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Automotive Industry

Volume 707: debated on Tuesday 27 January 2009


My Lord, I shall make a Statement on the Government’s plans to help the British automotive industry weather the downturn in the global economy.

The automotive industry—with nearly 1 million employees, from manufacturing to retailing, and £10 billion worth of added value to our economy—is in the front line of the downturn, with output falling faster and further than any other sector since the summer. We need to counter this to prevent an irreversible loss of capacity, skills and technology. The health of the automotive industry is vital to the strength of manufacturing in Britain and is at the heart of many of our regional economies.

The industry and its supply chain will benefit from the measures that the Government have already taken to boost the economy. These include the VAT cut that saves consumers hundreds of pounds when buying a vehicle, and government guarantees that secure £21 billion in new and existing credit lines and lending for businesses, many of them in the automotive industry supply chain.

But I recognise that we need to do more. Today’s measures will provide a specific boost to the industry, providing real help and laying the foundations of its reinvention for a low carbon future. This industry is not a lame duck and this is no bail-out. The industry has been transformed over the past decade. Productivity has risen, catching up and overtaking that in both France and Sweden. In Britain today, we have some of the world’s most productive car plants.

For the future, Britain needs an economy with less financial engineering and more real engineering. The car industry can and should be a vibrant part of that future. The steps we are taking today will help companies speed their way to becoming greener, more innovative and more productive. This is the route to securing jobs for the long term as we build a more balanced economy for Britain’s future.

The world’s car industry is at a turning point. In Britain, we need to be at the leading edge of the development of low carbon vehicles and green manufacturing. This offers a major business opportunity for us, but this greening of the industry needs investment in plant, research and development.

Today I can announce that to back that investment we will provide loan guarantees to Britain’s auto manufacturers and large suppliers. First, we will offer guarantees to unlock loans of up to £1.3 billion from the European Investment Bank. Secondly, we will offer guarantees to support up to a further £1 billion of lending, or loans, where appropriate, to cover worthwhile investments not eligible for EIB support or which will bring special value to Britain.

Applications will be assessed by us on a case-by-case basis. There is no blank cheque on offer and there are no operating subsidies. We are committed to ensuring that anything backed by the scheme offers value for taxpayers’ money, enables us to green Britain’s economic recovery, delivers significant innovation in processes or technologies for the long term, and supports jobs and skills in Britain.

To support these aims, the Government will build on their programmes that are currently supporting the automotive industry. To further strengthen the sector’s skills, we are increasing funding for the training of employees. We have already developed a package to tailor the Government’s Train to Gain programme to meet the automotive industry’s specific needs. If there is the demand from the industry, my right honourable friend the Innovation, Universities and Skills Secretary will boost the funding to support new training to £100 million from its present £65 million. This offers real help to people, including workers in SMEs in the automotive supply chain. The £50 million Economic Challenge Investment Fund being announced separately today by the Higher Education Funding Council also creates new opportunities for automotive employers looking to tap into academic expertise in improving business performance.

Earlier this month, my right honourable friend the Transport Secretary announced the provision of £250 million to support consumers switching to ultra-low-carbon cars. But we want the car industry in Britain to meet that demand for low-carbon cars. So, alongside our loan guarantees for the greening of the industry, the next element of today’s announcement is that I am inviting the regional development agencies to work with the Technology Strategy Board to bring forward a further step-change in our programmes for research and development into cleaner engines, lighter cars, plug-in hybrids and components for electric vehicles. This will build on the £110 million of support for research and development that was announced last September.

We are looking at steps to improve car company financing arms’ access to additional funding. The finance arms play an important role in providing the credit that keeps the industry functioning. I have tasked the new Trade and Investment Minister, Mervyn Davies, to draw up a plan for improving their access to finance, a task to which he will bring considerable experience and expertise.

Taken together, today’s announcement will provide our leading automotive companies, their workers and suppliers with a significant boost. It will also ensure that the downturn does not derail the investment in innovation and change needed to make Britain a world leader in the development and manufacture of low-carbon vehicles. This is both an economic objective and an environmental imperative. The automotive industry knows that it must change to succeed in this new world. It has to be cleaner and greener. The Government know this is an important national objective, a key to building a competitive and balanced economy in the future.

Within the resources agreed in the Pre-Budget Report and the provision made then for such contingencies, we are determined as a Government to counter the credit crunch, counter the recession, create a level playing field for industry and build Britain’s low-carbon industrial future. We will take, as a Government, whatever action it is possible and appropriate for us to do. I commend this Statement to the House.

