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Mr. Geoffrey Dickens (Littleborough and Saddleworth) : The hon. Gentleman had his chance.
Mr. Dewar : I am responding to the Secretary of State's invitation.
It is unfortunate that this decision was announced before Government influence could be brought to bear. If the Department of Trade and Industry, the Secretary of State or the Prime Minister were to see Sir Robert Scholey and put to him the sentiments that the Secretary of State had been putting in Scotland, I would see it as strong evidence of the Government's intention to reverse the decision.
Mr. Rifkind : If the action required by the hon. Gentleman, and the action that he says that a Labour Government would take, were simply that different Ministers would speak to British Steel than are speaking to it now, he cannot claim that that adds up to a fundamentally different approach to these matters.
Over the past few days, there has been great concern in Scotland, from all political parties and across the industrial spectrum, about the announcement by British Steel last week. In the light of some of the comments in
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newspapers in the south and others, it might be helpful to explain why that concern is felt so deeply. There is perhaps an impression in some quarters that the only point at issue is the loss of 770 jobs. Similar announcements in various parts of the United Kingdom have not led to similar reactions.Irrespective of political views, all of us in Scotland know that the issues involved are wider and greater than that and that the concern is, first, that closure of the hot strip mill could severely weaken, and might lead to the closure of, Ravenscraig as a whole, with the loss of about 3,200 jobs in an area of high unemployment. Secondly, if that happened--it must be seen as a possibility in the light of the announcement by British Steel-- for all practical purposes it would signal the end of the steel industry in Scotland. Therefore, wider issues are involved than simply the number of jobs to be lost from closure of the hot strip mill.
An additional important factor is that over the past three years, throughout the United Kingdom, but including Ravenscraig, British Steel has been making some remarkable achievements. Privatisation, far from leading to a decline in the industry as a whole, has brought tremendous new profitability and competitiveness, for which British Steel is to be congratulated and admired. It is a remarkable achievement. It is also significant that throughout that period Ravenscraig, including the hot strip mill, contributed to that profitability and was part of the success story. That makes last week's announcement much more significant.
As far back as October 1985, Sir Robert Haslam, the then chairman of British Steel, said in evidence to the Select Committee on Scottish Affairs : "Ravenscraig is in profit." If that was true in 1985, the tremendous progress made by British Steel and by Ravenscraig since suggests that the company's profitability must, if anything, be greater rather than lesser.
Mr. Jim Sillars (Glasgow, Govan) : Will the hon. and learned Gentleman give way?
Mr. Rifkind : I will do so shortly.
Not only Ravenscraig but its hot strip mill have been functioning to substantial effect. The House may recall that five years ago British Steel contemplated closing the mill but had second thoughts. It turned out that those second thoughts were better than its first thoughts, because far from the market for the mill's products declining, it substantially increased-- partly due to British Steel's own success--and the mill was fully utilised.
Another aspect is the dearth of information available to British Steel's employees. I say without qualification that we all recollect the point made by British Steel to its work force at Ravenscraig a few years ago, that the best prospect for the future of the plant, including the hot strip mill, would be increased productivity and competitiveness, and good industrial relations. I do not believe that there has been one iota of criticism from any quarter about the way that Ravenscraig's work force responded. Although that does not guarantee the work force a future livelihood--nor can it--it imposes an obligation on British Steel, in the event of a very unpalatable announcement having to be made, to give its employees the reasons for it.
Mr. Sillars : The Secretary of State mentioned a remark made by Sir Robert Haslam to a previous Select
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Committee on Scottish Affairs. I draw attention to the words of the right hon. and learned Gentleman's amendment, which"invite British Steel to explain and defend its decision". To whom is British Steel to
"explain and defend its decision"?
Is the Secretary of State aware that the people of Scotland will take it as a clear sign of the Government's determination not only totally to condemn British Steel but to examine the whole issue properly if he, the Leader of the House and the Cabinet announce this week that they have overcome the problems involved and will convene a Select Committee on Scottish Affairs very quickly, for the single purpose of investigating British Steel's contention that it is taking the right commercial decisions? It seems to me that a Select Committee would be the right instrument for judging whether British Steel's action is correct. Will the Secretary of State back that proposal?
Mr. Rifkind : I note the hon. Gentleman's comment, but I cannot help but recollect that when we last had such a Select Committee his party refused to be represented on it. Such a proposal does not sound very convincing coming from that quarter.
