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Dr. Julian Lewis: That is because they packed his parachute.

Mr. Cash: Indeed. The Prime Minister, in his Euro- enthusiasm--I would say Euro-fanaticism--traded his failure to convince the British people about the single currency for something else that he wanted to pull out of the bag. He knew that we did not have an opt-out on defence, and he thought that he would be able to take the initiative on defence policy and claim that he was leading Britain in Europe. That is what St. Malo, Cologne, Feira and Nice were all about. However, the right hon. Gentleman has got into an appalling quagmire, as has already been revealed.

I beg to differ with my hon. Friend the Member for Wycombe (Sir R. Whitney). His view is similar to that of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who said of the Maastricht treaty that he had not read it.

Sir Raymond Whitney: Will my hon. Friend give way?

Mr. Cash: In a minute. [Interruption.] Perhaps tomorrow! We have to consider the control and command to understand the basis on which such treaties are constructed. Without doing that, we do not know what is going on--

It being one and a half hours after the commencement of proceedings on the motion, Madam Deputy Speaker put the Question, pursuant to Standing Order No. 16 (Proceedings under an Act or on European Union documents).

Madam Deputy Speaker: I think the Ayes have it.

Hon. Members: No.

Division deferred till Wednesday 21 March, pursuant to Order [7 November 2000].

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation) [Queen's recommendation having been signified],

Data Protection and Freedom of Information


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Question agreed to.

Madam Deputy Speaker (Mrs. Sylvia Heal): With permission, I shall put together the remaining motions relating to delegated legislation.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Social Security








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Question agreed to.

LIAISON COMMITTEE (SUB-COMMITTEE)

Motion made,



Line 31, at end add--
'( ) The committee shall have power to appoint a sub-committee, which shall have power to send for persons, papers and records, to sit notwithstanding any adjournment of the House, and to report to the committee from time to time.
( ) The committee shall have power to report from time to time the minutes of evidence taken before the sub-committee.
( ) The quorum of the sub-committee shall be three.'-- [Mrs. McGuire.]

Hon. Members: Object.

SCIENCE AND TECHNOLOGY COMMITTEE

Order read for resuming adjourned debate on Question [31 January],


Hon. Members: Object.

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SELECT COMMITTEES (JOINT MEETINGS)

Motion made,



Line 40, before the word 'European' insert the words 'Environmental Audit Committee or with the'.
Line 50, before the word 'European' insert the words 'Environmental Audit Committee or with the'.
Line 52, at the end insert the words:--
'(4A) notwithstanding paragraphs (2) and (4) above, where more than two committees or sub-committees appointed under this order meet concurrently in accordance with paragraph (4)(e) above, the quorum of each such committee or sub-committee shall be two.'--[Mrs. McGuire.]

Hon. Members: Object.

PETITION

Winter Fuel Payment

12.41 am

Mr. Desmond Browne (Kilmarnock and Loudoun): I present the petition on behalf of my constituent Mrs. Margaret Lees of Kilmaurs and more than 2,000 other signatories from my constituency and other parts of the United Kingdom. It supports the extension of the annual winter fuel payment to physically disabled people under the age of 60.


To lie upon the Table.

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19 Mar 2001 : Column 165

Glass Industry

Motion made, and Question proposed, That this House do now adjourn.--[Mrs. McGuire.]

12.42 am

Mr. Bill Rammell (Harlow): I am very pleased to have the opportunity of this Adjournment debate to represent the interests and real concerns of my constituents who work at United Glass in Harlow. United Glass employs more than 300 people in Harlow, and theirs are the kinds of skilled and semi-skilled manufacturing jobs that used to be the bedrock of the local economy. However, they are also the kind of jobs of which we have lost so many over the past 20-odd years.

To put that in context, as recently as 1979 more than 50 per cent. of the jobs in Harlow were in manufacturing, whereas today the figure is barely above 20 per cent. Those are important jobs, because they provide ordinary working people with a career, stable employment and good remuneration--in short, the kind of job security to which many people aspire.

Those good, high-quality jobs would be at risk if the Government were to grant regional selective assistance--which has been applied for through the Department of Trade and Industry--to Quinn Glass to build a new glass manufacturing plant on the site of the old Ince B power station that straddles the border between Chester and Ellesmere Port. That application is the nub of the case that I wish to make this evening.

