§ 9.0 p.m.
§ Mr. W. F. Deedes (Ashford)
I do not think I have to explain to my hon. Friend the Under-Secretary of State for the Environment my interest in British Railways workshops and why I raise the subject on the Adjournment tonight. I acknowledge my gratitude to my hon. Friend for being here on an evening when very few other hon. Members are.
In Ashford, for a century or more, the railway workshops have been and remain today the guts of the town. Now we are in trouble. We are in trouble for reasons which I think it is now as well publicly to rehearse. As a result, the works face at worst a shutdown involving about 1,300 jobs by the middle of 1972 and at best some contraction, possibly severe.
I have been in two minds about seeking this debate publicly. For some months I have thought it right to negotiate urgently but privately with Mr. Richard Marsh and the Ministers principally concerned. There are situations in which correspondence can be more effective than public debate. But in this instance I have acted privately for two main reasons. First, I have been anxious to avoid aggravating the talks which have been going on between British Railways management and the unions, especially the working party talks which were in progress until a day or two ago. Secondly, I have been anxious, though less anxious, to avoid raising hopes falsely among those principally concerned, the men in the workshops.
However, events of the last 24 hours make it clear that we have now reached some kind of "crunch" and, therefore, those two considerations no longer arise. I know that my right hon. Friend has been seeing the unions today. I do not want to dwell on that aspect of the difficulties. I have no doubt that my hon. Friend will comment on it.
I want first to say a word about the background, partly historical, and then to deal with Ashford's special position. Finally, I want to put some questions to my hon. Friend.
The need for some contraction in British Railways workshops and their work force and the reason for it are not anywhere in dispute. One could spend a long time explaining it. I content 770 myself with dwelling on one or two salient facts which sum it up.
Rationalisation and modernisation of the railways, once a labour-intensive industry, has been going on apace for a number of years. Rationalisation of the industry's activities has led to rapid changes in the workshops. My workshops at Ashford now make and repair wagons. In the days of steam they did a great deal more. Their main contraction took place about a decade ago. Now they are engaged on wagon repairs and the production of new wagons.
It is worth considering this revolution through the eyes of the railway workshops. In 1953, for example, the railways owned 1 million wagons, with a ratio of repairs to replacements of about 10 to 1, or rather more. Today the figure is nearer 400,000. They are bigger, faster and more durable wagons. They include the express liner wagons which are made at Ashford, and the high capacity "merry-go-round" wagons which can carry about 150 tons a week. By 1975, it is said, we shall need only 200,000 wagons. That will represent a cut of about four-fifths in a quarter of a century. That is the nature of the revolution which has come about. In a sense, it is an historical process, and it cannot be attributed to political, social or other reasons.
Some may wonder why, with this faster, streamlined railway freight service, we have this gigantic growth of heavy road haulage creating environmental problems and likely to become bigger, uglier and heavier as we grow closer to Europe. Freight by rail today is about 8 per cent. of the total. Yet our main roads and towns are swamped by heavy lorries polluting the atmosphere and creating new problems of their own on the motorways. I am not dwelling on this crazy paradox. I am simply concerned with the consequences.
I wish that British Railways top management saw a bigger challenge on the freight side than it sometimes appears to do. It would be wrong to say that it sometimes gives the impression of a death wish. None the less, it seems to be reconciled to perpetual contraction. I cannot believe that in the general balance of things we should be satisfied to see railway freight, if anything, contracting while, on the other hand, road freight is manifestly expanding. However, that is 771 not what I want my hon. Friend to reply to.
To these general factors must be added the fact that more and more wagons have become privately owned and are off British Railways' books altogether.
All these factors put together have been greatly aggravated by the recession in recent months and the fall in, particularly, coal and steel freight. This is what led to the threat to the three principal workshops—Barassie, in which no doubt the right hon. Member for Kilmarnock (Mr. Ross) has a close interest, Swindon and Ashford.
