Vaux Brewery

Part of Opposition Day – in the House of Commons at 7:44 pm on 29th April 1999.

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Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry 7:44 pm, 29th April 1999

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 offer of 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.