In making that case, let me make it clear that I am not asking for special favours, or for preferential treatment for United Glass and my constituents. I am simply asking for a fair deal and a level playing field. Open and fair competition in the marketplace is a spur to increased competitiveness. However, United Glass--along with other glass manufacturers--is not given taxpayers' money to support its enterprise, and I do not see why Quinn Glass should be given taxpayers' money to start an operation in a market in which there is already significant overcapacity, when the granting of regional selective assistance would--a great deal of evidence suggests--lead to the provision of jobs in the north-west of England at the expense of jobs in my constituency and elsewhere in Britain.

I am speaking not just on behalf of United Glass and my constituents; every other glass manufacturer in Britain is concerned about the Quinn application. The Minister will know that my hon. Friends the Members for Barnsley, Central (Mr. Illsley), for Ochil (Mr. O'Neill), for Cunninghame, South (Mr. Donohoe) and for Normanton (Mr. O'Brien), among others, have enunciated significant concerns, and that many of us accompanied representatives of the glass manufacturing industry to see a DTI Minister before Christmas to express our anxieties. We are united in our view that taxpayers' money should not be used to support Quinn Glass at the expense of jobs in our areas.

Part of my reason for initiating the debate is that our fears are based on historical precedent. In April 1997, the Northern Ireland Office granted Quinn Glass a £13 million grant from the Northern Ireland Industrial Development Board to develop a plant at Derrylin, in County Fermanagh. As there was already overcapacity in

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the industry, that has led--perhaps unsurprisingly--to a loss of nearly 1,000 jobs over the past few years, and a fall in profitability of nearly 50 per cent.

The development in Northern Ireland was undoubtedly a factor in the closure of the United Glass plant in St. Helens. I have to say, however, that just as bad as the actual decision and its impact was the way in which the decision was made by the last Conservative Government. It was, by any reckoning, a hugely controversial decision, made on 17 April 1997. The contract was signed on 1 May 1997, the day of a general election that everyone--including, I believe, the Conservative party and Conservative Ministers--knew would bring a change of Government. Yet despite the knowledge that there would be a new Government with a new outlook, a new set of priorities and a new set of policies, the Conservative Government had the arrogance to press ahead with the decision, and by the time this Government came to power it was too late to reverse it.

On the basis of that precedent, my constituents have a real fear that what happened in Northern Ireland can happen again. I hope and believe that under this Labour Government things can and will be different.

Let me say something about the background to the current economic situation in the glass manufacturing industry, against which I think this application should be judged. There is undoubtedly overcapacity in the industry, and there are real problems in regard to profitability and sustainability. The UK glass manufacturing and container industries unquestionably face real problems, and have done for some time. Demand has been falling, owing to increased competition from alternative packaging materials, while supply has been increasing, owing to the industry's heavy investment in new technologies that have produced substantial productivity advances.

Across the European Union, that has led to overcapacity, currently estimated at about 10 per cent. In Britain, the results have been stark: since 1997 glass manufacturing sales have declined by 7 per cent., and there has been a dramatic decline of 48 per cent. in earnings. That loss of profitability has been translated directly into a loss of jobs: the number of people employed in the industry has fallen from 5,400 to 4,400, a drop of nearly 20 per cent. I know of no other industry in which there has been such a significant decline in such a short time.

Moreover, important elements of production have moved outside the United Kingdom because of the continuing high value of the pound outside the euro, which makes it more economical to produce goods outside the UK. That has applied to Heinz, Cadbury and Ovaltine. Let me say as an aside that the situation is a powerful antidote to the views of the Conservatives and other anti-Europeans--from whom we have just been hearing--who argue that we should never join the single currency, regardless of the consequences for British manufacturing industry.

The situation is undoubtedly full of real difficulties. That is why the Quinn Glass application concerns us so much. We are concerned that Government funds could be used to increase capacity that will cause the loss of jobs elsewhere in the industry. The Quinn Glass proposal, to put it into context, is to establish capacity in the north-west of England to produce 1.1 billion bottles a

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year. Based on year 2000 sales figures, such capacity equates to about 16.4 per cent. of total industry sales. On any analysis, that is a very substantial development.

ECOTEC Research and Consulting has been commissioned by both United Glass and Wrexham Glass to quantify the likely impact of the establishment of such additional production on three areas of Great Britain--on Harlow, in my constituency; on the central belt of Scotland; and on south Yorkshire. There is already significant glass production in all three areas.

