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Dáil Éireann debate -
Wednesday, 13 Dec 1995

Vol. 459 No. 7

Adjournment Debate. - Consultancy Report on Irish Steel.

I thank the Minister for coming here to reply to this Adjournment matter. I hope this is the last occasion we will have cause to raise the issue of Irish Steel as I wish for a successful resolution from the Madrid summit and the meeting of Industry Ministers in Brussels next week. The charade had gone on long enough.

Those of us who have followed this saga in the House will have felt a grave sense of tension and worry as the matter dragged on following meetings where one thought it would have been satisfactorily settled. This led to disquiet at the intransigence shown by British Ministers and officials regarding the Irish case, which was put forward coherently. I felt all along that the British would use it to build tension in the wider framework of Anglo-Irish relations. It is a mark of how they look at Irish difficulties and problems in that one must constantly engage in a battle with the UK Government on every issue. One step forward is always followed by two steps back, not only in industrial and commercial issues but in political ones also. It is clear to both Government and Opposition in Ireland that it is a matter of some pride to the British if they are seen from time to time to act with obstinacy and obduracy regarding anything connected with Ireland.

I thank you, a Cheann Comhairle, for allowing me to discuss this matter. As a guardian of our interests you have constantly afforded us an opportunity to discuss this important issue in the House. I raise it to assure the Minister of our support, which I have been vocal in offering. The British Government should know we speak with one voice on this matter, so that it will see the principle of divide and conquer is not operating.

The Minister commissioned a report so that he and the Taoiseach could present it as a case proven as to why the deal arranged with ISPAT for Irish Steel and the subsidy attendant upon that deal should be allowed to pass by Brussels and the Council of Industry Ministers, bearing in mind all the other countries agreed to it. We requested a copy of the report today and finally received it this evening, for which I thank the Minister. It is a simple but strongly worded report which bears out the point of view we all put forward, that the arrangement for Irish Steel would not in any way impinge upon the viability of either Scunthorpe or Shelton. The argument put forward by the British is that any productivity which affected the Scunthorpe plant could in turn affect Shelton. That has been proven to be incorrect.

As I said on the radio some time ago, Irish Steel is but a minnow in comparison with British Steel and in the European and world steel markets. The people of Cobh, the 350 workers in the plant — reduced from 550 — their families and children have all pulled together, made sacrifices and allowed the factory to become more streamlined and economically viable. It makes a good product and they look forward to the future with pride.

I urge the Minister to release this report to allow us publicly comment on it so that we can add our voices to the case being put forward and counter once and for all the spurious arguments raised by British Steel, which I strongly suspect is being encouraged by its Government. The Minister should condemn that argument and endorse the clear findings the report has produced. I encourage the Taoiseach and the Minister to be strong in their convictions when putting forward the case. The British arguments are tenuous to say the least and technically insupportable.

Irish Steel and its workforce should be congratulated on a job well done so far. Both the Taoiseach and his brother, the Minister for Enterprise and Employment, should stiffen their resolve in the face of intransigence, obstinacy and obduracy. The report ends by stating that Irish Steel's continued existence will have no impact on Shelton's viability.

I thank Deputy O'Rourke for her continuing interest in this issue and her support on what is an important matter for Ireland as well as for the people of Cobh. In a report sent to the Department of Enterprise and Employment by Eurostrategy consultants, the arguments advanced by British Steel over the past few weeks were examined. The report came to the conclusion that the arguments were tenuous and not supportable technically.

It had been maintained that Shelton and Irish Steel were in head to head competition but this is not the case — only 34,000 tonnes of Irish Steel products are in the Shelton range, representing less than 10 per cent of Irish Steel's products. Only 7,000 tonnes of this product goes into the UK market. Shelton is a heavy section mill, unlike Irish Steel which is a medium section mill. There is no basis for the suggestion that the continued operation of Irish Steel will damage jobs in Shelton. The management at that plant has confirmed this point.

British Steel had maintained that Irish Steel's viability was dependent on increasing its market share in the EU medium section market at the expense of British Steel. It also maintained that Irish Steel's viability was dependent on depressing market prices. According to Eurostrategy, the withdrawal of the Belgian steel company Cockeril-Sambre and the Portuguese company Siderugia Nacional from the medium sections market would ensure that Irish Steel and its competitors in that market, including the British Steel plant at Scunthorpe, will experience an increase in market share.

The consultants state that current economic indicators from independent sources in the UK forecast a rise in construction output in the industrial sector over the next few years. With millennium projects expected to underpin the non-housing construction market, the demand for structural steel will increase, so that Irish Steel should be able to meet its sales strategy without taking business from British Steel.

The consultants therefore feel the British Steel argument about Irish Steel's viability being dependent on increasing its market share at the British company's expense is not well founded. To put it in a nutshell, demand in Europe is forecast to grow by 7 per cent but Irish Steel is expected to increase its share by only 0.5 per cent to under 9 per cent of the relevant market segment.

As regards British Steel's point about Irish Steel's viability being dependent on it depressing market prices, the independent consultants said there was no evidence Irish Steel sold below market prices; it tended to follow British Steel's price lead. Steel prices are highly sensitive to demand. Over the past few months prices for steel have softened in anticipation of the seasonal downturn in construction demand during the winter. Overall steel prices should continue to enjoy a modest improvement of 2.5 per cent per annum. The consultants also feel British Steel's arguments are not supported by the facts. It is ludicrous to suggest a small plant could hope to survive by engaging in a price cutting strategy.

Another point made by British Steel in opposition to Irish Steel's case was that its Shelton plant was an overflow plant for Scunthorpe and its existence depended on Scunthorpe having excess demand which would disappear if Irish Steel continued or increased production. The consultants were unable to see any logical link in British Steel's argument in this area. This is plainly true, when one realises Shelton is a heavy steel mill and cannot produce the same product as Irish Steel.

Perhaps we should start boycotting their products coming into this country.

I met the president of the UK board of trade, Mr. Ian Lang, and the UK Minister for Industry and Energy, Mr. Timothy Eggar, in London on 5 December to discuss the UK attitude to the Irish Steel case. Since then, the UK has been considering the points made by me and I understand that senior British officials will contact senior Irish officials within the next few days. There is no particular action I can take to counteract the publicised move by the British Iron and Steel Producers' Association to seek a British veto at the forthcoming industry council. However, I assure the Deputy I will ensure that the opposite side and the very strong Irish case is made clear to those who should know of the strength of the Irish case.

The industry council has been specifically requested by Ireland to discuss the Irish Steel case on Wednesday 20 December. I hope that will result in Britain recognising the genuineness of the Irish Steel case which is supported by 13 of the other member states plus the EU Commission and the presidency. I hope it will enable the British Government to lift its reservation.

The Dáil adjourned at 9.45 p.m. until 10.30 a.m. on Thursday, 14 December 1995.

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