HC Deb 25 January 1973 vol 849 cc679-790
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 and in a quite considerable area around it which is not dependent to a greater or lesser degree on the effect of the steel industry in the area. Even if the half-promised billet production eventually materialised—and as I read the Secretary of State's remarks there is no more than a fifty-fifty chance that it will—it would mean that there would be thousands fewer jobs in the area and it would be a great blow to the economy of the whole area.

I am bound to say that the progress that has been made to date in providing alternative employment in this area gives very little indication, if any, that the jobs in steelmaking in Consett can be replaced. I am not only talking of what has happened under successive Governments over a period of years; I want also to make specific reference to the proposals announced by the Government on 15th January, to which the Minister, when he opened this debate for the Government, referred in somewhat glowing terms. Within those plans two advance factories are proposed to be built in the town of Consett. One of them is described as a nursery unit of 10,000 sq. ft., the other a standard unit of 15,000 sq. ft.

There is one advance factory 25,000 sq. ft. already in existence in the area. That stood empty for one year and it will not provide more than 100 jobs when it comes into full development. I quote as an example an existing advance factory equivalent to the two new ones together and indicating the number of jobs it will provide. There is another advance factory immediately adjacent to that I have referred to. That is 10,000 sq. ft. and it has stood empty for 18 months.

The Minister for Industrial Development (Mr. Christopher Chataway) indicated dissent.

Mr. Watkins

It is no use the Minister shaking his head, because I am speaking from knowledge.

Mr. Chataway

The hon. Gentleman has misinterpreted my point. The purpose of advance factories is that a factory should be ready and available as an inducement for industrialists to come in. Inevitably there will be advance factories standing empty for some period. That is their purpose.

Mr. Watkins

I am grateful to the Minister for so strongly reinforcing my point, which is the difficulty of providing alternative employment. My point is reinforced when the Minister admits that advance factories often stand empty for such long periods. The size of the factory which has stood empty is such that even when it is occupied it cannot provide other than a negligible number of jobs in the context of the scale of this problem. This is an area which has already suffered a massive rundown of the coal industry and from which over the last 15 years there has been massive migration. In spite of that, there remains a consistently high level of unemployment. The area cannot stand a comparable rundown in the steel industry.

The problem is not so immediately pressing as that at, for instance, Shotton; but in the long term it is a problem which is perhaps even more serious than those and it requires attention now, not at two years' notice in about five years' time when we are confronted with an irretrievable position. A major reassessment of the position at Consett is required. There is a problem here requiring immediate attention. We face a rundown of about 6,000 or 7,000 jobs in an area totally dependent upon those jobs and upon the economy built around them. Now is the time for urgent action.

6.43 p.m.

Sir Henry d'Avigdor-Goldsmid (Walsall, South)

I take the view that in a debate like this speakers with constituency interests have, and deserve to have, priority. I have not got a constituency interest, so I shall not keep the House long. Speaking in the presence of so many hon. Members on both sides who have deep personal feelings on these matters and who see the repercussions amongst their friends, and, as one hon. Member said, their relations, of decisions about the future of the steel industry, I can only feel that abstract comments are not likely to carry much conviction with them.

It is rather like the experience one had occasionally in the war when, having taken part in a rather disagreeable engagement, one received an intelligence report from an officer stationed well behind informing one that there was no enemy opposition to be expected. One had only to see the casualty figures to realise that that was a slight understatement. In this sense my sympathies are entirely with hon. Members who have a constituency case.

I speak as the former Chairman of the Select Committee on Nationalised Industries, which was engaged on the steel inquiry. I believe that I have a few modest contributions to make. The hon. Member for Chesterfield (Mr. Varley) surprised me greatly by the suggestion that the Committee's consideration had been delayed by the Government. This is so far from the facts that I must tell him that ever since I was made Chairman of that Select Committee in 1970 we have made an inquiry into the steel industry our first priority.

The inquiry was delayed not in any way by the Government but at the perfectly intelligible wish of the Chairman of the British Steel Corporation. The hon. Gentleman referred to a straitjacket being applied to the chairman of the corporation by the Government. I have never been in contact with the chairman of a nationalised industry who seemed to have greater freedom from interference than the Chairman of the British Steel Corporation. I do not think that inside the Ministry there is an organisation capable of controlling the corporation's activities in the way that other industries are controlled. This is a question which might be inquired into at another time. The word "straitjacket" is wholly inapplicable in this connection.

Mr. Varley

I was not referring to the Chairman of the British Steel Corporation in the sense of the Select Committee on the Nationalised Industries putting him in a straitjacket. My comment was in reference to the joint steering group which was imposed on him many months ago against the will of the corporation.

Only two or three days ago a member of the Select Committee on the Nationalised Industries told me that he was very concerned that the Select Committee had not been reconstituted this Session until about two weeks before the Christmas Recess. He was under the impression that it could have been reconstituted immediately the House returned in October, thereby getting ahead with the report so that the House would have had the benefit of the report.

Sir H. d'Avigdor-Goldsmid

The hon. Gentleman rather over-rates the influence and importance of this Select Committee. I do not think that it is an important weapon in this battle. If the hon. Gentleman defines "straitjacket" differently from me, he must not blame me for putting a different interpretation upon his words.

If I were in the steel industry I would look with great misgivings to Parliament and Government. In the words of Siegfried Sassoon, I think of the two soldiers going up the line. They passed the general. The general says, "Good morning, good morning" to them, rather sharply, He is quite an old card,' said Harry to Jack As they slogged up to Arras with rifle and pack But he did them both in with his plan of attack. This is the history of the steel industry and of the plans of attack put before it from both sides of the House. At the conclusion of the war the industry was exhausted. It had rendered magnificent service. It gave every effort it could to the national cause. The very dispersion of the steel industry was an asset. That was a particular point whose value was more applicable to war than to peace.

We know the history since the war. Earl Attlee's Government passed through the House of Commons a steel nationalisation Bill which was thrown out by the House of Lords on the new doctrinal point that it had not been included in the Labour Party's election manifesto. When the Labour Government were reelected in 1950, they thereupon passed another Bill, which got through both Houses, but they did nothing about implementing it when it became an Act, except by buying the shares. They let the companies continue independently. So it was not surprising that when the Conservatives returned to office in 1951 denationalisation was very much on the cards, and we proceeded towards it rather gently.

We almost completed the denationalisation of steel—so much so that in 1959 Mr. Harold Macmillan said in his election manifesto: We are unalterably opposed to the extension of nationalisation. That was a slightly hedging remark. Most of his supporters thought he was going to complete denationalisation, but he merely said that he was unalterably opposed to any extension.

Meanwhile, right hon. and hon. Members opposite had been vowing destruction of those unwise enough to buy denationalised steel shares, and their blood was made to run cold. It was indicated to them that they would be expropriated and would be lucky to escape with their lives. But came 1959. We did not complete denationalisation of steel. The exact opposite happened.

In 1961 the steel industry, having been running flat out for a long time, met a check when there was a depression in steel. What happened? Richard Thomas and Baldwin remained in public ownership, and it had almost a private client in the Whitehead Iron and Steel Company, which had depended on it for its supplies when steel was short. When the situation changed Stewarts and Lloyds, which was denationalised, made a bid for Whitehead and we had the almost ridiculous position in which Richard Thomas and Baldwin, with the Exchequer behind it, bid in a contest with Stewarts and Lloyds for the ownership of Whitehead.

This ridiculous position ended—that is to say, the shareholders of Whitehead were greatly and undeservedly enriched. All that happened was that Richard Thomas and Baldwin and Stewarts and Lloyds duly became part of the British Steel Corporation at great expense to the taxpayer. Therefore, the history of steel in relation to this House is not a happy one.

Indeed, instead of being one of the commanding heights of the economy, which it was and as it was referred to by Aneurin Bevan, the steel industry has become almost a plateau It is not a commanding height any more because conditions have changed so much.

This is one of a number of debates we are having, and I do not think that there is really any agreement on strategy at all. Do we want to go back to the small active steel plants that we traditionally know, or are we going forward to the Taranto-type concept? Here, the Italian Government, for regional reasons, put a great steel plant at Taranto, in southern Italy. It has been not a success but a failure. It was designed to create employment, but southern Italians did not like working in it.

The fallacy is that one can put a steelworks anywhere. The fact is that one has to put steelworks where there are steelworkers, and this is something which one does not get by theory, which is why I feel that the BSC, which is very ably run by able and intelligent people, knows, because it does not have the same regional orientations which people in politics are bound to have, that it cannot divorce the one from the other.

Mr. Eddie Griffiths (Sheffield Brightside)

Would the hon. Gentleman accept that the £3,000 million has been spent in traditional steel areas where there is a tradition of steelmaking? Would he also accept that most of the money is going into development areas and intermediate areas?

Sir H. d'Avigdor-Goldsmid

I am delighted to accept that statement. But the figure includes only 50 per cent. of new money. The rest is savings from the earnings of the steel industry and from depreciation, so it is not such a vast present as was originally considered. But I am glad to think that the money is going to steel areas. One must also bear in mind that modern plants are much less labour-intensive than old plants. This is one of the facts of life. I do not want to bandy statistics about, because my hon. Friend the Minister for Industry has done his job very well and I do not think that back-benchers do very well with statistics.

Mr. T. H. H. Skeet (Bedford)

They use them a lot.

Sir H. d'Avigdor-Goldsmid

That is true, but they do not do much good with them.

My hon. Friend the Minister for Industry has answered the argument about the number of unemployed to emerge. The chairman of BSC has said that redundancy, being phased over a number of years, and taking into account normal wastage, is not a major problem. These are the facts, and they are confirmed by my hon. Friend. But, of course, they do not in any way diminish the pain and human considerations behind the statistics.

My concluding thought is that the Department really needs to be more deeply versed in steeel than it is and that the great efficiency of the management of the BSC needs to be tempered a little by the sort of human considerations we get on either side of this House.

6.58 p.m.

Mr. Frederick Lee (Newton)

The hon. Member for Wallsall, South (Sir H. d'Avigdor-Goldsmid) referred to basing steel plant where steelworkers are. I thought that the Minister was quite unfair in his analysis of investment as between the period of the Labour Government and the current period. Indeed, the hon. Member for Walsall, South did much to disprove the Minister's case. That much of the Government amendment on the question of £3,000 million investment is, therefore, not correct.

My hon. Friend the Member for Chesterfield (Mr. Varley) mentioned the question of the electric arcs, the mini-works and where they should be sited. We in Irlam have been enduring agony for 18 months on that issue. When I listened to the eloquent pleas of my hon. Friends the Members for Flint, East (Mr. Barry Jones), for Consett (Mr. David Watkins), and various other places, I felt for them because we have been through it all in Irlam. My hon. Friend concluded that Irlam is one of the places where the mini-works may go. How long are we to wait until we know this? We were the advance guard, as it were. We have been waiting to learn our fate for so long and the Minister did not even tell us at what stage we could expect to know where the electric arc, which is not to go to Scotland, will be going to.

We are to have a 25,000 sq. ft. factory built in Irlam. I suppose we have to be thankful for small mercies. The amendment talks in terms of welcoming … the prompt action proposed by the Government to minimise the social consequences where modernisation results in closure of an existing steel plant. I cannot yet find any acceptance by the Government of the social consequences in Irlam—and we have waited a long time for it.

My hon. Friend the Member for Consett mentioned that there had been an advance factory empty for 18 months and the Minister told him that advance factories were built so that they could stand empty until someone wanted them. But if that is the position in special development areas how can we expect a 25,000 sq. ft. factory in Irlam, which is not even in a development area but purely an intermediate area, to be taken. Across the canal in Trafford Park, which was once the greatest industrial estate in the world, huge factories are lying empty. It is no consolation to us, although we hope against hope that someone will come along for the factory when it is built. It is not much consolation to be told that we have a factory if we cannot even get development area status in order to attract an employer to take it. I ask the Government therefore to agree to grant Irlam the status of a development area.

I had intended to take up many of the Minister's points about the strategy but because of the time factor I shall not do so. Is there any limit to the number of mini-mills which the private sector can open while the British Steel Corporation is continuing to close steelmaking capacity? We must have an answer to that question tonight. I have mentioned on other occasions the fact that throughout the country these mini-mills are being opened in the private sector. I have spoken before about three or four mini-mills being opened by the private sector in areas which are not traditionally steelmaking areas. There is one in Kent at Sheerness. It is a £10 million venture which will produce 200,000 tons a year. Will anyone tell me the history of steelmaking in that part of Kent? It has no such history. There are no steelworkers there. It is infamous that we should be stopping production in steelmaking areas while that kind of thing is happening elsewhere.

A few weeks ago I wrote to the Minister about a new mini-mill being opened in Birkenhead. He replied in a letter and sent me a copy of the Press release. Hall Engineering (Holdings) Limited is to build the project and the mill is to cost £7,500,000. The handout says that it will be financed partly by the Government and partly from the company's own resources. The financing will include a £1 million Government loan repayable over five years and a grant from the Department of Trade and Industry. In normal circumstances I would welcome more jobs being created in areas such as Birkenhead. But steelworkers in Manchester and Irlam are being thrown out of work while Government money is being spent—I suppose under the Industry Acts in grants and loans. I must ask the Minister when that kind of thing will end.

When I listened to my hon. Friend the Member for Flint, East making his case I asked myself why there are closures in a wholesome atmosphere where steel has been produced profitably for years, as it has been in Irlam; yet it is possible to read this kind of thing in the handouts. The handout says: A ready supply of local scrap will be available for the mini-mill which is expected to have an initial capacity of 150,000 tons of finished products a year with room for increased tonnage". These are the economics of Bedlam.

I have raised on a previous occasion the use of Section 15 of the Iron and Steel Act 1967. That section gives the Minister power to stop such developments if they are inimical to the interests of the publicly owned sector. Subsection (2) says: The Minister may from time to time by order require that, in such cases as may be defined in the order by reference to size, cost or other relevant factors, any person (other than the Corporation or a publicly-owned company) proposing to provide or procure the provision of any additional production facilities in Great Britain shall give particulars in writing of the proposal to the Minister and shall not proceed therewith without the consent in writing of the Minister. I take it that the Minister has given his consent in writing to each of these developments in the private sector.

Subsection (3) says: Before making an order under the last foregoing subsection, the Minister shall consult with the Corporation and also with such organisations as he thinks fit, being organisations appearing to him to be representative of iron and steel producers, I ask my hon. Friends to note this of workers employed in the carrying on in Great Britain of iron and steel activities, of consumers of iron and steel products, of workers employed in the undertakings of such consumers, or any class of such producers, workers or consumers as aforesaid. In other words, if the Minister will apply Section 15 he can stop any development in the private sector which is inimical to the best interests of the BSC. He can consult the trade unions in the steel industry and the consumers of steel to gather their reactions to developments of this nature. How can the Government expect, while that kind of thing is being condoned and encouraged by Government money, that the steelworkers in Irlam and elsewhere can understand that it is right for them to be thrown on the industrial scrap heap? It is too much to accept. I want answers about the application of Section 15 and about the creation of more mini-mills, the production from which the BSC should be allowed to provide.

7.8 p.m.

Mr. T. H. H. Skeet (Bedford)

We have heard the most extraordinary argument from the Opposition that the Government should use their powers under Section 15 of the 1967 Act to stifle private enterprise simply to placate the monopoly power which produces 90 per cent. of the steel in this country at a time when the private sector is making a contribution of one-third of the industry's £500 million turnover. It is a most extraordinary idea that the private sector, now recognised by statute, should be so discouraged, stultified and driven into the ground that it is not allowed to expand.

The right hon. Member for Newton (Mr. Frederick Lee) referred to the Hall Engineering development at Birkenhead. That company is acting in conjunction with Richard Johnson & Nephew which is, I understand, to take a 25 per cent. interest. The mini-mill will produce 150,000 tons a year and will be in operation by 1974. Its purpose is to provide the basic requirements of British Reinforced Concrete Engineering, which is a subsidiary of Hall Engineering. I see nothing wrong with it. It is vertical integration which would have the effect of assisting a particular market here and making the United Kingdom more competitive.

Further, F. H. Lloyd & Cooper Industries of Dudley, Worcestershire, which will be constructing a mini-mill, will be producing more than 75,000 tons of billet and slabs for its subsidiaries. In other words mini-mills will be developed in the United Kingdom in the private as well as the public sector. I do not believe that the British Steel Corporation should be excluded but its steel should be made available to private subsidiaries from bulk plants at competitive prices.

I am rather surprised that Sheerness Steel, which is the one operating and producing steel at the rate of 180,000 tons per annum, has not been referred to. It is now running at approximately 85 per cent. of capacity. I must ask the Minister one question. As the private sector has a statutory right to carry on its business, should we not try to identify and guarantee its rôle. I hope that this will appear in the White Paper. We have had the report of Hirshfield, which has been critical of the corporation, in which it is said that the profit margins of some of the private sector companies have been attenuated by the BSC.

I appreciate that the corporation has not accepted this but the Government have. Therefore the time is ripe when the private sector should have a defined area in which to operate under realistic and fair conditions just the same as the corporation. The corporation, being a monopoly power, will invariably have a substantial part of steel-making capacity and of the finished goods market and it should exercise its authority with justice and reality.

