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Mr. Bates : The whole House will have heard the hon. Gentleman's statement about the Conservatives being in favour of levelling down, implying that the Labour party is in favour of levelling up. Is he suggesting that all people who lose their jobs ought to have a £15, 000 to £20,000 retraining package ?

Mr. Fatchett : I wish that I had not given way to the hon. Gentleman for a second time. It was obviously a mistake, because the second intervention was no better than the first.

The nature of Britain's social history is that the Labour party has tried to improve social conditions and the Conservative party has always tried to level down. The hon. Gentleman's comments about the rights of steelworkers were typical of the history of his party and its current ideological position.

The Government's attitude to ISERBS shows a meanness and a weakness on the Government's part.

Mrs. Helen Jackson : Does my hon. Friend agree that the statement by the Government in the autumn of last year that the ISERBS scheme was no longer useful to steelworkers in the area was nothing short of disgraceful ? Is he aware that no fewer than 4,000 workers--4,000 people--from United Engineering Steels have benefited in the past few years, and that every one of them would endorse the view that the ISERBS scheme has been a major

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benefit to them in their tragic situation ? It is selling our work force short to say that that is no longer useful, when our European competitors are taking steps to extend the scheme for their workers.

Mr. Fatchett : My hon. Friend is correct, and she makes the argument with telling knowledge about her constituency in the Sheffield area.

The key theme that ran through the speeches of all my hon. Friends and of the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) was the extent to which the British steel industry and the communities based on it have endured significant change and pain in the previous decade. Job losses have damaged communities. My hon. Friends spoke about those communities in Scotland, in Wales, in Humberside and in Teesside, where there have been job losses, great change and great social stress as a result.

All my hon. Friends, and the hon. Member for Inverness, Nairn and Lochaber, said that that pain had not been fairly distributed. It is a pain that has come to an industry which has changed, which has improved, which is now a world leader, but it is a pain that has come disproportionately to British steel, and there is, in the jargon, as my hon. Friends have said, no clear level playing field in terms of competition.

That is the crucial argument that the Minister has to answer. All my hon. Friends said that we had been here before. The debate has taken place before ; the issues have been aired in the House and outside before. The British steel industry cazn compete, but it cannot compete against subsidies and unfair competition. What will the Government do to ensure that the agreement that was reached in December, and has been further monitored and discussed subsequently, will be kept and implemented ? That is the crucial question. The words that came through from my hon. Friends were words of scepticism, because they wanted to know exactly what the Government intend to do if there is no delivery in terms of surplus capacity in other countries. My fear is that there will be no change in other countries : as my hon. Friend the Member for Newport, East said, this is not just a debate about the Italian steel industry ; it affects each and every steel industry and steel community in the country. If the Government do not get it right, there will be more job losses, in Sheffield, in Wales and on Humberside, which will be a direct result of the Government failing to protect the British steel industry. My final question to the Minister is as follows. We have little faith in the agreement. We have little faith that it will be implemented and enforced. What we want to know is, what happens if that agreement fails, as other agreements and other words have failed in the past ?

This is an important debate. Opposition Members are saying tonight that the British steel industry is important to our manufacturing base. It is the essence of our wealth production in the future. That is why we take the position that we do. We want our industry, a world leader, to be able to compete fairly and openly with similar industries in other countries. We do not believe that that chance is there, and we believe that it is the responsibility of the Government to ensure that that opportunity is available. So far, the Minister and the Government have simply failed to deliver that level playing field. It is not words we want, but action from the Government.

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8.17 pm

Mr. Sainsbury : The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johston) asked the Opposition to spell out alternatives. I thought that he made a fair argument. He said that his party would not vote against the motion and I wondered why Labour Members were planning to do so. He, I feel, should not have been surprised at the failure of the hon. Member for Leeds, Central (Mr. Fatchett), with two opportunities to do so, to spell out the alternatives. My hon. Friend the Member for Castle Point (Dr. Spink) also noticed that lack of alternative. He probably shared my lack of surprise, however, at the failure of the hon. Member for Leeds, Central to produce an alternative, for the simple reason that he has no alternative. He blustered away, but he has no alternative. Perhaps I am not being fair to the hon. Gentleman. Perhaps there is an alternative that he did not want to tell us about. He made one revealing remark. He said that the Government have not offered their support in the way in which other continental and European Community Governments have. Other Opposition Members made it clear that they were well aware--even if the hon. Member for Leeds, Central was not--of the type of support that some European Community Governments had offered their steel industries. They had offered their steel industries massive subsidies. It was not clear to me whether the hon. Member for Leeds, Central was succumbing once more to that road to ruin.