The hon. Member for Garscadden asked what role the Government should play in the circumstances that have arisen. I refer to the interesting and constructive remarks by Mr. Brennan, the leader of the Ravenscraig shop stewards, whom I met this morning. He began by telling me that he wanted to make it absolutely clear that the case for the hot strip mill and for Ravenscraig as a whole must be fought and determined on commercial grounds, and on those grounds alone. Mr. Brennan went out of his way to emphasise to me the point that he has made publicly : that political campaigns and emotional appeals to British Steel or anyone else would be counter- productive. It is a sign of the changing position in Scotland, as throughout the United Kingdom, that Ravenscraig's leading shop steward should have made that point.
I noted that in its editorial this morning the Glasgow Herald, which serves the west of Scotland, said :
"No one is advocating old-style interventionism. Everyone agrees with Mr. Rifkind that the case has to be argued on a commercial and not an emotional basis."
It should be understood by all hon. Members that the work force and many others in Scotland believe that this matter will ultimately be determined by British Steel. There is no question of the Government issuing orders to a company, whether it be British Steel or any other, about what it should do with its plant and factory. British Steel will reach its own decision, but that is not against the interests of the Scottish economy.
The hon. Member for Garscadden is responsible for the motion on the Order Paper. Unlike the early-day motion that was tabled a few days ago, it calls on the Government to do all within their power without specifying what that might be. That is a throwback to a previous age, and I certainly could not recommend that my hon. Friends support such a motion.
Mr. Dewar : I hope that the Secretary of State will spell out what he will do and what steps he is taking to fight the case on the commercial grounds to which he refers and which he supports.
Mr. Rifkind : I wish to continue my remarks and address the points that the hon. Gentleman made.
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Mr. Alex Eadie (Midlothian) : It is an issue of commercial judgment. The convenor of Ravenscraig, Tommy Brennan, said that it is a commercial, viable industry. To assist the right hon. and learned Gentleman on the question of commercial judgment, does he recollect that he stood still when the South of Scotland Electricity Board decided to import 1 million tonnes of Chinese coal, which was grossly impractical? The market is not always correct. The right hon. and learned Gentleman will agree that that proved a disastrous contract, which he could have stopped.
Mr. Rifkind : The hon. Gentleman and I will have to agree to differ on the merits of his point.
The Government are not, cannot be expected to be, and are not expected by most of those in Scotland to be responsible for trying to run the steel industry. That does not mean that the Government can simply be disinterested when decisions are announced that have significant employment implications. That does not apply only in Scotland, and it cannot be relevant to British Steel alone. If any major United Kingdom company, such as British Aerospace or ICI, were to withdraw from the United Kingdom, of course Ministers would be concerned and would wish to discuss it with the chairman of the relevant company. They would wish to hear the reasons for that and to express their concern. The company would decide what its decision should be, but Ministers must be concerned.
I say to the House and to those commentators in the south who have expressed disagreement with such an approach that that would be relevant irrespective of which part of the United Kingdom was affected. British Steel, as the amendment states, should recognise the concern that has been expressed and explain and defend its decision. If it believes that there are justifiable commercial grounds for a decision that would have significant and serious implications for the economy in an important part of Scotland, it is not unreasonable to expect it to explain its reasons, especially to the work force. I will certainly be urging it to do so.
Mr. Archy Kirkwood (Roxburgh and Berwickshire) rose
Mr. Rifkind : May I continue? Many hon. Members wish to contribute to the debate. The more that I give way, the fewer hon. Members will be able to do so.
The hon. Member for Garscadden said that Ravenscraig is of great importance to the economy of Scotland. As I said in the Scottish Grand Committee, and it is important to emphasise it, Ravenscraig is crucial to the well-being of the people of Motherwell and to the economy of Lanarkshire because of the employment implications. It has significance and implications for the wider Scottish economy, just as any other major employer does. It is not the largest employer in Scotland, and Labour Members do a disservice to the cause that they wish to advocate by overstating their points. There are a substantial number of large employers in Scotland who make a useful and valuable contribution to the Scottish economy. One thinks of Ferranti with 6, 000 employees, the Rosyth dockyard with 5,300 employees, Rolls-Royce with 4,960 employees and similar companies.
Mr. Ernie Ross (Dundee, West) : How many steel mills?
