Paper and Board Industry

HC Deb 17 December 1980 vol 996 cc373-404

10.5 pm

Mr. Frank R. White (Bury and Radcliffe)

I am grateful for the opportunity to raise once again the problems of the paper and board industry. I offer no apology for repeating many of the arguments that my hon. Friends and Conservative Members have made on a number of occasions. This is the fourth time since the summer that the industry's problems have been brought to the attention of the House.

I am chairman of the all-party paper group, and I congratulate hon. Members upon their continued support and perseverance, which, in spite of the late hour, is demonstrated tonight by their presence.

We all regret that, irrespective of where we sit in the House, our arguments have failed to bring about a positive response from the Government—a response that we would expect from any British Government. We would expect a positive response in particular from a Government the Prime Minister of which has declared that compassion for the unemployed and concern for the loss of manufacturing industry is not the prerogative of one party. Would that deeds matched those words.

In the last year, many mills closed and thousands of workers in the industry were made redundant. However, we still lack an effective reaction from the Government to protect the remaining industrial capacity. Knowingly or unknowingly, the Government give the impression that the paper and board industry is expendable. They give the impression that only the weak and inefficient go to the wall. The impression gains ground when Government spokesmen throughout the country heap the blame for our industrial demise on to the backs of workers and trade unions by asserting that our problems would vanish overnight if wage demands were lower, demarcation lines were abolished, new technology was allowed to operate and we became more productive.

I do not claim that everything in our industrial garden is rosy. I accept that problems exist. However, I reject the general attitude adopted to all and sundry. Even where that attitude is applicable there is a backlog of mistrust and conflict, which neither side has taken initiatives to solve. Such accusations are unjust and unfairly apportioned.

The charge made by Government spokesmen throughout the country cannot be levelled at the British paper and board industry. The Under-Secretary of State for Industry, when winding up a similar debate, said of the industry: It has a good labour relations record and its record as an industry entitles it to respect. I salute it."—[Official Report, 4 August 1980; Vol. 990, c. 401.] Those words were welcomed by the House at that time. The industry was grateful for those comments. But the ensuing lack of action to support the Government's respect for this great industry left it with a feeling of "What good is a captain's salute when the ship is sinking?" I refer the Minister to the "Titanic", if he wants a reference. I take the Minister's words to mean that he accepts that the industry's problems are not self-inflicted—that they have been created by outside forces. He and I may differ on the cause of those outside forces and how they can be remedied.

Earlier this year, many hon. Members from both sides of the House received from the Paper and Board Industry Federation and SOGAT—the major union in the industry—a brief joint statement, which urged that the Government should impose temporary import controls and that interest rates and the price of energy should be reduced for industry. Those forces are outside the control of the British paper and board industry. It is right that the Government should be approached for action in those matters. At the outset, many hon. Members on the Labour Benches accepted that some of the requests were not attainable, especially because of the views of the Secretary of State for Industry on monetary policy. We saw no hope of positive action on exchange rates or interest rates because those aspects of economic policy were central to the Government's strategy. The request for import controls was even more remote, as the Government had nailed their flag to the mast of free trade, irrespective of the most compelling arguments.

However, we did see the possibility of a Government initiative to take action on energy costs. It is to that end that many of my hon. Friends and Conservative Members have directed their attention for the past few weeks. I wish to complement the work and contribution of my hon. Friend the Member for Workington (Mr. Campbell-Savours). No doubt he will direct the attention of the House to the issue should he catch your eye, Mr. Deputy Speaker.

I shall not dwell for too long on the detailed argument. Surely there must be a case for the Government to answer when faced with the overwhelming evidence of energy subsidies enjoyed by our foreign competitors. Since 1971, energy costs for paper mills in Britain have doubled, as a percentage of the unit costs of production, from 12 per cent. to 24 per cent. As a comparison, labour costs have increased by only 2 per cent., from 18 per cent. to 20 per cent. of production costs, during the same period. No doubt my hon. Friends will give more specific examples. I believe that time and time again in the House the case has been proved. We seek only what our competitors already enjoy, namely, Government support.

I read in The Guardian today that there is a strong lobby of wets within the Cabinet in favour of energy subsidies for British industry. I am sure that I speak for all my right hon. and hon. Friends in wishing them every success. As we face the industrial issues of Britain, and as the Cabinet face those industrial issues, the ranks and the volume of the wets in the Cabinet grow and grow. I do not know what the Cabinet Office is like at the present time. It is a long time since I was in there. By now the Cabinet Room must be positively awash with wets. Let us hope that there is enough water flowing around to float British industry.

I would welcome the Minister's comments on this issue and his assurance that the Department of Industry is supporting such attempts in the Cabinet as will place our industry's energy costs on an equal footing with those of our main competitors.

I wish to put before the House two arguments that I believe that the Minister and the Government must face—and face quickly. The Government must reassess their industrial strategy. First, there is the Government's attitude to intervention in industry. I well remember, during the general election, as do my hon. Friends, our opponents dismissing the Labour Government's industrial strategy and, in particular, the aid that was available for industrial regeneration. My own opponent claimed that it was cruel to prolong the life of dying industries and that it was much better to let them fade away and allow new industries to grow in their place. He painted a great picture. Industry was about to be released from the Government. The Conservative Party would restore to it freedom of action without Government interference. Free market forces would prevail, and prosperity would be assured for all.

All those claims were argued again on the hustings. It is not my intention to reduce this debate to a mere repetition of the hustings, but during that campaign the question was asked "What if the rest of the world does not play your free market game of industrial Monopoly? What happens to British industry if our foreign competitors receive help from their own Governments? Will you leave them naked in the market place, or will you match the terms of trade? Will you let British industry be sacrificed on the altar of free marketism—a policy that none but the British accept—or will you act to protect our industries, our jobs and our livelihood?"

The answers to those questions were not forthcoming during the election campaign, and they remain unanswered now. They are unanswered in one sense, but they are fully answered by the fact that the Government are standing back and letting our industrial competitors and their Governments get away with the rape and murder of British industry, the paper industry in particular.

There is no free market philosophy except in the mind of the Secretary of State for Industry. Until he sorts out that confusion, we shall continue to be picked off mill by mill by our competitors. It may be that the Government are not convinced by the past evidence. But recently evidence has come to light, which no doubt the Paper and Board Industry Federation has supplied to the Minister. If not, that omission will be rectified. I must tell the Minister that if his Department fails to act upon that evidence, or fails to influence his hon. Friends in other Departments, he will become an accessory to the crime.

For the purpose of my argument. I should like to give two examples. For obvious reasons, I shall not quote the names of the British companies involved, but they can he supplied to the Minister or to any hon. Member who wishes to see me afterwards. A paper converter operating in the Midlands was supplied with envelope paper from a British mill and also imported a similar type of paper from a Dutch company, Van Gelder. In October 1979, the British mill charged £475 per tonne. Van Gelder charged £450 per tonne. A year later, in October 1980, the British mill was charging £490 a tonne. In the meantime, Van Gelder, far from increasing its price, had dropped it to £400 per tonne. This month, it has further reduced the price to £345 per tonne. As exchange rates cannot account for reductions of that magnitude, that is an example of unfair trading by a State-subsidised company against which no United Kingdom mill can compete.

Mr. D. N. Campbell-Savours (Workington)

That is an important point, because the Van Gelder company is 20 per cent. owned by the Government and it relies on public money in the form of subsidies. That is a real advantage existing in the hands of overseas producers. The Minister should direct his reply to that point, because we need an answer.

Mr. White

My hon. Friend complements the point that I was about to make. That Government support is the main factor that led to the subsequent closure of the British mill, which had been operating for more than 200 years. As my hon. Friend said, the situation is even more stark, and is more demanding of Government action and ministerial reply, when one considers that Van Gelder became insolvent in 1979 and was bailed out to the tune of £14 million by the Dutch banks. I therefore support the views expressed by my hon. Friend.

Van Gelder has also operated quite a nice sleight of hand in the supply of copier sheets. The British company that is in opposition to it prices a full lorry load of copier sheets at £2.20 per 1,000 sheets. The A4 bond is slightly dearer, at £2.30 per 1,000 sheets. Van Gelder prices are £1.60 per 1,000 sheets for a bond which it says is suitable for copying and £1.86 per 1,000 sheets for its branded copier, which is supplied under plain wrapping.

Since April the British company has systematically reduced its prices, until today it sells at £1.87 per 1,000 sheets—a decrease of 18 per cent. With a fair utilisation of the plant, no breakdowns, no down times, no additional import penetration and no other aspects that could stop production, that company may be able to compete. But that is a nice, rosy world, which does not exist in industrial reality. That mill is now losing money. A reduction to Van Gelder's lowest price would represent a 30 per cent. drop in prices. The only way that that level of pricing policy is maintained by the Dutch is by subsidies in one form or another, and my hon. Friend the Member for Workington indicated where they came from.

The October 1980 edition of the magazine Pulp and Paper International made the following comment: The Intermills Group which was sold to Belgian interests for one Belgian franc"— I stress that— by Champion in 1977 is Belgium's leading producer of special printing papers and copy papers. In recent years it has been plagued by financial troubles which have led to the closure of several mills. The Belgian Government paid off the debt of Intermills, which amounted roughly to 1,500 million Belgian francs, or $50 million. Furthermore, they decided to inject $30 million as working capital into a reorganised group. In addition, they guaranteed new debts of over $30 million. The implications of this action in Belgium mean, for the British industry, that a major British paper company is now in direct competition with the Belgian group, which is backed by Government money despite a track record that indicates that it had not been able to produce viably even in periods of high demand.

