HC Deb 23 May 1986 vol 98 cc650-8 10.22 am
Mr. David Harris (St. Ives)

The House of Commons Library computer tells me that this is the 14th occasion on which I have raised the issue of the Cornish tin crisis. with special reference to Geevor mine in my constituency, since that crisis broke on 24 October—almost six months ago. I am grateful for the opportunity to return to the subject, because this may be my final plea to the Minister given certain circumstances which I shall mention later.

I am grateful for the tremendous support that I and my colleagues from Cornwall—the hon. Member for Truro (Mr. Penhaligon) and my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd)—have received in the matter. We have been supported by hon. Members on both sides of the House—an enormous number of who, six months ago, hardly knew of the existence of the tin mining industry in Cornwall. They have expressed genuine anxiety for the industry's future and especially for the future of the miners who, unfortunately, are in a serious positon today. There has also been an enormous upsurge of support in Cornwall for the industry. That has shown once again that the industry is special to Cornwall and is part of its heritage. The industry goes deep. not just into the soil, but into the minds of the people of Cornwall.

I pay tribute to those who have waged an unceasing campaign to save the industry, especially in Cornwall. I begin with the management of Geevor mine. The chairman, Mr. Wallis, and the deputy chairman, Mr. Gilbert, have worked tirelessly with their staff to prepare applications to the Government and have done their utmost to ensure that the mine survives, as I hope and pray that it will. I pay the greatest tribute to the men, who have worked extra time at the bottom of Geevor mine—not a pleasant thing to do. They worked an extra hour a day when the mine was operating. They have not given up hope, and my plea to the Minister is to hold out some hope for the future of the mine and those men.

Those of us who took part in the march through London in February — the Cornish tinners' march, as it will become known in Cornish history—were proud to do so. It was a tremendous occasion that brought home to the city of London, to Fleet street and to the House the plight of the industry.

The facts are well known, and I shall not take up too much time relating them. We all know how the crisis broke upon the industry with the suspension of trading on 24 October on the London Metal Exchange, and of the attempts, in which the Government took the lead, to try to put together a rescue package for the International Tin Council. Unfortunately, that attempt failed. Once it failed, because of the attitude of other countries, that which we feared happened: the price of tin crashed disastrously, and, during Easter, Geevor was forced to take the drastic step of laying off most of its 375 employees. It has now turned some of the layoffs into redundancies, partly because some of the men wanted it that way, and partly because there was pressure to do that. I cannot praise the management of Geevor strongly enough for its responsible attitude and the way in which it has had the welfare of the staff at heart. That is appreciated and acknowledged in west Cornwall.

I need not rehearse the importance of the industry to the economy of west Cornwall, because that has been said many times. The social life of that part of west Cornwall, which is about seven miles from Land's End — the Pendeen and St. Just area—depends on Geevor, and its closure was the biggest blow to that part of Cornwall for many a long year. Dare I suggest that it is the biggest blow this century to that part of Cornwall, with its already high unemployment. The communities of St. Just and Pendeen have taken the blow, as one would expect, with great fortitude, but with a feeling of uncertainty about the future. One of the worst effects of the closure is the uncertainty about the future, which has lasted for six months.

At the outset, I said that this might be my final plea on the matter, and I wish to explain what I meant by that. As is well known, on 9 April, Geevor submitted an application to the Government for assistance to carry out a development programme and to maintain full production and employment at the mine. After meetings with the Government, Geevor was asked to submit a new application, and that will be sent to the Minister this weekend. I am grateful to my hon. Friend the Minister for that. After pressure from me and others, the Government agreed to make available £40,000 to the mine, in addition to the £40,000 that was made available by the county council—I pay tribute to the county council for doing it—to enable the pumps to continue at Geevor while the revised application was drawn up and considered. That money will run out in the first week of June. At a meeting with the county council a week before last my hon. Friend the Minister said that he expected to be in a position to come to a decision before the money ran out for the care and maintenance operation.

Therefore, if the application goes in this weekend, as I understand that it will, there will be no occasion between then and the decision, if the Minister takes it on time as he thinks he will, for me to raise the matter again in the House as it will be in Recess. That is why I am particularly grateful to have this opportunity.

