Examination of Witnesses (Questions 280
WEDNESDAY 2 MAY 2001
(Sir Brian Moffat) And are going to be even more highly
281. Which again I am afraid brings me back
to the question of why, when you were in discussion with Government,
did it not occur to you to say, if you are in difficulty as you
are now, for example that this is in an Objective 1 area and it
is perfectly legal for you to ask for a business rates holiday
which would have been £15 million saved in two plants alone?
(Sir Brian Moffat) Which they did the reverse of:
they taxed us even more.
282. Did you ask, is the question? You do not
expect them to do something if you do not ask.
(Sir Brian Moffat) I told them I would welcome any
suggestions they could make within the law which would help our
situation, but I did not think that the fundamental problem of
the marketplace could be solved with subsidies because I thought
and still think that that would be banned under the ECSC Treaty
because it would be state aid. I would also say that Ministers
did not demur from that.
283. Those discussions with Ministers must have
been quite interesting then if there was no question of aid when
you were saying you were in difficulty. One wonders what you did
(Sir Brian Moffat) You can ask the Minister.
284. We shall at some point. Since we last met
you know that the Government have agreed a package with the unions
that about £80 million will be paid to defray the threatened
workers' wages bill for a year.
(Sir Brian Moffat) No, I am not aware of that.
285. The package was put to you as a company.
If you are not aware, perhaps Mr Jackson or Mr Pedder might help.
(Sir Brian Moffat) Nothing has been put to us as a
286. Nothing at all?
(Sir Brian Moffat) Nothing at all. The only thing
which has been put to us as a company I have already talked about
and it is to do with a training scheme where the company will
match the Government pound for pound in retraining our redundant
steel workers for a limited period.
287. May I ask a couple of questions on costs?
You mentioned with respect to the Welsh Assembly that you live
with a taxation burden on industry. CBI reckons that dividend
tax credit and high fuel duty alone have cost £26.4 billion
across this Parliament. Taxes have gone up by 10p on income tax.
You mentioned energy prices and Sir Brian mentioned this at the
last meeting saying that he had raised the issue with the Secretary
of State who said he was going to talk to the Regulator and we
are still waiting for an answer. You talked about the climate
change levy, which I think you have got down to £8 million
but that does not apply to 40 per cent of steel producing industries
because the Kyoto Treaty has not been signed up to. You say maybe
this all needs to be addressed. What do you think the actual burden
is on your business of regulation and tax which does not apply
to your competitors in cheaper countries? Have you given a list
to the Secretary of State which he could do something about?
(Sir Brian Moffat) We have given the individual items
from time to time. We have not updated that list on a rolling
basis because energy prices change significantly, usually increase.
No, we have not given that recently.
288. The British Chamber of Commerce reckon
in their burdens barometer a figure of £9.62 billion regulation
costs on British industry per year which are new. Have you gone
through that list and presented it to Mr Byers and said if he
got these burdens off your back you would be better off?
(Sir Brian Moffat) We have talked to different Ministries
individually, whether it is Transport or whatever it may be, but
we have not collectively added all that up.
289. You have just said that the right hand
does not know what the left hand is doing.
(Sir Brian Moffat) I would put it at several tens
Mr Smith: On a point of order, I object. This
is just point scoring.
Mr Paterson: This is about reducing the costs.
Mr Smith: This is such an important subject
and I do object. The Chairman of the company has made it absolutely
clear that from his point of view the main factor driving this
is the market and the demand for steel.
Chairman: I shall be the judge of whether it
is or not. Mr Paterson, will you continue as long as it is about
290. Sir Brian has just said that he could put
a figure of tens of millions on it. Could you present a memorandum
to this Committee listing these burdens?
(Sir Brian Moffat) I think the UK Steel Association
for the industry has done that. I think Mr Pedder has a report.
291. Could you send it to each one of us?
(Sir Brian Moffat) Yes, we could send
it to the Committee, if I am correct and I think I am.
292. If those costs were lifted, how many jobs
would be saved?
(Sir Brian Moffat) I do not know, because it is about
market, but it could obviously have some positive impact in saving
jobs; it could have. I cannot be very specific, because I do not
293. You did say £15 million, if I am right.
You said that subsidies were not going to
(Sir Brian Moffat) I said several tens of millions.
I do not know how much.
294. What we are talking about here, if these
costs are correct, is the equivalent of £15 or £20 million
subsidy. You said that would not save jobs.
(Sir Brian Moffat) I am saying that at any one period
of time one can give an answer. I think the UK Steel Association
has submitted evidenceI cannot remember to which Committeeon
the subject. The question to go with it, when I say it could have
an effect, is that it depends how long-lasting such a situation
is. We have seen prices in energy terms go up and down. We suffer
that at the petrol pumps over a year, for example.
295. You are saying clearly to the Committee
that lower regulation costs, lower taxation costs, no climate
change levy, etcetera would mean you saved tens of millions of
pounds per year and you would be able to employ more people.
(Sir Brian Moffat) Yes, the likelihood is that if
it were sustained we could employ more people.
296. And if pigs had wings they could fly.
(Sir Brian Moffat) If it were sustained there would
be a degree of greater competitiveness, which hopefully would
encourage our customer base in the UK also to manufacture to a
greater extent and we could feed into that market. It is not just
us, it is the whole effect on our customer base as well as our
costs. If we can help our costs, hopefully we can also encourage
our customer base because their costs will be helped.
297. Are you saying that if all these costs
were wiped out tomorrow you would not go ahead with closures?
(Sir Brian Moffat) No, I am not saying that.
298. No, you are not saying that; precisely.
(Sir Brian Moffat) If we knew it was sustainable and
our customers were also able to take benefits such that they would
order more business from us as a result of it ...
299. By then it would be too late because you
would not be producing steel in this country.
(Sir Brian Moffat) That would remain to be seen.
3 See page 55. Back