Ravenscraig

Part of the debate – in the House of Commons at 8:55 pm on 23rd January 1992.

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Photo of John Reid John Reid , Motherwell North 8:55 pm, 23rd January 1992

That is not true and the hon. Gentleman should withdraw that remark. We had discussions throughout with the people involved, and we carried our Front-Bench spokesmen with us. As so often, the hon. Gentleman is wrong.

Although I wish the Dalzell workers well, I must point out that, tragically, the only other people who opposed the idea were the shop stewards at Dalzell, even though it was the last chance to save Ravenscraig. We remember that now, when the SNP proposes keeping the Dalzell works and Ravenscraig without a finishing side at Shotton.

As I say, the Government ignored our warnings, and on occasion we have been bereft of support from others. What is to be done now? The Government say that there is nothing to be done. That is typical of their attitude over the past few years. For all their posturing and posing, the word was given out by the Secretary of State for Trade and Industry when refusing to meet the shadow Secretaries of State for Scotland and for Trade and Industry. Three days ago he said: Ravenscraig shows the folly of political intervention in commercial decisions". There you have it. For the Tories, Ravenscraig is not an industrial tragedy; it is and always has been a political folly. Despite the posturing, that is what has underlain their words.

But if we have a "do nothing" Government, we are not helped by a "promise everything" Opposition in the person of the hon. Member for Banff and Buchan. It is a tragedy that we have been diverted from the main possible alternative to save steelmaking by the fantasies that have been put forward for political reasons by the hon. Member. I have to spend some time tonight going through them because they are deluding some people—not many in Motherwell, I may add, but the less one knows about steelmaking the more attractive those proposals sound.

I should like to spend some time on the plans—there have been more than one. The first, in the immediate aftermath of the closure announcement, was to nationalise and restore Ravenscraig, presumably as a Scottish competitor to Port Talbot and Llanwern. The hon. Member for Banff and Buchan shakes his head. It was not he who made it; it was the steel spokesman who spends all the money apparently, Mr. Lawson. To the Ravenscraig shop stewards who knew the plant and industry better than anyone, the plan was sheer fantasy.

It will be obvious from what I have said already that the proposition would require vast expenditure. The purchase price of the plant, £50 million to reline the blast furnaces, £650 million for a cold mill, £750 million for a hot mill and £100 million for other necessary investment, such as coke ovens and blast furnaces, came to a total of about £1,700 million. The Scottish National party has never disputed that figure. It has said that it cannot be realistic because the share value is greater than that. I have to say to the right hon. Member for Ayr that, in his new job as chairman of the Royal Bank of Scotland, one of the first things to do is to make sure that the economists he employs know the difference between share value and capital value, because it is obvious from the hon. Member for Banff and Buchan that not all of them have done in the past.

Plan 2 came 48 hours later. When the Scottish National party found out the actual cost, it dropped the plan to reinstate Ravenscraig. It suddenly announced—again, Mr. Lawson in a radio broadcast with me and after a telephone conversation with the shop stewards at the Clydesdale works, who informed me about it, I am afraid—that the new plan was to nationalise Clydesdale. Clydesdale had been closed eight months earlier, but presumably then the Scottish Nationalists were committed to refitting the mills at Clydesdale. This would cost another £150 million. They threw in Clydebridge and Dalzell at the same time.

Plan 3 was on the Sunday, because the cavalry came over the hill in the form of the Dalzell shop stewards. They gave them a plan which was perhaps new to the Scottish National party—it was certainly not new to the Ravenscraig shop stewards, who had been offered it for three years and had tossed it aside as unrealistic. Plan 3 is the one that they stick to now. It promises to restore Ravenscraig as a producer sending 1 million tonnes of slab to the Dalzell plate mill, and proposes the building of a new pipe mill at another site in Motherwell, the cost of which varies between £150 million and £250 million. We will not quibble about that: different people make different analyses.

There is absolutely nothing new in the proposal. It has been considered and consistently rejected by those who know the industry—above all, the steel workers at Ravenscraig. But for the sake of fairness to the SNP—because, as hon. Members know, I am a fair man—let us assume that this £250 million is not in addition to the £2,000 million already spent by Mr. Lawson. If we were to assume that it was in addition, at the present rate of daily expenditure announced by the Scottish National party steel spokesman, by my calculations that party would have spent the entire budget of an imaginary Scottish government by St. Valentine's day this year.