My Lords, I welcome the fact that the Secretary of State is here in person and of his own volition making this Statement. Only yesterday the Select Committee on Communications, chaired by my noble Friend Lord Fowler, published an excellent report which includes, in paragraph 140, this reminder:

“The most important announcements of Government policy should be made in the first instance to Parliament. Ministers should be reminded that trailing the content of announcements is incompatible with the Ministerial Code”.

I sincerely hope that the Secretary of State is going to communicate this message to all his ministerial colleagues.

The UK automotive industry has been in serious difficulties, in particular since last summer. In the past few weeks, that has turned into a catastrophic decline, with output falling by almost half in December. This industry is afflicted by problems that are all too familiar in other sectors, too: punitive taxation, slumping demand and, above all, a sudden tightening in the availability of credit. The Government have a lot to answer for, but it would be churlish not to welcome measures that may ameliorate matters. Having said that, as long ago as 16 October the Minister’s junior ministerial colleague Ian Pearson stated, in a Written Answer in another place, that:

“BERR continues to work closely with the automotive manufacturing industry on a range of key issues for the sector and has made clear it stands ready to assist the industry on new issues where appropriate, especially in the current economic climate”.—[Official Report, Commons, 16/10/08; col. 1423W.]

Never mind “standing ready”, the department has sadly been standing still for the past few months. The fundamental problem that needs to be tackled is the availability of credit.

An aspect of this Statement that I wholeheartedly welcome is the belated extension of the loan guarantee scheme to the car loan industry. The Conservative Party first pioneered calls for a far bigger loan guarantee scheme as long ago as 10 November, since when the automotive industry has fallen into desperate straits as Ministers dithered. At last Ministers have had the sense to listen to the Opposition. The glass may be only half full, but even these inadequate measures go in the right direction.

However, the Statement, which I have only just seen, raises some important questions. First, delivery: how quickly will these measures be implemented? Any detail that the Secretary of State could give us would be warmly welcomed. Secondly, as pointed out in the debate initiated by the noble Lord, Lord Harrison, over 80 per cent of cars bought in the UK are imported. Given how badly our manufacturing base has been damaged over the past 11 or 12 years, is there not a danger that most of the benefits of these measures will be dissipated as the demand generated merely sucks in more imports? What assessment has been made of that?

Thirdly, given the increasingly dire state of the public finances, are Ministers certain that this package is affordable? What assessments have been made of the additional financial exposure of the taxpayer? Fourthly, as the Secretary of State’s ministerial colleague the noble Lord, Lord Carter, also noted last week in the debate to which I have already referred:

“When one is considering sectoral intervention, one needs to be very clear that one is not propping up business models, product lines, capacity and pricing structures from another time”.—[Official Report, 19/01/2009; col.1530.]

What measures and precautions has the Secretary of State put in place to ensure that that does not happen?

I also warmly welcome the announcement about the Train to Gain programme. We must make much more investment in training and education.

I have a final and connected observation. Much of the automotive industry here in the UK is owned by vast international companies with sound balance sheets. If they are to benefit from measures such as these, what undertakings have they given in return?

While I welcome the fact that the Secretary of State is here where he belongs to make this Statement, I am afraid that the Statement itself leaves too many important questions unanswered. After years of persecuting the motorist, Ministers now offer a range of placebos to an industry that is facing the most serious crisis it has ever faced. Once again, this Government offer too little, too late.

My Lords, I join the noble Lord, Lord Hunt of Wirral, in welcoming the Statement and the fact that the Minister has made it to this House. Perhaps I may do what I normally leave to the Tories by commenting that my noble friend Lord Tyler suggested on 14 January that the Secretary of State should make Statements to this House first and his junior Minister should follow in the House of Commons. The Secretary of State did not seem to be immediately enthusiastic about that suggestion, but that is what is happening today. Can he confirm that that will be the precedent he will follow?

The noble Lord, Lord Hunt of Wirral, demonstrated accurately the serious state in which the car industry finds itself. I do not think that anyone who passes through Southampton will fail to recognise the problem that the automotive industry faces there. Southampton City Council is making far more money on parking charges for unsold vehicles than the motor car manufacturers are making through selling those vehicles. The automotive industry is clearly in crisis, which is, of course, why the Minister had to come to the House to bring forward proposals to help it.

