Select Committee on Trade and Industry Minutes of Evidence


Memorandum submitted by the Iron & Steel Trades Confederation

  The steel industry internationally has a higher proportion of trade union membership among its employees than any other industry and 26,000 British people, the great majority of employees in the British steel industry, are members of the Iron and Steel Trades Confederation. Recently, the union has relaunched itself as the community union, seeking to represent people in communities formerly dependent on steel plants and to develop co-operation with local authorities, schools and other local organisations in order to buttress respect for community values. The instruments used include Steel Partnership Training, an organisation established by the ISTC which contributes unique expertise to the work of local agencies with responsibilities for retraining and promoting the employment of people who have lost their jobs as a result of redundancies in steel.

  The world steel industry is characterised by clear cyclical patterns arising from the low degree of concentration of production in the sector and the tendency for steel producers in periods of falling demand to sell at prices sufficient to cover the heavy fixed costs in the industry, without operating at a profit or even covering marginal costs. The European Union accounts for the production of nearly one-fifth of the world's crude steel production, a proportion greater than that of the US, China, Japan and the Commonwealth of Independent States, but is not immune from the pressures arising from cyclical fluctuations. Sharp falls in demand and prices at a world and European Union level are typical against a background of chronic overcapacity—amounting to about 25 per cent in the world and a lower proportion in the European Union—and a faster rate of increase in capacity than consumption. In addition, steel prices tend to decline steadily from one cycle to another, reflecting the impact of constant technical change and rapid improvement of productivity in nearly all the countries which produce steel.

PRODUCTIVITY IMPROVEMENT

  There is little difference in productivity rates between the European, best North American and Japanese producers and it can be said with certainty that the British steel industry has been fully competitive with the most efficient world producers since 1982. The most recent information from the International Iron and Steel Institute suggest that crude steel production per worker in the United Kingdom exceeds that of the other main European producers and is at worst on a par with Japanese counterparts and US employees in the most efficient mills. The longer hours worked by British steel workers compared with their counterparts in France and Germany are a factor in the superior per capita performance. Over the last 20 years productivity in the British steel industry has increased at an annual rate of 10 per cent—nearly three times as fast as the rate of improvement in British manufacturing as a whole. The industry also adds more value per employee than the car industry, the computer sector, and virtually every other significant sector of British industry.

  One result of maintaining the competitiveness of the industry has been the significant contribution which the industry has made to the balance of trade over two decades. About half of all steel production is exported, three quarters of it to other European Union countries. The most recent information for the year to July shows that British steel exports exceeded imports by 3 per cent despite the impact of the grossly-overvalued Sterling exchange rate in terms of Euro currencies. This achievement in raising productivity has been achieved to a greater extent than in any other steel-producing country in Europe through reducing employment. The table below shows that Britain experienced the sharpest fall in employment in steel of all the European Union countries in the last quarter century and that the Dutch industry retained three times as many jobs proportionately as the United Kingdom.

EMPLOYMENT IN THE EU STEEL INDUSTRY, 1974 AND 1999


  
Employment, '000s
1999 as percentage
of 1974

  
1974
1999
   

Austria
44
12
27
Belgium
69
20
29
France
158
38
24
Germany
232
78
34
Italy
96
39
41
Luxembourg
23
4
17
Netherlands
25
12
48
Spain
89
22
25
Sweden
51
13
26
UK
194
31
16
TOTAL
998
280
28

Note:  Germany includes former GDR in 1999 but not in 1974.
          Source:  International Iron and Steel Institute.