I come to the position of Ashford. In August I sent a fairly long paper to Richard Marsh, with a copy to my right hon. Friend, setting out the reasons why I believed that Ashford must be kept going. Nor was this simply special pleading of the order in which all good hon. Members should be proficient. If we have a Channel tunnel—the odds seem to be on that—the railway works at Ashford become indispensable.
First, they are best placed to deal with repair and maintenance of tunnel vehicles. I understand that the French have no counterpart near the tunnel mouth to the Ashford railway works. Second, they would be required to build wagons for the tunnel which, because of their size, cannot so readily be built elsewhere. We seem to have reached the point of being able to propose vehicles for the tunnel. Those which have been agreed with S.N.C.F. will have fixed bodies with an overall height and overall width far above normal railway size. I understand that these are for carrying coaches or vehicles. Design and construction will be easier and costs will be less if this work can be done at Ashford. At Ashford the work would provide us with at least 31 years' work load.
Thus it is imperative that British Railways, engaged in these current talks about the future levels in the workshops, should get from the Government as firm guidance as possible on whether the tunnel is thought by the Government to be a runner. I keep an eye on this because in another capacity I have certain constituents who may be afflicted by the tunnel, who may not benefit by it.
I am baffled to find teams of men in certain places, which I will not specify, 772 and in Europe, beavering away on the clear assumption that the tunnel will go ahead. I recently talked to some engineers in Germany who have no direct interest, but they were absolutely assured. I talked to certain people in this country who were absolutely assured. Indeed, in my area a large area is frozen or blighted because nobody can do things there: they are told that it may interfere with the tunnel. Yet British Railways' top brass is apparently uncertain, or claims to be, about these prospects. This is crucial, because if it was certain of the tunnel it would be certain that it needed Ashford.
I warned my right hon. Friend the Minister for Transport Industries about this, and I repeat my warning tonight. Even if nothing can be said publicly about whether we are to build the tunnel, it would be helpful to tell British Railways a little more explicitly what the Government's latest thinking may or may not be. It is conceivable that this would affect other things besides the Ashford works. I am told that Sir Eugene Melville, who is my right hon. Friend's principal adviser, has received the message and will do his best. I hope that he will pass it on to the Minister. Ashford has a distinctive rôle to play if we build the tunnel. There would be no prospect of closure. But building wagons, or even prototypes, cannot start for some time, and there is a gap with no immediate work to do, as far as I can see.
What, therefore, do we do in the meantime? There are two possible answers. The first is the general answer, on which I have been pressing my right hon. Friend the Chancellor of the Exchequer—and this affects everyone concerned with railway works. I have asked him to take a hard look at the railway programme and see whether some construction work could not be phased forward. From time to time applications for capital are made to the Treasury, which, for some reason or other, decides that they cannot be allowed. They are perfectly good reasons, and I do not quarrel with them. If that situation obtains now in respect of rolling stock, I suggest that the Treasury should reconsider and that any work which can be phased forward should be. This can be done with a certain amount of carriage work, although I am not sure about the position in relation to freight work. I am not, from this side of the 773 House, asking the Treasury to sanction vehicles which we do not want. I am asking for capital allocations to be scrutinised, and quickly.
More immediately, and in a sense more relevantly to Ashford, we have a prospective order from Yugoslavia for about £10 million worth of work. That would provide at least 15 months' work for 600 men, but the work requires an Export Credit Guarantee Department credit. As I have made clear, I am aware of the difficulties. Iron Curtain countries like a long line of credit, although they are good payers eventually. There clearly has to be a limit on the amount of E.C.G.D. loans which can go out where long periods of payment are involved. I accept this, and I know the difficulties. Yet surely it is not too much to ask that Ministers, when seeking ways and means of tiding over the recession and dealing with unemployment, should take a very hard look at terms like this, which very much affect jobs.
My information is that what we offered to Yugoslavia was not the £10 million over eight years but £6.4 million over five years. Let us be clear about it. I understand that a decision in a matter of this kind lies technically with the E.C.G.D. but finally rests with the Department and perhaps the Treasury. In other words, Ministers can exert some pressure if they want to.
