Invergordon Smelter

HC Deb 18 January 1982 vol 16 cc21-31 3.31 pm

The Secretary of State for Scotland (Mr. George Younger)

Mr. Speaker, with permission, I wish to make a statement about the closure of the British Aluminium Company's smelter at Invergordon.

Towards the end of last year, the company told the Government that the very large losses that it was incurring at Invergordon had reached the point at which the survival of the whole group was seriously and immediately threatened; it was therefore proposing to close the smelter by the end of 1981. The Government nevertheless decided that our first priority should be to try to keep the smelter in operation, and urgent discussions took place with the company in search of a basis on which the smelter could continue.

To enable the smelter to continue in operation, the company would have required the disputed charges of £47 million due to the North of Scotland Hydro-Electric Board to be written off and electricity charges to be reduced to a level which would have caused the board to make annual losses on the power contract of about £16 million per year, continuing at that level and possibly increasing until the year 2000. The Government therefore concluded with great reluctance that such commitments in respect of one company would be an unacceptable burden to the taxpayer and that the closure would have to proceed. The company then entered into discussions with the board about the termination of its power contract. Because these discussions were still in progress, the Government were not in a position to make any annoucement to the House before the beginning of the recess.

Under the terms of the settlement reached between the company and the board, the company's rights under the contract to electricity supplies from Hunterston B to the year 2000 were valued at £79.328 million. From this sum, the board deducted £47.049 million in settlement of disputed power charges. At the date of termination of the contract, the outstanding balance of the Government loans to the company, including interest due, totalled £33.527 million. Because it was the Government's intention that there should be an eqitable settlement which would reduce the threat to the company's other activities caused by the continuing losses at the smelter, my right hon. Friend the Secretary of State for Industry did not insist, as he was entitled to do, that the whole of the remainder should go towards repayment of the outstanding balances of the company's loans. Of the remaining £32.279 million, the company paid £4.488 million to the board in respect of current debts for electricity supplied and £12.279 million to my right hon. Friend in part repayment of the loan, and received £15.512 million.

The payment of £12.279 million was sufficient to repay the principal and interest of the 1975 loan in full, which was £6.547 million, and the interest due and part of the principal of the 1968 loan, which was £5.732 million. With the approval of the Treasury, the remainder of the principal of the 1968 loan, amounting to £21.248 million, was waived. The European Commission is being notified.

As I said on the day that the closure was announced, the Government regard it as a profound disaster for the area. We fully understand the serious consequences that it will have for Invergordon and the wider Moray Firth area, both in terms of jobs lost and in its effect on the local economy.

The company has undertaken to maintain the smelter in a usable condition for a period of six months and to co-operate with the Highlands and Islands Development Board in its efforts to find a new operator for the plant. We are already working with the Highlands and Islands Development Board and Locate in Scotland to ensure that every effort is being made to find a new operator. We are ready to assist the North of Scotland Hydro-Electric Board and any potential new operator in their negotiations.

In the event that no new operator comes forward, every effort will be made to try to attract new jobs to the area. The Government have agreed to provide a special extra allocation of funds, amounting up to £10 million over the next three years, to enable the Highlands and Islands Development Board to undertake special measures to provide new employment opportunities. My Department, the Highlands and Islands Development Board and the Scottish Development Agency will give the highest priority to finding new projects which may be established in the area.

Mr. Bruce Millan (Glasgow, Craigton)

I am glad that the Secretary of State has made the statement, but we shall of course require a full debate on the matter urgently. I shall return to that later.

Is the Secretary of State aware that, although we in Scotland are inured to redundancy announcements, I do not recollect anything so insensitive and indeed brutal as the announcement on 29 December that at 48 hours' notice the whole smelting operation would be closed down. As the Secretary of State acknowledged, the effect upon the area will be devasting and will go far beyond the 890 jobs directly involved. At least 1,500 jobs will be involved, and there are implications for the rest of Scotland as well.