There has been a development today in that Geevor has issued a statement which, for the sake of greater accuracy, I want to quote. It says: The Directors of Geevor Tin Mines announce that they have reached a conditional agreement to acquire Marine Mining Cornwall Consortium in exchange for the issue of 2,200,000 new ordinary shares". Later in the statement, the company says: As has already been announced, Geevor requires to invest in completing the present Victory Shaft Sub-incline extension and opening a new auxiliary mine at Botallack so that it is able to compete on even terms in the tin market once the depression brought about by the collapse of the International Tin Council's buffer stock has lifted. The proposed recovery of tin from sea bed dredging"— that is the marine mining operation— will also require some capital expenditure and the total programme now envisaged is some £25 million spread over 5 years. The programme would provide continuing employment for about 200 of the existing Geevor Marine Mining workforce, rising in due course to 500 when market conditions enable dredging to begin followed by the resumption of underground mining. The statement goes on to announce that the company is proposing to try to raise £2.5 million through a rights issue.

The attempts to come to some arrangement with Marine Mining, a company which has rights to carry out dredging operations to recover tin waste from the bed of St Ives bay, is something which, it is fair to say, the Government were keen that the company should explore. I am glad to see my hon. Friend the Minister nodding his head.

That has involved a tremendous effort on the part of Geevor. Geevor's executives have worked night and day in drawing up the revised package, including the hoped for deal with Marine Mining because part of that deal would be that the mill at Geevor would be used to process that tin from Marine Mining.

Therefore, the utmost has been done to try to meet the suggestions put down by the Government for the revised application. It is no exaggeration to say that the issue of whether Geevor will survive will depend on the decision taken, probably in the next week, by the Minister and, presumably, some of his colleagues and those who advise them.

I do not minimise for one minute the difficulties of the decision that they face. I do not go along with those who simply suggest that all the Government have to do is to write a blank cheque to the Cornish tin industry. That would be nice if it happened. but we know that it will not happen and I believe that the Government are right in setting down the guidelines that they have—that they will consider viable projects to enable the industry to stand on its own feet once the price of tin recovers.

The difficulty is that no one can say when the price of tin will reach a reasonable stable level, or, indeed, what that level will be. Therefore, I appreciate fully the difficulties which the Government, and the Minister in particular, face in considering the application. But my earnest plea to the Minister is that he should consider that application with flexibility, with urgency, because it is important to bring the uncertainty to an end, and with sympathy.

I end by quoting the concluding paragraph of the report by the Select Committee on Trade and Industry which carried out a deep investigation into the crisis. That Committee concluded its report by saying: It is of supreme importance that the Government should begin negotiations with the industry and conclude them without delay. We believe that the Cornish tin industry is worth saving. That is the view of Cornwall and of a lot of people way beyond Cornwall.

10.35 am
Mr. David Penhaligon (Truro)

I have not checked with the House of Commons computer, but if the hon. Member for St. Ives (Mr. Harris) has raised this issue 14 times my number must be similar.

I want to protest that the only way in which we have been able to raise the issue on the Floor of the House is by using our ingenuity as Back Benchers, through Adjournment debates and such like. Here is a major financial collapse and an industry in massive difficulty, yet not one second of time has been given in the normal manner on the Floor of the House to discuss that. In an odd way, that reflects the disadvantage that Cornwall feels it has—that, as a result of its remoteness, Britain's real establishment is not that interested.

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

Will the hon. Gentleman accept that every time anybody has asked to come to see me for a meeting on this matter, I have always acceded to that request immediately?

Mr. Penhaligon

I would not quibble with that. I have said before that the Minister is more than willing to have meetings. I have sometimes wondered how much he studied the issue between meetings, but he is undoubtedly willing to have them.

I want to set the problems of Geevor in the context of Cornwall's economy. Cornwall's economy is flat on its back. For a long time, we had the dubious distinction of having the lowest wage structure of any county in Great Britain. But on top of that western Cornwall has 25 per cent. male unemployment, and that was so before the crisis started. Answers to questions that I have asked show that a full 10 per cent. less of Cornwall's female population is in work than anywhere else in the country. I know that the unemployment figures are much the same but now only a person who has never managed to find a job cannot be unemployed under the present scheme.

For six or eight months of the year the main income of a large number of towns comes from state benefits in one form or another. That is the background of our economy. Therefore, one can understand why the loss of an industry which has put £50 million into the county's economy and provides between 2,000 and 2,500 primary jobs is not greeted enthusiastically by the county.

