HC Deb 14 May 1963 vol 677 cc1279-90

Motion made and Question proposed, That this House do now adjourn.—[Mr. I. Fraser.]

10.32 p.m.

Mr. Christopher Mayhew (Woolwich, East)

I wish to draw attention to the problem of redundancy at Woolwich Arsenal and the need to make clearer the rôle of the Royal Ordnance Factory and to increase its competitiveness. I also want to draw attention to the closing of the apprentice shop and to the waste of vast areas of War Office land in my constituency. It is by no means the first time I have had to raise the problems of Woolwich Arsenal in the House, and it will not be the last time unless the problems are better tackled by the Ministers than they have been on past occasions.

I begin on the subject of redundancy and with a tribute to the Minister. The actual handling of the problems caused by redundancy in recent years in the R.O.F. has been well done. Great care, skill and humanity have been shown in keeping individual hardship to the minimum, and this is appreciated. Even so, hardship and inconvenience do, of course, result, and at present there are skilled workers—pattern makers, fitters, sheet metal workers, welders and boilermakers—who are finding it hard to get jobs suitable to their skills when they leave the R.O.F. as they have been forced to do.

But my main task is to ask why there should be redundancy at the R.O.F., why there should be this failure on the part of the R.O.F. to get the contracts in competition with private companies. I am not satisfied with the explanations given to me in letters and in the House by the Secretary of State for War. When I ask why the R.O.F. fails to get its share of, for example, the extremely important contract for armoured personnel carriers or of other contracts that go to private firms, it is not enough for the Secretary of State to reply that it is because Woolwich Arsenal is not competitive. It is the Minister who is responsible for the efficiency of the R.O.F. He has had the management and direction of it for many years. If it is not producing effectively and competitively, whose fault and responsibility is it? It is, of course, the Minister's fault and responsibility. The staff in Woolwich Arsenal are no less hard working, experienced or skilled than others. The land, the buildings and the plant are there. Why, then, is the R.O.F. not competitive, and why is it faced with this serious redundancy of 650 men this year?

These are the questions that I want the Under-Secretary to answer plainly. Will he say why the methods required for costing for tenders by the R.O.F. put it at a disadvantage compared with private firms? I have had talks and correspondence with the Minister on this point, but I am not yet satisfied that the requirements placed on the R.O.F. relating to its costing for its tenders are fair. As we all know, R.O.F.s are required to maintain a certain reserve capacity, a war potential, and this puts them at a great disadvantage as far as the cost of their overheads is concerned as against private firms which do not have the same responsibilities. As we know, there is an allowance for this in the contracts of R.O.F.s But I am not satisfied that the allowance is sufficient. I am not satisfied that these heavy overheads, especially when production is at a low level, as it is and has been, does not place an unfair burden on the R.O.F.s in competition.

That is why I asked the Minister to set up an independent inquiry, particularly into the question of costs and the methods of tendering. This the Secretary of State refused to do, but I understand that a Departmental Committee is now studying this whole question and that its report will be assessed independently by a leading business man, Sir Eric Mensforth. I should like the Under-Secretary to state exactly what are the terms of reference of this Committee and of Sir Eric Mensforth, whether they will have full consultation with representatives of the workers in the Arsenal—for example, with the combined shop stewards' committee—when the report will be issued, and whether it will be published.

May I also ask the Under-Secretary to make clear that the R.O.F. is still a preferred source for the production of conventional arms. Will he also reaffirm that the rôle of the R.O.F. Woolwich is primarily for experimental and batch production? Can he tell me what plans there are for new tenants in the many buildings on the Arsenal site which are at present unused, and can he also tell me why far more maintenance and repair work on conventional arms and equipment does not go to the R.O.F.?

Part of what we are discussing relates to a bigger picture—the picture of the appalling chaos in our defence policy and the excessive emphasis in our defence policy placed on nuclear as against conventional weapons. If the Government were to do their duty in bringing the equipment and arms of B.A.O.R. up to the standard at which they ought to be, if they were to spend some of the £400 million, which they are preparing to earmark for Polaris submarines, on increasing the conventional strength of our forces, then the outlook for Woolwich Arsenal would be transformed. We are paying the penalty in Woolwich for the defence chaos created by nine different Defence Ministers in the last twelve years.