I want to put forward another argument which is slightly in contradiction of what I have already said. I was impressed by the arguments adduced by the hon. Member for Flint, East (Mr. Barry Jones) in favour of his constituents. Of course there are real problems in Shotton. I can understand that this site may, for basic steelmaking, be in the wrong situation. It is inland, with no port, and the ore has to be brought to a port and then shipped by rail.

This is the great dilemma. We must remember that one of the reasons why the Government and the corporation are making the change, and I support them, is that we have noted from Europe that there has been a move towards realising the potential of coastal sites. This will be the trend between 1972 and 1975. Coastal sites will be built up from a 27 million ton output to a 44 million ton output, an increase of 63 per cent. Inland sites will rise only 9 per cent. in production, from 109 million tons to 119 million tons. Hon. Members will be aware of projects at Fos, the expansion of Dunkirk in France and plant in Holland. We must now be able to compete most realistically.

The hon. Member for Chesterfield (Mr. Varley) talked about closures and about exports but he did not talk about inter-territorial trade. When talking about ultimate capacity we have to remember that prices must be right. If they are not and we are producing uneconomic steel, a lot of steel will flow in from Europe. Now that we are members of the Common Market we must face this reality. One of the points against Shot-ton is that it is not a coastal site. Port Talbot is being developed and a large sum of money is being allocated to Wales in a balanced programme. I know that there are political pressures which can be brought to bear in all constituencies to say that the entire package should be altered.

If it is altered we will be in the position that little will be achieved. Many years ago it was a political decision which split the tinplate plant, half to Wales and half to Scotland. All of it should have gone to one place. It is now recognised that it was a great mistake. Possibly hon. Members will say that it should all have gone to Wales with the necessary amount of steel to feed it.

If this package is broken down, if the Minister listens to the arguments of all concerned about not closing one plant because of redundancies, because another should be developed, we will end up with a situation in which we will be producing between 90 tons and 100 tons per man per year in competition with the Japanese, who, on average produce 220 tons per man per year while their best plants produce something like 350 tons. I believe that the Anchorage project will have a figure of 350 tons per man per year and it will be the showpiece of the United Kingdom.

We will be the bottom of the league unless we shape up to change. We will be below the United States, Japan and most of the European countries. It is a question of unemployment or technology. The Government have responsibilities on many fronts. We have to invest economically, and £3,000 has been invested. We have a responsibility for unemployment, and the Minister's first job should be to phase in the new proposals. I will fully support anyone who argues for a less rapid phasing programme. The Minister must next provide industries to go to an area of contraction. I am not in favour of an extension of nationalisation but, as the Minister has rightly said, if the industry had some connection with the steel industry this could be done. If it has no connection, suitable private investment can be drawn to the area, with proper incentives.

The third limb is perhaps the most important. If we are to have new industries we must have advance factories and extensive retraining. A man of 52 might not be able to go to a new job quite as readily as a younger man, but he can be trained to do so.

I come to a further point which has not been made tonight. The TLD furnaces, those which are to be found currently in Europe, produce the same quantity of steel as the open hearth furnace in one-twelfth the time and with one-fifth of the labour. It may be said that that will mean a lot of redundancies. This is the product of technology. How do we stand vis-à-vis Europe? If we consider basic oxygen it will be discovered that 103 million tons is produced in Europe by this method. That is 66 per cent. of the EEC total. In the United Kingdom the figure is as low as 44 per cent. If on the other hand we compare the open hearth, which we are trying to get rid of—and the corporation has done a reasonably good job here—the EEC figure was 24.6 million tons in 1971 as compared with 39 per cent. of our total.

What it comes down to is that if we are to concern ourselves with 6,000 men in one area, we should do the maximum we can for them through training, redevelopment and so on. But if we are so to average the position throughout the country that we stultify an effective and efficient industry, the whole industry will be wound down and tens of thousands of men will find that they have no jobs. No agreement which we enter into with the Japanese, the Germans or anyone else will keep out cheaper steel.

I come now to pricing. The hon. Member for Ebbw Vale (Mr. Michael Foot) came in on this point. Under Article 61 of the ECSC we are obliged to transfer authority over pricing' from the national Governments to the Commission as from the time of entry, 1st January 1973. I assume that we have already done so. I am supported in this when I look at the White Paper dealing with phase 2. Paragraph 17 states: Prices for coal and steel are subject to our obligations as members of the European Coal and Steel Industry. That would mean that by the end of 60 days—that is, 29th April 1973—the corporation will be able to charge what it likes. The corporation, however, is a 100 per cent. owned subsidiary of the Government and I dare say that it will have to listen to Ministers. It will still be able to use its discretion and charge what it considers to be appropriate, bearing in mind that it has to return 8 per cent. on its net assets assessed over a term of years.

While it is laid down in Article 61 that the Commission must have full authority over pricing we cannot escape the fact that the corporation is a wholly-owned Government subsidiary. The Government provide the capital. The corporation must have two ears open, one for the Commission and one for the Government. A little while ago it proposed to increase prices considerably—remember, we are 15 per cent. below European prices. It is now intended to advance the prices by between 5 per cent. and 6 per cent.

This is partly because of the exercise of its discretion and partly because it has listened to the Minister. I do not think that prices will stop there.

We are shortly going through to the basic points system. That will mean a complete change because basic prices will be established from specified points and then freight costs from those centres to customers' sites will have to be worked out. This will be a little more complicated than the present system in which there are standard prices irrespective of the geographic location of customers. It may mean final prices rising over the 5 per cent. to 6 per cent. referred to. For some customers prices will be higher. This brings me to another figure. If there is difficulty in ascertaining prices, it would be useful if the industry had guidance in the form of a non-operational price list over a run-in period.

May we have a few words from the Minister about scrap? The agreement which has been operating now for about 35 years is not to be terminated, as we all thought. Steel prices have risen by 45 per cent. but scrap prices have risen by only 7 per cent. The corporation is beginning to import scrap from the Soviet Union. Is it likely that the corporation and the Government will allow scrap to be moved freely inside the United Kingdom and the rest of the Common Market? When will it be possible for merchants to arrange their own prices in a free market? If the Minister is prepared to accommodate the small producers and the corporation so that it will be necessary to have a limitation on the free market for another term well beyond the six months, let him say so and tell us for how long.

I turn now to energy. It is known that coking coal has been a problem for the industry. Will the Minister continue to allow the corporation and the private sector to import coking coal, because we have an insufficient quantity and the quality is not right? Prices here and in Europe are well out of line with world markets and we will only be increasing our own costs if the industry is directed on this point. British steel, whether State or private, must be competitive and we must look at our basic costs. Whether it be scrap, coking coal or new technology, all these things are essential in modern Britain. While I appreciate the significance of the remarks made by constituency members—and I would do exactly the same if I were in their shoes—we must look at "Britain Limited". It has to survive and to be able to compete in Europe. It has to be able to compete with the Japanese. Let there be an end to some of the trouble we have had, holding our hands behind our backs, which has prevented us from moving forward at this crucial time in our history.

7.25 p.m.

Mr. David Lambie (Central Ayrshire)

I want to follow the trend taken by the hon. Member for Bedford (Mr. Skeet) and speak up for British steel. I will not follow the line taken by many of my hon. and right hon. Friends by putting forward a case for my own area and my own steel mill. Unless the Government and the British Steel Corporation change their policy and set their targets higher, there is no hope for any of us. Insistence on the steel industry remaining in our areas and not caring a damn about other areas will not solve the problems.

Scotland has seen a major rundown in the mining industry. The railway and the railway workshop industries have been almost eliminated. The shipbuilding industry has been rationalised and shipyards have been closed. Heavy and marine engineering have almost been eliminated. In the period before the last Labour Government each year 50,000 young people left in Scotland to emigrate to the richer areas in the south and overseas to Canada and the United States. During the period of the Labour Government that trend decreased, but it is now rising again. The sights of young people are set not on remaining in Scotland but on going to other areas. That is why I listened with dismay to the sorry statement of the Minister for Industry. If he is the man who is leading British steel into the 1980s there is little future for British steel.

The BSC development plan for Scotland published in 1972 envisaged a net production of more than 11,000 people in the number employed in the steel industry. By 1980 the total BSC manpower remaining in Scotland will be in the neighbourhood of 14,000 or 15,000. Many of us believe that, if the policy contained in the Minister's statement of last December is implemented, by the early and middle 1980s there will be an end of steelmaking in Scotland. Ravenscraig will stand out like a sore thumb as the only inland site in Britain producing steel. If the Minister's case for closing down steelworks in other areas is that they are on inland sites, there can be no future for steelmaking in Scotland and we shall lose 27,500 jobs.

In introducing his investment programme for the BSC in December the Secretary of State spoke of giving some faith to the steelworkers and targets for the BSC. He said that the aim of Government policy was to win for the industry its share of the expanding steel markets and to ensure Britain's continuing place among the major steel producers of the world. By 1980 we shall be producing 33 million tons. Japan will be producing 120 million tons. How can the Tories tell us that we have to speak up for British steel when we look at those figures?

Even the Labour Government's target in 1968 of 43 million tons was far in advance of anything that the Government are putting forward now. That target was too low. It should have been 50 million or 60 million tons to give Britain the opportunity of continuing to make steel.

Mr. Tom Boardman

When did the Labour Government give a target of 43 million tons?

Mr. Lambie

During the period of the Labour Government in 1968 the BSC set a target of 43 million tons. I am taking that as the target of the Labour Government at that time, just as I am taking the 33 million tons as the target of the Tory Government now.

Only the Secretary of State could get away with this programme for disaster as a success story. He is the biggest PRO in the House. Last December he put forward a programme for expansion which entailed a 23 per cent. reduction over a five-year period as the greatest success story in the history of steelmaking. No wonder the right hon. Member for Knutsford (Mr. John Davies) fled from the Department of Trade and Industry to the safety of Europe. He would not have had the courage to come to the House with this "success" story of a reduction in the annual production target of 23 per cent.

The Government's programme is relegating Britain into the second league of world steel production. It relegates Britain from the position of being a major world producer of steel into a small producer in the European league. We have joined our team to the European steel producers, and we are thinking not of British steel but of European steel.

We have watched the downfall of Britain's position as a world steel producer over the years. In 1951 the world steel league in order of annual production consisted of the United States, the USSR, the United Kingdom, France and West Germany. Japan was twelfth. Japan was not even in the first division. She was in danger of being relegated from the second division. In 1961 a great change took place. The United States and the USSR were still the first and second in the league but West Germany was third, Japan was fourth and the United Kingdom was at the bottom. By 1971 the USSR was top, next came the United States and then Japan, West Germany and the United Kingdom. For the last 20 years the United Kingdom has been at the foot of the world steel league. Unless we make some change now we shall be relegated.

Had Lord Melchett been running a football team he would have lost his job. If Tommy Docherty spends as much money during the next 12 months as he has spent during the last, he will be spending more on trying to save Manchester United from relegation than the BSC and the Government are prepared to spend in Manchester to keep the steel industry going.

Mr. Skeet

Is the hon. Gentleman aware that the workers at Scunthorpe have been on strike for a long time not through any fault of the BSC but because the two unions are using Scunthorpe as a battle ground? Does he think that that is the right method of competing with the Japanese? Does not he think that we should start all over again?

Mr. Lambie

It is not a matter of blaming this or that small group of people. I want everyone to say that Britain has a future as a major world steel producer. Our main competitor is Japan, whose steel industry shows what should be the future for the British steel industry. Japan has left the inland sites and gone to the coastal sites. Steel producers in Holland and France are going towards coastal sites. If we are to continue steelmaking on a competitive basis we have to go to the coastal sites. In the Clyde estuary we have the best deep natural harbour in Western Europe, but it is lying empty. When I travelled to Marseilles-Fos I saw the tremendous development of the steel industry, the ore and oil terminals, the petrochemical works and the oil refineries. But when I returned to Scotland I saw a better natural harbour lying undeveloped because of the activities of the Government and the pressure groups of environmentalists in Scotland who stop all development.

The BSC should develop Hunterston. A major, new, integrated steel plant should be built there. If the BSC is not prepared to use Hunterston, I hope that the Government will not prevent private interests from coming in and developing the Hunterston area.

When the Secretary of State for Scotland met the deputation from the STUC to discuss the Government's programme for investment in steel, it was found that £400 million had been allocated by the Government for steel development in Scotland over the next 10 years. When the Secretary of State was asked to say where the £400 million was going, he had plans for only £200 million of it.

I put forward a claim for Glengarnock, which is losing its steelmaking processes by the closure of the open-hearth furnaces. One-third of those workers will be redundant in an area where 54 per cent. of the male population is employed in the steel industry. In the Garnock Valley, as in the Welsh valleys, if steel goes, mining will go and the whole valley will go.

In the last five years the BSC has spent over £5 million modernising finishing processes. Glengarnock has the most modern rolling mills in Scotland. If the Government have not allocated this £200 million I put forward a claim for £20 million of it to allow the BSC to construct two electric are furnaces in Glengarnock to enable steelmaking to continue. Once steelmaking stops, at the next review when the book-keepers come round it will be common sense to say that the steel must be rolled where it is made. Unless Glengarnock continues to make steel, the next step will be the closure of the finishing processes as well.

I can well understand why the Secretary of State for Scotland could not find the £200 million. He is troubled only by sit-ins and is not worried about steel mills and £200 million. I hope that the people who are responsible for the Government's steel policy in the Cabinet and who have more power than has the Secretary of State in the final Government decision—

The Under-Secretary of State for Development, Scottish Office (Mr. George Younger)

The hon. Gentleman must not keep saying that the Secretary of State for Scotland does not know where the £400 million is going. My right hon. Friend, when asked to specify every detail of how every part of that sum was accounted for, properly said that if the Scottish TUC wanted that information it should go to the British Steel Corporation. That was a reasonable attitude to take.

Mr. Lambie

I am glad the hon. Gentleman has made that point, but I do not want to go to the corporation to find out where the money is going. I am here tonight asking the Minister who is to reply to tell us where the money is going. If the Under-Secretary of State for Development had been here during the speech of the Opposition spokesman on steel, my hon. Friend the Member for Chesterfield (Mr. Varley), he would have heard our detailed case on this point.

Mr. Younger

I am sorry to intervene once again in the hon. Gentleman's speech, but he must not misrepresent me. I was here during the speech made by the hon. Member for Chesterfield (Mr. Varley) and heard what he said on that point. That is why I am intervening.

Mr. Lambie

If the hon. Gentleman heard what the Opposition spokesman said, he did not need to intervene because my hon. Friend answered the point. But if the Minister who is to reply to the debate does not know the answer, who the hell does? I hope we shall be given a reply on this point.

If we want to solve the problem of British steel we must have faith in the industry. We must not be afraid of the future. If the Japanese 10 years ago had been led by the sort of men who are now responsible for these matters in Her Majesty's Government, the Japanese would not now be top of the world steel league. If those who control the British Steel Corporation have as much faith in the future of our steel industry as the Japanese had in their industry a decade ago and are as confident in the future of British steel, this will go a very long way to solve our problems. We should then be happy because it would mean that all our steelworkers would have jobs.

7.43 p.m.

Mr. David Crouch (Canterbury)

I well understand the views which have been expressed by the two Flintshire Members who have taken part in this debate, namely the hon. Member for Flint, East (Mr. Barry Jones) and my hon. Friend the Member for Flint, West (Sir A. Meyer). I can also understand and fully appreciate the views expressed by their constituents who have come to the House from Shotton today. I met many of those representatives as I came into the House, and, indeed, I went out of my way to talk to them.

As somebody who has spoken in various steel debates, I realise that the men of Shotton take strong note of which hon. Members take an interest in the steel industry. Some months ago they sent a delegation to the House to lobby those hon. Members who they discovered from HANSARD were interested in the affairs and future of the steel industry. It is because I understand the views expressed by the Flintshire Members and the sincerity of their appeal on behalf of the men in the industry that I address myself briefly to the problems faced by the industry.

I do not want to talk only about problems. Although I understand the views expressed about problems in the industry, I do not fully understand the Opposition's tone of approach to the question of modernisation. The Government are taking the opportunity to do something substantial for the steel industry before it is too late. I agree with the hon. Member for Central Ayrshire (Mr. Lambie) that, compared with Japan, we have lagged behind and have dragged our feet in the important area of competition in steelmaking. The Government have not been afraid to produce a 10-year plan involving £3,000 million investment. They are providing a real light at the end of the tunnel to men who are dismayed that they may not share in enjoying that light.

The Government aim to produce an efficient, capable, profitable and competitive industry. Coastal sites have been developed on the shores of the Mediterranean, and similar sites have been set up around the Japanese coast. The Japanese have made a colossal investment in their steel industry which makes our investment plans look small by comparison. But we are at least thinking about modernising our steel industry and are offering it an opportunity to put itself on its feet and to keep 180,000 men in what, I hope, will be well-paid jobs with a great and secure future.

I must take issue on one matter with the hon. Member for Central Ayrshire, to whose speeches I always listen. He said that if we take steel production from the valleys the valleys will die. But he cannot have it both ways by going on to say that he wants a coastal site at Hunterston. The future of the steel industry does not lie in the valleys of Wales, although I am very sorry that this situation has arisen—and I would be particularly concerned if, like certain hon. Members, I were representing the people affected.