We require to know far more about the negotiations which took place. In view of the major consequences of the closure, was the Secretary of State personally involved? What exactly was offered to the company? Even today, in its latest statement, the company contradicts certain statements already made by the Secretary of State. What did the Government get out of the negotiations? So far as I can see, the company obtained everything that it wanted and the Government got absolutely nothing. Why was the £21 million given to the company as a kind of sweetener to allow it to close the smelter? That was not legally necessary. Why was it given, and what did the Government get in return? The smelter was not kept open. The Government received no assurances on the other Scottish operations, as within a few days the company was talking about a threat to Falkirk. Nor have they achieved any kind of understanding about the sale value of the plant should a new operator be found.

Is the Secretary of State aware that giving £10 million to the Highlands and Islands Development Board over three years has already struck an extremely sour note in the area when one considers the jobs that have also been lost there as a result of the abandonment of the gas gathering pipeline? If we are to do anything for the area, we need a new contract and a new operator, a break-up value of the plant offered to the new operator and a new power contract which inevitably must be more favourable than that offered to British Aluminium, so it will ultimately cost the Government subsidies in any event. Indeed, is the Secretary of State aware that some of the statements about subsidies are highly misleading, given that the other two aluminium smelters in the United Kingdom—at Anglesey and in the North of England—are also heavily, but not openly, subsidised? If the fine words of the Secretary of State are to mean anything, the Government will have to come up with something far better in the way of a new power contract than they have so far been willing to offer.

The workers at Invergordon have not accepted this closure and nor have the Labour Opposition. We shall make every effort to get the smelter reopened.

Mr. Younger

I entirely agree with the right hon. Gentleman about the effect of the announcement being made so near to the new year. However, the right hon. Gentleman must realise that the survival of the rest of British Aluminium, with no fewer than 2,700 jobs throughout Scotland, was at stake.

The closure could have been announced earlier had the Government not made such vast efforts to find a way to keep the smelter going. The right hon. Gentleman has to live with that fact.

The right hon. Gentleman asked whether I was involved with the negotiations. I certainly was. I begin to wonder whether I was involved in anything else in December, so thoroughly was I involved in the whole thing.

As to how much was offered, we can look again at the joint statement made by Mr. Utiger of British Aluminium and my hon. Friend the Minister responsible for industry and education at the Scottish Office in early January when it was made clear that what was discussed was a break clause after three years, but the company felt that that was not a sufficiently long period for it to carry on operations of the smelter.

The right hon. Gentleman asked what the Government got. We got a chance of saving the rest of British Aluminium's operations. That is important not only to the Government but to many others in Scotland. The same answer can be given to the right hon. Gentleman's question about why the £21 million was left with the company. As I said in my statement, it was open to my right hon. Friend the Secretary of State for Industry to demand full repayment of the loan outstanding from the Government to the company. However, my right hon. Friend decided that to do so would be to put at risk all the other jobs in British Aluminium throughout Scotland. My right hon. Friend was right to take mat step and, if the right hon. Gentleman thinks otherwise, I hope that he will say that he thinks that the money should have been demanded and that the risk to other jobs was acceptable.

The £10 million to the Highlands and Islands Development Board is a considerable sum when compared with its annual budget—the right hon. Gentleman will know that. Our top priority is the same as that of the right hon. Gentleman. We wish, if at all possible, to find a new operator who wishes to carry on running the smelter. As I have made clear, we shall be willing to help in any way we can to negotiate a new power contract with such an operator.

Although the other smelters in the United Kingdom have all been started off on the same basis as the Invergordon smelter, they are at different stages of their contracts and they have different contracts.

Mr. Robert Maclennan (Caithness and Sutherland)

Have the Government a company, or companies, in mind with which they are prepared to enter into genuine negotiations—

Mr. Dennis Skinner (Bolsover)

Genuine? What, with Bill Rogers?