We on these Benches will support many of the proposals. As the noble Lord, Lord Hunt, said, the training of employees through the Train to Gain programme is highly desirable and we welcome it. The Minister indicated that the Transport Secretary has announced the provision of £250 million to support consumers who switch to ultra-low carbon cars, and we welcome that. We obviously welcome the initiative that he has given the new Trade and Investment Minister to look at access to finance. It makes no sense that someone wanting to borrow money to buy a car can go to Barclays Bank, or perhaps I should say RBS, which has government support and pressure, but if they go to Volkswagen’s leasing or financing company, it is difficult to raise finance. That initiative makes sense in the context of what the banks are doing.

However, whenever the noble Lord, Lord Hunt, and I stand up to respond to Statements, I am always left with the underlying question: is this enough? The real financial issue in this Statement is the £1 billion of lending to cover worthwhile investments that are not eligible for EIB support. What will that lending be for? The Statement seems rather opaque in detail. Is it to support jobs? Is it to pay salaries for people who probably, without that money, would be made redundant? Is it to keep people in part-time work who otherwise would be made redundant? Or is it for investment in new products and new technology? The Statement is extremely opaque on that.

Will similar proposals come forward for the steel industry or other industries that soon come up with the begging bowl? You have only to turn on the radio or television to know the industries with a problem. Is this a disguised form of job preservation or genuine investment in the future of the British economy? The Statement indicates that we have moved to the next stage of the economic crisis. We have had two, three or four proposals by the Government to deal with the banking crisis and to endeavour to improve the provision of credit in the UK economy. The heat has gone from the Treasury to the Minister and, given the effects of the economic crisis, we are turning to British industry right across the board, in services and manufacturing.

I do not blame the Minister at all. I suspect that he has been extremely innovative. Although he will not admit it to your Lordships’ House, he has the brace of the Treasury behind him, pulling him back as he produces his innovative solutions. That is what I observe to be happening. Rather than this ad hoc approach as industry after industry has a problem—I touched on the steel industry and there will be others—does he not feel that over the next week or two the Government could take a more strategic approach so that the public, your Lordships’ House and the other place could have a view of the strategic imperatives that will save us from the frightful horrors that otherwise lie ahead? What are the strategic industries which need efficient support to ensure survival?

As the Government have no clear strategy but are going ahead on an ad hoc basis, dare I suggest that, if there is a strategic approach, there should be one or two key principles? First, any money spent by the Government in industry must deliver real value; secondly, it should be spending that can be undertaken quickly; and, thirdly, the work should be as labour-intensive as possible with other costs kept as low as possible. If those principles were applied in the proposals that I am sure the Minister will bring to this House in the next month or two, such a strategic approach would find merit with your Lordships’ House.

I welcome the concentration in these proposals on the greening of the car industry. That greening principle could apply to a number of other industries. We could invest in greening public buildings by investment in technologies such as ground-source heat pumps, better energy conservation and modern energy-efficient data centres. I am sure the Minister, with his strategic approach, could lead us to the forefront of the greening of British industry. I fear that without a strategic approach, this economy is heading for the edge of the cliff and we will fall off it.

Among the caveats, qualifications and criticisms, I discern a strong welcome for the Statement from the noble Lords, Lord Hunt and Lord Razzall. I do not think it is quite such an achievement to be able to make this Statement without it having been leaked or trailed three days in advance but, having said that, I am pleased to have done so today.

The noble Lord, Lord Hunt, asks how quickly we will be able to implement these measures. As far as the loan guarantee is concerned, we will be approaching the European Commission immediately for its clearance. As your Lordships know, it has already indicated that it will consider such clearance speedily and in a flexible way. Knowing my ex-colleagues, I am sure that they will live up to their word.

The noble Lord, Lord Hunt, makes an interesting point about the very large percentage of cars that are bought here which are imported from outside the country. This point is made in criticism of what is sometimes put forward as a useful measure—the scrappage scheme for cars. While it is true that between 75 per cent and 80 per cent of cars bought here are imported, they contain about £4 billion worth of UK-manufactured engines and other components. That is worth bearing in mind.

The noble Lord asks whether this is affordable. It is affordable because it will be funded strictly within the provision made for such contingencies by my right honourable friend the Chancellor in the Pre-Budget Report. We are talking about fresh allocations of resources within the terms and original sums announced by the Chancellor for the fiscal stimulus. We are not talking about an expansion of that stimulus in overall terms, and so the markets can be reassured of that.