  Despite this productivity record, gross steel output has fallen from 20 million tonnes in 1975 to 16.3 million tonnes in 1999 and the indications that crude steel production in 2000 will fall substantially short of this total and that steel production in Spain will exceed that of Britain for the first time. The output of crude steel in other western European countries in the same period increased. Several different factors contributed to the contrasting evolutions of the steel industry in Britain on the one hand and the continental European countries on the other but the three most significant as it appears to the ISTC are:

    —  the retention of significant degrees of public ownership of large and successful steel companies in Austria, Belgium, France, Germany, Luxembourg, and—until the merger of Hoogovens with British Steel—the Netherlands. The main European competitors of Corus, namely Voest Alpine, Arbed, Usinor and Salzgitter, are all subject to a substantial element of shareholding by the state;

    —  the legal and other institutional constraints prevailing in the continental European countries on the closure and disposal of undertakings and the provisions requiring employers to extend substantial entitlements to information and consultation to their employees.

  These two factors together have had the consequences that the governments of other European Union countries have been ready at critical times to intervene to protect the public interest in respect of national strategic interests and to prevent or reduce the scale of redundancy programmes. National trade union organisations also have had opportunities to present practical arguments for maintaining productive capacity and avoiding recourse to collective redundancies. No doubt, employers have been deterred even from making attempts to close workplaces because of the need to present compelling arguments publicly in situations which in Britain would have resulted in closures and redundancies without the trade unions and the political authorities having access to the full facts. They have also contributed to a stronger propensity to make best use of their workforces and invest in developing skills through training as well as maintain a high rate of investment in plant and equipment.

  It is noteworthy that the accountability to their employees and to the public over the long term does not appear to have had an adverse impact on the capacity of the companies concerned to cope with the cyclical nature of the steel industry and to operate profitably in the long term. Voest Alpine, for example, in which the Austrian state has a 38.8 per cent holding, has been able to secure its ambitious target of a 12 per cent return on capital employed in most recent years and has every confidence that the target will be exceeded this year. Arbed and Usinor are also consistently profitable, as was Hoogovens before the merger.

SOCIAL IMPACT

  The ISTC has commissioned independent analyses of the prospects for steel production in Britain and changes in labour markets in steel communities in Britain, the preliminary results of which have just become available. The data suggest that areas where steel was or is produced have labour markets characterised by serious quantitative and qualitative problems of unemployment. Attendant on these employment problems are high incidences of family breakdown, drug and alcohol abuse, and health breakdowns, illustrated in a sympathetic way in the recent films Brassed Off and The Full Monty. The economic, social and personal costs of such concentrations of structural and long-term unemployment are well documented in academic works, notably by Ray Hudson and Sadler in British Steel Builds the New Teesside? 1984and Beynon et al in A Tale of Two Industries in 1991. The conclusion of the research conducted for the ISTC confirmed that many people had clearly become part of a population that was unemployable, given current labour market conditions. The 5,000 further job losses which Corus is seeking and other redundancies in the steel industry will aggravate problems of unemployment in the communities concerned. The record in the areas suggests that at best there will be limited re-employment in other industries of the steel workers who lose their jobs.

CORUS: THE FIRST YEAR

  The British steel industry faces acute short-term problems, most of them stemming from the over-valuation of sterling against the euro; as well as well-established long-term trends—notably the decline of manufacturing industry and the shrinking of the industrial base—which threaten its future. Corus anticipated that sterling would lose value against the euro in planning for 2000 and embarked on a programme of expenditure about which the trade unions at a very early stage expressed deep concern since it meant the abandonment of the prudent financial policies of British Steel. Corus paid out £600 million to shareholders in October 1999. It appropriated unilaterally £863 million from a surplus in the British Steel Pension Fund and is using it to reduce its own contributions to the Fund. Pay increases for all employees represented by the unions barely kept pace with inflation and were well below the increases in average weekly earnings in manufacturing as a whole. Despite this the company had by September accumulated debt of £1.86 billion and its most pressing problem at present is financing this debt which is costing the company approaching £1 million daily.

  The impact of the euro exchange rate was offset for the first half of the year by a favourable US dollar exchange rate, enabling British producers to purchase iron ore and coal advantageously compared to competitors in the Eurozone. The response of steel companies in Britain and the main company—Corus in particular—to the decline in revenue from its export sales and the threat to its market share in the United Kingdom from artificially cheap imports produced by companies operating in the Eurozone has been to aim to reduce its workforce in Britain by nearly 5,000 people, equivalent to 14 per cent of its employees.