The British company will have to fight in its own market and in the export market against a Government backed foreign competitor that has seemingly unlimited resources. Surely the Minister cannot be satisfied by these expressions of free marketism. Will he now undertake a complete review of his Department's attitude towards Government intervention and industrial assistance? If it helps him, we shall agree to use the Prime Minister's words "constructive intervention". That is what we need now. We need constructive help when so many foreign competitors are intent on destructive intervention in British industry.

Then there is the Government's attitude to public purchasing. Earlier this year the Prime Minister indicated that she supported the concept of assisting British industry by a positive purchasing policy to buy British.

The Under-Secretary of State for Industry (Mr. David Mitchell)

The hon. Gentleman says that he is seeking Government intervention. Will he be rather more precise? Is he referring to energy costs and import controls, to which he referred earlier, or is he asking for financial assistance when he uses the blanket term "intervention"?

Mr. White

As I said earlier—I hope that my hon. Friends will develop the argument and that the Minister has read the reports of previous debates—the all-party paper group is urging the Government to review their energy pricing policies for industry. That is one form of positive Government intervention. The Minister will also be aware of the Labour Government's support for the paper industry. There was the £23 million support scheme that enabled the industry to regenerate in capital investment a total of £93 million. That made British paper manufacturers better able to match foreign competition, and it had a continuing effect in machinery manufacture and engineering and machine tool manufacture. Measures of that sort are the ones that I wish the Minister to consider. Any measure that is now enjoyed by our foreign competitors will, I hope, be matched by the British Government. I trust that they will act and will not hide behind the door.

Mr. John Wells (Maidstone)

I am grateful to the hon. Gentleman for giving way, but he has gone on for a long time. I apologise for stirring him up and perhaps causing him to go on even longer, especially as I hope to make my own contribution later. The hon. Gentleman has referred to the all-party paper group and what that group is urging on the Government. I do not see many Liberals or Scottish nationalists—

Mr. Robert Litherland (Manchester, Central)

I do not see many Conservatives in the Chamber.

Mr. Wells

I am coming to that. There are no hon. Members representing the other fringe groups in the Chamber. None of my hon. Friends is in the Chamber save the Minister. As the chairman of the all-party paper group is well aware, I disapprove of his group.

Mr. White

The hon. Gentleman turns up on some occasions when the all-party paper group meets and he makes his views well known. Most Conservative Members—this applies to the Scottish nationalists, the Welsh nationalists and other parties, including my own—who attend the all-party group have a positive point of view of support for the paper industry. The hon. Gentleman may have a chip on his shoulder about all-party groups, which I understand, but I am sure that he wants to join the other members of the group in giving every possible assistance to the paper and board industry, in which his constituency has an interest.

My next point concerns the attitude of the Government to the question of public spending. Earlier this year the Prime Minister indicated that she supported the concept of assisting British industry by a positive purchasing policy to buy British. What steps have been taken to implement that policy through Government Departments? What guide has been given to the Departments of Government regarding the purchase of British paper products? Does the Department of Industry buy wholly British-manufactured paper products? Does Her Majesty's Stationery Office extend a buy-British policy beyond the purchase of the individual items of stationery, and does it specify that it has to be British-manufactured paper?

Earlier this year I had correspondence with the Prime Minister on behalf of a mill in my constituency that supplied paper to HMSO in competition with a German paper mill. I was not very happy with the reply. I hope that the Minister will indicate tonight a more positive Government attitude in this regard.

Is the Minister aware that at present HMSO is putting pressure on the United Kingdom mills that hold contracts with it to accept either a reduction of 30 per cent. in tonnage or a 10 per cent. reduction in price? Those are not figures of fiction. I have a letter, which I shall show to the Minister, from a chairman of a mill in my area. The chairman tells me that there has been no suggestion that orders will be placed abroad if there is no agreement, but it appears that HMSO is taking advantage of weak market conditions to force prices down to an even more uneconomic level.

Of course, another answer may be that Government spending cuts are manifesting themselves in this kind of action. If that is so, surely it must be the economics of the madhouse, for any savings gained by the Treasury in this respect will be lost if mills are forced out of business and the consequential costs of unemployment are felt by the Government and the whole community. I trust that the Minister will give reassurance on this disturbing development.

I recognise, as does the all-party group—notwithstanding the comments of the hon. Member for Maidstone (Mr. Wells)—that the problems that exist in the paper industry are not problems that lend themselves to single solutions. The all-party group recently met representatives of the paper merchants. The needs of that sector of the industry are very different from those of the paper manufacturers, and, correspondingly, the needs of these two differ greatly from the needs of the printing sector of the industry. It has been my responsibility to bring to the attention of the two groups the fact that we have met the example of the textile industry, where the failure of the spinning, weaving, dyeing and bleaching and clothing industry sectors to agree a broad textile policy has led these to be hived off and individually picked off, to the destruction of the industry. It has led them to be subject to import penetration and to the capacity levels that we see now, with the consequential loss of jobs.

I hope that in the new year—in this I have the support of the hon. Members who attend the all-party group—we can initiate discussions between the printing industries, the paper merchants and the Paper and Board Industry Federation to try to develop a broad policy for the paper industry that will meet the needs of the three vital sectors—the manufacturers, the merchants and the printers. In presenting that policy. I hope that we can look forward to a positive Government response.

Last week the Government increased the quotas for imports of Scandinavian paper and board. There can be no justification of that 15,000 tonnes a year increase, given what has happened in the past 12 months, with 18 mills closing and 10,000 mill operatives being put out of work. Many of my hon. Friends and Conservative Members have tabled a prayer against the order. We shall seek to detail the arguments on another occasion. In allowing that increase, when the market is 14 per cent. below the 1974 figures when the quotas were allowed, and when the Scandinavian manufacturers expected no increase because they appreciate the market conditions, the Government have not inspired much confidence among the industry in their will or ability to protect British interests.

I conclude on a personal note. My constituency contains more paper mills than any other area of the country. The entire community of Bury and Radcliffe prospers or fails by the success of that industry. I speak on behalf of the mayor, of the members of the council on both sides of the political spectrum, of management, of commerce and of trade unions when I urge the Government to review their policy on the British paper and board industry. I urge them to make a statement of intent that they fully accept the contribution that the industry makes to our economy and undertake to take all necessary measures to protect it from unfair competition and trading policies.

Anything less than that open declaration will leave my constituents and my town with the feeling that the Government do not care and that the industry is expendable. I ask the Minister to state clearly tonight that the Government will protect my constituents against the industrial piracy that is threatening their jobs, their livelihoods and their security. Will he state that he and his Department will take every measure to protect us from foreign competition—indeed, to take the sort of measures that other Governments take in respect of their paper workers?

Judging from the Minister's past comments, which I have quoted, he needs no reminding that my constituents and every employee of the British paper and board industry have given every possible assistance to maintain the viability of the industry. They have a right to expect what I am seeking from the Government. If the Minister cannot make that declaration tonight, will he at least agree to come to my constituency and meet the representatives from both sides of the industry to learn at first hand of the extent of their contribution and how that is mutually valued?

I thank the House for its patience with me this evening. This issue is of deep concern to my constituency, and I trust that we can all work together for the future of a viable paper industry in this country. I hope that the ensuing contributions and the Minister's reply will be the start of that ideal.

10.40 pm

Mr. John Wells (Maidstone)

The hon. Member for Bury and Radcliffe (Mr. White) has ranged widely and, in some small detail, wisely. But he has also indicated to me that he does not live in the real world. The paper-making industry is nearly as important to my constituency as it is to his. Therefore, I hold it in great affection and I am well aware of its problems. In so far as I disagree with the hon. Gentleman, I hope that he will respect my view as much as I respect him and his. In our different ways, we are both seeking to do our best for paper-making in our constituencies.

My people live in the real world. They are aware that paper in all its forms is used as world prosperity increases. If there is world recession, the uptake of paper products of all sorts declines. My constituency has a second great interest—horticulture. Apples come to market packed in cardboard boxes and with cardboard divisions separating them. Therefore, paper is important to my people in all respects.

The fact remains that if there is a smaller uptake of finished goods there is a smaller uptake of kraft paper. The world recession is affecting us all, and therefore we have to face the fact that machines, and in some cases—as the hon. Member for Bury and Radcliffe rightly said—whole mills are closing. The hon. Member used an emotive phrase in describing their being picked off one by one. I have enormous sympathy with that point of view, because although I have no mill closures as yet I have had and will have increasing machine closures.

Until we can see an upturn in world and British prosperity, our industry cannot expect a greater uptake of its products. No one will stock paper if he has no use for it. The hon. Gentleman made two particular points.

Mr. Campbell-Savours

Although I cannot accept the hon. Gentleman's point, I accept the spirit in which he puts it. If the capacity on the world market is being increased by 15 per cent. in the current year, there must be a market for that capacity, because some countries refuse to close mills. Where does the hon. Gentleman expect those products to go? If they are being dropped on to the British market, putting British people out of work, is there not a duty on the Government to introduce measures to protect the home producer?

Mr. Wells

I was foolish to give way to the hon. Gentleman. I should have left him to make his own speech in his own time. [HON. MEMBERS: "Answer the question."] It is for my hon. Friend the Minister to answer, but I shall answer the hon. Gentleman in due course, although I had sought to be brief.

The hon. Member for Bury and Radcliffe made two telling points, to which I hope my hon. Friend will reply. First, he sought a greater assurance about the uptake of British paper from the British Government. I have recently had cause to write to one of my hon. Friend's colleagues complaining that the Customs and Excise Department not only has its printing done abroad but uses foreign paper in some cases. It is deplorable that the Customs and Excise Department, of all Departments, should use foreign paper and foreign print. I wrote not to my hon. Friend but to one of his colleagues, so he probably does not have the answer at his fingertips, and I do not ask for it at this late hour tonight. However, I ask him to look at the matter after Christmas and to write to me. The hon. Member for Bury and Radcliffe raised the point in general, but I raise it in particular, with regard to Customs and Excise.

