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Paper Industry

Volume 990: debated on Monday 4 August 1980

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asked the Secretary of State for Industry if he will make a statement on his recent meeting with representatives of the paper industry.

I met representatives from the paper industry on 21 July, when we discussed the industry's situation.

Does my right hon. Friend agree that we face the threat of the virtual extinction of the manufacturing of news print in Britain? Does he accept that that has arisen despite good labour relations and considerable improvements in productivity? What steps are the Government taking, or what steps can they take, to ease the threat?

I accept that the industry faces difficult pressures. I accept, too, that there are a limited number of possibilities, which are now being discussed between the Government and the industry.

Is the Secretary of State aware that about 60,000 jobs in the paper and cardboard industry are in jeopardy, principally because of the Government's insistence on raising the price of energy? Is he aware also that if that continues there is no way in which our industry will be competitive vis-รก-vis its overseas competitors?

It is true that energy prices throughout the developed world are making it difficult for industry. That is one of the factors that it is raising with us.

Is not the increasing cost of energy one of the greatest burdens from which the paper and board industry is suddenly suffering? Is my right hon. Friend aware that the enormous increase in energy prices is breaking the camel's back?

My hon. and learned Friend will know that energy prices are a matter for my right hon. Friend the Secretary of State for Energy. The industry is arguing strongly that energy prices are damaging it.

Does the Secretary of State accept that British industry is paying much higher energy costs than its foreign competitors? Does he agree that what is needed, if the industry is to survive, is Government action at least to put it on a par with its competitors? Will he take the opportunity to announce that under section 7 of the Industry Act 1972 he is prepared to give assistance to Bowaters' Ellesmere Port plant to save 1,500 jobs?

I must not assume the responsibilities of my right hon. Friend the Secretary of State for Energy. There might be an argument whether, and if so the degree to which, the industry is paying more than its competitors. I have told the House that Bowaters and the industry are having discussions with the Government.