JTI Gallaher

Ian Paisley Excerpts

Monday 27th October 2014 Commons Chamber

[Ian Paisley (North Antrim) (DUP)]

On 7 October, my constituency received the devastating news that a 150-year-old manufacturing industry was to be brought to an end.

JTI Gallaher employs 900 people in Ballymena. It has existed in Northern Ireland since its foundation 150 years ago in the city of Londonderry, and it has been a mainstay of employment in Northern Ireland. It has stood along with key industries such as linen-making, textiles, rope-making and shipbuilding, and it has itself been part of one of the key industries in Northern Ireland. In my constituency, it alone employs those 900 people. It is regarded as one of the largest employers in the constituency, and, indeed, in Northern Ireland as a whole.

Let me put this into a local perspective. In a country of 1.8 million people, that employer’s wage input into my local economy is £60 million, and it puts a further £100 million into the entire Northern Ireland economy through transport, packaging and other associated industries.

In philanthropic terms, the company supports—and indeed is the lifeblood support of—key charities, including Age UK, the Harryville partnership in Ballymena and the Ulster orchestra. We are hearing much locally about the future of the Ulster orchestra. Let us be absolutely clear about this: without JTI Gallaher there would be no Ulster orchestra.

I want to put the 900 jobs into a UK-wide perspective. If those jobs were lost here on the mainland of the United Kingdom, it would be the equivalent of 32,000 people being told that their jobs are over. I welcome the fact that we have a Minister at the Dispatch Box, but I have been totally underwhelmed by the response of this Government to that blow to our economy. There has been no statement from that Dispatch Box about it. The Secretary of State has not come to that Dispatch Box. To say the sense of betrayal in my constituency is palpable would be an understatement.

[Sammy Wilson (East Antrim) (DUP)]

Does my hon. Friend agree that the Government have surrendered to the lobby from those who oppose smoking? They have put people out of jobs and yet their very objective will not be achieved, because all that will happen is that people will move over to an illegal market, with far more dangerous tobacco products and the financing of criminal gangs?

[Ian Paisley]

I thank my hon. Friend for his intervention.

There are three reasons why this factory is going to be closed. The first of the two main reasons is over-regulation. I am the first to say that smoking needs to be regulated—I do not smoke, I do not want my children to smoke, and the product is harmful so it has to be regulated—but to over-regulate it to such a degree that we close the industry down without stopping people smoking is just foolishness.

The second key issue is the illicit trade. As a result of over-regulation—my hon. Friend pointed to this—one in four cigarettes smoked across the whole of the United Kingdom is an illicit cigarette that has been smuggled in. That damages not only the economy and the country, but these jobs.

[Sir Gerald Howarth (Aldershot) (Con)]

Does the hon. Gentleman agree that the Government’s absurd proposal for plain packaging of tobacco will not only be dangerous to tobacco smokers, but is partly instrumental in the loss of jobs in his constituency?

[Ian Paisley]

The European tobacco directive has undoubtedly helped to kill this industry, but let us be absolutely clear: the betrayal of the Government in putting in place plain packaging has said to an entire industry, “There’s no point staying in this country. There’s no point continuing to manufacture in the United Kingdom.” All it has done is driven—and it will continue to drive—those jobs to eastern Europe while cigarette smoking continues in Northern Ireland.

[Jim Shannon (Strangford) (DUP)]

Europe clearly has a reason for the directive that is coming through, but does my hon. Friend recognise the good work MEPs Diane Dodds and Jim Nicholson did on behalf of JTI? Does he think Europe could have done more, and does he feel that the Minister should have more interaction with Europe?

[Ian Paisley]

My hon. Friend raises an interesting point which I want to address slightly later by talking about how Europe has played a devastating role in this development.

[Mr Nigel Evans (Ribble Valley) (Con)]

Does the hon. Gentleman agree that the Government caving in on this one, and indeed leading the charge on plain packaging, interferes with the intellectual property of companies, which is a dangerous precedent, and that we will end up not with more people giving up smoking, but with the exporting of jobs and the importing of tobacco products?

