Steel Industry

HC Deb 01 February 2001 vol 362 cc457-70 1.17 pm

The Secretary of State for Trade and Industry (Mr. Stephen Byers)

With permission Mr. Speaker, I should like to make a statement about the steel industry and the announcement made today by Corus.

The House will know that since early December Corus has been conducting a review of its operations, the results of which were announced this morning. Corus has said that it intends to introduce radical restructuring measures, which will mean significant job losses in England and Wales. More than 6,000 jobs will be lost; about 3,000 will be lost in Wales and 3,000 in England.

Corus has failed to discuss its plans with the Government. Relevant information has not been disclosed; the company has resisted any meaningful dialogue and has refused to discuss in detail its plans for the industry. We have expressed our anxieties to the company about that lack of information at the highest level.

There is no doubt that Corus has been facing difficulties. Trading conditions are tough, and there has been a clear need for the company to take steps to address those problems.

The Government recognise that it is for Corus and any other company to take the commercial decisions that it believes are necessary. However, in the case that we are considering, capacity will be reduced and thousands of jobs lost as a result of a short-term response to the difficulties.

The Government acknowledge that, at a time of globalisation, many sectors of industry are undergoing major restructuring. In those circumstances, the role of Government is to provide economic stability. We are doing exactly that. Consequently, more than 1 million more people are in work now than in 1997.

Inflation remains around or below the target of 2.5 per cent. Long-term interest rates are the lowest for 35 years. We have put an end to the old cycle of boom and bust. Building on that platform of stability, the Government have been driving forward an active industrial policy to enable established industries to modernise, to adopt new processes and technologies and to support the development of new industries.

We have seen manufacturing productivity increase by about 3.5 per cent. over the past year. Exports are growing, with manufacturing export volumes up by more than 9.5 per cent. in the past year. Manufacturing output is also rising. The prospects for manufacturing are improving,-with most forecasters expecting growth to pick up over the next two years. Only this morning, the latest Chartered Institute of Purchasing and Supply report showed manufacturing growing at its fastest rate since March last year.

Today's announcement by Corus stands in stark contrast to other manufacturing companies that are prepared to take a long-term view. In recent weeks, Toyota and Nissan have taken positive decisions on production in the United Kingdom, when they could have gone anywhere in the world. They have decided that they have a future as manufacturers in the United Kingdom. They have committed to substantial new investment. They have demonstrated confidence in their labour force and in the economic stability and favourable business environment that this Government have established.

Corus should, like Toyota and Nissan, weigh up its long-term interests and prospects and, in responding to the real challenges that it faces, put far greater weight on the new opportunities for developing into new markets. Even after today's announcement, Corus will remain a major employer, with about 22,000 employees in the United Kingdom—a demonstration of the fact that there is a future for the steel industry.

It is because there is a future for the industry that Corus should think again about the proposed closures and redundancies, and work with the trade unions, the Government and the National Assembly for Wales to identify a better way forward. We recognise that that is a commercial decision to be taken by the company and that action had to be taken to tackle the losses being suffered. However, Corus should now engage openly and work constructively with all the relevant parties, building on the strengths of the steel industry.

UK steelworkers have improved productivity dramatically in recent years. They are the most highly productive steelworkers in the whole of Europe. Between 1998 and 1999, they increased their productivity from 533 tonnes per person to 571 tonnes—well above the levels in Germany and France. We have been working with the industry to help it to improve productivity, to modernise and to adopt new technology.

The work force at Corus have shown their long-term commitment to the industry and to the company, and I share their anger at Corus's behaviour. Corus should now work with its employees and the communities affected. Should Corus refuse to change course, it must meet its obligations. It must pay the costs of the clean-up of the sites affected by today's announcement. It should then release them quickly and play its part in helping the communities affected.

The Government will not walk away from the innocent victims of this decision. We will be there alongside them. We will provide help for the individuals affected, support for local communities and backing for regeneration schemes to support the local economy and provide new jobs for people. However, it need not come to that.

Corus could adopt a different approach. If it were to do so, it would have the support of the Government. On behalf of 6,000 steelworkers, their families and the communities in which they live, I urge Corus to think again and to work with us to identify a better way forward.

