HC Deb 03 June 1986 vol 98 cc740-4 3.55 pm
Mr. David Harris (St. Ives) (by private notice)

asked the Secretary of State for Trade and Industry if he will make a statement on the Geevor Tin Mine.

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

After detailed and careful appraisal, the Department has reluctantly concluded that Geevor Tin Mine's latest proposals do not offer sufficiently robust prospects of commercial viability to justify financial assistance on the scale requested. The company has been notified of this decision.

Mr. Harris

I accept that my hon. Friend had to make a very difficult decision, and that Geevor was clearly the most vulnerable Cornish mine, but does he realise that the decision has caused those in west Cornwall deep dismay? I visited the miners last night and they were in a stunned state that was, I am afraid, giving way to anger. One can understand that.

Will my hon. Friend say something more about the £1 million of assistance that the Government are making available to west Cornwall? Will he also say something about the office that he is setting up? Can he hold out some hope to the rest of the Cornish tin industry? Does he agree that the decision does not sound the death knell for the tin industry but that, hopefully, other mines will survive the crisis and perhaps one day, who knows, Geevor will come back to life?

Mr. Morrison

I agree that the decision was very difficult. We have debated the situation in Cornwall, arid particularly in west Cornwall. several times and it is, indeed, very difficult.

My hon. Friend referred to the business improvement services. We hope that within a few weeks we shall be able to set up an office in close proximity to Geevor with three officials to administer the scheme. I cannot at present say precisely where it will be. My hon. Friend asked about the future of the Cornish tin industry. As the house knows, other applications are being processed.

Mr. David Penhaligon (Truro)

Does the Minister accept that his decision has destroyed a community, a lifestyle and a tradition, and will inevitably lead to an unemployment rate of 50 per cent in the area? Precisely why did the application fail? The Minister said that it was not vigorous enough. How did it fail the test of commercial viability? In reality, is not the message that if those 300 miners bought clapped-out vehicles that did not have MOTs, some wigwams, arid semi-trained dogs, and camped out in Hyde Park, the House and Britain's journalists would show far more interest in this tragedy?

Mr. Morrison

The hon. Gentleman has done Cornish tin miners, and particularly those at Geevor, less than a service. All hon. Members have rightly paid great attention to the predicament in which the tin miners find themselves. But the hon. Gentleman grossly exaggerated, when he said that there would be 50 per cent. unemployment, although I accept that the figure is very high and that we are talking about a very depressed part of Cornwall. The application was turned down, like many other applications for regional grants, on grounds of commercial viability. We must have certain criteria. If the hon. Gentleman was in my position, he would have them, too.

Mr. Robin Maxwell-Hyslop (Tiverton)

My hon. Friend will know that the Select Committee on Trade and Industry recommended, after a very thorough investigation, that there should be support from public funds for Geevor's programme in order to enable it to produce tin at a reduced price. He could have made the decision that Geevor's future was not viable only by making certain assumptions about the future price of tin. What assumptions did he make about the price of tin in three and five years' time? The present price reflects the fact that banks have unloaded their tin warrants, which were the securities for their loans on money advanced to the London metal exchange. Is my hon. Friend aware that, following the absurdly high prices caused by the cartel arrangement, tin production has fallen by about 40 per cent? I repeat—what assumption did my hon. Friend make about the world price of tin in three and five years' time, without which he could not have made any judgment about the viability of Geevor, Pendarves, South Crony or Wheal Jane?

Mr. Morrison

Of course I am aware of the Select Committee's recommendations on Geevor, and my right hon. Friend the Secretary of State intends to reply very shortly to the Select Committee.

My hon. Friend asked what assumptions we made. We looked at the assumptions in the Geevor application for the price of tin at the stage when the company would wish to produce from the current Geevor mining operation. That price was on the best advice that my Department has, within the band of what the price would be in five years' time. At this stage, in view of the fact that applications are being processed and looked at, in particular that from Rio Tinto Zinc, it would be inappropriate to say precisely what the price was.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

Is the Minister aware that the cost of flooding those mines, in terms of employment and the viability of communities, is far higher than the sum of money that he was being asked to contribute to keep them open? Is he also aware that, once the mines are flooded, he will have handed down the ultimate death sentence to the whole area? I hope that he will be able to sleep at night after that.

Mr. Morrison

I am very much aware of the point that the hon. Lady makes about the community. I am also aware of her point about turning off the pumps. That was why I was prepared to put up a matching £40,000 to keep the pumps operating for a further four to five weeks while we looked at the second application. We wished to see whether there was any proper way to operate the mines commercially in the future.

Mr. David Mudd (Falmouth and Camborne)

Does my hon. Friend accept that the Government are facing a major crisis with petty cash solutions? My hon. Friend has suggested that £1 million will be made available to the St. Ives and Penzance areas to bring them through this crisis, a sum that is to be spread over four years. My hon. Friend has told us that it will be administered by three civil servants, who will no doubt require office and back-up accommodation, so that we are talking about an input of probably less than £180,000 each year for the next four years to solve this massive crisis. Can my hon. Friend come up with something more promising, hopeful and positive?