Let us even assume, for the sake of argument, that costs for Ravenscraig and a new Dalzell pipe mill are accurate. The problem with the SNP nationalisation plan 3 is neither dogmatic nor ideological; it is that it is still wholly unrealistic. Let us look at just some of the criticisms. First, it assumes that a two-blast furnace operation at Ravenscraig would be viable at a production level of 1 million tonnes. Wrong. As the work force, economists and industrialists will tell the SNP, the viability figure of Ravenscraig is nearer 2 million tonnes.

Secondly, if Ravenscraig is to produce the necessary 2 million tonnes to make it a viable unit and Dalzell is to take a supposed 1 million tonnes on the plate mill, what is to be done with the extra 1 million tonnes of raw slab from Ravenscraig? Give it to charity? Perhaps give it out in Leningrad along with the butter? It certainly cannot be sold.

Thirdly, what makes the SNP think that Dalzell can take I million tonnes from Ravenscraig? In the best years, 1988–89 and 1989–90, it took only about 350,000 tonnes a year. How will the SNP suddenly triple the amount that can be taken by Dalzell?

Fourthly, the SNP assumes a massive, easy and open market in the North sea. Of course, no figures are given, so I bothered to check on the latest figures. The total market for the United Kingdom sector in the North sea in the past year—which was not a bad year—was 274,000 tonnes, roughly 25 per cent. of what will pass through Dalzell's plate mill. Of that 274,000 tonnes, only 71,000 tonnes was plate. Much of it was in seamless tubes, light gauge plate, which are not produced in Scotland—unless the SNP intends to reopen the Clydesdale works and spend £250 million on that mill.

Fifthly, is the SNP aware that the maximum length of Dalzell plate production is 23 m while the modern market demands 50 m plate? Even if money were invested to meet that requirement, the layout of the Dalzell plant is such that, to get the extra length, the plant would have to be turned at right angles. Do SNP members propose to turn it at right angles? If they do, have they told Bishop Joe Devine, because they would need to knock down Motherwell cathedral?

Sixthly, does the SNP think that it would be commercially competitive to produce steel at Ravenscraig at 1,500 deg, cool it and load it on a lorry, transport it to Dalzell, unload it and put it in the plate mill, heat it again to reduce it to plate, cool it and load it on a lorry, transport it to the new pipe mill that it proposes to build somewhere else, unload it from the lorry, place it in the pipe mill, bend it, put it on a lorry and send it to the customer? If the SNP thinks that that is a viable scenario to compete with others in the market, its view of competition is different from mine.

I shall not go into detail on the challenge to me about what Labour would do, but I shall deal with it quickly. First, we would insist that British Steel maintains the plant for sale on the market. [Interruption.] One of the ways is to make British Steel aware that £200 million in reclamation charges are hanging over its head if it does not play ball with the Government. Secondly, Government resources must be used in the search for a buyer. It should not be left to British Steel. Why are not the embassies and the Department of Trade and Industry making efforts to sell it? The third course of action is to do what my hon. Friend the Member for Motherwell, South has been doing, which is single-handedly to investigate thin-slab casting. It is amazing that the Government, with all their resources, are sending someone along with an Opposition Member to the United States to study an issue that they should have been studying long ago.

Finally, it should be made absolutely plain to any potential buyer that the Government would be prepared, if necessary, to intervene financially in a joint venture. That matter has been discussed with my right hon. Friend the Leader of the Opposition, who is at one with the Ravenscraig shop stewards. Eighteen months ago, my hon. Friend the Member for Dunfermline, East (Mr. Brown) pledged to make finance available to develop it.

I thank the shop stewards and the representatives of the workers at Ravenscraig. With three possible exceptions, the message from all hon. Members to those shop stewards is: "Do not think that you are demeaned or belittled when you are attacked by lesser men." It is the easiest thing in the world to take workers into a struggle that they cannot win and then to wash one's hands and say, "We did not sell out." It is harder to lead with honesty. The Ravenscraig shop stewards made it plain at the beginning of the campaign that they would never make aim promise that they could not keep, never make a pledge that they would not strive to maintain, and never make a claim that they could not justify. They have done us proud. The Labour party will adopt those three slogans, as it has in the past. We shall continue to fight for steel. We shall not make promises that we cannot keep or pledges that are fantasy, and we shall not exploit the workers in our area for our political advancement. The Ravenscraig stewards have done it, we have done it and the people of Motherwell, Lanarkshire and Scotland generally will recognise it and support us for doing exactly what the stewards did.