Now I turn to the question of the apprentices' shop which, we are informed, is to be closed down far a year, and a whole year's intake of apprentices will lapse. This apprentice scheme is an admirable one. It is a model in many ways. It gives to young men a fundamental training—not just a practical but a fundamental training—in their jobs. I want an assurance from the Under-Secretary that if it is the intention to move the site of the apprentice shop it will be done quickly. Two or three months should be enough.

Second, I want an assurance that the shop will be restarted, as before, at the end of the 12 months' period, and finally, that in the meantime it will not remain idle but will be used somehow for apprentice training even if it means bringing in non-governmental apprentices. Surely it is a very bad example to private industry for the Government at this stage to close down facilities for apprentice training when everybody on both sides of the House agrees that we need far more of this training and far more skilled workers in this country.

I also ask the Under-Secretary what is to be the fate of these young men who have gone to work at the Royal Ordnance Factory as pre-apprentice learners? They go there as learners on the understanding —not the guarantee, but the understanding—that they will become aprpentices in their turn. Now that the apprentice shop is closed for 12 months, what is to happen to those young men? Do they lose their chance of apprenticeship, or will arrangements be made to avoid an obvious injustice in their case?

Finally, I turn to the last point I want to make, the release of War Office land in Woolwich. Over 600 acres of Woolwich Arsenal have been idle and unused for years, the biggest waste of building land in Britain. Today, in the London postal area, one can, if one can avoid the police, shoot rabbits, partridges and pheasants, and fish in the canals. Ministers say they are shortly going to release this land, but they have been saying that for years. Let them hand it over to the L.C.C. immediately and let houses start going up without further delay. There is also other War Office land in Woolwich long overdue for release, for example, the Cambridge Barracks and Red Barracks area, which is urgently needed by the borough council for housing, We are told that it cannot be vacated till rebuilding of the R.A. barracks has been completed, but this rebuilding ought to have been started last year. We are now told—I have have been told by the Secretary of State in a recent letter—that it is not going to be started till next year. This has caused great disappointment in my constituency. We regard the postponement of this final stage of rebuilding as unnecessary and costly, and it is also holding up important development in the borough. I ask the Under-Secretary to give the assurance that rebuilding of the barracks will be speeded up.

These are the points which I put to the Under-Secretary. I hope very much that he will address himself to them in reply and try to give some answers which will reassure my constituents on them.

10.44 p.m.

Mr. Colin Turner (Woolwich, West)

I support the plea the hon. Member for Woolwich, East (Mr. Mayhew) has made for the release at the earliest opportunity of War Office land in Woolwich. Some of it is in my own constituency as well. I know my hon. Friend wants to reply and so I shall be brief, but that is the first point I want to make. I would ask whether there has been any further development of the study made by my right hon. Friend of the possibility of using in some form or another the apprentice training school for either Government or industrial apprentices. This is a very important isue in which I am particularly interested.

10.45 p.m.

The Under-Secretary of State and Financial Secretary for War (Mr. James Ramsden)

It would probably be for the convenience of the House if I began by answering some of the questions asked by the hon. Member for Woolwich, East (Mr. Mayhew) which are immediately connected with the Royal Ordnance Factory and came later to try to reply to his main argument.

I appreciate his anxiety that there should not be any avoidable delay in the rebuilding of the Royal Artillery Barracks at Woolwich, and I know of the anxiety of his constituents about the possibility of acquiring this land for other development, but I am afraid that the position is still broadly as, I understand, was explained to the hon. Gentleman by my right hon. Friend recently. We very much regret the delay, but, as the hon. Gentleman knows, the original tender for the rebuilding was too high. That has meant replanning and, in addition, our own requirements have turned out to be slightly different from what we anticipated.

As he knows, under present arrangements the next phase of building is the responsibility of my right hon. Friend the Minister of Public Building and Works and I cannot forecast when it will start, but I am afraid that it will be five years or so before Cambridge Barracks can be released. I am glad to say that the position with Red Barracks is a little better and it may be possible to release them in the next year or so. We are also in touch with the council about the possibility of part of Cambridge Barracks being used earlier.

We occupy the land on the west side of the estate, the dockyard, on loan from the Admiralty, and this, too, we are likely to need until full rebuilding of the depot is completed. As soon as it is, the dockyard will be handed back to the Admiralty and will be in its hands to be made available for disposal.

