Mr. Speaker

Before I call the hon. Member for Chesterfield (Mr. Varley) to move the motion, may I inform the House that I have selected the amendment in the name of the Prime Minister and other right hon. Gentlemen leave out from 'House' to end and add: 'regrets the low rate of steel investment during the Labour administration; welcomes the plans announced by Her Majesty's Government for the British Steel Corporation to invest £3,000 million in modernisation, thus safeguarding the future of 180,000 jobs and enabling the industry to compete prominently in world markets and to contribute to the competitiveness and growth of the rest of British industry; and further welcomes the prompt action proposed by the Government to minimise the social consequences where modernisation results in closure of an existing steel plant'.

4.54 p.m.

Mr. Eric G. Varley (Chesterfield)

I beg to move, That this House, whilst welcoming Her Majesty's Government's abandonment of its intention to impose a ceiling of 28 million tons on the production capacity of the British Steel Corporation, calls for the speedy publication of a White Paper which will allow for investment up to the 43 million tons capacity originally planned by the Corporation, thus allowing scope for careful and detailed reconsideration of any plans to close steelmaking plants; and asserts that, in any event, no closure shall be permitted until guaranteed new employment has been provided in the areas affected. This debate has already been truncated and at one stage I nearly got up on a point of order to suggest that we might hold the steel debate in the Scottish Standing Committee. We would probably have got ahead with it then.

The Opposition have chosen to debate the steel industry for three reasons. The first is that five weeks ago the Secretary of State for Trade and Industry promised a White Paper on steel. He said that he would produce it as soon as possible. That White Paper has not yet appeared and we on this side of the House wish to prostest in the strongest possible terms at the Government's lackadaisical attitude towards providing information on the steel industry which affects thousands of households and many communities. and which is causing great anxiety.

Secondly, now that we have tabled this motion and forced the Government to anounce that the publication of the White Paper will be next month, we intend to make it clear in the debate what we want to see in the White Paper. While we understand why the Secretary of State is absent from the debate we hope that when the White Paper is produced he will come to the House and speak as the Minister responsible for the steel industry. Throughout this period we have not had sufficient information on the steel industry and we hope that the White Paper will give us that information.

Thirdly, we wish to probe the statement made to the House last month by the Secretary of State, a statement which the more it is examined the more it seems to have been designed with the intention of misleading and distorting rather than providing the information which the House has a right to expect.

Again and again, for example, the Secretary of State talked about keeping steel plants open when on present intentions he means to close them. He said: Steelmaking and hot-rolling at Shotton will continue … That meant that Shotton was to be closed because he said that it would be until the end of the decade. Then there was Corby. This is what he said: Steelmaking is likely to continue … That was really Corby's death sentence. Dealing with Consett the right hon. Gentleman said: Consett will operate as a steelmaking concern certainly until late in this decade. That was how he announced the intended closure of Consett.

There was an even worse example of deviousness in what the right hon. Gentleman said about East Moors. He said: The future of East Moors and Brymbo are the subject of continuing discussion between the BSC and GKN. When he uttered those words the Secretary of State knew that the fate of East Moors was sealed and that Lord Melchett would be going down to Cardiff the following week to announce that verdict. If my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) is fortunate enough to catch your eye, Mr. Deputy Speaker, I am sure that the Secretary of State's ears will be singed across the Atlantic.

Even more misleading was the Secretary of State's version of what has happened in Scotland. In Scotland he proclaimed that there was good news which should be greeted with rejoicing. He gave the impression that he was performing the two-card trick. He made no reference to the 7,500 redundancies to be made in steel in Scotland over the next five years. He dressed up as a new announcement the plan announced last June to expand output at Ravenscraig. He then had the nerve to attack my right hon. Friend the Member for Kilmarnock (Mr. Ross) and my hon. Friends from Scotland for the manner in which they had received the statement.

We all know that Scottish Members on this side of the House are politically biased, quite unlike the Government Front Bench. Let us get an impartial opinion from someone whose credentials as Lord High Commissioner for the General Assembly of the Church of Scotland and one of Scotland's best known bankers and financiers would be acceptable to both God and mammon. I refer to Lord Clydesmuir, Chairman of the Scottish Council (Development and Industry).

Lord Clydesmuir has denounced the steel plan for Scotland as a bitter disappointment to the hope of steel and engineering expansion in Scotland. He went on to say that the plan appeared to differ in only two respects from the original BSC plans which were considered disastrous in Scotland and that these two references were so lacking in definition, time-scale and commitment as to have little meaning. That is how the right hon. Gentleman's good news to create rejoicing in Scotland was received.

The Secretary of State had some other good news. He proudly informed the right lion. Member for Orkney and Shetland (Mr. Grimond) that Investment in Scotland is likely to be about £400 million. That is a sizeable amount of money. Unfortunately no one seems to know how it was arrived at. Two weeks ago the Secretary of State for Scotland——

Mr. Gerald Kaufman (Manchester, Ardwick)

Where is he?

Mr. Varley

I do not know. Two weeks ago the right hon. Gentleman met the Scottish Trades Union Congress which asked him how the £400 million would be spent. He added it up as best he could. He talked about Ravenscraig, Hallside and the Hunterston ore terminal and the pelletisation plant and that was as far as he got.

The trouble was that the right hon. Gentleman could only add it up to £200 million, leaving another £200 million completely unaccounted for. Naturally the Scottish TUC was dissatisfied, but not as dissatisfied as the Secretary of State for Scotland. He was most upset, not because he did not have the answer, which he did not, but because the Scottish TUC had had the cheek even to ask him the question. He protested, according to the Scotsman: I think it is unfair for the Scottish TUC to complain that they did not have sufficient clarification of the figure. I do not have this detailed technical information I certainly hope that the Secretary of State for Scotland now has the information that he failed to provide in Edinburgh two weeks ago. We insist on having it from the Government Front Bench today. Otherwise we can only conclude that the £400 million announced by the Secretary of State for Trade and Industry was a bogus figure.

In Scotland and Wales, in Shelton and Irlam and other parts of Britain, tens of thousands of workers spent Christmas and New Year in fearful ignorance of what was to become of them. That is why after the camouflage we demand the facts. First we want the facts about the jobs to be lost. The Secretary of State slipped into his statement the forecast that 30,000 jobs would be lost by the end of the decade. Speaking from this Dispatch Box I pointed out that the number of redundancies was 50,000. I was wrong. I grossly under-estimated the position. The following day the BSC admitted that the number of jobs to be lost would be 75,000, counter-balanced by the hope of creating an additional 25,000 jobs in the steel industry.

But the situation is even worse. The Secretary of State's statement, as we have seen, did not include the 4,600 jobs due to be lost at East Moors. Nor did he include yet another 2,500 steel jobs which Lord Melchett has frankly confessed are to be wiped out in Wales alone in addition to those already announced.

First we need to know the true figures envisaged for total redundancies and jobs lost and for the new jobs to be created in the steel industry. We want the facts. We want the facts about another statistic with which the Secretary of State made free. He boasted in his statement that The investment required by the programme will sustain and create a large number of jobs, possibly as many as 75.000."—[OFFICIAL REPORT, 21st December, 1972; Vol. 848, c. 1576–89.] What does he mean by that, if anything at all? In this context, talk of sustaining jobs is double talk for workers who are at work now and going on working. What kind of credit do the Government expect to be given for their bounty in refraining from deliberately casting men on to the dole queues?

