G.E.C./A.E.I. MERGER (Hansard, 5 February 1968)

§ The Minister of State, Board of Trade (Mr. George Darling)
When my right hon. Friend considered the proposal for this merger, he had regard to the broad national interest, and the merger has been generally accepted as serving the national interest.
At that time, no indications could be given about the eventual reorganisation of the factories concerned, although it was clear that there would be some closures of factories and some expansions, but the Group gave assurances that, as far as possible, these closures, contractions and expansions would be in line with the Government's regional policies.
36 I understand that jobs are being offered to some of the work people affected in others of the factories of the Group, and my right hon. Friend the Minister of Labour is making available the full resources of his Department to find alternative employment for those made redundant.
I appreciate that this closure will come as a blow to many work people and, in some cases, families of work people who have been employed there for many years.
As for the industrial development of Thamesmead, I can tell my hon. Friend that I will consider any application for industrial development certificates there from suitable London firms with strong ties to the area.

§ Mr. Mayhew
Do I understand from that answer that this decision was not referred to the South-East Regional Planning Council? If not, why not, and will the Minister send it to that Council? Is he aware that there is a great deal of anxiety and strong criticism in Woolwich at this sudden decision, which was taken without adequate consultation, and that it will add to the employment problem already caused by the forthcoming influx of 60,000 new residents to the new town of Thamesmead? Will he tell the House what plans he has for alternative employment for my existing constituents and for the 60,000 newcomers who will start coming in May of this year?

§ Mr. Darling
On the point about consultation, we have reiterated to the firm concerned the importance that we attach to early discussion of these plans. The firm takes the view that it should announce its plans to the trade unions concerned at the same time as it announces them to the Government. Whether that is the right policy is a matter which we are discussing with them.
As for referring closures of this kind to the Regional Economic Planning Council, we certainly could not refer what are commercial decisions to the Council for it to decide whether they were in the regional interest—[HON. MEMBERS: "Oh."] This must be a matter to be decided by the commercial concerns in consultation with the Government. I am sure that that is the right policy to follow.
37 As for the provision of new jobs, the present unemployment rate in this part of London is about 1.7 per cent. In view of the fact that the closure will not finally take place until some months have elapsed, we think that we can do a great deal to find alternative work. This is something which we have been able to do rather successfully in this part of London, and we think that we may be able to do it again just as successfully. As I have said, industrial development certificate applications will be considered with these matters in mind.

§ Mr. Hamling
Is my right hon. Friend not aware that this large amount of redundancy is in addition to that which has already taken place in the London Borough of Woolwich accompanied by the closure of the Matchless motor cycle factory, and that, locally, the people of the borough do not consider that there are ample opportunities of alternative employment? Would he consider receiving a deputation of civic leaders from the borough to discuss the whole question of employment in the area?

§ Mr. Darling
I am always ready to receive deputations of that kind.

§ Mr. Frederic Harris
Does the right hon. Gentleman realise that these decisions have also brought about redundancies in high executive positions to men whose ages are such that they will experience difficulty in finding alternative appointments?

§ Mr. Darling
I am not aware of that, but I understand that discussions about possible redundancies at executive level are taking place with the people concerned.

§ Mr. Moyle
Is my right hon. Friend aware that if the company continues to handle this problem in the way that it has started, it is likely to go down as a classic case of how not to handle a reorganisation problem? Will he consult with his right hon. Friend the Minister of Labour to see that the company is advised to behave more intelligently in the months to come? Secondly, is he aware that there is no room for manoeuvre in the employment rate in South-East London? Thirdly, is he aware that the London Borough of Lewisham already has far less than its adequtae share of in 38 dustry, and will he give an undertaking to do what he can to see that that inadequate share is at least maintained?

§ Mr. Darling
I have said already that we have reiterated to the firm the need for early consultation. On the question of whether this area of South-East London is getting its right share of industrial development, this is a matter on which I would be willing to enter into disputative discussions. However, this is not the appropriate moment.

§ Mr. Costain
Does the Minister of State appreciate that the Government's policies, including Selective Employment Tax and the like, will encourage comcercial firms to transfer to the North and that they are causing unemployment not only in London but in the whole of the South-East? Will he deny that it is the policy of the Government to do that?

§ Mr. Darling
Of course I will not. That is what the Government's policy is meant to achieve. As I have said already, the unemployment rate in this part of London is 1.7 per cent. The work now to be distributed from that factory is going to several factories in the North-East and in Scotland, where the need for employment of this kind is very serious.

§ Mr. Lawson
I am sure my right hon. Friend will appreciate that we all regret hardship caused to anyone in matters of this kind, but will he bear in mind that many parts of our country have had their industry draining away for years, and that we welcome firmness in this connection, which has the object of returning some industry to those parts of our country?

§ Mr. Darling
Yes, Sir.

§ Dame Irene Ward
As my constituency will benefit from this transfer, for which I am sure we are very grateful, it had been suggested that there would be transfers from the North-East Coast to the North-West. So that the whole situation may be clarified, can we have attached to the OFFICIAL REPORT the whole decision and an explanation of what is to happen after this merger, including where transfers are to take place, where they are to go, and the whole range of happenings?

§ Mr. Darling
If the hon. Lady will put down a Question seeking that information, I will give it to her. That would probably be the best way of publicising it.

§ Mr. C. Pannell
Is my right hon. Friend aware that this is a disaster of the first magnitude to Greenwich, and that I speak from experience, having worked next to that factory before I came to the House'? With all the known devices of planning such as the Board of Trade now envisage them, it is a physical impossibility to clear up this mess in a few months. In effect, what will be the cost at the end of the day, by the time that the Government have paid regional employment grants to take factories to Scotland and then given incentives to bring another firm into the factory which has been vacated? My right hon. Friend must consider this more seriously than his answers today would indicate.

§ Mr. Darling
These are matters that can be considered. In carrying out regional policies of this kind, we have to take all these factors into consideration. It obviously would be wrong to get a redistribution of industry that was uneconomic and did not make commercial sense. Therefore, we consider all the time what is best both for the regions and in the national interest and we try to balance all the factors.

§ Mr. Speaker
Order. Mr. James Johnson—Private Notice Question.

§ Mr. Mayhew
On a point of order, Mr. Speaker. I beg to give notice that I shall raise this question again at the earliest opportunity.