Mr. Maclennan

—to resecure the 15,000 jobs in the smelter and associated industries and—[Interruption.]

Mr. Speaker

Order. It is most unfair for an hon. Member trying to address the House to be interrupted by hon. Members sitting next to him. It is not only unfair. The hon. Member who is interrupting now would not like to be interrupted himself.

Mr. Michael English (Nottingham, West)

My hon. Friend accused someone of not being genuine.

Mr. Younger

Yes, I can assure the hon. Gentleman that, if any other operator can be found to operate the smelter, we shall enter into any negotiations that we can and will be genuine about the whole thing. The hon. Gentleman must be aware that we are searching all over the world for someone willing to operate the smelter. It is too early yet to say what success we have had.

Sir Hector Monro (Dumfries)

Does the Secretary of State agree that my hon. Friend the Member for Ross and Cromarty (Mr. Gray) has had great success in attracting industry to Invergordon and has done everything possible to help his constituents in the plight in which they have been placed by British Aluminium? Will the Secretary of State confirm that all Government Departments and the Highland and Islands Development Boards will make every effort to process applications for small businesses in the area as quickly as possible, because time is all important?

Mr. Younger

My Department will do everything it can to help all businesses in the area, particularly small ones, and will process any applications as quickly as possible.

I entirely agree with my hon. Friend's comments about the Minister of State, Department of Energy. Not only has he done a great deal in the past for his constituency, but he was closely involved in doing everything possible to find a way of keeping the Invergorden smelter open during negotiations in December, and I am very grateful to him.

Mr. J. Grimond (Orkney and Shetland)

Has the Secretary of State read the letter in The Times of 13 January from the chairman of the Highlands and Islands Development Board in which he blames this closure upon the Hydro-Electric Board and alleges that, were the Hydro-Electric Board responsible for supplying electricity to Kinlochleven and Fort William, they too would be closed? He further says that had more hydro-generated electricity been made available, this smelter would still be open. Will the right hon. Gentleman comment on that? Under what arrangements is fuel supplied to other smelters outside Scotland? Will the right hon. Gentleman persuade the Government now to abandon their policy of deliberately dear energy, to the handicap of British industry, when we are one of the two countries in Europe which are self-sufficient in energy?

Mr. Younger

I noticed that letter about the hydro board and its role in this matter. The hydro board has been doing its best to operate the contract that, with its agreement, was laid down as long ago as 1968. I do not think that the hydro board could have done more than it did to try to help the company to keep going and, indeed, to operate the old contract in the way that it was designed to operate.

The old contract was based upon the ownership by British Aluminium of approximately 20 per cent. of the value of the Hunterston B nuclear power station. I understand that at the time when the contract was negotiated it was thought that in due course nuclear power would become cheaper than hydro-electric power. As the right hon. Gentleman will know, that has not happened, and we must go into that when looking at the lessons to be learnt from this contract.

The right hon. Gentleman also asked about fuel supplies to other smelters. At present, the Anglesey smelter is on an interim arrangement awaiting the completion of Dungeness B, but the negotiation of its power supplies was not on quite the same basis as the Invergordon smelter, and it is at an earlier stage in the arrangements. The other smelter at Lynemouth has a coal source and that is subject to individual negotiation with the Coal Board.

We must get the question of more expensive power into perspective. We should bear in mind that the old contract price of the power to the Invergordon smelter was just a little more than half the price that other industries throughout Scotland were paying for power. The negotiations we had with the company envisaged a price considerably less than that. Therefore, no one can say that this is exceptionally expensive power in relation to other industries.

Several hon. Members

rose—

Mr. Speaker

Order. I propose to allow another 20 minutes on this statement. I hope that both questions and answers will be as brief as possible, because another important statement is to follow.