  In December 1999, the company announced the closure of the Shelton section mill. On 19 May, Corus announced that it intended to reduce the number of manned shifts at the only railway track plant in Britain, in Workington, with the loss of 168 jobs from a workforce of 400. The ISTC and the other trade unions representing employees at Corus Rail in Workington are convinced that production at this level of activity is not sustainable for long. The treatment of its employees at the Corus Rail plant in Workington illustrates many of the weaknesses in the approach and policies of Corus which have contributed to its present difficulties. The episode is described in detail below.

  The three announcements threatening the biggest reductions in employment in the company affecting 4,200 people were made on Fridays in June and July. In September, the company announced that it aimed to cut a further 210 jobs from the strip businesses. The trade unions representing working people in the Corus plants concerned had at best only a few hours' advance notice of the broad nature of the announcements and had no practicable opportunity to present alternative proposals to the company to avoid job losses. They were given no opportunity to consult their branches in the plants affected about the proposed cuts.

  The ISTC regards these proposals as an ill-considered response to a short-term problem which is likely to impair seriously the capacity of the company to compete successfully and to be profitable in the long term. Even in the short term the proposals are likely to have a most damaging impact on morale and jeopardise the improvement of productivity. The company has resorted to cuts of experienced employees in response to the cash difficulties, concentrating its response to the cost problems on employment which accounted for only 18 per cent of overall costs. It is difficult to make precise comparisons but it is very likely that Corus employment costs in Britain are lower than those of steel producers in other Western European countries. The trade unions have grave concerns about safety among employees. Seven fatal accidents in the company worldwide in the last 15 months—four of them in England in the last year—is an appalling record which needs to be addressed most urgently.

  The ISTC has repeatedly impressed on senior manages of Corus that its methods for dealing with its proposals for redundancies do not reflect even the minimal standards of respect due to its employees and are even more offensive in the light of the treatment extended to its Dutch employees giving them a real say in resisting cuts of 590 jobs at the Ijmuiden long products facility. The ISTC is resisting vigorously these proposals and has made it clear that it will back members with industrial action if necessary if any attempt is made to:

    —  permit any diminution of protection against accidents in Corus establishments;

    —  impose compulsory redundancies;

    —  increase resort to the use of sub-contracted employment.

  The proposed employment cuts in the opinion of the ISTC jeopardise the ability of the company to produce the quantity and quality of steel products which the European market demands. The announcements in October of further cuts in the strip businesses less than three months after the announcements of June and July brought further demoralisation to the entire workforce in Europe. In the view of the ISTC, they call into question the capacity of the company to maintain market share in the United Kingdom The major shifts in the company's assessment of market conditions over a very short period further eroded confidence in its judgement.

INVESTMENT

  The continuing competitiveness of the British steel industry is dependent on a high level of investment in developing human resources and new plant and equipment incorporating technological advances. Since the merger Corus has shown a reluctance to commit resources to its operations in Britain. Despite the financial difficulties it has developed its downstream activities by purchasing or acquiring significant shares in existing plant in France, Canada, the Netherlands, Germany, Hungary and the United States. It has invested in a joint venture in China to produce large extruded aluminium sections, in a new sheet steel plant at Ijmuiden, and is engaged in negotiation for a 31 per cent share in a further joint venture with Huta Katowice in Poland to produce long products. In contrast, the Workington plant was denied investment which would have enabled it to produce longer rail lengths and the company only decided to commit resources provisionally to the refurbishment of the main blast-furnace at Llanwern after a determined campaign by the ISTC and other unions, the First Secretary of the Welsh Assembly and other political and community leaders.

  It appears to the ISTC that the short-term problem of the sterling-euro exchange rate is leading Corus to take investment decisions which will have the long-term consequence of reducing the capacity of the British steel industry to produce and to compete.