The Secretary of State gave as his figure "possibly … 75,000". How did he arrive at that figure? What did he mean by it? How many of those "possibly 75,000" jobs will be sustained and how many actually created? How many new jobs? What branches of the electrical, mechanical and civil engineering industries will be involved? In what areas of the country will the jobs be located? The Government must have this information. Officials of the Department must have compiled it to provide the Secretary of State with that figure. If the Minister for Industry or the Minister for Industrial Development does not supply that information today we shall come to the only possible conclusion, namely that this figure of 75,000 is completely phoney and was cooked up to bamboozle the House.

We also want to know something about the other side of the coin, the jobs outside the steel industry which will be lost as a result of steel closures. When the closure of East Moors was announced last month, the Town Clerk of Cardiff, Mr. Lloyd Jones, made an assessment that thousands of jobs would be lost in Cardiff in addition to the 4,600 at East Moors. Mr. Lloyd Jones has sent to me, to my right hon. Friend the Member for Cardiff, South-East, the Minister and other hon. Members a document containing an official estimate that the total number of jobs lost may approach 10,000. The document refers to the inevitable reduction of employment in Cardiff in the docks and among sub-contractors and local suppliers. Several thousand jobs will be lost in direct local suppliers to the East Moors works. The town clerk also mentioned the decline in employment amongst the milkmen, corner stores, garage attendants and so on who serve steelworkers in a private capacity.

That is not just Cardiff painting a black picture to get favourable treatment. The same story is told by Mr. Ian Kelsall, the Secretary of the Welsh Confederation of British Industry. In speaking of the consequence of redundancies at East Moors, Ebbw Vale and Shotton, Mr. Kelsall said that these decisions—and I quote from The Times of the 15th January: will have serious consequences for many companies who service, supply and are contractors to the steel industry, both in the public and private sectors, and for the economy of these areas generally. On Monday of this week The Times—referring to the redundancies in Wales alone—said that these redundancies: can at least be doubled when the effect on dependent industries, trades and services is taken into account. Even the Financial Times of Tuesday had something similar to say. The Minister cannot deny this evidence. It does not apply only to Wales. Scotland will be hit, as will be Irlam, Shelton, Corby, Consett, Stanton and Staveley and all the rest. These are jobs which, to use the Secretary of State's words, are sustained and created by steelworks now under sentence of death. How many will there be and what are the Government doing about it?

Contrary to the impression which the Secretary of State attempted to foist on the House, the greatest impact of the rundown in steel will be in the years immediately ahead. On 22nd December the BSC made clear that the rundown in its total number of employees would be fastest in the first five years of the 10-year plan. At East Moors 4,600 are planned to go in the next three years, and the new jobs will come in the latter part of the 10-year period and will not cushion the impact in the first part of the period.

That brings me to the mystery of the mobile mini-mills. Whenever an hon. Member asks him about the fate of any doomed area, the Secretary of State for Trade and Industry puts in his thumb and pulls out a mini-mill. When the hon. Member for Manchester, Withington (Sir R. Cary) asked what was to become of Irlam, the Secretary of State replied: Irlam is a possible candidate for a mini-mill in the future."— When my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) asked about Shelton, back came the Secretary of State, quick as a flash: Shelton is … a possible site for a minimill."—[OFFICIAL REPORT, 21st December 1972; Vol. 848, c. 1581, 1594.] We are told, too, that Bilston is on the mini-mill list. The Government have deliberately created the impression that before long, wherever one goes in England, Scotland and Wales, it will be difficult to avoid stumbling over a gleaming new mini-mill.

The Minister for Industry gave the game away on Monday of this week at Question Time. When he was asked about mini-mills by the hon. Member for Withington, who wants one for Irlam, he admitted that there were to be only two mini-mills in the whole of Britain. One is already allocated to Scotland. So the question is, who gets the other mini-mill? Will it be Shelton, Irlam or Bilston, or will none of those three get it? Will it go to East Moors where Lord Melchett was reported as faithfully promising to build one if GKN decided not to? The communities in these areas have the right to know.

The next subject on which we require information is the creation of new jobs. In his statement the Secretary of State spoke about working closely with the BSC and the trade unions concerned so as to minimise the social consequences. When Lord Melchett went to Shotton two weeks ago he spoke of the BSC as a catalyst in the creation of new job opportunities and he said to the workers of Shotton: We could even engage in joint ventures. There are quite a lot of things we would be prepared to do. On 10th January the Financial Times industrial correspondent speculated that approaches might be made by BSC to some of its major customers for coated steel, such as refrigerator producers, and went on to say: Too great an involvement by the nationalised BSC would almost certainly run into opposition within the Government and private sector industry. The industrial correspondent was saying that the Government would have objections to BSC participation in the way he described and in the way that Lord Melchett has said that BSC is prepared to help.

I say on behalf of the workers of Shotton—for whom my hon. Friend the Member for Flint, East (Mr. Barry Jones) has fought so untiringly—and on behalf of all steelworkers facing redundancies that the Government will never be forgiven if, out of dogmatic spite or dogmatic objections, they stand in the way of diversification by the BSC. For the Government to stand in the way of creating new jobs in the stricken areas would be very damaging and I hope they will not do so. We want to see the Government not advocating hiving-off but permitting and encouraging hiving-on.

Yesterday the TUC met to consider what help it could give in this problem. The TUC has suggested that a committee should be set up to include the Minister for Industry, Lord Melchett and Mr. Victor Feather. When the idea was mooted a couple of weeks ago BSC immediately welcomed the proposal, but the Government have remained silent on it. We want to hear today that the Government accept the proposal and that they will get moving immediately on the TUCs suggestions.

Again, we want information about the task forces which the Government are setting up. I do not share the cynicism of The Times this week which described the task forces as "window-dressing" and a "good public relations ploy". I want to know exactly what the task forces will do, their terms of reference and what powers they will have, if any. We want to hear about specific projects, a specific time-scale and specific areas.

We want more information about advance factories. As the Minister who three years ago announced the last advance factory programme and who in opposition has persistently and vainly pressed for a new advance factory programme, I am delighted with the Government's sudden infatuation for advance factories as a means of dealing with unemployment. But the programme announced by the Government a few days ago has curious gaps. The whole of the North West gets only 55,000 out of 950,000 sq. ft. Irlam, which faces a dismaying future, has to be content with one building which a local newspaper described as hardly more than a large shed". When my hon. Friend the Member for Flint, East on 21st December asked the Secretary of State what hope he could give to Shotton, the right hon. Gentleman promised to use every available method, including advance factories. Yet the Minister for Industrial Development excluded Shotton from his list of advanced factories, airily dismissing its claims by saying that it could be examined for a future programme. That was reported in The Times.

Another aspect of regional policy on which we need information is the designation of assisted areas. We know that the delay in announcing a mini-mill at East Moors is due to GKN's reluctance to construct such a plant in Cardiff because Cardiff is an intermediate area and therefore ineligible for the investment grants which are now, happily, restored to us. Will Cardiff, which will be hard hit by the BSC plans, be designated as a full development area? I understand that Cardiff Corporation has made a formal request which the Secretary of State has promised to consider. Will Irlam, also an intermediate area, obtain development area status? Will Shotton, now an intermediate area, become a development area?

We want a full statement about how assisted area policy will help the communities which will suffer so drastically from the Tory Government's long drawn-out vendetta against the BSC. That is the real root of the trouble and the origin of the situation which the steel industry and the steelworkers face. The redundancies of today, tomorrow and the next day, and the Government's unpreparedness are a direct outcome of two-and-ahalf years of humiliation and harassment.