The hon. Member made a second valid point when he grumbled about the great upsurge in the duty-free input from Scandinavia. Although he has teased me about my views on all-party groups, he will be glad to know that this evening I was re-elected to the chair of the Anglo-Finnish group. The point about being a member of the Anglo-Finnish group is simply that Finland is one of the great paper-making countries, and it is therefore important that hon. Members who have paper-making constituencies should be aware of what is going on in Scandinavia. I hope that my hon. Friend the Minister will give us a realistic explanation of this increase in the duty-free quota, because it is very important.

I also say to my hon. Friend that at a time when Her Majesty's Government are looking for wage restraint without imposing wage restraint, people in the paper-making industry are some of the most modestly paid in the industrial scene. These are not rich men. They are not, like public lavatory caretakers, getting vast overtime payments for cleansing in the middle of the night. [Interruption.] No, this is a serious point; it is not a frivolous one. In the paper-making industry many people work night shifts and are working long and unsocial hours, but not for the vast pay that, one gathers, school caretakers get under the ILEA.

Mr. George Grant (Morpeth)

Will the hon. Gentleman give way?

Mr. Wells

I think not. I have burnt my fingers once already. The hon. Member will have his chance if he is lucky enough to catch your eye, Mr. Deputy Speaker.

I put it to the Minister that this is a modestly paid industry and that it comprises people who are loyal not only to their mill but to the whole trade in which they have been brought up. Although I disagree with the hon. Member for Bury and Radcliffe in almost everything that he said, I was attracted by his remark, in closing his speech, that he spoke on behalf of his mayor and corporation and Bob's-your-uncle. He was speaking as a community member, and that is very much the spirit that we have throughout the country in the paper industry. The people in it are community-minded people.

I am not so naive as to be unaware that Dutch energy is cheaper than British energy, because Dutch gas bubbles up a great deal nearer to the place where it is to be used than British North Sea oil does to the place where it is used. British North Sea oil is not specifically useful in the paper industry. Therefore, the energy input to the industry is, by natural causes, more expensive than the Dutch energy input. The figures that the hon. Member quoted prove the exact truth of the energy position. There is nothing that Ministers can do about this; it is an international fact of life. The costs of putting energy into a Dutch paper mill are less than the costs of putting energy into a British paper mill, unless it is subsidised.

The hon. Member for Bury and Radcliffe was extremely woolly about what he wanted done. Did he want the paper mills to go bankrupt? Did he want English banks to bail them out? Or did he want the British Government to put in 20 per cent., I think he said, as in the case of Van Gelder? Does he want the British Government to put 20 per cent. into British paper mills and to have all the ills of nationalised industries? Does he want to have a little British Leyland in his constituency? I certainly do not want it in mine.

I implore the Minister, therefore, to give us concise answers to the reasonable questions that have been put concerning Government aid to the industry, but I hope that he will stand quite firm in pointing out to the industry the truths of which it is already well aware—that this is a great international problem and that there is very little that we can do unilaterally as Britain is a great trading nation, trading in the markets of the world.

10.49 pm

Mr. Robert Litherland (Manchester, Central)

This debate is an unashamed plea for assistance—financial or otherwise—to ensure the survival of a vital industry and its allied industries of printing, publishing and packing. The industry is fundamentally sound. There is a demand for its products. The expertise and skills needed are there in abundance. There have always been good labour relations. Indeed, that is a feature of an industry that was extremely viable until about 15 years ago. Problems set in because of the elimination of tariffs with EFTA and as a result of the subsequent duty-free quotas settled with our former partners when we joined the EEC.

Today, the industry finds it impossible to compete against overseas competition. It is trying to survive in a climate of high-value sterling, high interest rates and high-cost energy. The combination of those factors not only causes unemployment; it will destroy the industry unless the Government listen to the pleas of the trade unions and the employers' federations.

Government assistance is essential in such a predicament. Assistance must be immediate, because the crisis is gaining in momentum. Hon. Members should consider the speed with which disaster befell Bowater. Last August, I met one of the senior representatives of Bowater. I specifically asked him when he thought things would reach a crisis in the paper industry and in his firm. He said that that was a hypothetical question but that the crisis might come in the first six months or the last six months of next year. Within a week, the Bowater mill in Ellesmere Port had closed down and made 1,600 people redundant.

Unemployment has escalated at a frightening rate. Mills are closing, never to be reopened, because those mills and jobs will have been lost for ever. The general secretary of the Society of Graphical and Allied Trades, Mr. Bill Keys, said: the illness now besetting this industry can be terminal in many of its sectors That puts the situation facing the industry into perspective.

The industry faces disastrous prospects unless we can get the Government to listen. That appears to be a formidable task both for the trade unions and for the employers' federations. Those bodies have met the Prime Minister, the Secretary of State for Industry and other Ministers. Articles have appeared in the press, and there have been mentions on television and radio and in other media. Now, an effort has been made, mainly from the all-party group, to create an awareness of the industry's problems.

I commend my hon. Friend the Member for Bury and Radcliffe (Mr. White) on his initiative in achieving this debate. During discussions with the Prime Minister, members of the Cabinet and junior Ministers, a request was made for some flexibility in Government policy in order to help the industry. To date, nothing has been forthcoming. The pleas have fallen on deaf ears. Like the textile industry, the paper and board industry will suffer further contraction until it collapses or becomes a mere service industry, supplying small specialist items; in other words, until it becomes a corner shop for the printing industry.

The biggest threat to the paper and board industry is the impact of imports. As imports have increased, production in the United Kingdom has fallen. Import penetration is now 50 per cent. of the United Kingdom market—an increase of 15 per cent. since 1970.

Competition comes from countries that have a ready supply of raw materials. North America, Canada and Scandinavia have natural resources to supply wood pulp and, with their own processing industries, they can exploit the market on two fronts, by increasing the price of wood pulp without increasing the price of paper. How can United Kingdom producers remain competitive in that situation?

Investment is required to restructure small and outdated machinery. We appeal to the Government, management and the trade unions to work together to solve the problems, to increase productivity and investment, to increase domestic raw material supplies and, if employment is to be secured, to reduce import penetration.

How can we compete with North America, which now produces 40 per cent. of the total capacity? The United States of America is the lowest-cost producer of many grades of paper. It enjoys cheap wood and cheap power and, because of the size of its market, it is able to invest and install plant on the largest possible scale.

The Scandinavian countries have incorporated paper manufacturing into their wood pulp industries. This development has derived from duty-free access to the United Kingdom market which was made available under the EFTA agreement in the 1960s.

As tariffs were reduced, prices came under pressure, and the United Kingdom was caught in a vice-like squeeze of high-priced wood pulp and cheaper imported paper. The squeeze and the import penetration have already had their effect. That is borne out by the number of mill closures and the unemployment now being experienced by the paper and board industry. The Scandinavian countries enjoy substantial duty-free quotas and the United Kingdom remains an attractive market.

We cannot wait until we are trading on so-called equal terms by 1984. By then, the industry will not be in a positon to compete, because of the battering that it has received from the lack of investment.

British industry in general is suffering from economic factors. A strong pound encourages imports and makes exporting diffcult. A strong pound, high interest rates and inflation are creating a situation in the paper-making industry which will become irretrievable.

The great fear is that customer industries, such as printing, publishing and packing, will be encouraged to import the finished product. That is why I emphasise that immediate action is necessary to protect the industry from financial pressures beyond its control. A strong pound assists imports of paper and board from overseas competitors, puts pressures on allied industries and encourages imports of consumer articles, which are the finished products. At the same time, high domestic rates discourage investment.

Another aspect causing immense difficulty is energy costs. Such costs have, on average, risen to 15 per cent. of total manufacturing costs. The cost of energy now approaches 50 per cent. of labour costs. The Government must take a more sympathetic and understanding approach towards energy costs and the part that they play in aggravating the problems of the industry.

Paper-making is the sixth largest energy-consuming industry in the United Kingdom. Overseas competitors enjoy far better prices for energy than the United Kingdom industry. In the United Kingdom, oil prices are significantly higher and more than double those of the United States of America, and even in the most efficient mills we cannot compete. France can produce at £4 to £5 a tonne cheaper than the United Kingdom merely because of the energy factor.

Our coal is, in the main, higher priced and, if not the highest priced, is more than three times the cost of coal in the United States. Because of the Government's policy of imposing financial targets, gas in the United Kingdom costs one and a half times more than in France. Our cost of electricity is higher than in any other country and one and a half times higher than in West Germany. There is a strong belief that low energy costs are a deliberate and direct policy to subsidise manufacturing industries to compete in world markets. Energy costs are not the only issue, but they are a key factor in making the paper and board industry competitive and viable.

I now come to the most important effect—unemployment and closures. For the past 10 years there has been a steady decline, the number of workers having fallen by about 26 per cent. since 1969. Thousands more face redundancy or short-time working. Before long, that trend will be evident in all the associated industries. Again, those jobs will be lost for ever. Few people will return to an industry with shift work, with its inherent social problems. However, there again the industries may not be there for the workers to return to.

The paper-making industry has outlined its difficulties and has implored the Government to reconsider and not to leave the matter too late, when the industry will be decimated. It has asked for consideration of import penetration, finance, energy and afforestation. The debate is about finance. The present economic climate has exaggerated the problems, accelerated the lays-offs and closures and highlighted the failure of the industry and the Government to invest in its future. Unless the Government take note of what is being said to them, I repeat that, like the textile industry, the paper-making industry will be on a downward slope, until we are solely reliant on and at the mercy of overseas traders.