To modernise the industry and to redeploy the men—and "modernise" and "redeploy" are easy words for politicians and planners, but in practice are not so easy for those affected—will mean redundancies on a large scale. These redundancies will affect in all 50,000 men. The problem of redundancies on this scale is a much bigger problem than we faced in the rundown of the coal industry in the last 25 years, because there is now a different expectation among people, among Governments and, indeed, among employers in the public and private sectors.

Parliament must speak for the people. We must not look only at statistics. What I want to do, as a humble back bencher concerned about economic change, is to speak while there is still time for the people involved to see that Parliament ensures that the Government do the right things by them. That is what a Parliament is all about. We hear more and more about the growing power of the Executive and faceless bureaucrats. Parliament still exists to defeat those pressures and to put a restraining hand on anybody who would use words loosely without taking into account the human factor.

My hon. Friend the Member for Flint, West, said that a catastrophic mistake had been made at Shotton and that he was asking for a miracle. I long for the Government to make use of the instruments they have created to cope with this sort of problem. We went through a revolution on this side of the House some months ago with the introduction of the Industry Bill. I did not stand on my head about that decision, and, indeed, I welcomed it. I realise that we need such a measure to help cope with the problems of economic change in our industrial and social life, because the two things are interwoven.

My hon. Friend the Member for Flint, West said that we must have more time to cope with the problem of change. I agree with him and I ask Ministers concerned to recognise the plea that it will take time if we are to grasp the economic advantages and also solve the human problem. The two aims must go together.

I remind the House of the words of the Opposition motion, which is not all that different from the Government amendment. It merely quantifies the matter in a different way. The Opposition ask specifically that no closure shall be permitted until guaranteed new employment has been provided in the areas affected. The Government amendment talks about welcoming … the prompt action proposed by the Government to minimise the social consequences where modernisation results in closure of an existing steel plant. It is the same situation, with a different emphasis.

I wish I could believe that the Opposition's strong and clear statement could be realised totally. But even with the instrument of the Industry Act the Government would be misleading the public, especially the steelworkers concerned, if they said that they would guarantee other jobs for them when this closure took place. That is not the way that matters can be organised in our society. However, we have to try to make them work in that specific and exact way as far as possible.

When we were debating the Industry Bill in Committee, I said repeatedly that it was not enough to produce the Act and say "There it is. The Act will take care of the situation." Much work has to be done to produce the jobs. The Government do not produce the jobs. They merely produce the conditions and the climate which attract industry to move into the area and to invest and so create new jobs for the men so displaced.

I hope that the Government will recognise that they must use every spur in order to get industry to move into areas where there are closures. In the past year I have been visiting Clydebank. I have been very depressed with what I have seen there and, above all, by what I have not seen. I have not seen the arrival of new industries to provide new jobs for the men displaced by an industry which has been dying for years. My right hon. and hon. Friends are to be congratulated on the infrastructure. I used to work alongside Clydebank. The infrastructure is marvellous. There is virtually a motorway down each side of the Clyde, and the Erskine Bridge connects them. The area is waiting for industry, but it has not come. The infrastructure is not enough in itself. We expect the Government to produce that little extra bit of Government activity, energy, task force—whatever one cares to call it—and we expect the Government to succeed. I wish my right hon. and hon. Friends success in this matter.

Today I found myself unable to get into the House because of the vast number of steelworkers waiting outside. I met a number of colleagues trying to get in. They told me that it was impossible to get in and that we should have to come in through the mud in New Palace Yard. For once, the policeman at the door looked rather big. I said to him "I am going through. I am a Member of Parliament." I told the steelworkers that I wanted to speak in the debate, and they parted like the Red Sea. Their response to me was brief. They said "Do your best." That is what I am trying to do, and that is what I ask the Government to do—

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

Order. I hope that the hon. Gentleman has not a great deal more to say. I may feel obliged to call the Red Sea back.

Mr. Crouch

I am terrified that you might do that, Mr. Deputy Speaker.

Earlier in the debate, one hon. Member said that the British Steel Corporation did not think that the number of redundancies involved was very large. It was also suggested that the number was not a major problem. However, it is not only the number of steelworkers made redundant but the number of men in associated industries made redundant which is important. If, for example, it is definite that the East Moors site in Cardiff is to be closed, some 4,500 steel workers will be put out of work. However, the town clerk of Cardiff has said that the effect on associated industries, the service industries and the docks will bring the figure up to nearly 10,000. That is what we have to remember. That is the size of the problem. That is why I ask the Government to look forward and keep up their enthusiasm for modernising this vitally important industry but not to neglect the vital future of those who will be displaced from it.

7.55 p.m.

Mr. James Callaghan (Cardiff, South-East)

I shall take only a few minutes to put Cardiff's case. Having listened to the speech of the hon. Member for Canterbury (Mr. Crouch), I can only hope that the hon. Gentleman will soon be made a Minister in the Department of Trade and Industry. So long as we have to have a Conservative Government, I should much prefer to see the hon. Gentleman there.

Cardiff's case is one which I put on behalf of more than 4,000 steelworkers who have been told that they are to be made redundant. I speak for my right hon. Friend the Member for Cardiff, West (Mr. George Thomas) and for a much wider constituency. There is a united approach in Cardiff on this matter. The city council has made its representations known fully and it has been joined by the Confederation of British Industry, by the trades council and by the Members of Parliament. In fact I have never seen such unity of purpose. Therefore I hope that the Government will listen carefully to what I say as their mouthpiece. I believe that everything I say will be accepted fully by everyone there.

The decision came as a great shock to us. We were expecting rationalisation. Privately we had discussed the prospect of having to find, say, 2,000 jobs. I have followed the developments as closely as possible. It was a tremendous shock to be faced with the decision that within five years—and it will be shorter than that—there will be the loss of 4,000 jobs, which is at least double what we had feared.

We are to continue to have a re-rolling plant. We are grateful for that. Guest Keen and Nettlefolds will be there and the company intends to modernise its plant. We are fortunate also to have a mini-mill. However, when I tell the House that the mini-mill will provide for no more than 500 jobs, hon. Members will appreciate that it does not compensate for the 4,600 which are to go.

We do not accept the basic approach being adopted by the British Steel Corporation. The proposed output of billet steel of the mini-mill will supply only a proportion of the re-rolling requirements. Other billets will have to be shipped into South Wales from billet-making areas. They will be transported by the railways. In view of the transport costs that will be involved, when we have a works over the garden wall from the existing re-rolling plant it is very difficult for us to convince ourselves that the figures of the British Steel Corporation are correct.

The corporation has offered to produce the figures to us. We intend to get the most expert advice on them and we shall examine them all rigorously. All I say at the moment is that the BSC has not proved its case for closing this works.

The Minister said that there would be an 8 per cent. return on new capital investment on the net assets of the industry. We have more than that in the corporation's works at East Moors now. It is not a loss-making plant. It is still making a very substantial profit. We have to weigh these factors.

If we have to face the fact, in the end we demand that the period of rundown be much longer than it is. With the best will in the world and with all of us working as hard as we can, it is impossible to find 4,000 additional jobs in Cardiff to replace the jobs which will be lost.

If this works were loss-making, perhaps the accountants could say that it was overwhelmingly impossible to keep it. But it is making a profit. Neither I nor anyone else in Cardiff understand why we have to close a plant making a substantial profit within three years to satisfy some central plan which has been devised in London. We do not accept this.

The Government do not seem fully to recognise the intense feeling which is aroused when these sort of facts are known, as they are getting known, to the men in those works. We in Cardiff take the view that these works must be kept open until at least 1980. We believe, and will do our best to demonstrate, that they can be profit-making until at least that year. That gives us seven years. If the works can continue to be profit-making, if they have to be run down they should be run down side by side with the building-up of other industries and jobs.

That brings me to my third point. The unemployment will obviously be male unemployment. Cardiff has a high rate of unemployment. The travel-to-work area has a total unemployment of 7,045 men, women and young people. In Cardiff alone the figure is 4,925. That total unemployment represents 4.3 per cent. I am sorry to give figures but I think it is worth giving just three or four. However, Cardiff is fortunate in that it has a number of service industries which provide work for our womenfolk. In consequence, female unemployment in Cardiff is lower than in almost any other area of Wales. Indeed, it is about 1.5 per cent. Male unemployment in Cardiff—that is what will be added to here is 5.9 per cent. It is only the fact that we have this very low incidence of female unemployment, for which we are extremely grateful, that brings our total down to 4.3 per cent. However, what Ministers will have to face is a figure of 5.9 per cent. today for male unemployment which will be added to by about 4,000 workers who will lose their jobs if this plant goes within three years.

The average development area male unemployment in Wales today is 6.1 per cent. Cardiff is an intermediate area. There is not much difference between 5.9 per cent. and 6.1 per cent. when we come to measure it in this kind of figure. I suggest to the Secretary of State for Wales and to the Minister for Industrial Development that on any fair assessment Cardiff has an overwhelming case for development area status. In the 1960s Cardiff deliberately stood back. It would have been possible for us to have pressed our case harder, but the valleys were being run down, the pits were being closed and there was a formidable job to be done there. Therefore, Cardiff did not press overmuch for development area status.

I ask my hon. Friends representing development areas in the valleys to compare Cardiff's position with their own. There is no joy in equality of misery. However, in Swansea, which is a development area, male unemployment is 5.7 per cent. In Llanelly, which is a development area, male unemployment is 3 per cent. In Merthyr, which is a special development area or a development area-plus, male unemployment is 5.6 per cent. In Abertillery the figure for male unemployment is 5.6 per cent. In Cardiff it is 5.9 per cent.

The Secretary of State for Wales has an overwhelming case now for going to his colleagues in the Cabinet and saying "You must give Cardiff development area status. Other areas in South Wales sharing the same problems have now gone ahead of Cardiff." I say rightly so. We were happy that that should be so. We thought it was all part of what community interest ought to be about. We were ready to stand back. But it is now fair and right that Cardiff should be given the opportunity of development area status.

There is a substantial difference between individual projects being approved under the Industry Act and getting development area status. One has only to talk to industrialists to see this. If one approaches an American industrialist—some of us have been talking to these people—and says "Come to Cardiff. We can offer you a site. We will, if you agree to come, go to the Minister and see what we can get for you under the Industry Act", he will say "That is very good. See what you can do." But he does not make up his mind. There is a great difference between being able to do no more than that with an expectation of hope that one will get something and being able to say "Cardiff is in a development area so you will get as of right the following grants and loans." That is the difference between the two systems.

We urge as strongly as we can, in the interests of thousands of men in Cardiff, that Cardiff should have development area status now. On the basis of the figures that I have given I believe we have as strong a case as we have had since the end of the war.

I am glad that we are to have an advance factory of 50,000 sq. ft. I am not sure how many people it will employ—probably 200 to 250. But what is that? I do not spurn any of it. Indeed. my right hon. Friend the Member for Cardiff, West and I are very grateful. If we have the job of filling 50,000 sq. ft. with 200 to 250 men and then are told to find jobs for an extra 4,000 men in three years, what prospects have we got?

Mr. George Thomas (Cardiff, West)

We have 17 empty advance factories now.

Mr. Callaghan

I am obliged to my right hon. Friend. I make this plea. We need further retraining facilities, development area status and a much longer rundown period if this plan is to go forward.

The impact on the city of Cardiff will be formidable in terms even of rateable value. The steelworks in Cardiff represent one-third of the city's industrial rateable value. Imagine carving out one-third of the industrial rateable value at a stroke. That is the kind of situation with which we are faced.

I do not think I have ever spoken with, I was going to say, a heavier heart as a Member for Cardiff during the 27 years I have been in this House. It is a day I hoped would never come. I am sure that all of us feel genuinely and deeply about this matter. We know the families, the men and women, who live in these streets behind the steelworks. It is our job to fight for them, and we will. We ask the Minister, and especially the Secretary of State for Wales, to get for us development area status and a seven-year rundown. We in Cardiff will do our part. We will do all we can to restore our own fortunes, but for heaven's sake do not tie our hands behind our backs. Give us the help we need to overcome this problem.

8.8 p.m.

Mr. George Lawson (Motherwell)

I find it very difficult, in a debate where feelings run high and each hon. Member is so obviously concerned with very real problems, not to embark upon the same kind of argument.

I represent an area which is the centre of the steelmaking industry of Scotland. We have already had enunciated the statement that by 1975 virtually all the open-hearth furnaces in Scotland—about 34—most of which are concentrated in North Lanarkshire, will be closed and that there will be a loss of at least 7,500 to 7,800 jobs.

Unemployment in North Lanarkshire is about 8.6 per cent. at present. We must think in terms of this area. Nevertheless, I supported nationalisation of the steel industry believing that the only way that it could be made efficient was through the type of change that we see being carried out now. There might be arguments about where these developments should take place, but, as I argued in my steel- making area, I felt that it was necessary for the industry to be nationalised if it was to be got off its knees. For years the industry had been going down.

There is no point in opening up all the arguments why that was so. There was, one might say, a war on both sides in this connection and people were suffering from it. There was little investment and the industry went backwards. It was clear that if it was to be put in a position where it could be reasonably confident of meeting what it was facing, the steel industry had to be made efficient. I have always understood that, regrettably, efficiency involved the application of new techniques and a considerable reduction in the number of jobs available. If I may dare to refer to Marx and Marxism, the following definition is of value: The value of a commodity is determined by the amount of socially necessary labour of average skill and intensity required for its reproduction. But when these techniques were improved it meant that the value dropped. That is good Marxism.

I should have expected these arguments to have been advanced from this side of the House in the past and to be advanced now. Unfortunately, we sometimes suffer on this side of the House, as well as hon. Members opposite. I do not know who suffers more from dogma and doctrines that virtually blind us from seeing what is required and what is taking place around us. We cannot see such things because of the dogma that comes down in front of us like a set of blinkers.

We must recognise now that the world has changed. No major country can operate on a free enterprise basis. Governments everywhere, including the great nations, are becoming more and more involved with industry. There will be no returning from this situation. That involvement applies to the steel industry.

I am associated with our party on steel and power, and when we met Lord Melchett on the first occasion he told us that merely to replace the steel industry at its present capacity would cost a good £3,000 million. We have a steel industry that suffers from many disabilities. The nation has a heavy vested interest, and if it is to be put into the position of a self-sufficient and competent industry we must face the onus that might fall upon us to defend what could happen. In North Lanarkshire and in the area of my hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) there are heavy threats. But we must try to ensure that the steps which are being taken are reasonable.

We have heard it strongly put by my hon. Friend the Member for Central Ayrshire (Mr. Lambie) that our hopes in Scotland were high about the utilisation of what has been prescribed as the finest site in Europe—namely, Hunterston. But I am only referring to what has been said. I cannot pretend to be a judge of such matters. There were high hopes that there would be a great steel complex on that site which would be of great advantage to the United Kingdom as well as to Scotland in particular. I assume that the decision has been taken not to build a steel complex on that site.

I might be described as betraying Scotland, but for my part we must face the position that it will not be built. I put forward that view well knowing that if the decision had been taken to build my area could have become a desert because the steelmaking in the area would have been shifted to the coast. I take it that the British Steel Corporation looked at a number of sites and concluded, on the basis of past commercial judgment, that Hunterston should not be developed in that way at that time. What might happen in future is, of course, another matter. Development might go elsewhere, and I am not quarrelling at this stage should that decision be taken. I must admit that had I been a Government spokesman I should have found it exceedingly difficult to go over the head of the British Steel Corporation and take the responsibility upon myself to say that I knew better.

I am assuming that the decision not to build at that site is pretty well settled. But I repudiate the point that has been repeatedly made by my hon. Friend the Member for Central Ayrshire that if the development does not take place at Hunterston there will be an end to steelmaking and steel finishing in Scotland, with the exception of the Ravenscraig site.

Mr. Lambie rose——

Mr. Lawson

We will argue about it afterwards. When my hon. Friend makes that suggestion, he must remember that it is estimated that the lifetime of Ravenscraig is approximately 10 years. It would be absurd to spend £60 million upon something that will have a lifetime of that sort. That would be bad commercial judgment. Although Ravenscraig is in the heart of my constituency, if that is what is intended it is absurd.

But it is not true that Ravenscraig will be the only inland site. There are great plans for Scunthorpe, which, I understand, is as far away from the sea as Ravenscraig. However, Ravenscraig is one of the biggest schemes in which the British Steel Corporation and private enterprise are involved. As it happens, private enterprise went ahead of the corporation. In Scotland we were dreaming about some of these things. Of course, in some respects we have to suffer from our history. In many ways Scotland suffers from the Scots. Some of the worst difficulties which Scotland has faced have been caused by some Scots. It is said that the best of them leave Scotland.

In Scotland we have an excellent area with which to trade with Europe. As my hon. Friends will know, I have always been a supporter of entry into Europe. One of my justifications for that support is that I believe that the industrial belt from the Firth of Forth to the Firth of Clyde, which forms part of the coastline of the European Lake, the North Sea, is an excellent site. I disagree, when we are talking about the Ayrshire valleys that will become dead, that the future is so gloomy. Ayrshire is sited just where a sensible manufacturer would put his plant if he thought about exporting across the Atlantic or the shortest route from which to export into Europe across the North Sea. The British Steel Corporation should see that possibility and should not allow its steel making capacity in that area to decline or, indeed, the steel finishing capacity. In fact, I have urged the Corporation to build up its capacity. I have not argued on the basis of 10 million tons; I have merely argued about a capacity of 4½ million tons.