Mr. David Heathcoat-Amory (Wells)

I am grateful to the Secretary of State for giving me an advance copy of his statement.

The ending of iron and steel making at Llanwern and at Ebbw Vale and the plant closures elsewhere—not just in Wales, but in Yorkshire and Teesside—represent a devastating blow to the workers affected and their families, especially as productivity in those plants increased so enormously over the past 20 years. The 6,000 job losses announced today come on top of some 4,000 last year, and the ripple effect will be felt much more widely among suppliers and others, including, as it happens, my constituency, which provides limestone for steel making. Where will the 3,000 job losses affecting so-called "other business operations" fall? In other words, outside Wales and the north of England, which other local economies and communities will be affected?

The much wider problem represented by the job losses is the manufacturing decline since 1997. Will the Secretary of State confirm that, since the general election, more than 350,000 jobs have been lost in the manufacturing sector? What is his assessment of the rate of those job losses? Are today's announcements just the symptom of a wider malaise and a deeper trend, which is getting worse, not better, in manufacturing industry?

Last week, we initiated a debate on manufacturing in which we demanded from the Secretary of State a package of practical and immediate measures to help manufacturing. Why did he refuse our proposals? We gave him specific examples of the regulatory burdens and the extra business taxes on manufacturing, which are undermining its international competitiveness. Is he aware that the United Kingdom Steel Association has specifically drawn attention to the burden of those extra regulations and the damage that it is doing to our competitiveness in overseas markets?

Is the Secretary of State aware that Corus partly blames high transport costs, which, of course, are caused directly by Government taxation policies that have made road fuel taxes the highest in Europe and undermined every manufacturing company that has to transport its products to the continent or elsewhere?

Last week, we demanded that the Government withdraw the new energy tax—the so-called climate change levy—which will come into effect in April and will do further damage to manufacturing concerns such as steel making that are high users of energy. Will the Secretary of State, even at this late stage, withdraw that new threat to manufacturing jobs? How can he justify an unnecessary and damaging extra measure that Corus must have taken into account in its decision to lay off such a number of workers?

Manufacturing is the sector that the Labour Government forgot. The Government say, and the Secretary of State has just told us, that Corus must think again. I hope that it does think again, but the Government must think again as well, and they can start by dismantling the £32 billion of extra regulatory and tax costs that the CBI has identified as an extra burden on British business over this Parliament.

Who in the Government is responsible for policy on Corus and on manufacturing and the steel industry? Is it the Secretary of State for Trade and Industry? Is it the Secretary of State for Wales? Is it the First Minister of the Welsh Assembly or his deputy, who is a Liberal and who apparently speaks on economic matters? Is it the Prime Minister, who met the chairman of Corus? Is it the Chancellor, who imposed those extra, damaging business taxes? Instead of a firm and clear strategy to stop the closures and reverse the trend in manufacturing decline, all we get from the Government is policy fragmentation and devolution of responsibility to others. Who is in charge of a strategy to prevent this from happening again?

We have been warning of these job losses for months. We have seen new Labour taking old Labour for granted. We have seen a Secretary of State for Trade and Industry who is constantly surprised at the damage that his own policies are doing. The Opposition will do all that we can to help the Government find a way out of the serious situation, but only the Government can introduce a practical and immediate package of measures to restore the competitiveness of manufacturing industry in world markets. If the Secretary of State cannot do that, will he make way for those who can?

Mr. Byers

I think that there were some questions in that statement, to which I shall try to reply.

The right hon. Gentleman speaks of transport costs. When he has time to read the detail of Corus's announcement, he will see that transport costs were not a major issue. [Interruption.]

Mr. Speaker

Order. The right hon. Member for Wells (Mr. Heathcoat-Amory) asked the questions. He should let the Minister reply.

Mr. Byers

The right hon. Gentleman will see that, as part of the restructuring announced today, Corus will take products from Teesside down to Llanwern, so transport costs are clearly not a great issue.

The right hon. Gentleman did not mention the costs of the climate change levy to the steel industry: £8 million a year. If he had referred to the losses being incurred by Corus, he would have realised that £8 million is insignificant in that context. I do not know what contact the right hon. Gentleman has had with the chief executive of Corus, but if he had met him to talk about the company's plans and proposals—we have known since 5 December that the review was under way—he would know that the climate change levy was not a consideration. It was raised specifically with the chief executive, and it was not an issue.