On 22nd November my right hon. Friend the Minister for Transport Industries told me that matters were in the hands of the Yugoslavs. I hastened to disabuse him by letter. They have been offered certain terms which they do not wish to accept, and the order might drift away. Can my hon. Friend tell me the latest position? Where do we stand now? My right hon. Friend wrote to me today and indicated that eight years was now on, but I should like to be clear about the latest position now. If we do not get this right quickly, we shall have only ourselves to blame if the order drifts away, and it must be settled quickly. It is a matter of days, not weeks any more, and I am sure that my hon. Friend accepts that.
There are other factors in all this. Most of them are being dealt with by the management of British Railways, the unions, working party talks, and so on. I am limiting myself to the points which 774 I have raised with the Minister; namely, the Yugoslav loan, which is important, the Channel tunnel—and I should be grateful if my hon. Friend could be a little less vague about this—and the broad policy involved.
There are one or two hon. Members who want to intervene in the debate, and I shall begin to bring my remarks to a conclusion by saying that I have tried always to be reasonably conscientious about pleading special causes in this House for local reasons which may be contrary to sound policy. That is not what I am doing tonight. This is not a plea in defence of obsolescence. I am not saying that this is a railway works which has been there for a century and deserves to be preserved. Nor am I pleading against changes which must come. We know that certain changes must come, and they have been accepted.
This is a first-class works. It is well managed, has high productivity, and good labour relations. It can compete, as can many British Railways workships, with anything that private enterprise can put up against it. We are not dealing in anything weak. It has a major rôle to play in a major project of the future which Ministers affect to take seriously. As far as I know the Channel tunnel is being taken seriously by them.
The works has a force of skilled men which we shall need. If we make these men redundant, we shall disperse a labour force which we shall never get back. The notion—and I think that this floated around Euston Road at one time—that railway works like this can be put into mothballs and taken out again if a sudden need arises out of the Channel tunnel is pure cloud-cuckoo-land. It does not work. Once an organisation like this is put into mothballs and its labour force dispersed, with a great deal of agony on the way, the men can never be got back again, and I am sure that my hon. Friend accepts that.
I have no doubt that those considerations will indicate to my hon. Friend why I am simply not ready to see a national asset of this kind squandered without a hard battle.
§ 9.18 p.m.
§ Mr. Neil Carmichael (Glasgow, Woodside)
I am grateful to the right hon. Member for Ashford (Mr. Deedes) for 775 giving me the opportunity to put my point of view to the House during this Adjournment debate.
The title of the right hon. Gentleman's debate is "British Railways workshops". That gives me the opportunity to raise some matters of which I know the Minister will not be aware, and I shall therefore be content if he will take note of what I say and perhaps reply to me later. I know how these things are done. The Minister has prepared for a specific and important debate on a topic chosen by his right hon. Friend, but this is too good an opportunity to miss to raise some of the points that were raised last Wednesday by unemployed people who gathered in the Lobby.
A number of those who came to see me were members of the National Union of Railwaymen, of the Associated Society of Locomotive Engineers and Firemen, or of the Transport Salaried Staffs' Association. They are concerned about this problem in Scotland. As the Minister probably appreciates, I had one or two difficult furrows to plough when I held his office. The circumstances were slightly different. I had a difficult job over the Inverurie Works, which were being closed. I went to Inverurie with my hon. Friend the Member for Greenock (Dr. Dickson Mabon), who was then Minister of State at the Scottish Office. The people there were naturally not at all happy, but we spoke to them about the position.
At that time the Inverurie Works were in an area in which the average level of unemployment was very much below the Scottish average, even in 1968. The travel-to-work employment area in which the Inverurie Works were situated had a good employment record.
We are now reaching the point in the west of Scotland when something must be done because, as I say, the situation is very different from what it was then. Unemployment in the west of Scotland never was the same as in the Aberdeen area, but now all the unemployment figures have taken a big jump upwards and in the west of Scotland 101/2 per cent. of the male population is unemployed. In other words, 35 men are chasing every job.
As the situation is now very different from what it was two or three years ago, 776 the Government have a responsibility because of the social problems that are involved, leaving aside the technical standards of the Barassie Works, at least to lean on the British Railways Board to wait until other forms of employment come into the area before closing the Barassie Works.
