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Ravenscraig
Mr. Deputy Speaker (Sir Paul Dean) : We now come to the debate on Ravenscraig. Time is limited. Many hon. Members wish to speak, so I appeal for short speeches. I should also inform the House that Mr. Speaker has selected the Government amendment.
7.14 pm
Mr. Donald Dewar (Glasgow, Garscadden) : I beg to move, That this House condemns the repeated failure of British Steel to support and invest in its Scottish plants, culminating in the announcement that Ravenscraig is to close in defiance of guarantees given by the company ; calls for British Steel to honour these guarantees and for the Government to explore with determination every possible means of saving the steel industry in Scotland, including the search for a new owner and the use of new technology ; deplores the inadequate response from Ministers to the present crisis ; and demands a co-ordinated and determined drive to rebuild the Lanarkshire economy which has been cruelly damaged by the policies of both the Government and British Steel.
This debate is about a great industry and the trouble which has befallen it. Inevitably much of the spotlight will fall on the role of Government. I suspect that the Secretary of State is in difficulty and is embarrassed by his predicament. Well he might be.
At the end of last week, as the right hon. Gentleman may know, I put down a priority written question. It was a simple request for a list of dates of any meetings in the last six months between Ministers in the Scottish Office and British Steel. The list could not be long, and it did not require an extensive diary search. The first effort at a reply was :
"I shall reply to the hon. Member as soon as possible." Clearly the Secretary of State had no great interest in getting the information on the table. However, he may have had a tactical rethink, because today there crept on to the board a reply. It was the reply which I had expected. In the last six months, the entire contact at ministerial level between British Steel and the Scottish Office boiled down to one meeting on 6 January, after the Government knew that the closure decision had been reached.
According to reports in the Sunday Mail, the Scottish Office knew as early as 20 December that closure was coming on 8 January. It is a serious charge, but I fear that, as Ministers contemplated the grim future, their one thought was how best to survive the fine mess that their own incompetence had created.
So far as I can find out, the Secretary of State did absolutely nothing to influence events. I am strengthened in that conclusion by a letter which the Secretary of State wrote to me on 14 January, in which he told me precisely what happened at the meeting on 6 January. I remind the House that that was the one meeting at ministerial level with British Steel in the last six months. What happened at the meeting was that he
"pressed Sir Robert very hard indeed to make public British Steel's assessment of market conditions".
Faced with the final blow, with the long history of decline, and with the abdication of duty which has marked their course, the Government finally got into the presence of top management of British Steel, merely to press Sir Robert to make public the market assessment which had made him decide on closure. That is a fit comment on the total lack of action and the lack of fight shown by the Scottish Office over the years.
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That is typical of the hands-off, do-nothing approach which has been the hallmark of the Government. Successive Secretaries of State have been licensed to protest carefully packaged concern for Scottish consumption only. The one condition laid down was that no action was to follow and no real pressure was to be mounted on British Steel.Mr. John Marshall (Hendon, South) : Can the hon. Gentleman tell the House what action he would take? When the Labour party refers in the motion to
"every possible means of saving the steel industry in Scotland, including the search for a new owner",
does that mean that he would propose the nationalisation of Ravenscraig?
Mr. Dewar : I genuinely regret having given way to the hon. Gentleman. As he well knows, that will be the burden of the main part of my speech. He has an important role as a substitute Scot on this occasion. I hope that he will stay, listen and learn.
Suspicion of the Government's plans and of their attitude became a certainty when the Department of Trade and Industry finally blew their cover. Perhaps I do not recognise an unsuspected luminary, but I do not think that there is a representative of the DTI here. I remind the House that the DTI is supposed to be the lead Department in this business. That absence is therefore the height of discourtesy. [Interruption.] I know that the hon. Member for Stirling (Mr. Forsyth) likes to run everything, but so far as I know, he is not yet running the Department of Trade and Industry. He may be omnicompetent in the Scottish Office but, so far as I know, he has not yet got beyond the Scottish Office.
