HC Deb 03 May 2001 vol 367 cc962-6
2. Mr. Denis MacShane (Rotherham)

If he will make a statement on the future of the UK steel industry. [159059]

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

This morning, Corus has announced that it intends to proceed with the redundancies that it first outlined on 1 February. I know that many Members will understand and share the bitterness felt by Corus workers at this decision. Our priority now must be to offer practical support to the individuals affected and to put in place measures to promote economic regeneration and job creation.

For the individual steelworker, we will provide training opportunities and support from the Employment Service. In addition, to assist those individuals we will introduce a modernised form of the previous iron and steel employees re-adaptation benefits scheme—ISERBS. We shall do this under article 56 of the European Coal and Steel Community treaty. Under our proposed scheme, we will draw down European Community funds, which are available only until July 2002, so that each worker will receive an additional lump sum of about £2,500. That will complement the support for training that we are also making available and the employment credit for the over-50s.

The revised ISERBS scheme will cover not only those steelworkers affected by the announcement of 1 February, but all those made redundant from January 2000. About 12,000 steelworkers will benefit. In England, we shall put in place a package of regeneration measures at a cost of £48 million. A programme on a similar scale is being announced by the First Minister in Wales.

When Corus first announced these redundancies, we said that we would not walk away from the workers affected, their families or the communities in which they live. With a programme of action to bring hope to individuals and economic regeneration and job creation to those areas involved, today we are delivering on that commitment.

Mr. MacShane

Steelworkers will be sad that Corus has broken off its talks with the trade unions, turned away from the path of partnership and put 6,000 men on the dole. It has done so in a context in which the steel industry has inherited politics that have been hostile to manufacturing for 20 years. In the 1990s, Britain was the only country in which steel consumption went down, while it went up in America and Europe.

Mr. Speaker

Order. I know that the hon. Gentleman feels strongly about people losing their jobs, but he must ask a question so that the Minister can reply to it.

Mr. MacShane

Will my right hon. Friend join me in condemning Corus, and will he ensure that the ISERBS money that I first suggested, I think, last year is brought quickly into play? Will he also leave on his desk, for either himself or his successor, some new thinking on how manufacturing can be supported after the election? While he and the Prime Minister are committed, the attitude in Whitehall and the City remains hostile. We need a new deal and a new manufacturing policy.

Mr. Byers

I will leave a memo for myself on my return to the Department. It will make it clear that manufacturing must be regarded as a priority for any country that wants a stable economy in the future.

My hon. Friend made two specific points about the modernised ISERBS. We will deliver it as quickly as we can. It is subject to approval from the European Community, but we have notified the Community of our intention to introduce a scheme, and we expect approval to be given very soon.

As for the actions of Corus, we hoped that the company was genuine when it said that it wanted to discuss with the unions proposals for restructuring to find an alternative way forward. It is a matter of deep regret, to say the least, that when the unions presented their alternative proposals on a plant-by-plant basis, they were rejected out of hand by Corus. I think that when the management of Corus reflect on their actions in this whole saga, they will realise that the trade unions were right and Corus was wrong.

Mr. Michael Fabricant (Lichfield)

The Secretary of State will know that Corus is maintaining its operations in other parts of the world. Since its decision, Motorola has also had to make a decision about whether to close plants in Britain or in Germany. Is the right hon. Gentleman aware that a director of Motorola has reminded me that, during his stewardship of the Department of Trade and Industry—

Mr. Speaker

Order. I cannot allow a question on Motorola; the hon. Gentleman must ask a question about the steel industry.

Mr. Fabricant

rose—

Mr. Speaker

Is the hon. Gentleman going to ask about steel?

Mr. Fabricant

Yes, Mr. Speaker.

I was reminded that, during the right hon. Gentleman's stewardship, the United Kingdom's competitiveness has fallen from fourth place to 10th. Would that not have affected Corus's decision on whether to stay open in the United Kingdom, just as it affected Motorola's decision? Why is Corus closing in the United Kingdom, and not in Germany and the United States?

Mr. Byers

If the hon. Gentleman looks at figures showing the way in which manufacturing employment has declined in Germany, France, the United Kingdom, Japan and the United States—all the major industrialised countries—he will see that the percentage fall has been broadly the same in all those countries.

What the hon. Gentleman failed to mention was that this morning Ernst and Young is publishing its latest figures on inward investment in Europe. It has said very clearly that the United Kingdom is the number one location for such investment.