[Ian Paisley]

The hon. Gentleman is absolutely right when he says that plain packaging will not do what it sets out to achieve. It will not reduce consumption; it will simply help to destroy an industry.

I appeal to the Government tonight. They could help me to save jobs in my constituency and help me save this industry by indicating firmly that they will review immediately their decision to implement plain packaging, allowing me to go back to the company and argue that it is worth its while staying in a country that wants to encourage, not discourage, manufacturing.

[David Morris (Morecambe and Lunesdale) (Con)]

Does the hon. Gentleman agree that it is not just his constituency that would feel the economic impact of the closure of the JTI factory, but the whole of the north-west of England? Located in my constituency is Heysham port, which is the reserve port for JTI’s goods. My port will lose out on business from JTI should the factory close.

[Ian Paisley]

It is not only that the 900 directly employed people in my constituency will lose their jobs. The hon. Gentleman mentions associated companies. Yes, I will lose £60 million from my local wage economy, but approximately a further £100 million will be lost from the local economy in terms of the costs associated with transport, haulage firms and packaging companies. All those other aspects of associated business and trade will be gone. It is therefore no wonder that the hon. Gentleman is concerned about the impact that the closure will have on employment in his constituency.

[Mr Aidan Burley (Cannock Chase) (Con)]

Does the hon. Gentleman agree not only that the decision by JTI, based on the tobacco products directive, shows why the Government must immediately cancel their plans to proceed with plain packaging for tobacco products, but that all the evidence from Australia shows that this will simply drive more customers into the illegal trade, where there are none of the health benefits the Government want to see and none of the money coming into the Exchequer that they would wish? Moreover, it will lead to even more of the job losses he is suffering in Ballymena.

[Ian Paisley]

I thank the hon. Gentleman for that. Government policy should be based on evidence. If there were evidence to show that plain packaging will reduce consumption, the Government would have every right to attempt to implement the policy. But given that it is basically guesswork, and that the trial on the ground in Australia shows that consumption is not decreasing as a result of plain packaging, but that illicit trade is increasing, the Government should take stock immediately.

[Mr Laurence Robertson (Tewkesbury) (Con)]

rose—

[Ian Paisley]

I give way to the Chairman of the Northern Ireland Affairs Committee.

[Mr Robertson]

As a fellow member of the Select Committee, does the hon. Gentleman remember that when we looked into the illicit trade issue and interviewed the head of the relevant department in Her Majesty’s Revenue and Customs, his view was that plain or standard packaging would actually increase counterfeiting and the illicit trade?

[Ian Paisley]

The hon. Gentleman is making my case for me. He is clearly demonstrating, through his knowledge of this subject and what HMRC has told him that the Government’s policy is wrong-headed and will not prevent people from smoking. I say again: I want to see a reduction in smoking, but we have to have a policy that works and is proven to work. The evidence is not there to achieve the Government’s policy.

[Dame Angela Watkinson (Hornchurch and Upminster) (Con)]

Does my hon. Friend agree that when this Government sent their draft regulations to the EU indicating their intention to introduce standardised packaging, that created the uncertainty in the industry that has affected Gallaher so badly—it is now unable to forward-plan—and yet no ministerial decision has been made and no debate has taken place in this Chamber? We have passed enabling legislation, but we did not make a final decision.

[Ian Paisley]

I thank the hon. Lady for bringing me on to a key point—the impact of the European directive and, importantly, the Government’s betrayal of this industry. The Prime Minister answered a parliamentary question earlier last year on minimum pack size, which is what the tobacco directive is all about. He said:

“It does not, on the face of it, sound a very sensible approach. I was not aware of the specific issue, so let me have a look at it and get back to my hon. Friend.”—[Official Report, 9 October 2013; Vol. 568, c. 160.]

The Prime Minister was answering a question from a Government Member, and I believe that he has been let down by a failure of his party and colleagues to negotiate the matter appropriately in Europe.

While the then public health Minister, the hon. Member for Broxtowe (Anna Soubry), had control of tobacco products directive negotiations for the UK Government, she was required to keep Parliament informed of developments via the European Scrutiny Committee. When she was brought to that Committee on 17 July 2013, she had to apologise for poor political practice, saying:

“I do not hesitate to apologise for the fact that this Committee has not been fully informed. I only wish that, as a Minister, I was aware of all the things that happen within my portfolio.”