The right hon. Gentleman speaks of jobs being lost. He fails to refer to the fact that, on average, every year for 18 years under the Conservative Government 150,000 manufacturing jobs were lost. That is his record.

The right hon. Gentleman does not refer to the impact of Tory policies on the steel industry. All that he needs to look at is the record of his Government. Between 1979 and 1997, 121,000 steel jobs were lost under the Conservative Government.

The right hon. Gentleman's solution is to deny workers minimum standards. When he speaks about the burden of regulation and red tape, he means the national minimum wage, which would go under the Conservatives; he means the right to paid holidays, which would go under the Conservatives; he means that the opportunities that we have provided for trade union recognition would be denied; and he means that health and safety would be put to one side.

That is the Tory prescription for manufacturing industry and for industry generally. We will not embrace that approach. All that the Tories offered was boom and bust. We offer economic stability and a far better way forward.

Mr. Paul Flynn (Newport, West)

There was no malaise at Llanwern, which has the highest productivity, high investment and high tech—a brilliant success for Britain.

Today, we have witnessed the butchery of the steel industry. There have been many crises in the steel industry in the past 50 years. They have all been solved by common sense, agreements and deals done between Government and the industry. Today, we have seen the industrial heart ripped out of the Ebbw valley. Six months ago Corus said that it intended to invest £150 million in the furnace at Llanwern. Today, that prospect was given the death sentence. That will mean that the rest of the plant is less viable.

Is it not true that by rumour, by denial of dialogue and by refusing to consider any alternative deal, Corus has callously and cynically manipulated the position, indifferent to the suffering of local people, entirely for the internal benefit of one single company? The assets and skills of Llanwern are being stripped out to benefit the company, and the contracts will be enjoyed by its Dutch arm.

Is it not right for us to censure Corus today—

Mr. Nigel Evans (Ribble Valley)

The hon. Gentleman should censure his own Government.

Mr. Flynn

Those who claim that this is a party political matter will rightly be treated with contempt by those who have seen their futures destroyed by Corus. It should be seen as a company with an undeveloped social conscience, but a highly developed instinct for greed.

Mr. Byers

Labour Members understand the anger articulated by my hon. Friend on behalf of his constituents. There is a personal element in what he says: he worked at Llanwern for a number of years.

There is no doubt that the process and procedures adopted by Corus run counter to most of the ways in which British business should be operating at the beginning of the 21st century. It has not involved the work force: it has made no attempt to explain the policies or the difficulties. The review has been in progress for nearly two months, but there has been no attempt to adopt a partnership approach.

Our message to Corus is clear. We understand the difficulties that it faces, but we believe that it can overcome those difficulties if it works in partnership with the Government, trade unions and the National Assembly for Wales. The steel industry operates very much on an economic-cycle basis. It is experiencing difficulties now, but good times will come. What worries the Government is that capacity and jobs are being lost, and that when we have opportunities in future we shall not have a strong steel industry that can take advantage of those opportunities.

Mr. Richard Livsey (Brecon and Radnorshire)

Most right-thinking people will probably agree that Corus has displayed a disgraceful neglect of its work force—the most productive steelworkers in Europe. Those running the company have behaved like a bunch of 19th century ironmasters. The loss of 6,000 jobs in south Wales, Yorkshire and north-east England is a tragedy for those workers and their families.

Is the Secretary of State aware that today Corus is recruiting steelworkers for its plant in Holland, but sacking workers in the United Kingdom? Does he believe that the crux of the matter is the euro and, indeed, exchange rates, which have caused every ton of steel produced in the United Kingdom to make a loss? When will the Government address that problem?

Does the Secretary of State agree that our employment laws are inadequate to protect British workers, compared with those on the continent? When will the Government produce legislation to give British workers the same protection as their counterparts in Europe?

Why did the Department of Trade and Industry allow British Steel to amalgamate with Corus without considering some of the problems that have, in fact, resulted? There is no doubt that many communities will be devastated—not least Ebbw Vale, on the boundary of my constituency, which has been dealt what amounts to a knock-out punch.