Mr. Albert McQuarrie (Aberdeenshire, East)

Like the right hon. Member for Glasgow, Craigton (Mr. Millan), all Scottish Members wish to see this smelter restarted and will give every support to any action that is taken to achieve that. Does my right hon. Friend agree that the £20 million retained by, British Aluminium was designed to ensure that at this stage at least the jobs at the other plants, particularly in Falkirk, would be retained, and that the £16 million—

Hon. Members

Too long.

Mr. Speaker

Order.

Mr. McQuarrie

—and that the £16 million that my right hon. Friend agreed would be permitted for three years would have been equal to £17,000 per man per job for that period?

Mr. Speaker

Order. I appealed for brevity. I realise that the hon. Gentleman's supplementary might constitute brevity in his part of the world, but he ought to try to do better.

Mr. Younger

I am grateful to my hon. Friend for his support also for the primary aim, which must be to try to find a way of restarting the smelting operations. I can confirm that, without the deal that was made with the company on the smelter, there is no doubt that all the other jobs in British Aluminium throughout Scotland would have been in the gravest danger long before now.

I confirm that the £16 million that was discussed with regard to future contracts would have amounted to approximately £16,000 to £17,000 per job created, which is an astronomical sum by any calculation.

Mr. Neil Carmichael (Glasgow, Kelvingrove)

The Secretary of State said that he had been doing little else during December but dealing with the smelter. Does he not agree that there is something very wrong with our industrial relations when he, the company, the electricity board and the Government were all involved in these discussions and the last people to know about them were those who were working for the company? Does not that teach us some lessons for the future? Surely there could have been nothing so secret about the discussions that those whose livelihoods depended upon their outcome should not have been consulted.

Mr. Younger

I appreciate what the hon. Gentleman says, but the timing of the announcement was entirely a matter for the company. It was its decision when and how to make the announcement, with a view to all the considerations that had to be taken into account. The hon. Gentleman may agree, on reflection, that there is a difficult balance as to when it is best to make an announcement that is bound to create uncertainty. If one has to make such a difficult announcement, it is better to give it such clarity that those who hear it can understand clearly what is to happen. A half-baked announcement is worse than no announcement.

Mr. John Corrie (Bute and North Ayrshire)

If the unit closes, what will be the effect on consumer prices in Scotland? I understand that it took about 7 per cent. of the electricity in Scotland, so will prices rise?

Mr. Younger

Not necessarily, because, when the overall load of electricity is reduced, the most expensive plant producing electricity will go out of operation. One could take the view that the remaining electricity would be produced marginally more cheaply. Nevertheless, it is a great disaster to lose about 7 per cent. of the total output of the joint electricity boards in Scotland. That cannot be good, for either the electricity boards or anyone else.

Mr. Dennis Canavan (West Stirlingshire)

Will the Secretary of State admit that either he was conned by British Aluminium or, even worse, he collaborated with it to ensure that the company, financed with public money, walked away with over £20 million profit while the work force, without any consultation, was thrown on the dole queue and cheated out of earnings-related supplement? Will the Secretary of State give us a categorical assurance that he will not allow British Aluminium to indulge in any further asset stripping at Invergordon? Will he take immediate steps to reopen the smelter, even if it means taking it into public ownership and running it as a public enterprise, with a new power contract from the electricity board?

Mr. Younger

The company has assured me that it will be entirely helpful over the future of the buildings, plant and machinery. As I said in my statement, it has already undertaken to keep the plant in a usable condition for at least six months in the hope that another operator will come forward.

I was amazed to hear the hon. Gentleman of all people say what he did. I am sure that he must have many constituents whose jobs directly depend on the British Aluminium plant in Falkirk, which was at least taken into account and has some chance of carrying on, whereas previously it would have been closed before now. I should have thought that the hon. Gentleman would at least have said "Thank you" for that.

