BRISTOL COMMERCIAL VEHICLES

HC Deb 06 May 1964 vol 694 cc1412-24

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

10.2 p.m.

Mr. Anthony Wedgwood Benn (Bristol, South-East)

I want to raise a question tonight that greatly concerns a firm and its workers in my constituency—Bristol Commercial Vehicles, a famous firm of bus makers now working well below capacity, facing redundancy, and with a very uncertain future, solely and simply because of Government policy. Before I come to the point at issue, I should like very briefly to go into the background of the case.

Bristol Commercial Vehicles, in its very early days, had links with the famous Bristol Aircraft Company and was later taken over by Thomas Tilling at a time when it operated the Bristol Tramways and Carriage Company. The company's task then was to provide vehicles for the carriage company operating services in Bristol. At that time, it sold in the open market quite normally, and even had an export trade of its own.

In 1948, the firm of Thomas Tilling voluntarily sold itself to the British Transport Commission and, therefore, the operation of Bristol Commercial Vehicles, it being a subsidiary of Thomas Tillings, came under the British Transport Commission and under the operations of the 1947 Transport Act. That Act, which is no longer on the Statute Book, provided a quota system for the manufacture of vehicles, and certain limitations on the operations of subsidiaries or component parts of the Transport Commission. The firm only in one year actually reached the maximum production allowed within the quota. It had worked, and still works to a lesser degree, with the Eastern Coach Works in Lowestoft supplying vehicles for Tillings and also for the Scottish group.

Then came the 1962 Transport Bill. When that Measure was first introduced into the House the restrictions of the 1947 Act appeared to have been removed; that is to say, the Bill when first introduced was absolutely silent on the manufacturing powers of the new subsidiaries of the Transport Holding Company, of which Bristol Commercial Vehicles was one. Indeed, the hon. Gentleman's predecessor as Parliamentary Secretary to the Ministry of Transport defended this very vigorously in the Standing Committee when certain pressures were raised against this new freedom for subsidiaries. On 27th February, 1962, he talked about the pressure to limit the operations of these companies, and said: Frankly, if people like A.E.C. and Leylands—the big manufacturers—cannot meet competition from little firms like this which are producing a thousand or 300 chassis a year, then it is time that A.E.C. and Leylands woke up a bit."—[OFFICIAL REPORT, Standing Committee E, 27th February, 1962; c. 982.] This was definitely Government policy at that stage. However, when the Bill came to the House for the Report stage, the Minister changed his mind and the House wrote in, on his Amendment, a provision which laid down that the subsidiaries of the Transport Commission Holding Company were only to produce goods for sale or use by the Holding Company or any other subsidiaries. It is this provision of the Act which in the first instance created the difficulties to which I refer.

I know that it is not in order on the Adjournment to raise a matter which entails legislation. Lest you should think that I am veering from this, Mr. Speaker, I should explain that I shall make it clear that legislation is not necessary to put this matter right. At any rate, the consequences of this Amendment to the Transport Act has inevitably been the contraction of Bristol Commercial Vehicles. I say "inevitably" because of the position in which the company finds itself. It can sell only to subsidiaries of the British Transport Holding Company, namely, the Tilling Group and the Scottish Group. However, there is nothing to prevent the bus-operating companies from acquiring their vehicles from other sources. They can go to private enterprise for them but Bristol Commercial Vehicles is able to sell only to them.

Similarly, and this is an important point, Bristol Commercial Vehicles can buy components from private engineering firms but cannot sell them to private engineering firms. As an inevitable consequence of this, in November last year, production having fallen and prospects being poor, 123 men were declared redundant. The confidence of the workers in the future of the firm was greatly shaken. They began consultations with me and I went to see the firm. I saw modern equipment lying more or less unused and I tried to help find a solution to the problem.

I wrote to the Parliamentary Secretary and I pointed out the difficulties, particularly with regard to subcontracting I had a reply from him which was really just a repetition of a quotation from Section 29(7) of the Transport Act, 1962. He followed this quotation with a very firm reference saying that it was impossible in the circumstances to permit such subcontracting, which was a point on which I had particularly written to him.

