkins, Rt Hon Roy (Hillh'd)
Bruce, MalcolmJohn, Brynmor
Buchan, NormanJohnston, Sir Russell
Callaghan, Rt Hon J.Jones, Barry (Alyn & Deeside)
Callaghan, Jim (Heyw'd & M)Kennedy, Charles
Campbell, IanKilroy-Silk, Robert
Campbell-Savours, DaleKinnock, Rt Hon Neil
Canavan, DennisKirkwood, Archy
Carlile, Alexander (Montg'y)Lambie, David
Clark, Dr David (S Shields)Lamond, James
Clarke, ThomasLeadbitter, Ted
Clay, RobertLeighton, Ronald
Clelland, David GordonLewis, Ron (Carlisle)
Clwyd, Mrs AnnLitherland, Robert
Cocks, Rt Hon M. (Bristol S.)Lloyd, Tony (Stretford)
Cohen, HarryLoyden, Edward
Coleman, DonaldMcCartney, Hugh
Conlan, BernardMcCurley, Mrs Anna
Cook, Frank (Stockton North)McKelvey, William
Cook, Robin F. (Livingston)MacKenzie, Rt Hon Gregor
Corbett, RobinMaclennan, Robert
Cox, Thomas (Tooting)McNamara, Kevin
Craigen, J. M.McTaggart, Robert
Crowther, StanMcWilliam, John
Cunliffe, LawrenceMadden, Max
Cunningham, Dr JohnMarek, Dr John
Dalyell, TamMarshall, David (Shettleston)
Davies, Rt Hon Denzil (L'lli)Martin, Michael
Davies, Ronald (Caerphilly)Mason, Rt Hon Roy
Davis, Terry (B'ham, H'ge H'l)Maxton, John
Deakins, EricMaynard, Miss Joan
Dewar, DonaldMeacher, Michael
Dixon, DonaldMeadowcroft, Michael
Dobson, FrankMichie, William
Dormand, JackMikardo, Ian
Douglas, DickMillen, Rt Hon Bruce
Dubs, AlfredMiller, Dr M. S. (E Kilbride)
Dunwoody, Hon Mrs G.Mitchell, Austin (G't Grimsby)
Eadie, AlexMonro, Sir Hector
Eastham, KenMorris, Rt Hon A. (W'shawe)
Edwards, Bob (W'h'mpt'n SE)Morris, Rt Hon J. (Aberavon)
Evans, John (St. Helens N)Nellist, David
Ewing, HarryOakes, Rt Hon Gordon
Fatchett, DerekO'Brien, William
Faulds, AndrewO'Neill, Martin
Field, Frank (Birkenhead)Orme, Rt Hon Stanley
Fields, T. (L'pool Broad Gn)Parry, Robert
Fisher, MarkPatchett, Terry
Flannery, MartinPavitt, Laurie
Foot, Rt Hon MichaelPendry, Tom
Forrester, JohnPenhaligon, David
Foster, DerekPike, Peter
Foulkes, GeorgePowell, Raymond (Ogmore)
Fraser, J. (Norwood)Radice, Giles
Freeson, Rt Hon ReginaldRandall, Stuart
Redmond, Martin.Stewart, Rt Hon D. (W Isles)
Richardson, Ms JoStott, Roger
Roberts, Allan (Bootle)Strang, Gavin
Roberts, Ernest (Hackney N)Straw, Jack
Robertson, GeorgeThompson, J. (Wansbeck)
Robinson, G. (Coventry NW)Thorne, Stan (Preston)
Rogers, AllanTinn, James
Rooker, J. W.Torney, Tom
Ross, Stephen (Isle of Wight)Wallace, James
Rowlands, TedWareing, Robert
Ryman, JohnWeetch, Ken
Sedgemore, BrianWelsh, Michael
Sheerman, BarryWhite, James
Sheldon, Rt Hon R.Williams, Rt Hon A.