Mr. Hughes : The Government have been in power for 15 years, and our steel industry suffered badly more than a decade ago. Why have not the Government ensured parity of treatment between our steel industry and others, particularly in Italy ? They have given our steelworkers a smack in the eye by getting rid of ISERBS.

Mr. Sainsbury : I am astonished that the hon. Member for Newport, East (Mr. Hughes) insults our steelworkers by suggesting that they should have parity with Italian steelworkers. The Italian steel industry is the most overmanned, inefficient and uncompetitive in the world. As a result of the Government's policies, our steel industry is as competitive and efficient as any in the world.

Under the last Labour Government, it took more than 13 man hours to produce a tonne of steel, and the steel industry absorbed massive subsidies and lost a great deal of taxpayers' money, whereas under our policies the steel industry requires fewer than five man hours to produce a tonne of steel. In spite of what the hon. Member for Leeds, Central said, our steel industry is the world's fourth largest, and is as efficient as any in the world.

The Opposition have failed to justify opposing the motion. The hon. Member for Newport, East suggested that we should veto the deal. I thought that, like the Liberal Democrats, the Labour party wanted to abandon the veto. That would be very helpful in those circumstances.

Mr. Llew Smith : The Minister asks why we oppose the Government's line on the steel industry. Two examples of recent weeks concern Ebbw Vale and Trostre, which have resulted in a further 350 redundancies. The steelworkers in those communities are arguing that, were the Government willing to stand up for the steel industry as the French stand up for their industries, those 350 redundancies would not be necessary. Also, we are not supporting the Government

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also because they are too mean to give those 350 people, who will now be on the scrap heap, the ISERBS they deserve to relieve their position. They represent and are living in some of the most deprived communities in the United Kingdom.

Mr. Sainsbury : The motion is not about ISERBS and, as far as I can gather from what the hon. Gentleman and some other hon. Members have said, the Opposition want the extension of subsidies not only to encourage overmanning and inefficiency in the steel industry but to provide massive and unhelpful aid.

May I explain to the hon. Member for Sheffield, Hillsborough (Mrs. Jackson) that that aid is unhelpful because it does not help redundant steelworkers to return to employment. The Opposition want to give such unhelpful aid to everybody who loses his or her job. Will the hon. Member for Blaenau Gwent (Mr. Smith) work out what that would add to the burden of public debt ?

Mrs. Helen Jackson : Has the Minister any idea of the difference between subsidies and support for a major manufacturing industry ? I speak of support in terms of research and European grants for environmental technology. The Government have done nothing along those lines to support the key overheads of that core industry. Does the Minister have an answer to that type of support, which other European Governments successfully give their steel industries ?

Mr. Sainsbury : I do have an idea. Those European Governments now realise that they can no longer afford those large subsidies. As a result of pouring subsidies into their industries, they have overmanned and uncompetitive industries, on which they must now cut back. Changing the name from "subsidy" to "support" does not change the nature of the beast. A rose by any other name smells just as sweet, and a subsidy is just as wasteful.

The right hon. and learned Member for Aberavon (Mr. Morris) expressed a welcome to the points agreed at the December council. I thank him for that recognition. It may be another split in the Labour party--another disagreement between those with experience on the Back Benches and those without it on the Front.

The right hon. and learned Gentleman asked about Saarstahl. I find the position there as unsatisfactory as he does. It was made clear not only by me but by other Ministers at the last Industry Council that we did not regard it as acceptable that the German Government should shelter behind their bankruptcy laws effectively to provide subsidies to allow their company to continue in operation when it was losing large sums of money.

The right hon. and learned Gentleman also asked about Klocknerstahl. Our complaint, supported by other Community Governments, about Klocknerstahl is still under investigation by the Commission. Some reports have said that the Commission will allow Klocknerstahl to retain the steel-making capacity which it had earlier demanded be closed as part of the original debt restructuring plan.