ECOTEC's research and analysis is very clear that, overall, the best we can hope for is that the new facility will result in a zero-sum gain, with output from the new facility likely to displace a roughly equivalent amount of output from other United Kingdom-based producers. On a more pessimistic analysis, which is offered in the research, there is a view that for every new job that might be created at the proposed site, two existing jobs in the industry and in supporting businesses elsewhere could be lost. If Quinn Glass wants to wreak such havoc on the United Kingdom glass industry, so be it. However, I do not know why it should be aided and abetted by taxpayers' money in so doing.

I should like, finally, to deal with two red herrings that are being offered to justify and support the Quinn application. First, it is suggested that the plant will not hit production elsewhere in Britain because Quinn wants to focus on exploiting the current importation of glass from elsewhere in the European Union. Last week's Packaging Magazine had clearly bought the spin from Quinn Glass which argued that import substitution would be its main target. I believe that that reassurance is false. I say that for various reasons.

There is no evidence from Quinn Glass in Northern Ireland that it has a strategy in place to substitute for imports. We also have to understand the nature of the increase in imports--from 7 to 13 per cent. of containers--in recent years. The major driver of that increase has been the high value of sterling. The situation for any of the companies is unlikely to change until the value of sterling decreases appreciably. Moreover, when sterling's value does depreciate, not only Quinn Glass but all United Kingdom glass manufacturers are likely to benefit.

It is also very important to understand that more than two thirds of imports into Britain are substitute production--for example, to replace production lost when furnaces are being refurbished--or are more specialised glass containers, such as toiletries and cosmetics and pharmaceutical containers. The specialised containers require specialised machines and, in some cases, different glass composition. However, there is no evidence to suggest that Quinn Glass intends to invest in such equipment at the proposed mainland site. Indeed, the reverse is true, with a suggestion that the site will produce high-volume beverage containers.

As for the scale of available imports that Quinn could target, those 330 million containers are dwarfed by Quinn Glass's proposed 1.1 billion production capacity in the north-west of England. The figures just do not add up. The argument that everything will be all right and that the new plant will simply target imports lacks credibility and should be taken with a pinch of salt.

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The second red herring that has to be exposed is the notion that if Quinn Glass does not go to the north-west of England, the jobs that would have been provided there will be lost to northern France, where the application will receive French Government support. There is a link between the situation in France and that in Germany. In Germany, there have been moves to plastic in the soft drinks and water sectors, coupled with implementation of a deposit system that will soon be applied to currently non-returnable glass. Consequently, German glass demand is expected to decrease in the next two years by a staggering 1 million tonnes. That is such a dramatic change for the German glass industry that it has engaged consultants to work on securing German Government grants to close down glassworks.

As 40 per cent. of the German glass industry is owned by French companies, and as there is already overcapacity in both France and the Benelux countries, it is inconceivable that, in current circumstances, the French Government would consider grant aid for extra capacity.

I am grateful to my hon. Friend the Member for Barnsley, Central, who has informed me that the Barnsley development agency, which has established a good line of communication to the French authorities because of the sensitivity of the issue, has been unable to trace any line of inquiry from a British company. The argument that the jobs would go to France is unsustainable.

I believe that the arguments against the granting of regional selective assistance are very strong. As the Minister knows, in many senses the most important criterion in deciding whether to grant such assistance is the displacement impact on jobs. If it is concluded that grant aid would simply displace jobs elsewhere, the grant should be refused--and it is clear to me and to many others within the industry that grant aid in the circumstances that I have described would lead to a displacement of jobs. I hope that that will weigh heavily in the making of the final decision, and ultimately lead to a refusal.

There are also strong grounds for believing that granting assistance would be deemed to be unfair state aid under European Union competition rules. Indeed, several glass manufacturers are considering approaching the European Commission over the issue if the Government grant aid.

This is an issue of real significance and importance to my constituents in Harlow. More than 395 people are employed in the glass and associated sectors locally-- 320 directly by United Glass and the remainder indirectly supported by the sector. It is not only the people who are directly employed who would be affected; there is also the knock-on benefit to the local economy. ECOTEC has estimated the associated supplier expenditure at £1.64 million a year, and employee expenditure in the Harlow economy at £3.6 million a year.

This is an enormously important issue in Harlow, both for its economy and for the people whose employment depends on the plant. My constituents simply would not understand if Government money, provided by the taxpayer, were used to undermine their jobs and their local economy. I therefore strongly urge the Government to listen to our concerns. I hope and believe that they will act to protect my constituents' interests. All we are asking for is a level playing field, and I hope that we shall get it.

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12.57 am


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