The hon. Member referred to the land to the east of the Royal Ordnance Factory as though we were keeping it as a sporting preserve, not surprisingly from what it looks like now! We are conducting negotiations with London County Council at the moment about the future of this land and, as negotiations are now in train, I think that it is wise for outside parties not to say too much about it, and I intend to stand by that maxim tonight.

Mr. Mayhew

But progress has been so slow and so secret that sometimes I suspect that Ministers are not negotiating over the land but shooting over it.

Mr. Ramsden

I can assure the hon. Member that his suspicions are unfounded. It is not an easy problem and the possible interests of other Government Departments have to be consulted. We hope to make progress with these negotiations with London County Council. The hon. Member and my hon. Friend the Member for Wolwich, West (Mr. Turner) asked about the position of apprentices. I want to say how much I agree with the hon. Member for Woolwich, East about the value of the apprenticeship training which the Royal Ordnance Factory provides, something of which we are rightly proud. What has happened has been that we have had to suspend the intake of new apprentices at the Royal Ordnance Factory next September, that is, the intake for September, 1963.

The reason for this is purely local and practical. Obviously, the more apprentices there are in a factory, the more skilled craftsmen there are required to look after them and see them through their training. Because of the contraction of the Royal Ordnance Factory, we shall have fewer skilled craftsmen at Woolwich, and we have therefore had to take steps to ensure that the factory does not get over-staffed with apprentices. It would not be fair to them, nor to the people who would be expected to train them.

Having said that, there are one or two other comments on this decision which I should like to make. I can assure hon. Members that it does not prejudice what might happen in future years, and it does not affect the position of present apprentices who are currently going through their training, even those now in the first year of training shop, and it does not affect what are called pre-apprentice learners, boys who would be indentured as apprentices, but who are not 16 and who cannot by law be allowed to be so indentured. As a matter of fact I believe that the boys in this category who entered the first-year shop in the last intake have now become 16 and are fully indentured, so their position is assured and they will go on and complete their training.

I was asked whether this decision will mean that these excellent first-year training facilities will go into disuse. I am glad to say that we have been able to make arrangements for them to be used for the training of other Government apprentices. I hope that this will be found satisfactory, and on the local aspect I have arranged for the Royal Ordnance Factory Woolwich to inform all those who applied for apprenticeships at that factory of these alternative opportunities and to invite them to submit applications. I hope that this will help.

I come now to the main question raised by the hon. Gentleman, that of the latest redundancies at Woolwich and the question of the future of the group of factories of which Woolwich forms a part. I make no complaint whatever at the hon. Gentleman having taken the opportunity of raising this this evening. He raised it with me during the first fortnight of my tenure of this office, and I am glad to think that in spite of his opening remarks he has been sufficiently satisfied during the last 2½ years for this to be the first opportunity that he has 'taken since then to raise this matter.

We appreciate the hon. Gentleman's interest in this, but I think it is fair to say that this is now not a problem strictly confined to the hon. Gentleman and to my hon. Friend the Member for Woolwich, West. I have ascertained that over 40 per cent. of our staff at the R.O.F. come from more than 3 miles away from Woolwich, which in some ways is an improvement, and a rather satisfactory position, and it is a reflection of this that other of my colleagues, notably my right hon. Friend the Member for Bexley (Mr. Heath), have been in close touch with me and my right hon. Friend the Secretary, of State for War about these problems.

Dealing with these redundancies, the hon. Gentleman implied that it was our responsibility to see that these factories are efficient. I accept that, but I think the hon. Gentleman will accept that if efficiency is to mean making savings in overheads and rationalising production, this is bound sometimes to give rise to redundancy. Part of the present redundancy arises from the re-amalgamation of the Royal Arsenal Estate with the factory. Since the Perrott Report in 1954 there has been a separate organisation to provide services like steam, electricity, roads, and so on, for the tenants of the estate, including the factory. This arrangement made good sense when it was instituted when there were 14,000 people in the Arsenal and it was expected that the number would grow, but in practice, and following the changes in defence policy instituted in 1957, things have turned out rather differently. The total population of the complex is now 7,000. Half of this is in the factory, while of the remainder the Estate employees make up almost one-third.