I hope that the promises that were made just before Christmas will be kept and will not become a forlorn hope. I hope that those promises will form part of a definite plan. We must build up capacity at Ravenscraig to over 3 million tons. It was an excellent thing that the corporation inherited a plant which was half developed and that with relatively little work it could get very much more out of it than what it put in.

There is also a first-rate attachment to the Gartcost works, which we never hear about. That is a first-rate unit in the central Scottish industrial belt. But there is a great fear that the excellent rolling mills and finishing plant in Lanarkshire, Glengarnock and Dalziel, could have to receive steel from the south. It is easy to take a dog-in-the-manger line and say that we will not have any steel sent from the south, and a regular plan of that sort could mean that they went out. But if we could make the steel in the area to service those mills, Scotland and Britain as a whole would benefit.

Hallside, Clydebridge and Clyde Iron works are all adjacent and all threatened. Hallside built up the electric are furnace with a capacity of 100 million tons, and with that kind of performance Scotland can begin to help Britain to realise the full potential of this area. This region, which is far away from the big industrial centres, could be a first-rate export area for Britain as a whole, given a sufficient diversity of the steel industry.

There are three steel foundries in Scotland belonging to the British Steel Corporation and they are all threatened. One of them is Hallside, and that has notice of closure now. We might not be able to retain both the others, but I hope that we can keep one good steel foundry which is bigger than the existing ones. We need a steel foundry if we are to build up industry in the area apart from the steel-using industries.

We have an excellent special steel unit at Craigneuk which we call locally Clyde Alloy. It is so efficient that it can beat Sheffied at its own game——

Mr. Eddie Griffiths

You are biased.

Mr. Lawson

Of course I am; I am never anything else on a subject like this. But the facts are there.

When the Government are trying to encourage industry into an area, it is normally the very type of industry which will use the products of the Special Steel Group, the bright bars, for instance, which are necessary in lighter industries. It would be very bad national planning to try to encourage industry into Scotland—this is an accepted responsibility of this Government, as of others—while, at the same time stripipng the area of its capacity to make the steel which is so necessary for the type of industry.

We are asking, very modestly, for the full realisation of the plan enunciated, plus the assurance that we shall keep at least one steel foundry. We should also retain a substantia part of the special steel industry. We suffer now because the Scottish industry, which used to be homogeneous and under single control, is broken up into four groups, which jeopardises the close and coherent operation of the industry.

I am not pleading for a Scottish steel industry run by Scots. Sometimes I have confidence in them and sometimes I have not. I am asking for some plan by which we can effectively co-ordinate what is going on in the area, keeping in mind the needs of the steel-using industries in the area and thinking in terms of an industry producing not just for Scotland but for the South and for export as well. We are an important part of the United Kingdom, and I want this recognised. If it is, I will do my best to back the scheme.

Several Hon. Members rose

Mr. Deputy Speaker

Before I call the next speaker, and while thanking the House for its co-operation with short speeches, may I remind hon. Members that I am anxious to get in four more speeches and that the Front Benches would like to start at 9.10 p.m.?

8.24 p.m.

Mr. Patrick McNair-Wilson (New Forest)

I will not detain the House long, because this debate, not surprisingly, has been given over to hon. Members expressing concern about the social consequences of any reorganisation plan. It is of course the duty of the Government, in co-operation with the British Steel Corporation, to do what they can to ensure that those social consequences are met as far as possible. But it would be ungenerous for anyone to fail to recognise the magnitude of the reorganisation which is now planned.

This is the biggest single reconstruction of our steel industry in history and will make it the most modern and competitive we have ever had, capable of taking on anything in Europe or the world. I want to devote my speech not to the Government's plans, because we will be able to go into them in more detail on publication of the White Paper, but once again to the problem of the social consequences.

The British steel industry is made up of two component parts, the public sector and the private. It is not without importance that the private sector, the independent producers, can play an effective part in at least mitigating some of the consequences of closing certain areas under the corporation's control. The right hon. Member for Cardiff, South-East (Mr. Callaghan), who has now left the Chamber and to whom I gave notice that I would raise this matter, mentioned a very important scheme at East Moors in his constituency.

The British independent steel producers are at the moment suffering serious disadvantages because of the price arrangements being imposed upon them by the attitude of the BSC. It is an unusual situation as the BSC produces billets which it sells to the independent re-rollers. It also re-rolls its own billets. Therefore, by creating a differential between the price of the re-rolled product and the billet, it can create a situation which will squeeze the profit margin of the re-roller.

A report was published by Lord Hirsh-field which recommended that this practice should, as nearly as possible, be curtailed. The Minister will remember that on 6th December 1972 he accepted that report, but said: In the circumstances of the present prices standstill, it would be inappropriate for me to direct the Corporation to give effect to Lord Hirshfield's recommendations."—[OFFICIAL REPORT, 6th December, 1972; Vol. 847, c. 452.] The question I want to pose to the Minister tonight is this. The standstill is with us and has some time still to run. Phase 2 of the Government's policy is yet to come. Can my right hon. Friend give an assurance tonight that this pricing difficulty which is affecting the independent steel producers will be corrected, and that he will give that direction to the corporation in the near future, because it is of great significance for the profit margins of the independent producers? I shall show presently why it is also important in the global picture of social consequences.

It was particularly worrying when, on the evening of the same day as my hon. Friend the Minister for Industry made the statement to which I have referred, the Lord Layton—who is, after all, a British Steel Corporation board member—stated We certainly would not commit ourselves to any specific arrangements on these prices when we are just about to have the rules changed. We felt all along that it was unwise for an arbitrator such as Lord Hirshfield to be introduced on such an issue when the issue itself was going to be transfererd from the Government to the jurisdiction of the ECSC. The fact is that the ECSC is of great significance, but necessarily it must work slowly. I still believe that it is essential that the Government should give the direction which was promised when that report was accepted. I refer to this in the context of what the independent steel producers can do to mitigate the situation we have been described.

In association with Guest Keen and Nettlefolds, I have been discusing this matter in some detail so far as it affects the East Moors steel complex. The pricing situation to which I have referred now affects GKN adversely to the tune of £1.6 million per annum at 1972 prices, and if GKN is to invest in the new hot rod mill and the mini-mill at the East Moors site, one costing about £18 million and the other about £12 million, and is to be faced with a continuing disadvantage in pricing such as I have spoken about, this will affect the company's judgment concerning that investment.

The right hon. Member for Cardiff, South-East referred to development area status for that part of the country, and here again the figures are staggering. I am sorry to see that my right hon and learned Friend the Secretary of State for Wales is not present in the Chamber.

The Minister of State, Welsh Office (Mr. David Gibson-Watt) rose

Mr. McNair-Wilson

Oh. The fact is that for GKN the difference in the figures which would be able to support this project is that if the area remains an intermediate area it will receive about £600,000, whereas if the area gets full development status the figure will be something over £6 million.

The point here is quite simple for all to see. The two disadvantages of the non-acceptance of the Hirshfield recommendations and the fact that Cardiff does not get this status will mean that GKN may well naturally look elsewhere for its investment. This could ultimately mean serious problems not only for that area but also for other parts of Wales.

Mr. Tom Boardman

If I may correct my hon. Friend on the question of non-acceptance of the Hirshfield recommendations, those recommendations were accepted by the Government and the British Steel Corporation, which said that it would take full account of them. My hon. Friend will know that the power of direction is no longer appropriate.

Mr. McNair-Wilson

Yes. I am grateful for my hon. Friend's comment. Nevertheless this continuing disadvantage for this particular independent producer is serious. I am sorry to recognise now that there is very little that can be done, because it means that the company will have to suffer this disadvantage for the foreseeable future. The fact is that the BSC has said that in the absence of GKN's project it will do something itself. Nevertheless, having in front of me the corporation's Press hand-out which gave that information, I am not sure how satisfactory that information really is, because it is stated in the corporation's hand-out, under the heading "Steelmaking in the Cardiff Area", that A new electric are steelmaking plant will be built in the Cardiff area in place of the obsolete East Moors Works of General Steel's Division, B.S.C. Discussions between the Corporation and Guest Keen and Nettlefolds are continuing, on the basis that the new steel making capacity will be built and operated by GKN. However, if these plans do not come to fruition, the Corporation will itself build and operate the new plant. What it does not refer to is the proposed rod mill which GKN has said it will put in and the mini-mill plant operating with scrap, and it is that which could cause serious troubles in the area. Until the corporation is able to give the same promise as GKN, there will be a serious gap in the number of jobs available.

We must recognise that the British independent steel producers have a vital rôle to play in the maintenance of our industry in these times of change. Unless we can get fair trading for the independent producer, the independent re-roller, and as much as we can for the others, many of these companies will find that they cannot get the support which I believe to be vital.

8.35 p.m.

Mr. R. B. Cant (Stoke-on-Trent, Central)

We have been discussing one of our great industries which is in a process of agonising transition. I think that it would be expecting too much of human beings, certainly of politicians, to think that they could regard this as an academic exercise and not do a bit of special pleading for their own areas.

I am interested personally in the economic geography and future of the steel industry, and as Secretary of the British-Japanese Parliamentary Group I have studied what these remarkable Japanese people have done. It is obvious that whatever solution we adopt for the steel industry in this country it must not fall too far short of standards of efficiency in both Japan and Europe, and we cannot move towards that greater efficiency without a great deal of heartache and suffering.

The only thing that I would add to that little preface to my parochialism is a plea for time, and this has already been made by others. In a number of these declining areas or areas associated with declining industries, where time is given experience has proved that in some cases, but not all, a good deal can be done.

Naturally, I want to talk about the steelworks in Stoke-on-Trent. I know that the Potteries are better renowned for the excellent tableware that they produce and are perhaps even better known for the fact that they have coal mines and that on these old coal mines we have done a great deal of land reclamation, and so on, but we also have a steelworks. It may be the Cinderella of the steelworks in this country but, nevertheless, it employs 2,700 men, and it is at some risk.

This country is ruled by a Government of alleged businessmen. I am just an economist. I am one who, by definition, knows a great deal more about money than the people who have it. But here we have a Government of businessmen who are thinking of putting at risk an enormously viable plant. I could combine parochialism with financial viability, rationalism and all the other criteria.

I have been looking at a works report. It says: We are now the most profitable Works in our Group … and we must surely be amongst the leaders in the Division. It goes on under various headings: Output of cast blooms I am not sure what those are— … was the best ever attained … Mill. Output at 85,000 tonnes was the highest ever achieved over 12 working weeks … Finishing End … A shift record of 647 tonnes through the roller straightener was achieved. Some of these works descriptions are almost as bad as one finds in the Potteries, where the most famous is the "Bagger maker's bottom knocker".

This plant is making profits that will enable it to repay within a period of two years the total capital investment that it is seeking for the installation of electric are furnaces, yet it is at risk. It may be that the steelmaking process will end in the next two years. My right hon. Friend the Member for Newton (Mr. Frederick Lee) talked about the economics of Bedlam. All I can say is that it is strange economics indeed which can even contemplate the partial closure of these works at Stoke-on-Trent.

The other argument that we use for the investment that we are seeking is that in no other instance is the investment that would be required for similar output so small. We must tread with caution here. We cannot talk about other constituents' steelworks without expecting a little retribution in the debate. But in one case at any rate to produce the same result would require an investment of £40 million against £4½ million, and in another case an investment of £20 million. I do not want to pursue that because it is so obvious. I just want to make three brief comments, and I am sorry the Minister for Industry has left the Chamber because I wanted to make some rather critical remarks.

To go back to the point raised by my right hon. Friend in respect of mini-steelworks, here one has a situation in which the Government are permitting almost monthly—we can forget about Sheerness and its maverick mini-plant—the building of mini-steelworks; some have been measured. But we can go further than that; we can take the Lloyd Cooper mini-steelworks. This is a very remarkable example, because this firm applied for an industrial development certificate to enable it to build this mini-steelworks, and the Minister of Industry turned it down. But in the letter he wrote to me—marked "Confidential" with two lines underneath, and dated 4th January, although every word of this letter was in the Financial Times of 6th December—he says he has refused an industrial development certificate to this private firm. I thought we had a minor triumph here, but as I read on he tells me that, unfortunately, this firm has decided to go ahead without an industrial development certificate.

Is this permitted? Is a firm which applies for an industrial development certificate and is refused allowed to say "We do not care; we will just go ahead"? I think that is very remarkable.

The next step is that the Minister has given a certificate for another mini-steelworks at Patent Shaft—there are some very peculiar names—in the West Midlands area. The irony of this situation is quite simply that the main supplier of pig iron for this particular works is the Shelton Steelworks. So if it is not very careful it is going to be hoist, to some extent, with its own petard. It is absolutely deplorable: we have 2,700 men wondering what their future is going to be, knowing that this depends on the development of electric are furnaces, knowing that they must be fed by scrap and seeing these private firms pre-empting this scrap to such an extent that we have had to import 100,000 tons of scrap at a cost of £250,000 from the Soviet Union. I do not know whether this is economics or planning gone mad, but I think that an end should be put to it, and very quickly.

The second point is this, and I would like clarification on it. Quite simply, hon. Members have been regretting that they are in intermediate areas wanting to be development areas. But we are not in an intermediate area. We have made a very powerful application, but we are not even an intermediate area. Yet the Minister of State, in a letter to one of the hon. Members, has said: "Do not worry. Even if the axe falls, the powerful package of measures now available under the Industry Act to help direct new employment to the areas affected will be available to you". This cannot be true. One cannot have the powerful package of measures available to an area which is not even an intermediate area, much less a development area. If this is so, I hope the Minister will tell me.

Thirdly, and finally, I should like to say to the Minister that these men must know what their fate is going to be. We as Members were asked to come into this in the action committee almost two years ago. These men, as with many others in the industry no doubt, have been complimented, not only on the way in which they have conducted their case, but also on the restraining way which they have behaved. They deserve better than this managerial sword of Damocles that has been hanging over their heads for so long. They hoped that when the Secretary of State spoke in the House before Christmas the Government would at least tell them, before they went home for Christmas, what their fate was. Instead, it was the old formula: "I cannot say more, but you are a candidate."

This is not good enough. Whole generations have spent their lives in this steel mill. It is one of the most profitable steel mills in the division. I hope that when the Chairman of the British Steel Corporation tells these 2,700 men early in March what their fate is to be he will have a positive answer for them.

8.46 p.m.

Mr. Eddie Griffiths (Sheffield, Bright-side)

I shall not fall into the trap of trying to make cheap political points. We are discussing the state of the British steel industry in 10 years' time. If we were to waste precious time in taking the political rise out of one another and blaming each other, we would let down the 250,000 workers in the industry.

However, to make just one small political point, I have noticed a distinct change in the 4½ years since I have been a Member of the House. When the Labour Government were in power all of us on the Government side defended Lord Melchett right, left and centre, and he was attacked by Tory back-benchers. Now that the Government have changed, many of my colleagues spend a great deal of time attacking Lord Melchett because he is not coming up with the right answers for their area, and the Government and Tory back-benchers defend Lord Melchett and the logic of his argument.

I shall divide my arguments into two sections. First I shall take a quick look at the proposed development plans. Secondly, but certainly not least, I shall consider the social consequences of the changes that are to be brought about.

Under the first heading, in 1964–66 when I was campaigning before I came to the House in 1968, one of the great things advocated from this side was nationalisation of the industry. Some of the arguments then advanced—indeed, I put them forward myself—were that the old steel barons were playing about making parochial steel, that they could not see further than their works boundaries, that they never came together, that they could not come together on joint ventures and that they were so busy competing with each other in a small way that they were not equipping themselves to meet the great international competition for business. So the industry was nationalised.

I have great sympathy with the redundant steelworkers, but it comes ill from those politicians who say, because their constituencies are affected, "If the huge investment proposed under this great plan, with all the coastal sites, does not happen to come to my midden, I condemn the whole scheme as shocking and I shall not play ball". I wonder what the whole exercise is about. That is what steel debates in the House are deteriorating into. They are becoming debates not on a broad, logical policy for the industry which will safeguard it for the future, but on parish pump steelmaking.

Another point worth making concerns the 40 million ingot tons by 1980 which has been referred to. I do not think that during the last three or four years anyone on either side of the House has defined what this means. Does it mean total capacity, good, bad and indifferent? Does it mean all modern capacity? Does it mean the total of the steel industry including the private sector? Or does it mean the huge coastal sites? Does it include the special steels division, in Sheffield, Rotherham and other places, which produces about 3½ million ingot tons? We bandy these words around without knowing exactly what we are talking about. I believe that the proposals which have been outlined, assuming that they come to fruition, mean that by 1980 we shall have a total capacity, including private steel and special steels, of between 39½ million and 41½ million ingot tons.

Many of us on this side of the House have never realised that when we modernise and put in competitive steel plants there is a price to pay. What we 'have seen in the last few months—is indeed, the last couple of years—is that we jib at the price we have to pay. I do not mean the price in terms of human suffering, which I shall come to later, but the price of closing obsolete plants, plants located in wrong places, plants based on wrong technology and so forth.