Mr. Alex Pollock (Moray and Nairn)

Is my right hon. Friend aware that the ramifications of this smelter closure are already being felt elsewhere in the Highlands including in my constituency where a leading engineering company has had to lay off its specialist work force? Will he therefore confirm that the Government fully appreciate the need to find an urgent solution to help this beleaguered Scottish work force? Will he maintain all possible pressure on British Aluminium to co-operate as fully as possible in attempts to find a prospective purchaser?

Mr. Younger

I share my hon. Friend's concern. One of the worst features of the closure is the effect on other businesses in the area. I am sorry to know that at least one company in my hon. Friend's constituency is affected. I assure him that the Government will do everything possible to encourage the main objective, which must be to find a way of getting the smelter into operation again.

Mr. William Hamilton (Fife, Central)

Does the Secretary of State appreciate that the Scottish people will not understand how a big company such as this can sack thousands of people and get away with £15½ million worth of loot? Does he understand the difficulties of local authorities in the area, which provided the infrastructure, such as housing and education? How does he propose to compensate them for that loss? Is this not an outstanding example of the crass stupidity of the Government?

Mr. Younger

The hon. Gentleman is less than realistic in his remarks. He knows from what I have said already, and I should have thought that he would know from the press if not from that, that, if the Government had refused to make any arrangements with British Aluminium, in all probability it would have collapsed and all the jobs in it throughout Scotland would have been lost. I very much doubt whether he would have supported me if I had taken that attitude. My hon. Friend the Minister responsible for industry and education at the Scottish Office has already had talks with some local authorities and we shall keep in contact with them on their problems as a result of the closure.

Mr. David Myles (Banff)

Does my right hon. Friend agree that, with the benefit of hindsight, which is always useful, the forecasts that were made about the viability of the smelter project in Invergordon in 1968 were hopelessly optimistic? Will he ensure that this tragic mistake is not repeated?

Mr Younger

I agree with my hon. Friend that, with hindsight, it appears that many optimistic assumptions were made in 1968. At the end of the day, they have not done anyone any good. I hope that that is one of the lessons that we can learn from this tragic affair.

Mr. Alex Eadie (Midlothian)

Will the Secretary of State confirm that British Aluminium went to Invergordon of its own volition? If it had not gone to Invergordon, two other companies would have gone in any case.

Mr. Younger

I gather that that is so. British Aluminium decided to go there of its own volition. I understand—it is not for me to confirm—that it was informed at that time that the Government's advice was that nuclear power would become progressively cheaper and would become cheaper than hydro-electric power at a break-even point during the contract.

Mr. Barry Henderson (Fife, East)

I welcome the Government's efforts to find another operator for this smelter, but will my right hon. Friend ensure that any arrangements that are made are better thought out and better controlled afterwards than the original deal that was made in 1968 which has come to this sad end and which has cost the taxpayer—perhaps my right hon. Friend can tell the House how many hundreds of millions of pounds?

Mr. Younger

I appreciate my hon. Friend's comments and when we discuss a new contract, as I hope we shall, I hope that we shall do better about staying power than we did with the old contract. It has cost well over £100 million already in the form of public subsidy and would have cost much more if it had gone on.

Mr. Dick Douglas (Dunfermline)

Is the Secretary of State aware that the House considers it completely inadequate that the Government were given six weeks' notice by the company of its intention? Will the Secretary of State give the House an indication of the knock-on effect on other parts of Scottish industry? He is already on record as saying that there is a probablility that it will involve two to four pit closures and the possibility of power station closures. What are the job effects of that in view of the fact that the Secretary of State has no guarantee from British Aluminium on the complete security of other jobs in Scotland?

Mr. Younger

I have no guarantee for the complete security of other jobs, but I have a guarantee that, if the Government had not been prepared to enter into negotiations in December, they would all have gone by now. I hope that at least that can be regarded as something worth having. I agree with the hon. Gentleman that to give six weeks' notice of such a traumatic event was highly undesirable. I should have liked more notice, but I had to deal with what was presented. There are indeed effects on other industries, and there will be some effects on the coal industry. The Government are considering how best they can mitigate those effects.