I then went to the factory in Bristol and discussed the matter with the men there. It was unanimously decided by the men that the way in which the problem should be tackled would be quite another way, namely, that the workers in the factory, and this was unanimously agreed at a meeting in the canteen of the clerical and manual staff, should write to the chairman of the Holding Company, Sir Philip Warter, and ask permission to buy shares in the company. This they were entitled to do under the Transport Act, 1962. The intention was to buy shares to participate in the ownership of the company. It would then no longer be a "wholly-owned subsidiary" of the Holding Company it would be free to trade without restriction. This was plainly stated in a letter to Sir Philip Warter and to the Ministry of Transport and I sent a covering letter in support of the application.

I want to make it clear, because I am not sure that it was altogether clear, that the workers had no specific interest in the management aspect of the company. They were concerned, by sharing in the ownership of the company, to free themselves from statutory restrictions which made nonsense of their work. It showed a remarkable faith in the future of the company that they should do this. Incidentally, this cooperation in national and co-operative ownership could well have something to offer in the future, but I let that pass.

The chairman of the Holding Company wrote to me in response to my letter and he said that, in the circumstances, he thought it necessary to consult the Minister of Transport. Under the Transport Act, of course, the Minister has power to deal directly with the Holding Company. He can give it a direction compelling it to sell the shares in this instance or to refuse the request. He is ministerially responsible, and this is the only reason why I am able to raise the matter on the Adjournment tonight.

Later, I had a reply from the chairman of the Holding Company in which he said that he had decided to decline the request to buy shares, and in his letter he used a phrase which puzzled me very much. He said that he thought it would be better if we used more direct means of dealing with this particular problem. I could not understand the meaning of "more direct means" because the only more direct means which came to my mind was an amendment of the Act. It would not be in order for me to speak about that now, and it was clearly impossible for an amendment to be introduced this side of the General Election. Therefore, I asked exactly what "more direct means" meant. As a result, I learned that it was in the mind of the Holding Company that it might decide to sell shares to private industry or exchange shares with private industry, which would have exactly the same effect as what the workers in the firm wanted, namely, it would lift the restriction which now applies to the firm and permit it to trade outside.

At the same time, I had a letter from the Minister of Transport himself in which he said that this was a decision of the Holding Company, indicating that he did not feel able to overturn it although, clearly, he had power to do so. From the Holding Company, on the other hand, I had a message to say that this was their view but that, in any case, I should remember that, if it had been an opposite view, the Minister would have power to overturn it. Thus, there was a completely circular argument, the Holding Company to some extent shielding behind what it thought the Minister's view would be and the Minister upholding a view which the Holding Company had taken after consultation with him.

The Holding Company being prepared, if circumstances were right, to contemplate the transfer or sale of shares to private interests, the last logical reason for refusing the workers' request had completely disappeared. It would be one thing to say "We, the Holding Company, are hanging on to our subsidiaries and we will not let them go to anybody", but it is totally illogical to say, "We are prepared to sell them to certain economic groups which might be interested but not to the workers who have a direct interest in the success of their undertaking". In fact, the only valid case which the Minister and the Holding Company had in these circumstances is destroyed.

I have, therefore, tried on several occasions, so far without success, to raise the matter in the House in order to air the problem and to ask the Minister, as I do tonight, to reconsider the decision taken in his Department and to ask the Holding Company to agree to sell the shares.

I do this for four reasons. First, the position of the firm is now absolutely intolerable. Here is a firm which can only face long-term contraction, a firm which has excellent new plant, newly equipped, which is not being used. Its position is quite impossible. With the great appeals which the N.E.D.C. now makes for an extension of production and with the great need for general economic expansion, it seems to the workers there and to me absurd that this plant, because of Ministerial decision, should not be used as it could be.