The Prime Minister, in her letter of congratulation to Paper, recognised the industry's importance, when she wrote: The pulp and paper industry which the Paper magazine serves are essential to the communications industry and thus to international understanding. They are part of the economy. The industry calls on the Prime Minister to act positively to save the industry and the jobs. It calls for no more closures and no more redundancies. The communications to which the Prime Minister referred are a sign of a standard of civilisation, whether through library books, paperbacks, stationery, leaflets, newspapers, magazines or Hansard, which reports what we are debating tonight. Communication is always needed.

General recommendations have come from my union, SOGAT, on the four main points. First, on import penetration, it asks the Government to adopt a more aggressive policy; to consider some types of selective import control, such as quotas, surcharges or minimum prices; to ensure strict enforcement of all existing duty-free quotas at their present levels; to apply tariffs on all other imports; and to impose import restrictions to check excessive competition, including that which does not come under anti-dumping rules.

Secondly, on finance, SOGAT asks the Government to provide financial assistance and subsidies similar to those provided by other Western European Governments; to redirect some oil revenues into those industries essential to the future of the economy; to lower interest rates; to take measures to reduce the effect of oil revenue on current exchange rates; to make a determined attack on inflation; to introduce appropriate investment incentives; immediately to increase regional development grants; and to introduce a selective grant scheme to assist with the necessary reinvestment in new improved plant.

Thirdly, on energy, SOGAT asks the Government to support the industry by concessionary tariffs that would bring prices to the industry as low as the fuel prices of its main competitors. It asks that recognition of the advantage of volume and base load provided by the industry should be given by suitable discounts. It asks the Government to remove the tax on fuel oil for the paper and board industry or to give temporary relief by way of a rebate, to improve energy-saving investment incentives in the light of the special requirements of the paper industry and to introduce measures to lighten the cost of water and water purification equipment.

On afforestation, the proposals are for stepping up the planting and conversion of forest output, giving direct assistance with contract supply terms, encouraging the establishment of new pulping capacity and playing a full part in the formation of any future EEC policy on afforestation. Those are recommendations from SOGAT. My own recommendation is that the next Labour Government should take the paper industry into public ownership.

The paper and board industry provides an important service to the community and to the economy. There is a demand for the product. The industry has the skills, and labour relations are good. The essential ingredients are present. All that is required is the finance and the policies to enable it to compete in a realistic atmosphere.

11.5 pm

Mr. William Hamilton (Fife, Central)

The paper and board industry is a powerful lobby in the House. It vies almost with the NFU. It has its own effective all-party group, to which I belong. There is nothing wrong with a lobby or an all-party group if one can get it, so long as those involved are not bought and so long as they do not take everything as it is fed to them. I have one or two reservations about remarks that have been made in the debate.

My relations with the paper mills in my constituency—Tullis Russell, Smith Anderson and Dickinson—are on a personal friendship basis with the management. Those companies are under no illusion about where I stand politically. I am under no illusion about where they stand politically. I smiled wryly to myself when Tullis Russell presented me with a document during the Summer Recess stating that, in general, it agreed wholeheartedly with the overall economic strategy of the Government but that it should be excused from the painful consequences of that strategy. I told the company, frankly, "You cannot have it both ways. You cannot support the Government in destroying industry while saying 'Please leave us out of the general destruction.'" That is its dilemma.

I have a personal vested political interest in seeking to preserve the industry. I have to protect it from the depredations of the Government. This is the problem of my hon. Friend the Minister for Bury and Radcliffe (Mr. White). He does a good job. His public relations exercise is excellent. There is no doubt that he will save his marginal seat as a consequence of his efforts on behalf of the paper industry. I am under no such difficulty. I am a little older than my hon. Friend and I do not have a marginal seat. I can be a little more free in what I say about the industry and about the Government's policies generally.

The Prime Minister chastises industries that are closing down because wages are too high, productivity too low and the industry generally inefficient. Those accusations cannot be laid at the door of the paper industry. If the Minister goes to Tullis Russell at Markinch, Fife, he will find that its capital investment programme since the war has been excellent. Its labour relations are first-class. The mill is run by die-hard Tories, but it is an extremely good example of a private enterprise industry. It is the biggest independent and privately owned paper-making company in the United Kingdom. It is declaring workers redundant and has to close machines—one is closed on alternate weeks—and the company is worried.

The firm presented papers to me, which I sent on to the Department of Industry, about energy prices and the high exchange rate and the difficulties that those problems created for the firm. I got the predictable brush-off from the Department. I sent the reply to the firm and it said "Sympathy costs nothing, but the Government do not seem to be willing to do anything for us."

The paper industry in Scotland is 400 years old. In 1860 there were 54 mills in Scotland. This year there are 23. Under successive Governments, the industry has been up and down like a yo-yo. In 1965 there were 16,000 workers in Scottish paper mills. By October 1979, the number had gone down to 8,100 and there has been a steady decline since then, despite the good investment record and good labour relations. Translated into a United Kingdom context, the figures are even more disturbing. It is worth putting them in terms that might register with the ordinary citizen. Redundancies this year have been at the rate of 170 a week—in a highly efficient industry. A total of 15 mills have closed and 43 machines have been shut down—almost one machine a week.

The Minister knows that when there have been such closures it is extremely difficult to reopen the mills. People who think that one can close a coal mine and reopen it six months later do not kow what they are talking about. It is the same in the paper industry.

On energy prices, I want to enter one or two caveats about the case that is being put. Massive evidence has been handed to the Government by the paper industry, independently and via the CBI, about alleged unfair competition that the United Kingdom industry is facing from overseas. When I had my exchanges with Tullis Russell in the summer, the company presented factual examples of unfair competition and I expressed the view that I thought the average layman would express.

The United Kingdom has invaluable resources of coal and invaluable and almost limitless resources of natural gas and oil from the North Sea—not all of it yet tapped—yet our industries, not only the paper industry but chemicals, steel and other industries, all complain that their energy prices are 15 per cent. or 20 per cent higher than those of our overseas competitors who do not have those enegy resources.

There must be something wrong somewhere. The answer lies with Government polices, which seek deliberately to force up energy prices. For example, the Government have said that gas prices for domestic consumers—the position is even worse for industry—shall be—by edict of the Government, not British Gas—10 per cent. higher than the going inflation rate. That is deliberate Government policy. They have set targets for the nationalised fuel industries that compel the prices to rise. The consumer then blames the failure of nationalised industries to keep down their prices. They are compelled to raise them by Government policy.

Having said that about the absurdity of the position, I wish to quote from an article that appears in The Times today under the heading Joseph plea on energy pricing. I want the Minister to reply in detail, becasue he must know whether these things are happening, will happen or have happened. The article states: Sir Keith Joseph, secretary of State for Industry —the Minister's master— has called on Cabinet colleagues to find ways of cutting the burden of rising oil, gas and electricity prices on business. That is a step in the right direction. The Secretary of State at least concedes that there might be some hardship in various industries because of rising energy prices. The article continues: One possibility is for domestic gas prices to rise faster than planned to subsidise industrial users. In orther words, that would shift the burden on to the domestic consumer to subsidise the paper trade, the chemical industry and others making the case. That idea was put forward by the Secretary of State for Industry to the Secretary of State for Energy. The article continues: Although such a move would raise no immediate objections from the Treasury, because it would leave British Gas's financial requirements unchanged, it is regarded as politically inadvisable by many ministers. It can say that again. If the Government seek to alleviate the burden of energy prices on paper, chemicals, steel or any other industry at the expense of old-age pensioners or others who already have great difficulty in meeting their energy costs, there will be a great deal of opposition from the Labour side of the House, from the gas consumer councils and other consumer councils in Britain. Domestic consumers must not be asked to shoulder further burdens in that area.

The Times article states that other proposals have been put to the Department of Energy by the Department of Industry—for example: the possibility of reducing, if not actually abolishing, the £8 a tonne excise duty on heavy fuel oil. The article continues: However, as MPs were quick to point out last week when the Select Committee on Energy took evidence from the CBI, the duty raises some £385m a year in revenue. I wonder what the First Lord of the Treasury—the Prime Minister—has to say about that. She will not lose without a struggle £385 million revenue from that source. Neither the Government nor the members of the Select Committee seem to be impressed by the CBI argument about energy prices. The members of the Select Committee described the CBI's evidence as contradictory and skating round the problem.

I gather that the Department of Energy has asked suppliers of energy to examine closely individual cases of alleged hardship. That is not their function. The gas industry, the electricity industry and the suppliers of oil do not ask their consumers how hard up they are and what price they can pay. They are under instructions from the Government to charge economic prices and to get a return on their capital that is laid down by the Government. It is not their responsibility to assess hardship and subsequently to assess the prices that they call on their consumers to pay.

I gather that various groups are continuing to hold discussions with the Department of Energy on comparable figures for EEC fuel costs. I mention those facts and figures to present what I think is a reasonably fair case for the need for some intervention by the Government to help the industry. The phrase used by the Prime Minister was "constructive intervention", but that intervention cannot stop at the paper industry. It must continue. Once we accept the principle of Government intervention, the Government's philosophy fails.

The Government have said continually that they must stop intervening and allow industry to get on with the job. That policy is becoming increasingly unstuck. They have had to revoke that policy on steel, and no doubt in a few months British Leyland will come along for another £1,000 million. The Government will not refuse it. They dare not refuse it. The same applies to British Rail. Unless there is a massively increased Government investment in British Rail, we shall not have railways. They are falling to pieces. Unless the Prime Minister quickly translates "constructive intervention" into reality as it applies not only to paper but to British Rail, the car industry, steel and the infrastructure generally, we shall have no industrial base come the end of the recession.