When we saw the then Secretary of State for Trade and Industry, the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley), he was disastrously frank. I recall it because it made such an impression on me. He said that he was doing nothing to help, because the Scottish Office had not asked him to do anything. The harsh truth is that there has been no real attempt to derail British Steel's plans. The search has always been for a face-saving formula, never for a solution.
Mr. Phillip Oppenheim (Amber Valley) : Will the hon. Gentleman give way?
Mr. John Marshall : The hon. Gentleman would nationalise the industry.
Mr. Dewar : I shall deal later with the hon. Gentleman's point. What can now be done? There has been a long campaign to try to persuade British Steel to consider offers for the Ravenscraig plant. British Steel now says that it will do so, but I fear, because one has to face reality, that it has probably agreed to consider offers because it is confident that offers will not be forthcoming. The tragedy is that, when there was an opportunity to find a buyer, it was fiercely obstructed by British Steel. The Secretary of State for Scotland lamented that fact before the Select Committee but, as far as I can determine, he did nothing to unblock the logjam. The option of a new owner should be kept on the agenda for as long as possible. The possibility of new technology must also be examined urgently. It was identified as a possibility--not, I admit, as a strong possibility--in the Arthur D. Little
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report. I know that it is still being investigated by Scottish Enterprise. Many of those who have followed the argument will be familiar with the innovative proposal that has been put forward. It contemplates the linking of thin slab casting to traditional steelmaking techniques. My hon. Friend the Member for Motherwell, South (Dr. Bray), showing more energy and determination than any Minister, is going to Indiana in the next week or so to look at one of the plants where thin slab casting is in operation. I do not pretend that it is an easy option, but it must be pursued to find out whether there is any possible way forward.Dalzell is still producing plate. As everyone connected with the plant knows, the Labour party has always maintained that there is a case for investment there, and it has consistently challenged the single plate mill strategy. It is not in the best interests of the industry. In our view, it was always likely to be bad news for Dalzell. Sadly, that was almost borne out.
Circumstances have changed. The recession has undermined the plan for a new plate mill on Teesside. The Government should be pressing for the modernisation of Dalzell, including the installation of accelerated cooling. It still remains a low-cost option. In hard times, it must be attractive to British Steel.
There are no short cuts, however. This is a time for realism. I want to make it clear, as I have done in the past, to the hon. Member for Hendon, South (Mr. Marshall) that we do not believe that nationalisation is the answer in this case. If I believed that it was, I should be arguing for it.
Mr. Oppenheim : Will the hon. Gentleman give way?
Mr. Michael Brown (Brigg and Cleethorpes) : Will the hon. Gentleman give way?
Mr. Brown : I am surprised that the hon. Gentleman will not give way.
Mr. Dewar : If the hon. Gentleman is expressing surprise at what I have just said, it shows that he is abysmally ignorant of the debate.
Mr. Oppenheim rose --
Mr. Brown rose --
Mr. Dewar : Let me again make the point that we do not believe that in the current circumstances nationalisation is an option or a way out for British Steel. If the hon. Member for Brigg and Cleethorpes (Mr. Brown) can understand and digest that statement, we can come back to it.
Mr. Brown : Will the hon. Gentleman give way ?
Mr. Dewar : No. I believe that nationalisation is no more than a slogan--[ Hon. Members :-- "Hear, hear."]--in these circumstances. It is a doubtful luxury, available only to a party with no expectation of gaining power. I say that honestly. It is irresponsible to consider nationalising the industry ; it would hold out hope where none exists. The arguments do not stand up. I repeat that, if I thought they did, I should argue for nationalisation. It is not a matter
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of dogma ; it is a matter of doing what is right for the steel industry and for the people of Lanarkshire who have taken such a pounding.Mr. Oppenheim : Will the hon. Gentleman give way ?
Mr. Oppenheim rose --
Mr. Dewar : The nationalists want Ravenscraig to operate--hon. Members will correct me when they speak if they believe that I have got the detail wrong--on two blast furnaces, tied to the Dalzell plate production, with a pipe mill on an unnamed Motherwell site. The problem is the market.
