Ravenscraig

Part of the debate – in the House of Commons at 7:36 pm on 23rd January 1992.

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Photo of Dr Jeremy Bray Dr Jeremy Bray , Motherwell South 7:36 pm, 23rd January 1992

For the people of Motherwell, and for Ravenscraig steel workers and their families, this is a sad occasion. They have worked hard and loyally, they have learnt new skills, developed new methods, pioneered new technologies and triumphed over disasters. They have acted intelligently, with foresight, courage and integrity. They have achieved unequalled levels of performance.

Steel is the most dramatic of industries, but it is not an industry for drama. It is an industry for steady, careful, considered judgment, because a worker's life and those of his work mates depend upon what he does. Because the steel workers have felt, worked and argued their case in that steady way—not just for our own interests as a steel community, but for the public who invested in the plant, for the customer and for the end consumer—they have seen the direction in which British Steel was taking us since the closure of Gartcosh in 1985, and even before that. It has been a long planned closure and now the workers have been told that British Steel is planning, finally, to close the works in September.

On Second Reading of the British Steel Bill in February 1988 I pointed out the likelihood that the privatisation of British Steel as a monopoly producer in the United Kingdom would lead to the closure of Ravenscraig, as British Steel exerted its unfettered monopolistic power to restrict capacity. I argued how a competitive solution, with the separate privatisation of Ravenscraig, Shotton and Dalzell, would give Ravenscraig a chance to demonstrate its market strength. But the Government would not listen. I said: If Ravenscraig is to be killed, it will die with dignity. But the House will understand the politically explosive effects in Scotland if our largest fully competitive industrial unit were closed with the Government having denied the test of the market, in which they believe".—[Official Report, 23 February 1988; Vol. 128, c. 215.] That effect will soon show in the ballot box.

First, is there any possibility of a phoenix operation now that British Steel is pulling out? The chances are slim, but they must be pursued until all reasonable possibilities are exhausted. The search must be taken up again for a steel business elsewhere in the world that has the finishing mills which British Steel has stripped from Ravenscraig. It could be supplied with high quality slabs from Ravenscraig at lower cost than by building itself a new modern steel-making plant. Scottish Enterprise must explore all possibilities. It will not be easy, and the chances of success are not high in view of the excess slab capacity elsewhere in Europe seeking distress sales.

I put the different proposition of using Ravenscraig as a demonstration plant for introducing thin slab casting into the integrated steelwork BOS—basic oxygen steel—route. Arthur D. Little endorsed it as the other option worth exploring. It would be a world first, with a new product and a new process. The Secretary of State and the Government have never understood that the last thing that British Steel and other conventional steel producers want is a new process which will undercut their costs and make their plants obsolete, so it has been a mini-mill in NUCOR in the United States that has pioneered the new thin slab technology. Without the research and development resources of a big steel company, there are still surface quality and other problems that need ironing out before the product can sell as top quality strip. There is no problem about installing it on a BOS plant; the quality problems will be solved there. There were similar problems with thick slab casting when it was introduced and it was Ravenscraig that pioneered that and strip products in this country. In some respects thin slab strip has inherently superior qualities, with its finer grain from more rapid cooling.

NUCOR and its plant builder, the German firm, Schloemann Siemag, is ready to assist in the examination of possibilities at Ravenscraig. I have suggested that the most likely way forward would be with a consortium of at least three steel producers interested in a full-scale demonstration of the process on a BOS plant. The process is long past the pilot plant stage. Because of the reluctance of British Steel and perhaps other European steel companies to encourage a new process in their own market, the first member of the consortium might have to be a non-European steel company. Once it was apparent that the demonstration was likely to go ahead, European steel companies and, I suspect, British Steel—I have told it so—might have second thoughts. They might like to look at what is happening with the Japanese car plants.

There is precious little time to explore the options. I am going to NUCOR on 5 February to discuss the possibilities with the chairman, Mr. Kenneth Iverson. I am grateful to the Secretary of State for allowing an executive from Scottish Enterprise to come to NUCOR with me. British Steel has told me that its offer to sell the Ravenscraig plant will expire in September when it closes the plant. It has pointed out that the one remaining blast furnace will then be allowed to cool, which normally results in the collapse of the brick lining, making the furnace inoperable until it has been re-built at a cost of £50 million. The coke ovens would also collapse, and their replacement would cost £150 million. To continue operating Ravenscraig from September, it would have to use the existing thick slab concast, so only slab sales would be possible and that faces the difficulty of the present depressed state of the steel market.

However, the blast furnace lining and the coke ovens are coming to the end of their useful life—that has been a careful part of British Steel planning—so little would be lost if there was a break in production while a new thin slab plant was built, but it means that a new operator would have to spend at least £250 million putting the steel making end in working order. People in Motherwell would have no wish to keep a derelict steel plant lying around. They are not interested in a Mickey Mouse gimmick to keep the plant stumbling along for a year or two. They would also not wish the liability for the costs of the reclamation of the steel sites to fall on a shell company with no resources, which would not be able to meet the costs. There is therefore no interest in keeping British Steel waiting indefinitely against the contingency of a buyer turning up at some indefinite time in the future.

Conversely, it would not be in British Steel's interest to be over-hasty in the demolition of Ravenscraig if the effect was to incur the heaviest possible claim for the most expensive kind of reclamation and restoration of the site as a country park. The Government's consultants, appointed by the Lanarkshire development agency on the prompting of the Scottish Office, have estimated that that would cost about £200 million.

My experience of the operating management of British Steel is that, within the limits of their job, they are reasonable men acting in a reasonable way, and I am sure that it is in our interests in Motherwell to deal with them as such. I am sorry that the Secretary of State and the Scottish Office have not done that. There have been no informal meetings and no serious discussion, and now the Secretary of State has written formally to the chairman and wielded the big stick.

Everyone in Scotland supports the case for the modernisation and extension of the Dalzell works to the limits of its capacity as British Steel's lowest-cost option for the development of plate, and that is not now affected by the closure of Ravenscraig.

The Scottish National party policy for nationalisation as a solution does not add up, as The Glasgow Herald shows in articles today. My hon. Friend the Member for Motherwell, North (Dr. Reid) will show that clearly, if he is successful in being called to speak in the debate. Once the election is over, Dalzell workers will be seen to be getting on with keeping their plant the model of efficiency, which is best calculated to win the long life for the plate mill that Motherwell desperately needs.

We must explore all possible avenues for steel, and we are doing so. The Secretary of State is utterly wrong to accuse us of not having specific proposals. We have some of the most specific and practical proposals, and I have the full support of the shadow Secretary of State, of the Leader of the Opposition, of the whole shadow Cabinet and of all my colleagues in Scotland in making these comments. It is therefore utterly preposterous for Conservative Members to think that my hon. Friends and I can be embarrassed on the token issue of nationalisation. We are not in that kind of political debating area. We are dealing with the serious business of industry.