House of Commons Hansard Debates for 4 Jul 1991

Mr. Speaker : With this it will be convenient also to discuss the second estimate on the Order Paper--class XV, vote 3--

That a further sum, not exceeding £421,137,000, and including a Supplementary Sum of £161,194,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1992 for expenditure by the Scottish Office Industry Department on Scottish Enterprise and Highlands and Islands Enterprise ; on regional enterprise grants ; on technical and vocational education ; on the promotion of tourism ; on financial assistance to the electricity industry and local enterprise companies ; on residual expenditure for the Scottish Development Agency and the Highlands and Islands Development Board ; on roads and certain associated services, including the acquisition of land, lighting, road safety and related services ; on assistance to local transport ; on support for transport services in the highlands and islands ; on piers and harbours, and on certain other transport services and grants ; and on other sundry services in connection with trade and industry, etc.

Mr. Jim Sillars (Glasgow, Govan) : On a point of order, Mr. Speaker. Can you tell us whether the Secretary of State for Scotland will be present for the debate? The right hon. Gentleman has figured prominently north of the border on the steel debate in Scotland, not only in the Scottish press but also on Scottish television, which, unfortunately, is not beamed into your office. He has been at the centre of Government activity. Can you tell us whether he is at a garden party at Holyrood house this afternoon, or is likely to be able to attend the debate in which it is extremely important that he participates?

As you know, Mr. Speaker, from my intervention during business questions, we do not have a Select Committee on Scottish Affairs, which means that Scottish Members have only a limited ability rigorously to pursue and examine the Scottish Office and its performance. It would be a disgrace and an insult to the Scottish people if

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the Secretary of State for Scotland was not present this afternoon to participate in the debate and to answer the highly pertinent questions that we want to put to him.

Mr. Speaker : I have responsibility for what happens in the Chamber, but it would be placing a heavy responsibility upon the Speaker if he had to know what right hon. and hon. Members do when they are outside the House. I have no idea where the Secretary of State is.

Sir Hector Monro (Dumfries) : Further to that point of order, Mr. Speaker. Is it not wrong for a party that operates by leaks and smears to criticise my right hon. Friend the Secretary of State for Scotland who is carrying out the full responsibilities of that position by attending Her Majesty the Queen at Holyrood palace?

Mr. Speaker : I do not want to be drawn into that argument, but some functions are not by invitation, but by command.

Dr. Jeremy Bray (Motherwell, South) : On a point of order, Mr. Speaker.

Mr. Speaker : Order. There is nothing more that I can say about the matter.

Dr. Bray : It was the responsibility of the Government to arrange the business for today, and they did so in the full knowledge that the Secretary of State for Scotland would not be present. Was it a ruse to excuse him from the debate?

Mr. Speaker : How on earth would I know something like that? 4.40 pm

Mr. Robin Maxwell-Hyslop (Tiverton) : I am sure that the whole House hoped that the Chairman of the Select Committee on Trade and Industry--my hon. Friend the Member for Hastings and Rye (Mr. Warren)--could have been here today, as he chaired the Committee during its inquiry into the closure of the hot wide strip mill at Ravenscraig. Unfortunately, my hon. Friend has not been able to attend the House for a month because of ill health, although we hope that he will be back shortly. The members of the Committee called me to the Chair as acting Chairman in my hon. Friend's absence, and it is in that capacity that I sought to catch your eye, Mr. Speaker. The history of the Select Committee's interest in the steel industry goes back to the original Nationalised Industries Committee, which used to take a great interest, on behalf of the House, in many factors--both internal as well as external--affecting the health of the steel industry in the United Kingdom. When the departmentally-related Select Committees were established in 1980 in their present form, the then nationalised British Steel fell within the remit of the Select Committee on Trade and Industry.

The industry does not function in unfettered competition ; it is subject to the articles and supervision of the European Coal and Steel Community, which has its own competition regulations. Technically, therefore, the Directorate-General of the European Commission does not have formal jurisdiction over the steel industry within the EEC. It was necessary to mention that because I shall shortly be referring to a document that has emanated from the Directorate-General for Competition in the EEC.