Hard rock mining represents about one third of Cornwall's mining, and it is obviously in some difficulty. It is worth remembering just how much the Government get out of the other two-thirds of Cornwall's mining—china clay. The ECLP company last year declared a profit of £75 million. I recognise that not all that comes from Cornwall, but between £40 million and £45 million does. The Government's take on that has been substantial. All that Cornwall is really asking the Minister at this moment is to put back into Cornwall what came from Cornwall and to put back into Cornish mining what came from Cornish mining. That is what the county is asking for and what the hon. Member for St. Ives has just argued for so articulately.

When we meet the Minister or exchange letters and read whatever information somebody else has obtained, the question that is constantly raised is viability. I have no great complaint about that, but in this particular case viability is even more difficult than it is in some other circumstances. The mines can make a fair guess about sterling costs per tonne of tin. They never quite know what the ore quality will be 3 yd in front of the drill, but they can make a fair guess. They have been in the business for a long time and they are not foolish. Secondly, they must guess what the sterling exchange rate will be over the next couple of years. If anyone thinks that that is difficult, I must tell them that that is the last easy calculation that can be made because from there on the calculations are impossible.

In January last year, tin was exchanging hands freely at £10,000 a tonne. At this moment, it would be difficult to get £3,500. That is the extent of the fall. There cannot be 5 per cent. of mines in the world that are making a profit with a price of £3,500 a tonne. Therefore, anyone who knows anything about economics can confidently predict that international tin prices must rise. That begs two questions—rise to what and how long will that take? One calculation is how much tin the world uses and at what cost the world can produce it. The marginal price is about £6,500 a tonne. No one has any idea of whether that price will be obtained in six months—I fear not—two years or even longer, but in the long run it must get back to its marginal production costs.

The Minister has said at several meetings that we cannot have a subsidy for tin because the EEC will not allow that. I am as pro-Europe as the Minister—perhaps more — but assertions front Ministers about what the EEC will or will not allow have taken a severe dive in popularity in Cornwall. We were told that a large swathe of Cornwall could not have development area status because the EEC would not allow more than 35 per cent. of the population within that designation. However, we now know that that is not true.

I can persuade my Cornish miners to accept no subsidy from the Government—and that is a generous offer that must make any Conservative Government prick up their ears—if he can persuade the EEC not to allow any subsidised tin into the Community. The companies could then take a deep breath and somehow finance themselves through what would, I believe, be a short-term crisis.

Sometimes the Government are accused of knowing the price of everything but the value of nothing. I am not absolutely sure that that is true, but it is a rather nice line of rhetoric. The Government face a difficult decision—whether to save the Cornish tin industry. I believe that the arguments for doing so are overwhelming. When the Minister makes his decision in the next few days, I ask him to raise his sights a little above the absolute short-term figures on paper, which are probably wrong anyway because there are so many unknown quantities. He must decide whether he wants to give a traditional industry in one of the remoter parts of this country a chance to survive. I have no doubt that he should do so. The Cornish people want him to do so and subsequent generations will thank him for doing so. Of course, the Minister has the power simply to switch off the industry and to end hundreds of years of history. I cannot believe that he wishes to be remembered for that.

10.43 am
Mr. Alan Williams (Swansea, West)

Like most hon. Members, I am sad that we have to debate this matter yet again because we had all hoped that, by now, there would have been some positive action. I must emphasise that when considering the cost of providing support is important to balance that with the cost to the Government of not providing it, and it is even more important to consider the cost to the subregion of not providing it.

We have already heard of the 1,300 jobs that are directly involved, but they are only a fraction of the jobs that will be lost if the industry is abandoned. Indeed, almost twice that number could be lost in the secondary effect of the decline of the tin industry. If the Government allow the industry to disappear, that may cost the Exchequer at least £18 million, and possibly more than £20 million a year as a result of the unemployment that will flow. Over a five-year period — the same period for which certain evaluations have been discussed at a commercial level—the Government will incur a cost of about £100 million for doing nothing and for keeping the people in Cornwall doing nothing.

