Select Committee on Welsh Affairs Minutes of Evidence

Examination of Witnesses (Questions 260 - 279)



  260. In your evidence to the Trade and Industry Committee you told them in reply to a question that Corus were investing £300 million in steel plant in the UK this year. Then in subsequent written evidence you only detail commitment to £18 million spending. Where is the other £282 million?
  (Sir Brian Moffat) I am sorry, I do not know what you are talking about. I know the report but it is the £18 million I do not know.

  261. I shall quote what I have and you can tackle it. This is paragraph 13 of the Fourth Report of the Trade and Industry Committee. In evidence on 14 February 2001 we put to Sir Brian Moffat the accusation levelled by the ISTC in supplementary evidence to us that Corus had no proposals for investing in new plant or equipment in Britain when it made its restructuring announcement on 1 February. Sir Brian told us that Corus had announced plans for investment on 13 February and that they would be investing over £300 million this year, although in subsequent written evidence Corus corrected this impression, stating that Corus has not announced an investment programme and gave details of three projects totalling only £18 million announced so far this year. The £18 million is evidence you have given in writing to the Trade and Industry Committee. Can you explain?
  (Sir Brian Moffat) Thank you, that has put that in context. The £18 million was because we were being asked whether it was true that we would not invest in the UK iron and steel industry this year, particularly in the integrated parts and the £18 million was a response which we had actually announced in the previous ten days or so at three of our plants in the UK. The £300 million expenditure programme is the sort of money we spend on an annual basis going forward. Some of those schemes are in being and are being undertaken today. Indeed when you see our annual report you can pick up the details of many of those schemes. One was an announcement about recent schemes as against an ongoing process.

  262. So the £18 million is a new investment programme and the rest is ongoing expenditure.
  (Sir Brian Moffat) They were new schemes, part of those would form part of the £300 million going forward over time. Some of our schemes take two and three years to build. As you know, they are big and they take a relatively long time to build and can go over two or three years of the annual results.

  263. If you are providing information to us in writing, would it be possible for you to includes these too.
  (Sir Brian Moffat) That is in the annual report.

  264. How the remainder of the £300 million will be spent?
  (Sir Brian Moffat) No, not going forward but historically how we spend money in terms of capital expenditure. That is properly, and legally has to be, shown and we do that at the end of the year.

  265. We want to know what you will be spending in this next year to 15 months. How do we find that out?
  (Sir Brian Moffat) You will find that out in the report.

  266. Once you have spent it.
  (Sir Brian Moffat) Yes.

  267. We cannot find out in advance.
  (Sir Brian Moffat) No.

  268. Do you know?
  (Sir Brian Moffat) Yes.

  269. Why will you not pass that information on to us?
  (Sir Brian Moffat) Because it is commercially sensitive information. We do not give our competitors rhyme and verse.

  270. This is not massive new investment.
  (Sir Brian Moffat) £300 million is pretty big money.

  271. Yes, but you have said that only £18 million of it can be regarded as new investment. What is the problem in divulging the information about the other £282 million?
  (Sir Brian Moffat) I did not say that. I was asked in the context of the £18 million whether it was true that we were not going to spend any more money on iron and steel making in the UK and I instanced those three schemes which we had announced in the previous ten days or so, which confirmed that we were going to continue to maintain properly and invest in our integrated iron and steel plants and indeed in our downstream plants in the UK. Our annual programme of investment in the UK is on record over many years, which has been very significant and will continue to be significant. It was in that context I was talking.

  272. You intrigue me. I cannot understand why you cannot let us have your planned programme. What huge secrets are you hiding from us?
  (Sir Brian Moffat) I am not hiding secrets. I would have thought you would have been sensitive in the situation we are in and with our vulnerability in the market not to ask for information which could in any way be used against us by competition.

  Mr Caton: Yes, I represent 167 very sensitive people right at the moment.

Mr Llwyd

  273. When you last gave evidence before us you told us that you had not made any specific proposals to Government as to how they might help you because you were of the view that Government could not do anything legally to help you. Yes?
  (Sir Brian Moffat) In terms of avoiding these closures, yes.

  274. You have already confirmed today and it was in the Western Mail yesterday, that there have been 145 meetings with Ministers and Members of Parliament over the last two years.
  (Sir Brian Moffat) Yes.

  275. Not once was the question of assistance raised by yourself or your colleagues.
  (Sir Brian Moffat) Not assistance in the direct sense of monies, state aids to us in that sense, because we know and have fought with Government against state aids with competition. What we should like and continue to like and over time we wish to participate in is helping to create an environment whereby investment in the UK becomes more attractive, which in turn helps manufacturing industry and therefore, given that we are the main material for manufacturing industry, we shall sell more steel in the UK.

  276. What in particular are you referring to there in terms of aid?
  (Sir Brian Moffat) No, sorry, not aid, a manufacturing environment which facilitates and encourages investment.

  277. With regard to operating aids, for example, which I suggested to you last time we met, you were of the opinion that operating aids could have been involved and could have been used to help you and could have been suggesting legally that they could have been brought in, for example business rates relief and other matters.
  (Sir Brian Moffat) I was pointing out that for things like rates we get taxed like all companies and individuals in this country and where we think we are being over-taxed we appeal. We have appealed and indeed in some areas have got money back. That is not always the case. Here is an update on the last Committee in Wales. We thought we were going to get £4 million back in rates for one of our works, which was an appeal for 1991, together with the interest burden on the money we had paid then, which was more significant than the £4 million. Two days before the expiry of the ten-year period the rates were re-appealed against us and we shall not get that money.

  278. What I am putting to you, perhaps not in a sufficiently direct way is that if you had gone to the DTI at some point and explained the full position to them, they would have been empowered—
  (Sir Brian Moffat) I have talked with Mr Byers about rates specifically and I have written recently to the Chancellor about this situation too and sent a copy of that also to Mr Byers because the right hand does not seem to know what the left hand is doing, if after ten years, within two days of an expiry date, having given us our appeal, they appeal against it.

  279. You did send a written note to us after the last evidence session referring to comparable rates bills between two plants in Wales and one in Holland, did you not?
  (Sir Brian Moffat) Which shows that the ones in Wales seem to be very highly taxed.

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