Mr. Keith Best (Anglesey)

While I appreciate that my right hon. Friend said that the circumstances confronting the Invergordon smelter were different from those at Anglesey Aluminium in my constituency, will he acknowledge that recent reports have established beyond peradventure that our larger energy consumers are paying more for their electricity than are their European counterparts? Will he have discussions with his Cabinet colleagues—I am gland to see that my right hon. Friends the Secretaries of State for Wales and Energy are on the Front Bench with him—to see what can be done to try to succour similar industries? My right hon. Friend mentioned earlier that it had been discovered that nuclear power was not as cheap as was once predicted. Does he agree that the last people who should suffer as a result of that are those such as Anglesey Aluminium which have set up in areas of high unemployment to provide bright prospects? Does my right hon. Friend also agree—?

Mr. Speaker

Order. The Welsh take longer than the Scots.

Mr. Younger

I appreciate my hon. Friend's anxiety about the smelter in Anglesey. That is not directly affected by my statement, but I note what he says. Power prices are a matter for my right hon. Friend the Secretary of State for Energy and no doubt my hon. Friend will pursue him on that. It is worth pointing out that the Invergordon smelter—and I think that the Anglesey smelter is in a similar position—was already getting power at about half the cost charged to other industries. It is a different situation from power prices generally.

Several Hon. Members

rose—

Mr. Speaker

Order. I intend to use the remaining time for those who have been seeking to catch my eye.

Dr. Jeremy Bray (Motherwell and Wishaw)

What will be the impact of the settlement that the Secretary of State has reached on other electricity consumers in Scotland? Is it fair for Scottish consumers to pay such a large proportion of the cost of carrying spare electricity capacity in the United Kingdom as a whole?

Mr. Younger

It does not quite look like that from the electricity boards' point of view, because it is to Scotland's advantage to be able to sell electricity to other parts of the United Kingdom. That helps the finances of the Scottish boards.

Scotland benefits from the fact that a considerable proportion of our electricity is produced by hydro-electric power, which is very much cheaper than other forms of power. Despite all that I have said about nuclear power, it is considerably cheaper than coal, oil or gas.

Mr. George Foulkes (South Ayrshire)

Will the Secretary of State stop talking about the closure as though it were caused by someone from Mars and accept that it is a direct result of Government economic policy? Is he aware that in the three months to the end of November we imported £61 million of worked aluminium and aluminium alloy, £11½million of which was from East Germany? Is it right that we should import so much subsidised aluminium while Invergordon starves? What action will he take about that aspect?

Mr. Younger

The hon. Gentleman is absolutely right in saying that the situation is due to Government economic policy. That policy was carried out in 1968 and it led to the contract which has resulted in the present sad and disastrous position. On power prices, which lie behind the hon. Gentleman's remarks, the power contract that the company was operating, and on which it made a loss in every year except one, was already very much cheaper than those for other users. Imports are a matter for the aluminium industry to decide when considering how best to operate its affairs to keep all plants in operation. It should be borne in mind that the company still has 2,700 other jobs in Scotland, let alone those in England. Those people are still working and if the company had collapsed, they would all be out of work.

Mr. Gavin Strang (Edinburgh, East)

Does the Secretary of State understand that this is the most disgusting and disastrous decision ever taken by the Government? It is socially and economically indefensible. Will he and the Secretary of State for Energy stop their pretence of scouring the world and face up to the fact that, if the Government decided to bring forward a revised power contract, the smelter could start up again next month? That decision is not only crucial to the Highlands, but vital to the future of the Scottish electricity and coal industries.

Mr. Younger

I am not certain what decision the hon. Gentleman is talking about. The company made the decision, on the basis of its own operations, that it could not continue to operate the smelter and that if it did so there was a danger of bringing down the entire company. The Government decided to do everything in their power to keep the smelter in operation and only when the cost reached an astronomic level—I think that everyone would agree that the cost was astronomic—did the Government decide reluctantly that the smelter had to be allowed to close. If that is the decision to which the hon. Gentleman refers, I stand by it and I have no doubt that any other responsible Government would have taken much the same decision.