As we have said before, there is another aspect to the issue at a time of oil surplus, decline and manufacturing deficit. We must remember that the tin industry has, year in and year out, made a positive contribution through import substitution—although I accept that that is not the major case. In terms of national accounting, it is small figures, but at least it is positive figures. Far more important must be the localised effect on the community. Local authorities have pointed out that those working in the industry spend £18 million a year of their wages in their communities, helping to generate demand for other people's produce and thereby maintain employment. The mines also contribute £8 million of contract work into the communities—and those are only direct contributions. If we remember the number of jobs outside the industry that will be lost, we can understand the downward spiral into which that part of Cornwall could be thrust. However, bad as that multiplier effect may be, even worse is the loss of opportunity and hope for an area and its people.

Throughout our debates on the future of the industry, hon. Members have emphasised that one cannot judge by ability in an extractive industry on the same basis that one judges by ability in a manufacturing industry. As the hon. Member for Truro (Mr. Penhaligon) said, what is a fair price as against the current market price? With everyone offloading tin, it is being sold at an enormous loss, so the industry's viability in the short term is an utterly improper yeardstick for the Government to use.

Cornwall is ill-fitted to deal with the aftermath of allowing the industry to disappear. Like my part of the country, Wales, and like Scotland and the north, Cornwall has suffered a massive cut in regional aid. It is down to about one third of what it was when the Government took office. Like parts of west Wales, Cornwall must deal with the problem of remoteness. Most of our assisted areas are peripheral in the European context, but west Wales and Cornwall are the most peripheral of all. They must overcome the gravest difficulties of communications. They have the greatest cost disadvantage for which they must somehow compensate would-be investors to persuade them into the area.

We all know that the reality is that if the industry disappears, under the present regional aid regime there is no chance of any new industries moving into the area. There simply would not be the incentives, even if the Government were operating a growth economy, which they are not. Cornwall is left absolutely defenceless against the impact—

Mr. Harris

I wish to set the record straight on that point. I am sure that the right hon. Gentleman will agree that Penwith, where Geevor is situated, has had its status increased under the redrawing of the regional map. It has gone up to the top tier, and I am sure that the right hon. Gentleman will wish to bear that in mind.

Mr. Williams

When I set up the special development areas in the 1960s the top tier received 25 per cent. investment grants. Now, the top tier has been abolished and the highest grant is 15 per cent. All that the hon. Gentleman is saying is that something was given but the top was lopped off and it is now worth only a fraction of what it used to be worth. Clearly, that was more of a cosmetic sop than a practical gesture. When the matter was debated I have no doubt that the hon. Gentleman went into the Division Lobby against the Government to protect his locality.

Communities will go into decline. They are already under pressure. Decline in this sense is selective. Decline means the loss of skilled workers and of the young. Those who can get out, will do so in desperation. If we allow the industry in Cornwall to decline further the young will be even more under pressure to leave their communities. They will leave behind gradually aging populations with heavy social costs.

Even for those who stay there will be no hope. For 50-year olds there will certainly be no hope. For 40-year olds there will be little or no hope and even for 30-year olds there will be little hope if the industry is allowed to disappear. Such people do not have the option of getting on their bike, or even on the high-speed train. Many of them are inevitably rooted because of home ownership. They cannot contemplate the costs and upheaval of selling and moving elsewhere. Those who do not own their own homes know that if they try to move away there is little or no hope of finding rented accommodation, particularly in the public sector now that that is so diminished.

We are not dealing only with the problem of a couple of mines, important as they are in terms of their historic significance and their direct link with Cornwall's character. We are talking about the survival and the viability of communities.

Unless the Government act quickly Cornwall will face a decade of despair with no hope for those who are thrown out of their jobs. The Minister will express his support for the area and his concern. We will be taken trip by trip on each of the journeys that he has made to Cornwall. We do not doubt that he likes the communities or that he has been to Cornwall. However, much as we like the Minister as a colleague, bland reassurance is no substitute for a sense of urgency. Quick and positive action is needed above all.

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

I am delighted that my hon. Friend the Member for St. Ives (Mr. Harris) has managed to draw our attention yet again to an important issue for him, his constituency and for Cornwall. It is also an important national and international matter which has not only grabbed the headlines but captured the imaginations of many people. If this were the 34th rather than the 14th occasion on which he had raised the matter I should have been happy to respond.