With the worldwide collapse--not just in Europe and the United Kingdom--in demand for steel products of

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every sort, the European Coal and Steel Community has made many provisions that differ from the strict competition requirements of the EEC, and require us to avoid gross over-capacity and to attempt to have, within the countries of the EEC, orderly industries rather than industries in competitive chaos.

On 16 May 1990, British Steel announced the planned closure of the hot wide strip mill at Ravenscraig, with the loss of 770 jobs. There was a further announcement on 8 November 1990 of plans to close the steel works and tube mill at Clydesdale early in 1991, with the loss of a further 1,200 jobs. It was in that context, rather than just as an inquiry that was not especially timely, that the Select Committee focused its attention not only on the internal position within British Steel--now, of course, in the private sector--as a whole, but on certain concentrated aspects.

The first was the effect on the local and more widespread economy of Scotland, in which the plant is located. For the very reason that was mentioned earlier--that there is no Select Committee considering Scottish affairs--the Trade and Industry Select Committee felt obliged to mount an inquiry into the consequences of the projected closure on the local and more widespread economy of Scotland--which, of course, is outside the fiduciary duties of the directors of British Steel, but is wholly within the remit of the Select Committee.

Secondly, we were concerned about the employment implications for those who had previously been employed in Ravenscraig and Clydesdale. That matter can fall within the fiduciary responsibilities of the directors of a public company. It is not a requirement, but modern company law enables it to do so. Therefore, it is not an irrelevant consideration either for the directors of British Steel or for the Select Committee.

We needed to examine the reasons why British Steel took that management decision and what alternative arrangements could have been made, given the market--as British Steel saw it--for the products produced both in Ravenscraig and Clydesdale and also in British Steel plants elsewhere in the United Kingdom. We were also concerned whether reduction in capacity at those plants in Scotland would produce a restriction in effective competition, which would enable British Steel to increase its prices in a way that it would not otherwise have been able to do. That is a fair statement of the framework in which the Committee conducted its investigations, which were not wholly located in Committee Room 15 at the Palace of Westminster.

The Committee visited not only Ravenscraig, but the British Steel site in south Wales which, in the plan given in evidence to the Committee by British Steel, was where it intended to concentrate production after the closure of Ravenscraig. We visited both sites, rather than simply taking verbal and written evidence at the House of Commons. Of course, it is often the case that the taking of evidence itself is an important service to the House of Commons, and the Select Committee on Procedure has often emphasised that. Sometimes, it is not the actual production of the report that is crucial, but the illumination of relevant factors through the taking of evidence in public-- [Interruption.] Does my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) have a problem?

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Mr. Michael Brown (Brigg and Cleethorpes) : I apologise to my hon. Friend.

Mr. Maxwell-Hyslop : The collecting of written evidence, which is released both to the House and in the public sphere, is of great service to the House. I mention that because the hot wide strip mill at Ravenscraig was closed on 12 February 1991, whereas the Committee did not conclude its report until a week later, on 20 February. That was not due to any lassitude by the Committee, but because there was an exchange of correspondence with the EEC. We were awaiting evidence from that source, as well as taking evidence in the United Kingdom. We were not masters of our timetable.

The production of the report, although it came nine days after the actual closure, did not mean that the inquiry and the production of the report were a waste of time. They illuminated issues that were and are of great importance. I shall not attempt to summarise the entire report ; I trust that hon. Members who are interested in the subject will have read it for themselves. I am glad to see that many hon. Members are present for this debate who were not members of the Select Committee.

The Procedure Committee, in its recent report on our Select Committees, emphasised that debates on Select Committee reports were not just events produced for the benefit of the members of the Select Committees concerned. The Committee reports to the House, and it is to enable the House to debate the issue constructively that is the prime service of the Select Committee.

Let me turn to the conclusions on page xvii--

Mr. Tom Clarke (Monklands, West) : Before he does so, will the hon. Gentleman note the comment in paragraph 20, on page ix--

"The Clydesdale and Imperial Works have been losing money for the last six years"?

Special factors apply to Clydesdale ; I am sure that my hon. Friends will mention them. It is not true, however, that Imperial--which is quite separate--was losing money. Is it not rather a pity that the report did not give the details?