CORUS RAIL, WORKINGTON

  The cuts at Workington epitomise the short-sightedness of Corus, the lack of political awareness, and the inadequacy of the company's respect for its employees. The Workington plant is renowned for the quality and safety record of the rail it has been rolling for more than a century. It produces the heavier 60 kg UICA high quality rail which is less prone to breaking than lighter rail. It continues to export to a wide range of countries though recently foreign demand for railway products has fallen. Despite that fall in the market, Corus purchased in October 1999 the Hayange plant of Sogerail at a cost of £83 million and had to spend a further £19 million to adapt the plant to its needs. This expenditure contributed to the massive debt now afflicting Corus when a much smaller investment in Workington would have enabled the company to produce rail lengths in excess of 36 metres at the Workington Rail plant and serve the substantial and growing British market for rail products. For it was plain before the Secretary of State for the Environment, Transport and the Regions made his announcement of the massive 10-year programme of investment to restore the rail infrastructure that the Government needed to intervene to restore the decayed national infrastructure, the constantly failing London Underground, and other elements of the national transport infrastructure. It was clear that it would allocate substantial resources to the transport system and would create large-scale new demand for rail and other railway goods among other steel products.

  Employees at the Corus plant in Workington were on a four-day week and the plant badly needed to secure the renewal of a five-year contract to supply Railtrack. The ISTC first raised in October 1999 with senior Corus managers the opportunities for the company and the Workington plant in particular which the programme would open and returned to the point on several subsequent occasions. No response was forthcoming from Corus. From March, the ISTC worked hard through representations to Ministers to assist Corus obtain a large share of the Railtrack order and Corus did win a substantial part of the Railtrack order.

  However, the company on 19 May announced that the Workington plant would be placed on a five manned shift working basis and that 168 jobs would be cut from the workforce. The Corus statement gave three reasons for reducing the manned shifts to five at Workington: the continued strength of sterling which makes the export business less viable; the declining trend in world demand for rail products; and Workington's inability to roll rail in excess of 40 metres to meet the increasing demand from European customers for longer rolled rail products.

  The announcement came as a deep shock to the workforce and was a source of profound dissatisfaction to the trade unions who were under the impression that the success of Corus in winning a big share would enable the company to increase the number of manned shifts worked from six; At a meeting with senior trade union representatives in May the company refused to give information about how much of the order would be produced in Workington. The ISTC representatives said that they could not understand the commercial reasons for not using the Workington facility to the full. They pointed out that the Railtrack order was not an export order. The pound had been losing value against the euro and the cost—estimated at £40 per tonne—of transporting steel from Hayange, which unlike Workington has no port, to Britain made a big difference to the relative costs of producing in the two countries. The costs of production in Workington would be even cheaper relatively once sterling returned to a sustainable rate of exchange with the euro.

  The trade unions also pointed out to Corus that national British strategic interests were at stake. The Ladbroke Grove rail disaster in September 1999 had suggested that the rail infrastructure had been allowed to deteriorate to the extent that public safety could not be guaranteed and it seemed likely even then that there would be a surge in demand for railway track and other railway products which Corus would be well placed to meet from Workington. The recent disaster at Hatfield has pointed to the need for the more frequent renewal of track. The strategic supply of rail might be interrupted by events over which the company and the British Government have no control, such as a sudden surge in demand for rail in France, a blockage of the Channel Tunnel, or large-scale industrial or political unrest. There is no other producer of rail in the United Kingdom; the present level of working there is not sustainable; and the nation will become dependent on rail supplies from other European countries if Workington is allowed to run down and be closed.

  The Workington local authority offered to pay for an independent feasibility study of the scope for development of the plant and possible sources of financial help and the ISTC pressed the company to accept the offer but again the company refused. It was also unwilling to provide to the trade unions with members in the plant the information which the unions had requested and to enter discussions with the Government about ways in which the vast public expenditure increase on the rail and other transport infrastructure might be deployed in the years ahead to the advantage of the company and the national interest. A little consideration of the record of the ISTC in similar situations to Workington would have showed you that we have made a significant difference, for example at Avesta in Sheffield.