When the company first filed for bankruptcy protection, the Commission, in the shape of DG XVIII, was among its creditors. The Commission agreed to restructure the debt in exchange for the definitive closure of one blast furnace and the reduction of 500,000 tonnes of hot strip capacity. A date was not set for the definitive closure, but the company has been held to the production limits.

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Negotiations are now at an advanced stage for another steel company, Sidmar, to participate in the restructuring. The Commission has said that it would accept the reduction of alternative closures if that would help to rationalise the merged companies. But it has insisted that any replacement capacity cuts must be in the same product sectors, and affect plant in current use.

I agree with the hon. Member for Glanford and Scunthorpe (Mr. Morley) who referred to the Italians counting the reduction at Bagnoli as a reduction in current capacity. We should not like to have agreed that. However, in respect of that, as of other matters that were less than satisfactory in the agreement, the alternative to reaching that agreement, which could be brought about by using the veto which Opposition Members want us to abandon, would have been the continuation of those subsidies for a considerable time and no capacity reductions.

Moreover, we would not have obtained the most satisfactory feature of that agreement, which is a monitoring arrangement that is stricter, more rigorous and more capable of being overseen than anything that we have had before.

Mr. Morley : Will the Minister give way ?

Mr. Sainsbury : No, I must complete my speech.

It is a major step forward that the agreement requires a report to the council. There is a good reason for not making the monitoring reports public : they contain a lot of sensitive commercial information. For the first time, however, they will be made available to the Council of Ministers, which also means to my officials, who can scrutinise exactly what is happening.

That has never happened before. It gives us a much better prospect of achieving what we set out to achieve, which is a level playing field for an efficient British steel industry that deserves our support, rather than the criticism that it has received from the Opposition.

Question put :

The House divided : Ayes 295, Noes 212.

Division No. 231] [8.27 pm


Ainsworth, Peter (East Surrey)

Aitken, Jonathan

Alexander, Richard

Alison, Rt Hon Michael (Selby)

Allason, Rupert (Torbay)

Amess, David

Ancram, Michael

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas (Hazel Grv)

Ashby, David

Aspinwall, Jack

Atkins, Robert

Atkinson, David (Bour'mouth E)

Atkinson, Peter (Hexham)

Baker, Rt Hon K. (Mole Valley)

Baker, Nicholas (Dorset North)

Baldry, Tony

Banks, Matthew (Southport)

Banks, Robert (Harrogate)

Bates, Michael

Batiste, Spencer

Beith, Rt Hon A. J.

Bellingham, Henry

Bendall, Vivian

Beresford, Sir Paul

Biffen, Rt Hon John

Blackburn, Dr John G.

Bonsor, Sir Nicholas

Booth, Hartley

Boswell, Tim

Bottomley, Peter (Eltham)

Bottomley, Rt Hon Virginia

Bowden, Andrew

Bowis, John

Boyson, Rt Hon Sir Rhodes

Brandreth, Gyles

Brazier, Julian

Bright, Graham

Brown, M. (Brigg & Cl'thorpes)

Browning, Mrs. Angela

Bruce, Ian (S Dorset)

Budgen, Nicholas

Burns, Simon

Burt, Alistair

Butcher, John

Butler, Peter

Butterfill, John

Campbell, Menzies (Fife NE)

Carlile, Alexander (Montgomry)

Carlisle, John (Luton North)

Carlisle, Kenneth (Lincoln)

Column 96

Carrington, Matthew

Carttiss, Michael

Cash, William

Churchill, Mr

Clappison, James

Clark, Dr Michael (Rochford)

Clarke, Rt Hon Kenneth (Ruclif)

Clifton-Brown, Geoffrey

Coe, Sebastian

Colvin, Michael

Congdon, David

Conway, Derek

Coombs, Anthony (Wyre For'st)

Coombs, Simon (Swindon)

Cope, Rt Hon Sir John

Cormack, Patrick

Couchman, James

Cran, James

Curry, David (Skipton & Ripon)

Davies, Quentin (Stamford)

Davis, David (Boothferry)