The memorandum I was given by the T.S.S.A. is quite frightening when one examines the results of closures. The implementation of the two-tier management system in 1969-70 meant a loss of 389 clerical and supervising jobs. The closure of the Inverurie Works, the closure of the Perth Regional Workshops, where they do wagon repairs, the closure of the Kilmarnock Regional Workshops, where they also do wagon repairs, the proposed closure of the Leith Central Diesel Depot in May, 1972, the scheduled closure of the Corkerhill Diesel Depot in 1972-73, and the threatened closure of the Barassie Works, where wagon repairs are also undertaken, will mean the redundancy of 480 wages staff, 34 clerical staff and 45 supervision staff, bringing the grand total of redundancies for the Barassie Works to between 550 and 560. It is natural in an area of high unemployment that we should be extremely concerned about this state of affairs.
I hope that the Minister will intercede with the British Railways Board over this. I am aware that the Board must act commercially, though I am not convinced that closing the Barassie Works would necessarily be of immense commercial value. But even if it were, I am pleading, unlike the right hon. Member for Ashford, for the defence of obsolescence in this case.
I am not suggesting that the Barassie Works are obsolescent, but even if they were, they should be maintained in being, if only for a short time. Considering the economic circumstances of Scotland and particularly of the West of Scotland just now, the works should be kept open so that at least 550 people are kept in work until the boom which we have been promised comes next year.
This is not the end of the story. The whole question of the railways in Scotland is at stake. The railways in Scotland are becoming the victim of over-centralisation in the South, and particularly in the Midlands-to-London triangle. There is talk, for instance, of large parts 777 of Buchanan House, the Scottish Region headquarters, being transferred south. There is the threatened transfer of the paybill section to Crewe which will apparently mean 150 clerical jobs, the threatened continuity of the whole computer section, involving 50 jobs, and the transfer of the claims section to Leeds, with 40 jobs. I gather that, if the McKinsey Report is fully implemented, there will be eight territorial reorganisations, with the possible loss of the train planning section to Crewe, with 50 jobs, and a transfer of the accountancy section to York, which involves between 40 and 100 jobs.
Therefore, I am glad of this opportunity to put it to the Minister that, on top of the problems which we have in Scotland generally, something catastrophic will be added which the Government could, with a little persuasion, hold off for a time. Plans have not always gone smoothly and I am simply asking for the blueprint to be lost for a few months or a year.
I make no apology for pleading this special case. I ask the Minister to consider in a quieter moment the whole question of staff centralisation. Having always been interested in efficiency, I have a small worry that, in the past two years, many people throughout the world have begun to realise that the reorganised organisation may also lose some of its efficiency in the process.
This is not a party point. With modern techniques of computer control, all of us have got carried away with the idea that a big unit is more efficient. I doubt whether we get all the benefits that the management consultants promise us. Sometimes, these things never seem to get into complete working order. I sometimes feel that management consultants' first job is looking for their second job when it comes to reorganisation. That is probably facetious; they do a good job. They tend, however, to carry their clients—in this case the railways—a little too far in their enthusiasm for over-centralisation.
There is no place for these people of whom I have been talking to go for jobs, particularly the men over 50 in the wages, clerical and supervisory sections. We are forcing them into premature retirement. I hope that in the meantime the Minister will have talks with the Railways Board, 778 with all the Government's authority, to do something for the regions of Scotland. Perhaps he can delay these plans, so that works like Barassie can continue and so that some of these alterations are postponed so that the jobs can stay in this region.
§ 9.30 p.m.
§ Mr. William Ross (Kilmarnock)
I congratulate the right hon. Member for Ashford (Mr. Deedes) on his timely intervention over railway workshops because it was today that eventually, after a change of heart, the Minister agreed to see the unions. We are certainly anxious about the outcome. "If it is bad news don't give it to us; just listen carefully tonight and change your mind." That is my advice to the Minister because the last thing I want to do is to get a Minister to say "No". It is better to keep him talking, discussing and giving a certain amount of hope than to have the final "No". There are many paradoxes. The right hon. Gentleman mentioned one about the use of roads. No one could fail to be struck by this when looking at the carnage which took place on the M1 the other day and contrasting that with the degree of safety in travelling by rail.