  Public resources are still available in West Cumbria and with them the opportunity to develop the capacity at Workington. This had been audited independently and found to meet the highest quality safety and quality specifications. The trade union representatives did not receive a reply to their question whether the track from Hayange met all the ultrasonic testing requirements for the European market which Workington has proved that it satisfied.

  In the view of the trade unions, the company had not taken account either of the human and social consequences for its employees, their families and the whole community in West Cumbria dependent on the Corus plant. Unemployment in the West Cumbria region was already above the national average and there was an urgent need for action and resources to attract new investment and to create new jobs in the region. The company has missed chances for discussing ways of coping with the immediate production and financial problems and of equipping the company to compete most effectively and to maximise profitability in the long term. It is losing skilled and experienced people and is demoralising the employees who remain. The ISTC remains ready to find ways with the company and the public authorities to maintain the plant at a level of operation which would be profitable long into the future.

  The ISTC renews its call to Corus to accept the offer by the Cumbrian authorities to undertake an independent feasibility study about the potential for developing the Corus Rail plant in Workington in the light of recent tragic developments which have underlined the need for replacement of rail in the national system. The programme of redundancies should be halted at once.

OUTLOOK

  It is not lost on ISTC members that the way they are being treated is much less respectful of their interests and dignity than the manner in which the rights of their Dutch counterparts are guaranteed. This has been harmful to morale. In the view of the ISTC, the cuts and the impact has rendered Corus ill-equipped to meet the production and quality requirements of customers in the long term.

  In other respects the economic and industrial environment in Western Europe remains positive for manufacturing and for steel. Corus in the UK has to contend with exceptional problems because of the unsustainable value of sterling but the company has been able to make recent price increases stick. The company led the way in Europe in September in increasing prices for sections and wire rod and the increases are being accepted. There are other areas of strong demand for steel products and domestic demand in countries like Russia, the Ukraine, Korea, and other nations is increasing and reducing the danger that cheap supplies will be available for export to Western Europe. Prices in Asia are stabilising. There are all good reasons for believing that European demand and prices will begin to rise again in the New Year and that the recent surrender of capacity in Britain by Corus may be exposed. In the event that sterling does lose value substantially against the euro Corus will be extremely competitive but may not have the human resources to take advantage of its competitive edge.

CHALLENGES OUTSIDE THE CONTROL OF THE INDUSTRY

  The ISTC recognises that the ability of Corus and other steel producers in Britain to do much about the overvaluation of sterling and the narrowing industrial base but the Executive Council is convinced that the company could have acted to ease the problems confronting it. In meetings with the Chief Executives and other senior Corus representatives the ISTC has called on Corus leaders to:

    —  declare publicly full support for the British accession to the single European currency at a sustainable exchange rate. The company has acknowledged that it needs to be able to plan investment and commercial policies against a background of stable exchange rates yet it has not taken this elementary and essential next step.

    —  Corus should lobby the Government publicly and strenuously about the damage the unsustainable exchange rate is causing to Corus and to British manufacturing generally. The Government has shown itself to be readily open to the influence of other multinational companies but Corus does not have the ear of Cabinet ministers and does not appear to have tried hard to win it.

    —  Corus should use the problems facing the industry to enlist public support. Instead the company chose to phase the employment cuts in June and July to minimise the public outcry which so clearly played a part in the Rover crisis earlier this year in saving production and jobs through engaging the undivided attention of Cabinet ministers. The scale of job losses in Corus stands to be just as serious as at Longbridge but it has not created strong pressure for Government help and has been reported to have turned down assistance.