Second, the decision by the Minister and the Holding Company is entirely contrary to the claims which the Government have made about their attitude to the running of nationalised industry. The Minister justified the Beeching plan for the railways on the ground that one had to operate the railways on a commercial basis. When the right hon. Gentleman was himself speaking on the Transport Bill in 1962, in a period of my temporary absence from the House, he said that he thought that …the assets should be used to the maximum".—[OFFICIAL REPORT, 18th April, 1962; Vol. 658, c. 513.] That was the Minister's view. Yet, as a result of this restriction, the assets are not being used to the maximum.

The third reason why this is such a monstrous decision is that it makes nonsense in a modern technical age when firms increasingly specialise in certain components. They buy what they need from firms which specialise in such components, and they would normally wish to sell what they specialise in and make best. Bristol Commercial Vehicles buy engines, chassis frames, castings, springs and electrical apparatus from private enterprise, but the things in which they specialise, which include engines, gear boxes and axles, they are not allowed to sell even for assembly by other bus construction companies. This has the effect of freezing the pattern of production in the nationalised industries into a pattern which has no relation to modern technical needs.

The final reason why I raise this matter is this. No doubt the Minister will produce the figures of the chassis being produced. A year ago 800 were being produced. Now the figure is 757. A year ago 900 men were employed. The figure now is 680. No doubt the hon. Gentleman will produce these figures and say that as far ahead as can be seen there is a prospect for the firm to do well. But the men do not see it this way, because, although there is no immediate prospect of further redundancy, they know very well that the situation in which they are trying to operate is economically nonsensical.

The result is that, after the redundancies had stopped, skilled men who are now needed in the firm are seeking employment outside. Although I do not want to suggest that morale in the factory has collapsed—the attitude of management and men on this issue is absolutely united; there has been full support for this at every level—the anxiety of the skilled men about the future is likely to do further damage to the company.

I sum the matter up in this way. The restrictions under which Bristol Commercial Vehicles operate are absurd, unfair and economically nonsensical. The Minister has the power, without legislation, to correct the situation and to lift the restrictions by acceding to the workers' request to buy some of the shares—they are interested in only a very small number—which will enable them to go ahead. I appeal to the Minister to give Bristol Commercial Vehicles, 'Which has a proud history, modern machinery and a highly skilled and forward-looking labour force, the green light which it needs to develop in future.

I want to ask the hon. Gentleman two questions which I hope he will be able to answer, for unlike some ministerial decisions this is not a once-for-all decision; it can be reviewed at any time. There is no reason why it should not be reviewed again. Will the hon. Gentleman come to Bristol and visit the factory and experience for him-self the sense of waste that there is in these well equipped workshops not operating at capacity when there is a demand for the products which they make? Will he talk to the Chairman of Tillings, who has been charged under the Transport Act with the responsibility for maximising the profits of his undertaking, and ask him how this can be done in the existing situation?

Naturally, I have thought of the situation in terms of the forthcoming General Election. Hon. Members opposite have decided to stay in office for a little longer. The inevitable effect of this in this field and every other has been to delay important decisions. Therefore, having failed to get satisfaction from the hon. Gentleman and from the Minister, I decided to approach my right hon. Friend the Leader of the Opposition, since it is a matter of great concern to my constituency and others in a similar position. I am glad to be able to give the answer which my right hon. Friend would give if he were answering this debate—that "a Labour Government will remove the restrictions that now prevent nationalised industries from engaging in normal trade in the home and export markets, and will encourage them to develop to the full in the interests of the industry, the workers in it and the whole community."

Those are quotes from my right hon. Friend the Leader of the Opposition who, within a few months, will be able during his period of office to give instructions—[HON. MEMBERS: "Oh."] This is the consequence which hon. Members opposite must face of deciding to delay the election. The power and decision making on this and other issues must now be passed to my own Front Bench but there is no reason why the Minister should not review the situation now, visit the factory and discuss it with the chairman concerned.

10.20 p.m.