Mr. Maxwell-Hyslop : That may well be a point that the hon. Gentleman will wish to develop if he catches your eye, Madam Deputy Speaker, but I suspect that, in the time allocated for this debate--and there are two debates this afternoon--the House would not wish me to monopolise more than a comparatively limited part of it. I want in particular to refer to No. 2 in our summary of recommendations, which states :

"We recommend that the competition case on the closure of Ravenscraig should be further examined by the relevant authorities in the European Community."

We said that for a number of reasons, to some of which I have already alluded, because of the general supervision of the Competition Commission over the whole of productive industry. There are many other parts of productive industry in this country potentially affected by changes in the supply of steel which do not themselves come under the competition provisions of the European Coal and Steel Community. That is why we were interested in learning the views of the Competition Commission as well as those of the European Coal and Steel Community.

So was the Scottish Steel Campaign Trust, which wrote to the competition directorate of the European Commission. The Committee was sent a copy of the official reply from the Community, and it is to that that I now wish to refer. Before this debate, I sent the Clerk of

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the House, for laying on the Table, copies of this correspondence, because it is never fair to the House just to quote selected portions of a document unless other hon. Members can have the opportunity of reading the whole of it for themselves.

The Competition Commission's initial paragraph makes clear its lack of actual jurisdiction. It says :

"You will, of course, be aware that the Commission is under no legal obligation under the ECSC competition rules to state its position or to examine complaints such as the one you have made. Nevertheless in view of your members' responsibilities as public authorities and as representatives of the workers, the Commission is willing, as a matter of courtesy, to indicate how it sees the case. This letter deals with your complaint dated 26 October 1990 concerning the closure of the hot wide strip mill at British Steel's Ravenscraig works."

When we now come on to what was actually said in the letter--which extends to 59 paragraphs--there are, I think, five which draw together the strands of its conclusions. I start with paragraph 48, which states :

"The complainant has alleged that the failure to make the mill available to competitors, or to mothball it until such time as the steelworks is closed and then to offer the entire package to a competitor, is an abuse of a dominant position. This could be true only in very exceptional circumstances if this was the only practicable way that a competitor could enter the market." According to paragraph 49,

"This is not so. Many competitors are already present in the United Kingdom either as direct sellers or as stockholders. These competitors can easily increase production or sales at any time. As they are already present on the market they face no barriers to entry."

That was the focus of the response from the Competition Commission on the question of whether British Steel should have offered the plant, which was redundant for its purposes, for sale to other competitors, and whether it was, in a sense, put in a position to manipulate market prices by its reduction in local capacity. Paragraph 52 states :

"The refusal by BS to offer the Ravenscraig mill for sale or to mothball it pending an offer to sell it with the steelworks is not therefore an abuse of dominant position."

Let me turn now to paragraph 59, the last paragraph before the conclusion, which says :

"The complainants claim that the closure of the hot wide strip mill will inevitably lead to the closure of the remainder of the Ravenscraig complex and of the Dalzell plate mill. The Commission takes no view on this contention, but considers that even if this total closure comes about it is unlikely that there would be an infringement of the ECSC competition rules, and in particular of Article 66(7) ECSC, as BS is not dominant in the relevant market." Lastly, the conclusion--paragraph 60--states :

"The Commission regrets to inform you that it can see no grounds on which to sustain your complaint."

I read that out for two reasons : first, because that response was not in the possession of the Committee when we finalised our report, and secondly because it is clearly relevant to the conclusions that the Committee drew in the absence of that information.

Mr. Alex Salmond (Banff and Buchan) : The hon. Gentleman's views on the further reference to the European authorities is well known following the vote that took place in the Committee. Does he not recall, however, that, in his evidence to the Committee, Sir Robert Scholey, British Steel's chairman, claimed that the European

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Commission would exert some blocking power on the sale of the Scottish steel industry? He said, in fact, that "it would have them jumping out of their skins".

Is it not the case that both the letter from the Commission and the Committee's own further investigations proved that that was not true, and that, whether knowingly or unknowingly, the chairman of British Steel had attempted to mislead the Select Committee?

Mr. Maxwell-Hyslop : The words with which I started my quotation give the Commission's own views on that. Those words can speak for themselves ; they do not need me to speak for them. I am not authorised to speak on behalf of the European Commission. Nor am I authorised to speak on behalf of British Steel. But I do think that this letter makes an additional contribution to our debate today. The other paper which is relevant to today's debate is, of course, the Government's response to our recommendations, which was published on 22 May by this Committee. We published reports and observations by the Government on the second report of the Trade and Industry Committee. So I think that that completes the papers which the House needs to consider in order to form an important judgment on this now irreversible series of events.