    —  Corus should take the trade unions into its confidence and make common cause with them in approaches to the Chancellor and other senior ministers. So far the company has shown reluctance to discuss with the unions ways of maximising influence through co-ordinating representations and through bringing other influences to bear on the Government.

GOVERNMENT RESPONSIBILITIES

  The steel industry in Britain is a strategic resource crucial not only to the national infrastructure but also to the defence sector and manufacturing generally. In the absence of a domestic steel industry the relatively heavy cost of transporting steel into the United Kingdom would raise costs of goods and many services throughout British industry. Britain needs an efficient and profitable steel sector based in the United Kingdom.

  The most acute difficulty in the external environment affecting the British steel industry at present is the gross overvaluation of sterling in relation to the euro. At the end of October the pound sterling was worth deutsche marks 3.36. This represents a 10 per cent appreciation in 12 months and 20 per cent since the euro was launched in January 1999. It is at least 20 per cent above the rate which would give British steel and other manufacturing a reasonable change to compete with producers in the Eurozone. The Chancellor of the Exchequer, the Secretary of State for Trade and Industry and other ministers have been ready to meet ISTC representatives to discuss in depth the euro exchange rate and other aspects of the economic environment in which the steel industry operates and of British economic, industrial and financial policies bearing on the difficulties being experienced in the industry.

  The Chancellor may have been influenced by ISTC representations in early May when he began to talk up the euro, pointing out that the economic fundamentals—rates of economic growth, control of inflation, and public expenditure—all favoured the appreciation of the euro currencies against sterling and the US dollar. Other ministers at about the same time made public statements about the need to advance the debate concerning British accession to European economic and monetary union, and about British interest rates having reached their peak for the time being.

  The value of sterling fell sharply in the next few weeks from DM 3.46 to DM 3.07 but it has gradually regained value since making British exports of steel yield less revenue and putting home markets in jeopardy to competition from foreign producers whose costs of production appear lower as a result of sterling's appreciation. This is eroding the market share in the United Kingdom of Corus and other companies producing steel in Britain and making it very difficult for them to retain export markets, especially for strip products. The ISTC very much shares the view of the Select Committee that the euro-sterling exchange rate is essentially a problem for Britain alone: manufacturers in the Eurozone are enjoying a massive competitive advantage because of the persistence of the undervaluation of the euro and they have no pressing reason to want to see a correction.

EMPLOYMENT

  The ISTC recognises the considerable achievement of the Government in creating an environment in which there are more than one million new jobs, unemployment is at its lowest rate for two decades, and significant progress has been made in tackling long-term unemployment. It views with deep concern, however, the sharp decline of employment in manufacturing in Britain and considers that the potential for fast economic growth is being surrendered and the prospect of restoring balance in visible trade seriously diminished. The ISTC also takes the view that the concentration of steel plants in the north of England and Wales is aggravating inequalities at the root of educational, health, and other disadvantages suffered by the people in those parts of the United Kingdom.

  The ISTC calls on the Secretary of State for Trade and Industry to reactivate the Iron and Steel Employees' Re-Adaptation Scheme to help steel workers who lose their jobs to acquire skills and aptitudes helpful to them in finding new employment.

MONETARY POLICY COMMITTEE

  With the Select Committee the ISTC favours adjustment of the role of the Monetary Policy Committee. The short-term interest rate decisions of the committee aimed at an inflation target are damaging seriously British manufacturing. It should be noted too that the MPC have consistently missed the inflation target by as much as 20 per cent since the inflation rate has been held at about 2 per cent most months. In the view of the ISTC the Government should

    —  require that the MPC take account of the pernicious impact on manufacturing of their contribution to sustaining a grossly overvalued Sterling exchange rate with the euro;

    —  adjust the composition of the committee to switch their focus from the needs and prejudices of the City and the South East of England to the needs of working people in the steel and other manufacturing industries, who despite having improved productivity at rates unapproached in other sectors and have exercised moderation in pay claims, are losing jobs because of the committee's misjudgements and City focus.