The Parliamentary Secretary to the Ministry of Transport (Mr. T. G. D. Galbraith)

The hon. Member for Bristol, South-East (Mr. Bonn) has raised a subject of considerable interest to a number of his constituents and one which also contains important points of policy and principle. In deploying his case the hon. Gentleman has, I think—and I hope that he will not mind my saying this—made quite a good speech. I do not deny that there is something in what he has said but perhaps not as much as he thinks, for otherwise there would not, of course, be any difference of opinion between us.

In order to understand the points at issue properly, it is, I agree, necessary to go back a little into the history of the firm involved. As the hon. Gentleman knows, Bristol Commercial Vehicles Limited is one of three wholly owned subsidiaries of the Transport Holding Company. The other two are Star Bodies (B.R.S.) Limited and Eastern Coach Works Limited and they are all three engaged only in manufacture.

The Bristol Company makes chassis for road vehicles. Its capacity is about 1,070 chassis a year and, until recently, output has been running at about 1,000 a year, more or less up to capacity. It is now, as the hon. Member said, expected to stay at about 750 per annum. Most of the firm's orders come from bus companies in the Tilling Bus Group, though the company has also done work for the Scottish Bus Group and for British Road Services.

Before the Transport Act, 1947, the Bristol vehicle manufacturing plant was owned by the Bristol Tramways and Carriage Company, Limited, and it was sold with the rest of the Tilling Group bus interests to the British Transport Commission in 1948. Here, we come to what is a very interesting point.

Under the 1947 Act, the company was obliged, like the other manufacturing companies I have just mentioned, to manufacture solely for the British Tran-port Commission and its subsidiary undertakings. In other words, it was statutorily debarred from supplying its products to outside concerns. It was also subject to an output restriction in the form of a quota.

That was the position under the Socialist Party's nationalisation Act. The company was doubly limited—limited in its clientele and limited in its output. So I really do not understand why, in the last few minutes, the hon. Gentleman got so excited, saying that this is a most monstrous state of affairs and how he and his party, in the extremely unlikely event of their ever getting power again, will change the set up. If, after all, it is as bad as that, why did they ever introduce it in the first place? It is their baby and yet from the hon. Gentleman we have had the same sort of arguments as we had from several of his hon. Friends in a somewhat similar debate on the railways' manufacturing powers and the same threat to alter their own legislation if they get power.

I suppose, however, when it is so difficult to get a clear enunciation of policy on major issues from hon. Members opposite, we must be grateful to be told what their policy is on these minor matters, even if it is only to reverse decisions they themselves took when they were in power.

In the Government's Transport Act, 1962, although some changes were made, the position remains very much the same as in the original Act which the hon. Gentleman now complains about. Under Section 29(7) of the 1962 Act the three companies I mentioned are still allowed to manufacture only for the nationalised transport undertakings and their subsidiaries. On the other hand, the quota system has been removed and instead the companies are subject to a direction issued by the Minister to the Transport Holding Company under Section 29(4) of the 1962 Act. This requires the Transport Holding Company to exercise its powers over the manufacturing companies so as to ensure that their productive capacity does not exceed the productive capacity as it stood on 1st January, 1963.

The Government's view on this whole question was made abundantly clear when the Bill was being passed through Parliament in 1962. We recognised two things. First of all, we recognised that the position of the three companies in the new organisation was anomalous, but that to prohibit them from manufacture would seriously affect the value of the public investment in them. Secondly, we recognised that there was no objection to the sale of these companies at the right price and under the right conditions.

In fact, the components of the Holding Company were placed in much the same position as they had been in when they were part of the British Transport Commission. I hope that the hon. Gentleman will give us credit for the fact that, though there was scope here for changes of a doctrinaire nature, we virtually maintained the status quo as it had been in the Socialist 1947 Act.

To bring the picture up to date, there has recently been, as the hon. Gentleman said, some redundancy in the Bristol company's works. As the result of this redundancy, the men made a request to the management to buy some shares in the company. The object of this proposal—and there was never any secret about it—was to make the company no longer a wholly owned subsidiary of the Transport Holding Company, so that it would escape from the manufacturing restrictions imposed by Section 29(7) of the 1962 Act. The company could then, in its new found freedom so far as the Act was concerned, set out to expand its markets and during slack periods perhaps accept sub-contracting work from local engineering firms.

