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5.1 pm

Mr. Barry Jones (Alyn and Deeside): I am glad to follow the hon. Member for South-West Bedfordshire (Sir D. Madel). I did not agree with his concluding thrust, but I know him to be a distinguished parliamentarian and an advocate for his constituency. He defends his constituency and I appreciated the overall content of his speech.

I am happy to support the Gracious Speech. I very much like the Atlee-esque first sentence:

I have no doubt that those are the very words that the great Mr. Attlee put in his party's election manifesto as long ago as 1945. With a little more luck, the Chancellor of the Exchequer and the Prime Minister will have stable levels of growth and employment.

I welcome the measures to combat crime, assist the national health service, develop our schools, tackle social security fraud and give us the chance to get rid of hunting with dogs. As a Welshman, I look forward to the Government setting up the children's commissioner for Wales--not before time--and I very much like the elliptical phrase in which Her Majesty's Government say that they are

--amen to that.

My remarks will relate to the economy, British manufacturing and the steel industry in particular. My constituents at Shotton steelworks are anxious about the weekend boardroom coup in the Anglo-Dutch Steel Company, which is now named Corus. The joint chief executives have been sacked, the finance director has been replaced and the chairman--a one-time Shotton steelworks works director--has assumed control. It looks like a particularly bloody coup. What are the implications for the Shotton steelworks in my constituency, where about 1,200 men and women are employed?

Shotton was once a mighty 15,000-strong integrated steelworks. Then we suffered Europe's greatest ever redundancies. We now need to know the implications for Shotton steel workers of the boardroom changes in Corus.

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The Times--still a newspaper of record--speculates that up to 8,000 steel jobs will be lost in the new year, and that a plant will close in Wales or on Teesside. It refers to unrest among shareholders, but that unrest is as nothing compared with the unrest among steel workers in Britain. I do not want Shotton steelworkers sacrificed on the altar of short-term shareholder selfishness. I do not want the British steel industry sacrificed and truncated because shareholders are bullying the board of a company that is the consequence of an ill-conceived merger.

The Times refers to the fact that no redundancies are predicted for the Dutch side of the merger, nor have any Dutch redundancies taken place. However, we in Wales and in Shotton have suffered job losses, and they are currently taking place. The sacked chief executive, John Bryant, was a popular, successful, accessible, courteous and distinguished one-time director of the very Shotton works that I represent. He is, to boot, a Welshman. I suspect that he was given the black spot because he was no longer prepared to ask British, Welsh or Shotton steelworkers to yield further redundancies and suffer more closures to placate shareholders. John Bryant must know in his Welsh guts that if Wales and Britain want to retain a viable, seedcorn foundation industry, this is a case of so far and no further. A line must be drawn in the moulding sand.

I worked as a labourer at the Shotton work's No. 2 blast furnace and my late father worked on the production line, as did my grandfathers, one of whom was a peripatetic steelworker. That shows my huge bias to the steel industry and the steelworkers in my constituency--a bias that I have always had and will always have. I support my steelworker constituents 100 per cent.

If Britain is to retain the shreds and shards of a one-time manufacturing greatness, Britain's steel industry must be saved. If we let go now, Britain's steel industry will be finished, dead, broken and irretrievably lost. I do not like the idea of a boardroom having the power gravely to injure that strategic industry. The board of Corus must halt its slide to ruin. There are social consequences and there are the requirements of a modern, medium-sized west European state to retain a sizeable steel industry.

What is the point of a sea-based nuclear deterrent force and a large standing Army if there is no steel industry? Steel is strategic. Steel is greatness. A nation is nothing without a foundation industry such as steel. Without it, the rest is posturing. That is my view garnered during a few years in this honourable House.

The good thing is that, at the drop of a hat two weeks ago, the Prime Minister saw a group of his Back-Bench Members of Parliament representing the steel industry, of which I was one. Does Sir Brian Moffat, the Corus chairman, have ice in his veins? Surely he will not metamorphose into a Sir Ian McGregor figure. We do not want that. It cost £400 million to form the new company, Corus. That sum spent on the merger should have represented £400 million of investment, not retrenchment. British Steel and Corus have made huge, multi-million pound investments abroad, but there have been large-scale redundancies here. We do not need any more closures, and we certainly want no more redundancies. All the steelworkers in my constituency tell me that they have had enough.

Although since denationalisation parliamentarians have had much less influence than the dreaded market forces, in less than 15 months I have taken three Shotton

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deputations to Ministers in the Department of Trade and Industry, the Treasury and the Welsh Office. We were well received; the problem is that Corus puts the short-term before the long-term needs of our nation's economy.

Shotton steelworkers are well served by the current director, Andrew Page, and by the convenors at Shotton: Robert Butt of the Transport and General Workers Union; Jim Mullins of the Iron and Steel Trades Confederation; Mike Parkinson of the craft unions; and Arthur Davidson of the GMB. When they came to Westminster, they spoke with dignity, insight and great responsibility. They represented their work force well and I backed them then as I do now: 100 per cent.

I want the board of Corus to draw back. It is inconceivable that the steelworks of Shotton and Wales must suffer more redundancies. The problem is that morale is low. I want morale raised, not driven to the ground. We have given our blood to the industry and now we want back some loyalty and some investment from the company. What measures can be taken to restore the morale of Britain's steelworkers, who feel neglected and frustrated?