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Mr. Rifkind : By all means let the Opposition emphasise the serious and severe implications for the Lanarkshire economy and suggest the implications for the wider Scottish economy, but they know as well as I do that the importance of Ravenscraig is similar to that of IBM, Ferranti and other companies of a comparable size. It is not appropriate to suggest that different fundamental considerations apply.Only one in 300 employees in Scotland works at Ravenscraig--[ Hon. Members :-- "Oh!"] I am sorry, but if the Opposition think that exaggeration and emotion help their case, they are doing a disservice to the people of Ravenscraig and I will have no truck with it.
Dr. John Reid (Motherwell, North) : No one denies that there are bigger employers than Ravenscraig in Scotland. But can the right hon. and learned Gentleman name any other concern which, by its closure, would withdraw 50 per cent. of the freight transport from British Rail, almost 25 per cent. of the electricity consumed and a huge amount of fuel and cause such massive repercussions in terms of services throughout Scotland as would Ravenscraig? I doubt whether the right hon. and learned Gentleman could find one such concern.
Mr. Rifkind : The hon. Gentleman has a good case, but he must not exaggerate it. He referred to the use of electricity, but he should know that 1.5 per cent. of the total output of power in Scotland goes to Ravenscraig. Ravenscraig is as important as any other customer would be. The hon. Gentleman must not spoil a good case by exaggerating it. I do not in any way intend to underestimate the importance of Ravenscraig, but I will not be tempted into suggesting that somehow the future of the Scottish economy depends on one Scottish plant.
Mr. Dickens : I hope that I shall be helpful. Because of the social consequences and differences between the contracts with British Rail, the Scottish electricity authorities and so on, does my right hon. and learned Friend agree that if the management of British Steel could negotiate keener prices with these companies that depend so much on Ravenscraig, Ravenscraig could again become a commercial consideration?
Mr. Rifkind : As my hon. Friend the Member for Littleworth and Saddleworth (Mr. Dickens) will realise from the response to his intervention, the point at issue is whether at present there is a good commercial case for maintaining the hot strip mill at Ravenscraig. We hope that British Steel will provide proper information on that point.
Mr. Michael Grylls (Surrey, North-West) rose --
Mr. Gavin Strang (Edinburgh, East) rose --
Mr. Rifkind : I should like to continue my remarks because I am conscious that many hon. Members wish to take part.
Mr. Dewar : Will the right hon. and learned Gentleman give way on his latter point?
Mr. Rifkind : If I gave way to the hon. Gentleman, I should have to give way to my hon. Friend the Member for
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Surrey, North-West (Mr. Grylls) and the hon. Member for Edinburgh, East (Mr. Strang). I must ask the hon. Member for Garscadden not to insist.The hon. Member for Garscadden asked me about contacts that we have had with British Steel over the past few months, so it might be helpful if I put them on the record. There have been meetings with Sir Robert Scholey at ministerial level, a meeting between my officials and the chief executive and ministerial and official correspondence with the company. There have also been telephone contacts between my officials and British Steel, both at plant management level and with the chief executive. During that period, I instructed my officials to prepare a paper making the commercial case for further investment at Dalzell in the context of British Steel's current review of plate strategy. A decision to expand Dalzell would, of course, have consequences for the future security of steelmaking at Ravenscraig. It can be seen, therefore, that over the past few months we have had ongoing contact with British Steel about its operations in Scotland.
Three weeks ago, I asked Sir Robert to come to see me to discuss various matters--in particular, the Scottish Office paper on plate mill investment. He replied that he would be willing to do so but that he particularly wished to see me on 15 May as his board was meeting the previous day and he wished to inform me of decisions likely to be taken by his board. I was concerned by the implications of that and asked Sir Robert to come to see me before the board met. We had an informal meeting on 3 May, but he gave me no information then regarding the proposals that were likely to be put to his board. Nevertheless, I asked him whether the board would be considering plate mill investment as it affected Dalzell but he said that a decision on that was unlikely for some months. I made it clear to him that, if the board considered the future of the hot strip mill at that meeting, I hoped that, given its contribution to British Steel's profitability, the mill would not be closed as that would have implications for the future of Ravenscraig as a whole and I would find it necessary to express my views in the event of such an announcement. Sir Robert quite properly declined to comment on what his board was about to consider.