The noble Lord made another good point, as did the noble Lord, Lord Razzall, about ensuring that the measures that we are taking are for new production processes and new vehicle models of the future, and not based on old business models and out-of-date products. In our case-by-case consideration of the applications for the loans and loan guarantees, I shall ensure that we are talking about production processes and models of the future, not the past. That condition is absolutely fundamental to everything that I have described and announced this afternoon. I am grateful for the noble Lord’s welcome for the additional training commitment, and I am grateful, too, to my right honourable friend the Secretary of State for Innovation, Universities and Skills for making additional sums available.

The noble Lord, Lord Razzall, was slightly carping, if I may say so, in describing us as having dragged our feet and come late to this announcement—a point that the noble Lord, Lord Hunt, also tried to make. We have to ensure that interventions such as these are properly weighed and properly considered, that they will meet real needs, that they target specific requirements that will make a difference in industrial sectors such as this, and that they are affordable. They have to meet the mark and reach their target, and, if it takes a little longer to establish that, I do not apologise for it.

However, I think that the noble Lord is slightly unfair when he suggests that this is the first measure of its kind that we have taken to help the automotive sector. There has been, for example, the working capital scheme that I announced to this House, the enterprise finance guarantee and other measures announced in the Pre-Budget Report to help to stimulate consumer demand, including the cut in VAT, the reductions in vehicle excise duty, and the provision for further finance for SMEs, including in the automotive supply chain. All those measures have already been put in place and important companies in this sector are already benefiting from them.

Lastly, the noble Lord, Lord Razzall, suggested that our approach is in some sense ad hoc. There is no sort of overall industrial plan. I am not presiding Soviet-style over some sort of Gosplan in which I am going to present indicative numbers for production and investment for every sector across the entire economy. We are certainly not in the business of bail-outs and we are not looking at the next intervention in line. We will take action where it is necessary and appropriate to do so within the overall funding for the fiscal stimulus provided by the Treasury on the basis of agreed criteria where the businesses in question are key to our industrial future, where their loss would have a substantial employment and regional impact and where government action would be likely to be effective and give value for money. It is on the basis of those criteria, and none other, that we will consider future interventions.

My Lords, I am sure my noble friend is aware that, when an economy goes into recession, the easiest thing for firms and households to do is to postpone the demand for durable goods, of which automotive products are as good an example as any. Therefore, it is not in the least bit surprising that that sector of our economy takes a terrible hit when we go into recession. However, it is equally true that when later this year, or more likely early next year, the economy starts moving forward again, part of the driving force for that will be the demand for durable goods of all kinds, including automotive products. Therefore, it is vital to have an industry sitting there and able to meet that demand when it emerges. The Government are to be congratulated, as I am sure they will be from these Benches, on offering proposals that will help that industry to survive and to improve itself to meet that emerging demand. That seems to be an entirely correct policy and one that I personally support.

My definition of rational action—my noble friend was more or less saying this anyway—is that you think before you act. The noble Lord, Lord Hunt, seemed to be saying that you should not do that, but rush into acting without waiting to think it through. The noble Lord might approve of that, but the Government are to be congratulated on working this through and coming up with today’s proposals.

My Lords, I am grateful to my noble friend. The auto industry, as both sides of the House have already acknowledged, has taken the brunt of the downturn far more quickly and deeply than any other. These are high-skill, high value-added manufacturing companies and they are at a turning point in their industrial future.

This is the main point and it is what has created the exceptional circumstances in this case. It would be really appalling if we were simply to take the downturn, ride out the recession and watch such a key industrial sector go to the wall, without being able to keep it in place to take advantage of the certain demand that will grow for its products when the upturn begins. It will play an absolutely key part as a cornerstone of this country’s advanced manufacturing. This Government stand full-square behind that industrial need and objective, which is why, among other reasons, we are taking this action today.

My Lords, does my noble friend recognise how warmly his Statement will be received on these Benches, and more widely and broadly? Has he had the opportunity to read, in Hansard, the debate that took place last Monday, which was answered by my noble friend Lord Carter of Barnes? Many ideas were presented to the Government there about helping the automotive industry. Professor Garel Rees has suggested, given that the downturn may last until 2011, the possibility of a kurzarbeit system of funding key workers in that industry—a practice copied, I think, in the Netherlands. Has my noble friend given any consideration to that system?