First there was the constitutional monstrosity of the joint steering group, and the meddling of McKinseys, the American external consultants, paid by the Government to sit in judgment on the BSC. Then on 21st December the Secretary of State portrayed the situation in such a way that one would never think any of this had happened, that there had never been a joint steering group, that McKinseys had never reported and that there had been no report from the Select Committee. There has not yet been such a report because the Government did not set up the Select Committee until two weeks before Christmas.

The Government boast of a £3,000 million investment programme. One would never guess that the BSC originally planned for a programme costing £4,000 million at 1970 prices. The Government claim credit for a cut of at least 25 per cent.

The Government's record is equally discreditable when we consider the BSC's capacity target. The right hon. Member for Knutsford (Mr. John Davies) told the House on 18th March 1971 that Lord Melchett's target was 35 million tons by 1975 and 43 million tons by 1980. As recently as 9th November Mr. K. W. Atchley, representing the Scottish Confederation of British Industry, told the Minister for Industry at a meeting in the Department of Trade and Industry that 44 million tons was the right capacity, yet on Monday the Secretary of State claimed that the corporation could—that was his word, not "will"—achieve 33 million tons by 1980. If that target is reached—and there is no guarantee it will be—the corporation in 1980 will be 2 million tons short of its 1975 objective.

We must compare that notional 33 million tons with the 36 million tons which, as recently as last week, the Secretary of the British Steel Corporation was still proclaiming as the revised target. But more of the truth can be discerned through the Government's spokesmen. The Secretary of State claimed that the corporation was producing 38 million tons "through the 1980s". That is the right hon. Gentleman's "double talk" for 1990. Again, on his own admission, the corporation in 1990 will be 5 million tons short of its 1980 objective. Scraping together every scrap of steel production he could find, the Secretary of State for Trade and Industry expressed the hope that including the private sector British steel production at the end of the 1980s "ought to reach"—again we admire his fastidious use of words—42 million tons. Therefore in 1990 there is the vague hope that the whole British steel industry may produce what the BSC alone hoped to produce by 1980. Let us make no mistake that this so-called strategy is a straitjacket fastened on to the BSC by the Government.

In Shotton two weeks ago Lord Melchett told union representatives that it was a Cabinet decision, a political decision. Yet what is the national need for steel? It has been estimated that on the basis of a 3½ per cent. national economic growth rate the corporation would need to produce an annual output of 31 million tons by 1980. But we are now told that the Government are planning for a 5 per cent. growth rate and are asking trade unionists to accept their prices and incomes policy on the basis of a continuing growth rate of 5 per cent. The Chancellor of the Exchequer claimed on Tuesday that the Government were on target for a 5 per cent. growth rate, yet many experts in the steel industry calculate that for every ½ per cent. increase in economic growth an extra 3 million to 3½ million tons of steel-making capacity is needed. This means that for a continuing 5 per cent. growth rate we shall need a steel capacity of around 41 million tons by 1980. Yet what the Government offer is the likelihood of 33 million tons.

On this basis home production could not begin to satisfy home demand. This leaves exports out of account altogether. Even in 1971 the corporation exported 4.7 million tons and its plan for 1980 budgeted for 9 million tons of exports. It is obvious that in the national interest we should place the maximum emphasis on the encouragement of exports. Yet the programme so vaingloriously trumpeted by the Secretary of State would mean, not expanding exports, but importing steel on a huge scale. It is calculated that 1 million tons of steel imports adds £90 million to the country's trade deficit. We know that the Chancellor of the Exchequer has converted the balance of payments surplus which he inherited from the Labour Government to a deficit for 1972 and that there are now forecasts that a monumental deficit is likely to pile up this year.

Will the Department, which has direct responsibility for overseas trade, add to that deficit by forcing on the steel industry a policy which inevitably will involve heavy steel imports? The Government must think again and must accept the principle behind our motion.

One by one the steel-making areas have put forward constructive alternative suggestions for their future. The Government must give an assurance before coming to any firm, final decision that they will give full and genuine consideration to all these alternatives, bearing in mind that in many cases the decisions which will have to be taken will be life or death decisions for the communities concerned.

As so often with the present Government, a decision announced with trumpets blaring, in an atmosphere of bogus euphoria, looks very different when examined in the clear light of day. The future of the steel industry, the steelmaking communities and the thousands of families who live in them is more important than the pride of any Government, especially that of the present Government. We demand justice for the steel industry and the steelworkers. It is in that spirit that I commend the motion to the House.

5.27 p.m.

The Minister for Industry (Mr. Tom Boardman)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'regrets the low rate of steel investment during the Labour administration; welcomes the plans announced by Her Majesty's Government for the British Steel Corporation to invest £3,000 million in modernisation, thus safeguarding the future of 180,000 jobs and enabling the industry to compete prominently in world markets and to contribute to the competitiveness and growth of the rest of British industry; and further welcomes the prompt action proposed by the Government to minimise the social consequences where modernisation results in closure of an existing steel plant'. The hon. Member for Chesterfield (Mr. Varley) opened this debate on what is perhaps one of the boldest and most exciting decisions of this decade with a crabbing, distorted, misleading speech. I recognise his problems for he has behind him many hon. Members who, for understandable reasons, wish to keep open small works in their constituencies. Keeping them open cannot be consistent with the policy which other hon. Gentlemen on the Opposition side wish to see, namely, a grand strategy for consumption and production of steel far in excess of that which has been justified by any predictions so far made. The hon. Gentleman went too far.

The hon. Gentleman repeated the allegation of a vendetta between the Government and the British Steel Corporation, an allegation for which he knows there is no foundation. Although there has been a free exchange of views, there has been on both sides the will to co-operate in every possible way to achieve a strong and virile industry in the interests of those who are engaged in it and the country as a whole.

The hon. Gentleman misquoted and selected figures given by my right hon. Friend the Secretary of State for Trade and Industry. I will not respond to those now. I will give one or two examples of matters to which the hon. Gentleman referred. He referred to East Moors and alleged that my right hon. Friend misled the House and that the figures for East Moors were not included in my right hon. Friend's figures. The hon. Gentleman is incorrect. The figure for East Moors was included in the figures given to the House by my right hon. Friend. I could go on to deal with practically every one of the quotations or partial quotations given by the hon. Gentleman and correct him in that way.

The hon. Gentleman referred to the travelling mini-mill as though my right hon. Friend had suggested that there were to be a number of mini-mills. It was quite clear that my right hon. Friend said that there would be one mini-mill in Scotland and one other elsewhere for which there were a number of possible sites. This matter was made perfectly clear. If the hon. Gentleman did not know that, he cannot have been studying this subject on which he is the spokesman for the Opposition. It does less than justice to him, but if he has not managed to accept that basic fact it is time he did so.

The hon. Member also referred to some apparent disparity between the rate of job rundown and that which was given in reply to a parliamentary Question last Monday. In that reply I made it clear that the rate of rundown in the next two years was estimated to be less than 10,000 people. I also made it clear, as it has been made clear throughout, that we were talking of a net loss of job opportunities over the period of this strategy—in other words over the next 10 years—of 50,000 people.

However, much of the time for this debate has been taken up by other matters so I will not detain the House by responding to the variety of matters put to me by the hon. Gentleman. I hope to cover some of them in my later remarks.

The Gentleman referred to the White Paper and to the fact that he had forced the Government to announce that there would be a White Paper. Again he did less than justice to my right hon. Friend. In his statement my right hon. Friend announced that there would be a White Paper. He also announced that it would be published as soon as possible and, in response to a letter to my right hon. Friend, I replied to the hon. Gentleman and told him that we did not expect the White Paper to be published before the end of January. Right hon. and hon. Gentlemen opposite are perfectly entitled to ask for the debate today, before the White Paper is published. However, they have done so in the knowledge that the White Paper would not have been published, so it is not for them to complain that the information that will be in the White Paper is not available in time for this debate.