I am reminded of the efforts made by some of my right hon. Friends and my hon. Friend the Member for Glasgow, Woodside (Mr. Carmichael) when they were at the Ministry of Transport to try to get some switch from road to rail and the outcry there was from right hon. and hon. Members opposite and the public—or certain interested sections of the public. Parliament saw the need but would not face up to measures which might prove temporarily unpopular. We may have to come to it and some day we may wonder why we lifted certain tracks and wish that we had been more sensible in conserving what is the best way of transporting goods and people.
The right hon. Member talked of the Channel tunnel and the impact that it will have on patterns of transport. We can imagine what the South will be like when that happens. If we do not have a properly co-ordinated policy there will be a hopeless muddle. We are in danger of a certain amount of such unco-ordinated planning, although it may be less now that we have railways and other aspects of transport and planning under one Department. I cannot say that I 779 am all that thrilled about these mammoth Departments and it may be some time before we get proper planning. We used to have problems at the Scottish Office. I often felt that the Department responsible for the railways, a United Kingdom Department, was eager to close lines to ease the financial pressures on the railways, but that Department was not the same one which had responsibility for roads in Scotland. The poor old Scottish Office had to find additional money for roads. My first plea is for co-ordinated planning.
I have been concerned with railways all my life and if I favour any industry it is the railway industry. I used to catch the 6.50 train from Newton-on-Ayr and I remember on occasions just catching that train, and the driver was howling at me telling me to hurry up. That was my father. The fireman was equally vociferous; that was my uncle. And that was nothing to what the guard was saying. That was my grandfather. I have a feeling for railways and a bias towards them but also a knowledge of railways and railwaymen. At one time the railways had the pick of the men in the country. Railwaymen have become councillors and mayors, mainly because the old railways gave them time off.
The right hon. Gentleman spoke of the crazy paradox; but the paradox will be even crazier with all the developments that are taking place. Barassie is part of Troon, which is better known as a golfing centre, within four or five miles of Prestwick and on the border of the new town of Irvine. Within 10 to 15 miles is a development that even English members have heard of—Hunterston. Today there has been an announcement that the South Scotland Electricity Board has embarked on the building of a jetty at Wemyss Bay. The reputation of the Secretary of State for Scotland hinges upon the initiation and completion of the Hunterston project to use the deep water facilities available for a general cargo port. A study was set up, in which the Scottish Office participated, the chairman of which was the late Hugh Stenhouse, to consider what kind of industry would fit in here. This is not far away from the part of Ayrshire we are talking about.
We must be optimistic about the future of Scotland, and many of our hopes are 780 fixed on this kind of development. We shall need good communications and railways, and if a general user port is developed we shall need wagons. Instead of looking at the past, we should be looking at the future.
I can understand the point of view of British Railways, whose finances are being squeezed by the Government. On 27th October, 1970, the Chancellor of the Exchequer announced a saving of £1,500 million by the middle of this decade. A considerable part of that was to come from cutting back on the investment plans of this nationalised industry. This will affect the Hunterston project in more ways than one. It will affect the railways and the port development. So British Railways have been forced into facing up to what we hope will be a temporary recession and, unfortunately, making decisions that will be permanent in the form of closures of places like the Barassie workshops, which are old Glasgow and South Western Railway workshops. They are one of the few remanants of a considerable industry in that part of Scotland.
We used to have Cowlairs in Glasgow. Now all we have is St. Rollox. We used to have the great locomotive works at Springburn, the biggest in Europe. We used to have the Caledonian works in Kilmarnock, and it was Jack Maclay who as Minister of Transport had the honour of closing that one down. Then we were left with some wagonworks, and it has been under the present Administration that it closed down. The remaining 41 men have gone quietly, but sadly, in the past few weeks. Inverurie went in 1968. It angered me then, because the unco-ordinated planners in British Railways had told us not very long before that it would continue.