Mr. Morrison

I am sorry that my hon. Friend does not welcome this substantial sum of money. We expect that in the first year £250,000 will be spent. Three officials in the right area to advise on any request is the right number to administer the scheme.

Mr. Doug Hoyle (Warrington, North)

Does the Minister agree that he has looked at this problem in the short term rather than in the long term and that this is a short-term solution? Will he re-read the report of the Select Committee on Trade and Industry, which pointed out that if the grant had been made to the mines, they would have been competitive against the prices that might be prevailing in five to 10 years? Would not this have been a practical solution? Does he further agree that the £1 million, spread over four years, will provide only candyfloss and ice cream jobs, which are purely seasonal, when what are needed are real jobs and real help?

Mr. Morrison

I assure the hon. Gentleman that, when we looked at the Geevor application, we did not consider it only in the short term. I appreciate his point, but, because of the current state of the tin market, that would not have been a solution by any stretch of the imagination. We were looking forward five years out from now.

As to the point about business improvement services, the hon. Gentleman will be aware from his experience in our part of the country that the scheme is popular. I am sorry that he does not welcome the scheme, even though he may not agree that it goes as far as he would like it to.

Mr. Kevin McNamara (Kingston upon Hull, North)

When are we likely to have the decision on the RTZ application? Is the hon. Gentleman aware that the majority of people employed in those pits are members of my union, and they feel that the decision announced yesterday sounds the death knell for the whole of the Cornish tin industry?

Mr. Morrison

To deal with the hon. Gentleman's second question first, he should not draw any particular analogy from yesterday's decision with any future decision, because each application will be considered on its merits. I hope that we shall be able to give a decision in the next five or six weeks. I would not wish to be precisely tied to that date, because it is important for the company and its employees that we should explore every possible avenue.

Mr. Tony Marlow (Northampton, North)

I have every sympathy with the problems of the distressing situation that my hon. Friend the Member for St. Ives (Mr. Harris) and his constituents face, but is it not the case that £25 million was being requested to sustain 375 jobs? Is that not at the rate of about £60,000 per job and, with the best will in the world, is that not rather above the odds for providing Government money to sustain employment?

Mr. Morrison

I am not in a position, because the applications are dealt with commercially and in confidence, to confirm or deny the figures that my hon. Friend has given. The cost per job would have been very expensive indeed.

Mr. Dennis Skinner (Bolsover)

Is there not a big difference between saving the jobs of a few bankers at Johnson Matthey, which cost the taxpayer £100 million, and the 300 jobs that are due to be lost in the Geevor mine? Have not the Government a strange list of priorities when they have before them a paper from the oil industry in which the companies say that, because of the fall in oil prices, they will need some special tax relief from the Government to exploit the small pools of oil in the North Sea——

Mr. Speaker

Order. We are talking about tin.

Mr. Skinner

I am drawing an analogy, Mr. Speaker.

The Government are prepared to back the oil barons but not to protect the jobs of 300 miners in Cornwall and prevent the many more hundreds of redundancies that will follow if other pits close. Is not the job of a miner just as important as those of the bureaucrats in the Common Market? We have just paid £250 million to bail out that clapped-out organisation the Economic Community. Are not the jobs of the miners as important as those of the bankers at Johnson Matthey? The Government will use the test of viability to suit the casino economy, but they will not do so to look after people's jobs.

Mr. Morrison

The hon. Gentleman, as always, makes a cheap party political point. If he had been involved, as I have been in the past two months, in all the work put into looking at the first and second applications to see whether it was possible to help, he would not have put such a question.

Mr. Alan Williams (Swansea, West)

Is this not a tragic and sad end to an inglorious catalogue of Government blunders and failures? Does the Minister remember that the Select Committee condemned the Government for giving a warning of the impending tin crisis in such imprecise terms as to be worthless? Is he aware that the Committee deplored the Secretary of State's refusal to give full answers to questions, the same evasiveness that was repeated today when the Minister refused to give us information on the future of tin prices?

Does the Minister also recollect that the Select Committee stated categorically that the Cornish tin industry is worth saving and went on specifically to recommend that Government aid be given to Geevor? Why are the Government so contemptuous of a Select Committee when the cost of aid is less than the cost of the unemployment?

Have the Government no sense of the absurd? Does not the Minister realise that an offer of £1 million aid is so derisory as to be a gross insult? Will he recognise that today Geevor has been condemned to die, and the people of Cornwall will never forgive the Governent for their lack of preparedness, lack of interest, and their pathetic ineffectiveness?

Mr. Morrison

The right hon. Gentleman anticipates the response to the further applications. As he is aware, because I have said so, the only response so far given is that to the application on Geevor. My right hon. Friend the Secretary of State will soon be replying, as is the parliamentary convention, to the recommendations of the Select Committee.

I would like, as much as the right hon. Gentleman, to give a grant to Geevor so that the mine could become commercially viable. It just did not prove possible. I do not think that, over the next three or four years, the recipients of the £1 million will consider it the gross insult that is suggested by the right hon. Gentleman.