Select Committee on Trade and Industry Minutes of Evidence

Examination of Witnesses (Questions 112 - 119)




  112. Good afternoon, gentlemen. This is a bit of a novel experience for us. This is a new building but this particular room is constructed for a far bigger Committee than we have, so we are not normally as far away from you as we are today. Can I welcome you today. Sir Brian, could you introduce your colleagues and then we will start.

  (Sir Brian Moffat) Yes, surely. Thank you, Chairman. On my right is Allan Johnston, who is Director of Human Resources in the company, and on my left is David Jackson, who is Director of Corporate Relations.

  113. Thank you. We are grateful to you for coming today. We realise that today is the end of the consultation period and that you obviously wanted to talk to the unions. Part of our function is to get at the truth and get rid of some of the clutter that surrounds this issue. The Prime Minister asked you to think again and you have had these 14 days in which you have taken representations, have you had second thoughts of any kind?
  (Sir Brian Moffat) Can I just correct you on one or two points and then I will try to answer your question?

  114. Yes, of course.
  (Sir Brian Moffat) First of all, the consultative period so far as the announcement was concerned has not actually started, it starts on the 15th. What we agreed with the national officers of the trade unions was to give them a fortnight to talk among themselves and to think about the announcement and, indeed, to meet with us when they wished in order to ensure that they had a full understanding of the reasons for the announcement as well as the detail before the legal consultative period of 90 days started. We have just had a meeting today with them, a sensible, useful and constructive meeting, as to how now, in the light of the discussions that we have had and with the clarification of points, the discussions can start to take place at local level to get an even greater understanding of what is proposed; to hear if there are any suggestions to try to ameliorate the problem, which in business terms makes sense, and we are open to listen to them, as that is what consultation is all about. Then in the light of that to meet in about a month's time to see what the outcome of the situation is. That is exactly where we are as of just now as far as the trade unions are concerned. As far as the Government is concerned, the Prime Minister and, indeed, the Secretary of State for Trade and Industry, we have explained to them again what the problems we face are, and I am happy to talk to the Committee about that, what the reasoning behind the proposed closures and job reductions are. At the time we were not in a position to talk about the detail, although we were able to outline the sorts of regions that were likely to be affected, because we had not finished working out the plans. As soon as we had we wanted first to talk to the workforce about them because consultation, unlike what has been said in the press, has taken place over a considerable time with Government, and by that I mean years, in terms of the worsening climate as far as industry is concerned, and indeed in the plants, particularly in the plants affected. It was not news in terms of the trade scene. The unfortunate thing for those directly affected with job reductions was it confirmed their worst fears because the consultative process is built within the fabric of the company wherever we are, wherever we operate, and it has been over many, many years.

  115. I am not very sure if you and I have the same definition of the word "consult". Maybe we could get clear what you mean by it. Has there been any material change as a consequence of the first 14 days of discussions since your announcement?
  (Sir Brian Moffat) No, but that was never the intention of the first 14 days. The first 14 days was to give the unions time to consider and decide how best to approach the consultative period. How to tackle it. They have now decided how they wish to do that, which is to allocate to the various plants involved and to take the discussions in detail with the local management, and we have agreed to that. In the light of those discussions to then bring them back to national level and to talk with myself and colleagues, Mr Johnston in particular, about the way forward as well as—because there is an inevitability for some jobs out of that—how we develop training or retraining schemes and deal with people who unfortunately will be redundant.

  116. I am sorry but are you suggesting that there may well be fewer people made redundant as a result of what will now be set in train at the local level following from your announcement?
  (Sir Brian Moffat) We are not suggesting that but we are open to look at any suggestion, constructive suggestion, to try to overcome, if we can, the business scene that we are faced with. We are not saying this is game, set and match, we are saying we will talk in detail, because we have not yet talked in detail about the particular proposals and over the period of time in front of us, several months in front of us, we will talk about that and listen to any constructive suggestions that anybody wishes to make in terms of our trade union consultative process.

  117. You have said already that you had been having discussions of this character prior to the announcement last week.
  (Sir Brian Moffat) We have got Works Councils at all the works, indeed we have got a European Works Council as well, and our employees were fully aware of the difficulties we faced in the UK both at the corporate level through, for example, the European Works Council, and through the individual within the Works Councils so far as it affected the particular businesses.

  118. You have in the past, for example, I understand, had an offer from the unions to buy Llanwern, is that correct?
  (Sir Brian Moffat) There was a proposal from one of the unions, from the ISTC, that they wished to consider the thought of buying Llanwern before Llanwern had actually been identified as a possible closure situation by us. In the event they have never taken that further.

  119. Is it not the case that on 29 February you sent a letter to the ISTC stating "I do not think it appropriate to meet to discuss a possible acquisition of Llanwern by you"?
  (Sir Brian Moffat) At that time, yes. At that stage we had not finished the work to specify that Llanwern was a closure candidate. The question of Llanwern as we now know it, and indeed the whole subject, is a question of market size in the UK and the fact that the market is not growing, the market is declining, particularly in flat products. It is not a question of maintaining capacity, we have far too much capacity in the UK for the market.

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