Shore, Rt Hon PeterWilson, Gordon
Short, Mrs R.(W'hampt'n NE)Winnick, David
Silkin, Rt Hon J.Woodall, Alec
Skinner, DennisWrigglesworth, Ian
Smith, C.(Isl'ton S & F'bury)
Smith, Rt Hon J. (M'ds, E)Tellers for the Ayes:
Soley, CliveMr. Norman Hogg and
Spearing, NigelMr. Allen McKay
Steel, Rt Hon David
NOES
Adley, RobertGale, Roger
Aitken, JonathanGalley, Roy
Amery, Rt Hon JulianGardiner, George (Reigate)
Ancram, MichaelGardner, Sir Edward (Fylde)
Atkins, Rt Hon Sir H.Garel-Jones, Tristan
Baker, Rt Hon K. (Mole Vall'y)Gilmour, Rt Hon Sir Ian
Baker, Nicholas (Dorset N)Goodlad, Alastair
Banks, Robert (Harrogate)Gow, Ian
Batiste, SpencerGrant, Sir Anthony
Benyon, WilliamGreenway, Harry
Best, KeithGregory, Conal
Bevan, David GilroyGriffiths, Sir Eldon
Biggs-Davison, Sir JohnGriffiths, Peter (Portsm'th N)
Body, Sir RichardGrist, Ian
Bottomley, PeterGround, Patrick
Bottomley, Mrs VirginiaGrylls, Michael
Brandon-Bravo, MartinGummer, Rt Hon John S
Brinton, TimHamilton, Neil (Tatton)
Brown, M. (Brigg & Cl'thpes) Hampson, Dr Keith
Bruinvels, PeterHanley, Jeremy
Burt, AlistairHannam, John
Butler, Rt Hon Sir AdamHarris, David
Carlisle, John (Luton N)Harvey, Robert
Carlisle, Rt Hon M. (W'ton S)Haselhurst, Alan
Cash, WilliamHawkins, C. (High Peak)
Chapman, SydneyHawkins, Sir Paul (N'folk SW)
Clark, Sir W. (Croydon S)Hawksley, Warren
Coombs, SimonHayes, J.
Cope, JohnHayhoe, Rt Hon Barney
Cormack, PatrickHayward, Robert
Couchman, JamesHeathcoat-Amory, David
Cranborne, ViscountHeddle, John
Currie, Mrs EdwinaHenderson, Barry
Dorrell, StephenHickmet, Richard
Douglas-Hamilton, Lord J.Hicks, Robert
Dunn, RobertHiggins, Rt Hon Terence L.
Durant, TonyHill, James
Dykes, HughHolland, Sir Philip (Gedling)
Emery, Sir PeterHolt, Richard
Eyre, Sir ReginaldHordern, Sir Peter
Fairbairn, NicholasHoward, Michael
Fallon, MichaelHowarth, Alan (Stratf'd-on-A)
Favell, AnthonyHowarth, Gerald (Cannock)
Fenner, Mrs PeggyHowell, Rt Hon D. (G'ldford)
Finsberg, Sir GeoffreyHowell, Ralph (Norfolk, N)
Fletcher, AlexanderHubbard-Miles, Peter
Fookes, Miss JanetHunt, David (Wirral, W)
Forman, NigelHunt, John (Ravensbourne)
Forsyth, Michael (Stirling)Hunter, Andrew
Forth, EricIrving, Charles
Fowler, Rt Hon NormanJackson, Robert
Fox, MarcusJessel, Toby
Fraser, Peter (Angus East)Jones, Robert (Herts W)
Freeman, RogerJoseph, Rt Hon Sir Keith
Fry, PeterKellett-Bowman, Mrs Elaine
Key, RobertProctor, K. Harvey
King, Roger (B'ham N'field)Raison, Rt Hon Timothy
King, Rt Hon TomRathbone, Tim
Knight, Greg (Derby N)Rees, Rt Hon Peter (Dover)
Knight, Dame Jill (Edgbaston)Rhodes James, Robert
Knowles, MichaelRidsdale, Sir Julian
Knox, DavidRifkind, Rt Hon Malcolm
Lamont, NormanRippon, Rt Hon Geoffrey
Lang, IanRoberts, Wyn (Conwy)
Latham, MichaelRoe, Mrs Marion
Lawler, GeoffreyRossi, Sir Hugh
Lawrence, IvanRumbold, Mrs Angela
Lee, John (Pendle)Ryder, Richard
Lennox-Boyd, Hon MarkSackville, Hon Thomas
Lester, JimSt. John-Stevas, Rt Hon N.