The debate is about not only the paper industry but the philosophy on which the Government's strategy is based. That is why I think that the Government are anxious not to appear to be intervening too effectively in paper. They know that once the principle is established of intervening on a massive scale in that industry, it will not stop there.

11.23 pm

Dr. Oonagh McDonald (Thurrock)

I wish to draw attention to the board and packaging section of the paper industry. I note that it is Labour Members, with one exception, who are speaking on behalf of the paper and board industry. There are now no Conservative Members in the Chamber, apart from the Minister, who is about to reply. No Conservative Members are prepared to defend the industry in their constituencies. That is surprising, because 36 per cent. of the mills and, consequently, 36 per cent. of the employment in the industry is to be found in the South-East, where the constituencies are at present, unfortunately, mostly Tory-represented. Given the efforts of Conservative Members to defend the interests of their constituents, that position will probably not last much longer.

The concentration of employment in the industry in the South-East relates to another feature from which the industry suffers—namely, that it receives less direct Government assistance in the form of regional grants or even inner urban aid than some other industries do.

The industry has suffered from the recession, but the effects have been made far worse by the Government's policies. In my constituency, production in Thames Case and Thames Board Mills is running below capacity. We have already heard about the good industrial relations in the industry. In Thames Case in particular, the fact that production is running below capacity, and has been for some time, cannot be blamed on industrial disputes. The work force is stable, well-established and streamlined, and procedures for consultation exist at every level of production. No difficulties arise from overmanning or poor industrial relations.

Some new investment has taken place, in Thames Case in particular, in an effort to boost production and improve the product offered. But domestic orders are falling fast. What we fear in Thurrock is a sharp drop in demand after Christmas, traditionally the time of the year when the demand for packaging products drops sharply. We expect that drop to be much worse after this Christmas.

The industry as a whole has been operating at less than full capacity since 1975. It needs to operate at 85 per cent. of capacity to meet its costs, particularly in the production of corrugated case material. Production throughout the country is now 20–25 per cent. below capacity, and in some cases even below that. The present level of demand is below that of 1974 and only slightly higher than that of 1970. Demand for some products has fallen by up to 30 per cent. in the past few months.

To try to preserve their share of the market, companies such as Thames Case have cut prices sharply in their endeavour to maintain price competitiveness. Price constraint of this sort cannot continue indefinitely. If the industry is forced into that position, jobs will disappear, and disappear for ever; they will not be replaced.

Even this part of the industry faces the threat of competition from imports, especially imports of kraft liner from America. The hon. Member for Maidstone (Mr. Wells) referred to the fall in demand for kraft liner and stressed that it was only to be expected in a time of recession. That is not the only reason. The American product is currently more attractive because of the relative strength of sterling, and manufacturers now turn to the American product rather than the more expensive British product. In other words, the fall in demand for kraft liner is also a result of Government policies: the still relatively high exchange rate means that the industry begins to suffer from imports. This is borne out by last year's figures—467,915 tonnes imported—and this year's figures will probably show a further increase.

At present the United Kingdom market amounts to 1 million tonnes of corrugated case materials a year. If there are further closures, imports of kraft liner from America and high-grade packaging products from Western Europe and Scandinavia will increase. This will contribute to the balance of payments constraints on growth when oil output begins to level off in about two years.

Apart from employing about 11,000 people in 28 mills, United Kingdom production of corrugated case materials saves the country about £100 million on the balance of payments. If the Government continue their present policies, those jobs will be lost and the balance of payments advantage will also be lost. In turn, the imported products will be more expensive, because imported corrugated case materials are derived from wood pulp rather than waste paper, as in this country.

This part of the British industry has been particularly successful. It has so far supplied 75 per cent. of the domestic market. But the pressure from imports is growing, because Western European countries can now sell duty-free all grades of board following the removal of EFTA tariffs in 1967 and EEC tariffs in 1977. So this section of the industry faces greater competition from abroad, but the Government are prepared just to sit back and let it happen, with imports flooding in to affect the general economy and, yet again, to destroy jobs here.

My hon. Friends have spelt out the number of disadvantages that the paper and board manufacturing industry has compared with the main foreign competing companies. It has been hit by a high level of interest rates—they are at a higher level now than during the last recession in the industry, when they stood at 11 per cent. in 1974–75. Once again the Government have no excuse. They cannot simply point to the recession and say "That is why the industry is slowly being destroyed." The situation of the industry is an aspect of the Government's own policy in maintaining high interest rates—and they are still high despite the recent 2 per cent. reduction in minimum lending rate. The Government are simply ignoring the devastating effect of their own policies on industry.

In her speech at the Lord Mayor's banquet, the Prime Minister said: If our own industries do not become more efficient and produce the products that people want, other nations' industries will. They will get our business and our jobs. That is certainly true, but the point that we are making is that the Government, through their policies, are putting one obstacle after another in the way of the attempts of the British paper and board industry to continue to supply the domestic market—and I am referring to a particularly successful section of that industry, which has consistently supplied 75 per cent. of the domestic market.

The Government's actions are at every turn making it more and more difficult for the industry to maintain this kind of provision. One can see from the figures what has been happening to the industry. Thirteen mills have announced closure this year—more than twice the number closed last year; machine shutdowns have increased from 26 in 1979 to 35 so far this year, a 35 per cent. increase in one year. Last year, 2,866 jobs in the industry disappeared, a 249 per cent. increase over the previous year. This year, 7,220 jobs have been lost so far, an increase of 152 per cent. over 1979. Eleven per cent. of the labour force has gone this year, and both unions and the manufacturers suggest that between 7,000 and 10,000 jobs are likely to vanish from the industry as a whole over the next 18 months.

The reasons for this situation have been spelt out by my hon. Friends—for example, the effects of high energy costs, high interest rates and high exchange rates—and we have suggested what the alternative should be. If the board and packaging sections of the industry disappear, unemployment in my constituency, which has reached an unprecedentedly high level in Thurrock, will shoot up once again. It is now over 10 per cent. higher than the national average.

Many employees in the industry in my constituency are process workers, grades 1 to 3, and skilled workers, maintenance engineers and craft fitters. The latter group may find less difficulty in getting new jobs, though that is doubtful now. But the former group—the process workers—will find it much harder to get new jobs. Many of them have specific job skills, and they will be especially hard hit by unemployment in an area where industry is collapsing as a direct result of Government policies.

We have talked this evening about what has been happening to the industry and we have painted a truly depressing picture, which is caused by Government policies. We have also suggested alternatives—a proper policy on energy prices and a reorientation of the whole of the Government's industrial strategy. We want to see the Government directly and constructively intervening in the industry with an aid scheme for further investment to make the industry more efficient, bearing in mind that the costs of investment in some sections of the industry are exceptionally high. We want to see Government subsidies properly and sparingly used so that the industry can compete with the subsidised industries in Holland, America and elsewhere, which have been described in detail by my hon. Friends.

If the Government continue on their path, this whole section of British industry could simply disappear and we should have to depend on foreign products to supply all our domestic needs The Government must surely pause now and look at the rate at which jobs are disappearing and at which mills are closing down. Do they really want to see a whole industry just disappear? Do they want more and more expensive imports flooding into the country? Do they want to destroy jobs—jobs that cannot be replaced in the near future? We demand that the Government change the whole direction of their policy and take care that they support this industry before it disappears altogether.

11.38 pm.

Mr. D.N. Campbell-Savours (Workington)

It falls to me to sweep up after a very wide-ranging and effective debate among Opposition Members. My hon. Friends have carefully and effectively covered all the major areas of conflict between Opposition Members—and Government supporters—and the Government.

Mr. John Home Robertson (Berwick and East Lothian)

Are there any Government supporters?

Mr. Campbell-Savours

As my hon. Friend points out, it is most significant that the Tory Benches have been virtually empty. The only hon. Members to have spent any time in the Chamber during this debate are those who are waiting for the next debate, on London. I do not think that that is a fair and reasonable way for hon. Members with mills in their constituencies to represent their constituents who have been losing jobs in the past 12 months as a result of the policies being pursued by this Government.

Mr. Peter Bottomley (Woolwich, West)

If the hon. Member for Workington (Mr. Campbell-Savours) hangs round for the next debate, which I doubt, he will discover that I remain silent during that one as well, because I am involved in the debate after that.

Mr. Home Robertson

It serves my hon. Friend right for giving way to the hon. Gentleman.

Mr. Campbell-Savours

As my hon. Friend says, I deserved that. I shall not give way again.

We have been very lucky, because in the last 24 hours we have had two major debates in the House on the paper and board and newsprint industries. Last night's newsprint debate was enjoyable and perhaps memorable, since the Government were shown up clearly to be failing to take action to resolve the problems afflicting that industry.

If there are problems afflicting the paper and board industry generally, they were outlined very adequately in a submission made by the chairman or director-general of the Paper and Board Industry Federation, Mr. Adams, to the Secretary of State for Industry in July of this year, in which he laid down three areas in which he thought that the Government should take action to resolve the problems of the industry. One concerned interest rates and the need for the Government to respond to industry's inability to afford the high interest rates which they are required to pay.

The second matter on which Mr. Adams commented was energy prices, an area that has drawn little response from the Government to date. The third area on which he commented was the need to introduce some form of import controls and restrictions on the high level of imports being allowed into this country. In the document entitled "The Serious Situation in the Paper and Board Industry", he outlined the problems that the industry saw and which it was seeking the support of the Government to resolve.