Madam Deputy Speaker (Miss Betty Boothroyd) : Order. Before I call another hon. Member, I should say that Mr. Speaker has asked me to make a strong plea for short speeches. This debate must finish at 7.36 pm and a tremendous number of hon. Members wish to speak. 5.2 pm

Mr. Donald Dewar (Glasgow, Garscadden) : May I start by congratulating and thanking the Select Committee for its efforts and careful consideration of the issues. The hon. Member for Tiverton (Mr. Maxwell-Hyslop) spoke with a certain precision and scholarly niceness, but that is far removed from the passion and red blood of the arguments in Scotland, where the steel industry's fate has caused great anxiety and understandable and justified bitterness. I admire those who have conducted and maintained the campaign tirelessly, with impletion and dignity over a period of literally years. The work force and the stewards who represent them in Clydesdale, Ravenscraig and Dalzell have never flinched and have maintained their position with immense courage, determination and effectiveness.

I greatly regret that the Secretary of State for Scotland is not in the House today. It is now well known--almost notoriously well known--that he is in Edinburgh at a royal garden party. I recognise that he would normally be expected to keep such an engagement. However, the circumstances are exceptional and he should be here, accounting to hon. Members and the people of Scotland for his actions or lack of them.

Mr. Michael Brown : On a point of order, Madam Deputy Speaker. You will recall that the question of the whereabouts of my right hon. Friend the Secretary of State for Scotland was drawn to Mr. Speaker's attention at the beginning of this debate. Mr. Speaker said that ifthe Secretary of State was attending an engagement at the Palace or Holyrood house, it was a command from the sovereign.

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Mr. Jimmy Hood (Clydesdale) : On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker : Order. The House is wasting precious time with these points of order. That is a debating point and has nothing whatever to do with the Chair.

Mr. Dewar : On Monday this week, Lanarkshire and Scotland suffered a severe blow as a result of the Dalzell announcement. There are questions about the extent to which the Secretary of State was privy to British Steel's decision. There are severe doubts about the Government's commitment to rebuilding Lanarkshire's economy and whether promises of additional funding have been made in good faith. In his own interests, the Secretary of State should have been here to answer the charges that are being widely made about his competence and integrity.

On 26 June, the Secretary of State wrote to me refusing a meeting to discuss the steel industry and saying that there would be an opportunity, during the proposed estimates debate on steel, for Members to express their views on the Government's position in relation to the Scottish steel industry. I shall certainly make use of that opportunity, but, in the light of that letter, the Secretary of State's absence is extraordinary. He might have thought that he had a duty to listen and to learn. His behaviour can only reinforce fears about his ability to grasp the scale of Scotland's present problems.

It is a disease that has afflicted not only the Scottish Office. Although it is sad that the Secretary of State for Scotland is not present, it is compounded by the fact that the Secretary of State for Trade and Industry is not here either. After all, he is the Minister with direct responsibility for steel and his Department is very much involved in the estimates that we are discussing. Not only is neither Secretary of State present, but not even the Minister responsible for steel in the Department of Trade and Industry is here. It seems as though almost every Minister who should be here is absent without leave, which may be a measure of the embarrassment that they feel about what has been happening and the recent tragedies that have unfolded in the Scottish steel industry.

The tragedy has taken the form of a vendetta, ruthlessly conducted over many years by British Steel's top management. The evidence of malice has been persistent and unmistakable. The plants in many areas have had excellent records of productivity and the work force has shown a commitment to quality control. If, in some parts, there has been a shading of that performance in recent months, it is because of the persistent refusal in the past decade to give the plants and work force the tools and investment to carry out the job.

Some time ago, British Steel decided to concentrate on an even smaller number of sites. Scotland is not the only part of the United Kingdom to suffer and there will be other victims in the future if present policies are pursued. The obsession was reinforced by privatisation, and wider considerations of public interest were abandoned along with the work force which, in Clydesdale, Ravenscraig and Dalzell, have served the industry so well. Employees became no more than a disposable asset. Valid and well- founded technical and financial arguments were swept away, soon to be followed by the plants, simply because they did not fit into Sir Robert Scholey's grand design.

