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Lord Sainsbury of Turville: My Lords, with the greatest respect to my noble friend, I believe that his desire to return to the policies of the past and the failed policies of boom and bust is not one that the great majority of British industry would in any way welcome. I see that my noble friend shakes his head, but, in reality, if we want to reduce the level of the pound, there is only one way that that can basically be done; namely, by convincing the financial markets that inflation will take off in this country and that there will be an extensive increase in the money supply, with all the inherent risks involved in terms of inflation rising. That is surely one of the lessons that has been learnt over the past 25 years. This Government have no intention of returning to those polices. If people want to put forward such policies, I believe that they should honestly say that increasing the money supply and the inflation rate is what they propose in order to bring down the pound. British industry should be asked whether that kind of instability and boom and bust is what they want.

Lord Brookman: My Lords, perhaps I may begin by declaring an interest. I worked for some 20 years at the

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Ebbw Vale steelworks, which is now one of those places destined to be closed. I must confess that I never thought that I would be present in this Chamber and hear from my noble friend the Minister--not of his making--that the heart would be ripped out of the Welsh steel industry. It is a sad day for me. Of course, even further job losses will take place in Redcar and elsewhere; and, indeed, there will be an unspecified number in other areas, probably 3,000, about which we do not know as I stand here today.

Corus is wrong. It is short-sighted and, as many noble Lords will I am sure agree, it is grossly unfair. The company should keep its nerve. My noble friend the Minister is correct: manufacturing has a future. Toyota and Nissan showed that recently with their respective announcements. Corus is wrong in the whole area of consultation. Quite frankly, the situation is absurd. My noble friend said that the Government knew about the company's plans at eight o'clock this morning. That is unbelievable. Therefore, if ever there were a case that proved that further legislation should be introduced so that workers could have their due rights discussed in consultation, this situation has surely proved that point.

My union, along with my successor, has worked extremely hard in a proper manner to put together a plan, a set of proposals. The latter was not formulated off the top of anyone's head in that sense: the proposals were properly constructed so as to try to save these jobs at Llanwern. They suggested the putting together of a consortium. That suggestion was rejected out of hand. That, in itself, is disgraceful. Workers have a right to be consulted and to have their views considered. If that union, the Iron and Steel Trades Confederation (ISTC), has a consortium ready to pick up the gauntlet in an effort to try to save those jobs, I believe that Corus should listen to the workers even at this late hour.

Can my noble friend the Minister tell the House what the Government actually put before Corus in relation to the package? Indeed, the Welsh Assembly also maintained that it did so. Finally, will my noble friend or the Government be attending further meetings with the company to try to persuade those concerned that what they are doing is irresponsible and wrong for the British people?

Lord Sainsbury of Turville: My Lords, I agree with my noble friend; there is a future for manufacturing in this country. Indeed, I believe that there is also a future for steel manufacturing in the UK. That is why we have asked Corus to reconsider its decision. I very much hope that the company will give serious consideration to the views that we have put forward today.

As regards consultation, it is most regrettable that people hear of these collective redundancies by way of radio programmes rather than through proper arrangements from the company. That is why, on 18th January in the light of events elsewhere, the Secretary of State announced a review of UK arrangements for collective redundancies. As I said, this is no way for people to hear about such developments. I can tell my

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noble friend that we did not go into great detail on the package of measures. It was not an enormous package, but it was dismissed out of hand by the company. Again, that is a sign that the company is not prepared to give serious thought to these issues.

When proposals--though not worked-out properly--were put forward for the workers to take over some of these operations, it is extremely unfortunate that they were not given any consideration. I hope that the company will now reconsider the issues involved and sit down with the Government, the trade unions and the National Assembly for Wales to see whether we can overcome at least some of these difficulties and identify a way forward.

Lord Marlesford: My Lords, I obviously realise the deep anxiety and concern of the local people in Wales as a result of this announcement. I recognise that Corus probably behaved less than tactfully. I also recognise that the company may have made a commercial mistake. I have not the slightest idea as to whether or not it did; indeed, I wonder whether anyone in this House knows whether or not it made a commercial mistake. Does the Minister recognise that the economic success of this country, over the past decade at any rate, has been largely due to allowing major restructuring of British manufacturing industry?

I take the latest figures available for steel. At constant prices, the value of output of iron and steel from the UK increased by 32 per cent between 1983 and 1999, during which period employment in the industry fell by over 50 per cent. In the eight major manufacturing industries in the United Kingdom, employment since the end of the war has fallen by over 80 per cent; in steel by 82 per cent. During that period the total employment went down from over 4 million to well under 1 million. Yet we have an economy with high productivity and high output. Inflation for the past decade has been less than 4 per cent. As the Minister rightly says, that is one of the factors that makes the pound high. I wonder whether higher inflation would be a price worth paying in order to get a lower pound.

Does the Minister agree that it is right to allow overall market forces to continue because otherwise we too could regress as France has done? France has considerable economic problems because it has failed to face up to restructuring.

Lord Sainsbury of Turville: My Lords, I do not think this is a question of tact; it is a question of how a major corporation in this country behaves to its workers. I believe that in this day and age consultation and discussion with them about long-term strategy when in this difficult situation is absolutely fundamental to running a good business. As I say, this is not a question of tact; it is about how one runs a modern business appropriately.

The Government are quite clear. We are not saying that we know better than Corus with regard to its strategy. What we are saying is that a company of this

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size in these extremely difficult circumstances should be prepared to talk to the Government to discuss its strategy and the way forward so that it can convince the Government that it is following an appropriate strategy and adopting a long-term view and that it is not reacting to a short-term situation. When it refuses to do so, it cannot expect the Government or any other parties not to suspect that it is taking a short-term view. The behaviour of this company is not in tune with what we would expect of a major company. Of course, we are well aware of the importance of restructuring and, indeed, the necessity for it in many industries. However, this company has systematically restructured over a long period and has achieved incredibly high--indeed, the highest--rate of productivity in Europe for this kind of plant. The question, therefore, that must be raised is whether it is a long-term sensible decision to take the action that the company has done. That is what we question, not the need for restructuring to take place where it is necessary.

Lord Davies of Coity: My Lords, this is an extremely sad day for the people of South Wales. It is not the first sad day that the people of South Wales have had to suffer. I think that we all recognise that for well over a hundred years the economy of South Wales was based on coal and steel which produced hundreds of thousands of jobs in their heyday. I take a leaf out of the book of my noble friend Lord Shore when he says that we should not calmly discuss the eonomics of the situation. I am not concerned in this debate about the exchange rate or restructuring. What I am concerned about is the impact that this action will have on people's jobs, on communities and on the quality of life in South Wales when these closures are implemented. I have always believed that we should consider the economics of the situation but that we should also remember that the economics must be geared to improve people's quality of life. Sometimes we have to stand back and say, "What is most important is how this impacts on people".

My noble friend said that Corus employs 22,000 people in the steel industry in this country. When I left the industry 32 years ago in 1969, there were 17,500 people working in a single plant at Port Talbot where I had worked for 20 years. That is the difference. I congratulate the Government on attacking Corus for what I call "industrial vandalism" in this case. It is not considering the people who have produced the steel and helped to make the profits over a long period of time. The Opposition ought not to be carping about the Government's condemnation of Corus. They should support that condemnation. They should support the Government if and when they put in place support for the people involved. I say that for one big reason: it is not so long ago that the party opposite saw pit after pit close in this country, particularly in South Wales, damaging the interests of communities and

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people. This House needs to face up to the fact that people are more important than anything else. I believe that the Government recognise that.

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