Mr. Llew Smith (Blaenau Gwent)

I welcome the package negotiated by the Government, particularly the additional money for Ebbw Vale and the additional £2,500 for each worker who has been made redundant. Does my right hon. Friend accept, however, that no package deal can compensate for the loss of more than 1,000 jobs in Blaenau Gwent, one of the poorest areas in the United Kingdom? Does he also accept that since Corus was formed, instead of concentrating their energies on building up the steel industry, Moffat and his fellow directors have done nothing but asset-strip the industry and line their own pockets? Does he agree that the honourable thing for Moffat and his directors to do now is resign?

Mr. Byers

There is no doubt that today's confirmation by Corus of its decision will be a bitter blow for Blaenau Gwent, and for communities in that part of south Wales. The First Minister is making a statement in the Welsh Assembly today, outlining a package of some £32 million to help Ebbw Vale and Llanwern overcome the difficulties that they will face.

My hon. Friend is right to point out that although there will be a measure of regeneration and job creation, that will not help individuals who face the prospect of losing their employment now. They need to know that they have a Government working alongside them, alongside their unions and alongside their community to find a better way forward, and that is what the package seeks to achieve.

As I said at the outset, the bitterness and anger felt by Corus workers will be shared by many Members of Parliament. What we must now do is work through this difficult period, and offer individuals, their families and communities, in Blaenau Gwent and elsewhere in Wales and England, some real hope for the future.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

Given the evidence that the Welsh Affairs Committee heard yesterday from the joint chair and chief executive of Corus that the Government have been on notice of huge redundancies since the beginning of last June and that he has met the right hon. Gentleman several times, why has no rescue package whatever been offered to the company until now?

Mr. Byers

I think that the hon. Gentleman is aware, because he has followed the discussion, that a package was offered to Corus, but was turned down. Sir Brian Moffat indicated very clearly that the measures that we were prepared to put in place were not significant in terms of the overall problem that he faced, but a package was there. We have had this discussion in the House before. Corus was simply not interested in the package.

I have noted what Sir Brian Moffat said before the Welsh Affairs Committee yesterday, but I reinforce the point that I have made to the House on previous occasions—we were ready and willing to come forward with a package, but Corus was simply not interested.

Mr. Paul Flynn (Newport, West)

Is not it contemptible that this amoral international company played off one group of workers in this country against groups of workers elsewhere? Newport will suffer severely from Corus's decision, but it is a resilient town that will start to fight back now.

Although we are grateful for the resurrection of ISERBS, will the Secretary of State and the Government look at the proposal by Newport borough council to introduce a regeneration company, which will act positively to rebuild the economy of Newport—which still remains, even after Corus's decision, the most attractive place in Wales for new business investment?

Mr. Byers

My hon. Friend is right. Great strengths exist in Newport which will see it through the difficulties that it will face over the coming weeks and months. He makes an important point about the valuable role that an urban regeneration company can play. In his announcement in Cardiff this morning, the First Minister will outline that that is very much one of the options that he wants to pursue with the local partners in Newport and in that part of south Wales.

Mr. David Heathcoat-Amory (Wells)

The Secretary of State is now trying to clear up the mess in the steel industry of his own making and as usual he blames everyone but himself. It is the Government who have been in charge of economic policy for the past four years. Will he confirm that, this week, he received a letter from seven manufacturing trade associations describing what they call a downward spiral in their industries, and demanding the withdrawal of what they term the damaging and unfair climate change levy and a halt to the 10 business regulations a day that the Government have imposed on them over the past four years? Will he also confirm that, according to the Government's own figures, the productivity gap in the steel industry and in other British industries has widened since 1997? Before he denies that, it comes from his Department's expenditure report published two months ago.

In the face of the mounting job losses and all the complaints from the people at the front line of British industry, will the Secretary of State at last start to listen to what manufacturing is telling him and start to stand up for British industry against the demands of the Treasury, or is he content for manufacturing to be the sector that Labour forgot?

Mr. Byers

Because it suits the right hon. Gentleman's purpose, he does not mention the fact that large sections of manufacturing are desperate for this country to join the single European currency. He does not mention that because it does not fit in with his political agenda. He wants to make a broader political point, so he ignores the situation in steel. He mentioned productivity. He needs to be aware that the 6,000 people who have today been made redundant by Corus are some of the most productive steel workers in the world—that is the reality of the situation.

Steel productivity has improved dramatically in recent years. Decent, hard-working people have been affected by today's decision. As the main question is on steel, the right hon. Gentleman should consider the steel productivity figures. If he addressed that issue, he would realise that those people are productive workers who have dramatically improved their productivity.

Steelworkers across the country, whether in south Wales or in Teesside, know what happened to their industry under years of Tory rule—they were slaughtered under the Tories, and nothing was done to help them. They were the innocent victims. The Government of whom the right hon. Gentleman was a member walked away from what they did, but we will not do that.

Mr. Speaker

Order. I say to the Minister and to Opposition Front Benchers that I want shorter questions and shorter replies.