My next meeting with Sir Robert was on 15 May. The suggestion that the Scottish Office has had no contact with British Steel over the past few months is completely bogus.
I have been asked whether there might be an alternative purchaser for British Steel's assets in Scotland. Hon. Members have referred to the commitment in the prospectus, as has my right hon. Friend the Prime Minister. The shop stewards themselves have emphasised that that is not their first option. They wish British Steel to continue to have responsibility for its assets at Ravenscraig, and that is a view that many will share. It would be helpful if British Steel could say whether it believes that the circumstances referred to in the prospectus, in which it would contemplate an alternative private sector purchaser for its assets, now pertain. If British Steel does not believe that that stage has been reached, it would help if it would outline the circumstances in which such arrangements would apply and it would also help if British Steel could confirm that it sees itself as remaining committed to such a course. We must be clear that, for that option to be worth considering further, it is necessary not only that there should be a willing seller but
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that there should be a potential buyer. If there is a potential buyer at home or abroad, it would help our continuing debate if that interest made itself felt.Mr. Dewar : During our exchanges following the private notice question on Wednesday, the Secretary of State said unambiguously that he deplored the decision that had been made and that he sought to have it reversed. Is that still his position, and how does he intend to achieve that?
Mr. Rifkind : It is indeed still my position. Everything that I said to the House last week remains exactly and without qualification my position. I am happy to give the hon. Gentleman the assurance that he seeks.
Mr. Grylls : Does my right hon. and learned Friend accept that all Conservative Members believe that he is acting entirely honourably in taking his present line and seeking more information from British Steel about its proposals? None of us would do any less for our constituencies. But will he bear in mind British Steel's record in job creation, given that since 1976 British Steel has created 45,000 new jobs at Corby, Consett, Sheffield and Shotton, where there had been huge job losses? New jobs can be created if the closure finally goes ahead.
Mr. Rifkind : Of course my hon. Friend is correct, and there are good precedents to suggest that if, unfortunately, jobs are lost in a locality--even in an area of high unemployment--it is not the end of the world. Having said that, one hopes that that can be averted in the first place because there is a significant time lag in creating new employment or attracting it to the area and, in the meantime, significant unemployment results. Our main objective is to establish whether British Steel will be prepared to reconsider the decision that it announced last week.
We must all be realistic. We cannot assume that the representations will succeed. As Secretary of State for Scotland, I have a responsibility to consider the implications for Motherwell if the hot strip mill closed next year. Accordingly, on a contingency basis, I am asking the Industry Department for Scotland and the Scottish Development Agency, together with the other relevant interests including local authority and private sector interests, to consider what could be done to encourage new employment and investment in Motherwell in the event of the hot strip mill closing--[ Hon. Members :-- "You are giving up."] No, it is not a question of giving up. Opposition Members would be the first to criticise in nine months' time if the campaign to save the hot strip mill did not succeed and if the Government had done nothing to anticipate that possibility. I want to be entirely frank with the people of Motherwell. We know and Opposition Members know perfectly well that there can be no guarantee for a campaign of this sort. My responsibility is to use the facilities available to anticipate one possible outcome and, on a contingency basis, to plan what that would involve. I make no apology for that.
We will also want to explore with British Steel the statement that it made last week that the company will take positive steps through British Steel Industry Limited to assist in the creation of new jobs in Motherwell. Clearly, that would be an important component. Of course, our primary desire is for British Steel to respond to the concern that has been expressed. If it cannot explain and defend the decision that it announced
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last week, we will be delighted if it reverses that decision. There is already a precendent for British Steel doing just that : three years ago it reversed an intention to close the hot strip mill and that was found to have been a wise change of mind because the mill went on to high productivity and to contribute towards the profitability of British Steel's operations. British Steel had second thoughts then, and I very much hope that it will have second thoughts now. That would benefit the future of the people of Motherwell and Lanarkshire, and it might also make an important contribution to British Steel's ongoing profitability.4.32 pm
Dr. Jeremy Bray (Motherwell, South) : I am grateful to you, Mr. Speaker, for calling me early in this debate. I am also grateful to you and to other hon. Members on both sides of the House for your good wishes following my recent heart operation. I am sure that hon. Members will understand if I do not stay for the whole debate. The closure of the great Ravenscraig works and Dalzell works in my constituency would be a grievous blow to Lanarkshire and to the whole of Scotland, with the loss of 10,000 jobs and £100 million a year in income. The social consequences do not bear thinking about. It would not be the death of the local community, nor the end for the steel workers of Ravenscraig. They are too fine workers, there is too great a strength and vitality in the local community for that. But it would be a painful and bitter 15 years of the kind that we hoped was behind us. Over the past 15 years, we have already lost three times the number of steel jobs that remain. The case for a comprehensive redevelopment programme for Lanarkshire is there already. No steel workers, certainly not the steel workers at Ravenscraig and Dalzell, see themselves as working in a national symbol, still less an industrial museum. They see themselves as producing efficiently a useful commodity for a fair wage. They would not be there if their work was not economic and commercially viable. They do not need to be told that it is the economic and commercial case that has to be argued.