I now move to the strategy itself, because I believe that the House is more concerned with the general strategy, the considerations which have gone to build it up and the consequences of it than with exchanging profitless figures across the Floor of the House. In any event, I do not think that the hon. Member for Chesterfield will find that his figures are justified.

The strategy that we have announced for the British Steel Corporation's longterm investment is a hold decision to invest very large resources in building a modern industry able to hold its own in the world. It will bring great economic benefits to many areas of the country. The hon. Member for Chesterfield referred to the establishments at Shotton and Cardiff. He did not refer to the great benefit which will come to places like Port Talbot and Llanwern. He preferred to look purely at the negative aspects.

I recognise that to men at the works faced with partial or total closure this will come as a bitter blow. The industry has a tremendous tradition of skills and teamwork, and loyalties have been built up over a long history. It is not all that long ago that these steelworks were in separate companies each of which gave rise to its own loyalties. The belief of the men in each of those works in the strength and potential of their works is impressive and I appreciate their feelings when an apparently remote decision is taken that a business founded on their skills has no long-term future.

Mr. Eric S. Heffer (Liverpool, Walton)

Does not the hon. Gentleman agree that this is not only a matter of the workers at Shotton? One has to consider the effect that the partial closure of Shotton will have on Deeside, which in the future looks like becoming almost another Jarrow. It will also affect Merseyside and the North West as a whole. The effect of the closure will be dramatic in the area. As a result of the Government's policies, there are already 50,000 men unemployed in Liverpool. That is what we are concerned about, and we want some answers.

Mr. Boardman

I recognise what the hon. Gentleman says about the multiplier effect of job loss. In turn he will recognise the multiplier effect of secure jobs and jobs gained and the security which will come with the growth policy pursued by this Government and with a strong and healthy steel industry, none of which could be achieved if we allowed the industry to run down in the way in which it was running down when the Labour party was in office.

It is because of the consequences of plant closures and because the Government recognises the effect of these on communities that we pondered anxiously upon the strategy proposed by the British Steel Corporation. We wanted to be satisfied that it was the right course not only to create an efficient and profitable industry but also to provide the highest possible level of employment. An immense amount of work has been done by the Government and the corporation in their studies. We are confident that everything has been done to ensure that the decision is the right one.

The need for rationalisation and the human problems resulting from it and from the structural and technological changes are matters which have been recognised by successive Governments. They were recognised in the 1965 White Paper and they were very much to the fore in the 1966 Benson Report to the Iron and Steel Federation which predicted a reduction in manpower of 100,000 by 1975 from the then industry total of 317,000. I am sure that I do not have to remind the House of the words used by the right hon. Member for Barnsley (Mr. Mason) when he was Minister of Power predicting the need to close down the smaller works and the need for large integrated works with the social consequences which inevitably that would bring about. It was the right hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths), with a great knowledge of the steel industry, who echoed those thoughts in a speech which he made in December with a realistic recognition of the problems and acknowledged at the same time that they were problems which had to be faced and about which decisions had to be made. It is in accordance with that philosophy that the Government have made these decisions.

Without taking up too much time in jogging back into history, I must recall that when the Labour Party was in office it faced this problem and recognised the need for large integrated works and what would happen if the small works were kept. What did right hon. and hon. Gentlemen opposite do? In the words of the Leader of the Opposition recently in another context, Labour acted. Labour acted, but in this way. It kept the industry in suspense for many years about its future. It nationalised it. Finally it tried to starve the industry. Let me give some illustrations—

Mr. James Callaghan (Cardiff, South-East)

We did not put 4,000 men out of work.

Mr. Boardman

None of us likes the fact that 4,000 men may be put out of work. But we want an industry which will provide secure employment for the future, albeit for a reduced number. If that policy had been pursued when right hon. and hon. Gentlemen opposite were in government we might not be faced with the severe problems that we have today.

In 1965 the United Kingdom had the same proportion of basic oxygen steelmaking plants as there were in Germany and the United States. By 1970 the United States and Germany's proportion was twice as great as ours. That is one measure of the decline which occurred during that period. In the four years prior to 1964, at 1972 prices, the United Kingdom steel industry invested an average of about £280 million per annum. In the period from 1964 to 1970, that investment had dropped to about £130 million per annum—under half. That was how Labour acted, and that was where many of the problems that we are now having to tackle arose.

Mr. John Morris (Aberavon)

How much of that investment was at Llanwern and at Ravenscraig in Scotland, because private industry failed miserably to put up the necessary capital?

Mr. Boardman

The right hon. Gentleman will not expect me to be able to give him the figures, I am sure. The total investment made during those periods was at a pitiful level compared with the periods before and since the present Government came to office.

Mr. Frederick Lee (Newton)

Surely it is logical that the capital cannot be spent until the British Steel Corporation has decided where to spend it. In other words, the capital expenditure would depend on the plans that were being made during that period. Is it to be spent first and afterwards decided where it should go?

Mr. Boardman

I recognise the right hon. Gentleman's point, but his right hon. Friends did not take it in the same way. Apparently any time-lags regarding decision-making whilst we are in office are alleged to be on the part of the Government. It is a matter of having a proper understanding of planning and strategy between the Government and the British Steel Corporation. That was what we set out to do, and for that reason we established the joint steering group to have a full exchange of views on proper planning, in the meantime going ahead with a high level of investment. We are now going ahead with a level of investment which, over the next 10 years, will average £300 million a year. This is a measure of the difference between the approach which has come during the time of the present Government in contrast to what happened before.

I now turn to the rationale of the strategy that was adopted. Hon. Members who have particular interests will wish to know the motivation, the causes and the philosophy that was applied in coming to the decision arived at by the British Steel Corporation and which influenced the Government in endorsing that decision.

A number of different considerations had to be weighed and balanced in deciding the strategy. A growing national output means a growing demand for steel, though not at the same rate. Many hon. Members know that steel intensity declines with increasing national incomes. If the industries using steel are to grow successfully against world competition they must have steel at competitive prices and increasingly they must have steel of better quality and to more exacting standards. Steel users will be looking to the British steel industry to match these requirements. The industry must either be expanded and modernised to produce steel in the quantities required with competitive costs and quality standards or users will look to other countries, including producers in the rest of the European Community, and we shall be faced with growing imports and a declining steel industry.

Secondly we have throughout been acutely conscious of employment considerations. Any conceivable strategy must mean a large reduction in the British Steel Corporation's employment. There is no other way. By the standards of its world competitors the corporation is severely handicapped with too many small and obsolete steel works. Many existing plants have no commercial future and there is no way in which they could be kept alive. Modernisation, however much we may regret it, means fewer jobs. But without it all the jobs in the industry would ultimately be at risk because it could not stand up to competition. Therefore, whilst modernisation means fewer jobs, it means more secure jobs.

Thirdly the projected investment in steel, which at 1972 prices will average £300 million a year over the next decade, represents a massive call on national resources. It would not be in the national interest to put resources on this scale into the industry if the return was unlikely to match that expected if the resources were used in other ways.

The British Steel Corporation has been set the objective of earning an average return of 8 per cent. on its net assets, after depreciation and before interest, over the next four years. At least as high a return will be expected subsequently. Moreover, under the rules of the European Coal and Steel Community, the corporation cannot expect Government subsidies to take care of trading losses.