The number of job losses in Llanwern is enormous. What we need now is a crash programme of investment. Will the Secretary of State plead with the Treasury for extra money for the Welsh block grant, to ensure the establishment of the new industries that will be so badly needed?

Mr. Byers

The hon. Gentleman raises the important question of what would happen if Corus proceeded with the plans that it announced today. I hope that the House will be united in sending Corus the clear message that we want it to reconsider, but, as I said in my statement, if it fails to do so we shall need to work alongside the individuals and communities affected by the decision.

We need to ensure that regeneration measures and job creation programmes are supported, and we shall certainly do that. We will not walk away from the difficulties being experienced by those individuals and communities.

The hon. Gentleman raises United Kingdom employment law. Of course the European works council provisions apply to Corus as a company that operates in two European Union countries. There are signs that the European works council provisions are perhaps not working as effectively as they should, and the Government will certainly want to consider that.

The hon. Gentleman will also be aware that, only last week, in the light of events that occurred elsewhere, I announced that we would consult the Trades Union Congress and the Confederation of British Industry on our domestic information and consultation arrangements. We have already had first meetings with both organisations, and I hope that we can make progress with those discussions as quickly as possible.

Mr. Martin O'Neill (Ochil)

Labour Members are shocked by the fury that my right hon. Friend is expressing and the way in which Corus has sidelined the Government and rejected out of hand the offers of assistance and support that have been proffered. Will he tell the House of the discussions that he has had with Corus and the attitude that the company has adopted towards him? I think that it would be instructive for the House to appreciate the manner in which the company behaves.

Will my right hon. Friend, in considering what we do next, try to impress on Corus that if it is not prepared to save the jobs, it should try to save the plant so that others can take on the responsibility of steel making. Then, if and when we join the euro and our circumstances change dramatically, we will be able to take advantage of new market conditions and new industrial opportunities which many of us see as the future for our country?

Mr. Byers

There have been numerous meetings with the company and with the chief executive since the review started at the beginning of December. However, the chief executive indicated very early in those discussions that a package of measures to assist the company would not be enough to remedy its underlying problems as he saw them.

My hon. Friend will also be aware that, at the end of last week, there was an approach by those representing the work force at Llanwern about the possibility of taking over the plant and operating it themselves. As I understand it, Corus has dismissed that possibility because it does not want someone to be competing against it in the market. That was the company's reason, and I hope that it will reconsider that approach. If the work force genuinely feel that they can take over the plant and make it run profitably—we have seen at Tower colliery, in south Wales, that it can be done—I hope that Corus will give the idea proper and detailed consideration.

Mr. Ian Bruce (South Dorset)

Will the Secretary of State answer the question asked by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) about which communities will lose the other 3,000 jobs?

Mr. Denis MacShane (Rotherham)

Read the press release.

Mr. Bruce

The hon. Gentleman obviously has not read the press release; I have it in my hand.

Has the company given details of those job losses? The Secretary of State says that he has had extensive talks with the company. Has Corus said that it did not want to give details on job losses to the DTI because when Vauxhall did so, they were leaked to the press and the poor people who were losing their jobs learned about it on local radio?

Mr. Byers

The hon. Gentleman keeps making that accusation about Vauxhall, which he knows is untrue. If he wants to learn the details of the Corus announcement, he should talk to Corus.

Ms Dari Taylor (Stockton, South)

It is appropriate that my right hon. Friend should know of the anger of the work force on Teesside and in my constituency at this devastating news. They believe that their livelihoods and their families are unquestionably in desperate straits. My right hon. Friend will also want to know that my constituents' anger has been increased by the fact that they heard the news on the radio. Representatives of the lion and Steel Trades Confederation were refused the opportunity to discuss with management what options existed to save jobs.

My constituents have also been told that a further 3,000 jobs are to go. It is possible that they will hear on the radio the news about where those jobs will be lost. The work force are angry and their families are exceedingly anxious. My constituents would like to know how many times the Government approached Corus to achieve a resolution. Did the Government offer the company an effective package worth some £85 million, which it refused even to contemplate?

