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§ Mr. David Harris (St. Ives)(by private notice)asked the Secretary of State for Trade and Industry whether he will make a statement on the breakdown of the negotiations with the International Tin Council and the attempt to resolve the debts of that council.
§ The Minister for Trade (Mr. Alan Clark)The Government regret that the protracted negotiations between the International Tin Council and its bank and broker creditors have now broken down without reaching agreement to resolve the tin crisis.
We have constantly made it clear, following suspension by the ITC of its operations in the tin market on 24 October last with gross commitments exceeding £800 million, that the United Kingdom was prepared to accept its share of the liabilities of the ITC, and we called on all other members to do likewise.
It is especially unfortunate that the breakdown of negotiations has come at a time when substantial progress had been made towards resolving the tin crisis in an orderly fashion. Had the ITC member countries collectively shown a greater sense of urgency and responsibility from the outset, a solution might have been found. Discussions between members of the European Community were protracted, and formal negotiations by the ITC began only at the end of January. However, the final breakdown of negotiations was caused by the refusal of some producer countries to accept the proposals.
At this late stage, it seems unlikely that a settlement can now be reached in order to secure a return to orderly trading in tin. If a substantial number of other ITC countries were prepared to make a new effort to resolve the crisis, the Government would of course be willing to join such discussions. But it must be clear, as it has been throughout the earlier discussions and negotiations, that the United Kingdom Government are not prepared alone to take over the responsibility for the ITC's debts.
The Government deplore the failure of certain other Governments to agree to meet their share of the commitments of the ITC. That failure undermines good faith and integrity in international financial dealings.
§ Mr. HarrisFirst, I pay tribute to the Government for the lead that they have taken in trying to achieve a resolution of this complex international problem and for their willingness to put up £50 million as their part of a bid to achieve a solution. Does my hon. Friend agree that it is a real tragedy that the negotiations have broken down after having got so far, and that the ramifications of that failure of negotiations are truly enormous, making the Westland affair look like a minor financial incident?
Does my hon. Friend agree that there are enormous implications for the whole future of London as a commodity trading centre, major implications for the Third world and—this is my particular preoccupation—extremely worrying implications for the Cornish tin industry? May I press my hon. Friend the Minister and my right hon. Friend the Secretary of State for Trade and Industry to act with real urgency over the problems of the Cornish tin industry? May I impress upon my hon. Friend that, through no fault of its own, the Geevor tin mine in my constituency is really at risk now that the talks have 590 broken down? Will the Government respond urgently to the request for special temporary assistance to enable the Cornish tin industry, and Geevor in particular, to survive?
§ Mr. ClarkI am obliged to my hon. Friend the Member for St. Ives (Mr. Harris) for the tribute that he paid to the Government's efforts to solve the crisis or to prevent it reaching its present dimension. The United Kingdom has played a leading part throughout in attempting to achieve a solution and in offering contributions greatly in excess of the 4 per cent. that we are bound under the agreement to contribute to costs.
I agree with my hon. Friend that at this early stage the implications, both in global terms and in the effect on the City, have yet to be seen in their entirety. I know that my hon. Friend has a particular constituency interest, and the whole House will applaud his efforts to draw our attention to the plight of his constituents. The Government are very much aware of that aspect, but we feel that it would not be appropriate to take action until the market has at any rate stabilised, so that we can see what the prospects for commercial trading in tin and the economics of mining it are likely to be. Once the market has stabilised and we see what the commercial prospects are, we would of course be willing to consider applications for grant towards the cost of capital investment. Those grants will be made in the light of the market conditions prevailing at the time.
§ Mr. Alan Williams (Swansea, West)I am grateful to the Minister for coming here and giving us a fairly interesting historical analysis of the situation leading up to today's statement, but he has said nothing about where we go from here. He has put forward no positive proposals. The negotiations have been running into trouble for more than four months, and collapse must have been a strong possibility throughout. What are the Government's contingency plans? Is the Minister seriously telling us that, having been aware for four months of the crisis that was liable to occur, the Government have not one positive proposal to make, apart from the suggestion that they might give some grant if someone is silly enough to invest in tin mines which will have no market for their product?
The Minister seems unaware that the price of tin is likely to collapse as 16 banks begin to offload 45,000 tonnes of tin on to the market. What does he think that that will do to the 13 brokers who are at risk for up to £550 million? Many of those brokers also deal in other commodities, so there may be repercussions way beyond the tin market, putting at risk the survival of the whole London metal exchange. The Minister seems completely unaware of all that or of the fact that there is about to be chaos in the world tin market.
What plans does the Minister have to help the Cornish tin workers, for whom his hon. Friend the Member for St. Ives (Mr. Harris) has pleaded, if the price of tin collapses below the level at which it is viable to produce it, for example, at Geevor? Does the Minister appreciate that if he has no plans to help, this could mean the end of tin production in the United Kingdom?
§ Mr. ClarkIn answer to my hon. Friend the Member for St. Ives I stated the Government's position in relation to the Geevor tin mine and tin production in Cornwall. We view the situation with great concern, we are watching it very closely, and at the appropriate moment we shall judge the level at which grants should be made for investment.
591 The right hon. Member for Swansea, West (Mr. Williams) fell somewhat short of his objective in accusing the Government of failing to intervene on a greater scale to prevent chaos in the City. I am not sure what the right hon. Gentleman was recommending. We have already taken the lead in the efforts to solve the crisis. Our offer of a contribution to finance the agreement was extremely generous, both in absolute terms and in relation to our treaty obligations. Perhaps the right hon. Gentleman will enlighten the House on whether he is really suggesting that yet more taxpayers' money should be thrown into an extremely uncertain and difficult situation. He mentioned the difficulties that will face certain brokers. Is he suggesting that they should be individually bailed out by the Government?