I understand that the hon. Gentleman's constituents then appealed to him to support this proposal and the hon. Gentleman wrote to my right hon. Friend, as he has told us, and to the chairman of the Transport Holding Company, supporting the request of these workers at the Bristol Factory to buy shares in the company.

What happened after that was that Sir Philip Warter, the chairman of the Transport Holding Company, discussed this suggestion with my right hon. Friend and subsequently replied to the hon. Gentleman that he did not consider that the course proposed was the best way of dealing with the restrictions placed upon the company by the 1962 Act. But even if the chairman had agreed to the proposal, I must remind the hon. Gentleman of the assurance given by Lord Mills in July, 1962, that the company's productivity would not be materially increased. This means that, even if the company were free to find customers outside the nationalised transport field, it could do no more than take up the slack to the level of capacity as it existed at the beginning of 1963. It could not, in fact, expand beyond that level.

But, quite apart from this restriction against expansion, would it be right to proceed in the way that the hon. Gentleman's constituents have proposed? I think that this is an important aspect that we ought to consider—the propriety of acting in the way that the hon. Gentleman's constituents want. I am sure that there is no doubt about what the intentions of Parliament were in this matter. They have been stated, after all, on two occasions. In the 1947 Act the company was confined to the nationalised transport field, and in the 1962 Act Parliament clearly decided to leave that position unchanged—a tribute, if one may put it that way, to the original legislation of the party opposite.

In view of this twice-expressed decision, a small sale of shares on the lines proposed would be merely a device—that is all it would be—to circumvent the intentions of Parliament, and my right hon. Friend would not consider it proper to give his consent to a sale for such a purpose, as he would have to do under Section 29(8) of the 1962 Act, even if the Holding Company sought his consent. But it has not done so, and the initiative in a matter like this is, of course, not for my right hon. Friend but for the Transport Holding Company.

However, as my right hon. Friend suggested in the debate on the 1962 Act, the Government would not think it improper for the Holding Company to consider selling the works outright if a satis- factory offer were made. In the absence, however, of such an offer, it is the responsibility of the Holding Company to manage the securities entrusted to it by the Act to the best of its ability.

The whole of this problem has, of course, really arisen, as the hon. Gentleman indicated, out of the reduced demand from the company's customers. As I expect he knows, the company has completed the process of rationalisation which it decided to undertake recently. The company tried to handle the unavoidable redundancies as fairly as possible, and I am told that practically all the men who were dismissed were quickly able to find other employment in the Bristol area. I can assure the hon. Gentleman—he indicated that I should probably be able to give an assurance, and I can—that the company is always on the lookout for additional orders of the kind permitted by the Act, and, indeed, that the Holding Company believes that for the foreseeable future there will be enough work for round about the present numbers of staff employed—about 678.

I know that this is not what the hon. Gentleman wants, because he has various doctrinaire desires which I am sorry I cannot satisfy, but I hope that this will be an assurance of the kind in which his constituents are mainly interested. It shows that the position is very far from being impossible in the way that he suggested. The hon. Gentleman may say that he is not asking for an increase but for production to be maintained at the level at which it was before these changes were made, but this would involve a complete change in the purpose of the Company and would, in fact, amount to an extension of nationalisation.

Before I end I should just like to explain how my right hon. Friend became involved in all this. My right hon. Friend came into the picture as a result of the letter which the hon. Gentleman wrote to him about his constituents' proposals. My right hon. Friend then got into touch with the Holding Company and was informed by the chairman of its views and its policy in this matter. I should emphasise, however—I do not think that the hon. Gentleman really appreciated this—that the initiative has genuinely come from the Transport Holding Company and not from my right hon. Friend. The Transport Holding Company does not like the proposal, and my right hon. Friend agrees that, taking three things into account, it is perfectly right to have come to that conclusion——

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned a twenty-eight minutes to Eleven o'clock.