On certain specific comments with regard to the review I agree with my hon. Friend the Member for Chesterfield (Mr. Varley) that we must never have the indignity of review bodies constantly looking at every nationalised industry. I am delighted that the whole plan of the BSC—its detailed plan and broad principle—has been completely vindicated. I think it is time for this House—both sides—having nationalised an industry and having appointed a chairman of the board, to show confidence in him. We should not be questioning him every time he wants to move one man or have great public debate when he is running a great industry. If in the end he is not delivering the goods, let us get rid of him, but do not let us keep questioning him on every piece of tittle-tattle within the industry. Let us show confidence in the industry.

Mr. Ron Lewis (Carlisle)

Will my hon. Friend give way?

Mr. Griffiths

No. I have not much time.

The question of money has been raised. I repeat what I said earlier, that every farthing is going to the traditional steel industry areas, so if there is not enough money to go round all the existing steel areas it is not because some brand new area is getting the money at their expense. From Port Talbot to Ravenscraig, to Sheffield, Rotherham, and the North-East coast, it is all going to traditional steel areas.

One of the things I have learned about steel men—whether in Shotton, Sheffield, Scotland, on the North-East coast or anywhere else—is that they are a good breed of workers. Yet we hear hon. Members saying that Shotton workers, for example, are the best, or those on the North-East coast are the best. My experience—and probably I mix more than anyone else here with steelworkers all over the country—is that they all have a great dedication to their work.

Mr. Ron Lewis rose——

Mr. Griffiths

I am not giving way. My hon. Friend has just come in and I have waited six hours to speak in the debate.

Again, all the money is going to development areas and intermediate areas.

The question of mini-mills has been mentioned a great deal. I think there is a great danger of certain areas building too much hope on mini-mills. I believe that there will be a scrap crisis in the country when the steel industry is working at top level, and in this respect I do not think that we can have too many mini-mills. There may be a case for a mini-mill in an area where scrap arises on a large scale and where the products can be readily and easily utilised, but I cannot see more than two or perhaps three mini-mills being developed other than for the production of special steels.

I wish now to deal with the social consequences of the changes which will come about. I do not believe that any steel man in this country feels that he has the right to spend all his working life in the steel industry. But I support any steel man from any part of the United Kingdom who says that he has the right to work. I believe that to be a problem. When the Government's plans are matured the number of true redundancies will be relatively small in proportion to the total numbers before us. But the job losses will be in these areas for ever and that is one of the reasons why it is important to bring in alternative industries. One particular area I know of will have a cloud over it for the next few years but there are 250 men there over the age of 65 who are still working. The steel industry is a hard, physically exacting industry, one which demands that its workers shall work shifts and rotas, week-ends and so on. It seems ludicrous that at this time steelworkers should have to work after the age of 65 in areas of escalating unemployment.

The time is ripe for a policy of retirement at 60 years of age within the steel industry. It could be achieved by 1980 by providing that in 1975 all men aged 65 should retire, in 1976 all those aged 64 should retire, in 1977 those aged 63 should retire, and so on. The money that the BSC is paying out in compensation should be concentrated in a pension fund. If a man has gone into the industry at the age of 16 he deserves that kind of treatment.

A great deal of emphasis has been placed on the problems of the next 10 years. There has been reference to 30,000 to 50,000 jobs disappearing over that period. But since nationalisation there has been a loss of well over 30,000 jobs from the industry and the bulk of them are in the Sheffield-Rotherham area. But at least the announcements relate to closures three, five or seven years hence. In the past, and my own Government were responsible for it, the maximum notice for a closure was 18 months. What plans and preparations can be made in those circumstances? Will the Government therefore accept responsibility for steelworkers who have been made redundant since nationalisation? The Government are concentrating on the problems of the future but forgetting the hardship of the past.

I find it disappointing that up to now no one has mentioned the huge investment that will take place at Redcar. Unemployment in that part of the country ranges from 6.7 per cent. to 8 per cent. We have become bitter and twisted about certain areas but there is no mention of areas like Redcar or that this kind of investment will be a wonderful thing and will ease the chronic unemployment of the past.

The steel industry has a great challenge before it. We have gone into Europe. The important thing is that we are in. I do not believe this statement to be the complete answer. I should like to see a further review in 1975 on planning and investment in the early 1980s and later. We must become competitive and get rid of the dead wood—please do not misunderstand me; I am talking not about human dead wood but about obsolete plant. We must start to supply things in this country made with steel produced in this country rather than from escalating steel imports. We must start increasing our exports. If we act in a humane way and if the Government and the BSC accept their responsibilities to bring alternative work into those areas, with alternative jobs which redundant steel workers can see are coming, the British steel industry will have a great future.

9.0 p.m.

Mr. Roy Hughes (Newport)

This debate has certainly taken on a new significance since the statement in the House on 21st December by the Secretary of State for Trade and Industry in which he announced the future investment programme for the steel industry. We know now that whole communities will be affected by redundancies and closures. It would be right to say that Wales, as in many other areas under this Government, is getting a very bad deal indeed. There are to be something like 18,000 redundancies in the Principality with catastrophic blows in Shotton, East Moors and Ebbw Vale. Other smaller works will also be affected.

There is, for instance, the tube works in my constituency whose closure has already been announced. It is a tragedy because it is an ideally situated works. There are great possibilities for the future arising from developments in the Celtic Sea. I want to be sure that our tubes will be used in these projects rather than Japanese tubes. This closure should be postponed for some years. If we look at the production figures we notice tha4. Scottish production will rise by no less than 50 per cent., production in the North-East will go up by 260 per cent., in Yorkshire by 40 per cent., whereas in Wales it will rise only by 8 per cent.

There is a bit of an enigma about the investment programme. We are told that about £900 million is to be invested in the Welsh steel industry. It is difficult to find out where this money is going. About £400 million is to go to Port Talbot, £30 million to East Moors, £16 million to the Spencer Works and £45 million to Ebbw Vale. There is a big discrepancy, and I hope that the Minister can explain this in winding-up. We all know that there have to be changes in the industry. Steelworkers are not Luddites.

We know, too, that these problems would have been much easier to solve if the original proposal of the British Steel Corporation for an annual target of 43 million tons had been allowed to proceed. I note from an announcement by the Press and information office of the corporation on 15th January that the corporation is to seek new industry for Ebbw Vale. Well it might. This is welcome news. We want the corporation to stay in Ebbw Vale. What is not so welcome is the appointment of Mr. Fred Cartwright to oversee this operation.

Some of us on this side of the House opposed his appointment after steel was taken into public ownership. For some years he has been the voice of Wales in the heirarchy of the steel corporation. What has happened in the intervening years? The Uskmouth project has been pigeon-holed; Port Talbot is allowed to go ahead with its iron-ore terminal. Port Talbot was the original base for the privately-owned steel sector. There is now to be a vast expansion at Port Talbot, yet the Spencer Works is much more modern, one of the most modern in Europe.

The Newport Tube Works is to close, yet capital is to be poured into a less efficient works in another part of the country. Then there is the fateful decision about Ebbw Vale. It is fair to say that the steel industry in Monmouthshire is in its present state partly because of the ministrations of Mr. Cartwright. The cornerstone of my constituency is the Spencer Works. Lord Melchett referred to Shotton as a three-legged horse because it did not have its own iron-ore terminal. The same applies to the Spencer Works.

I have always felt that it was not right that the Monmouthshire steel industry should be treated as a branch factory of Port Talbot or that Monmouthshire should bear the overheads of the ore terminal there. It appears that the corporation has given a lot of thought to these matters. I have before me an extract from the "secret" report of the corporation about this. It says: It is here assumed that, if used as the location for the smaller Squares plant, Llanwern could still be fed with ore and coal through Port Talbot … rather than by building a new jetty at Uskmouth, at a cost of £32.5 million. … The new Uskmouth jetty would almost certainly be necessary for the larger Flats plant. … the figure for total BSC inward transport costs with Squares plant at Llanwern is based on the concept that the additional ore needed at Llanwern would be shipped in through Port Talbot and sent on by rail. If this proved impracticable, e.g. because of physical limitations on the South Wales rail network, or because of environmental objections to the additional bulk ore movements through urban areas, the Uskmouth jetty would have to be built to accommodate the smaller Squares plant as well as the larger Flats plant. Five years ago the Uskmouth project was estimated to cost £15 million. Where has this £32.5 million come from? There is inflation, but is the extra cost caused by bigger vessels being brought in than was originally envisaged? The BSC has told me from time to time that no rail or environmental problems are involved, but it appears from the extract which I have read to the House that that is not so.

What about expansion at the Spencer works? Does it mean that we are to have only this smaller Squares plant and no Flats plant, and that there is to be little expansion? The workers at the plant have a right to know.

9.10 p.m.

Mr. Michael Foot (Ebbw Vale)

The Opposition asked for this debate because they believed that it might, possibly, influence the White Paper upon the steel industry which the Government are to produce. I understand that the Government felt that it would have been better to have had the debate after the White Paper, but we wanted a debate both before and after. The Government will appreciate from the debate that we have had that we thought it was specially necessary because a debate before the production of the White Paper would involve arguments from hon. Members representing constituencies in areas which would be the heaviest hit by the changes. That is why we have arranged it in this way. Those who have attended the debate will agree that it has been an extremely good debate in which varying points of view have been advanced from different areas, particularly those that are threatened.

We do not believe that the argument about the future of the steel industry should be concerned solely with the areas that are threatened. That is made clear in our motion. We are calling for the maximum extension of the steel industry. We have not become contractionists. Ebbw Vale is threatened in one sense more severely than almost anywhere—I am not making any competitive claims—our whole community is threatened, but Ebbw Vale makes its claim as a supporter of expansionism in the steel industry and we have not become contractionists.

Although I will seek to nut the case that the people of Ebbw Vale have the right to have put to the House on a matter threatening their whole future, I am not asking that there should not be a major modernisation of the steel industry. We have not changed our view. My hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths) is under a misapprehension. We want to see a major modernisation of the industry. We believe that a major modernisation must to a great extent eventually follow the lines laid down by the BSC, but that does not mean that we think that the BSC is infallible. It does not mean that we have to accept its recommendations. It does not mean that any of us in the House are prepared to accept diktats from the BSC or the Government as to how we are to deal with these matters without having the widest possibility of examining what is proposed.

I will not go into lengthy criticisms of the Government because my hon. Friend the Member for Chesterfield (Mr. Varley) dealt with those at the beginning of the debate. Part of our criticism of the Government is of their delay in bringing forward this great investment programme. The fact that it has been delayed does not mean that the people who are most affected do not have the right to make investigations. The Government have taken three years to examine the investment programme of the BSC. It did not start with the Secretary of State or the Minister for Industry coming into office. Some of us have been dealing with this question ever since June 1970. As the Government have taken three years to examine these questions, they must recognise that the people in the areas most affected—Shotton, Ebbw Vale, Consett, East Moors and the rest—have the right to examine the proposals in detail. We will not take as long as the Government took to examine them, but we cannot be denied the right to investigate them in the greatest detail.

In a debate such as this I am particularly conscious that I am speaking for the people of Ebbw Vale. My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) said that in some respects this was the saddest day he could remember since he became a Member of the House. If what the British Steel Corporation and the Government are doing is carried through, it will be the greatest tragedy which has affected Ebbw Vale and the surrounding area since the closure of the old steelworks at the beginning of the 1930s. We are debating a matter of consequence to the people who send me to this House, and, therefore, I have a right to speak on that aspect of the matter.

What I say about Ebbw Vale applies also to many other areas. The problem in Shotton is not exactly the same as that in Ebbw Vale, but it is similar. Although there are similarities in East Moors, the situation is not exactly the same. If the Government and the steel corporation are serious in wanting to solve the question, with all the consequences for steelworkers and the surrounding community as a result of the closures embodied in the Government's programme, they will have to solve the problem in Ebbw Vale. Under these proposals we are scheduled to come first on the list. I repeat that when I speak about Ebbw Vale this evening I also speak of matters and principles which apply to the other areas.

I wish to make these remarks to the Minister with the utmost restraint, because I am concerned to protect the livelihood of the people in my constituency, and in this respect nothing else counts besides that overriding consideration. The Minister repeated to the House today the same statement about Ebbw Vale as on one occasion was made by the Secretary of State for Wales, and, indeed, as was previously made by another Minister in the Department who is not able to be here today.

The Minister, when he made his announcement in December, gave the House and the country a completely misleading account of the situation in Ebbw Vale. I thought he had made that statement inadvertently; I did not think he would be so callous as to say it in that form if he had appreciated its effects. It was partly for that reason that I invited the Secretary of State for Trade and Industry to come to Ebbw Vale to discover the real situation.

He has now been to Ebbw Vale and knows the situation much better. I was all the more surprised when today the Minister for Industry seemed to repeat the formula which has been served up to Ministers—including, I am sorry to say, the Secretary of State for Wales, who should have known better. As a formula concerned with Ebbw Vale it is false.

What the Government have said on three occasisons from the Treasury Bench—and this affects the livelihood of at least 4,500 people—is that the announcement about the end of steelmaking in Ebbw Vale was all made in March 1970, and apparently that is the end of the matter. But the statement in March 1970 was not a notification of the end of steelmaking at Ebbw Vale. Let us not be under any misapprehension about this, because we have taken up the matter directly with Lord Melchett. He confirmed to representatives of the works council in Ebbw Vale that the statement made in March 1970 was never regarded by the corporation as being a formal notification of the end of steelmaking. The first intimation which they regarded as anything like a firm statement, though still only a proposal, was what Lord Meichett said on 16th December last.

This is the essential point that the Government must understand and which so far they have not recognised in any statement. When the Minister considers it, I am sure that he will recognise its importance. In the statement made in March 1970 by Lord Melchett he said not merely "We envisage that in the future steel making may end." Certainly he said that. That is the statement which has been quoted on several occasions. But he also said "We envisage that we shall be able to sustain employment at Ebbw Vale steelworks at the figure of 8,000." What is even more important, he also said "We will invest some £9 million to develop your hot mill." That was the figure at that time. It would be much more today. If a hot mill is to be developed, that has implications for the heavy end of the works as well, and a representative of the British Steel Corporation came to Ebbw Vale a few months later and confirmed that. He said "That is a reasonable deduction. If we are to spend that amount of money to develop your hot mill and we give you a guarantee of 8,000 jobs, you are entitled to draw the inference that may be we shall have proposals for continuing to produce special steel at Ebbw Vale."

For people trying to deal with a threat to their community in an intelligent manner, which is what we are trying to do in Ebbw Vale, it is very galling to be told time after time that this is what happened in March 1970 when, until we got the Minister to come to Ebbw Vale, we had not the slightest recognition of these facts.

Mr. Tom Boardman

What I said today, and what the hon. Gentleman attempted to dispute, was that the decision to close down those parts involving the loss of 4,000 jobs was made before any decision was made on the strategy. It was independent of the strategy and related to the earlier policy.

Mr. Foot

I will deal with that matter, too. If the hon. Gentleman wants to deal with these matters with any sensitivity he must take into account the fact that we do no regard what Lord Melchett said on 16th November as decisions. Nor does Lord Melchett. They are proposals. We are having a negotiation at present between the works council and the British Steel Corporation. That has been established on the basis that they should be regarded as proposals. Lord Melchett has agreed with that proposition. It is not for the Government to talk about decisions.

The hon. Gentleman should follow what the Secretary of State said in Ebbw Vale. We asked him this precise question because, naturally, we were concerned about whether the fact that a statement of proposals had been made in Ebbw Vale on 16th November meant that we were being treated differently from the others embraced in the statement made in December. Naturally, we were concerned about that. We asked him, and the Secretary of State said "No." He told me in Ebbw Vale "When the White Paper is issued in a few weeks it will embrace proposals dealing with Ebbw Vale in the same way as all the other works concerned—Shotton and the others." If the right hon. Gentleman now says that we are to be treated in some separate way, he will only inflame matters in Ebbw Vale.

We are faced with a threat of major consequence to our community. If these proposals went through, the life of our community would be shattered. We have had to deal with that possibility in these intervening weeks. We have been concerned about the morale of people living in that town. We could have had a collapse, with people saying "Every undertaking that we were given by the BSC has been broken. If they are going to cut our works in half, contrary to their undertakings in 1970, why should we believe that the other half will survive?" Sometimes they say similar things in Shotton. We might say that in Ebbw Vale too.

However, we wish to protect the situation. Therefore, we in Ebbw Vale made proposals for dealing with the situation and investigating the proposals that the corporation was making.

We certainly do not accept the corporation's proposals as being the best, even in the interests of the steel industry. We are now examining the proposals with the assistance of independent experts, as my right hon. Friend the Member for Cardiff, South-East will be doing in East Moors and as will be done in Shotton. We shall investigate the corporation's proposals, taking into account the sociological costs and all the other factors involved. We have a right to do this. We have a right to carry out those discussions not under duress—that is, not under a rigid timetable.