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Mr. Phillip Oppenheim (Amber Valley) : Will the hon. Gentleman commit a possible future Labour Government to keeping the plants at Dalzell and Scunthorpe open? Would they intervene to keep them open? Yes or no?

Mr. Dewar : The answer is simply that the Government's sin is not that they have failed but that they have not tried. We have seen a dereliction of duty by the Government over a considerable period. For example, I gather from an interview of the Under-Secretary of State in The Scotsman today that British Steel is prepared to clear the sites of its former plants only in the most superficial fashion. It refuses even to deal with the central problems of subsidence and contamination. The cost to the public purse has been estimated at over £50 million. We have a company that is not afraid to act as an industrial vandal and the Government have stood by and watched it happen. They do not care that their policies add insult to injury. The Scottish Office has, once again, been left lamenting and empty handed.

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart) : If the hon. Gentleman had been Secretary of State for Scotland for the past year, precisely what would he have done differently?

Mr. Dewar : We shall be saying a good deal about that. On the specific point with which I am dealing, I would have made it clear to British Steel that it could not simply nod an apology as it left and that it could not walk away without even clearing and preparing the sites that it was abandoning. I would not then lament the fact in a public interview in The Scotsman but apparently do nothing about it. I would not remain a member of a Government who, when hon. Members came to the Department of Trade and Industry worried about the loss of thousands of jobs, told those hon. Members that they were doing nothing and would do nothing because the Scottish Office had asked them to do nothing.

As long as I am in politics I shall remember the Secretary of State for Trade and Industry who is responsible for the steel industry getting the name "Ravenscraig" wrong. Perhaps it was an unfortunate slip of the tongue. He then told me that he would not be involved and saw no need to be involved. The difference between a Government who are committed to trying to save those jobs and who believe that the industry has a future and are prepared to use the influence, leverage and pressure of the Government to do something about it, and a Government who make a virtue of the fact that they are doing nothing is the difference between success and failure, between betrayal and a Government who know their duty.

On Monday, British Steel attempted to pronounce the death sentence on Dalzell, moving ruthlessly on from the destruction of Clydesdale and Ravenscraig. The timing and form of the announcement is of some interest. The Minister owes us an account of the Government's involvement because it has been alleged that, on 4 June, British Steel told Ministers that that would happen. The Government therefore collaborated with the company. If that is true, they were simply the passive recipients of unwelcome news, interested only in minimising the embarrassment to the Government and distancing the Secretary of State as best they could from the coming disaster.

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It has already been mentioned by other hon. Members that the Prime Minister was writing to the Dalzell stewards on 4 June--the very day-- [Interruption.]

Madam Deputy Speaker : Order. This is a serious debate, let us hear what the Opposition have to say about it.

Mr. Dewar : I hope that my colleagues will not be offended, but I must confess that the comings and goings of the hon. Member for Amber Valley (Mr. Oppenheim) are of limited interest.

Mr. Oppenheim : On a point of order, Madam Deputy Speaker. Surely it is reasonable for an hon. Member to walk out of the Chamber when, patently, he has not received an answer from the Opposition spokesman.

Madam Deputy Speaker : That is not a point of order for the Chair. There has been no breach of Standing Orders.

Mr. Dewar : Let me assure the hon. Member for Amber Valley--who I believe has finally left us--that I was making the point that I did not care whether he was here or there--he is usually both.

Mr. Irvine Patnick (Sheffield, Hallam) : Cheap.

Mr. Dewar : The Whip is mouthing "Cheap" at me. I think that he recognised the description--that is probably the trouble.

I should like to return to the serious points. The Prime Minister was writing to the Dalzell shop stewards on4 June, the very day on which we understand--it is up to the Minister to confirm it--that the Secretary of State for Scotland learnt of the decision to close the plant. Many people will wonder if the letter was any more than a defensive device, written in the knowledge of what was coming. The Secretary of State is shaking his head--

Mr. Allan Stewart : The Parliamentary Under-Secretary.

Mr. Dewar : Ah, well, the Parliamentary Under-Secretary is shaking his head. He may be able to clear this up--we shall wait. I hope that he will give us some details. I recognise that his job is complex and difficult.

