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Dáil Éireann debate -
Thursday, 16 Nov 1995

Vol. 458 No. 4

Adjournment Debate. - Negotiations on Future of Irish Steel.

I thank you, a Leas-Cheann Comhairle, for having given me permission to raise this matter and the Minister for attending. Since a Private Notice Question on the subject was tabled last week the overall position has not merely changed but deteriorated. My purpose in raising it again this evening is to seek the up-to-date position and to reiterate that we are all at one on it.

I asked the Minister for Enterprise and Employment last week whether he would speak to the Taoiseach and request him to speak directly to the British Prime Minister, Mr. John Major, because of the now perilous state of negotiations between British and Irish officials in this matter, with the survival deal daily becoming less sure of implementation.

I understand that no progress has been made even though it has emerged that the British Government acted in bad faith at European Union level by claiming that British Steel would close a plant. The Minister informed us last week, also reported in The Financial Times, that Britain had said that if Ireland went ahead they would close a British steel plant leading to loss of employment within their industry. It now transpires that the chairman of British Steel, Mr. Brian Moffat, has said there will be no closure of any of their plants despite what may or may not happen in the case of Irish Steel, demonstrating that that pretext has been blown out of the water. They named the particular plant in Staffordshire, which it appears does not produce the same product as Irish Steel Limited. That, therefore, is also a flimsy pretext. The British are being deliberately intransigent. They are acting in bad faith in the negotiations with the Irish officials, and appear to be playing games with the EU. When Luxembourg dropped its initial objection, the rest of the Ministers were in agreement with what Ireland was trying to do. Their attitude was that Ireland and the UK should get together and settle the matter. British intransigence must be ended. The Irish Steel workers are going through a very worrying time, and they have already been through stringent retrenchment, particularly in the last 12 months. They have weathered all sorts of domestic and internal storms during which they made massive readjustments, and now our neighbour across the water will put a spoke in their wheel. It is imperative for the Taoiseach to take an interest in the matter.

Before I came into the House I spoke to someone, not from the Irish side, who is very involved in this, who said that just 30,000 tonnes divides the two negotiating teams. Surely this is a case of a giant British Steel-UK Government, which has done very well having reported a threefold increase in profits in its half-yearly results, taking a sledgehammer to 400 Irish Steel workers in a small country, very committed to Europe, with one steel plant, Irish Steel. That company is prepared to live with the guarantee of a limited output and has found a congenial partner prepared to invest money to enhance the plant while sticking rigidly to the production limits with which the Minister, Deputy Richard Bruton, went to Brussels. So much for European solidarity. Will the Minister of State convey to the Taoiseach our solidarity on the issue and, most of all, our wish that by whatever means he can, perhaps during the upcoming summit, he should speak directly to the British Prime Minister, Mr. John Major? It requires intervention at that level to make sure that the veto is dropped.

I appreciate Deputy O'Rourke's raising this issue and I share her disappointment at the attitude of the UK Government on this very important issue. It is not the case that the circumstances have, as the Deputy put it, not just changed but deteriorated. The circumstances have not deteriorated. Discussions and contact are ongoing. It is proving a very difficult problem, but there is no basis for the Deputy's claim that the situation has deteriorated.

At the Industry Council on 6 and 7 November, 14 member states were prepared to approve the State aid recommended by the EU Commission for Irish Steel. The only exception was the UK.

Since the Industry Council on 6 and 7 November, officials of the Department have been in almost constant contact with top representatives of ISPAT International. Formal meetings have also taken place to discuss the matter. Last Friday, 10 November, the Minister for Enterprise and Employment, Deputy Richard Bruton, met the UK Minister, Mr. Timothy Eggar, to see if the remaining gap between Ireland and UK could be bridged. The Minister tabled proposals which went some way towards meeting the UK objections while at the same time ensuring that the viability of Irish Steel would not be threatened. Unfortunately, it was not possible to reach agreement at the meeting with Mr. Eggar. Differences clearly existed on issues such as annual production output for Irish Steel and in relation to where the steel from the Cork plant would be sold. The Minister, Deputy Bruton, was prepared to agree that not all Irish Steel production would be sold in the EU. Both Ministers agreed that contacts should continue at official level to resolve the problem. A senior official of the Department subsequently had a meeting last Tuesday with his corresponding number in the UK Department of Trade and Industry, and I understand that a further meeting between officials will take place shortly.

As Deputy O'Rourke can see, continuing contacts are taking place between the Irish and UK sides and it is still hoped that with goodwill on the part of the UK, they will appreciate the special circumstances of Irish Steel and come to an agreement with us which will not threaten the viability of Irish Steel. The Minister, Deputy Bruton, is doing everything in his power to ensure that the difficulty with the UK authorities is resolved. He is disappointed that a deal with the UK has not yet been finalised, but he is still hopeful that, if a reasonable approach is adopted by the UK authorities, a formula can be found which will resolve the matter.

I do not automatically accept what Deputy O'Rourke said about the attitude of the UK Government and British Steel hardening considerably in the past four days against the Irish Steel case. There has been some comment in the Financial Times in this period about British Steel but the comments have been about the very successful record profits made by British Steel of £550 million sterling for a six month period. There has been no direct comment about the UK attitude towards Irish Steel in the Financial Times in the past four days of which I am aware and no indication of any considerable hardening in attitude as stated by the Deputy.

It may be that Deputy O'Rourke is referring to statements in the Financial times by the Chairman and Chief Executive of British Steel that British Steel ruled out any plant closures in the UK in the medium term. It has been speculated in the UK media that if the Irish Steel package was approved it would lead to the closure of a British Steel plant in Shelton, near Stoke-on-Trent. The Minister, Deputy Bruton, made it clear in the past few days that this was not a credible position. I acknowledge that Deputy O'Rourke corroborates that position. A small increase in production by Irish Steel could not have a major impact on a plant in the UK which is estimated to have an annual output of 400,000 tonnes. The idea that approval by the UK of the Irish Steel package would close down production in Shelton is a fallacy.

That was my point. They are persisting in that. There was an article in a British newspaper today to the same effect, that the plant at Shelton would close if the Irish got their way. That has a hardening effect.

It would not be particularly helpful for me to comment on that except to say that I believe the argument is fallacious, from whatever source it comes. I assure Deputy O'Rourke that the Government regards the Irish Steel case as of vital importance and will do everything within its power to convince the UK of the desirability of the UK joining an other member states of the European Union in approving the very modest state aid involved in the Irish Steel case. I accept that is the position of Deputy O'Rourke's party and of all Members, including my colleagues, the Minister of State, Deputy Coveney, and Deputy Lynch. It is the Government's view that this is a matter of vital national interest and the British Government has been made clearly aware of that view.

The Dáil adjourned at 5.10 p.m. until 2.30 p. m. on Tuesday, 21 November 1995.

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