The interesting thing about the debate that takes place on the paper and board industry is that common views exist between the management and the unions. At the same time as the industry was producing its report, the unions were producing theirs, entitled "Action Now" that was the report of the Society of Graphical and Allied Trades, in which it drew precisely the same conclusions. Since those reports were published—the first in July, that being but 24 weeks ago—there have been 10 more major mill closures and 4,979 more people have lost their jobs. It can therefore be seen that, from mid-year to date, by failing to intervene to protect it, the Government have led the industry into the situation that it has dispensed with the services of a further 5,000 people.

I should draw the attention of the House to the comments of the Secretary of State for Industry in reply to the submission that was made by the Paper and Board Industry Federation. He said to John Adams: For the present, high interest rates must continue to play a crucial role in the Government's strategy for conquering inflation. Thus, in the crurcial area in which the industry was demanding action the right hon. Gentleman was saying "No". That is the kind of response that my hon. Friends and hon. Gentlemen on the Conservative Benches have increasingly come to expect from the Government during these particularly difficult periods.

In that letter, the right hon. Gentleman dealt also with the reduction of energy prices. He said: It was agreed that the factual position about energy costs here and on the Continent needs to be more fully established and duly disseminated. The CBI undertook to examine the available evidence and report back to the Council. The Department of Industry will be closely involved in this exercise. I should like the Minister to tell us the extent to which the Department was involved in that exercise. Some of us are beginning to sense that the various Government Departments—certainly the Department of Energy—having listened to the questions that were to put to the Secretary of State for Energy during Question Time last week, are beginning to dissociate themselves from much of the evidence that is being put forward by the industry.

Perhaps I should outline the areas in which the CBI thought that changes should be made and the response that it was seeking from the Government. The CBI thought that excise duty on fuel oil should be abolished immediately; that the Government needed to recognise the impact on prices of onerous financial targets for the nationalised fuel and power industries; and that the Government should ease the rate of price increases to industrial gas consumers. The CBI also thought that discussions should be held between the electricity supply industry and large industrial electricity users to ensure that the local characteristics of those industries were fully reflected in the price. The CBI was demanding action from the Government on energy prices.

I know that the Minister is assiduous in carrying out his duties. He and his hon. Friends should have attended energy Question Time last week. Had they done so, they would have heard hon. Members asking questions during what I regarded as the most important Question Time since the House reassembled in mid-November. Time and again during energy questions, hon. Members on both sides of the House have pressed the Government on this vital area. They do it knowing that they carry the support of all the political parties in this country, the TUC and the trade unions, the CBI and most of the manufacturing federations that exist as representative bodies of the great majority of sectors of British industry. In other words, in the country there is general acceptance of the need for the Government to intervene in the area of energy prices. For many of us, it is quite incomprehensible why the Government are refusing to respond in the way necessary to help to resolve the problems.

During questions to the Secretary of State for Energy on 8 December, my hon. Friend the Member for Coventry, North-East (Mr. Park) was indicating to the House that in Italy and Spain 18½p and 20p per therm respectively are paid for gas. I do not wish to misquote the Secretary of State; I am taking the latter part of his answer so as to avoid delaying the House.

Mr. J. F. Pawsey (Rugby)

Hear, hear.

Mr. Campbell-Savours

If the hon. Gentleman does not like it, he can always leave the Chamber.

The Secretary of State said: I do not dispute that unfavourable disadvantages for Britain exist in some cases, but, in general, the pattern is less unfavourable—and, indeed, moderately favourable—for British industry. That is what we wish."—[Official Report, 8 December 1980; Vol. 995, c. 598.] What is implied in that answer is a feeling in the Government that perhaps British manufacturing industry is over-reacting to the problem of energy and energy prices. Hon. Members on both sides of the House will reject that because they know that it is wrong. They know that manufacturing industry is demanding action in this sector. The Government say that the pattern is favourable. Industry says that it is unfavourable. If we are to resolve this problem, it may be that a national energy forum—if that be the term—should be set up, involving members of the TUC, the CBI, consumers and all sorts of interests, with the Government, to analyse what is happening across the board internationally in terms of energy prices, so that no longer can the Government dispute the figures being put up by hon. Members. There are clearly people in the Government who feel that by disputing the figures that are put to them on the Floor of the House they effectively divide and rule the debate that exists on the whole question of reform of energy prices.

I hope that the Minister takes that point on board, because if such a forum is set up it can come forward with recommendations. It may well be that it has to come forward with recommendations that have a public expenditure commitment, but then it would be for the House to make recommendations, I hope, to the Government on whether those levels of public expenditure commitment were acceptable to the people, because they are now of vital importance.

I turn to the last question that was raised by the Paper and Board Industry Federation and the union involved—SOGAT—in their submissions: the imposition of controls and restrictions on imports and general protection for home producers. I again quote the letter from the Secretary of State for Industry to John Adams, director-general of the British Paper and Board Industry Federation. On that point he said: Import controls would treat the symptom and not the disease and they would do so in a way that is likely to make the real problems worse. He went on: For the paper industry you have suggested import controls against countries such as the EFTA nations, North America and perhaps even our European Community partners also with whom we do over 75 per cent. of our trade. The implications for commercial policy would thus be considerable. We all accept that there are implications for international trade, but we do not accept that a blanket argument of that nature can be used to rule out any suggestion of protection when a great industry, which is important to the economy, is being placed at risk.

When the Government make such assumptions, we have to consider what happens in other countries that have had the guts to introduce forms of restraint, direct protection and public purchasing arrangements to assist their industries. Let me list just a few. In France all newsprint is purchased by a co-operative and resold to the press at a uniform price. The price paid to domestic suppliers is decided by a committee consisting of representatives of newsprint producers, publishers and the Government and is based on an addition to that paid by Scandinavian suppliers. In addition, there is a direct Government subsidy, based on the level of investment by the mills. That subsidy is currently 4.5 per cent. That is a direct aid to the industry.

My hon. Friend the Member for Bury and Radcliffe (Mr. White) referred very effectively to Belgium and produced examples. I propose to approach my hon. Friend after the debate to discover his source of information. It is obviously better than mine. I am sure that we can gain from that source much material that we can use in subsequent debates on the industry.

In Belgium there is a complex agreement by which the press is understood to pay approximately 3½ per cent. more for domestic newsprint compared to the imported variety. I cannot believe that the press in those countries openly volunteers to pay 3½ per cent. more. We must assume that the Belgian Government came to an agreement with the newsprint purchasers by which they would be willing to pay that extra amount. We all know that in the world of hard commercial reality people do not volunteer to pay more. There must have been a catalyst, and we can only assume that the Government played that part in those negotiations.

In Holland there is no direct subsidy on newsprint production, but the Government hold a 20 per cent. stake in a newsprint plant run by a subsidiary of the Van Gelder company, which itself is kept alive only by Government-sponsored loans. In Germany there is no subsidy, but there is an unofficial agreement that the domestic mills should receive a higher price from the press than is paid to importers.

Can the Under-Secretary understand what we are trying to say? Those Governments, in ways that perhaps we do not understand, are somehow involved in negotiations that result in protection and retention of their industries. Our Government, however, are refusing to intervene in these precious areas, and they are responsible in many ways for the dilemma that currently faces the industry.

In Sweden, we are informed, timber is being subsidised in one form or another. In this country the reverse is about to happen. The timber industry is about to be sold off. We can assume, since the sale is opposed by the British Paper and Board Industry Federation, that when private enterprise gets its hands on the Forestry Commission's extensive afforestation it will raise the price of the timber it sells. We were also informed informally at the dinner organised by the federation—it was a very enjoyable dinner—that the Italians and the French have now introduced a parafiscal tax on paper of 1 per cent. We must assume that that is only the beginning.

Agriculture within the European Community exists under the umbrella of what is called a common agricultural policy. Without risk of appearing amusing, I may say that it may be that in many other sectors of industry we should increasingly be looking towards the principles of common industrial policies. Perhaps one day we shall have to buy and sell paper and board and newsprint into intervention, but if that is what we have to do to protect the industry at some stage in the future and protect jobs at home in a period of recession, let it be. But it is incumbent on the Government to take action to protect the industry.

I turn to the question of capacity internationally. The fourth annual survey of the paper and pulp industry capital expansion notes that 450 current projects will raise the international capacity of the paper and board and newsprint industry by 15 per cent. It reveals a rapid growth in production in the United States and Latin America and assumes that over the next four years there will be a 20 million tonne increase in the international capacity of paper and board and a 13 million tonne increase in the international capacity of pulp, making a total of a 33 million tonne increase in international capacity in this sector.

I do not wish to detain the House by listing all the individual countries that have caused that increase, but if there is to be over-capacity in the industry internationally, if we are in a recession and if extensive pressure is imposed by overseas producers on international markets, so much so that British consumers will be pressed to take paper imports from our international competitors at low prices, it is incumbent upon the Government to take action in the form of quotas and import restrictions in order to protect the domestic producers.

11.58 pm

The Under-Secretary of State for Industry (Mr. David Mitchell)

I congratulate the hon. Members for Bury and Radcliffe (Mr. White), for Workington (Mr. Campbell-Savours) and for Manchester, Central (Mr. Litherland) and my hon. Friend the Member for Maidstone (Mr. Wells) on their constancy on behalf of the paper and board industry in securing yet a further opportunity for debating it and its problems.

I had the pleasure of replying to the Adjournment debate about the industry that was introduced by the hon. Member for Edinburgh, East (Mr. Strang) at the end of October, and only last night the House was discussing newsprint.

I said in October that the Government were continuing to keep in close touch with the paper and board industry. Since then senior representatives of the industry have met my noble Friend the Minister of State, and most recently my right hon. Friend the Secretary of State for Scotland explained how companies in Scotland are managing. The Government have been very ready to meet the industry and to discuss its problems. I am sure that hon. Members on both sides of the House who are concerned with the industry, as the Government are, will acknowledge the tireless work of the British Paper and Board Industry Federation in keeping the problems and the position of the industry before us.