The Minister talked of flexibility, and I asked him a question about it. I very much hope that the White Paper will show the utmost flexibility in the dates which are to be applied. That applies to Ebbw Vale as much as to any of the other places. That was what we urged upon the Secretary of State when he came to Ebbw Vale, and I think he showed considerable appreciation of it. If the dates for the closures scheduled at Ebbw Vale proposed by the corporation, and apparently approved by the Government, were carried out—that is, the ending of the blast furnace in 1975, further closures in 1976 and the hot mill in 1978—and if everything was done about preparing alternative industries, we could never make up for it. So those dates are intolerable—impossible.

The Government as well as the corporation have responsibilities. I am not absolving the corporation. We will not allow the Government to hide behind the corporation or the corporation to hide behind the Government. Do the Government have to agree to those dates? That is what is to be in the White Paper apparently. I ask the Government to give us in the White Paper the undertakings for which we are asking—that is, that those dates for the proposed closures in Ebbw Vale be withdrawn so that the discussions with the corporation do not proceed under duress and so that we shall have an honest chance, supposing that the case is proved against us of maintenance of our integrated steelworks, of getting new industries to make up for the loss.

If the Government insist on those dates we shall not believe anything they say on the subject. Therefore, I ask the Government to withdraw the dates. We suggested it to the Secretary of State when he came to Ebbw Vale. I think he listened very carefully and appreciated the arguments. If the Government were to say in their White Paper that the dates are flexible, that these definite dates which were laid down are withdrawn, so far as Ebbw Vale is concerned—of course, this applies to Shotton and East Moors in much the same sense, although their dates are slightly different; they are not as abrupt as for us—I believe they would get a much better atmosphere into the situation. Indeed, I think we are asking for something which is entirely modest.

Let us look at the corporation's arguments—there really is only one argument—for insisting on these dates. We have gone into these matters in great detail. This is a further matter we shall examine with the utmost care with the steel corporation. We have every right to do so, because, I repeat, our livelihood as a community is at stake. If any possibility in this matter were neglected it would be criminal on the part of those who represent people in Ebbw Vale and the surrounding area. We must go through everything.

What is the steel corporation's argument for laying down these dates? The argument is that we shall have too much steel in 1975 and 1976, and maybe 1977, because of the calculations that have been made of what will be produced in Llanwern, Port Talbot, and so on. The argument is that we must arrange to make the cuts now and cut off some of these areas. If this argument applied to Shotton in the same way—of course, the same argument applies—Shotton would be closed earlier than is now proposed.

I am not arguing in favour of that. I am saying that the argument that is used, which the steel corporation knows so well and has calculated so carefully, overlooks certain matters. First, what will be the steel production from Llanwern and Port Talbot to suppliers? Secondly, what will market conditions be in 1975 and 1976? How can the corporation be definite about those conditions now? Anyone who knows anything about the steel industry knows that they are impossibilities.

It may very well prove to be that Llanwern and Port Talbot will not produce the amount of steel by that date. Further, many people in the steel industry have put that argument to the corporation over the past weeks and months. Some of us know what we are talking about on these matters. Even if the corporation's figures and calculations of the total steel production in 1975 and 1976 are correct, that is the whole of its argument for fixing these dates and imposing them upon us. If they are correct—and these are matters on which huge errors can be made, as everybody knows in the industry—that is not an escape from the situation. If that is the amount that the corporation will produce, why does not the corporation say, in order to give more time to Ebbw Vale or Shotton, "We will take what steps we can to ensure that we sell the extra steel that we shall have during those years"? That is a perfectly possible commercial proposition to be argued. Indeed, there are people in the steel industry who argue these propositions.

I am discussing a matter that concerns the livelihood of people. Not only that, if this intolerable timetable were forced upon us, not merely would we have our steel industry disrupted but any possibility of carrying through the changeover from one kind of industry to another would be utterly abandoned. Ebbw Vale is asking the British people to listen to the people who are putting the arguments. From the very moment when we were threatened with the disruption of our community we took steps to say to the corporation "We will argue this with you. We will take it up on every possible occasion. We will use every conceivable pressure to ensure that our community is given the right to live and breathe." That is what we are fighting for.

I believe that our case is so just that the Government should come to our assistance. When the Secretary of State visited Ebbw Vale and listened to what the people had to say, I believe he understood. But whether he understands sufficiently well will only be known when the White Paper comes out.

I hope that the Government will seriously consider these matters. I hope they will consider not only the case I have sought to put but the case put forward by my right hon. Friend the Member for Cardiff, South-East, and the case put so movingly by my hon. Friend the Member for Flint, East (Mr. Barry Jones), who spoke on behalf of the Shotton workers who came to London today. No one who listened to the arguments could doubt not merely our claims on the grounds of human compassion but our claims about how major industrial changes should be carried through in a modern society.

We are determined in Ebbw Vale, whoever helps us or does not help us, to carry through the change if we must have it. However, we want to keep our steelworks and we demand the right to put our case for it. We cannot be certain that we shall win, but we shall do our best. If we lose on that argument we shall not be defeated. We have a second argument: namely, that the corporation and the Government should stand by the undertakings which they gave us in 1970, which they so far appear to give every sign of breaking. But over and beyond that even, we will not submit to dictation from London or anywhere else saying that our communities are to be destroyed. Therefore, we are going to take every other step and get assistance from every quarter to ensure that we postpone these dates of closures to allow us to put through these measures in their proper way.

I return to the general subject, on which I would be glad to speak at greater length. I said at the beginning that, although many of us are bound to speak so strongly on these matters, because we are threatened with so much, nonetheless we on this side are not putting some petty parochial view. We are speaking for people who have contributed much more than most others to the steel industry, who know much more about it than most others, and who are insisting that they want to play their part in the expansion of this great industry.

I therefore hope that the Minister will apply his mind to the questions and arguments that we have put and to the real problems we face, and will not try to ride off on any suggestion that we on this side are not in favour of a mammoth investment in the steel industry, to make it the great industry that we believe it should be as a central part of the British economy. We believe that, but we also believe that the great and famous steelmaking areas of this country have a great part to play in that as well.

9.37 p.m.

The Minister for Industrial Development (Mr. Christopher Chataway)

I have listened with great respect to the speech which the hon. Member for Ebbw Vale (Mr. Michael Foot) has made on behalf of his constituents, and I think that the whole House will have done so. The hon. Member has talked about those of his constituents who face the threat of very serious disruption as a result of the strategy of the British Steel Corporation. In all the speeches today dealing with constituency problems, hon. Members have put forward powerful and often emotional cases for their particular areas.

But the motion goes a good deal further. It argues that there is something fundamentally wrong with the BSC's proposals and that a new principle should be adopted by the Government. The hon. Member for Ebbw Vale had nothing to say about that and very little to say about whether the strategy as a whole was right, whether it was good for the nation as a whole—[Interruption].

The hon. Member for Feltham (Mr. Russell Kerr), who has just arrived and has listened to none of the debate, suggests that what is contained in the motion and what was said by the hon. Member for Chesterfield (Mr. Varley) is that the Government are leaning on the BSC in order to prevent it from expanding as fast as it would like. The hon. Member for Ebbw Vale said exactly the opposite. He said in the middle of his speech—if he had come in earlier, the hon. Member for Feltham would have heard it—that it was the BSC that was saying it would not be able to sell enough steel in the mid-1970s to retain steelmaking capacity in Ebbw Vale.

I want to deal mainly with the social consequences of this strategy and with the Government's plans for meeting them. We are determined to ensure that we bring new jobs into those areas. In most of the regions—in fact in all of them—there has been a substantial reduction in unemployment over these months. [HON. MEMBERS: "Oh."] But this is a debate about an enormous investment programme of £3,000 million over 10 years. The hon. Member is quite right to say that there are fundamental questions that the whole House wants to ask. It is surely right to look at some of the broader consequences for employment.

It is true that already, since nationalisation, about 27,000 jobs have been lost in steel and that the BSC had already announced measures which would reduce employment by a further 20,000. It is true that the corporation's strategy in- volves the loss of a further net 30,000 jobs. May this massive investment and this particular strategy be the only way of safeguarding the remaining 180,000 jobs in steel? That is a question to which the hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths) gave an affirmative answer. He is one of the few hon. Members who have taken part in the debate who have looked at that broader question.

There can be very little doubt about the huge job modernisation that the corporation faces. We all know that in the latter part of the 1960s we fell behind a number of other countries. My hon. Friend the Minister for Industry gave some striking comparisons between us and some Continental countries. We all recognise that the British Steel Corporation has a very substantial task ahead of it if it is to ensure that we have a steel industry able to compete in the world and to provide steel in the quantities and at the price necessary for British industry, because there are large parts of British industry, for example, the supplying industries for North Sea oil and the British motor-car industry, whose competitiveness is enormously affected by the state of the British steel industry, and the number of jobs in those industries is also affected.

The scale of the task in front of the corporation is fairly well indicated by the fact that it aims over the strategy period to double the overall labour productivity. That is what it believes to be necessary in order to sustain the sales on which it is basing its strategy. One figure that was striking to me, and probably to the House, is that the corporation estimates that in the new Teesside complex the overall labour productivity will be 800 tons a year, which compares with 200 tons a year in the corporation's present best works. That is an indication of the improvement which the corporation believes to be necessary to be able to compete and to be able to meet the targets it has set. So it is right, in a debate such as this, that the House should be concerned with the general strategy as a whole.

At the heart of that strategy is the use of rich foreign ores transported in large bulk carriers, the installation of large modern blast furnaces and large-scale steel plants employing the basic oxygen process. It is based, too, on the concentration of steelmaking at large integrated iron and steelworks which have ready access to deep water and preferably a capacity of 6 million tons or more.

In judging whether all this is right and necessary—this is the fundamental question; if the strategy were wrong, it would not be necessary to close so many of the steelmaking plants in existing locations—it is surely worth noting that it is a path which is being followed in the majority of other steelmaking countries, not only in Japan but in France and Italy. At Fos and Dunkirk in France there will be integrated plants of this kind producing 7 million or 8 million tons by the end of this decade, and in Japan the plants will be much larger.

Before arguing that the corporation ought to settle for a different strategy, it is only right to consider whether, if it were to do so and to ignore these advantages of size, it would in the long term be putting at risk the jobs of the majority in the British steel industry.

It is right to recognise that this investment of £3,000 million will have very important consequences for a number of supplying industries. The hon. Member for Chesterfield asked about the figure of 75,000 jobs which was used by my right hon. Friend the Secretary of State. That figure comes from the corporation. It can only be an approximation and it is not possible at present to say which regions will benefit and in what proportion from the investment. The heavy engineering in the North-East clearly will be a major beneficiary, as will the heavy electrical industry and the computer industry. That £3,000 million will have a substantial effect on employment in the Midlands, in the Northern Region and in Scotland.

Mr. Churchill (Stretford)

My right hon. Friend did not mention that the North-East Region has 6,000 more unemployed than any other region of the United Kingdom, including Scotland. In those circumstances, will he give high priority to the siting of further industries, and in particular a mini-steel mill in Lancashire?

Mr. Chataway

The supplying industries in the North-West, and particularly electrical engineering centred around my hon. Friend's constituency, will benefit from that investment.

Mr. Kaufman

The right hon. Gentleman referred to sustaining jobs in the computer industry. ICL is in my constituency. Will he guarantee that no American company will be allowed to take over ICL and do away with employment? As I have constituents who will be made redundant by the closure of Irlam, we cannot accept further unemployment.

Mr. Chataway

I have made it clear on many occasions, and again yesterday to the Select Committee, that there is no question of an American company taking over ICL.

A good deal has been said in this debate about Wales and one recognises that some of the serious social consequences of the strategy are centred there, but there should be no doubt about the scale of the investment in Wales. Some hon. Members have talked as though my right hon. and learned Friend the Secretary of State for Wales, on looking at this plan, should feel that Wales was not benefiting, but the fact is that one-third of the investment—£900 million—goes to Wales. As the Chairman of the Development Corporation for Wales said the other day, that represents a 15 per cent. annual addition for 10 years to the total budget of Wales. That will have an enormous effect.

Mr. Barry Jones rose——

Mr. Chataway

The hon. Gentleman asked a number of questions and I should be grateful if he would allow me to reply to them.

The Government and the corporation are determined to do everything possible to mitigate the impact of the job losses in the areas that are affected. It is tempting to avoid the short-term difficulties in the way I have described but I believe—and I think this view will be shared by both sides of the House—that if we were to do that it might put in jeopardy many thousand more jobs. But there is an obligation upon us and upon the corporation to do everything in our power to bring forward jobs in those areas that will be particularly affected.

Mr. Roy Hughes rose

Mr. Chataway

I cannot give way.

Since my right hon. Friend's statement on 21st December there have been three developments of some importance. I have announced the largest ever advance factory programme, and that takes account of a number of forthcoming steel closures. Many of these factories will be in steelmaking areas. It is encouraging that the number of factories let or sold in all parts of the country has greatly increased this year, and there is therefore every reason to believe that we shall be able to continue letting or selling these advance factories in most areas.

I think that many hon. Members from Scotland will have been particularly heartened. Yesterday we had a statement by the Chairman of the Scottish Industrial Estates Corporation which made it clear that it had had the greatest level of activity for 25 years and that as a result of letting and sales this year he expects 10,000 jobs in the next three years, which he describes as a phenomenal rise.

Secondly, my right hon. and learned Friend the Secretary of State for Wales made an announcement on 19th January about the setting up of task forces. During this debate a number of hon. Members have asked for further details. These task forces have already been decided upon for Ebbw Vale, Shotton and Cardiff and they are getting down to work immediately. Task forces have also been set up in other areas. They have the job of studying the problems and the resources of the area in detail and in consultation with all the interests which are able to make a contribution. They will be concerned with roads, the clearance of derelict land and a range of measures necessary for bringing in new industry. A Minister will oversee the progress of each of these task forces.

Thirdly, a consultative group consisting of the General Secretary of the TUC, Mr. Vic Feather, the Chairman of the BSC and my hon. Friend the Minister for Industry is being formed to consider and discuss arrangements for providing the new employment which is required for redundant steelworkers. At the regional level arrangements are being made to ensure that there is very close consultation and opportunity for the fullest pos- sible discussion of the necessary measures with the trade unions and the BSC.

In addition to these special measures, we intend to make full use of our wide-ranging powers under the Industry Act.

That includes, of course, regional development grants and regional selective assistance to attract employment. On top of that, when the circumstances of a particular locality justify it, assistance will be given on especially generous terms, We therefore have here a powerful and flexible instrument which we are prepared to use forcefully in getting the right kind of employment at the right time.

Mr. John Morris

Eyewash. Chicken-feed.

Mr. Chataway

The right hon. Gentleman says, "Eyewash" and "Chicken-feed". If he will stop shouting I will tell him that what we are talking about in Wales is 17,500 jobs over the next decade. He will recognise that during the 1960s—a decade in the latter part of which at least there was miserably slow progress; 120,000 jobs were provided for by new industrial development certificates—the rate of rundown in coal was far faster than anything we are discussing here. I hope he will recognise that this is undoubtedly the most determined effort that a Government have made to meet these problems.

Mr. Callaghan

The right hon. Gentleman has not commented on the length of rundown and the time we shall have to provide the jobs that are necessary. Can he undertake that in addition to what he has already said, the Cabinet will give serious consideration to the granting of development areas status, as was done in the case of the coal industry rundown, to areas such as Cardiff, East Moors, Irlam and other similar areas which are affected by a level of unemployment which is as high as it is in the present development areas?

Mr. Chataway

The right hon. Gentleman put that point forcefully in the debate.

Mr. Arthur Lewis (West Ham, North)

On a point of order. Can the right hon. Gentleman give me an assurance that no action has been taken by the Chair to bar the Liberals from being here? For the whole of the evening they have not been present.

Mr. Chataway

I am sorry, Mr. Speaker, but I shall not be able to cover a number of the points that have been raised. However, on the question of development area status, obviously the task forces will be concerned with looking into the boundaries and assessing the strength of the case. The right hon. Gentleman will know that there are great disadvantages in short-term changes to these boundaries. We reviewed them only last April.

Mr. Callaghan rose

Hon. Members

Sit down!

Mr. Speaker


Mr. Chataway

I must get on because I have a great deal to say. The right hon. Gentleman made a typically constituency speech, but he has on previous occasions in his constituency talked of the Labour Government's £150 million two-stage development of the East Moors works [Interruption.] The right hon. Gentleman did that in the Welsh Grand Committee debate in March, 1971.

If the right hon. Gentleman is not any longer saying that, I am glad to hear it. That was an example of something of which we have seen a little in this debate, of hon. Members who argue that if only there had been a Labour Government this modernisation could have been carried through painlessly. It is recognised by most hon. Members on both sides that if we are to have a competitive steel industry there are bound to be redundancies and we must face this problem. It is the determination of the corporation and of ourselves by these measures and a variety of others which will be detailed in the White Paper to ensure that we get the jobs in in time.

The motion, which has not been much discussed, argues two things—first, that even the ambitious target set by the corporation is not enough and that, although in 1965 the then Labour Government committed themselves to 4 million tons expansion and they achieved only 1 million tons of that and we are now committing ourselves to an expansion of up to 8 million tons by the late 1970s and an expansion that could be up to 11 million tons by the 1980s, even that should be more.

Hon. Members opposite should recognise the implausibility of that argument given their own experience and that to aim at any unrealistic targets which are not in the result met could jeopardise substantially more jobs. No case has been made today against the corporation's estimates and the policy of a flexible targeting system of this kind.