Today we are making decisions that may result in considerable hardship, in loss of jobs and closures of workshops, closures which may be justified by the present pessimism but which will not be justified and will be greatly regretted in the light of the developments that I am sure will be needed in five to 10 years if right policies are followed. So we make the same sort of plea for the Barassie workshops as the right hon. Member for Ashford did for the Ashford workshops.
I was very disappointed to learn that there is still trouble with the Export 781 Credit Guarantee Department over the Yugoslavia order. Not long ago a junior Minister who is not present tonight was thrown in at the deep end on an Adjournment debate and was rather caught out on that. The Minister who was expected to deal with the matter, and who had a little more knowledge of it, did not appear that night. The next day we received information from the Department that the position had been clarified. Things were being held up because of doubts about the credit-worthiness of Yugoslavia.
Since British Railways have gone so far, the Government should make the right decision on the matter. It may not directly affect us in Barassie, but it is of considerable importance for the position at Ashford and probably elsewhere.
§ Mr. Deedes
I am sure that the right hon. Gentleman will not want to dish the Ashford—Yugoslavia deal now by referring to the credit-worthiness or otherwise of Yugoslavia. That is not the issue. The issue is the length of years.
§ Mr. Ross
The right hon. Gentleman might have been here when we had the last debate, which was not all that long ago. [Interruption.] I wish that the right hon. Gentleman would contain his frustrated soul in patience. What was read out that night was a letter from the Department; that phrase was a quotation from a Government Department. I was as surprised as the right hon. Gentleman was, particularly as I think that just the day before President Tito had been in this country. I thought that the matter had been resolved. Therefore, I was surprised to learn tonight of the further holdup. The order will not be there all that long for us to take up and, facing the sort of employment situation we do, we should not hesitate in this way.
My real point is that it is easier to save jobs than to make jobs. Some 480 to 500 jobs are at risk in a part of the country which is suffering from severe unemployment. My hon. Friend the Member for Woodside quoted the figure of male unemployment in Scotland, and we know that in the west of Scotland it is over 10 per cent. My hon. Friend knows what this means in human terms. Industrial employment in Troon is entirely dependent on what happens in Barassie, and this decision will create 782 a fantastic amount of male unemployment in Troon. I do not think anybody would suggest that all the unemployed should become caddies this winter, nor, indeed, would it offer satisfactory alternative employment for these men in the summer.
I have already spoken about the quality of these men and the service they have given to British Railways. British Railways must accept a great measure of responsibility in saving these jobs. If it is said that the trouble flows from pressure of finance, then it is up to the Minister to examine this matter. Let there be co-ordination between him and the Ministers responsible for employment.
There is no job available in this part of the country for these men. We have 141,000 unemployed, and we are just entering the winter. This is the highest unemployment figure for 30 or 40 years. During the whole period of Labour Government unemployment never rose to 100,000. The present figure is even higher than it was when the present Prime Minister was President of the Board of Trade and was in charge of employment in 1962–63. The figure reached by the Tories in 1963 was some 134,000. Now it has gone up to 141,000—and, as we say in Scotland, we are just at the mouth of the poke. If we add 20,000 to that figure we shall know what the figure will be in February. In this situation the Government, by deliberate decision, are failing to meet the financial needs of British Railways to enable them to live through this period of stress. A decision is to be taken which will mean the loss of some 500 jobs. It is not good enough.
We are reminded of what was said by the Prime Minister when he came to Scotland in the run-up to the General Election. He then said on television "What do you want in Scotland—a soup kitchen economy in a soup kitchen country?" It is this Government which are bringing back the soup kitchen economy—it is they who have the soup kitchen mind, with means testing for school meals, denying the children their milk, and failing to provide the kind of attitude—[Interruption.] Oh, I have not started yet. Surely the Under-Secretary of State will not want any more than half an hour.
§ The Under-Secretary of State for the Environment (Mr. Eldon Griffiths)
I should like 40 minutes.
