HC Deb 29 April 1986 vol 96 cc788-92 3.47 pm
Mr. David Penhaligon (Truro)

(by private notice) asked the Secretary of State for Trade and Industry if he will make a statement indicating the Government's intention regarding the future of the Cornish tin industry.

The Minister of State, Department of Trade and Industry (Mr. Peter Morrison)

The Government have made it clear that they are willing to consider applications for assistance towards the cost of projects which will make the mines competitive in a free tin market. An application from Geevor tin mines is already being considered. An application from the RTZ group is expected shortly. Both will be assessed as rapidly as possible.

Mr. Penhaligon

I remind the Minister of the seriousness of the situation, as these mines are in an area where average male unemployment is in excess of 25 per cent. Already this saga has been going on for six months. Furthermore, I remind the Minister that he still has the £50 million that was offered to the tin dealers. Will the Minister accept that because of the current price for tin very few mines in the world are breaking even, let alone making a profit? If, therefore, Rio Tinto Zinc could be persuaded to give the mines and the £15 million that they would incur in closure costs to a management-employee buy-out and if the employees could be persuaded to take a pay cut in lieu of some form of long-term profit sharing, would the Government be prepared to make a significant contribution towards enabling a new company to be relaunched on the market so that advantage could be taken of the rise in the price of tin when it occurs?

Mr. Morrison

As the hon. Gentleman knows, I am aware of the serious position in Cornwall. With every respect to him, his question about management buy-outs by those involved in the RTZ mines was hypothetical. As I said in my original answer, we expect a proposition to be put forward by RTZ on the ground that it will make the mines viable at some future stage. Like all Governments, we need to have a test of viability foremost in our minds.

Mr. David Harris (St. Ives)

Is my hon. Friend aware of the desperate situation facing Geevor mine—that, unless help is forthcoming this week, it is almost certain that the pumps will be switched off at the weekend and that the mine will be flooded, probably never to reopen? I make an earnest and urgent plea that, before this week is out, the Government will make assistance available to Geevor, at least to keep those pumps going while negotiations continue on the Geevor application.

Mr. Morrison

I assure my hon. Friend that it is important to expedite the Geevor application. Whether we can have care and maintenance in the meantime will depend upon that.

Mr. Dennis Skinner (Bolsover)

Do not the Government have a cheek to talk about a test of viability regarding the thousands of people who have lost or will lose their jobs in the tin mines in Cornwall and the southwest when the Government never applied that test of viability to the Export Credits Guarantee Department, when it was £350 million in the red, but used taxpayers' money to bail it out? The Government found £252 million to bail out the Common Market, because it had run out of funds, and more than £100 million to bail out Johnson Matthey Bank, because their friends were involved. The Government talk about a test of viability. Why do they not give people a chance to earn some money instead of throwing them on the scrap heap and paying out dole money which the taxpayers have to find?

Mr. Morrison

If I recall correctly, the hon. Gentleman supported a Government during the 1970s—

Mr. Skinner

Supported a what?

Mr. Morrison

—supported a Government during the 1974–79 period that used the test of viability to close down the Ebbw Vale steelworks in the constituency of the right hon. Member for Blaenau Gwent (Mr. Foot). They used the test of viability, as we must.

Mr. Robert Hicks (Cornwall, South-East)

Is my hon. Friend aware of the rising sense of frustration and annoyance at the delay in resolving the tin question with specific reference to the Cornish tin-producing mines? Will he assure the House that the various suggestions and applications that have been made will be dealt with immediately by his Department in the context of our county, which is already in a hard-pressed economic position?

Mr. Morrison

The simple answer to my hon. Friend is yes. If my hon. Friend were to discuss the matter with the management of Geevor and of RTZ, he would be informed that my officials have dealt with the matter as expeditiously as possible in terms of the preparation of submissions, and so on. Therefore, the simple answer is yes.

Mr. Michael Foot (Blaenau Gwent)

I advise the hon. Gentleman to check his facts a little more carefully before he again refers to Ebbw Vale. Regarding the specific question which he is supposed to be answering today—on the Cornish tin mines—will he look back and see what a Labour Government did to put money into those mines and to keep them going thereafter? Without that money, the closures might not have taken place in the late 1970s. Many miners in Cornwall know that that is the truth, even if some of their representatives in this place do not.

Mr. Morrison

I am delighted to be reminded by the right hon. Gentleman that I should check my facts more carefully on the steel works which I mentioned. I certainly am aware of what happened under the previous Administration.

Sir Peter Emery (Honiton)

I remind my hon. Friend that, as long ago as Easter, the Select Committee on Trade and Industry published an interim report urging the Government to be prepared for the possibility of the action that has now come about and to be ready to take interim measures to sustain the position until final decisions can be made. Will my hon. Friend express a greater assurance which we can pass on to management and workers in Cornwall and which will allow them to continue until a final decision has been made? Surely it would be fatal to have the matter closed now, because the Government might come forward with a favourable decision in four or five weeks.

Mr. Morrison

I am aware that the Select Committee on Trade and Industry spent a considerable time looking into the matter. Its report goes into detail in many ways about the whole tin problem. I am aware also that the Select Committee recommended certain proposals that the Government should adopt. I hope that my hon. Friend agrees that it would not be sensible to reply to the Select Committee's proposals until we have had an application from RTZ—we shall reply as soon as we can—because that would be the wrong way to proceed. I listened carefully to my hon. Friend's other question.