Will my noble friend also report on his visit to Brussels, where Commissioner Verheugen convened those in the European Union interested in the automotive industry, and what resulted from it? Will he ensure that there is a co-ordinated EU policy so that one member state does not try to outbid another, but that we have a co-ordinated industry? As he rightly says, here in the United Kingdom we have a successful industry, which is true of other European countries, and we wish to emerge successfully on the other side for the future.

My Lords, I am grateful to my noble friend and am aware of the debate that took place last Monday. I have not read every word of the Hansard report but I have been fully briefed on the ideas that emerged. He is right to point to approaches, schemes and programmes operated in other European countries, including the Netherlands. I am aware of the scheme that he referred to and continue to study it carefully.

However, I want to echo my noble friend’s important point about co-ordination across the European Union. It is only too easy, I fear, for different member states with important automotive sectors to find themselves played off, one against the other, by multinational companies which want to play the field in pursuing whatever benefit-incentive advantage they can. I hope that we will not see that approach either from the companies concerned or from European member states falling into that trap. I made that point at a ministerial automotive summit in Brussels two weeks ago, and it will require further co-ordination between me and ministerial partners in other member states.

My Lords, I recognise that many people feel that the Government have perhaps been too optimistic about how long the present troubles may last and that many may not share the view expressed by the noble Lord, Lord Peston, on how quickly they might be resolved. This appeared to include the head of Nissan, who suggested that it might be seven years before car sales and output generally return to previous levels that they have enjoyed. In those circumstances, what time limit will there be or what plans do the Government have to sustain such levels of expenditure if the present troubles last for a considerable time?

My Lords, I understand the noble Lord’s concern. This is a temporary framework being put in place and I shall not put a time limit as such on it, but it has a resource limit, which is a real one. We should be in no doubt that this sector will go through real difficulties and some profound change in the coming years. It is not our job to ignore the needs of the industry or to intervene in a way that will simply maintain the status quo and pickle the sector in past technology, products and processes. Our job is to help the industry and the entire sector to move with the times. It has a future, about which I am sure and confident. It has to embrace the future and our job is to help it to do so.

My Lords, I warmly welcome my noble friend’s Statement, unlike the noble Lord, Lord Hunt, who was rather churlish in his acceptance of it. I think that he was agreeing with it. However, I am a little unclear about the difference between loan guarantees and the insurance scheme being introduced by the Treasury for banks. My noble friend said that it was all inside the pre-Budget stimulus. Why does it need to be within that stimulus? If it is helping an industry, which clearly needs help, why should we not go beyond the figures that were sort of mentioned in the pre-Budget stimulus? The total level of stimulus is unclear. What is the difference between what the Treasury is doing and what is being done here? I assume that my noble friend is very friendly with the Treasury and has its agreement on what he said today, if he needed it. Perhaps he can explain that a little further.

My Lords, I would not dream of opening my mouth without the agreement of the Treasury. I note that my noble friend speaks as a former and very distinguished Chief Secretary to the Treasury. I know exactly what it is like and will always operate within its discipline.

The difference is that the insurance scheme that the Government have put in place is to help the banks deal with the loss of value of securitised assets that they have taken on to their balance sheets in the past. These loans and loan guarantees are available to corporates in this sector to assist in production and the introduction of new technologies and new models that in our view and theirs have a green future. That is the difference.

In answer to a previous question, I should add—not least because I have been prompted to do so—that the loan guarantee scheme has an effective two-year time limit under EU rules, as that is the period for which the Commission has agreed to relax the rules on state aid.

My Lords, I welcome a lot of what the Secretary of State has said, especially a reduction in financial engineering and an increase in real engineering. However, will he reassure us that we will really get there and will really get some creative engineering and some unique capabilities that might better anchor these facilities in this country?

My Lords, I absolutely share the noble Lord’s concern and interest in this area. If there is not real engineering, there will not be real loans or real loan guarantees.

My Lords, I very much echo what the noble Lord, Lord Broers, has said. What the Secretary of State has announced could be very helpful in advancing technology. The Secretary of State two or three times mentioned the cut in VAT. Does he recognise the growing awareness that this was a profound mistake and a waste of £12.4 billion? Shopkeepers, including car salesmen as much as anyone, are in the business of cutting prices desperately to try to sell things. Therefore, the result of cutting VAT merely meant that they would have to make a slightly smaller cut for themselves.

