HC Deb 12 January 1981 vol 996 cc739-40
9. Mr. Moate

asked the Secretary of State for Industry what recent representations he has received about the position of the United Kingdom paper and board industry.

Mr. Kenneth Baker

My right hon. Friend has received a considerable number of representations in recent months.

Mr. Moate

Is my hon. Friend aware of the rumour of support by the French Government to the bankrupt paper company of Chapelle Darblay to the tune of about £90 million and of other examples of Continental support for the private sector paper industry at a time when Continental exports of paper to this country are increasing substantially? Does he accept that as fair competition? If not, what steps are the Government taking to ensure that there is fair competition between this country and at least the other countries of the European Community?

Mr. Baker

I was not aware of the example from France that my hon. Friend has quoted. I shall make inquiries into it. I was aware of the two examples in Belgium and Holland and my Department has asked the Commission for its views on both cases. We shall be vigilant in these matters.

Dr. John Cunningham

Is the Minister aware of the paper by Sir Arthur Knight to the Institute of Fiscal Studies in which he said that our major competitors, America, Japan, Germany and France, intervened in their industrial economies in a more sophisticated and more sustained and widespread way than any Government had done in this country? Will he take that into account in considering the special problems faced by the paper industry in Britain?

Mr. Baker

I read Sir Arthur Knight's speech when I was a Back Bencher. It goes wider than the paper and board industry. I refute the argument that the Government have stood on the sidelines. In the two major closures last year, at Ellesmere Port and Fort William, it was made clear that substantial Government assistance was available if the companies wanted it. In the event, the companies decided that they did not want it.

Mr. Speller

Will my hon. Friend consider, among the many representations that he receives, that the greatest problem currently in the board industry is the high cost of fuel? The increasing cost particularly of electricity—yet another nationalised industry—may mean that the price of the product includes not less than 20 per cent. represented by energy costs. This alone is one of the greatest deterrents to any further expansion or, indeed, to the continuation of the industry.

Mr. Baker

My hon. Friend is right. The cost of energy to this industry is very high at between 20 per cent. and 25 per cent. As the House will know and as my hon. Friend has said, Neddy last week set up a task force comprising members of the CBI, the TUC and the Department of Energy to examine urgently the complicated matter, especially of high energy users. It will report back to the March meeting. We welcome the setting up of the task force.