Secondly, and perhaps more remarkably, the motion argues that no closure shall be permitted until guaranteed new employment has been provided in the areas affected. This is an entirely new principle. I have argued, and I believe it will be widely accepted, that we are doing more than any previous Government to get those jobs in. With the 404,000 redundancies in the nationalised industries during the Labour Government's term of office, did they say to Lord Robens "You may not close any pit until alternative jobs have already been provided"? Of course they did not.

I therefore believe that the House will reject the motion and support the amendment; recognising the wisdom of the strategy and its value to the British economy as a whole.

Question put, That the amendment be made:—

The House divided: Ayes 280, Noes 250.

Division No. 37.] AYES [10.0 p.m.
Adley, Robert Bell, Ronald Braine, Sir Bernard
Allason, James (Hemel Hempstead) Bennett, Dr. Reginald (Gosport) Brinton, Sir Tatton
Amery, Rt. Hn. Julian Benyon, W. Brown, Sir Edward (Bath)
Archer, Jeffrey (Louth) Berry, Hn. Anthony Bruce-Gardyne, J.
Astor, John Biffen, John Bryan, Sir Paul
Atkins, Humphrey Biggs-Davison, John Buchanan-Smith, Alick (Angus, N&M)
Awdry, Daniel Blaker, Peter Buck, Antony
Baker, Kenneth (St. Marylebone) Boardman, Tom (Leicester, S.W.) Bullus, Sir Eric
Baker, W. H. K. (Banff) Body, Richard Burden, F. A.
Balniel, Rt. Hn. Lord Boscawen, Hn. Robert Butler, Adam (Bosworth)
Barber, Rt. Hn. Anthony Bossom, Sir Clive Campbell, Rt. Hn. G. (Moray & Nairn)
Batsford, Brian Bowden, Andrew Carlisle, Mark
Carr, Rt. Hn. Robert Hornby, Richard Percival, Ian
Cary, Sir Robert Hornsby-Smith, Rt. Hn. Dame Patricia Peyton, Rt. Hn. John
Channon, Paul Howe, Rt. Hn. Sir Geoffrey Pike, Miss Mervyn
Chapman, Sydney Howell, David (Guildford) Pink, R. Bonner
Chataway, Rt. Hn. Christopher Howell, Ralph (Norfolk, N.) Pounder, Rafton
Chichester-Clark, R. Hutchison, Michael Clark Powell, Rt. Hn. J. Enoch
Churchill, W. S. Iremonger, T. L. Price, David (Eastleigh)
Clark, William (Surrey, E.) Irvine, Bryant Godman (Rye) Prior, Rt. Hn. J. M. L.
Clarke, Kenneth (Rushcliffe) James, David Pym, Rt. Hn. Francis
Cooke, Robert Jenkin, Patrick (Woodford) Quennell, Miss J. M.
Coombs, Derek Jennings, J. C. (Burton) Raison, Timothy
Cooper, A. E. Jessel, Toby Ramsden, Rt. Hn. James
Cordle, John Johnson Smith, G. (E. Grinstead) Rawlinson, Rt. Hn. Sir Peter
Corfield, Rt. Hn. Sir Frederick Jones, Arthur (Northants, S.) Redmond, Robert
Cormack, Patrick Jopling, Michael Reed, Laurance (Bolton, E.)
Costain, A. P. Joseph, Rt. Hn. Sir Keith Rees-Davies, W. R.
Crouch, David Kaberry, Sir Donald Renton, Rt. Hn. Sir David
Crowder, F. P. Kellett-Bowman, Mrs. Elaine Rhys Williams, Sir Brandon
Dalkeith, Earl of Kershaw, Anthony Ridley, Hn. Nicholas
Davies, Rt. Hn. John (Knutstord) Kimball, Marcus Ridsdale, Julian
d'Avigdor-Goldsmid, Sir Henry King, Evelyn (Dorset, S.) Rippon, Rt. Hn. Geoffrey
d'Avigdor-Goldsmid. Maj.-Gen. Jack King, Tom (Bridgwater) Roberts, Wyn (Conway)
Dean, Paul Kinsey, J. R.
Deedes, Rt. Hn. W. F. Kirk, Peter Rost, Peter
Dixon, Piers Knight, Mrs. Jill Russell, Sir Ronald
Dodds-Parker, Sir Douglas Knox, David St. John-Stevas, Norman
Douglas-Home, Rt. Hn. Sir Alec Lambton, Lord Scott, Nicholas
Drayson, G. B. Lamont, Norman
du Cann, Rt. Hn. Edward Scott-Hopkins, James
Dykes, Hugh Lane, David Shaw, Michael (Sc'b'gh & Whitby)
Eden, Rt. Hn. Sir John Langford-Holt, Sir John Shelton, William (Clapham)
Edwards, Nicholas (Pembroke) Le Marchant, Spencer Shersby, Michael
Elliot, Capt. Walter (Carshalton) Lewis, Kenneth (Rutland) Sinclair, Sir George
Elliott, R. W. (N'c'tle-upon-Tyne, N.) Skeet, T. H. H.
Emery, Peter Lloyd, Ian (P'tsm'th, Langstone) Smith, Dudley (W'wick & Lmington)
Eyre, Reginald Longden, Sir Gilbert Soref, Harold
Fell, Anthony Loveridge, John Speed, Keith
Fenner, Mrs. Peggy Luce, R. N. Spence, John
Fidler, Michael McAdden, Sir Stephen Sproat, Iain
Finsberg, Geoffrey (Hampstead) McCrindle, R. A. Stainton, Keith
Fisher, Nigel (Surbiton) McLaren, Martin Stanbrook, Ivor
Fletcher-Cooke, Charles Maclean, Sir Fitzroy Stewart-Smith, Geoffrey (Belper)
Fookes, Miss Janet McMaster, Stanley Stodart, Anthony (Edinburgh, W.)
Fortescue, Tim Macmillan, Rt. Hn. Maurice (Farnham) Stoddart-Scott, Col. Sir M.
Foster, Sir John McNair-Wilson, Michael Stokes, John
Fowler, Norman McNair-Wilson, Patrick (New Forest) Stuttaford, Dr. Tom
Fox, Marcus Maddan, Marlin Sutcliffe, John
Fraser,Rt. Hn. Hugh (St'fford & Stone) Madel, David Tapsell, Peter
Fry, Peter Maginnis, John E. Taylor, Sir Charles (Eastbourne)
Galbraith, Hn. T. G. D. Marples, Rt. Hn. Ernest Taylor, Edward M. (G'gow, Cathcart)
Gardner, Edward Marten, Neil Taylor, Frank (Moss Side)
Gibson-Watt, David Mather, Carol Taylor, Robert (Croydon, N.W.)
Gilmour, Ian (Norfolk, C.) Maude, Angus Tebbit, Norman
Gilmour, Sir John (Fife, E.) Maudling, Rt. Hn. Reginald Temple, John M.
Glyn, Dr. Alan Mawby, Ray Thatcher, Rt. Hn. Mrs. Margaret
Goodhart, Philip Maxwell-Hyslop, R. J. Thomas, John Stradling (Monmouth)
Goodhew, Victor Meyer, Sir Anthony Thomas, Rt. Hn. Peter (Hendon, S.)
Gorst, John Mills, Peter (Torrington) Thompson, Sir Richard (Croydon, S.)
Gower, Raymond Mills, Stratton (Belfast, N.) Tilney, John
Grant, Anthony (Harrow, C.) Miscampbell, Norman Trafford, Dr. Anthony
Green, Alan Mitchell, Lt.-Col. C. (Aberdeenshire, W) Trew, Peter
Griffiths, Eldon (Bury St. Edmunds) Michell, David (Basingstoke) Tugendhat, Christopher
Grylls, Michael Moate, Roger Turton, Rt. Hn. Sir Robin
Gummer, J. Selwyn Molyneaux, James van Straubenzee, W. R.
Gurden, Harold Money, Ernle Vaughan, Dr. Gerard
Hall, Miss Joan (Keighley) Monks, Mrs. Connie Waddington, David
Hall-Davis, A. G. F. Monro, Hector Walder, David (Clitheroe)
Hamilton, Michael (Salisbury) Montgomery, Fergus Walters, Dennis
Hannam, John (Exeter) More, Jasper Wells, John (Maidstone)
Haselhurst, Alan Morgan, Geraint (Denbigh) White, Roger (Gravesend)
Hastings, Stephen Morgan-Giles, Rear-Adm. Whitelaw, Rt. Hn. William
Havers, Sir Michael Morrison, Charles Wiggin, Jerry
Hawkins, Paul Mudd, David Wilkinson, John
Hay, John Murton, Oscar Wolrige-Gordon, Patrick
Hayhoe, Barney Nabarro, Sir Gerald Wood, Rt. Hn. Richard
Heath, Rt. Hn. Edward Neave, Airey Woodhouse, Hn. Christopher
Heseltine, Michael Nicholls, Sir Harmar Woodnutt, Mark
Hicks, Robert Nott, John Worsley, Marcus
Higgins, Terence L. Onslow, Cranley Wylie, Rt. Hn. N. R.
Hiley, Joseph Oppenheim, Mrs. Sally Younger, Hn. George
Hill, John E. B. (Norfolk, S.) Orr, Capt. L. P. S. TELLERS FOR THE AYES:
Hill, James (Southampton, Test) Owen, Idris (Stockport, N.) Mr. Walter Clegg and
Holland, Philip Page, Rt. Hn. Graham (Crosby) Mr. Bernard Weatherill.
Hordern, Peter Parkinson, Cecil
Abse, Leo Galpern, Sir Myer Mayhew, Christopher
Albu, Austen Garrett, W. E. Meacher, Michael
Allaun, Frank (Salford, E.) Gilbert, Dr. John Mendelson, John
Allen, Scholefield Ginsburg, David (Dewsbury) Mikardo, Ian
Archer, Peter (Rowley Regis) Gourlay, Harry Millan, Bruce
Armstrong, Ernest Grant, George (Morpeth) Miller, Dr. M. S.
Ashley, Jack Grant, John D. (Islington, E.) Milne, Edward
Ashton, Joe Griffiths, Eddie (Brightside) Mitchell, R. C. (S'hampton, Itchen)
Atkinson, Norman Griffiths, Will (Exchange) Morgan, Elystan (Cardiganshire)
Bagier, Gordon A. T. Hamilton, James (Bothwell) Morris, Charles R. (Openshaw)
Barnes, Michael Hamilton, William (Fife, W.) Morris, Rt. Hn. John (Aberavon)
Barnett, Guy (Greenwich) Hamling, William Moyle, Roland
Barnett, Joel (Heywood and Royton) Hannan, William (G'gow, Maryhill) Mulley, Rt. Hn. Frederick
Beaney, Alan Hardy, Peter Murray, Ronald King
Benn, Rt. Hn. Anthony Wedgwood Harper, Joseph Oakes, Gordon
Bennett, James (Glasgow, Bridgeton) Harrison, Walter (Wakefield) Ogden, Eric
Bidwell, Sydney Hart, Rt. Hn. Judith O'Halloran, Michael
Bishop, E. S. Hattersley, Roy
Blenkinsop, Arthur Healey, Rt. Hn. Denis O'Malley, Brian
Boardman, H. (Leigh) Heffer, Eric S. Oram, Bert
Booth, Albert Hilton, W. S. Orbach, Maurice
Bottomley, Rt. Hn. Arthur Horam, John Orme, Stanley
Broughton, Sir Alfred Houghton, Rt. Hn. Douglas Oswald, Thomas
Brown, Robert C. (N'c'tle-u-Tyne,W) Howell, Denis (Small Heath) Padley, Walter
Brown, Hugh D. (G'gow, Provan) Huckfield, Leslie Paget, R. T.
Brown, Ronald (Shoreditch & F'bury) Hughes, Rt. Hn. Cledwyn (Anglesey) Palmer, Arthur
Buchan, Norman Hughes, Mark (Durham) Pannell, Rt. Hn. Charles
Buchanan, Richard (G'gow, Sp'burn) Hughes, Robert (Aberdeen, N.) Parker, John (Dagenham)
Butler, Mrs. Joyce (Wood Green) Hughes, Roy (Newport) Parry, Robert (Liverpool, Exchange)
Callaghan, Rt. Hn. James Hunter, Adam Pavitt, Laurie
Campbell, I. (Dunbartonshire, W.) Irvine, Rt. Hn. Sir Arthur (Edge Hill) Pendry, Tom
Cant, R. B. Janner, Greville Perry, Ernest G.
Carmichael, Neil Jay, Rt. Hn. Douglas Prentice, Rt. Hn. Reg.
Carter, Ray (Birmingh'm, Northfield) Jeger, Mrs. Lena Prescott, John
Carter-Jones, Lewis (Eccles) Jenkins, Hugh (Putney) Price, J. T. (Westhoughton)
Castle, Rt. Hn. Barbara John, Brynmor Price, William (Rugby)
Clark, David (Colne Valley) Johnson, Carol (Lewisham, S.) Probert, Arthur
Cohen, Stanley Johnson, James (K'ston-on-Hull, W.) Reed, D. (Sedgefield)
Concannon, J. D. Johnson, Walter (Derby, S.) Rees, Merlyn (Leeds, S.)
Conlan, Bernard Jones, Barry (Flint, E.) Rhodes, Geoffrey
Corbet, Mrs. Freda Jones, Rt. Hn. SirElwyn (W. Ham,S.) Richard, Ivor
Crawshaw, Richard Jones, Gwynoro (Carmarthen) Roberts, Albert (Normanton)
Crosland, Rt. Hn. Anthony Jones, T. Alec (Rhondda, W.) Roberts, Rt. Hn. Goronwyl Caernarvon)
Crossman, Rt. Hn. Richard Kaufman, Gerald Robertson, John (Paisley)
Cunningham, G. (Islington, S.W.) Kelley, Richard Roderick, Caerwyn E. (Br'c'n&R'dnor)
Cunningham, Dr. J. A. (Whitehaven) Kerr, Russell Rodgers, William (Stockton-on-Tees)
Dalyell, Tam Kinnock, Neil Roper, John
Davidson, Arthur Lambie, David Ross, Rt. Hn. William (Kilmarnock)
Davies, G. Elfed (Rhondda, E.) Lamborn, Harry Rowlands, Ted
Davies, Ifor (Gower) Lamond, James Sandelson, Neville
Davis, Clinton (Hackney, C.) Latham, Arthur Sheldon, Robert (Ashton-under-Lyne)
Davis, Terry (Bromsgrove) Lawson, George Shore, Rt. Hn. Peter (Stepney)
Deakins, Eric Leadbitter, Ted Short, Rt. Hn. Edward(N'c'tle-u-Tyne)
de Freitas, Rt. Hn. Sir Geoffrey Lee, Rt. Hn. Frederick Short, Mrs. Renée (W'hampton, N.E.)
Delargy, Hugh Leonard, Dick Silkin, Rt. Hn. John (Deptford)
Dell, Rt. Hn. Edmund Lestor, Miss Joan Silkin, Hn. S. C. (Dulwich)
Dempsey, James Lewis, Arthur (W. Ham, N.) Sillars, James
Doig, Peter Lewis, Ron (Carlisle) Silverman, Julius
Dormand, J. D. Lipton, Marcus Skinner, Dennis
Douglas, Dick (Stirlingshire, E.) Lomas, Kenneth Spearing, Nigel
Douglas-Mann, Bruce Loughlin, Charles Spriggs, Leslie
Duffy, A. E. P. Lyon, Alexander W. (York) Stallard, A. W.
Dunn, James A Lyons, Edward (Bradford, E.) Stoddart, David (Swindon)
Dunnett, Jack Mabon, Dr. J. Dickson Stonehouse, Rt. Hn. John
Eadie, Alex McBride, Neil Strang, Gavin
Edelman, Maurice McCartney, Hugh Strauss, Rt. Hn. G. R.
Edwards, Robert (Bilston) McElhone, Frank Summerskill, Hn. Dr. Shirley
Edwards, William (Merioneth) McGuire, Michael Swain, Thomas
Ellis, Tom Mackenzie, Gregor Thomas, Rt. Hn. George (Cardiff, W.)
English, Michael Mackie, John Thomas, Jeffrey (Abertillery)
Evans, Fred Mackintosh, John P. Thorpe, Rt. Hn. Jeremy
Ewing, Harry McMillan, Tom (Glasgow. C.) Tinn, James
Faulds, Andrew McNamara, J. Kevin Torney, Tom
Fletcher, Ted (Darlington) Mahon, Simon (Bootle) Tuck, Raphael
Foot, Michael Mallalieu, J. P. W. (Huddersfield, E.) Urwin, T. W.
Ford, Ben Marks, Kenneth Varley, Eric G.
Forrester, John Marsden, F. Walden, Brian (B'm'ham, All Saints)
Fraser, John (Norwood) Marshall. Dr. Edmund Walker, Harold (Doncaster)
Freeson, Reginald Mason, Rt. Hn. Roy Wallace, George
Wntkins, David Whitlock, William Wilson, William (Coventry, S.)
Weitzman, David Willey, Rt. Hn. Frederick Woof, Robert
Wellbeloved, James Williams, Alan (Swansea, W.)
Wells, William (Walsall, N.) Williams, Mrs. Shirley (Hitchin) TELLERS FOR THE NOES:
White, James (Glasgow, Pollok) Wilson, Alexander (Hamilton) Mr. Michael Cocks and
Whitehead, Phillip Wilson, Rt. Kn. Harold (Huyton) Mr. John Golding

Question accordingly agreed to.

