Examination of Witnesses (Questions 260
WEDNESDAY 2 MAY 2001
260. In your evidence to the Trade and Industry
Committee you told them in reply to a question that Corus were
investing £300 million in steel plant in the UK this year.
Then in subsequent written evidence you only detail commitment
to £18 million spending. Where is the other £282 million?
(Sir Brian Moffat) I am sorry, I do not know what
you are talking about. I know the report but it is the £18
million I do not know.
261. I shall quote what I have and you can tackle
it. This is paragraph 13 of the Fourth Report of the Trade and
Industry Committee. In evidence on 14 February 2001 we put to
Sir Brian Moffat the accusation levelled by the ISTC in supplementary
evidence to us that Corus had no proposals for investing in new
plant or equipment in Britain when it made its restructuring announcement
on 1 February. Sir Brian told us that Corus had announced plans
for investment on 13 February and that they would be investing
over £300 million this year, although in subsequent written
evidence Corus corrected this impression, stating that Corus has
not announced an investment programme and gave details of three
projects totalling only £18 million announced so far this
year. The £18 million is evidence you have given in writing
to the Trade and Industry Committee. Can you explain?
(Sir Brian Moffat) Thank you, that has put that in
context. The £18 million was because we were being asked
whether it was true that we would not invest in the UK iron and
steel industry this year, particularly in the integrated parts
and the £18 million was a response which we had actually
announced in the previous ten days or so at three of our plants
in the UK. The £300 million expenditure programme is the
sort of money we spend on an annual basis going forward. Some
of those schemes are in being and are being undertaken today.
Indeed when you see our annual report you can pick up the details
of many of those schemes. One was an announcement about recent
schemes as against an ongoing process.
262. So the £18 million is a new investment
programme and the rest is ongoing expenditure.
(Sir Brian Moffat) They were new schemes, part of
those would form part of the £300 million going forward over
time. Some of our schemes take two and three years to build. As
you know, they are big and they take a relatively long time to
build and can go over two or three years of the annual results.
263. If you are providing information to us
in writing, would it be possible for you to includes these too.
(Sir Brian Moffat) That is in the annual report.
264. How the remainder of the £300 million
will be spent?
(Sir Brian Moffat) No, not going forward but historically
how we spend money in terms of capital expenditure. That is properly,
and legally has to be, shown and we do that at the end of the
265. We want to know what you will be spending
in this next year to 15 months. How do we find that out?
(Sir Brian Moffat) You will find that out in the report.
266. Once you have spent it.
(Sir Brian Moffat) Yes.
267. We cannot find out in advance.
(Sir Brian Moffat) No.
268. Do you know?
(Sir Brian Moffat) Yes.
269. Why will you not pass that information
on to us?
(Sir Brian Moffat) Because it is commercially sensitive
information. We do not give our competitors rhyme and verse.
270. This is not massive new investment.
(Sir Brian Moffat) £300 million is pretty big
271. Yes, but you have said that only £18
million of it can be regarded as new investment. What is the problem
in divulging the information about the other £282 million?
(Sir Brian Moffat) I did not say that. I was asked
in the context of the £18 million whether it was true that
we were not going to spend any more money on iron and steel making
in the UK and I instanced those three schemes which we had announced
in the previous ten days or so, which confirmed that we were going
to continue to maintain properly and invest in our integrated
iron and steel plants and indeed in our downstream plants in the
UK. Our annual programme of investment in the UK is on record
over many years, which has been very significant and will continue
to be significant. It was in that context I was talking.
272. You intrigue me. I cannot understand why
you cannot let us have your planned programme. What huge secrets
are you hiding from us?
(Sir Brian Moffat) I am not hiding secrets. I would
have thought you would have been sensitive in the situation we
are in and with our vulnerability in the market not to ask for
information which could in any way be used against us by competition.
Mr Caton: Yes, I represent 167 very sensitive
people right at the moment.
273. When you last gave evidence before us you
told us that you had not made any specific proposals to Government
as to how they might help you because you were of the view that
Government could not do anything legally to help you. Yes?
(Sir Brian Moffat) In terms of avoiding these closures,
274. You have already confirmed today and it
was in the Western Mail yesterday, that there have been 145 meetings
with Ministers and Members of Parliament over the last two years.
(Sir Brian Moffat) Yes.
275. Not once was the question of assistance
raised by yourself or your colleagues.
(Sir Brian Moffat) Not assistance in the direct sense
of monies, state aids to us in that sense, because we know and
have fought with Government against state aids with competition.
What we should like and continue to like and over time we wish
to participate in is helping to create an environment whereby
investment in the UK becomes more attractive, which in turn helps
manufacturing industry and therefore, given that we are the main
material for manufacturing industry, we shall sell more steel
in the UK.
276. What in particular are you referring to
there in terms of aid?
(Sir Brian Moffat) No, sorry, not aid, a manufacturing
environment which facilitates and encourages investment.
277. With regard to operating aids, for example,
which I suggested to you last time we met, you were of the opinion
that operating aids could have been involved and could have been
used to help you and could have been suggesting legally that they
could have been brought in, for example business rates relief
and other matters.
(Sir Brian Moffat) I was pointing out that for things
like rates we get taxed like all companies and individuals in
this country and where we think we are being over-taxed we appeal.
We have appealed and indeed in some areas have got money back.
That is not always the case. Here is an update on the last Committee
in Wales. We thought we were going to get £4 million back
in rates for one of our works, which was an appeal for 1991, together
with the interest burden on the money we had paid then, which
was more significant than the £4 million. Two days before
the expiry of the ten-year period the rates were re-appealed against
us and we shall not get that money.
278. What I am putting to you, perhaps not in
a sufficiently direct way is that if you had gone to the DTI at
some point and explained the full position to them, they would
have been empowered
(Sir Brian Moffat) I have talked with Mr Byers about
rates specifically and I have written recently to the Chancellor
about this situation too and sent a copy of that also to Mr Byers
because the right hand does not seem to know what the left hand
is doing, if after ten years, within two days of an expiry date,
having given us our appeal, they appeal against it.
279. You did send a written note to us after
the last evidence session referring to comparable rates bills
between two plants in Wales and one in Holland, did you not?
(Sir Brian Moffat) Which shows that the ones in Wales
seem to be very highly taxed.