I was interested to read of the important concession made in an article in today's edition of The Scotsman, to which I have already referred. In it, the Parliamentary Under-Secretary, talking of the industrial mix of Scotland, said :

"In addition, there are situations when the Scottish Office has to know what is happening and liaise with Whitehall--an example of that would be Rosyth."

I am glad that the Parliamentary Under-Secretary and, no doubt, the Secretary of State recognise that there are occasions when the Scottish Office has to know what is happening. I should have hoped that the Scottish Office would like to know what is happening most of the time, but that may be an optimistic assumption to make of the present incumbents.

There are also rumours circulating about imminent announcements involving Rosyth. If they are as advertised, any words about being in touch with what is happening and liaising with Whitehall in that connection

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may come back to haunt the Parliamentary Under-Secretary unless he can deliver in a way in which he has signally failed to do in the past for the steel industry in Scotland.

On 14 June, BBC Radio Scotland reported that the decision to close Dalzell had been taken and Ministers had been told of it. That was followed by fierce denials all round. It is typical. Throughout the proceedings, it seems that the Government have been more interested in saving face and manipulating the timetable for their own political purposes than in finding solutions to existing problems. That shabby episode does little for the confidence of those who hope for a little frankness in public affairs.

I now come to the substantive points. I believe that the Government lost the battle with British Steel at an early stage. It goes back to the days when the now Secretary of State for Transport was Secretary of State for Scotland and complacently told Scottish Members that privatisation was the best way of ensuring a secure future for the industry. The message was that British Steel always knew best. The Government have never put British Steel under effective pressure. They have not acted with decision in the public interest. The Department of Trade and Industry did nothing and said nothing, claiming as its alibi that it had not been asked to help by the Scottish Office. We were left with the impression that the Secretary of State for Scotland was licensed by the Cabinet to make noises and protests as long as they were ineffective and as long as he did not embarrass his colleagues by asking them to join the fight. That is not the sort of service that we expect from a Government of the United Kingdom, and it is certainly not the sort of service and commitment that Scotland expects from a Secretary of State for Scotland.

There was a complacent acceptance of guarantees at the time of privatisation which turned out to be worthless. There has been a persistent refusal to recognise that the existence of the golden share--I concede that it has a limited remit--meant that the industry had a special standing and the Government had a special relationship with, and responsibility for, its fate.

The Secretary of State's casual admission to the Select Committee of the interests of prospective purchasers and the subsequent failure to act to allow them to pursue those interests seems lamentable. I stress that twice in recent months my hon. Friend the Member for Dunfermline, East (Mr. Brown) and I have made requests to both the Secretary of State for Trade and Industry and the Secretary of State for Scotland for meetings to discuss the future of the Scottish steel industry and the aftermath of the announcements that had then been made. On both occasions, both Secretaries of State replied that they would not have meetings with their opposite numbers because there was nothing to discuss.

I cannot remember any time in my career when, with a major industrial issue unresolved, with jobs and investments at stake and anxieties being expressed, a Secretary of State has refused point blank to discuss the matter or meet his opposite number because he felt that it was not necessary. Everyone in Scotland thought that the meeting was necessary. I do not belittle the fact that the problems are difficult to solve, particularly post-privatisation, but to say that there is no place for, and no point in, a meeting seems to be an insulting wish to save ministerial embarrassment at the expense of public interest and the parliamentary process.

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What of the future? Steel making at Ravenscraig will continue at least until 1994. Plates will be produced at Dalzell until 1994 or perhaps as late as 1996. Are Ministers prepared to stand aside as spectators of the sad, dying decline of a great industry? The Government should be prepared, and Labour would be prepared, to look at new technology and to examine such options as thin slab casting. Ministers should be prepared to explore and push the Arthur D. Little options, not simply nod to them in passing. As I understood it, that was the view of the Select Committee, expressed in its conclusions and in the text of its report.

The Labour party has never accepted that the one plate mill strategy was inevitably right and the only way forward for the industry. What has happened this week fully justified our scepticism. I believe that, even now, there is a case for further investment in Dalzell and the introduction of accelerated cooling techniques. A strong financial case has been made for that investment, and the Government should not accept, as the Prime Minister has said, that the decision will be for British Steel to take on commercial considerations alone. There is a wider public interest which a wise Government would not ignore.