Mr. Stan Crowther (Rotherham)

Would it not be disgraceful if this small but important industry, which contributes many millions of pounds a year to the national economy, were allowed to die from lack of help from a Government who claim to be devoted to the free market philosophy but who have actively supported an international cartel which was set up to manipulate the market and whose activities the Select Committee found came pretty close to the borders of criminality? If Ministers are prepared, as they said they were, to put £50 million of taxpayers' money into trying to rescue the dealing end of the business, does it not make sense to accept the Select Committee's recommendation that the Government should invest at least that amount in the producing end of the business where the real wealth creation takes place?

Mr. Morrison

With respect, I do not think that the hon. Gentleman listened to my original answer. I said that my Department was looking carefully at applications to ascertain whether they passed the test of viability. That is precisely what we are doing and, I think, what the hon. Gentleman would want us to do. I can assure the hon. Gentleman that we could not be looking more closely at the applications.

Mr. Robin Maxwell-Hyslop (Tiverton)

Is the problem for my hon. Friend as a Minister the fact that the test of viability depends upon predicting the world price of tin after the banks have finished unloading the tin warrants they hold as security and after the mines throughout the world have finished unloading the stock which they thought they had sold ahead but for which the contracts have gone bad? Will my hon. Friend follow the much more positive recommendations of the Select Committee on Trade and Industry, as expressed by my hon. Friend the Member for Honiton (Sir P. Emery), and support the development work in the mines which will reduce production costs, whatever the price in five years' time? None of us can possibly foresee that price. As this crisis will drive out many marginal producers in the world, is it not sensible to take a "risk"—no one can predict the price four or five years ahead—and support employment rather than suffer unemployment?

Mr. Morrison

I agree with my hon. Friend that one important element is the price of tin in three, four or five years. I agree also with his proposition that, if there is to be investment in any of the mines in Cornwall, it must be aimed at reducing production costs. The judgment to be taken is based more on the former than on the latter. We shall have to take those matters into account, as will the companies concerned.

Mr. Tam Dalyell (Linlithgow)

Judging from the example of Polkemmet in my constituency, once the pumps have been turned off in any mine, one might as well call it quits. May I ask a question of fact? How much tin will actually be anaesthetised by any decision to close down the mines and cut off the pumps? It may not be possible to regain the tin at any time. Frankly, is this not another case of accountants in the City of London making decisions on matters for which they have little feeling?

Some of us support strongly the views of the Cornish tin miners. As one who has attended party meetings in Cornwall, I know how strongly they feel. Their factual questions have not been answered. What are the reserves of tin which will be anaesthetised? Does the Department know, or does it have no notion?

Mr. Morrison

Of course the Department knows. The amount of tin produced at the current price, which is just under £4,000 a tonne, is equal to the sum of £25 million a year. Of course the hon. Gentleman will appreciate that tin is an international commodity—

Mr. Dalyell

What are the reserves? The Minister is not answering the question.

Mr. Morrison

I have answered the question. One of the points which must be taken into account is that there is, to a great extent, over-production; that is why the price of tin has come down gradually.

Mr. Kevin McNamara (Kingston upon Hull, North)

Will the Minister confirm that, in 1979, RTZ was offered money under the Labour Government scheme to develop the mine? The company turned down that offer because it was confident that it would prosper under the present Government. More important, is the Minister aware that over 1,000 members of my union and other unions are likely to be made unemployed as a result of this action? While the Minister is waiting for RTZ and the other companies to state the schemes to make the mines viable, what are the Government prepared to offer the firms to maintain jobs? That is what Cornish people want to know, and that is what my union want to know. What are the Government prepared to offer the companies to keep people in jobs?

Mr. Morrison

The hon. Gentleman asks a hypothetical question. The answer depends entirely on what applications are made. The hon. Gentleman is aware that, under regional grant and regional assistance, aid is not cash-limited so the answer is as long as a piece of string.

Mr. Ian Wrigglesworth (Stockton, South)

If these mines are closed there will be dire consequences for Cornwall, the industry and the country. In view of that, will the Minister explain more fully to the House what he means by viability? When considering viability, will the Minister take into account the long-term position of these mines, and the enormous cost to the public purse as well as the companies involved of closing any pits?

Mr. Morrison

I hope that it goes without saying that the long term is what we must take into account. Obviously, at this stage, there is no question of the mines being anything but unviable. Any investment will be in terms of production costs and the price of tin in three, four, or five years' time.

Mr. Dalyell

What a bloody way to run the country.

Mr. Alan Williams (Swansea, West)

Why is the Minister reluctant to show any relevant initiative when he is faced with this critical problem? Will he recognise that this is not a normal rescue case? In addition to needing the appropriate investment decision to which he has referred, there is a desperate need for interim aid to meet the crisis which has followed the collapse of the International Tin Council. The Minister has sat back for six months. He has watched the situation develop, he has done nothing and now he has been caught unawares.

Does not the hon. Gentleman realise that it is not just a matter of 1,300 jobs at Geevor and RTZ, but also of more than 2,000 other jobs in the Cornish community which depend on those mines? The present 3,000 jobs in Cornwall will be impossible to replace now that regional aid has ben diminished to a cosmetic sham. When the Minister eventually makes his penny-pinching calculations, will he recollect that these mines put £26 million a year into the local Cornish economy? What is at risk is not just the viability of the mines, but the viability of a sub-region.

Will the Minister reflect on the fact that, last year, the same mines saved the country £40 million in import substitution? The Minister could rescue the mines for less than the annual £80 million cost of keeping 3,000 miners and dependent workers on the dole queues for two years.

Mr. Morrison

I do not think the right hon. Gentleman is correct when he says that no real initiatives have been taken. During the last few weeks my Department could not have done more in terms of encouraging applications, sifting them carefully and giving guidance on how best they could be put forward. That is the fact of the matter. The right hon. Gentleman suggests that we should go down the route of operating subsidies regardless. On reflection, that would not be the right course to pursue.