§ Mr. David Harris (St. Ives)Even at the end of an all-night sitting, and with limited time available, I am grateful for the opportunity to raise what is undoubtedly the most important question facing the county of Cornwall today—indeed, the most important question that that county has faced for a long time—the deep crisis in the tin industry.
It is exactly eight weeks ago today that trading in tin on the London metal exchange was suspended with the price of tin at £8,140 per tonne, whereas at the beginning of the year the price of tin on the exchange had been more than £10,000 a tonne.
The suspension came about with the withdrawal of the buffer stock manager of the International Tin Council from the operation of that market. The price of tin was falling fast and the fear now is that if the market reopened with the buffer stock manager taking part, tin would go into what is colloquially called a free fall and would drop dramatically to an artificially low level. That is the background to the crisis.
Although I have raised this matter on about six occasions, and the hon. Member for Truro (Mr. Penhaligon) has also done so—for example, earlier this parliamentary day, although it was a whole night ago—we have not yet had a statement from my hon. Friend the Minister for Trade. That is through no fault of his. I pay great tribute to him for the patience that he has exercised over this matter and the very hard work that he has put in behind the scenes to try to achieve a solution to an extremely complicated matter.
There are many ramifications to this crisis. There is the question of the international position, and the fact that the International Tin Council now represents only 60 per cent. of world production of tin. There is the European dimension, there are big questions for the City of London and its good name, and there is the question of the liability of Governments to stand behind their commitments under international agreements.
My main preoccupation must be—and I make no apology for this—the effect of this crisis on the tin industry in Cornwall. I am especially worried about the effect on the Geevor mine in my constituency, which has already been mentioned a number of times in the House. Just over a fortnight ago, the Geevor mine, a small public company, served redundancy notices on 340 of its 375 work force. It did so with the greatest reluctance but had to do so because of the crisis hanging over the whole industry. If nothing happens between now and the end of April, those men will be made redundant. That will have an absolutely disastrous effect on the economy of that part of Cornwall. Indeed, west Cornwall is now facing its biggest crisis for many a long year.
Geevor is in the village of Pendeen, some six miles from Land's End. It is beautiful country on the north coast of Cornwall. It is very remote—there is nothing else there other than some farming and some tourism. If, heaven forbid, anything happened to Geevor mine, the economy of Pendeen, the neighbouring town of St. Just—some say the most Cornish of all Cornish towns—and the whole of that area would be absolutely devastated 540 economically. Male unemployment there is already more than 26 per cent. There is nothing else there to provide jobs.
My right hon. Friend the Minister has tried his hardest behind the scenes to bring about an agreement in the International Tin Council at least to start trading again on the London metal exchange in an orderly fashion. That must be the first priority. However, after the long meetings of the International Tin Council, the signs seem to me, as an outsider who is not privy to all that goes on in those meetings, to be not good. The talks seems to be dragging on and getting nowhere.
I hope that my right hon. Friend will throw some light on the matter. He has made valiant attempts to get a common position inside the European Community with his fellow Ministers, but so far they do not seem to have brought much success. That is not for want of trying by my right hon. Friend.
A few weeks ago, in the presence of the hon. Member for Truro, I took a delegation to see my right hon. Friend from the county council and the mining industry. At that important meeting, we said to my right hon. Friend that we believe that there is an overwhelming case for temporary assistance for the industry to get it through this deep crisis.
Before anybody says, "You did not argue that in the case of the coal industry," let me say that there are great differences between the situation facing tin mines in Cornwall and that facing some mines in the coal industry, although I accept that the social consequences are probably similar. However, we are not talking about mines that have come to the end of their life in the case of the Cornish tin mines. There are good reserves of ore there, and the problem is that if they close they will not open again. The history of the price of tin is one of fluctuation, although it has been ironed out by the International Tin Council in recent years. If those mines closed and the pumps were switched off, it would be like switching off a life support machine, and those mines would not reopen. That must not happen. I do not believe that it will.
There is an overwhelming case for the Government to give temporary assistance to those mines. I believe that the best way is to help them with their considerable development programmes in the same way as the Government rightly are helping the coal industry with its considerable development programme. That is what I am asking for today.
I do not expect my right hon. Friend to come up with an answer or, indeed, to reach for his cheque-book; life is not like that. However, I am saying, as the House prepares to adjourn for the Christmas recess, please do not sit back; please give urgent consideration to the case being made by the industry, the county councils and the district councils, particularly Penwith district, in which Geevor is situated, and St. Just town council.
We are united in Cornwall. I am delighted to say that the argument in support of the industry is solid, going right across the political boundaries. I am pleased that the hon. Member for Truro is here today. I pay full tribute to the role that he has played in the crisis. We are united, but we look to the Government to save the part of the industry that might be in danger, because the signs are not good. I hope that the Minister will be reassuring, but I do not think that they are good. Even if trading in tin is resumed fairly soon on the London metal exchange, parts of the industry will need special temporary assistance. The case for assistance 541 is overwhelming. Aid can best be channelled through the development programme, which would make the industry more efficient, open up new reserves of ore and, I hope, enable it to compete with the rest of the world when we return to stability.
We look to my right hon. Friend to respond sympathetically to the case being made by Cornwall on behalf of perhaps its oldest industry, which is part of its heritage. The industry must not be allowed to die.
§ Mr. David Penhaligon (Truro)As the hon. Member for St. Ives (Mr. Harris) said, there is no political disagreement on this issue. Our job is to ensure that London is aware of what faces our county.