It is not my intention to apportion blame. It is my duty to ask what can sensibly be done, and to call for it to be done. The Secretary of State has said British Steel has not provided any details as to why it believes that the closure of the hot strip mill is necessary. That is true. But the underlying strategy of British Steel has been clear since the closure of the cold strip mill at Gartcosh. Although it is public information, neither the privatisation prospectus of British Steel nor any of the stockbrokers' circulars gave the capacities of the different stages of steel production in each of the major works. It was left to the Arthur Young report, commissioned by Motherwell district council, to spell out the underlying strategy of British Steel, which would be carried to its logical conclusion if British Steel was constituted as a private monopoly producer, with its monopoly power in the United Kingdom strengthened by the higher transport costs from elsewhere in the European Community.
In strip products, the bottleneck lay in continuous casting at Port Talbot and Llanwern. Ravenscraig pioneered continuous casting in British Steel flat products, and long ago achieved 100 per cent. continuous casting. The commissioning of the continuous casting extensions at Port Talbot planned for early in 1991 would mean that
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British Steel could then attain its peak 1989 levels of output without Ravenscraig. Now, with British Steel's announcement of the further continuous casting at Llanwern, all three strip mills will have 100 per cent. continuous casting by 1993, putting the final question mark over Ravenscraig.In the current review of plate strategy, the lowest cost solution would be the redevelopment of the Dalzell heavy plate mill. Scunthorpe knows that it is not capable of rolling greater thicknesses of steel. But that deal option would be ruled out if Dalzell could not rely on a continuing supply of slabs from Ravenscraig. The prior announcement of the run-down at Ravenscraig appears to be a move to pre-empt the decision on plate strategy. In fact, the decisions are interdependent. The reality is probably that British Steel is putting them to its board separately to ease their acceptance.
In 1989, British Steel worked flat out, yet there was a record £20 billion deficit in Britain's balance of payments. Since then, the prospect for final demand for steel in the United Kingdom has increased with the expansion plans of our depleted motor industry, promising the biggest increase in vehicle production of any country in the Community. The European Commission has concluded that it is possible for steel plants to operate at lower levels of average capacity than previously assumed. The idea that "it is possible to maintain steadier" demand by restricting capacity does not work, since customers lost at the peak do not return at the trough, and suppliers abandoned at the trough will not oblige by supplying at the peak.
The first question, therefore, is whether 1989 steel capacity to which British Steel proposes to restrict itself without Ravenscraig strip products is consistent with the restoration of economic growth and the balance of payments in the United Kingdom.
The smaller vessels and specialised plant at Ravenscraig have enabled it to produce difficult-to-roll products like electrical steels which have not been economic at Port Talbot and Llanwern. It is widely expected that if British Steel acquires Klockner in Germany, it will source such special steels from there, and cease its production in the United Kingdom. The second question is therefore whether the restriction in product range without Ravenscraig will further weaken Britain's competitive position.
