Dear Mr. Weighell,
Thank you for your letter of 4 January. I do of course deeply regret the breakdown in negotiations between the British Steel Corporation and the unions representing their workforce, particularly as the Corporation are offering employees the opportunity to earn substantial increases through negotiated productivity schemes. That opportunity has not yet been properly explored.
The plain fact is that the BSC has to compete in an international market and simply cannot afford to give pay increases without getting corresponding increases in its productivity—any more than we as a nation can afford to go on paying ourselves increases we do not earn.
I still hope that we can avoid the widespread damage which a prolonged dispute will cause to the BSC, its customers, and others such as some of your own Union's members whose livelihoods depend in part on a successful steel industry.
As Keith Joseph indicated in the House of Commons on 14 January, the Government cannot play a direct role in trying to settle this dispute. But I understand that ACAS are talking to the parties concerned at present. I hope that they may be able to contribute to a resumption of negotiations between the BSC and the unions concerned, and to an early settlement of the dispute.
Yours sincerely,
Margaret Thatcher