I pay tribute to the work done by the estate organisation. It has done a very good job and discharged its duty admirably, but these numbers that I have quoted can only mean that the estate organisation is now top heavy for what it has to do. The amalgamation started on 1st April, and the present plan is to wind up the estate by the end of 1963, and there will be scope here for economies in administrative overheads as a result of this change.

Then there was the decision that the order for armoured personnel carriers should go complete to industry and no part of it to the R.O.F.s. The hon. Gentleman asked me questions about this, the first of which was, "Do we, in comparing costs in these cases, and in deciding where to allocate orders, give to the R.O.F.s sufficient credit for the spare capacity that they have to maintain in the national interest and which adds to their overheads?"

I have been fully into this matter, and I can assure the hon. Member that we do do so. We have this formula, which my right hon. Friend explained to the hon. Member in a recent letter, which takes account of the extra cost arising from spare capacity. But I am quite sure that no amount of tinkering with this formula would or could have affected the decision on where this order went. I am quite satisfied about that. The costing system is a well-tried one, which has worked well in the past. If it has imperfections, these make their appearance—as I think the hon. Member suggested—when the factories are working at very low levels of capacity, and I am sure that the right thing to do is not to try tinkering with the formula but to take steps to get the capacity right. That is what we did.

As to why a private firm was successful as against the Royal Ordnance Factory in this case, I cannot say. My hunch is that the firm was more competitive because its normal production is permanently organised to fill this sort of order, with the result that it will be able to do much of the armoured personnel carrier work with a semi-skilled force, and, therefore, much more cheaply than we can with a factory essentially organised as a skilled factory.

The hon. Member's second series of points bore on the future. He asked what our plans were for keeping the Royal Ordnance Factories efficient and competitive. Here I must go back and give the background to the present position. When I first came to the War Office, nearly three years ago, one of my responsibilities was to review the capacity of all the remaining Royal Ordnance Factories. Today we are concerned only with the Weapons and Fighting Vehicle group, among the four groups, and we concluded, after this review that, all being well, we should need the fighting vehicle capacity at Nottingham and Woolwich to make the armoured personnel carrier, but that when this was done with there would be a surplus for which we could foresee no use. We said then that there would be another review in two years' time. That review has had to be put forward, because the loss of the armoured personnel carrier order was the equivalant of three years' work for one factory, and in fact it is going on now. I cannot anticipate the outcome in any detail, but we shall aim at an organisation within the group which is adequate for the jobs that have to be done. Before a final decision is taken my right hon. Friend will have the independent advice of Sir Eric Mensforth, and we are grateful to him for having undertaken this task.

The hon. Member asked about his terms of reference. We have not finally agreed the terms of reference, but he will give my right hon. Friend private advice on a departmental problem. We have it in mind that he should advise us how this group of factories should be organised, and how many factories it should contain, so as to function economically and, where applicable, competitively. We have not given him formal terms of reference, such as would be appropriate in the case of a committee. We hope that his report, and the outcome of the review, will come forward as soon as possible, because we want to put an end to the present uncertainty as soon as possible. It would not be appropriate for there to be direct consultations between Sir Eric and either the staff side or the unions, but during the progress of this review the normal channels of consultation between those bodies and the Department will be open and available. I hope that as a result of this review we shall be able to achieve some stability in this group of factories.

I now come to what the hon. Member said about efficiency. There ought to be no doubt in the mind of the House that the factories are efficient, but we ought also to remember what they have to be efficient for. They have a specialist job to do, primarily to produce armaments designed in Government research and development establishments for the Government and the Services. It is no reflection on that if it turns out that non-specialist production can sometimes be more cheaply undertaken by outside industry. Our problem now—and it has been a continuing one over the last six years—has been to match the capacity available in the R.O.F.s for this sort of work, which is now too large for the Services' requirements and which, for obvious reasons, has been growing smaller.

I am grateful to the hon. Member for the kind things he said about the arrangements we have been able to make to handle these redundancies in the past. We regret that this one is having to take place, but we must face the facts. Not all the capacity in the Weapons and Fighting Vehicle Group is now required, and it would be wrong to run away from this problem.

Question put and agreed to.

Adjourned accordingly at Eleven o'clock.