HL Deb 09 June 1980 vol 410 cc4-7

2.40 p.m.


My Lords, on behalf of my noble friend Lady Elliot of Harwood and at her request, I beg leave to ask the Question which stands in her name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they are aware of the very bad effect the imminent closure of the Scottish Pulp and Paper Mills at Fort William is having on forestry in Scotland.

The MINISTER of STATE, SCOTTISH OFFICE (The Earl of Mansfield)

My Lords, the Government are extremely sorry that the pulp mill at Fort William is to close, and are very much aware of the concern of the forestry industry in Scotland. The object remains to encourage the establishment of a wood-based industry at Fort William and the possibilities are being urgently re-examined. Meanwhile, strenuous efforts are being made to develop alternative outlets for the wood, partly by a redistribution to existing British industry, and partly by export as a short term measure. There are good prospects of maintaining employment in forest harvesting and wood haulage on that basis.


My Lords, I should like to thank my noble friend for that reply. Is he aware that the pulp mill at Fort William was the first big manufacturing industry in the Highlands for 75 years? While I welcome everything he says about trying to develop another one, or some alternative, I do not believe that shifting the timber elsewhere, and particularly exporting it, would be of very much value to the Highlands. Secondly, may I ask my noble friend whether the strengthening of the forestry industry, which is a very long-term industry, is not the perfect use for some of the oil revenues which are, by nature, rather short term? Lastly, will my noble friend agree that it is remarkable that my noble friend Lady Elliot should have asked not about sheep but about timber?


My Lords, I appreciate what my noble friend says. Unfortunately, the fact remains that this plant has never been viable and, in any event, was coming to the end of its useful life so far as the machinery is concerned. In those circumstances, the firm of Wiggins Teape gave notice that they could no longer continue in production. So far as my noble friend's second point is concerned, I want to emphasise that the export of wood as a raw material in these circumstances is of course, if I may say so, repugnant, but it will in fact save not only the private forestry sector but also the jobs of many employees of the Forestry Commission, and it is a short-term measure to keep the forestry industry going.

So far as my noble friend's third question is concerned, I am happy to say that we now have, by virtue of what my right honourable and honourable friends have achieved in Brussels, a sheepmeat regime which will bring much-needed relief to Scottish sheep farmers and at the same time a steady supply of sheepmeat to the consumer at no extra cost.


My Lords, is the Minister aware that this has caused the greatest disappointment to the workers and company alike because of the failure to bring this project to a successful conclusion? Will he bear in mind that there is a contradiction in our closing one of the outlets for forest products when he, as I know well, is working very hard to bring about an effective forestry policy? Will he accept that the two go together: that the paper industry and the pulp mill help the whole of the forestry policy by taking the thinning trees and thereby enabling greater profitability and more effective working of mature forests? Will he therefore keep this scheme in mind and under constant review?


Yes, my Lords, I am aware of the keen disappointment of the workforce about this closure; indeed I met a section of them only last week, and if I had any doubts they certainly removed them. The difficulty of the matter is that although, as my right honourable friend announced in another place, the Government had assistance available under Section 7 of the Industry Act 1972, and that by volume was comparable to other projects of comparable size and importance, and furthermore we should have been in a position to pay regional development grants up to the statutory provisions, and bearing in mind the fact that the Forestry Commission were prepared to offer the raw material at an extremely keen price, in spite of all those inducements, if I may so call them, the other company which was going to come in with Wiggins Teape felt that the return on their capital would not be sufficient for the project to go forward. It is in those circumstances that Wiggins Teape announced the closure of the plant and it is in those circumstances that the Government, as a matter of extreme urgency, are looking at a number of alternatives, one of which we hope might provide a solution, but I would not want to he over-optimistic at this stage.


My Lords, may I ask the noble Earl to confirm that the Government will do all they can to encourage the home-grown timber industry in the United Kingdom so that we do not have to rely quite so heavily on imports from Finland and the Soviet Union?


Yes, my Lords.


My Lords, while agreeing with my noble friend that probably the best thing in the circumstances has been done in this case, may I ask whether he would agree that it enormously reinforces the importance of getting a satisfactory strategic forestry policy for this country formulated and implemented?


My Lords, my noble friend may be aware, and certainly some Members of your Lordships' House will know, that Ministers responsible for forestry are currently reviewing aspects of forestry policy, and we hope to be in a position to make an announcement soon.


My Lords, may I ask the noble Earl to say what is the view of the Scottish Development Agency and the Highlands Development Board, and is this not a case where, if private industry cannot solve what is really a social necessity of the area, there is possibly a case for public industry?


My Lords, I hoped I had already covered what the noble Lord is asking. The State agencies were ready, willing and, if I may say so, filled with necessary funds to come to the aid of the particular firm in this instance who were going to take over from Wiggins Teape and produce a new wood processing industry at Fort William. As I said, we were, as a Government, available to offer advice and encouragement and, perhaps more important, the necessary cash—I would emphasise, on a grant basis and not on a basis of loan—which we hoped would be sufficient to continue the employment of those who are currently engaged in the Wiggins Teape operation at Fort William. But, as I said, unfortunately the Canadian firm in question came to the conclusion at the end of the day that the whole operation would not be sufficiently profitable so far as they were concerned, in the sense that it would not give them the return on their money to which they felt they were entitled; and in those circumstances they withdrew.