The merger between the Dutch and British steel industries has spawned British steel redundancies, but not Dutch job losses. Welsh steelworkers break every production record. They do everything that they are asked to do, and they do it well, but their reward so far is redundancies every year and compulsory redundancies this year. Responsible and dedicated union leaders are now at their wits' end. They are not irresponsible, militant or anti-social; they are the most positive and co-operative union leaders I have ever known. They are responsible and honourable, but they are at their wits' end.

I notice that far eastern and east European countries are now penetrating with a vengeance the British home market. That cannot be good. The strong pound and weak euro impose a huge premium against our exports, and energy costs are sky high. Something should be done about that. The question that my constituents are asking is: what can be done to help the most productive workers in Europe? May we please have special, additional European funding of the current redundancy payments? We used to have such payments until the previous Government abolished them in the mid-1990s.

While my steelworkers lose their jobs, I have the impression that our steel competitors in some parts of Europe cheat. They do not obey the regulations as the British industry has done and does. Enough sacrifices have been made in the British steel industry. Enough have been made in the Welsh steel industry and certainly at home in Shotton. I have no doubt that the First Minister of the National Assembly for Wales will raise his voice on behalf of the Welsh steel industry. He has a duty to do so, and I am sure that he will. I expect also that he will mention the high importance of Shotton steelworks in north Wales, as well as that of Llanwern in the south.

Those are my brief remarks. I hope that something can be done to assist the steelworkers of Britain and Shotton.

5.13 pm

Sir Michael Spicer (West Worcestershire): This is the third time that I have had the privilege of following the right hon. Member for Alyn and Deeside (Mr. Jones). It is, therefore, the third time that I have heard him wax lyrical

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about Shotton steelworks. I feel almost that I know the inside of the furnace and have come to feel its extremities physically--and quite right, too. My only criticism of the excellent speech that he made on behalf of his constituents concerns his reference to Mr. McGregor, as he then was.

Mr. Bercow: He was a great man.

Sir Michael Spicer: Many people, of whom I am certainly one--my hon. Friend the Member for Buckingham (Mr. Bercow) seems to share my view--believe that, without the intervention and management of Mr. McGregor, painful though it was at the time, the British steel industry would no longer exist. It was cumbersome, completely uncompetitive and far too large for the marketplace. Unlike steel industries in other countries, our industry was saved. That included the works in the constituency of the right hon. Member for Alyn and Deeside.

The Queen's Speech heralds a Session of Parliament in which only two important events will occur before the general election. The first is the Budget and the economic circumstances that surround it. The second, which will happen quickly, is the announcement of the terms of the treaty of Nice and any ratification process that the Government involve themselves in. In response to a question that I asked two weeks ago on the Floor of the House, the Foreign Secretary said that he intended the treaty to be ratified quickly. We will have to see how soon that occurs, but certainly the treaty of Nice will feature in this Session. I want to concentrate on those two events, which are the only important aspects of a pretty bland Queen's Speech.

The Budget is fairly predictable. It will be a give-away, soft-talk, soft-soap, electioneering Budget. We could all write a Budget for this Government on their terms, although it would be the opposite of what a Conservative Government would produce. However, we can understand its parameters and do not need to spend much time considering it. What is interesting are the economic circumstances that surround the Budget and which will be affected by it. Those are less predictable. We have high, although not peaking, interest rates and a wobbly stock market, which did well yesterday and, I am told, has done quite well today, probably on the back of what has happened in America. However, people's confidence, as expressed through the stock market, paints an uncertain picture. In addition, unemployment is beginning to return in certain sectors.

Under those circumstances, I would have thought it natural for interest rates to come down. The Treasury Committee, of which I am a member, probes that subject when the Chancellor of the Exchequer and the governor of the Bank of England appear before it. However, although there are uncertain and, from an economic point of view, worrying signs in the economy, there is also an extremely loose monetary policy, as the Bank of England's inflation report dramatically illustrates. According to its front page, most monetary supply figures are roaring ahead. The growth rate of notes and coins has increased to 8 per cent. in the past 12 months. M4--the normal measure of monetary supply--stands at 9.1 per cent. and will probably rise to 10 per cent.

The vast explosion in monetary growth is especially reflected in consumer lending, which is exploding. The combination of monetary supply and the loose fiscal

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policy that the Government are employing for obvious electoral reasons--which no doubt will be confirmed in the Budget--gives rise to an argument for higher interest rates when lower interest rates might be right for the current economy. The economic prospect is one of stagflation.

In attempting to work out how that will emerge, a good indicator has typically been the American economy, which must be worrying the Government. We all know that the most recent quarter's growth figures were half those of the previous quarter. The American economy seems to be slowing down. Even Mr. Alan Greenspan, with whom the Treasury Committee had a meeting a few weeks ago, has publicly said and made it clear--although he always speaks obliquely--that, after being extremely bullish about its economy and, in particular, the new economy, he is becoming concerned. I suspect that that is of great interest to this country. If Mr. Greenspan is becoming concerned about the American economy, it is probably about time that others became concerned. There is an element of self-fulfilment.

On a read-across between the American economy and the British economy, it is clear that America has 40 per cent. higher productivity. It has massively better productivity rates. France has 20 per cent. higher productivity rates than the United Kingdom and the German rates are about 10 per cent. higher than here. We are lagging--

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