The hon. Member for Bury and Radcliffe, wearing his all-party paper group hat, made a series of comments—with only the dissident voice of my hon. Friend the Member for Maidstome—about the position in the industry. As the hon. Member for Fife, Central (Mr. Hamilton) said, the paper and board lobby is second only to that of the National Farmers Union, and he suggested that his hon. Friend was doing a very good public relations job. Public relations has many aspects. What can be said is that whether or not the hon. Member for Bury and Radcliffe is doing a good PR job, this industry has serious problems and it is right that the House should give serious consideration to them.

The hon. Member for Bury and Radcliffe rejected blanket attributions of blame for the present position. I have to agree with him that there is something else that one should also reject, and that is a blanket assumption that the whole of the industry is in exactly the same state. There has been a deterioration—I shall come to that in a moment—but there are areas in which the position is brighter than in other parts of the industry.

Mr. Dennis Canavan (West Stirlingshire)

Where?

Mr. Mitchell

For instance, in the tissues side of the business. When I spoke on the subject on the last occasion, I praised the industry, and the hon. Member for Bury and Radcliffe noted that. I do not disagree with the analysis that has been made by many hon. Members—Members who have sat through the whole of the debate—concerning the seriousness of the position facing the industry, but I query the practical terms of what can be done. It is not sufficient merely to have one's heart in the right place; it is also necessary to look in practical ways at what is within our ability to achieve.

Several hon. Members mentioned energy prices. This is an industry that is very much concerned with the high proportion of its costs related to energy. It is energy-intensive, and in this industry worries over rising energy costs are compounded by the fact that the industry's main competitors are in North America and Scandinavia, where energy prices are cheaper. Some of this is due to natural advantage in coal and hydro-electricity which we cannot expect to match. [Interruption.] The National Coal Board, faced with losing a large customer at Ellesmere Port, was willing to offer Bowater better terms on a commercial basis.

With regard to the price controls currently in operation in the United States and Canada, we shall continue to do all we can to press those countries to raise their prices to world levels as soon as possible. It is they, after all, who will suffer in the end from a policy of over-rapid depletion of their resources. We, in the longer run, will benefit from the policies that we have pursued.

Mr. Canavan

rose—

Mr. Mitchell

The hon. Gentleman has not been here throughout the debate. His hon. Friends have been here and have raised many serious points. There are other hon. Members who want to participate in the next debate. [Interruption.]In fairness to them, the hon. Gentleman, who has only just come into the Chamber, should not preempt the discussion to which hon. Members have asked me to reply.

The Government's policy is based on the economic pricing of energy, a principle that has been accepted by the summit nations—[Interruption] —and by the European Community member States. [Interruption.]

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Order.

Mr. Mitchell

That means relating energy prices to the longer-term costs of production and the market conditions prevailing in the country concerned. I know that British industry—not just the paper and board industry—is concerned about the difference in energy prices from country to country. [Interruption.]

Mr. Deputy Speaker

Order.

Mr. Mitchell

The Government are anxious to establish the true competitive—[Interruption.]

Mr. Deputy Speaker

Order.

Mr. Mitchell

The Government are anxious to establish the true competitive position of our energy-intensive industries and welcome the CBI's study and other comparative asessments, which are being examined carefully. [Interruption.]

Mr. Deputy Speaker

Order. That is the fourth time that the hon. Member for West Stirlingshire (Mr. Canavan) has defied the Chair. I warn him that he must obey the rules of the House.

Mr. Canavan

Am I right, Mr. Deputy Speaker, to say that it is against Standing Orders for any hon. Member, including a Minister, to read—

Mr. Deputy Speaker

Order. The hon. Gentleman has been here long enough to know that Ministers always read from their briefs.

Mr. Mitchell

As hon. Members know, it is not permitted to read during Question Time, but Ministers often read when replying to debates. I happen to have thrown away the speech that the Department prepared for me. On certain subjects, I wish to ensure that I use the appropriate words. There is a wider audience than this Chamber. Industry wants to know where the Government stand. It is right, therefore, that I should be careful in the words that I use. That is why I used those words when I spoke on energy.

The CBI was invited to produce a report and to give evidence to the Government. That evidence is in the hands of the Government. It took a long time to come. It is being assessed. The matter will come up at the meeting of the National Economic Development Council on 7 January. We shall have the opportunity to examine fully the evidence submitted.

Hon. Members have consistently asked for import controls. The Government do not consider that such controls offer a solution to our wider economic problems. It should not be overlooked that the imposition of import controls would be a matter for decision by the EEC and not by the United Kingdom in isolation. Those hon, Members who want Britain to leave the EEC may say that that is a price that they are prepared to pay.

The reality is that this country is overwhelmingly dependent on access to markets in Europe. Access must work both ways. We cannot isolate ourselves and impose import controls on goods from Europe when we want access to its markets for a multitude of our products. Interest rates have come down by 2 per cent. since our last debate. However, on its own, that is not an adequate answer, and I shall elaborate later.

Several hon. Members, including the hon. Member for Workington, mentioned the Van Gelder company. It was brought to our attention a few days ago. I have recently received the details of the case from the British Paper and Board Industry Federation. It is being looked at by the Departments of Trade and Industry, in co-operation with the industry, in order to see how best this might be raised with the EEC Commission.

I understand that the case of Intermills was also raised in this connection. The United Kingdom has recently formally asked the EEC Commission to consider that case.

Mr. Campbell-Savours

From what position will it look into the case? According to EEC law, everything is perfectly acceptable. It is allocating loans to the company. The Government have a stake in the company. What is being looked at?

Mr. Mitchell

The hon. Gentleman cannot have it both ways. He cannot complain that this is a form of unfair competition and then argue that it is not right for us to raise the threat of unfair competition with the Commission.

Mr. Campbell-Savours

I did not say that it was unfair.

Mr. Mitchell

The hon. Gentleman may not have said that it was unfair, but one of his hon. Friends said that it was unfair. If that cheaper selling is because of an unfair advantage, there may be a prima facie case of there being a contravention of the rules of the Common Market.

The hon. Member for Bury and Radcliffe sought intervention by the Government, particularly with investment assistance. The hon. Gentleman must appreciate that substantial investment finance is available from the Government in the form of regional development grants and assistance under sections 7 and 8 of the Industry Act 1972, but it is related to investment in more modern equipment, job preserving or creating, re-equipment or buildings. What he is seeking is somewhat different. The tenor of his argument was for assistance with the industry's running costs. That is an entirely different matter. The Government would not wish to hold out any hope of such assistance being a sensible use of taxpayers' money. A sensible use of taxpayers' money is to look for ways to encourage the industry to invest in its own viable and profitable future.

Mr. William Hamilton

Does the hon. Gentleman recognise that one of the principal complaints made to me by Tullis Russell and others was the delay in the payment of regional grants? I understand that that is deliberate Government policy. Will the hon. Gentleman make representations to the Treasury or other appropriate Departments to shorten the delay in the payment of such grants?

Mr. Mitchell

The hon. Gentleman is right to draw attention to the delay. It is in two parts. One part is administrative. The other part is the four-month period of delayed payment, which is part of the economy measures taken by the Department of Industry in its savings last year.

On the administrative delay, I should point out that there was a bunching of claims as people sought to get their claims in under the previous terms before the summer. As a result, there was substantial overloading of the offices that had to deal with them.

In addition, we have had an inquiry by Sir Derek Rayner. That resulted in recommendations which I think will lead to a considerable speeding up in the processing of claims for regional development grants. I hope that that will in some way reassure the hon. Gentleman.

Mr. Frank R. White

Mills in my constituency have taken advantage of these grants. Multi-million pound developments are going on. There has been investment in the industry. But the industry has been undermined on operating costs because foreign Governments have been giving their industries an operating cost advantage. I accept the Minister's point about the use of the taxpayer's money. I suggest that it would be a good use of the taxpayer's money to give assistance in that way. However, it would be wrong to allow mills to go to the wall and to make people redundant and join the unemployment queue and add to the numbers drawing DHSS benefits, with the resulting on-cost to the Exchequer.

Mr. Mitchell

The hon. Gentleman is opening a somewhat wider subject.

Mr. Canavan

It is a good point.

Mr. Mitchell

I should be happy to debate that matter with the hon. Gentleman at length on some other occasion.

Mr. Canavan

Why not now?

Mr. Mitchell

The essence of what the hon. Gentleman said could easily lead to a massive amount of expenditure. I assure him that I am keenly aware that industries other than the paper and board industry are under pressure. The number of cases in which one could put forward the hon. Gentleman's argument for assistance with running expenses would, if accepted, involve massive expenditure.

Every time we gave that assistance, we should be taking money from another part of the business system and so losing jobs somewhere else, until we ended up with everybody being bailed out by everybody. It is not in the realms of reality to work in that way.

The hon. Member for Bury and Radcliffe went on to raise certain specific points. He asked about HMSO and the Department of Industry buying British. Normal business practice is to seek a printing quotation and leave the decision about British printing machinery or British-made paper to the contractor. However, we are reviewing the purchasing policy of HMSO and the Department of Industry in relation to paper. I readily give that assurance to the hon. Gentleman.