Mr. Byers

As I said earlier, there have been numerous meetings with Corus over the past two months, but the difficulty was that Corus would not enter into a meaningful dialogue or discussion about working together to overcome the difficulties being experienced by the industry.

I understand the anger that my hon. Friend's constituents must feel. It is bad enough to lose one's job, or have it threatened, but I hope that all hon. Members will agree that to learn about it from a local radio broadcast is unacceptable. We have begun the consultation on information in part to find a better way forward, to ensure that a similar event does not occur in the future.

Mr. Patrick McLoughlin (West Derbyshire)

Is the Secretary of State proud of his record and that of his Department? He did not know about BMW or Corus, and he makes statements to protect the textile industry while wearing a South African suit. Is it not about time that his job went too?

Mr. Byers

I do not know where the hon. Gentleman's suit was made, but he will be pleased to know that I am wearing an English-made suit. Perhaps a Whip will find out soon where the hon. Gentleman's suit was made.

On the serious point, the reality is that the Government engaged with Corus, but that Corus did not want to enter into dialogue with the Government. On behalf of the Government and the 6,000 steelworkers who have lost their jobs, I am asking Corus today to think again and to work with us, to find a better way forward and to overcome the company's difficulties.

That is the message from the Government. I regret the fact that the Tories have not joined us in that call.

Mr. Win Griffiths (Bridgend)

I congratulate my right hon. Friend on setting out very clearly the miserable way in which Corus has dumped British workers on the scrap heap. Sir Brian Moffat now joins Sir Ian MacGregor in the history of treachery in the steel industry: both have treated British steelworkers in a miserable way, and both have been honoured with knighthoods. That is a great pity.

Will my right hon. Friend confirm that Corm refused to discuss aspects of the plans that it was making, and that it blocked the Government's efforts to begin the process of regeneration by refusing to give the age profiles of the workers in their plants? Will he further impress on Sir Brian Moffat that it was that work force who earned British Steel such profits that it was able to throw £700 million at shareholders to get them to agree to the merger with Corus? I wonder what those shareholders are thinking about Sir Brian's actions now. I hope that further representations will be made to Corus to try to save something from this disaster.

Mr. Byers

My hon. Friend knows from his constituency experience exactly what large-scale job losses mean in the steel industry. If I recall correctly, in the Tory years about 10,000 steel jobs were lost in his constituency, so he will know at first hand the difficulties that will be encountered. We will certainly continue to make representations to Corus. I hope that in the face of the anger that has been expressed today and the shock felt by the communities and the individuals affected by the decision, Corus will engage far more constructively and that it will reconsider its announcement.

Mr. Richard Allan (Sheffield, Hallam)

The Secretary of State may be aware of a particular problem that all the steel areas face, including my own in south Yorkshire, which this announcement can only make worse. I refer to high levels of long-term sickness and unemployment among older workers who have left the steel industry as a result of previous redundancies, or who will leave it in future. Does he agree that if ever there were a priority for joined-up Government action, it would be to offer new opportunities to people who have had to leave the steel industry so that they are not simply left to face 10, 15 or 20 years of inactivity followed by retirement? Does he agree that many national programmes, however well intentioned, have failed to touch those groups? Will he make it a priority for his Department to do something to help?

Mr. Byers

We have been working for some time now in this area because of the needs referred to by the hon. Gentleman. I hope that in the very near future we will be able to make proposals, perhaps as part of a package in response to today's announcement. As I said, I hope that Corus will reconsider its position, but if it does not, we will need to introduce a package of measures to provide help for those affected and, in that context, we will need to address the issue referred to by the hon. Gentleman.

Ann Clwyd (Cynon Valley)

I am glad that my right hon. Friend mentioned the experience of Tower colliery in my constituency. When the previous Government and the Coal Board wanted to shut down the pit, the workers said no and set up a workers' co-operative. Will my right hon. Friend put every pressure possible on Corus to allow the men to be given the chance to run their own business? The men know better than anyone where efficiency savings can be made in the industry. Give the men in the industry a chance if the owners have failed.

Mr. Byers

My hon. Friend makes a powerful point. When my right hon. Friend the Secretary of State for Wales and I met Sir Brian Moffat this morning, we made exactly that point about providing an opportunity for workers at Llanwern, who suggested last week that they were interested in taking over the plant. We urged him to give detailed consideration to the proposal. Corus has resisted so far, but I hope that in the light of today's announcement it will now give detailed consideration to the proposition from the ISTC.