Day, Stephen

Deva, Nirj Joseph

Devlin, Tim

Dickens, Geoffrey

Dorrell, Stephen

Douglas-Hamilton, Lord James

Dover, Den

Duncan, Alan

Duncan-Smith, Iain

Dunn, Bob

Durant, Sir Anthony

Eggar, Tim

Elletson, Harold

Evans, David (Welwyn Hatfield)

Evans, Jonathan (Brecon)

Evans, Nigel (Ribble Valley)

Evans, Roger (Monmouth)

Evennett, David

Faber, David

Fabricant, Michael

Fenner, Dame Peggy

Field, Barry (Isle of Wight)

Fishburn, Dudley

Forman, Nigel

Forsyth, Michael (Stirling)

Forth, Eric

Foster, Don (Bath)

Fowler, Rt Hon Sir Norman

Fox, Dr Liam (Woodspring)

Fox, Sir Marcus (Shipley)

Freeman, Rt Hon Roger

French, Douglas

Fry, Sir Peter

Gale, Roger

Gallie, Phil

Gardiner, Sir George

Garel-Jones, Rt Hon Tristan

Garnier, Edward

Gill, Christopher

Gillan, Cheryl

Goodson-Wickes, Dr Charles

Gorman, Mrs Teresa

Gorst, John

Grant, Sir A. (Cambs SW)

Greenway, Harry (Ealing N)

Greenway, John (Ryedale)

Griffiths, Peter (Portsmouth, N)

Hague, William

Hamilton, Rt Hon Sir Archie

Hamilton, Neil (Tatton)

Hampson, Dr Keith

Hanley, Jeremy

Hannam, Sir John

Hargreaves, Andrew

Harvey, Nick

Haselhurst, Alan

Hawkins, Nick

Hayes, Jerry

Heald, Oliver

Hendry, Charles

Higgins, Rt Hon Sir Terence L.

Hill, James (Southampton Test)

Hogg, Rt Hon Douglas (G'tham)

Horam, John

Hordern, Rt Hon Sir Peter

Howarth, Alan (Strat'rd-on-A)

Howell, Rt Hon David (G'dford)

Hunt, Rt Hon David (Wirral W)

Hunt, Sir John (Ravensbourne)

Hunter, Andrew

Jack, Michael

Jackson, Robert (Wantage)

Jenkin, Bernard

Jessel, Toby

Johnson Smith, Sir Geoffrey

Johnston, Sir Russell

Jones, Gwilym (Cardiff N)

Jones, Robert B. (W Hertfdshr)

Key, Robert

King, Rt Hon Tom

Kirkhope, Timothy

Knapman, Roger

Knight, Mrs Angela (Erewash)

Knight, Greg (Derby N)

Knight, Dame Jill (Bir'm E'st'n)

Knox, Sir David

Kynoch, George (Kincardine)

Lait, Mrs Jacqui

Lamont, Rt Hon Norman

Lawrence, Sir Ivan

Legg, Barry

Leigh, Edward

Lennox-Boyd, Mark

Lester, Jim (Broxtowe)

Lidington, David

Lightbown, David

Lilley, Rt Hon Peter

Lloyd, Rt Hon Peter (Fareham)

Lord, Michael

Luff, Peter

Lyell, Rt Hon Sir Nicholas

Lynne, Ms Liz

MacKay, Andrew

Maclean, David

McLoughlin, Patrick

McNair-Wilson, Sir Patrick

Maddock, Mrs Diana

Madel, Sir David

Maitland, Lady Olga

Major, Rt Hon John

Malone, Gerald

Mans, Keith

Marland, Paul

Marlow, Tony

Marshall, John (Hendon S)

Marshall, Sir Michael (Arundel)

Martin, David (Portsmouth S)

Mates, Michael

Mellor, Rt Hon David

Merchant, Piers

Michie, Mrs Ray (Argyll Bute)

Mills, Iain

Mitchell, Andrew (Gedling)

Mitchell, Sir David (Hants NW)

Moate, Sir Roger

Molyneaux, Rt Hon James

Monro, Sir Hector

Montgomery, Sir Fergus

Moss, Malcolm

Needham, Richard

Neubert, Sir Michael

Newton, Rt Hon Tony

Nicholls, Patrick

Nicholson, David (Taunton)

Nicholson, Emma (Devon West)

Norris, Steve

Onslow, Rt Hon Sir Cranley

Ottaway, Richard

Page, Richard

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