Lewis, Sir Kenneth (Stamf'd)Sayeed, Jonathan
Lightbown, DavidShaw, Giles (Pudsey)
Lilley, PeterShaw, Sir Michael (Scarb')
Lloyd, Peter (Fareham)Shelton, William (Streatham)
Lyell, NicholasShepherd, Colin (Hereford)
McCrindle, RobertShepherd, Richard (Aldridge)
Macfarlane, NeilSilvester, Fred
MacGregor, Rt Hon JohnSims, Roger
MacKay, Andrew (Berkshire)Skeet, Sir Trevor
MacKay, John (Argyll & Bute)Smith, Sir Dudley (Warwick)
Maclean, David JohnSmith, Tim (Beaconsfield)
McNair-Wilson, P. (New F'st)Soames, Hon Nicholas
Madel, DavidSpeed, Keith
Malins, HumfreySpencer, Derek
Malone, GeraldSpicer, Jim (Dorset W)
Marland, PaulStanbrook, Ivor
Marlow, AntonyStanley, Rt Hon John
Mates, MichaelSteen, Anthony
Maude, Hon FrancisStern, Michael
Mawhinney, Dr BrianStevens, Lewis (Nuneaton)
Maxwell-Hyslop, RobinStewart, Allan (Eastwood)
Mayhew, Sir PatrickStewart, Andrew (Sherwood)
Mellor, DavidStradling Thomas, Sir John
Meyer, Sir AnthonySumberg, David
Miller, Hal (B'grove)Taylor, John (Solihull)
Mills, Iain (Meriden)Taylor, Teddy (S'end E)
Mitchell, David (Hants NW)Temple-Morris, Peter
Moate, RogerThomas, Rt Hon Peter
Montgomery, Sir FergusThompson, Donald (Calder V)
Moore, Rt Hon JohnThompson, Patrick (N'ich N)
Morrison, Hon C. (Devizes)Thornton, Malcolm
Morrison, Hon P. (Chester)Trippier, David
Moynihan, Hon C.Trotter, Neville
Murphy, ChristopherTwinn, Dr Ian
Neale, Gerrardvan Straubenzee, Sir W.
Nelson, AnthonyWaddington, David
Neubert, MichaelWakeham, Rt Hon John
Newton, TonyWaldegrave, Hon William
Nicholls, PatrickWalker, Bill (T'side N)
Norris, StevenWalker, Rt Hon P. (W'cester)
Onslow, CranleyWaller, Gary
Oppenheim, PhillipWard, John
Oppenheim, Rt Hon Mrs S.Wardle, C. (Bexhill)
Ottaway, RichardWatts, John
Page, Richard (Herts SW)Wells, Bowen (Hertford)
Parkinson, Rt Hon CecilWells, Sir John (Maidstone)
Parris, MatthewWheeler, John
Patten, Christopher (Bath)Whitfield, John
Patten, J. (Oxf W & Abdgn)Wiggin, Jerry
Pattie, GeoffreyWinterton, Mrs Ann
Pawsey, JamesWinterton, Nicholas
Peacock, Mrs ElizabethWolfson, Mark
Percival, Rt Hon Sir IanWood, Timothy
Pollock, AlexanderWoodcock, Michael
Porter, BarryYeo, Tim
Portillo, MichaelYoung, Sir George (Acton)
Powell, William (Corby)Younger, Rt Hon George
Powley, John
Prentice, Rt Hon RegTellers for the Noes:
Price, Sir DavidMr. Archie Hamilton and
Prior, Rt Hon JamesMr. Timothy Sainsbury.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.

Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved,That this House recognises the fundamental importance to Scotland and to the United Kingdom as a whole of the Government's and British Steel Corporation's aim of restoring the Corporation to financial self-sufficiency and sustained profitability; and endorses the Government's decision not to intervene in the Corporation's commercial decision to close the Gartcosh plant.