Dalzell, expanded to 1 million tonnes--two or three times current output-- could survive only on the assumption that British Steel was not competing in the market. Plans for a new plant at Teesside would have to be abandoned. Plate production at Scunthorpe would have to be closed, together with the welded pipe mill facilities at Hartlepool. Ironically, the whole scheme would depend for its viability on British Steel's acquiescence.
There is no escape in myth-making about the North sea market. Every authoritative commentary tells the same story. Structural steel, tubes and plates for the North sea are not required in sufficient quantities to breathe life into the SNP headlines. All the signs are that the market will fall sharply over the next few years. It is--to use a perhaps unhappy phrase--no more than a nationalist pipe dream. This is not a plan to rescue Ravenscraig. It would be left as a slab producer, in effect tied to one outlet. If it runs on one blast furnace and produces 1 million tonnes, the cost base will be wrong. If it loads effectively at 2 million tonnes, there will be a surplus for which there is no demand. The European hurdle on competition policy would be formidable. An operating subsidy would simply not be available.
I say all that with no pleasure, but I do so because I am not prepared to be dishonest and go down a road that I do not believe is open. The SNP claimed initially that its target was the restoration of Ravenscraig, complete with a hot mill, cold reduction plant, relined blast furnaces and much work done to such facilities as the coke ovens.
In order to discredit the pointed attack, on grounds of cost, by the Ravenscraig stewards, the SNP has been reduced to confusing market capitalisation with British Steel's asset value--as it does in the most blatant way in this pamphlet that I am holding. It is nonsense to pretend that the share capitalisation of the company is relevant to the argument in favour of putting plant on the ground. It is a deliberate attempt to falsify the argument, and suggests a certain desperation. The back-up has been to dispute the integrity of the stewards whom they were once proud to praise and who are universally seen as having fought a sustained and courageous campaign in defence of the steel industry.
The SNP once did a lot of running in and out on Scottish industrial matters, including nationalisation. I remember when the nationalisation of the shipbuilding industry was on the agenda. SNP Members sat in the Chamber tearing up telegrams from the work force on the grounds that they did not believe in that particular form. The scheme that has now been produced has changed shape and content several times.
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It is worth remembering that there is no provision for this adventure in the ingenious sums cobbled together by the hon. Member for Banff and Buchan (Mr. Salmond) to form his so-called Scottish Budget. The scheme has only one essential virtue for the nationalists : it gives them something to say.The debate takes place on the day that The Sun has declared itself the house journal of the SNP. I fear, although I may be a little over- confident, that that will turn out to be something of an embarrassment to the party. In the context of this debate, the party might care to remember that, on 9 January, The Sun considered the future of the steel industry and claimed that that particularly misbegotten group of men, the socialists, could
"only throw money at problems."
It went on to pronounce :
"Sure, 12 hundred jobs could be saved at Ravenscraig. But in the end the price would be the loss of ten times as many jobs elsewhere."
The Sun's principal columnist happily contributed the thought. "Ravenscraig should have been shut down years ago."
All that I can say about The Sun and the company that it is now keeping is that, if it is a conversion, it is not one based upon principled conviction. I predict that the future of that misalliance will be private grief for the SNP.
We must look to the future. There is much that must be done to rebuild and strengthen the Lanarkshire economy. Although I can only sketch what needs to be done, I shall try to state what I believe are the most important points. The sites must be dealt with and reclaimed. It is no use the Government paying lip service to the principle that the polluter pays when the Secretary of State for Scotland announced on 13 January, as though it was good news, that British Steel would clear the Ravenscraig site
"down to ground level and leave it in a tidy condition".--[ Official Report, 13 January 1992 ; Vol. 201, c. 672.]
The Government must not be allowed to cover their retreat with a handful of grass seed.
I believe that the enterprise zone was scrambled into the frame only when the closure announcement loomed. The Sunday Mail reported that the Scottish Office had indeed been pushing for that, and that there would be £100 million of investment, but that has now been reduced to £50 million.