Both those questions will have been considered by British Steel. If its decision is to be questioned on the ground of competition policy which the present Government and all Governments must have, as a monopolistic or restrictive practice, the mechanism for doing so is the Office of Fair Trading and the Monopolies and Mergers Commission in the United Kingdom, and the European Commission. The formal and informal review would almost inevitably have both a United Kingdom and a European dimension. But, as most Ravenscraig products come under the treaty of Paris, the primary formal responsibility for competition policy in this case would probably lie with the European Commission. The European Commission regulatory regime has certainly been moving away from restricting competition and capacity to expanding it, as with the planned ending of
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voluntary restraint agreements on imports of steel by 1992, but it would be expecting too much to rely solely on that approach. The third question is technology. The continuous casting of 9 to 12in thick slabs, now operating at Ravenscraig and still being extended at Port Talbot and Llanwern, is an obsolescent technology. The new technology is thin-slab casting, with continuously cast slabs 2in thick going straight into a slimmed-down hot mill, and coming out as hot rolled coil only 0.1in thick, with little work for a slimmed-down cold mill to do to reduce the coil to a typical 0.04in thick cold rolled strip of the kind used for car bodies. Furthermore, the strip is superior, very fine grain steel, as a result of the more rapid cooling than is found in the present thick-slab technology. The mills are smaller, but considerably more sophisticated than conventional hot and cold mills.The pioneering thin-slab caster is now being run in by the Nucor Corporation at Crawfordsville, Indiana. An informative article on it appears in the current May edition of Metal Bulletin Monthly, the leading international journal of the steel industry. The expected cost reduction over thick-slab steel is a decisive $50 to $75 per ton, and energy savings are substantial. The Nucor plant uses electric arc steel, which limits the purity of the steel to that of the scrap used. But the process is operable on basic oxygen steel in an integrated steel works, though its introduction will require a serious but manageable development effort. Sooner or later, integrated steel works will have to come to grips with this new technology.
Ravenscraig is well suited to be the pioneer plant for the introduction of the technology to integrated steel making because it is large enough to introduce an effectively new strip product to world markets, while its relatively small vessel size and the need to upgrade and replace the present finishing end make it suitable as a development plant. There are certain aspects in which it looks as if Ravenscraig's continuous casting experience could already improve on Nucor practice. The development would be complementary to the investment planned at Port Talbot and Llanwern.
The Government should offer British Steel this option for Ravenscraig, as a pioneering development plant, in addition to its present roles, essential in any production complex, as the swing plant and the maker of special products. It is not a soft option. While the Economic Community state aids code bans subsidies, it allows support for investment involving research and development, which would certainly be the case here. Other European countries support civil industrial research to a greater extent than we do, and the record shows they benefit commercially. It is fully economic for Governments and the European Community to enable private firms to go beyond the short term and conservative practices which so many firms believe their shareholders require of them. There is no reason why such a development at Ravenscraig should not be a joint venture between British Steel and other European, American or Japanese companies. All face the same problem of introducing this important new technology.
There is much technical and commercial investigation to be done before such decision can be made. The Government should seek the full participation of British Steel, which I believe would be forthcoming. I have a letter from Mr. Martin Llowarch, chief executive of British Steel, confirming that thin -slab casting will have a major
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effect on strip products. If I am wrong, and British Steel will not co-operate, the Government should go ahead with other steel companies. It would be best if the necessary investigations were started by this Government, but against the timetable which British Steel has set out, it would not be too late to initiate such a development after the election.This is not the first time that I have suggested a major development project to a private British steel company. Nearly 25 years ago I suggested to the Steel Company of Wales--before nationalisation--that it should develop the world's first adaptive computer control system for its cold mill. A young engineer whose first job in the steel industry was on that project is now the works director at Shotton.
I speak as the Member privileged to represent the constituency that contains Ravenscraig, but as Opposition spokesman on science and technology I believe that this is the kind of industrial development project which any Government should be prepared to back after full investigation. I would say to my constituents that we have learned not to trust people who offer us guarantees in a world where we are accustomed to having to win the hard way, but I firmly believe that this readiness to embrace the future is the best route for us to pursue.
British Steel has a task of human and not merely financial reconstruction-- I am thinking not of social obligations, but of the morale, capability and enterprise of the people whom British Steel will need to employ in the future. They will wish to respond to the kind of challenge that I propose, and I believe that they will. 4.46 pm
Mr. Allan Stewart (Eastwood) : I am sure that I speak for all hon. Members in welcoming back to the House the hon. Member for Motherwell, South (Dr. Bray) after his recent operation. As always, the House listened intently to him because he speaks with an unrivalled personal knowledge of the industry and was most constructive. We all extend to him our best wishes for a steady, continuing and full recovery.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) referred to some of the reports about Ravenscraig in the English press. I was surprised by the tone of some of those comments, about which it is worth saying two things. First, no one has been calling for a subsidy, as was alleged. The hon. Member for Garscadden did not call for a subsidy--I do not know what he was calling for, but I shall leave that aside for the moment. There is simply no question of the Scottish interest, or of Scottish steel workers, Scottish Members of Parliament or the Government seeking a subsidy. Secondly, the reports seemed to suggest that the position taken by my right hon. and learned Friend the Secretary of State for Scotland was unexpected, unusual or incompatible with the principles that the Government have adopted in their approach to industry. Nothing could be further from the truth. The Government have rightly rejected old-style interventionism, which has had such disastrous consequences for many parts of Scotland as for other parts of the United Kingdom. However, to reject interventionism is not to argue that when major decisions such as the one we are considering have been announced industry and Government are inhabiting wholly different worlds. That is an absurd proposition.