Main Question, as amended, put:

The House divided: Ayes 279, Noes 250.

Division No. 38.] AYES 10.13 p.m.
Adley, Robert Eden, Rt. Hn. Sir John Jessel, Toby
Allason, James (Hemel Hempstead) Edwards, Nicholas (Pembroke) Johnson Smith, G. (E. Grinstead)
Amery, Rt. Hn. Julian Elliot, Capt. Walter (Carshalton) Jones, Arthur (Northants, S.)
Archer, Jeffrey (Louth) Elliott, R. W. (N'c'tle-upon-Tyne,N.) Jopling, Michael
Astor, John Emery, Peter Joseph, Rt. Hn. Sir Keith
Atkins, Humphrey Eyre, Reginald Kaberry, Sir Donald
Awdry, Daniel Fell, Anthony Kellett-Bowman, Mrs. Elaine
Baker, Kenneth (St. Marylebone) Fenner, Mrs. Peggy Kershaw, Anthony
Baker, W. H. K. (Banff) Fidler, Michael Kimball, Marcus
Balniel, Rt. Hn. Lord Finsberg, Geoffrey (Hampstead) King, Evelyn (Dorset, S.)
Barber, Rt. Hn. Anthony Fisher, Nigel (Surbiton) King, Tom (Bridgwater)
Batstord, Brian Fletcher-Cooke, Charles Kinsey, J. R.
Bell, Ronald Fookes, Miss Janet Kirk, Peter
Bennett, Dr. Reginald (Gosport) Fortescue, Tim Knight, Mrs. Jill
Benyon, W. Foster, Sir John Knox, David
Berry, Hn. Anthony Fowler, Norman Lambton, Lord
Biffen, John Fox, Marcus Lamont, Norman
Biggs-Davison, John Fraser, Rt. Hn. Hugh (St'fford & Stone) Lane, David
Blaker, Peter Fry Peter Langford-Holt, Sir John
Boardman, Tom (Leicester, S.W.) Galbraith, Hn. T. G. D. Lee, Rt. Hn. Frederick
Body, Richard Gardner, Edward Lewis, Kenneth (Rutland)
Boscawen, Hn. Robert Gibson-Watt, David Lloyd, Ian (P'tsm'th, Langstone)
Bossom, Sir Clive Gilmour, Ian (Norfolk, C.) Longden, Sir Gilbert
Bowden, Andrew Gilmour, Sir John (Fife, E.) Loveridge, John
Braine, Sir Bernard Glyn, Dr. Alan Luce, R. N.
Brinton, Sir Tatton Goodhart, Philip McAdden, Sir Stephen
Brown, Sir Edward (Bath) Goodhew, Victor McCrindle, R. A.
Bruce-Gardyne, J. Gorst, John McLaren, Martin
Bryan, Sir Paul Gower, Raymond Maclean, Sir Fitzroy
Buchanan-Smith, Alick (Angus,N&M) McMaster, Stanley
Buck, Antony Grant, Anthony (Harrow, C.) Macmillan, Rt.Hn. Maurice (Farnham)
Bullus, Sir Eric Green, Alan McNair-Wilson, Michael
Burden, F. A. Griffiths, Eldon (Bury St. Edmunds) McNair-Wilson, Patrick (New Forest)
Butler, Adam (Bosworth) Grylls, Michael Maddan, Martin
Campbell, Rt. Hn. G.(Moray & Nairn) Gummer, J. Selwyn Madel, David
Carlisle, Mark Gurden, Harold Maginnis, John E.
Carr, Rt. Hn. Robert Hall, Miss Joan (Keighley) Marples, Rt. Hn. Ernest
Cary, Sir Robert Hall-Davis, A. G. F. Marten, Neil
Channon, Paul Hamilton, Michael (Salisbury) Mather, Carol
Chapman, Sydney Hannam, John (Exeter) Maude, Angus
Chataway, Rt. Hn. Christopher Haselhurst, Alan
Chichester-Clark, R. Hastings, Stephen Maudling, Rt. Hn. Reginald
Churchill, W. S. Havers, Sir Michael Mawby Ray
Clark, William (Surrey, E.) Hawkins, Paul Maxwell-Hyslop, R. J.
Clarke, Kenneth (Rushcliffe) Hay, John Meyer, Sir Anthony
Cooke, Robert Hayhoe, Barney Mills, Peter (Torrington)
Coombs, Derek Heath, Rt. Hn. Edward Mills, Stratten (Belfast, N.)
Cooper, A. E. Heseltine, Michael Miscampbell, Norman
Cordle, John Hicks, Robert Mltchel, Lt. -Col. C (Aberdeenshire, W)
Corfield, Rt. Hn. Sir Frederick Higglns, Terence L. Mitchell, David (Basingstoke)
Cormack, Patrick Hiley, Joseph Moate, Roger
Costain, A. P. Hill, John E. B. (Norfolk, S.) Molyneaux, James
Crouch, David Hill, James (Southampton, Test) Money, Ernie
Crowder, F. P. Holland, Philip Monks, Mrs. Connie
Dalkeith, Earl of Hordern, Peter Monro, Hector
Davies, Rt. Hn. John (Knutsford) Hornby, Richard Montgomery, Fergus
d'Avigdor-Goldsmid, Sir Henry Hornsby-Smith, Rt. Hn. Dame Patricia More, Jasper
d'Avigdor-Goldsmid, Maj.-Gen. Jack Howe, Rt. Hn. Sir Geoffrey Morgan, Geraint (Denbigh)
Dean, Paul Howell, David (Guildford) Morgan-Giles, Rear-Adm.
Deedes, Rt. Hn. W. F. Howell. Ralph (Norfolk, N.) Morrison, Charles
Dixon, Piers Hutchison, Michael Clark Mudd, David
Dodds-Parker, Sir Douglas Iremonger, T. L. Murton, Oscar
Douglas-Home, Rt. Hn. Sir Alec Irvine, Bryant Godman (Rye) Nabarro, Sir Gerald
Drayson, G. B. James, David Neave, Alrey
du Cann, Rt. Hn. Edward Jenkin, Patrick (Woodford) Nicholls, Sir Harmar
Dykes, Hugh Jennings, J C. (Burton) Nott, John
Onslow, Cranley
Oppenheim, Mrs. Sally Scott-Hopkins, James Thomas, Rt. Hn. Peter (Hendon, S.)
Orr, Capt. L. P. S. Shaw, Michael (Sc'b'gh & Whitby) Thompson, Sir Richard (Croydon, S.)
Owen, Idris (Stockport, N.) Shelton, William (Clapham) Tilney, John
Page, Rt. Hn. Graham (Crosby) Shersby, Michael Trafford, Dr. Anthony
Parkinson, Cecil Sinclair, Sir George Trew, Peter
Percival, Ian Skeet, T. H. H. Tugendhat, Christopher
Peyton, Bt. Hn. John Smith, Dudley (W'wick & L'mington) Turton, Rt. Hn. Sir Robin
Pike, Miss Mervyn Soref, Harold van Straubenzee, W. R.
Pink, R. Bonner Speed, Keith Vaughan, Dr. Gerard
Pounder, Rafton Spence, John Waddington, David
Powell, Rt. Hn. J. Enoch Sproat, Iain Walder, David (Clitheroe)
Price, David (Eastleigh) Stainton, Keith Walters, Dennis
Prior, Rt. Hn. J. M. L. Stanbrook. Ivor Wells, John (Maidstone)
Pym, Rt. Hn. Francis Stewart-Smith, Geoffrey (Belper) White, Roger (Gravesend)
Quennell, Miss J. M. Stodart, Anthony (Edinburgh, W.) Whitelaw, Rt. Hn. William
Raison, Timothy Stoddart-Scott, Col. Sir M. Wiggin, Jerry
Ramsden, Rt. Hn. James Wilkinson, John
Rawlinson, Rt. Hn. Sir Peter Stokes, John Wolrige-Gordon, Patrick
Redmond, Robert Stuttaford, Dr. Tom Wood, Rt. Hn. Richard
Reed, Laurance (Bolton, E.) Sutcliffe, John
Renton, Rt. Hn. Sir David Tapsell, Peter Woodhouse, Hn. Christopher
Rhys Williams, Sir Brandon Taylor, Sir Charles (Eastbourne) Woodnutt, Mark
Ridley, Hn. Nicholas Taylor,Edward M. (G'gow, Cathcart) Worsley, Marcus
Ridsdale, Julian Taylor, Frank (Moss Side) Wylie, Rt. Hn. N. R.
Rippon, Rt. Hn. Geoffrey Taylor, Robert (Croydon, N.W.) Younger, Hn. George
Roberts, Wyn (Conway) Tebbit, Norman
Rost, Peter Temple, John M. TELLERS FOR THE AYES:
Russell, Sir Ronald Thatcher, Rt. Hn. Mrs. Margaret Mr. Walter Clegg and
St. John-Stevas, Norman Thomas, John Stradling (Monmouth) Mr. Bernard Weatherill.
Scott, Nicholas
Abse, Leo Davis, Clinton (Hackney, C.) Horam, John
Albu, Austen Davis, Terry (Bromsgrove) Houghton, Rt. Hn. Douglas
Allaun, Frank (Salford, E.) Deakins, Eric Howell, Denis (Small Heath)
Allen, Scholefield de Freitas, Rt. Hn. Sir Geoffrey Huckfield, Leslie
Archer, Peter (Rowley Regis) Delargy, Hugh Hughes, Rt. Hn. Cledwyn (Anglesey)
Armstrong, Ernest Dell, Rt. Hn. Edmund Hughes, Mark (Durham)
Ashley, Jack Dempsey, James Hughes, Robert (Aberdeen, N.)
Ashton, Joe Doig, Peter Hughes, Roy (Newport)
Atkinson, Norman Dormand, J. D. Hunter, Adam
Bagler, Gordon A. T. Douglas, Dick (Stirlingshire, E.) Irvine, Rt. Hn. Sir Arthur (Edge Hill)
Barnes, Michael Douglas-Mann, Bruce Janner, Greville
Barnett, Guy (Greenwich) Duffy, A. E. P. Jay, Rt. Hn. Douglas
Barnett, Joel (Heywood and Royton) Dunn, James A. Jeger, Mrs. Lena
Beaney, Alan Dunnett, Jack Jenkins, Hugh (Putney)
Benn, Rt. Hn. Anthony Wedgwood Eadie, Alex John, Brynmor
Bennett, James (Glasgow, Bridgeton) Edeiman, Maurice Johnson, Carol (Lewisham, S.)
Bidwell, Sydney Edwards, Robert (Bilston) Johnson, James (K'ston-on-Hull, w.)
Bishop, E. S. Edwards, William (Merioneth) Johnson, Walter (Derby, S.)
Blenkinsop, Arthur Ellis, Tom Jones, Barry (Flint, E.)
Boardman, H. (Leigh) English, Michael Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)
Booth, Albert Evans, Fred Jones, Gwynoro (Carmarthen)
Bottomley, Rt. Hn. Arthur Ewing, Harry Jones, T. Alec (Rhondda, W.)
Broughton, Sir Alfred Faulds, Andrew Kaufman, Gerald
Brown, Robert C. (N'c'tle-u-Tyne, W.) Fletcher, Ted (Darlington)
Brown, Hugh D. (G'gow, Provan) Foot, Michael Kelley, Richard
Brown, Ronald (Shoreditch & F'bury) Ford, Ben Kerr, Russell
Buchan, Norman Forrester, John Kinnock, Neil
Buchanan, Richard (G'gow, Sp'burn) Fraser, John (Norwood) Lambie, David
Butler, Mrs. Joyce (Wood Green) Freeson, Reginald Lamborn, Harry
Callaghan, Rt. Hn. James Galpern, Sir Myer Lamond, James
Campbell, I. (Dunbartonshire, W.) Garrett, W. E. Latham, Arthur
Cant, R. B. Gilbert, Dr. John Lawson, George
Carmichael, Neil Ginsburg, David (Dewsbury) Leadbitter, Ted
Carter, Ray (Birmingh'm, Northfield) Gourlay, Harry Lee, Rt. Hn. Frederick
Carter-Jones, Lewis (Eccles) Grant, George (Morpeth) Leonard, Dick
Castle, Rt. Hn. Barbara Grant, John D. (Islington, E.) Lestor, Miss Joan
Clark, David (Colne Valley) Griffiths, Eddie (Brightside) Lewis, Arthur (W. Ham, N.)
Cohen, Stanley Griffiths, Will (Exchange) Lewis, Ron (Carlisle)
Concannon, J. D. Hamilton, James (Bothwell) Lipton, Marcus
Conlan, Bernard Hamilton, William (Fife, W.) Lomas, Kenneth
Corbet, Mrs. Freda Hamling, William Loughlin, Charles
Crawshaw, Richard Kannan, William (G'gow, Maryhill) Lyon, Alexander W. (York)
Crosland, Rt. Hn. Anthony Hardy, Peter Lyons, Edward (Bradford, E.)
Crossman, Rt. Hn. Richard Harper, Joseph Mabon, Dr. J. Dickson
Cunningham, G. (Islington, S.W.) Harrison, Walter (Wakefield) McBride, Neil
Cunningham, Dr. J. A. (Whitehaven) Hart, Rt. Hn. Judith McCartney, Hugh
Dalyell, Tarn Hattersley, Roy McElhone, Frank
Davidson, Arthur Healey, Rt. Hn. Denis McGuire, Michael
Davies, G. Eifed (Rhondda, E.) Heffer, Eric S. Mackenzie, Gregor
Davies, Ifor (Gower) Hilton, W. S. Mackie, John
Mackintosh, John P. Parry, Robert (Liverpool, Exchange) Stonehouse, Rt. Hn. John
McMillan, Tom (Glasgow, C.) Pavitt, Laurie Strang, Gavin
McNamara, J. Kevin Pendry, Tom Strauss, Rt. Hn. G. R.
Mahon, Simon (Bootle) Perry, Ernest G. Summerskill, Hn. Dr. Shirley
Mallalieu, J. P. W.(Huddersfield, E.) Prentice, Rt. Hn. Reg. Swain, Thomas
Marks, Kenneth Prescott, John Thomas, Rt. Hn. George (Cardiff, W.)
Marsden, F. Price, J. T. (Westhoughton) Thomas, Jeffrey (Abertiilery)
Marshall, Dr. Edmund Price, William (Rugby) Thorpe, Rt. Hn. Jeremy
Mason, Rt. Hn. Roy Probert, Arthur Tinn, James
Mayhew, Christopher Reed, D. (Se[...]gefield) Torney, Tom
Meacher, Michael Rees, Merlyn (Leeds, S.) Tuck, Raphael
Mendelson, John Rhodes, Geoffrey Urwin, T. W.
Mikardo, Ian Richard, Ivor Varley, Eric G.
Millan, Bruce Roberts, Albert (Normanton)
Miller, Dr. M. S. Roberts, Rt. Hn. Goronwy (Caernarvon) Walden, Brian (B'm'ham, All Saints)
Milne, Edward Robertson, John (Paisley) Walker, Harold (Doncaster)
Mitchell, R. C. (S'hampton, Itchen) Roderick, Caerwyn E. (Brc'n&R'dnor) Wallace, George
Morgan, Elystan (Cardiganshire) Rodgers, William (Stockton-on-Tees) Watkins, David
Morris, Charles R. (Openshaw) Roper, John Weitzman, David
Morris, Rt. Hn. John (Aberavon) Ross, Rt. Hn. William (Kilmarnock) Wellbeloved, James
Moyle, Roland Rowlands, Ted Wells, William (Walsall, N.)
Mulley, Rt. Hn. Frederick Sandelson, Neville White, James (Glasgow, Pollok)
Murray, Ronald King Sheldon, Robert (Ashton-under-Lyne) Whitehead, Phillip
Oakes, Gordon Shore, Rt. Hn. Peter (Stepney)
Ogden, Eric Whitlock, William
O'Halloran, Michael Short, Rt. Hn. Edward (N'c'tle-u-Tyne) Willey, Rt. Hn. Frederick
O'Malley, Brian Short, Mrs. Renée (W'hampton, N.E.) Williams, Alan (Swansea, W.)
Oram, Bert Silkin, Rt. Hn. John (Deptford) Williams, Mrs. Shirley (Hitchin)
Orbach, Maurice Silkin, Hn. S. C. (Dulwich) Wilson, Alexander (Hamilton)
Orme, Stanley Sillars, James Wilson, Rt. Hn Harold (Huyton)
Oswald, Thomas Silverman, Julius Wilson, William (Coventry, S.)
Padley, Walter Skinner, Dennis Woof, Robert
Paget, R. T. Spearing, Nigel
Palmer, Arthur Spriggs, Leslie TELLERS FOR THE NOES
Pannell, Rt. Hn. Charles Stallard, A. W. Mr. Michael Cocks and
Parker, John (Dagenham) Stoddart, David (Swindon) Mr John Golding.

Question accordingly agreed to

Resolved, That this House 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.

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