Will he therefore take to his right honourable friend the Chancellor the suggestion that he should announce that that VAT cut will be reversed with a time limit, which would stimulate people to buy things for a bit? That money could be used temporarily to finance the introduction of 100 per cent capital allowances for plant and machinery, and perhaps even industrial buildings, for a limited period to encourage people to bring forward plans for expenditure. Introducing 100 per cent capital allowances has no long-term effect on government revenue, which is a huge plus for it, but the £12.4 billion would be useable for the Government’s short-term cash-flow costs.

My Lords, I always take seriously and listen with great interest to what the noble Lord has to say, but on this occasion I simply cannot agree with him. It is all very well seeking new ways to stimulate the availability of credit or the availability of capital for investment, but the economy also desperately needs sustained demand and greater demand, for which we are providing a much needed stimulus. I simply do not accept his judgment about the effect of the VAT reduction and that everyone thinks it is a profound mistake. I know plenty of people who take the opposite view because they are not looking at this as a temporary expedient and as something to benefit the shops for Christmas. They are looking at the continuing effect for an entire year of the scale of spending power put into the pockets of consumers from which the economy will benefit for the year and beyond, and not just for a few weeks.

My Lords, in thanking the Minister for this Statement, I know that I speak for many, particularly those who are living, working and ministering in areas affected by the downturn in the automotive industry, when I say that this level of support and commitment is to be very much looked on with favour. Perhaps the Minister is disappointed that within this debate so far precious little has been made of the main thrust of his Statement; namely, that any aid to be given will be targeted towards the greening of the automotive industry.

I think the Minister said that it would be difficult to have a strategy to cover all cases and that, therefore, a case-by-case basis will be adopted. However, on the point made by the noble Lord, Lord Razzall, if there is to be a strategy, perhaps we will see the signs of that strategy in the fact that the main thrust of this Statement is about the greening of the automotive industry as a condition on which any public moneys will be made available. Can the Minister confirm that that is indeed part of the Government’s strategy so that any further assistance given to any industry will be made precisely on that condition—that it will be environmentally-proofed? If that is the case, today’s Statement is welcome, not only for the automotive industry, but perhaps for the wider cause of sustainability and our future environmental well-being.

My Lords, I am grateful to the right reverend Prelate for spotting the absolutely central point. This is not simply to assist an important industrial sector to weather the downturn and survive into the future. It is to define that future in the way that the right reverend Prelate has described. Strategically, the Government’s job is to help put in place the right bridges to our economic future, which will be a low-carbon economic future. We will do this with the right alignment of government policies and incentives to do it smartly and, throughout, with the grain of the market. That is fundamental. Essentially, we do not need old-style interventionism, as we knew it in the 1970s—and, a little, in the 1980s—but stable frameworks of policy, within which the private sector is free to take its own decisions. This is the Government’s approach, our policy rubric, which we need to apply to our economy’s productive base as a whole. The right reverend Prelate is right: at a time when people are feeling low, this is the sort of approach that gives them confidence and hope in the future.

My Lords, as I think the Minister was announcing the end of a big car culture, from which Britain and Germany need to move on, does he agree that, under this scheme, no car should be allowed to have an engine larger than two litres?

My Lords, I do not accept that. This announcement is not part of the end of a big car future. It is about the end of high emissions and a high-carbon past. That is central to what I have announced this afternoon. The noble Earl should not infer from it that I am being size-ist in any way.

My Lords, does the Statement have any effect on the situation at Corus? Noble Lords will be aware that a large number of redundancies have been announced and that the problem there is a decline in the demand for steel. However, the company is making quite large profits. This is of great concern to the unions, including my union, Unite, which is now pressuring the company to ensure that its present situation does not result in a desperate situation for some neighbourhoods, where it would be appalling if this number of people were made redundant.

My Lords, I share my noble friend’s concern about the implications of the announcement made yesterday by Corus. I spoke to the union leaders, as well as the chief executive of Corus, yesterday. All I can say in mitigation of what is very disappointing news for many people is that the structural changes that the company will undergo will—I have heard this from the company and I probably agree—contribute to its long-term competitiveness and, therefore, the security of production and employment in the longer term. That does not alter the pain of the news for those who are immediately affected, although I also have an assurance from the chief executive of Corus that, as far as possible, these redundancies will be voluntary, not forced. The Government stand ready, through all their agencies, to intervene wherever communities and individuals are affected and to give them every possible assistance.