Mr. Anthony Wedgwood Benn (Bristol, South-East)

In view of what the hon. Gentleman said about the European Communities, may I point out that the Government are taking powers in the Counter-Inflation Bill on matters relating to prices which take precedence over the European Communities Act? Will the hon. Gentleman confirm, now that we have had a chance of studying the Bill, that though Ministers may choose to go along with what is done in the Common Market, there is no statutory obligation whatever for him to be guided by Community decisions in view of the provisions in the Counter-Inflation Bill?

Mr. Boardman

What is made clear and has been stated clearly in this House is that the British Steel Corporation will be free on its pricing after the standstill.

Mr. Benn

This is an important point. Clause 8 of the Counter-Inflation Bill gives the Minister power to make an order on any matter relating to prices, even though it involves the amendment of any Act passed up to that time, including the European Communities Act or orders made under it. May I ask the hon. Gentleman to tell the House candidly whether it is the judgment of Ministers that they retain the power to control BSC prices even though they may not choose to do so?

Mr. Boardman

I have no intention of being drawn into a debate, no matter how attractive, on the Community. The right hon. Gentleman will see in the White Paper, which sets out the Government's intention, that phase 2 will not apply where it would be contrary to international arrangements that have been made.

The return on the investment for the BSC was not decisive. Though social and employment questions are primarily for the Government, the corporation also paid full regard to them in its planning. I believe that the right hon. Member for Cardiff, South-East (Mr. Callaghan) will acknowledge that the corporation has throughout shown a real sense of responsibility in dealing with problems of redundancy and so on during its history.

Mr. Callaghan

I agree with what the Minister is saying, but may we have an answer to the question about the Government's policy relating to the British Steel Corporation's desire to enter into joint ventures in the areas concerned? Is there any likelihood that the Government will prevent it from doing so or will hold it back? If so, that would be a monstrous act of policy.

Mr. Boardman

I think the right hon. Gentleman will accept that the corporation has a massive task ahead in building up a successful and modern steel industry and that it should concentrate its resources of management and so on on this prime objective. Clearly any joint ventures which are put forward will be complementary to the activities of the corporation and would certainly assist in relieving problems in areas which the Government and I certainly would wish to look at with sympathy.

Mr. Callaghan

I am obliged to the hon. Gentleman. That is a partial answer. But why must they be complementary to the existing activities of the corporation? Surely that is purely ideological. If they can help to supply some of the capital and technology, and others are willing to put in their share, why should the Government deny them the right to do so? I hope that the Minister will withdraw the last part of his answer.

Mr. Boardman

I will certainly reaffirm that it is right, in the massive task facing the corporation, that its capital resources and management should be devoted to its prime objective. The Government accept that they have a real responsibility, about which my right hon. Friend will say more later, in dealing with particular problems. I do not close my mind, nor will my right hon. Friend, to joint venture projects, particularly if they have a complementary connection with the corporation's main-line activities.

Mr. Callaghan

It is not ruled out?

Mr. Boardman

I believe the effort should be concentrated. The cobbler should keep primarily to his last. It is put forward for that purpose.

The Government also had to consider the implications for foreign trade. I am taking the House through the points which I believe it would wish to know leading to the decision that was taken. The British Steel Corporation is a major net exporter, and obviously the effect on the balance of trade is important. The decision on the BSC's total capacity rests on a complex analysis. The corporation is not a monopoly supplier. It makes about 90 per cent. of crude steel but only 70 per cent. or less of finished steel products.

There is a vigorous private sector of the industry. It is a sector which we wish to welcome and encourage. It has had to put up with many difficulties in the past and it must not be neglected in future. That sector and imported steel account for a share of the market which would grow if our steel products were not competitive. Imports would grow and take away the benefits which we believe should belong to our steel industry.

The corportion is a major exporter, the effect that reorganisation will have upon its efficiency and its ability to compete abroad will be material in its future costings and prices, and in the exports that it achieves and the corporation's approach to these matters.

The corporation was satisfied that the market prospects were good enough to justify a major investment, although there must be greater uncertainty when look-ink ahead 10 years or more. The corporation evaluated a variety of capacity options and different plant patterns within the total capacity range of 28 million to 36 million tons which was announced on 8th May. It used a computer model and various sophisticated techniques to reach a conclusion. It concluded that a high level of investment leading to capacity towards the top of the range was likely to yield the best return.

However, there was concern about the inevitable uncertainty in the market prospect and the resulting risk. Therefore it rightly refused to be committed to achieving precise capacities in particular areas. Instead it recommended a flexible strategy whilst retaining the possibility of varying the times both of the closures and new developments in the light of market development.

It has been suggested that the corporation or the Government should fix themselves on a given quantity of production and a given capacity at a given date. That is unrealistic. In the opinion of the corporation—this is an opinion which is endorsed by the Government—it is essential that there should be flexibility in the plan. That indeed is what has been built into the plan.

Sir Robert Cary (Manchester, Withington)

Does the expenditure of £28 million include the establishment of the two mini-mills, one of which is to go to Scotland?

Mr. Boardman

I am sorry if I misled my hon. Friend. The 28 million is the capacity of crude steel. That was the bottom end of the bracket. The bracket of 28 million to 36 million tons was fixed by the joint steering group. The corporation agreed and within that bracket it planned its strategy and came out with the strategy. That includes the Heritage works which we have been talking about and the mini-mills.

Mr. Varley

The hon. Gentleman gives the impression that the corporation was quite happy with the joint steering group's flexible arrangement. Is the hon. Gentleman denying that his right hon. Friend the former Secretary of State for Trade and Industry, said on the 18th March 1971 that the British Steel Corporation wanted 43 million tons by 1980?

Mr. Boardman

I do not want to detain the House by going over that argument again. It has taken place before. The joint steering group, of which the corporation was a party, agreed upon a bracket of between 28 million and 36 million tons. It is clear from the statement which I made on 8th May that the British Steel Corporation veers towards the top end of that bracket. That has been and that is its opinion. It is within that bracket that it worked. There has been no pressure by the Government to bring that down from a higher figure.

Mr. Kaufman

The hon. Gentleman must be joking.

Mr. Boardman

The size of the investment and the size of the capacity must be assessed against the risk that must be run. If a large-scale modern steel plant runs below capacity there are heavy penalties. A premature commitment to a capacity in excess of the growth of profitable sales opportunities could result not only in unprofitable working and low return on the investment but also the risk of additional closures and loss of jobs. Consequently, to aim too high or to decide upon a fixed target of capacity to be achieved by a particular date irrespective of markets would be foolhardy.

In the face of such risks, if return on investment were the sole criterion there would be a case for a cautious course aiming at only a modest expansion of capacity. That would bring the best return in the event of market conditions being unfavourable. The Government had to weigh the other factors which I have mentioned and in particular to support the economic growth and the aim of providing the highest level of secure employment in the industry. A low investment course would offer less scope for modernisation and leave no room for having a new works of modern design. Neither would it obtain the lowest possible operating costs or provide as good a base for subsequent expansion as a higher course.

A difficult balance had to be struck. On the one hand excess capacity could endanger employment. On the other hand a cautious approach would produce an industry less competitive in cost and quality and so also endanger employment in the long term. The decision that has been made in the strategy announced by the Government is, we believe, the correct balance. It is essential that a course be taken to give opportunity for modernisation and for seizing profitable trade opportunities, as recommended by the corporation. That was best for the nation, the industry and those employed in it, provided that the uncertainty about the future was recognised and the plans were kept flexible.