The hon. Gentleman then raised a much more technical point. He sought an explanation of what he said had been a 10 per cent. cut in prices by HMSO. I do not have the full story, but in the short time available I can give him the broad picture. HMSO found that there was a widening disparity between prices under its running contract arrangements with United Kingdom mills for general purpose printing and printings of multi-purpose bonds and the prices quoted by United Kingdom mills for ad hoc contracts. That indicated to HMSO a lowering of market prices. It therefore approached its United Kingdom suppliers and offered them the choice of an agreed reduction of about 10 per cent. on prices on running contracts, with the alternative of a reduction of 30 per cent. in the nominal tonnage bought by HMSO under the running contracts, that portion to be bought under ad hoc contracts, for which United Kingdom mills would tender.

Nearly all the United Kingdom mills have opted for an agreed price reduction on their running contracts. HMSO recognises that price reductions have been unwelcome to United Kingdom mills, but HMSO and Government Departments are having to be increasingly cost-conscious in order to minimise public expenditure.

The hon. Gentleman invited me to visit his constituency. I am grateful to him for his kindness, but my noble Friend the Minister of State has already accepted an invitation from the mayor of Bury to visit and meet representatives of the paper and board industry. I am sure that the hon. Gentleman will be present. A date for the visit is in the course of being arranged. The hon. Member asked for a junior Minister, and he will have the Minister of State. I hope that he will be pleased to accept that as a little Christmas present on the eve of the House rising.

My hon. Friend the Member for Maidstone is much respected for his independence of view and the forthright way in which he expresses it. He brought home to us in a homely way the extent to which the paper and board industry is geared and related to the general level of economic activity. He talked of the packing of apples in cardboard cartons and wines and spirits being delivered at this season of the year in cardboard cartons and the direct relationship between the demand for products and the resulting demand for paper and board. Indeed, when I was in Opposition and anxious to know the likely trend of trade in the months ahead, because I did not have an immense respect for the Treasury computer I asked my friends in the paper and board trade what demand was like. From the orders that they had coming through, they were most likely to know what the expectations of industry generally were in the months ahead.

It is not for me, in my present position, to speculate on whether that is a better guide than the Treasury computer. My hon. Friend the Member for Maidstone is right in saying that in a time of recession, when there is less demand and less production, one will inevitably see a consequence for both the United Kingdom industry and world industry. My hon. Friend accepted the validity of the Government's need for a purchasing policy. He alleged that the Customs and Excise Department prints abroad on foreign paper. I shall look into that matter.

My hon. Friend and the hon. Member for Bury and Radcliffe asked for an explanation of the duty-free quotas from EFTA. The duty-free quotas for paper and board from EFTA sources arose from the proposals for the 1981 duty-free quota levels. The Government took the current state of the United Kingdom industry fully into account. Careful consideration was given to the views of the British Paper and Board Industry Federation, which made representations to officials and Ministers in the Departments of Industry and Trade. The conclusions reached by the Government reflected the problems currently being experienced in the industry while also taking account of the interest of United Kingdom user industries and our wider bilateral obligations to the EFTA countries.

An order proposing the 1981 levels was laid before the House on 9 December. The total overall increase proposed is 15,000 tonnes, an average increase of 1.06 per cent. of the total. Three-quarters has been granted in grades that are non-sensitive to the United Kingdom paper and board industry. The matter was thoroughly discussed with the industry. We have taken its advice fully into account.

My hon. Friend the Member for Maidstone talked about the lower cost of gas in Holland. He pointed out that gas supplies are nearer inshore than those of the United Kingdom and that this gives a natural cost advantage.

The hon. Member for Manchester, Central was worried about imports, to which I have already referred. The hon. Gentleman asked how this country could compete with the United States, which has cheaper wood, cheaper power and large integrated plants. I do not deny that the United States has those advantages. There are natural advantages for a country such as the United States with the vast integrated plants that can operate there. There is no power in the Government's hands to take away those natural advantages. We cannot take away the hydro-electric power of Scandinavian countries.

Almost all speakers in the debate have referred to the need of the industry to see changes in the areas of inflation, high interest rates and the strong pound. The hon. Member for Thurrock (Dr. McDonald) argued that the Government were maintaining too high a level of the pound. I remind the House that inflation was not invented by this Government. More than anything else, it was inherited from the previous Government.

Mr. Canavan

Will the Minister give way?

Mr. Mitchell

We all know—

Mr. Canavan

Will the Minister give way?

Mr. Deputy Speaker

Order. The hon. Gentleman knows full well that if the Minister does not give way he must resume his seat.

Mr. Canavan

Will the Minister say what was the rate of inflation when the Conservatives came to power?

Mr. Deputy Speaker

Order. I must warn the hon. Gentleman once again that he is defying the Chair. Mr. Mitchell.

Mr. Mitchell

The level of inflation at the time the Government took office is irrelevant. There is an 18 to 24-month time lag between a change in monetary management and increased prices in the shops, and what matters is what was in the pipeline when the Government came to power. In the pipeline was a massive increase in the money supply, due to the pre-election mini-boom stoked up by the previous Chancellor of the Exchequer. That came through in its full flood tide in May this year, when inflation reached 21.9 per cent. Since then the effects of the present Government's policies have come through and the inflation rate has fallen steadily and has been in single figures for the past three months.

A reduction of inflation can be achieved only by a policy of restricting the money supply. It has worked, but when the supply of anything is restricted its price is inevitably increased. The price of money is interest rates, and we inevitably have to go through a period of high interest rates if we are to bring inflation under control. The policy is working. Everyone can see that inflation has come down substantially. It did not go up to 26 per cent., as it did under the previous Government, and we have already seen interest rates beginning to fall. There was a 2 per cent. reduction only a few weeks ago.

The hon. Member for Thurrock said that the Government were maintaining too high a level of the pound. It is not the Government who settle the level of the pound; it is an internationally traded currency. The Chancellor of the Exchequer of a small, far-off country or the treasurer of an international company who wants to put money somewhere will choose this country because we have a stable society and an oil well in our back garden. There are high interest rates, but the combination of oil and a stable society has given the pound its great strength of recent months.

Of course, high interest rates are an inevitable price of squeezing out the inflation that we inherited. They mean that we have had an enhancement of the value of the pound, but we are beginning to see interest rates falling in this country and rising even higher in the United States. We may hope to see the international pressures that drove the pound so high beginning to ease. I do not prophesy that they will, but the hon. Member for Thurrock assumes that it is in the gift of the Government to determine the value of the pound. I only wish that it were as easy as she suggests.

The hon. Member for Fife, Central spoke of the mutual respect between himself and the management of the industry. He has passed on views on energy prices to the Department. These matters are still under review. The hon. Gentleman asked me to speculate on speculative reports on interdepartmental representations of the Secretary of State and the Department. I know that the hon. Gentleman will not expect me to join in the speculations.

The hon. Gentleman mentioned gas prices. He must be keenly aware that we have had low-cost gas from nearby gas fields, but we shall come on to high-cost gas from fields far into the North Sea. If we continued to keep gas prices artificially below the level for alternative fuels, we should have a rapid depletion of the near-in gas supplies and dramatic price increases to industry that would be far more destructive than gradual increases up to prices that we shall have to bear anyway when we get on to the distant gas fields.

Mr. William Hamilton

Will the Minister place on record whether he approves of the idea to transfer the cost to domestic consumers so that industrial consumers might benefit?

Mr. Mitchell

I have already said that I shall not speculate on speculative reports. I am afraid that I stand on that. The hon. Member for Fife, Central asked me to defend the fact that the whole philosophy of the Government was interventionist. I am greatly tempted to do so, but I do not feel that the House would wish me to embark upon that at this hour of the night.

The hon. Member for Thurrock regretted that her area was not eligible for assisted area status. I beg her to accept that assisted area status is not a virility symbol that should be sought after for its own end.

The hon. Member for Workington spoke of sweeping up at the end of the debate. That implies rubbish. It has not been a case of rubbish in the debate tonight. It has been a serious debate about a serious matter, with a shrewd and correct judgment about the problems that face the industry. The difficulty is that in the real world no solutions are on offer that are as easily available as it is easy to analyse the problems. The hon. Member specifically raised the question of interest rates. Progress has been made. There has been a 2 per cent. reduction between the earlier debate and this debate. I trust that there will be further reductions before we debate the issue again.

The question of energy prices is on the agenda for the National Economic Development Council meeting on 7 January. That is precisely what the hon. Gentleman asked for. He asked for a multi-based forum in which it could be discussed. That is a multi-based forum, and the issue will be discussed as soon as 7 January. He asked for protection. Protection from whom? Is it protection from Europe, from the very places to which we need access for our manufactures to sell? Protection cannot be one-way. It would be a sad day for Britain if we were to erect barriers between us and markets to which we need access in Europe. The hon. Gentleman raised a number of specific points about subsidies in Europe. If he wishes to bring those cases to my attention, I shall examine them individually to determine whether they can be raised with the Commission.

We have had a lengthy debate on—

Mr. Campbell-Savours

I asked the Minister to say to what extent the Department of Industry was involved in the exercise of establishing the real costs of energy to manufacturing industry on the Continent and the dissemination of that information. Perhaps he will answer my question directly. To what extent was the Department of Industry involved in the reports that have been produced?

Mr. Mitchell

The Department of Industry has played its part in assembling information that has come to it. We have a sponsoring role throughout much of industry. We keep closely in touch with trade associations and many firms in industry. We have assembled some information that has been fed in. The task performed by the CBI has also been fed in. The Department of Energy has carried out its own inquiries and reviews. That forms a basis for the discussion at the NEDC meeting on 7 January.

We have had a lengthy debate about the problems of a troubled industry. I have endeavoured to reply to each hon. Member, apart from the hon. Member for West Stirlingshire (Mr. Canavan), who has been promoted to the Opposition Front Bench. I hope that by the time that we debate the problems of the industry on future occasions we shall see some improvement in the major problems that face our economy, and with it this industry.