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That is as true of the Department of Trade and Industry as it is of the Scottish Office. One of the Sunday newspapers rightly referred to the limousines of the captains of industry queueing up at 1 Victoria street--the headquarters of the DTI--and commented, "They must be talking to somebody."Yes, management must manage, but to accept that proposition is not in any sense to accept that there is some law of management infallibility. My right hon. and learned Friend rightly said that in 1987 British Steel nearly closed the strip mill at Ravenscraig. That was followed by three years of record production.
Let me give another constituency example. Hon. Members will recall the campaign about the Armitage Shanks tubal works in Barrhead. On that occasion, my hon. Friend the Minister of State asked the holding company to defer the redundancies to allow a full study of constructive alternatives to take place. That position was fully and publicly endorsed by the Prime Minister. My right hon. and learned Friend's position is perfectly correct, and it is wrong to suggest that he has taken a unique stance that is incompatible with previous Government decisions.
If British Steel is to be persuaded to change its mind, two things must happen. First, there must be a united and sensible response from all concerned. Partisan points have been made in the debate--it would be surprising if they had not--but, broadly speaking, Scotland has so far given a united response to the announcement. Secondly, as my right hon. and learned Friend rightly said, British Steel will be persuaded to change its position only by commercial facts and figures, and perhaps by the constructive suggestions made this afternoon by the hon. Member for Motherwell, South. It will not be persuaded by ranting and raving--however satisfying such activity may be to hon. Members.
During the past few days, some Opposition Members seem to have been obsessed with studying every statement made by every Minister or spokesman to see whether minute observation can detect textual or syntactical differences between what was said on different occasions. They remind me of the mediaeval scholastics who spent so many years arguing about how many angels could dance on the head of a pin : their activity is about as useful.
I do not wish to stir up passions in other parts of the United Kingdom by making remarks about the Welsh, but for a long time there has been a suspicion that the decisions of the senior management of the company--now and before it was privatised--have been biased in favour of south Wales and against Ravenscraig. That may or may not be correct, but the feeling exists regardless. That is why I argued--as did the hon. Member for Motherwell, South, with greater expertise--for the break-up of British Steel on privatisation, and why I support the early-day motion tabled by my hon. Friend the Member for Tayside, North (Mr. Walker).
Of course the Secretary of State was right to say that we must not take our eye off the ball, and that our priority must be to put forward a rational case to encourage British Steel to change its position. He was also right to announce today contingency plans for the regeneration of Lanarkshire in the regrettable event of the decision going ahead. I was astonished that Opposition Members jeered that decision. Do they not want contingency plans? Do they think that there is an absolute guarantee that the decision can be reversed? There is no such guarantee.
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We must face up to the possibility that a decision may already have been made to close Ravenscraig in the long term. Although I have no knowledge that it has been, we must recognise that it is a possibility.Sir Nicholas Fairbairn (Perth and Kinross) : If the Secretary of State's initiative goes ahead--whether or not the strip mill closes--it is likely to produce enormous benefits for Lanarkshire with the introduction of new industry.
Mr. Stewart : My hon. and learned Friend is absolutely right. It does no one any good for Opposition Members to deride the efforts made throughout Scotland, by people of all political persuasions, to regenerate areas that have faced major closures. If the decision has been made, the sooner British Steel fulfils its obligations to offer Ravenscraig for sale- -if it has no further use for it--the better. However, that is not, and cannot be, the priority for the moment. It is better for that possibility to be faced in a year's time than in 1994, when I suspect there will be no possibility of a buyer coming forward with sensible proposals.
The entire House will agree that the trade unions have reacted with determination, and also with great common sense. They have the right to expect the House to act with the same common sense.
