This is the section which enables the Minister to subscribe additional share capital for the company. I should like to take advantage of Committee Stage to ask the Minister how the proportion which is to be subscribed as share capital was arrived at. He mentioned on Second Reading that of the £45 million required, £10,500,000 would be provided by the Exchequer as share capital, that £4 million would be provided by way of IDA grant and so on. Is there a rationale to this or is the £10,500,000 the residual that remains to be provided after the loan from the European Coal and Steel Communities and the leasing arrangements and IDA grant? I am particularly interested in this because the equity contribution is the capital contribution which does not have to be remunerated in all circumstances. Therefore it is the element of capital which could be a channel for subsidisation of the company in case of need—in other words, by not drawing a dividend on the share capital.
The Minister has assured us that the modern methods of steel production which will be brought into being will ensure that unit costs of production will be on a competitive level with that in the European Community. That is a careful statement. It does not necessarily mean that production will be profitable. The company however, he says, have made projections showing that allowing for the servicing of the loans there will be profits in the third and subsequent years of operation. If those profits happily materialise then they provide a source from which the Exchequer's equity contribution could be remunerated. If they do not materialise for any reason then the equity goes unrewarded and in effect, in addition to the IDA grant interest-free capital is being provided for the company—a form of subsidy.
I wonder when the Minister is replying could he clarify also a point where the language in his speech was perhaps a little careful. He said the consultants are satisfied that the export targets can be met. I realise that to get on a competitive unit-cost level output has to be considerably enlarged and that, therefore, exports have to be arranged. I yield to nobody in admiration for the valiant work done by previous chairmen, the present chairman and the Board and management of the company in trying to achieve viability under the handicap of a very low throughput and difficult labour relations at times, as the Minister has said. When it is said that the export targets can be met does that mean—which would be rather obvious—that production for export on that scale is possible, or that in fact remunerative markets for the export surplus of the company are likely to be found?