THE EURO EXCHANGE RATE

  The ISTC has urged the Government to use the many instruments at its disposal to restore a sustainable exchange rate with the euro. In particular the Government should:

    —  have regard to the disruptive consequences for the world economy of a sudden and steep decline in the value of sterling and the US dollar and promote co-ordinated action by the US, Japan and the European Union government and financial authorities to gradually move exchange rates into line with economic realities and competitiveness;

    —  demonstrate a readiness to intervene directly to buy Euro-denominated bonds to boost the euro. Such interventions would carry little risk even in the short term because of the patent undervaluation of the euro in terms of sterling;

    —  acknowledge clearly that long-term protection against the economy being swamped by international financial speculation lies in eventual full economic and monetary union within the EU and giving a strong lead to a public campaign for a yes vote in the referendum on the issue.

ENERGY PRICES AND PROTECTING THE ENVIRONMENT

  The ISTC has raised with the Government on numerous occasions the need to eliminate the disadvantage which producers of steel in Britain are under from being compelled to pay higher prices for energy than European competitors. The ISTC welcomes the coming into effect of new trading arrangements in 2001 but notes that they are unlikely to eliminate the full difference in electricity costs which favours those competitors. The ISTC asks the government:

    —  to review the operation of the new trading arrangements at an early stage and take action at national and EU levels to ensure that British steel producers' competitiveness is no longer seriously impaired by unjustifiably high energy costs.

  The ISTC welcomed the budgetary measures taken by the Government to minimise the adverse impact of the Climate Change Levy on the production of steel in the United Kingdom. The present regime holds out the prospect of enabling the United Kingdom to fulfil its obligations under the Kyoto Protocol without putting energy-intensive manufacturing at an additional competitive disadvantage. However, little progress seems to have been made in other European Union countries to achieve the Kyoto targets.

  The ISTC has asked the Government to look again at the application of the Levy to ensure that the energy-saving recycling of steel through electric arc furnace production is encouraged and not deterred. The ISTC shares the concern of the UK Steel Association about the decline in the proportion of EAF steelmaking in Britain in contrast to the experience of all other EU countries which produce steel. The ISTC calls on the Government to ensure that:

    —  the measures taken in other EU countries do not put steel producers in those countries at an advantage;

    —  the Climate Change Levy is applied in ways which do not put EAF steelmaking at a disadvantage nationally or in relation to other European producers.

INFORMATION AND CONSULTATION RIGHTS

  The ISTC has asked the Government to accept that some British based multinational companies are not voluntarily extending to their employees basic rights to information and consultation.

  The ISTC ask again that the Government should legislate to ensure that:

    —  British employees in multinational companies are enabled to practise the same rights to information and consultation as their counterparts in other EU countries;

    —  Britain is no longer the country in the EU in which it is easiest to dismiss working people.

INDUSTRIAL POLICY

  The experience of the ISTC is dealing with the proposed run down of the rail plant at Workington revealed a disturbing unwillingness on the part of the Government to discuss with the companies and the trade unions concerned ways in which it might use its purchasing power and influence to benefit British manufacturing. Corus was transferring production of a strategic requirement out of UK control and the Government was announcing a 10-year £80 billion programme to develop the national transport infrastructure yet the Government gave no recognition that its plans might be developed in ways which would enable the country to retain a strategic asset, give practical support to the hard-pressed steel industry, and promote well-paid jobs in an area of high unemployment. The ISTC also reminded the Government that the cost of restoring the railway system would be substantially increased if it became necessary to import rail—at an estimated additional cost of £40 per tonne.

  The ISTC is convinced that the Government should seek to ensure that the massive expenditure on transport is deployed to assist the track production facilities in Workington and other parts of the manufacturing at this critical time when the gross overvaluation of Sterling in Euro terms—sustained by the current economic policy of the Government—is fast eroding its base in this country.

  It would be a grave failure to protect national strategic interests if the plant at Workington was allowed to close.

1 November 2000


 
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