Mr. John Home Robertson (Berwick and East Lothian)

Will the right hon. Gentleman tell the House a little more about the likely impact of the closure on the electricity supply industry in the south of Scotland? As he appears to have allowed the Hunterston B reactor to become semi-redundant, what future is there for the Torness power station, which is under construction in my constituency? Is there any threat to efficient coal-burning stations in Scotland?

Mr. Younger

The Torness power station is required in any case because, when it is completed, it will produce some of the cheapest electricity available in Scotland to help Scottish consumers have cheap prices. I am sure that the hon. Gentleman agrees that those who advocate a halt to the Torness power station are proposing a disastrous course which would result in the immediate loss of 1,800 jobs.

Mr. Ron Brown (Edinburgh, Leith)

Is it not clear that the Government are presiding over the de-industrialisation of Scotland and are encouraging a new Highland clearance? Clearly, the answer to class parliamentary democracy is that a sit-in must take place and, indeed, it is taking place. Does not the Secretary of State accept that workers in Scotland and England will increasingly be forced to take such neasures to defend their living standards and their jobs? If the right hon. Gentleman does not understand that, he should not be in office.

Mr. Younger

I congratulate the hon. Gentleman on asking a question containing more slogans than I have heard for a long time.

Mr. Ron Brown

Not slogans, reality.

Mr. Younger

I thought that the hon. Gentleman might have appreciated by now that, if a company is trying to make aluminium and is losing so much money that there is a threat of the whole company being brought down, no amount of sit-ins or slogans will alter that fact. The Government tried to make possible a way of keeping the smelter open and only when the cost reached an astronomic level were the Government forced to conclude that it had to close.

Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)

The Secretary of State said that he had been involved in the discussions. How often did he meet the chairman and senior management of British Aluminium during the negotiations? We are anxious to know whom he met and when.

The right hon. Gentleman made great play of the fact that he received assurances about Falkirk. Did it surprise him that no sooner had he made his announcement on 29 December than Mr. Dick Charles of the company went on record as saying that there was no security at Falkirk and that, unless that plant was in the black by June this year, he would close that as well? Is there not a serious risk that the Secretary of State will finish up with the closure of Invergordon and fairly substantial job losses at Falkirk, in my constituency?

Is it not the case that the timing of the announcement had nothing to do with the Government's intention to try to keep the smelter open and everything to do with depriving the workers at Invergordon of their earnings-related supplement? Will the right hon. Gentleman confirm that, because of the timing of the announcement, not one redundant worker from Invergordon will qualify for earnings-related supplement?

Mr. Younger

Not only did I meet Mr. Utiger two or three times, but I spoke to him on the telephone and I met some of the directors of Tube Investments, including Lord Plowden, which has a shareholding in British Aluminium. My officials consulted the company's representatives over many days and weeks and for much of the time early December. The hon. Gentleman can be satisfied on that aspect.

I hear that there have been some negotiations at Falkirk about viability. Obviously, that is important, but I hope that the hon. Gentleman understands that, if the Government had not managed to make a settlement with the company before 31 December, all his constituents would almost certainly have lost their jobs then. I very much hope that the new arrangements that the company is negotiating with the workers at Falkirk will lead to work and jobs continuing there. That was one of our main objectives in trying to meet the company's requirement of getting a settlement before the end of its financial year.

Of course, it would have been far better for the announcement to have been made at almost any other time of the year, but, as I have explained, as the company's financial year ended on 31 December and its viability and survival depended on a deal being agreed by then, it was essential to do it quickly and at that time. The hon. Gentleman represents the people of Falkirk and he should at least be grateful that his constituents' jobs have been saved.