Within the agreed strategy decisions will be taken in the light of developments over the decade, including market trends and the changing efficiency of individual works. The right timing will be important both for major developments and for closures. I stress once more that the timing both of closures and of starting new projects must be kept flexible. Decisions upon these matters will be primarily for the corporation. The pattern for the decision on total capacity has some effect on the numbers employed, but the pattern of the plants which will be most immediately affected are those largely dictated by technology.

It is because of the implication of other places traditionally dependent on the industry, such as Shotton, and Ebbw Vale, that the Government considered most carefully the possibility of redeveloping steelmaking and aiming at the same total capacity with less concentration. We were convinced that it would not be in the best interests of the industry or those employed in it. It would mean forgoing scale economies and the full advantages of large modern plant. Costs would be increased and the corporation would be less able to stand up to competition. Employment at large in the industry would be at risk. The Government judged it right to face and to tackle the problems caused by closures for the sake of building an industry capable of achieving long-term prosperity and so providing secure employment.

Mr. Michael Foot (Ebbw Vale) rose——

Mr. John M. Temple (City of Chester)

My hon. Friend has so far been dealing with steel production. Can he say something about the capacity which he envisages for the rolling side and the finishing side? It is those aspects of the steel industry which are so important in Shotton and various other parts where steelmaking will be closed down.

Mr. Boardman

Under the strategy finishing plants will be retained at a number of centres where steelmaking is to close, including Ebbw Vale, Shotton and Glengarnock. There is no reason why finishing work should not have a viable long-term future. There are not the same economies of scale in concentrated finishing works that apply in bulk steelmaking.

Mr. Foot

In preparation for the rest of the debate, perhaps the hon. Gentleman will answer this question, which relates particularly to Ebbw Vale although it applies to other places. The hon. Gentleman has talked about the absolute need for flexibility. He has said that the Government have particularly examined proposals for Ebbw Vale. Will he make it clear that the Government are in no way bound by the proposals for the dates of closures that have been made at Ebbw Vale, Shotton and other places.

Mr. Boardman

The decision to close Ebbw Vale, or at any rate to reduce it, was made a long time ago. The final announcement was made in November when the Chairman of the BSC went down to Ebbw Vale, before any decision had been made on the strategy or was known. Therefore, it is quite independent of the strategy.

Mr. Foot

What the Minister has said about Ebbw Vale is in flagrant contradiction of what was said by the Secretary of State for Trade and Industry when he came to Ebbw Vale last week. He told us quite clearly that any proposals about Ebbw Vale were in exactly the same category as the other matters and that they would all be governed by and taken into account in the statement which would be made in the White Paper. I therefore ask the Minister to consult more clearly about this, when he will discover that he is in flagrant contradiction of what his Minister said.

Mr. Boardman

If the hon. Gentleman will read what I have said, he will find that I said the decision to close the bulk steelmaking plant at Ebbw Vale was made in 1970, when the Labour Party was in power. The announcement about the job loss of 4,500 by the chairman of the corporation in Ebbw Vale in November was made before there had been any decision with regard to the strategy. I think the hon. Member will find that that is consistent with what has been said throughout.

With a decision on the strategy, the British Steel Corporation now has a clear path before it. It can concentrate on making a success of building future prosperity. I recognise that of course it has to put an end to the uncertainty for not everyone in the industry and that, understandably, those in each works want to know precisely what the future holds for them.

This was not always possible, and the White Paper will not be able to answer every question. I stress that this is a flexible strategy. We have set a broad strategy for investment over 10 years, but no one can predict with certainty how the market will develop. New assessments will have to be made as we go along and the timing of the development of total capacity will be reviewed as the strategy is updated and rolled forward. Because of this, decisions on some works are still some way off, and these are decisions for the corporation to make.

The Government and the corporation are determined to do everything possible to mitigate the impact of job losses and plant closures on the men affected and the communities in which they live. My right hon. Friend will be saying more about what has already been done in this direction when he winds up the debate. I would like, however, to answer the three points which the hon. Member for Chesterfield made about the social consequences. First, there is the announcement of the task forces by my right hon. and learned Friend the Secretary of State for Wales, who has been tireless in his efforts to see that the problems of Wales are dealt with in the most effective way possible. He made this announcement on 19th January when he was there, and further task forces will follow.

The consultative group consisting of the General Secretary of the TUC, the Chairman of the BSC and myself is being formed to consider and discuss arrangements for providing new employment for redundant steelworkers. At regional level arrangements are being made to see that there is close consultation and the opportunity for the fullest discussions of the measures among those organisations, the Government, the trade unions and the corporation. In addition we will have the advantages of the facilities under the Industry Act.

We are also negotiating under the ECSC reconversion and re-adaptation arrangements and we shall, of course, by continuing to pursue our policies to sustain a high rate of growth ensure that the efforts to provide jobs and place men in new work are made in the most favourable circumstances.

So we have the modernisation of the nationalised steel industry, and now the path is set. It is a massive and bold undertaking. It is one which was not grasped by the Labour Party when it had the opportunity to do so. We have the level of investment to which I referred. Competitors on the Continent and in other parts of the world have been forging ahead, with the construction of big, modern steelworks, taking full advantage of modern technology, while the BSC still has a large number of small, obsolete works, where these advantages are not available. Modernisation is overdue and it will not be easy to catch up. Nevertheless the corporation has charted a course which gives it an oppor- tunity of doing so and the Government have given it their full backing.

The industry now has the possibility of taking and holding its rightful place among the world's steel industries, but there can be no guarantee of success. Great efforts will be needed by all concerned to seize the opportunities. The strategy is a challenge to those in the corporation who plan the immense programme of investment and carry it through. It will be a challenge to the plant and construction industries, which are given an unrivalled opportunity with the long-term programme of work in which they can demonstrate their capabilities. It will be a challenge to management and men in the individual works whose task it will be to achieve cost and quality standards which investment in modern plant will make possible. Finally, it will be a challenge to the Government themselves, on which falls the main responsibility for easing the process of modernisation by mitigating the consequence of closures and redundancies.

Success in this undertaking is vital to the future of the industry. It is also vital to the future prosperity of the country. The Government are determined to play their part in ensuring its success.

Mr. Deputy Speaker (Miss Hank Anderson)

Before calling on the next hon. Gentleman, I would like to draw the attention of the House both to the time and to the fact that a great many hon. Members hope to take part in the debate.

6.7 p.m.

Mr. Barry Jones (Flint, East)

I think that, as the Minister for Industry listened to his speech, he became unconvinced by it. Looking at the Government Front Bench at this time, I am reminded of the splendid bronze in the park by Westminster's Victoria Tower, called "The Burghers of Calais"—their supplicatory poses, handing in the keys, as it were, of the future of many communities. I can only say—miserable burghers they.

I make my contribution in the knowledge that the Government have put their seal of approval on a plan to eliminate 7,200 jobs from my constituency. They are a callous and soulless Government who unleash such a devastating blitzkrieg. By any standards, in economic and social terms this is a sentence of death. It seems that the Government are conniving at an unquantified trail of social misery and destruction.

The steel men of Shotton feel that they are pawns in other men's games. A supposed cost-benefit analysis is the basis, it seems, for the annihilation of a loyal and highly skilled work force making steel. I must ask whether the British Steel Corporation has its strategy right and whether possible alternatives for the Shotton works have been considered.

