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Mr. Bryant: If all that the hon. Gentleman says is true, why did the Conservative party refuse to stop receiving money from foreign organisations and businesses until forced to do so by the law?
Mr. Whittingdale: As I pointed out, the last Conservative Government intervened to try to prevent Mr. Mittal's company from taking over an overseas business. We were standing up for British steel and British jobs, rather than supporting a company which plainly is not British and which is threatening British steel and British jobs.
Dr. Julian Lewis (New Forest, East): I apologise to my hon. Friend and to the Secretary of State for not
having been present for the earlier part of the debate, but I was present for the debate on Welsh affairs on Thursday. The line that the Secretary of State took then was that the Government had acted out of the goodness of their heart to help build up Romania and deprived areas of eastern Europe. However, the line that the Prime Minister has consistently taken is that they were acting to help British industry and back a British company. Can my hon. Friend tell me which line the Secretary of State has been taking today?
Mr. Whittingdale: Part of the problem is that the Government's defence of their actions has changed every five minutes. We have been given a dozen reasons why the Prime Minister chose to intervene, and each one that is probed is shown to be incredible and untrue. That is why nobody believes the Government's explanations any more.
I return to the threat to the UK steel industry.
Mr. Paul Murphy: The hon. Gentleman has not yet touched—he may do so later in his speech—on the significance of the enlargement of Europe, and Romania being part of that. Does he agree, first, that the enlargement of Europe, which includes Romania, is a good thing for British industry, and Welsh industry, for that matter, and secondly, that a privatised Sidex is much better for competition than a communist-controlled state industry, heavily subsidised, which does not produce a level playing field for our own steel industry?
Mr. Whittingdale: I am utterly delighted to welcome the Secretary of State to the ranks of those who support privatisation. That is a fairly new theme for the Labour party.
I support enlargement of the European Union. I support Romania coming into the EU. I want to help the Romanian economy. However, I do not want to do so at the expense of British steel, British industry and British jobs. That is what is at stake.
Mr. Murphy: Will the hon. Gentleman give way?
Mr. Whittingdale: A last time.
Mr. Murphy: This question is crucial to the debate. Every time the European Bank for Reconstruction and Development gives a loan to a country such as Romania or Bulgaria, of course there will be a risk of competition. That is inevitable, but the consequence is that the trade which this country will have with the burgeoning economies of those countries will mean more jobs, more work and better conditions. Does the hon. Gentleman agree?
Mr. Whittingdale: Once again, the explanation is changing by the minute. First, we were told that the Romanian steel works would have been acquired by the French, had the Prime Minister not intervened in support of a supposedly British company. There was no question of the steel works not having a purchaser if the company had not gone ahead. The point at issue, which the right hon. Gentleman should know, as he represents a large number of people involved in the steel industry, is that the biggest threat to the steel industry is overcapacity. That is
why Governments across the globe are working to try to reduce overcapacity. The right hon. Gentleman's Government have maintained overcapacity, which must be damaging to the long-term interests of British steel and British jobs.There is a greater threat to the steel industry, and it is much more immediate: the potential prospect of import controls imposed by the US Government. Perhaps the most extraordinary revelation of all in this saga is that fact that Mr. Mittal, we discover, is actively campaigning in America for the imposition of tariffs on steel imports from the UK.
At Department of Trade and Industry questions last month, the Under-Secretary of State for Trade and Industry, the hon. Member for Welwyn Hatfield (Miss Johnson), replied to me that
- "the industry faces concerted unilateral US action on steel imports that would create fresh barriers to transatlantic trade and fresh distortions in the global steel industry. That is the real issue facing the UK steel industry."—[Official Report, 14 February 2002; Vol. 380, c. 302.]
The Secretary of State said that the United Kingdom will support retaliatory action against the United States if import controls are imposed, and the Prime Minister raised the issue with President Bush, yet once again no Minister from the Department of Trade and Industry is willing to come to the Dispatch Box to speak about this immediate and extremely serious threat to the UK steel industry, despite it clearly being one of the main topics for debate today. Ministers are embarrassed that one of the prime lobbyists for US import controls is none other than Mr. Mittal. Ispat Inland, Mr. Mittal's American steel company, gave more than £400,000 to the lobbying organisation that is pressing the US Government to impose import tariffs; yet the Prime Minister was happy to write to the Romanian Prime Minister recommending Mr. Mittal's firm.
Why did the DTI not advise Downing street that preserving global steel-making capacity was the last thing that the UK steel industry needed? Why did it not tell No. 10 of the hundreds of British small firms that were still owed money as a result of Mr. Mittal's Irish takeover? Why did it not warn the Prime Minister that his friend was actively campaigning in the US against UK interests? It did not because, as we are now told, it was not even consulted before the letter was signed. It is the maxim of Sherlock Holmes that once we have eliminated the impossible, whatever remains, however improbable, must be the truth. The one explanation left for the Prime Minister's intervention in support of Mr. Mittal's bid is that it was a payback for the support that he had given to the Labour party.
I am not necessarily suggesting the Prime Minister wrote because Mr. Mittal rang him up to call in a favour. However, we know from Sir Richard Packer, a former permanent secretary, the extent to which the culture of cronyism permeates the Government's activities. In a
masterly understatement, Sir Richard said that it was grossly disproportionate for the Prime Minister to write to his Romanian equivalent supporting Mittal's bid for Romanian assets. His explanation is that Downing street must have contacted the British ambassador in Romania to inform him that Mittal was known cordially to the Prime Minister. The ambassador would have realised that, in Sir Richard's words, examining closely Mittal's precise entitlement to help from Her Majesty's Government would be only too likely to result in the Foreign Office being told that he was proving "unhelpful". According to Sir Richard, once officials know that Ministers view certain developments or people favourably, they will do their best to help the endeavour or the individual. The result is that help is given not because it is in the British national interest, but because it is in the interests of the Labour party.Last week, the Secretary of State for Trade and Industry said that the Government were not going to stop talking to business. No one is suggesting that they should, but the right hon. Lady should know only too well that what is poisoning the Government's reputation is the growing perception that the way to influence the Government is not by speaking to Ministers and officials, but by supporting the Labour party. As the Secretary of State said in a speech:
- "we should all be worried about what happens to the health of our democracy if such cynicism takes hold."
Mr. Whittingdale: First, I would be very surprised to learn that Corus had authorised its American arm to give £400,000 to the campaigning organisation that is pressing for the imposition of US import controls. Secondly, I am sure that the Minister will want to visit LNM Holdings in this country and to congratulate it on its work in support of British interests, but he will be hard pressed to find anybody, as most of the people involved do not live or work in this country.
Despite all the best efforts of the Secretary of State and the Minister to brush this matter under the carpet, it is not going to go away. Yesterday, my right hon. Friend the Leader of the Opposition wrote to the Prime Minister pointing out that the statements made by his spokesman have now been clearly shown to be untrue. Unless these matters are cleared up, they will leave an indelible stain on the Government. The only way of avoiding that is to conduct the full, independent public inquiry for which the motion calls. It is for that reason that I urge the House to vote for the motion.
5.10 pm
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