HC Deb 10 July 1968 vol 768 cc494-9
6. Sir C. Osborne

asked the President of the Board of Trade if he will make a statement on the progress made so far with the proposals of the Rio Tinto Zinc Corporation and the British Aluminium Company to produce aluminium in Great Britain; and how he proposes to protect them from Soviet competition in world markets, in view of the fact that Soviet electricity is supplied at one-twenty-fifth the price in the Western world.

9. Mr. J. H. Osborn

asked the President of the Board of Trade what proposals he now has for establishing an economic and viable aluminium smelting industry in Great Britain.

28. Mr. Michael Shaw

asked the President of the Board of Trade when he will make a further statement about the establishment of aluminium smelters.

57. Mr. Ridley

asked the President of the Board of Trade if he will state the estimated total cost to public funds of the aluminium smelter programme.

Mr. Crosland

Negotiations with the British Aluminium Company and the RTZ/BICC consortium are making progress; both I and the companies aim to bring them to a successful conclusion in the near future. Negotiations with Alcan are complete and planning permission has been issued for their smelter and power station. Site preparation work at Lynemouth will begin shortly. I am satisfied that we have adequate powers to deal with any unfair Soviet competition.

Sir C. Osborne

Whilst welcoming the announcement of the decisions, may I ask whether the President of the Board of Trade is aware that the recent Parliamentary Delegation to Siberia was shown great plants which were producing electricity at one-twenty-fifth of our price and that we were told that 60 per cent. of the production of aluminium was from electricity? How can our people compete? Will the right hon. Gentleman make some inquiries and try to safeguard our people?

Mr. Crosland

I was very interested in this part of the hon. Gentleman's Question. I have looked into the figures in great detail. We import a certain amount from the Soviet Union. The amount has been growing, but it is still quite a small proportion of our total imports of aluminium. If not only the Government but also the companies think that they will be able to compete with fair imports from the Soviet Union, we should take this as being a reasonable commercial judgment.

Mr. Osborn

I regret that there has been this long delay in reaching the decision. Is the right hon. Gentleman satisfied that three separate units will in the end be economic and viable, bearing in mind that the combined capacity of these units will be one-third that designed for a modern aluminium smelting unit in the U.S.S.R. and elsewhere? Is the right hon. Gentleman satisfied that we shall have a competitive aluminium smelter industry at the end of the day?

Mr. Crosland

Yes. Neither the Government nor the three companies concerned would have been spending so much time on detailed negotiations, as we have been, unless we were all of us satisfied that the outcome would be an economic, viable and competitive smelter industry.

Mr. Shaw

As the first announcement on this subject was made in the fresh and heady atmosphere of Scarborough last year by the Prime Minister, will the right hon. Gentleman note that we would much prefer the next announcement to be made to the House rather than in similar circumstances in Blackpool in the autumn?

Mr. Crosland

I do not know why this prejudice against either Scarborough or Blackpool should emerge from hon. Members opposite. I hope that it will be noted by the constituents of the hon. Gentleman and of some of his hon. Friends. I certainly hope to be able to make a further announcement—one, I hope, of a detailed kind—on this subject before the House rises for the Recess.

Mr. Ridley

What will the total cost to public funds of these smelters be? How can the right hon. Gentleman possibly justify this to the E.F.T.A. Council in the face of this absolutely obvious and clear subsidy which we are putting into these smelters?

Mr. Crosland

I cannot say what the cost to public funds will be until the negotiations are complete. The hon. Member knows full well that we have strongly maintained—I think with considerable support—that no element of subsidy will be involved in the creation of these smelters.

Mr. William Hamilton

Is my right hon. Friend aware that the whole of Scotland is desperately anxious that we get one of these smelters in Invergordon in the Highlands? Can my right hon. Friend say at this point whether that will be the case and whether there are any objections to it or any other of these projects from our E.F.T.A. partners?

Mr. Crosland

I am well aware that very strong feelings are held in Scotland about the location of one of these smelters at Invergordon. I hope that the negotiations about this will come to a fruition. I have already referred briefly to the E.F.T.A. objections and there is another Question on the Order Paper relating to these.

10. Mr. J. H. Osborn

asked the President of the Board of Trade what consultations there were with the European Free Trade Association countries before October, 1967, about the proposals for establishing an aluminium smelting industry in Great Britain.

The Minister of State, Board of Trade (Mr. Edmund Dell)

None, Sir. The proposals for expanding the aluminium smelting industry in Great Britain were first raised in the Official Council of E.F.T.A. by the Norwegian Government, following the announcement by my right hon. Friend the Prime Minister in his speech to the Labour Party Conference at Scarborough on 4th October, 1967.

Mr. Osborn

Is it not deplorable that the Government did not think fit to discuss with our E.F.T.A. partners this important question of aluminium smelting, since they have for some years objected to the whole system of investment grants as providing a means of unfair subsidy to industry, power generation and other activities?

Mr. Dell

I do not understand why the hon. Gentleman should consider it necessary that, on a commercial proposition made by private firms to the Government, which in no way breaches any international regulation, the Government should consult foreign Governments before coming to a decision. We took account of the interests of the traditional suppliers of aluminium to this country, but we had to make up our own mind on these propositions.

Mr. Milne

Does my hon. Friend agree that talk of disputes with the E.F.T.A. countries regarding the aluminium smelting industry does no service to the industry, to the E.F.T.A. partnership or to the prospect of job opportunities which the industry is presenting to this country?

Mr. Dell

My hon. Friend will appreciate from the earlier answer given by my right hon. Friend that we are going ahead with the negotiations and we fully intend to have an aluminium smelting industry in this country.

16. Mr. Lane

asked the President of the Board of Trade what is the extent of Government financial assistance for the power station to be constructed for the aluminium smelter at Lynemouth.

Mr. Dell

I would refer the hon. Member to the Answer I gave on 20th June to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley).—[Vol. 766, c. 176.]

Mr. Lane

As the right hon. Gentleman was able to tell my hon. Friend practically nothing more this afternoon, can the hon. Gentleman tell us something about the order of the assistance at Lynemouth and in the other two cases still under consideration, though I appreciate that he cannot yet give us full details?

Mr. Dell

It is quite clear that assistance to the alumium projects, as with all other manufacturing investments in developing areas, will consist of investment grants where appropriate and Local Employment Acts grants where appropriate. However, the hon. Gentleman is asking me about the power station, and there is no grant for that. The specific figures for individual companies cannot be given because they are confidential.

30. Mr. Emery

asked the President of the Board of Trade what is the cost of the Government's contribution per permanent job expected to be provided by the aluminium smelter to be built at Lynemouth.

The Parliamentary Secretary to the Board of Trade (Mrs. Gwyneth Dunwoody)

Information about assistance to individual applicants under the Local Employment Acts is confidential.

Mr. Emery

Does the hon. Lady realise that it is being suggested that this will cost the Government, irrespective of the contributions of industry, over £30,000 per job to be created, and that the sooner we have either denial or acceptance of those figures, the better?

Mrs. Dunwoody

The hon. Gentleman must learn not to believe what he reads in the newspapers.