Debate on the Address

My Lords, congratulations are warranted on a first-class maiden speech, as was the previous one. I am sure that all noble Lords present share my view and warmly congratulate the noble Lord, Lord Rowe-Beddoe. He and I have much in common. No, I did not go to Cambridge, but I did go to grammar school. We were born in the same year, but I won’t tell what year if he won’t. We did our national service at approximately the same time, he in the Navy and me in the RAF. Of course, as you can tell by my accent—not necessarily by his accent—we are both Welsh, and very proud Welshmen we are. The similarities end here—he has three daughters and so have I, hence our aged look. The noble Lord has had a distinguished career. As chairman of the Welsh Development Agency—we have just heard him talk a little about that—he was successor, some years down the track, to Dai Davies and myself. He was some eight years in that job. His work in the Wales Millennium Centre is recorded and has been invaluable. The noble Lord has made a major contribution to the people of Wales, and I sincerely hope that we will hear from him on many more occasions in this House. I am grateful for the opportunity to speak in this debate and to focus on the approach to British industry and economical development, as well as to refer to climate change. Under Labour’s stewardship, in my view—I realise that it is not necessarily the view of many present in the House—our nation has prospered from nearly a decade of growing employment, steady economic growth and low inflation. In that respect, I agree with the Minister in his excellent opening address to the Chamber. Much of the benefit has been skilfully and imaginatively deployed to restore and develop the NHS and our public education. Much has been done, but much more needs to be done. However, noble Lords would not expect me to intervene in the debate just to celebrate the successes of the Government whom I support. No, I speak from the perspective of a former general secretary of the steel workers’ union, the Iron and Steels Trade Confederation, now renamed Community—a union with a new and imaginative approach that is capturing the imagination of many. I speak to reflect once again—I have said it before in this Chamber—my deep concerns for the millions of people whose employment and standards of living depend on manufacturing industries. I, for one, believe in a strong manufacturing base. Therefore I am sad to have to say that my Government could do more for manufacturing. For some, the Government offer little comfort to British manufacturing. Our manufacturing industries are losing jobs at a much faster rate than the competing industries in all other European countries. That is especially true of the steel industry, whose productivity has maintained an average of 10 per cent annual improvement during the past 20 years. British productivity in steel is among the highest in the world, yet output has declined. Indeed, our output per capita has fallen below that of every other western European steel-producing country and the United States of America. Why? Following privatisation under a Conservative Government, the stewardship of the main player in this country, then named British Steel, was—I have to make the point—disastrous. Many noble Lords will recall that, by March 2003, the share price fell below 4p. In other words, the company came to the brink of collapse. Thankfully, new and effective management, consulting constructively with my old union and the other steel unions while investing large sums of money in all its major installations in Britain and the Netherlands, has seen the unconsolidated share price rise to just over £1. It has been said before that the challenges are considerable and will intensify; the Minister said so himself. That will be the case whether the owner is Tata Steel, CSN—the Brazilian company—or any other company with or without access to cheap slab or iron ore, because UK producers suffer greatly compared to other European producers. That is my key point. For example, why was a decision taken to move from the tested method for calculating new entrant allocation for steel companies under the Emissions Trading Scheme in its second phase, and to move to arrangements not used by any other European producer? That will penalise the very investments likely to yield increased carbon efficiency. In my considered view, my Government do not ensure a level playing field—and they should. Community and other unions are correct in saying that on this issue and in other areas the Government should listen to their representations. Some weeks ago in this Chamber, the noble Lord, Lord Lamont, in a question to the Minister said that it was outrageous—I paraphrase him, but that is the feeling that he conveyed—that the French and Luxembourg Governments were examining and questioning the bid for Arselor by Mittal Steel. I disagreed with the noble Lord, Lord Lamont, but the Minister agreed with him. Those Governments were trying to ensure that the workers’ interests and their national interests were being safeguarded. I have no difficulty with that. In these troubled times, is it not the case—and if it is not, let us be told—that steel is still a strategic industry? I have always held that view and if that is not the case I should like to hear it from the Minister. If it is a strategic industry, the Government should support it in every way possible. Take our policies on climate change—we know that it is of great importance to this country and to the world, as has been said here most eloquently, but heavy users of energy in this country are again at a disadvantage relative to the rest of Europe. That is an undisputed fact. For example, in recent months, Avesta Polarit, a stainless steel manufacturer in Sheffield, closed, citing the high cost of energy as a key factor in that decision. Last week, Alcoa, the Canadian aluminium manufacturer, closed its plant near Swansea for exactly the same reason. Carbon steel companies in the UK pay between 40 and 50 per cent more for their energy than their competitors in western Europe. Our European partners will and do not stand idly by while their steel or other manufacturing industries become uncompetitive because of mounting imports from countries without Kyoto obligations. I have a great fear that carbon steel efficient plants in the United Kingdom will suffer greatly at the expense of China, Brazil or a countless number of other countries that are not party to Kyoto. That is not right and my Government, the Government who I support wholeheartedly, will have failed if they sit idly by. Finally, I was privileged to attend the Aneurin Bevan memorial lecture given by John Monks, once general secretary of the TUC and now general secretary of the European Trade Union Confederation. I recommend his first-class thesis and that it be widely read. He spoke of ““new capitalism””—yes, ““new””, which is the operative word—in which firms were bought up and then restructured, before being sold off at a profit. John talked of ““Wimbledonisation””, whereby we in the UK provide a good location, but the top prizes are won by foreigners. That speech is worth a read. He is a moderate man making a case worth listening to.