HC Deb 31 March 1999 vol 328 cc1078-9
5. Mr. Paul Flynn (Newport, West)

What new proposals he has to improve the competitive position of the Welsh steel industry. [78063]

The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain)

With the world collapse in the demand for steel the Government's commitment to the economic stability that our policies have already achieved is even more important in improving the competitiveness of the Welsh steel industry.

Mr. Flynn

The recent record of the Welsh steel industry is one of the great unsung success stories of industry. More steel is being produced in Wales than ever before. There is a 25 per cent. increase in the sales of Welsh steel and nearly half of all the steel being produced in the United Kingdom is made in Wales. In spite of that, Welsh steel makers are facing hostile and unfair competition which has brought about the regrettable job losses today in Newport and west Wales. Will the Minister redouble his efforts to guarantee that the Welsh steel industry has not merely a proud, successful past but a brilliant future?

Mr. Hain

Yes, I can reassure my hon. Friend that we will do exactly that. We are working closely with British Steel to provide technology and training support and with the European Commission to tackle discriminatory dumping measures and illegal use of state aids. The British steel industry—especially the industry in Wales—is an example to the world and we want to work with it to protect its future and safeguard the jobs in it, despite a massive reduction in the demand for steel world wide.

Mr. Ian Bruce (South Dorset)

What representations is the Welsh Office making to the Treasury to ensure that the euro does not continue to be devalued and that the Bank of England sets the interest rates that are right for British industry?

Mr. Hain

We have the lowest long-term interest rates for 40 years and mortgage rates are the lowest for 33 years. Compare that with the Tory Government's period of office, when interest rates were at record levels, the steel industry was badly hit and other businesses in Wales and throughout Britain were devastated.

Mr. Barry Jones (Alyn and Deeside)

May I tell my hon. Friend that Shotton steelworks is to lose 150 jobs even though it is competitive, productive, breaks all records and has a loyal work force? Can I persuade him to tell the arrogant, faceless bureaucrats of Brussels that the assisted area status that we have should not be lost? Will he remind them that in 1980 we lost 8,000 steel jobs overnight and that we have yet to rebuild our economy, so we need assisted area status to the end of the century and beyond?

Mr. Hain

I am aware that the steel industry in Shotton is grateful for my hon. Friend's continued hard work on its behalf. We are working closely with the industry to ensure that it has a positive future, and to ensure that the measures about which he complained are tackled as soon as possible.

Mr. Andrew Lansley (South Cambridgeshire)

Is the Minister aware that the Treasury proposal for an energy tax would hit the British steel industry and British Steel in particular extraordinarily hard? Recent figures suggest that the Government propose a discount of £5 million for a tax that will cost British Steel £200 million. In the light of all that has been said about the extraordinarily difficult competitive position of British Steel, will the Minister guarantee that the energy tax will not be imposed on it in that discriminatory way?

Mr. Hain

We will certainly not impose any tax, let alone an energy tax, in a discriminatory way. I am aware of the problems that high energy users, such as steel, face. For that reason, the Deputy Prime Minister is meeting to consider and consult on the matter. My right hon. Friend the Chancellor will also be consulting on it. [Interruption.]

Madam Speaker

Order. The House must come to order: it is far too noisy.