4.56 pm
Dr. John Reid (Motherwell, North) : It is a testimony to the eloquence of my hon. Friend the Member for Motherwell, South (Dr. Bray) that there are few speeches that are worth getting out of a sick bed and coming to the House to hear.
The Secretary of State for Scotland referred to passion, anger and emotion. It is inevitable that there will be some of that today, partly because of the importance of the Ravenscraig plant to the entire Scottish economy, partly because of the pride in the efforts of the Ravenscraig work force that has existed for many years--a professional pride shared by a cross- section of Scottish opinion, regardless of political persuasion--and partly because survival has never been easy for Ravenscraig or its work force, but has had to be fought for and won, sometimes at an immense price in terms of self-sacrifice and effort. However, there would be no identification, interest or attachment on the part of people throughout Scotland--highland crofters, border farmers, manual workers and professionals from the lowlands and the west of Scotland--without that passion. There is emotion too : no group of men and women have fought for so long with such vigour, dignity and sheer common sense as the Ravenscraig work force.
When the Secretary of State warns us against emotion, I hope that he realises that it is not always negative emotion. I make no apology for not adopting the clinical approach of the mercenary advocate on behalf of Ravenscraig. However, both he and my good friend Tommy Brennan will be pleased to know that, although passion and emotion will be involved, they will not be the substance of our argument this afternoon. That would be to demean the efforts of the work force, who would be the last to indulge in sentimentality or to seek charity. The Secretary of State knows that, as he met them this morning. He must also know that, contrary to the
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poisoned opinions of some London leader- writers for whom Motherwell appears to be a faraway town--a town about which they care little and obviously know even less--the case for Ravenscraig has never been based on sentimentality. It has been based on an appreciation of hard facts of commercial and industrial importance--facts relating to industrial productivity and industrial performance as a whole. My hon. Friend the Member for Motherwell, South outlined in far greater detail than any other hon. Member could the economic and industrial alternatives that may be considered. In view of some of the myths, inaccuracies and half-truths that have been stated, I shall reassert several simple facts.First, last week the chairman of British Steel did not announce merely the closure of the hot strip mill ; implicit in every detail was the closure of the whole Ravenscraig plant. That announcement was predictable and, indeed, predicted not only by my hon. Friend and me, but in the Arthur Young report which was commissioned by Motherwell district council, was widely available and was ridiculed by Ministers in 1987-88. Although the closure may have been predictable, it was not inevitable. It could have been avoided if the Government had heeded the warnings before and during privatisation.
I do not wish to spend time on recriminations. I mention that fact only because British Steel's so-called guarantees in December 1987, as I said at the time, were more a timetable for the execution of the plant than anything else. It is clear from the announcement of the closure of the hot strip mill that it is a timetable to which the chairman of British Steel is keeping exactly. It implies the closure of the whole plant in 1993-94. That is what we are fighting against today. We are fighting not only for the 1,000 jobs directly or indirectly related to the hot strip mill, but for the 2,500 employees over and above those to whom Bob Scholey gave notice last Wednesday. If Bob Scholey wins his case, we will also be fighting for the Dalzell plate mill. Nobody who knows anything about steel believes that he will leave Clydesdale tube works on its own, 400 miles from the rest of British Steel's operations. Therefore, let us be clear about the importance of the announcement about the hot strip mill. If Bob Scholey wishes to blow the Scottish steel industry to bits, the Ravenscraig hot strip mill is the trigger that he is using. Secondly--this has been covered in a dispute, more academic than real, between the Secretary of State and me--the Ravenscraig plant is crucial not only for Lanarkshire, but for Scotland in terms of freight, transport industries, road and rail, the Clyde port authority, electricity and fuel. Thirdly, the hot strip mill is not a dispensable luxury to either the Ravenscraig plant or British Steel. For the past three years it has been working to capacity and, as the Secretary of State said, producing steel of high quality. It is important to remember that it has overcome the tremendous difficulties of producing high-quality steel, which cannot easily be replaced by alternative production in high- volume plants within British Steel. Until last Wednesday, the mill was commercially viable and in the absense of detailed information to the contrary it must continue to be considered commercially viable.
Fourthly, Ravenscraig is not only commercially viable, but one of the most productive plants in Europe. The Japanese and many others use it as a measure of productivity and a yardstick for economic efficiency man hours per tonne. At Ravenscraig workers are producing
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