To take the strategy, first, in the next few years obviously the corporation proposes to concentrate most of its production in a handful of massive plants, despite the fact that it has not yet a single plant in operation of the size envisaged. It seems that the model for reshaping British steel is to be found in Japan. There has been an astonishing procession of BSC leaders making pilgrimages to the Mecca of modern steelmaking. Perhaps Japan has an efficient steel industry. Of course we must improve. But it does not follow that Britain should slavishly copy everything that the Japanese steel masters have done.

Our starting point is different; different in management, in labour relations and in pollution controls. I want to see us learn from the Japanese, but that which is relevant to our own industry in the 1980s. It is possible that our strategy is to be based on what was good for Japan 15 years ago. But the corporation has worked hard to compensate for the worn-out plant it inherited on vesting day, and there is much in its record for us to praise. But I suspect that Lord Melchett could be over-reaching himself. All his eggs are going into one basket, the basket of large scale, the format of the large blast furnace, LD steel making, and continuous casting.

It is conceivable that the corporation's formula for tomorrow's commercial viability could be out-dated before the last of the corporation's proposals have been implemented. I hope, therefore, that Lord Melchett will not shackle the next generation of steel makers with an expensive but out-dated industry.

So at this stage I find the corporation's strategy, at best, not proven, and, at its worst possible, wrong for the corporation and tragic for Britain.

We should remember that Rolls-Royce over-reached itself and had to be bailed out. Nor should we forget that an 8–10 million tonnes a year plant is in dead trouble if not run at near maximum capacity. A United Kingdom plant of 8–10 million tonnes, let us remember, is one quarter of our total production. But a similar Japanese plant is but one-tenth or one-twelfth of Japan's production total.

Passing to the Shotton works, the Shot-ton management proposed a scheme costing E50 million or so. The corporation told the Government that in its view some £200 million is needed to be spent at Shotton. Was the scheme submitted by the Shotton management evaluated? If it was not, why? More recently, the Shotton Works Trade Union Action Committee prepared an alternative scheme, which has been submitted to Lord Melchett. This scheme makes full use of plant which the corporation proposes to scrap. It combines the use of the present facilities with a new melting shop which could in its entirety be built for £7 million to £8 million. For this modest expenditure the current 12 open-hearth furnaces could be replaced by three tandem furnaces. This process has been well tried and proven efficient and economic both in Poland and in Czechoslovakia, and, I understand, in North America, too.

Thus it is possible that Shotton could be a well-balanced, self-contained unit capable of producing nearly 2 million tonnes of steel a year. It would, therefore, retain most of the 7,200 jobs now threatened by the Government's acceptance of the corporation's proposals.

This is a real bargain. Can anyone show how we can provide 7,200 jobs for between £7 million and £8 million? I ask the Minister for Industry to direct the corporation to evaluate this scheme in a constructive, careful and positive manner. Will the Minister also undertake that his Department, one way or another, will evaluate this scheme?

Lord Melchett implied recently that Shotton was a three-legged horse in the regional race for capital investment because it had no deep-water ore terminal. Was the Morpeth Dock scheme for Shot-ton fully evaluated by the corporation?

The House knows that enormous ore ships will not necessarily be the cost-savers of the future. Many countries which now export raw materials are insisting on a share of the processing. Oil is the classic example. On foreign ore-fields there are now schemes to combine natural gas with iron ore, to produce a partly refined, more valuable export product. It is conceivable that Britain will import sponge iron by the 1980s. Clearly, the more valuable the product the less significant the transport costs. Will the Minister for Industry ensure that the corporation has fully considered this likely trend?

I am trying as best I can to make constructive proposals in the debate, but I should like to put two other questions to the Minister. Will he sanction a full, detailed disclosure of the costing of the alternative corporation schemes for Shot-ton to be made available to the management and workers at that works? Will he direct the corporation to make this information available to the consultants engaged by the Flintshire County Council, and direct that the corporation gives its utmost co-operation to those consultants, as so many thousands of jobs—indeed, the future of the whole community—hang in the balance? I hope that the Minister will make these facilities available to us.

Wales suffers some 18,000 redundancies in this strategy. Yet we get only a beggarly 8 per cent. increase in productive capacity. The North Wales steelmaking industry appears to be scheduled for obliteration. I suppose that the Secretary of State's figleaf is his task force system. But I think that he is the Cabinet's bunny. We in North Wales believe that he has let us down badly. With this decision and Common Market entry, we may as well tow North Wales into mid-Atlantic and leave it there.

If the Shotton rampart falls, all of North Wales will be hurt and, indeed, part of greater Merseyside. Gwynydd now has a standard rate of unemployment approximating 10 per cent. in some parts. I presume that Flintshire, come the disaster in steelmaking, will have first call on jobs available; and the Minister for Industry strikes us down, with the Minister for Industrial Develop- ment supposedly to pick up the bits. I presume that Flintshire will have first call on these new jobs. So what is left for those in Gwynydd and North Wales? We are to be the sieve through which every job will pass. What is left for poor Gwynydd; that is, the three northwestern counties? It seems that what is left is just more depopulation.

I should like to place on record the gratitude of steelworkers in my constituency for the regional help they have had from a variety of Members of Parliament, and I must not forget the Merseyside Members in that. I think that Shot-ton steelmen are right to put their priority on retaining steelmaking at Shotton, because if steelmaking goes, all in my constituency think that the finishing processes there, supposedly to employ 7,000 men, will surely be obliterated when the book value of the accountant passes on.

We are scheduled to receive at the Shotton works in my constituency, by 1980, metal from Scotland and from South Wales. I cannot calculate the cost of bringing all that metal to my constituency. I only know that it would be tremendous, and that every year it would increase. The pressure from the corporation to the Government to eliminate the finishing processes would be bound to be enormous. That seems to be the economics of madness.

So my constituents, the steelmen I represent and their families, will not be kidded by the assurances given so far. We know that our regional and social case is a strong one. If we lose 7,200 jobs we shall surely lose another 7,200 jobs, because for every person directly employed in the industry there is another in the area who will be employed indirectly. I do not see how any task force on earth can put right such a mess, not when it has to compete with others in the same country. The Minister for Industrial Development is not a Solomon, whatever else he may be, and I wish him well in his task.

There are no other areas near my constituency for redeployment in steel. It is not my direct responsibility, but the steelworks at Brymbo employs 2,500 men and I estimate that 500 of my constituents work there. I should like to know what is to happen to Brymbo. We have not been told. Whatever else I have said about the corporation's strategy, I should like to congratulate its brilliant director of information on the timing of the announcement of these redundancies. It has been beautiful!

East Flint sits on the edge of Merseyside's massive unemployment rates. Who will want to employ a redundant 50-yearold steelworker whose only skill and craft is that of making steel, having left school at 14 or 15. How can that man—and there are several thousands like him at Shotton—hope ever again to have a job? If he does have a job offered to him, I dare say it will be to make plastic toys, or curtain rails, or to brush up. That is what the men who for so long have been employed in making steel will be reduced to, and I cannot see how they will swallow it. I do not believe that hon. Gentlemen opposite have made any estimate of the enormous social consequences of what they have done, or are proposing to do. They are whistling in the wind, and they have not served us well.

How are we to replace the corporation's 250 annual apprenticeships? Do the Government realise that my constituency has the fastest-growing population in all Wales, and probably in Britain? It has had a population explosion. Where are all these young people to go when they leave school if they are not capable of getting the extra qualifications on paper in academic terms? What is to happen to them? Are my people expected to go to Merseyside? There are no jobs there.