§ Mr. Tim Smith (Beaconsfield)Does my hon. Friend accept that the United Kingdom was the only member of the International Tin Council prepared to stand behind its legal obligations? Is it not deplorable that other members, including members of the EEC, and in particular, West Germany, have refused to do so? What possible future can there be for international trade agreements if member states refuse to stand behind their legal obligations?
§ Mr. ClarkMy hon. Friend's view is uncomfortable, but valid. At every stage the United Kingdom has done its best to bring about a solution to the crisis. It is regrettable that delays, indecisions, and a certain optimism—I am not the best person to judge that—prevented any of our Community partners or other countries from coming forward with positive suggestions. As to the future, it may be possible to reach agreement and for all the parties to mount a salvage operation, but at the moment the prospects look exceedingly bleak.
§ Mr. Robert Maclennan (Caithness and Sutherland)Is the Minister's statement not a deeply irresponsible and shocking abdication of Government responsibility which will be noted with appalled reactions throughout the City? Last night why did the Minister not respond positively to the proposal by Mr. Jacques Lyon that the Government should take a lead in the rescue plan and not simply rail against other countries for their failure to take a lead?
Does the hon. Gentleman have any understanding of the consequences, not only for the City but for the banking system, of the collapse of the London metal exchange, which is at risk because of the Government's supine response to the crisis? Has the Minister nothing more to say to the 1,500 workers in the tin industry, and will he examine proposals for investment in the industry?
§ Mr. ClarkI am amazed at the hon. Gentleman. He knows the lead that the United Kingdom has adopted throughout. He has heard from both sides of the House how we received almost no support from the other partners to the agreement. He has heard the size of the sum—£50 million—which the United Kingdom has put on the table.
Is the hon. Gentleman suggesting that we should have increased the sum, and not put it into the founding of a new tin council, which would take over the obligations, but paid it directly to the City? What is the hon. Gentleman suggesting? It would be wrong and irresponsible to increase the sum and to use taxpayers' money for direct grants—if that is what the hon. Gentleman is suggesting—to those who are in difficulties in the City of London.
§ Mr. Harry Greenway (Ealing, North)Is my hon. Friend aware that the International Tin Research Institute is in my constituency? Is he aware also that I hope he will continue to attempt to drag European and other Governments, kicking and screaming, towards an agreement on tin? Does he agree that without that agreement container commodities for food and drinks, including bottles, will not have the strength or unbreakability which is needed? Tin is essential.
§ Mr. ClarkMy hon. Friend is right. The prospects are bleak. I do not know about dragging Governments kicking and screaming, but if there is a general perception of the gravity of the problem, the original possibilities remain. It has proved so difficult to achieve unanimity that the possibility of finding a solution is not promising.
§ Mr. Dennis Skinner (Bolsover)Is the Minister aware that if he started by being concerned, not about speculators in the City but about the more than 1,000 workers engaged in the tin mining industry, and if he was prepared to strip himself of the dogma, he might be able to find a solution? Tin is a non-perishable commodity. If the Government want to keep the tin industry and to keep the tin miners and others in jobs, the Minister would take the stance that he took in October 1984 with another valuable commodity — gold. At that time the Government were not much bothered about market forces or uneconomic units of production and decided to save Johnson Matthey Bankers by nationalisation. The same process could be developed in the tin industry.
A previous Government took a similar attitude when Rolls-Royce got into an almighty mess. People felt that something should be done, so it was taken over. If the Government seriously want to look after the jobs of the tin workers and ensure a continuing tin industry, they would dismiss questions about the London metal exchange arid get on with the job of saving the tin mines in Cornwall.
In the absence of the Liberals, who do not seem to be interested, will the Minister take the questions on board and do what was done with JMB and so save the jobs and the industry?
§ Mr. ClarkI appreciate that the hon. Gentleman could hardly let his chagrin fail to show. We are not bailing out the London metal exchange, although I am sure that that would be the solution that the hon. Gentleman would have predicted.
§ Mr. SkinnerI did not say that.
§ Mr. ClarkI can understand the hon. Gentleman' s chagrin at the fact that we are not running true to the stereotype that he describes. I have already explained the measures that we envisage taking to help the plight of the Cornish tin miners. The miners' problem is different in quality from that of others who are in difficulties because of the situation. The hon. Gentleman is so ready—understandably—to condemn certain aspects of the Common Market and the CAP and the accumulation of mountains, and I was interested to hear that his solution is the accumulation of a giant mountain of tin.
§ Sir Antony Buck (Colchester, North)Is my hon. Friend aware that I sympathise with him in having to deal with a difficult problem? Will he comment further on the attitude of our allies, because it seems that they, and West Germany in particular, have not fulfilled their obligations?
§ Mr. ClarkThe House can reach its own conclusions and read the press, but I do not want to pick a fight with any of our Community partners or with any of the other countries involved. The facts speak for themselves. The failure to achieve harmony, a united attitude, or a level of contributions is at the root of the mishap.
§ Mr. Frank Cook (Stockton, North)Has the Minister tried to solicit American involvement as a means of rescuing the industry, or are Americans who invest in this country interested only in cleaning up profits and milking the economy?