Mr. Tony Baldry (Banbury)

Of course, mass sackings are not consistent with the image of an economically buoyant Britain that the Government wish to spin in the run-up to an election. However, the Secretary of State has to accept that the board of Corus is acting not capriciously but because the company is making losses. That is happening because of the cheap imports of steel to this country and because a loss is made on every ton of steel made here. Until the Government are prepared to face up to why that is happening, there will continue to be a haemorrhage of jobs from the steel industry and from UK manufacturing. When will the Government show some leadership on that issue?

Mr. Byers

I know that the hon. Gentleman has strong views about the European single currency, and he may find himself isolated in the Conservative party at present. He gave a coded message, which I hope his Front Benchers heard. We are aware of the issues to which he referred and we have a clear policy on them. We are keeping the option open, and I think that business understands that. Only a week ago, Nissan took its very positive decision because we kept the option open and did not rule it out for the next Parliament.

Mr. Ian Cawsey (Brigg and Goole)

My right hon. Friend will welcome the news that if he can have conversations with Corus over the aid package that has been put in place, workers at the Scunthorpe site will support him in all his endeavours. Scunthorpe and the north Lincolnshire area are losing objective 2 status, which is in a transitionary phase. Four hundred jobs could be lost at the Scunthorpe works on top of the 670 jobs already lost. Will my right hon. Friend give an undertaking to look at the objective status of the north Lincolnshire area and to see what further money can be invested to assist in the regrowth of that economy and to help those people find jobs?

Mr. Byers

Our first task must be to try to get Corus to reconsider this morning's announcement, but my hon. Friend makes an important point: the more than 400 jobs that are projected to be lost at Scunthorpe are on top of the nearly 700 losses that Corus declared last year. Of course, if Corus proceeds with the proposals announced today, we will put in place a package of measures to ensure economic regeneration and job creation in the affected areas. I assure my hon. Friend that we shall carefully examine how we can do that in Scunthorpe and north Lincolnshire.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

There is no doubt that today's announcement is disastrous for the communities in Teesside, Yorkshire and Wales that will be so badly affected; it is a real body blow. While I acknowledge that Corus has hitherto behaved very badly, does the Secretary of State realise that since Labour took office, 16,000 jobs have been lost in manufacturing in Wales? Is it not a fact that keeping inflation down has become something of a sacred cow? Should we not be looking at fiscal rather than monetary policies to control inflation? Does he agree that the Monetary Policy Committee should consider employment as well as inflation? Will he please tell the House what kind of help was on offer to Corus?

Mr. Byers

The hon. Gentleman will know that the Welsh Assembly proposed a detailed package of measures, and support would have come from the United Kingdom Government as well. It was carefully tailored to ensure that we did not come into conflict with any European Union state aid provisions. In the end, it was clear that Corus did not want to engage in those discussions. The company said that discussions would make no difference to today's announcement. I regret that, because if we had had a genuine dialogue, we could have gone through with Corus the details of the support that would have been available. We may not have avoided all the consequences of today's announcement, but we would have been able to alleviate some of the pain now being suffered in many communities.

On the Government's economic policies, short-term measures could be taken, which might be broadly supported, but which would, in the medium and long term, cause lasting difficulties. Wales knows that because it went through a desperate, painful period in the early 1980s. There are difficulties at the moment, but people in Wales, especially in south Wales and at Shotton in north Wales, know that they do not want to return to the early 1990s, when not thousands but tens of thousands of jobs were lost.

With respect to the hon. Gentleman, the policy prescriptions that he proposes may receive plaudits today, but they will reap real problems in the medium and long term, with tens of thousands of job losses in Wales and throughout the United Kingdom.

Several hon. Members

rose—

Mr. Speaker

Order. I wish to help every hon. Member in this very serious matter, but I need the co-operation of the House. Questions must be brief if I am to call every hon. Member who wishes to speak.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

May I tell my right hon. Friend that anyone who knows the history of Ebbw Vale and the surrounding communities, some of which I represent, will know that steel making is vital to our communities? A total closure, such as that proposed, would therefore be desperate and devastating. Even at the eleventh hour, will my right hon. Friend make an appeal to Sir Brian Moffat and Corus because they owe a responsibility not only to their shareholders and bankers, but to the people who have made the industry such a great success?

