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Mr. Derek Foster (Bishop Auckland) rose--
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The right hon. Gentleman was not here at the start of the debate.
7.44 pm
The Secretary of State for Trade and Industry (Mr. Stephen Byers): I congratulate my hon. Friend the Member for Sunderland, South (Mr. Mullin) on securing this debate. It is appropriate to bring this matter to the attention of the House this evening. The closure of a firm with more than 150 years of history and the prospect of some 600 job losses merits consideration on the Floor of the House.
First and perhaps most importantly, I want to emphasise that my deepest sympathies lie with those employees at the Vaux brewery, and at the Ward brewery in Sheffield, who stand to lose their jobs. Their interests have been and remain the main focus of our concern as a Government. It is a good reflection of the concern felt in the House that several right hon. and hon. Members are present to listen to the debate. My right hon. Friend the Member for Bishop Auckland (Mr. Foster)--a Sunderland lad, if I may say so--has taken a great personal interest in the matter. As a Salvationist, he has some difficulty defending the employment of people working in the brewing industry, but he represents the interests of many people in the Sunderland area so I hope that he will be forgiven in the appropriate quarter.
I also welcome my hon. Friends the Members for Tynemouth (Mr. Campbell), for Jarrow (Mr. Hepburn) for Houghton and Washington, East (Mr. Kemp) and
for Stockton, South (Ms Taylor). Between us, we have probably contributed significantly to the profits of Vaux breweries over the years, although I certainly cannot say the same about my right hon. Friend the Member for Bishop Auckland. However, it is not the quality of the beer that brings my hon. Friends to the Chamber this evening, but their concern about the future of brewing in Sunderland and, in particular, of the Vaux brewery.
I also welcome to the debate my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts), who is present because of the implications for Sheffield and the Ward brewery. I shall address the issues specifically related to the Vaux brewery, as raised by my hon. Friend the Member for Sunderland, South. In doing so, I do not wish to diminish the difficulties faced by those individuals linked with the Ward brewery. Many of the issues that I shall raise about the Vaux brewery apply also to the Ward brewery.
As my hon. Friend the Member for Sunderland, South said, many people in the north-east regret the decisions that have been taken. The history and the sequence of the events were clearly explained by my hon. Friend. As he said, I have been fully aware of the seriousness of the situation and have taken a personal interest in the developments. The Department of Trade and Industry was approached at the outset by the management team bidding to buy the breweries. At that time, it was confident that a deal could be done that would save the breweries and the jobs of those who work for them. When it first emerged that financial assistance would be required to secure the future of the breweries, the Government office for the north east quickly responded and made an initial offerof support through regional selective assistance of £1 million.
It subsequently emerged that a significantly larger sum would be needed to try to secure a positive decision to maintain the breweries in Sunderland and in Sheffield. We were prepared to increase the offer of regional selective assistance by an additional £5 million, so that a total of £6 million would be available to a new purchaser of the breweries to secure future employment opportunities. Unfortunately, a mutually acceptable basis for agreement between the Swallow Group and the management buy-out team could not be found. I am deeply saddened that it should have come to that, especially for the employees affected, their families and the wider communities in Sheffield and Sunderland. We have to assume that the Swallow Group considered that alternative courses of action represented the best interests of the shareholders, but many people will share the concerns expressed by my hon. Friend the Member for Sunderland, South about the real motives behind the decision that the Swallow Group has taken.
Mr. Derek Foster:
I apologise for not being here at the beginning of the debate, but I was hosting a reception downstairs for 300 people from my old college in Oxford, for which I left Sunderland in 1957.
I congratulate the Government on their speedy and excellent action. They cannot be faulted at all, as they have done everything that has been required. However, as a very small shareholder in the firm, I do not accept that the board has acted in the shareholders' interest. Indeed, it has never put any information before the small shareholders, even though they own at least 15 per cent. of the shares--very nearly the largest tranche of the shares in the company.
I hope that my right hon. Friend will call in the board, and suggest to its members that they have a moral duty to the city of Sunderland--and to the Government, who may have to pick up the bill--to put the facts before the small shareholders so that they can be independently assessed.
Mr. Byers:
I shall deal specifically with the relationship between shareholders and the company in a few minutes, and I should be grateful if my right hon. Friend could wait until I reach that part of my contribution. I think that that will be a more helpful way in which to tackle his very genuine concern.
Although we accept that it may be difficult in the days and weeks ahead to find a new buyer for one or both of the breweries, we have not given up hope. Someone who sees the excellent facilities at the both the Vaux and the Ward breweries may well decide that buying and maintaining the breweries would represent a viable commercial opportunity.
The Government's position is very clear. If new options emerge for preserving employment at the breweries, we stand ready to provide assistance. I confirm to my hon. Friend the Member for Sunderland, South that the £6 million that we offered a few weeks ago in an attempt to secure the future of the Vaux brewery in Sunderland remains on the table. I hope that someone will come forward, in the days and weeks ahead, and use the £6 million that the Government are prepared to offer to secure the employment of the 600 or more people who presently work at the Vaux brewery.
My hon. Friend the Member for Sunderland, South raised a number of specific issues that I shall address head on this evening. First, he mentioned the possibility of anti-competitive behaviour in the beer market, and suggested that the four big brewers may be acting and exerting influence in a way that would distort that market. My hon. Friend would be absolutely right to draw that possibility to the attention of the Director General of Fair Trading. It is exactly the sort of conduct that would be appropriate for him to investigate.
My right hon. Friend the Member for Bishop Auckland and my hon. Friend the Member for Sunderland, South will be aware that it is for the director general to consider the comments that have been made, and to decide whether an investigation should be carried out. However, I am confident that the director general will look carefully at what has been said in this debate, and at any further information that may be passed to him.
My hon. Friend the Member for Sunderland, South also raised the issue of action by certain large City institutions. The Government are very much aware of how such institutions can operate, and of those institutions' powerful position in relation to matters such as this.
We are considering ways in which to make the market for investment work more effectively as part of our wider agenda of increasing growth and jobs in the UK by improving productivity. We want City institutions to recognise that a short-term approach is often neither in the interests of individual companies that might be affected at the time nor in the long-term interests of City institutions themselves or the wider UK economy.
My right hon. Friend the Member for Bishop Auckland mentioned the position of small shareholders and the possibility that the views of a minority of shareholders
may be ignored by those who command block votes. The 1998 pre-Budget report introduced by my right hon. Friend the Chancellor of the Exchequer discussed ways in which to bring greater transparency, responsibility and accountability to the relationship between institutional investors and the fund managers they employ. That work is being progressed right now. There are real issues about the interests and rights of small shareholders.
There are no easy or quick answers in this area. However, I can assure the House that I will talk personally to investors and fund managers about the points raised in the pre-Budget report and in the debate tonight about productivity and corporate governance.
Mr. Alan Campbell (Tynemouth):
On short-termism and regional assistance, I know that my right hon. Friend shares my concern about today's decision by Siemens to invest in a plant in France rather than on north Tyneside. Quite apart from the fact that the French factory will not be making the same product as the north Tyneside one, that suggests an appalling lack of commitment by Siemens to finding a secure future for the plant and for the work force.
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