That is an appalling indictment of a Minister who took her eye off a brief and allowed the policy to be rammed through with the consequences that we are feeling today. We will reap a terrible harvest in Northern Ireland as a result.

The provisions under the TPD on the minimum pack sizes that may be manufactured have the direct impact that 82% of the output of my constituency’s factory will be made illegal. The Government have done that with the sweep of a pen—it is little wonder that 900 people are being told that it is over for them. The Government could have said, “Let’s continue to manufacture, but not sell in the United Kingdom,” or looked at other options, but instead they implemented a policy even though their Minister said that she was not fully aware of what was happening. That is a betrayal. It is a scandal that the Government were not paying proper attention.

The Government cannot say that they were not warned. I have spent three years in the House warning the Government about their actions. I was able to attract 82 signatures to an open letter to the Secretary of State for Health from Members on both sides of the House, including former and current Cabinet Ministers. The letter stated that if the Government continued with the tobacco directive and plain packaging, it would have

“disastrous consequences for independent retailers, consumers and those employed in the legitimate tobacco supply chain.”

It said that the products affected involved

“a very significant level of employment in UK factories.”

It said:

“Should these packs disappear, the machinery needed for them will be made redundant alongside the workforce who are employed to operate them. In the current economic climate, can the Government afford to put so many UK manufacturing jobs at risk?”

My constituents got the answer on 7 October: they were told by this Government that they could be put at risk, that they did not matter, and that their jobs and livelihoods were over.

What frustrates me most is that the Government had warning upon warning upon warning from not just me but colleagues. The Chair of the Home Affairs Committee visited my constituency and the factory to find out about smuggling. The shadow Secretary of State for Northern Ireland visited the factory, as did the previous Northern Ireland Secretary. The Minister’s predecessor has visited the factory, as have my Northern Ireland colleagues and other MPs, including members of the Northern Ireland Affairs Committee. However, when I asked the Government to come and to say, “This fight is on. This is about saving jobs,” I got the terrible message that they did not want to be associated with the industry. I can represent jobs in my constituency without being associated with smoking. It is a pity that there was not just a wee bit of strength—a wee bit of backbone—in the Government when it was needed. They could have stood up to Europe and said, “We’re not implementing that. That’s the end of our jobs.” Instead, they have stubbed those jobs out, just like a fag end, and my constituents are facing the terrible consequences of that tonight.

There are some things that the Government could do, and I want to turn to those briefly in my closing remarks. First, I think that they could look afresh at the issue of plain packaging and recognise that it offers them a negotiating opportunity with the company. Removing the proposals for plain packaging and the threat to the industry for the next five years would provide an opportunity to stretch those jobs out a little longer. I have managed to help negotiate a two-year stretch for those jobs. If we could push that to five, six, seven or even eight years, because the Government are prepared not to roll over on plain packaging, that would help considerably in defending and keeping those jobs.

[Dame Angela Watkinson]

Like my hon. Friend, I am a non-smoker, but I never miss an opportunity to ask smokers whether their tobacco purchasing habits would change if plain packaging were introduced. They find the idea laughable, so the whole thing is based on a false premise.

[Ian Paisley]

I agree with my hon. Friend.

Secondly, I want the Government to help the work force via the European globalisation fund, because many of my constituents currently in employment will need to be retrained. The skilled engineers, for example, could work on oil rigs or do other engineering work, but the certifications needed cost thousands of pounds. The globalisation fund, if accessed by Her Majesty’s Government, would allow for those certificates to be paid for and help those employees under a restructuring deal.

Finally, if the work force come up with an alternative plan to help save some of those jobs, I want the Government to assist them by allowing them access to Invest Northern Ireland and other skilled business planners so that they can put in place an alternative plan that will hold water and can be put to the company’s headquarters in Geneva. That way, they can see for themselves that there may be a viable alternative. If that happens, we might be able to postpone what is happening in Northern Ireland, but I am really concerned that the Government have put out these jobs for ever.