I sought from the Prime Minister the guarantee of a job for every man made redundant at Shotton. In reply I received a letter in which the right hon. Gentleman quoted Article 26 of the Treaty of Rome and said that there were payments for removal expenses and payments for tiding people over the difficulties of moving. My people do not wish to leave their country, but that is the possibility that stems from the decision taken by the Government Front Bench. That is the decision taken by our Secretary of State for Wales. The right hon. Gentleman is our protector. We look to him for help. My constituents will make their assessment, but I suppose that the right hon. and learned Gentleman can still come home to Wales.

The future is bleak for our local chamber of trade. It has come to a pretty pass when I have to make this point. Who will re-employ the shop girls, the caretakers, the canteen assistants, the kitchen hands and the corporation's gardeners? Who will give them employment, and how soon? The Government are, in effect, saying to my constituents "Work yourselves patiently out of a job, but remember there is no guarantee of another job when your present job ends and the profit that you are making so reliably is to be spent elsewhere to ensure that you are jobless anyway." If that is not taxing the patience of the steelmen at Shotton, I do not know what is. How are they to face that slow agony? What about the thoughts of their wives and children? There are as many as four wage-earners in one household in Shot-ton and other townships in that area. In effect, we are being asked to exchange today's prosperity for tomorrow's poverty.

I must report to this honourable House that there is in my constituency a rising tide of bitterness and resentment at the inhumanity of this decision. We have a distinct sense of fair play, and we know that the Government are serving us rotten. I can speak for Shotton steel-men in this. I am one of them myself. I am the third generation of my family to have worked at Shotton. Indeed, many members of my family will lose their jobs because of this decision. It seems that on Deeside we have been too loyal, too efficient and too co-operative, and now we are offered a poisoned chalice—if the Secretary of State can spare the time to hear us—industrially anyway—of Japanese make, I suppose.

The sad fact is that the next few months are vital. If the decision is not changed soon it may prove impossible to change it later whether or not there is a change of Government heart. My advice to the Government—and I say this on behalf of the 3,000 steelmen who have come here today—is to change their mind and change it quickly, because I do not think that they can expect us in Shotton and East Flint to exchange the substance for the shadow.

6.27 p.m.

Sir Anthony Meyer (Flint, West)

I cannot support the Opposition motion although I find myself in a measure of agreement with its concluding words.

The target for the steel industry as a whole to which hon. Gentlemen on the Opposition side have nailed their colours is, I am convinced—and I am even more convinced in the light of the debate so far—one which, were it to be attempted, would make our steel industry hopelessly uncompetitive in the markets of the world.

Furthermore, given what are now clearly the fixed ideas of the corporation in these matters, I cannot believe that even were this unrealistically large target to be accepted there would be any reprieve for Shotton and the other works that are threatened with rundown. Indeed, were this larger target to be accepted we would find some gigantic new Japanese-style venture set up and in consequence there would be even more closures and rundowns than are likely to occur within the present realistic target which I am convinced the Government were right to accept.

Having said that, I must say that I still believe that the decision not to provide Shotton with the new equipment that it needs in order to produce its own steel for finishing will turn out to be a catastrophic mistake and that the determination of the corporation to venture all on a few large new steelmaking complexes—for which it will necessarily have to recruit labour very rapidly from wherever it can—will turn out to be an unwise decision.

I believe that the readiness to allow the team of workers, which over many decades has welded together into what one might call a happy family of workers, to be dispersed is worse than a mistake. It is a crime. To illustrate the quality of that team at Shotton, I would say that any hon. Members who have had the privilege today, as I had, of moving among the lobbyists, both within the House and outside, cannot but have been impressed by their moderation, their good sense and their determination.

I believe that this decision, if it is persevered in, will turn out to be a catastrophic mistake. I still hope for a miracle and I think that the hon. Member for Flint, East (Mr. Barry Jones), in a very eloquent and sincere speech, did what he could, as he has done all along, to promote that kind of miracle. But we must be realistic about this, and if the miracle does happen there is still the certainty of the loss of 3,500 jobs at Shotton, even if we get the investment that we are fighting and praying for. Therefore, whatever happens, it is the responsibility of those who have the interests of North Wales and the North West at heart to think in terms of bringing new jobs to the area and bringing them on a scale hitherto undreamed of.

Flintshire cannot be allowed to become an area where rich commuters live in the surroundings of an industrial slum. This is the kind of socially explosive mixture which is so dangerous in the Third World. We do not want to introduce this kind of thing into the United Kingdom. We must have those jobs and I am satisfied that to the extent that it lies within their power—and the mistake that all of us make is to over-estimate the capacity of any Government to bring about the impossible—the Government are doing everything they can to bring in those jobs as soon as possible. If, as a result of all this, Flintshire should get what it has not yet had—that is, a genuine variety and choice of employment for its school leavers, a choice of well-paid, challenging jobs—that would be at least a measure of compensation for the very tragic times that the working people of Flintshire are at present undergoing. That is as it may be, but the point I want to make this afternoon is that we must have more time. As I have said. I believe that the Welsh Office is making heroic efforts to rise to the challenge of the hour, but it is wildly unrealistic to imagine for one moment that new jobs can be created on this vast scale on the same kind of time scale as is evidently envisaged for the rundown of steelmaking at Shotton, which I gather is scheduled to begin probably in 1975 and to be concluded by 1978. At the very least this whole operation must be set back by a minimum of three years, perhaps by some such device as the hon. Member for Flint, East suggested: a tandem scheme to enable the workers of Shotton to go on producing raw steel without the kind of massive investment which would really be necessary in order fully to modernise the works.

I believe that if Shotton were given this kind of reprieve, if we could gain another three years and if we could have the very limited amount of investment which would be necessary to enable the workers of Shotton to continue during those three years, to go on producing steel as they know how, they could once again astonish the whole steel world by their achievements, by showing the kind of spirit which they have shown throughout and which they have shown in the lobby which they have conducted here today.

6.35 p.m.

Mr. David Watkins (Consett)

The hon. Member for Flint, West (Sir A. Meyer), like my hon. Friend the Member for Flint, East (Mr. Barry Jones), made a very moving speech to the House about the devastating effects of the proposals for the Shotton steelworks. I am sure that both hon. Members will excuse me if I do not follow in detail their specific line of argument, because I want to turn, of course, to the proposals as they will affect the steelworkers and the economy of the area of Consett in my constituency. Although the effects of the proposals for the steel industry are not so immediately devastating at Consett, the fact remains that in the longer period they will be perhaps even more devastating than at Shotton, and in fact the proposals are casting long shadows over the future of Consett.

My hon. Friend the Member for Chesterfield (Mr. Varley), in opening the debate, drew the attention of the House to the fact that the Secretary of State, when he made his very long-delayed statement to the House on 21st December, gave singularly little information about the specific effects in the various steel areas and constituencies. There was no mention, of course, of the effect in my constituency and it was only when I put a question to the Secretary of State that I elicited any information about what was proposed for the future of Consett. I quote what the Secretary of State said to me: Consett will operate as a steelmaking concern certainly until late in this decade. It is impossible to make a decision beyond that. I am advised by the BSC that it is considering Consett as a possible supplementary source of billets together with a number of other candidates."—[OFFICIAL REPORT, 21st December, 1972; Vol. 848, c. 1589.] Of course, what the Minister did in effect was pass a sentence of slow death on one of the most modern, most efficient and indeed most profitable steelworks in the country and, for that matter, in Europe. He also passed a sentence of slow death on a town and a locality which is almost wholly dependent upon the steel industry for its economy, its prosperity and its employment prospects.

There are 6,500 people employed in iron and steel-making at Consett and that very fact injects something of the order of £30 million a year of spending power into the economy of the area. There is hardly a business or undertaking of any description in the town of Consett an