The Secretary of State for Scotland (Mr. Ian Lang) : I shall correct that mistake from the hon. Gentleman now, but I shall deal with some of the others later. That is entirely and absolutely without foundation.
Mr. Dewar : Of course I take the Secretary of State's word for that. It was not scrambled quickly into the frame when the announcement of the closure was known. However, I understand from a press release from Sir Leon Brittan's office, which reached me today, that a formal application under article 93.3 of the treaty was launched only today. That does not suggest that there has been a great deal of forethought or planning.
I am conscious of the difficulties that may arise. I understand the problem over the Mossend freight village and terminal. There are always difficulties over the boundaries of enterprise zones. However, I think that, on balance, that is an important part of the package, and something on which we expect the Secretary of State to
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deliver. The package that the Government have put together lacks coherence and shape. It is a case of anything and everything being thrown together. Significant sums would have been available in any event. I refer to Lanarkshire development agency's and East Kilbride development corporation's contributions.I hope that the Secretary of State will be prepared to listen to the local community and that he will create some sort of forum in which the ideas of the local community can be taken into account and considered in a wider way than has been possible up to now. It is important that emphasis be placed on infrastructure improvements, and especially on the M74 and M8 link.
Lanarkshire does not want a series of reports on infrastructure questions-- a buck-passing exercise to a regional council that does not have the finance. We must capitalise and have a targeted strategy to encourage development around the freight terminal and the new electrified line linking Motherwell to Glasgow and Edinburgh. I hope that that will be tackled with more energy than hitherto. There must be a real drive to improve training and to encourage innovation. The Government should consider the possibility of establishing a central institution of Lanarkshire to give a new impetus to the excellent work that is carried out by the existing colleges there. My hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) will have a word or two to say about training towards the end of the debate. The experience and expertise of East Kilbride development corporation's industrial team should be kept together.
The Labour party has argued for a Scottish innovation centre. There are many examples of similar successful ventures in Europe, some of which have an almost international reputation, such as the Steinhers Foundation in Baden-Wu"rttemberg. Such a venture would give a boost to the local economy and allow companies to plug into a Europewide network of technology transfer so that even the smallest firms would have access to the best of the world's technologies and to the expertise that would allow them to put that technology to work. It would offer positive support on production methods and marketing. It should be based in Lanarkshire, complementing the work already carried out at the National Engineering Laboratory in East Kilbride. I finish--
Mr. Oppenheim rose --
Mr. Oppenheim rose --
Mr. Oppenheim rose --
Mr. Dewar : No. I appreciate--
Mr. Oppenheim What a pathetic performance.
Mr. Dewar : I should like to conclude, Mr. Deputy Speaker, because I am conscious of the fact that, although very few Conservative Members will seek to participate in the debate--and certainly very few from Scotland-- many hon. Members have constituency interests and want to participate.
There can be no promises of an overnight transformation. The Government's dereliction of duty has
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contributed to a major crisis. I refer to their failure to challenge British Steel at a time when such a challenge would have had an impact, and to the ravages of a recession that was made, at least in part, in Downing street.We argued for a DTI task force, and found no sign of life. We pushed for an export drive, but got no reaction. We looked for a reference to the Monopolies and Mergers Commission, but got no co-operation. There has been no attempt to force British Steel to honour its guarantees at a time when the market was more optimistic and there was the possibility of new owners.
The Secretary of State will claim that everything possible is being done that could be done, but that is simply not true. Promises and expressions of concern there are in plenty, but what is missing is the commitment and determination to fight unemployment and industrial decline. We have had soothing words from the Secretary of State. Suggestions that unemployment in Lanarkshire is not as bad as it might be add insult to injury. A male unemployment rate of 16 per cent. is no justification for the kind of complacency that we have seen in recent months. There has been one meeting- -after the event--with British Steel in six months.
The charge remains--not that Ministers have failed, but that they have never really tried. Their record of inactivity strips them of all credibility. The Secretary of State can hardly complain if he and his colleagues are not trusted by the people of Lanarkshire and of Scotland. This Government should go, and surely will, whether it be in April or May. There will be no reprieve--and neither should there be.
