Paper and Board Industry

HC Deb 24 November 1980 vol 994 cc194-6

10. Mr. Moate

asked the Secretary of State for Industry when next he expects to meet representatives of the United Kingdom paper and board industry.

Sir Keith Joseph

I have no immediate plans for another meeting, but my noble Friend will be meeting senior representatives of the industry later this week.

Mr. Moate

May I remind my right hon. Friend that when his Department made considerable efforts to help to save the Bowater, Ellesmere Port plants, his Department, successfully in some cases, encouraged certain nationalised industries, namely, the Forestry Commission and the National Coal Board, to reduce costs to the industry? Will be ask his Department to lean equally heavily on those bodies to ensure that those benefits are available throughout the paper industry to help save many other mills that are in great danger?

Sir Keith Joseph

It is for the nationalised industries to co-operate in saving consumers, to the extent that they think that it is in their commercial interest to do so.

Dr. McDonald

Is the right hon. Gentleman aware that the packaging and board industry makes a great contribution to the balance of payments, by saving £100 million a year? Is he further aware that two mills in my constituency are operating at well below capacity, and that his turning a deaf ear to almost all the representations that have been made by the unions and the manufacturers' federation is doing further damage to industry? When will be consider the questions of import controls and high energy costs of that industry, and when will be give it the assistance that it needs so that it can continue to provide a good service to the community?

Sir Keith Joseph

I know that the industry is going through a difficult combination of pressures, but I do not think that the recommendation of the hon. Lady would benefit British industry or British consumers as a whole.

Mr. Henderson

Is my right hon. Friend aware that one of the particular pressures on the paper-making industry is competition from new sources, mainly from within the European Economic Community? Is he further aware that there is a widespread feeling in the industry that the combination of subsidies and other inducements to those industries has many of the characteristics of a preemptive strike, aimed at capturing a part of our market, and certainly does not come under the general heading of fair competition?

Sir Keith Joseph

If what my hon. Friend says is true, it may be very relevant. I should be grateful if he would substantiate what he is saying, either by seeing me or by writing to me.

Mr. Robert Hughes

Is the right hon. Gentleman aware of the closure of the Culter paper mills near Aberdeen, with a loss of over 350 jobs and the ending of 300 years of paper making there? Is he further aware that the whole of the paper industry in the North-East of Scotland is complaining that it is suffering from high interest rates, high energy costs and fierce competition from subsidised foreign goods? When will the Secretary of State take off his blinkers and recognise that there is a real world outside the Department of Industry?

Sir Keith Joseph

I do not underestimate the difficulties of the industry, but the hon. Gentleman must realise that the higher public spending that he and his colleagues are constantly pressing upon the Government would put up borrowing, and therefore take interest rates even higher.

Mr. Nicholas Winterton

Will my right hon. Friend confirm that when he last met representatives of the industry the subject of the Catalonia Paper Tube Company Ltd. was raised with him? Is he aware that that company has received aid under the regional assistance scheme and under the provisions of the Industry Act 1972—thus enabling a Spanish-based company to set up in this country in an area of manufacture where there is already overcapacity—and that the two or three dozen jobs that have been treated at that factory are likely to put several hundred people out of work in the other companies in this sector?

Sir Keith Joseph

I shall review yet again the case of which my hon. Friend speaks, and I shall write to him about it. However. I find it difficult to believe that his two propositions are valid.

Mr. John Silkin

Does the Secretary of State recall that when I wrote to him in August about the paper-making industry I received a reply saying that it was in no danger of destruction but that there were difficulties because of the high cost of energy? I was told that the Government were looking at the position with a degree of urgency. In this instance, is four months urgent enough to save that industry from destruction?

Sir Keith Joseph

Until last week we had not received the survey of comparative energy prices that the CBI promised some time ago. We recognise that high energy costs are an added difficulty for the paper industry, but I must point out that some paper firms are doing relatively well.