Mr. Byers

Many communities will suffer if today's announcement is implemented, but Ebbw Vale in particular will be devastated by the announcement of the whole plant's closure. That community and town has developed very much on steel, the fundamental core of its economic activity. If Corus proceeds with the closure of Ebbw Vale, the Government and the Welsh Assembly will work alongside the community and the individuals affected to help them through a painful and difficult time. Better than that, however, we urge Corus to think again, to reconsider its proposals and to find a way in which Ebbw Vale can retain steel-making capacity. As my hon. Friend suggests, I urge Corus to reconsider the decision that it has taken today.

Mr. Christopher Chope (Christchurch)

Did the Government not know that this disaster was impending? Last October, in evidence to the Select Committee on Trade and Industry, the Secretary of State's Department analysed the problems faced by the steel industry and came up with an extremely complacent response. If the Government had got down to solving the problem then, developing the package of support that the Secretary of State tells us that they have offered—late in the day—to Cores, might not the disaster have been averted? Was not one contributory factor the high cost of energy in this country in comparison with that of our European competitors?

Mr. Byers

The reality is that when Corus had two joint chief executives, I discussed with them the possibility of support and assistance for the industry. The hon. Gentleman will be aware that those joint chief executives were dismissed in early December, which led to the review that we are dealing with—the consequences of which were announced today. We have been engaged with the company but, as I said in my statement and in reply to hon. Members, the company simply did not want to have a dialogue about how we could work in partnership to identify a better way forward.

Mr. MacShane

When Nissan and Boeing are investing in the UK, when there are 1.1 million new jobs here and 4.7 million new jobs in the euro zone and when Europe and Britain are growing, it is crazy to take so much steel capacity out of our economy. Sir Brian Moffat will ask a sacrifice of many men and women. May I suggest that he adds his own name to that list of sacrifice by resigning? A new leadership at Corus—because we must look forward—should work with the Government, the unions and even some Opposition Members, who understand the needs of manufacturing, to build a policy that gets us fully into Europe. The pound-euro imbalance has been the main cause of those running losses. We need a policy whereby we use more steel in the UK. The Tory anti-manufacturing policies that Corus so brilliantly represents are at the root of the problem.

Mr. Byers

My hon. Friend makes an important point when he draws the attention of the House to the significant announcements made in recent weeks that core manufacturers have decided to invest in the United Kingdom. He was right to point out that Boeing made an announcement yesterday; there were also announcements from Nissan seven days ago and from Toyota at the beginning of January. If Corus takes the opportunity to reflect on today's announcement and on those decisions, it will recognise that manufacturing in the United Kingdom has a strong base. We have sectors of great growth—for example, in aerospace—for which steel will be required in the future. Corus will still employ 22,000 people after today's decision, showing that there is a long-term, viable future for the steel industry in the UK. The Government want to work with Corus to identify a common agenda, so that the company can meet its responsibilities and we can give hope to the individuals and communities affected.

Mr. Frank Roy (Motherwell and Wishaw)

I would like to be able to say that the last remnants of the Scottish steel industry at the Dalyell and Clydebridge plants have avoided the cuts because of the lobbying carried out by my hon. Friend the Member for Glasgow, Rutherglen (Mr. McAvoy) and myself, but it would not be true. Frankly, the management of Corus have shown me that they do not give a damn for local politicians or, indeed, for the work force. As someone who has spent most of his life in a steelworks, I point out that tomorrow morning, 6,000 men will wake up with real fear for the first time in their lives—fear that the skills that they have honed working in blast furnaces, coke ovens, strip mills, boss plants and continuous casting plants will no longer be of any use to them. Will the Secretary of State ensure that, if those men lose their jobs, retraining will be given as quickly as possible?

Will the Secretary of State also ensure that he does not look across the Floor for lessons from Tory Members? The Tory party tried to smash steel trade unions into the ground in the 1980s; they sold off British Steel—

Mr. Speaker

Order. I think that the Minister has heard what the hon. Gentleman has to say.