Of course, I agree with my hon. Friend and with the right hon. Member for Swansea, West (Mr. Williams) that the issue is not just about tin, but about the regional implications of tin. As the right hon. Gentleman was kind enough to say, I know Cornwall well and have been there. Unlike some hon. Members, I knew about tin mines well before the current crisis. I apologise to the right hon. Member for Swansea, West for reminding the House about that.

The right hon. Gentleman, my hon. Friend the Member for St. Ives and the hon. Member for Truro (Mr. Penhaligon) told us about the high levels of unemployment in Cornwall. They are very high. In Penzance and St. Ives unemployment is 21.2 per cent. In Redruth and Camborne it is 22.2 per cent. Relatively, in Truro the level is a little lower, at 12.2 per cent. I accept the serious regional implications.

Tin mining in Cornwall is not a new phenomenon. The industry has managed to survive through good and bad times for about 2,000 years. The current crisis started in the latter part of October last year when the genuine uncertainty began. Between then and early March negotiations took place in an attempt to come to an agreement with all the parties, including the international sector, in an attempt to resolve the crisis. As my hon. Friend, the Member for St. Ives said, if agreement had been reached the current price of under £4,000 per tonne would have been higher. It is impossible to say by how much. If it had been higher it would have been in the interests of the Cornish tin mines.

The £50 million figure which has been bandied about by several hon. Members was not for the London Metal Exchange, but to restore an orderly market in tin. That would have been in the interests of the Cornish tin mines.

The hon. Member for Truro said that it would be difficult to decide at what price tin would be trading in the years ahead. It will be difficult. It would be difficult to decide at what price any commodity will be trading in five years. Let us take, for example, a hotel room in St. Ives. The price of that room will vary from season to season and from summer to winter. To have a stab at reckoning what that price will be in five years' time would be difficult, just as difficult as would be to guess the precise price of tin.

The right hon. Member for Swansea, West talked about uncertainty. I accept that the uncertainty has continued for a long time and that that in itself is debilitating. The right hon. Gentleman was a distinguished Minister in the Department of Trade and Industry, so he knows that one cannot approve an application which has not been received. I make no complaint about the time at which the applications were received because that depended on the outcome of negotiations involving the International Tin Council. The first application, from Geevor, was received on 9 April. Like my hon. Friend, I pay tribute to Mr. Wallis and Mr. Gilbert and all their employees for the enormous amount of work which went into their applications.

The RTZ application was received on 9 May. We could start to operate only after those applications were received. I am sure that all hon. Members who have been closely involved will accept the importance of my Department's role since the applications were received—and prior to that. My Department could not have done more work than it did both before the applications were received and since.

Dr. David Owen (Plymouth, Devonport)

Everyone understands the urgency of the matter, but can the Minister, before the House goes into Recess, tell us clearly when he expects to make a decision on Geevor and RTZ? We must have a firm timetable.

Mr. Morrison

If the right hon. Gentleman had been a member of the delegation that I saw the other day, he would have heard what I had to say on that matter. I shall come back to it later.

Let me underline the efforts that are being made to process the applications. The second application for Geevor will be received over the holiday weekend and arrangements have been made for my officials to look at that application during that weekend. The test will be viability and I was glad that both my hon. Friend the Member for St. Ives and the hon. Member for Truro agreed that viability should be the test.

In response to the right hon. Member for Plymouth Devonport (Dr. Owen), I remind hon. Members that I told the recent delegation of Cornwall Members and representatives of Cornish town and district councils that I intend to do everything in my power to respond to the Geevor application by 1 or 2 June. I do not want to be forced into a rigid position, because if I cannot respond by then there will be problems about the pumps, care and maintenance and so on.

The chairman of Geevor referred, in a letter to me yesterday, to the generosity of the Cornish town councils and the Government and the £40,000 that was made avalable to ensure that there was time for the second Geevor application to be made and for the Department to process it.

I do not think that the right hon. Member for Devonport would want me to give a precise date on the RTZ application. I should prefer not to do so, because if I am tied to a specific date, proper consideration may not be given to the application. Hon. Members would not appreciate that. They will want us to give proper consideration to the application.

We all love to visit Cornwall; millions of people take their holidays there. However, the transition from traditional manufacturing and mining processes to more modern methods of production will be very painful for Cornwall. The Government have done a lot for the area, but unemployment remains high. It is with that consideration in mind, and having regard to the important test of viability, about which there is a consensus in the House, that we shall be reviewing the applications as quickly as possible.