In its annual report, British Steel made it clear that a final decision on the Teesside investment would be taken only when the budget had been agreed and optimum financial and technical terms had been finalised. The stewards at Dalzell are rightly determined to argue the commercial case, despite British Steel's record of embittering indifference. Above all, Ministers should be pressing British Steel to offer their existing plants in Scotland for sale in the open market. The Government preach the gospel of competition, the spirit--

Mr. Richard Holt (Langbaugh) : It is the first time that the hon. Gentleman has mentioned Teesside, and there are no Labour Members representing Teesside present. Would a Labour Government stop investment in Teesside and so stop the joy and jobs which it has brought to my constituents in that hard-pressed part of the north-east of England simply because the hon. Member for Glasgow, Garscadden (Mr. Dewar) wears a Scottish hat and is not concerned with the whole country?

Mr. Dewar : No, and if the hon. Gentleman had listened to my arguments he would understand why. We welcome investment in the industry, and modernisation. Throughout the long, hard and sometimes depressing days of the campaign, the steel workers in Scotland have never cavilled about development in south Wales or the north of England or anywhere else. We still want a modern, competitive industry. What I have said--and I hold to this--is that we have consistently argued that the idea that one can concentrate on not just five integrated sites, but reduce it to two or three at the most--so that one concentrates and concentrates still further- -is not necessarily the right formula for the industry. Of course, I welcome investment in Teesside, but I do not believe that that excludes investment in Dalzell or other parts of the industry.

To return to my point about sale on the open market, the Secretary of State told the Select Committee that there had been "approaches from interested parties", but that they did not have the information to pursue matters. In that case the Government should have made sure that they were in a position at least to make their approach and to consider whether they could get to the stage of an offer. If

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British Steel is so certain that there is no case for a strip mill at Ravenscraig of for a plate mill at Dalzell, what risk does it run in testing the market? The only explanation is that it wants to knock out the capacity. I should not have thought that an attractive argument to a Government who preach the doctrine of competition. What about the future? There have been many easy promises to rebuild Lanarkshire's industrial base. It is, of course, easier to make the commitment than to carry it out. Even if the Government have failed the steel industry it is important that people be convinced that a new and diversified economy is the long-term aim of the Government and that in the short term immediate steps are being taken to lay the foundations for that. Precious little, however, has happened so far. A working party has been set up. I have been told, I do not know whether accurately, that its chairman opened the first meeting by saying that the group should base its plans on the assumption that there would be no additional finance. Certainly, there does not seem to be enough money to measure up to the scale of the crisis.

The Prime Minister told the party faithful at Perth on 10 May : "For too long the outdated face of Scottish industry turned opportunity away. Now people and businesses are voting for Scotland with their cash and with their feet."

The Prime Minister's message has obviously not got through to Sir Robert Scholey. The Prime Minister did, however, recognise in the same speech

"that for all the progress since 1979, some parts of Scotland have managed these changes less easily than others. Lanarkshire is one." I think that that was a delicate reference to unemployment and to the closure of the steel industry.

The upshot was the offer of £15 million to green over the worst areas of industrial decline. There was something a touch patronising about that. The Labour party is not interested in greening over the memories of industrial decline. We want to put in its place viable industries that provide jobs and a high technology base for a work force with skill, commitment and a wish to earn their way. Where is the £15 million? I asked the economic section of the Library to look into the matter. It told me that the money was not in the June supplementary estimates--so far, it appears to have had life only on the page of a party conference speech. That is rather curious ; after all, the speech was made at the beginning of May and the estimates were for June. If the Government had been genuinely committed to finding even that limited additional money for Lanarkshire I should have expected it to appear in the June supplementary estimates. It may just be a little late and be on its way, but I should like an unambiguous answer from the

Under-Secretary.

The Government have responded to the package unveiled by the working party, but I must protest that the small print makes depressing reading. The working party spoke of the need for spending between £200 million and £300 million and it required between £85 million and £110 million for immediate projects. Measured against that, the Government's response adds up to next to nothing. Of course, large figures are bandied about, but most of them come from programmes already in being. The commissioning of a much-needed general hospital at

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