We all recognise that the world's tin producers have operated a cartel and that the cartel has broken. One of the initial problems after a cartel is broken is that the commodity's price falls way below the marginal costs of production. That presents great difficulty for the industry. It requires much belt tightening and investment. If the price falls dramatically below the marginal cost of production, swathes of our industry are in the greatest difficulty. Indeed, I wonder whether there is any future for it.
I am aware of the international ramifications and of the European role, but the mines are in Cornwall, which is represented here, and we look to the British Government for some assistance. I hope that the Minister does not put off saying whether he will be able to help by saying that we are appealing to the EC, the United Nations or someone else. It is a British responsibility and there should be a British response. I do not expect the Minister to stand up with his cheque book and say exactly how assistance will be given, but he could give west Cornwall the most joy by saying that the Government recognise the problem and, come the crunch, will assist.
§ The Minister for Trade (Mr. Paul Channon)My hon. Friend the Member for St. Ives (Mr. Harris) and the hon. Member for Truro (Mr. Penhaligon) deserve the congratulations of the House and their constituents on the extreme assiduity and persistence with which they have pursued this important subject, the crisis in the tin market and the difficulties that have arisen with the international tin agreement.
The House will appreciate that, at this very minute, the International Tin Council is in session in London, so I hope that hon. Members will understand if I am cautious about what I say about what might or might not be the outcome of any talks. The United Kingdom has been a member of successive international tin agreements since 1956. The current agreement—the sixth—came into force in 1982. Like previous ones, it provided for the International Tin Council to engage in buffer stock operations—buying and selling tin—to keep tin prices within an agreed price range. It was a commodity agreement with full economic provisions and was due to expire in 1987, but it could be extended up to two years. Its purpose was to maintain the price within a given range. Buffer stock was therefore established and a buffer stock manager operated a system of intervention buying and selling to keep the price within that range. The agreement 542 has had the difficulty from the start that the price range seems to have been always higher than that which might have been set by a free market. Therefore, production has been stimulated, consumption has fallen, and large stocks of tin have accumulated, despite export controls in some producer member countries. It is a case of over-supply.
On 24 October the International Tin Council announced that it no longer had sufficient funds to continue buffer stop operations. The London metal exchange later announced the suspension of dealing in tin, and since then it has remained closed. From the outset the Government have made it clear that our overwhelming priority is to secure agreement to a satisfactory resolution of the ITC's obligations, and to get a return to ordinary trading in tin. That must be in everyone's interests.
My right hon. and learned Friend the Secretary of State has repeatedly stated that the Government remain fully committed to meeting their share of any commitments of the council member countries. He has used every conceivable channel open to him, diplomatically, through the Community, and in every other way, to impress on other members of the ITC that that is the case, and that they should adopt the same position. His proposals are still under consideration in the ITC, and we are pressing other council members to follow his lead on financial obligations.
The present meeting, which began on 2 December, will remain in session until definitive decisions have been taken. I hope that the House will understand if I decline to comment on the progress of those discussions, as we do not wish to prejudice the chances of a successful outcome. The task is extremely difficult. The United Kingdom is one of 22 members of the international tin agreement. It has been suggested that the ITC should be enabled to recommence its buffer stop operations to protect the interests of poorer countries which are particularly dependent on sales of tin, and the Cornish tin mining industry. Our priority is to secure the agreement of the member countries on an equitable way of settling the council's obligations. It is premature to discuss any future arrangement until we have agreement on what should happen now, and until an agreement has been reached. However, it is difficult to envisage that it is likely that we shall find an agreed basis for the renegotiation of the agreement in future.
I agree with my hon. Friend and the hon. Gentleman that the matter is tremendously important to Cornwall and those who live and work there. There are only three main tin mines, as I understand it. My hon. Friend referred to Geevor and the hon. Gentleman has talked about Wheal Jane and South Crofty. About 1,520 people are directly employed in tin mining. The figure includes the three mines and smaller mining activities. Other people are indirectly employed. We are fully aware of their great anxiety.
I had the opportunity to meet members of Cornwall county council with my hon. Friend and the hon. Gentleman. It is too early to judge what impact recent developments will have on the commercial prospects of United Kingdom tin mining. The most important factor will be the price at which tin settles when orderly trading has been resumed. The hon. Gentleman is right in saying that if we have a hard landing, it is likely that the price of tin will fall lower than if there was a soft landing.
§ Mr. Gordon Brown (Dunfermline, East)Will the Minister respond to calls from companies and trade unions in the Cornwall area for a capital injection? Will he delay a decision on this beyond the point at which many people may be made redundant?
§ Mr. ChannonOf course, no decisions will be delayed beyond the point at which decisions would be too late. As my hon. Friend the Member for St. Ives said, we have a little breathing space. We cannot foresee what the position will be when ordinary market trading resumes, but we are monitoring it extremely carefully, and we shall continue to listen to the views of all those with an interest in the well-being of the Cornish industry. I have taken full note of the views of hon. Members on both sides of the House, and the views of the hon. Members who visited me recently with representatives of the Cornish industry. I hope that my hon. Friend and the hon. Member for Truro will remain in touch with me. The position will be much clearer in a few weeks, if not days, when the International Tin Council concludes its deliberations. I shall take every care—
It being Nine o'clock am on Thursday, the motion for the Adjournment of the House lapsed, without Question put.