Mr. Byers

My hon. Friend makes a powerful point based on his experience of the steel industry. If Corus does not withdraw these proposals, we will want to work with the individuals affected to ensure that their skills can be used to good effect in new jobs that give them good prospects for the future.

Mr. Stuart Bell (Middlesbrough)

One of the few worthwhile things that the shadow Secretary of State for Trade and Industry said was that a ripple effect would follow today's announcement by Corus. More jobs might be lost if it continues with its present line.

May I underline the remarks of my hon. Friend the Member for Stockton, South (Ms Taylor)? BBC Radio Cleveland announced the closure of the coil plate mill on Teesside, and we have made representations for a month about that plant without receiving any significant response.

Will my right hon. Friend impress on Corus the importance of the pension rights of the people who will be transferred? I understand that those rights will be frozen until people reach the age of 65, and that fact is causing additional anxiety. My final plea is to call on the House to be unanimous in calling on Corus to think, think and think again.

Mr. Byers

I hope that that will be the case, but I regret the fact that the Conservative Opposition did not join us in asking Corus to reconsider its approach.

We shall certainly raise my hon. Friend's specific point about pension rights with the company, because the issue is of great concern to the people who might be affected. I also share his concern about the way in which the work force on Teesside learned of their future. To hear the news on a local radio station must have rubbed salt into their wounds.

Mr. Derek Wyatt (Sittingbourne and Sheppey)

Corus's behaviour makes it a founder member of those who represent the unacceptable face of global capitalism. A steel mill in Sheerness in my constituency is owned by ASW Holdings of Cardiff. Workers there and at Corus have raised the issue of pension funds. One of the attractions of takeovers arises when the smaller company has a much richer pension fund. The pension funds of the two companies are merged, the trusts are changed and the owners of the new pension fund raid it. That has happened at Corus, and it could happen at ASW. Will my right hon. Friend examine the way in which pension funds are operated in the steel industry?

Mr. Byers

My hon. Friend makes an important point. We have already considered in some detail the way in which the new company, Corus, which emerged from British Steel, has used the pension fund. So far, it appears that it has operated perfectly lawfully, although I know that many Labour Members think that its conduct has been unacceptable. Perhaps we should re-examine the rules that apply to pension funds.

Mr. Lindsay Hoyle (Chorley)

Is my right hon. Friend aware that, just over 12 months ago, Corus invested in a French steel plant that cost £80 million? A further £22 million was invested in that plant to produce rail lines that could easily have been produced at one of the plants in the United Kingdom that is now suffering from redundancies. That is unacceptable.

Mr. Byers

The House will understand that companies take commercial decisions on what might be a good long-term investment. We are saying to Corus that it needs to take a long-term approach to the steel industry in the United Kingdom. If we had had the levels of investment that my hon. Friend mentioned, some of the difficulties being experienced today might have been overcome.

The Government can impress on Corus the damaging effects of its decision. We stand ready and willing to work with it to identify a practical way forward that will overcome the problems that Corus is facing—clearly, there are problems—and to do so in a way that will secure the long-term future of the industry in the United Kingdom and the 6,000 jobs that are at risk as a result of today's announcement.

Mr. Huw Edwards (Monmouth)

Today's news will be devastating to my constituents who work at Llanwern and an insult to those who worked there and paid the price in early retirement and redundancy to help to contribute to making the plant more profitable. Sir Brian Moffat met a group of Welsh Labour Members on Monday evening and assured us that he had made no decision about any plant. If that were the case on Monday, what happened during the past two days? Have all the decisions been taken in just two days? If they have, does that not show how short term they are? If he was not telling the truth, does it not show his deceit and the contempt with which he has treated the Government, the House and the work force?

Mr. Byers

My hon. Friend speaks powerfully on behalf of his constituents, and I fully understand his concern. It is clear that over several years the work force at Corus have demonstrated a lasting commitment to the industry and done everything asked of them. They have improved productivity and have been prepared to take early retirement, where appropriate, to secure the future of the industry and their colleagues. It is about time that Corus demonstrated a similar commitment to its work force, and it can do so by reconsidering the decisions and announcement that it made earlier today.