7.36 pm
The Secretary of State for Scotland (Mr. Ian Lang) : I beg to move, to leave out from "House" to the end of the Question and to add instead thereof :
"commends the Government's response to the announcement by British Steel of its decision to close Ravenscraig ; acknowledges the extensive and effective nature of the measures already being undertaken by the Government as part of its continuing commitment to improve the economy and infrastructure in Lanarkshire, in partnership with Scottish Enterprise, the Lanarkshire Development Agency, and a range of other public and private bodies ; welcomes the Government's commitment of some £120 million since the beginning of March 1991 for economic development and training in Lanarkshire ; and supports the proposal by Her Majesty's Government that an enterprise zone be established in North Lanarkshire."
The kindest thing that could be said about the speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar) is that he must have been fazed and thrown by the extraordinarily good news of the winning of the contract for three frigates by Yarrow in his constituency. What a pity that he did not find it possible even to express his appreciation for that. Instead, he spoke in a wholly sniping, dull and negative way to a motion that is wholly negative. He did a considerable discourtesy to the House in failing to give way to my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown), formerly the Member for Brigg and Scunthorpe, who has direct and close experience of the steel industry. My hon. Friend said that he was surprised by that. Of course he was, because the hon. Member for Dagenham (Mr. Gould) gave a firm commitment to the House--admittedly four years ago,
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which is probably a long time in the life of the Labour party. He said that Opposition Members "strongly believe"--not just "believe"--that"the steel industry is most appropriately owned in a form of public ownership."--[ Official Report, 23 February 1988 ; Vol. 128, c. 184.]
Therefore, when my hon. Friend the Member for Brigg and Cleethorpes read the Opposition's motion, which states :
"That this House calls for the Government to explore with determination every possible means of saving the steel industry in Scotland",
he clearly thought that "every possible means" would include nationalisation. However, it turns out that that phrase not only does not include nationalisation but that nationalisation is "no more than a slogan".
Mr. Michael Brown : My right hon. Friend is absolutely right. He may recall that I served on Standing Committee D in the 1987-88 Session. Having listened on many occasions to the then Opposition Front-Bench spokesman, the hon. Member for Great Grimsby (Mr. Mitchell), as well as to the hon. Member for Dagenham, I can confirm that we heard a commitment to renationalise the steel industry at virtually every Standing Committee sitting. As a member of that Standing Committee, I can confirm that my right hon. Friend is correct.
Mr. Lang : I am most grateful to my hon. Friend and hope that there will be time in the debate for the House to benefit from his experience.
The tone of the Opposition's motion is without doubt
interventionist, dirigiste, and very much in the mould of the old Labour party, calling
"for the Government to explore with determination every possible means of saving the steel industry in Scotland".
Indeed,
"it isn't intervention that the steel industry needs. What the steel industry needs is a more vibrant domestic market, specially in the manufacturing sector and a chance therefore to make even further increases in their productivity and be more competitive in difficult international markets."
The industry does not need
"some civil servant or minister sitting on their shoulder saying to them well, strategically this is what we think you should do". That is what I believe. It is also what the Leader of the Opposition believes. Those were not my words but his words from today's Financial Times. He said :
"it isn't intervention that the steel industry needs some civil servant or Minister sitting on their shoulder saying to them well, strategically this is what we think you should do."
That quotation clearly puts the House in great difficulty. It discredits and disqualifies about 90 per cent. of what the hon. Member for Garscadden just said. But the position becomes more confusing. The interventionist motion tabled today calling "for the Government to explore with determination every possible means of saving the steel industry"
bears the name of the Leader of the Opposition. Yet the article appeared in the Financial Times today with a quotation in inverted commas which gives the directly opposite view. Which is the view of the Leader of the Opposition--let alone that of the Labour party?
Mrs. Maria Fyfe (Glasgow, Maryhill) : Does the Secretary of State realise that this fourth form debating stuff is neither funny nor smart and impresses no one back in Scotland? Will he concentrate on what the Government can do in their dying moments for the steel industry in Scotland and for the people of Motherwell?
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