§ Mr. Ross
The hon. Gentleman will have plenty of time. Parliamentary time is valuable, and over the years Scottish Members have learned how to use it. We remain here when other people go. The hon. Gentleman should be thankful for it. Only today the Leader of the House was saying that we had not time to do this and that we had not time to do that. The only way to make proper use of this House is by being here and creating and taking opportunities as they arise. I assure the hon. Gentleman that Scottish Members are past masters in this art.
Our plea is that British Railways should think again. One of my hon. Friends spoke about a probability. It is more than a probability nowadays regarding Barassie. Until a final decision is made I shall refuse to accept it. Even when it is announced, I shall try to persuade British Railways to change their mind. What is proposed is wrong in terms of railway economics and the future of that part of the country, as Scottish Ministers are always telling us. This is the last thing that should be done.
I sincerely hope that the hon. Gentleman will look again at the report of the efficiency experts. The only hope of getting efficiency in British Railways is to sack some of the efficiency experts. Judging by what they have done before, they do not save money when they close a line: they seem to lose more. We require a complete new look at the situation. It may cost money, but if we are to get the kind of reformed Scotland and Britain which we want, with the communications system we want, we should not begin by destroying the one we have we should be building it up.
I am convinced that there is every justification for keeping Barassie open and using it properly and adequately. I sincerely hope that the Government will not readily accept any advice to the contrary which may be given to them by British Railways.
§ 9.53 p.m.
§ Mr. Norman Buchan (Renfrew, West)
I regret that I was unable to be here to hear the speech of the right hon. Member for Ashford (Mr. Deedes). I had hoped to be here, but I did not make it in time. However, I understand that he made a plea for the retention of the railway workshops. I should like to support his plea with other reasons than 784 those which he deployed. His argument was that there was time ahead for the development of communications in the South, the Channel tunnel, and so on. It was a good argument why this great sector of public industry should be kept open. In other words, it was the realisation that some of the things we have been seeing recently in the form of dogmas are unrelated to the needs of the people of this country.
I should like to draw attention to the fact that right hon. and hon. Gentlemen opposite have changed a great deal in this respect. At one time it was easy to look at an industrial problem concerning potential closure and redundancies and to argue that commercial considerations made them necessary and that there was no point in keeping things which were not running at a sufficient profit, and so on. This was the basis of their attack over a year ago on the public sector of our economy. But dramatically over the last week there has been a necessary and sensible dropping of these dogmas. We have had £180 million worth of droppings. This was necessary and sensible, because the Government realise that if we are to restore the economy to its proper condition, that which gives the most rapid return is the public sector.
There is an obvious reason. We know that the social cost of this huge unemployment figure which faces us today begins to outstrip the economic cost of bringing about the closure of an uneconomic enterprise. For example, the rate of unemployment that we are experiencing at present in Britain as a whole represents about 230 million working days' production lost per year. That is a gigantic loss, and it cannot be compensated for by looking at the balance sheet which causes any closure or redundancy.
The right hon. Gentleman argued that there was economic sense in keeping the workshops open. There is a second reason. It is that in the past we have stripped lines only to discover a few years afterwards that we needed to restore them or to find alternative and more costly transport methods. We have denuded urban areas such as Glasgow of vast networks of railways. Today, we are crying out for their restoration. The railways cannot be allowed to run down any further. If we wanted to restore them in a few years' time, it could be done only at a massive cost.
785 The problem of the right hon. Gentleman at Ashford is repeated for us in the West of Scotland, with the threatened closure at Barassie. In the area as a whole, unemployment is running at just below 5 per cent. If the Barassie works closed, it is estimated that that would double to 10 per cent.
The trouble with past Governments of both parties is that they have never looked at the social cost of this problem. They have never asked themselves what is the cost of unemployment in terms of unemployment benefits, redundancy payments, social security benefits, quite apart from all the other problems that it creates for a community in general to ancillary workers, shopkeepers and so on. No Government have measured that against the economic cost of keeping an establishment open. It has been left to the trade union movement to do it. The Scottish T.U.C. is currently trying to do a costing of this nature. When that is published in January or February, the Government will have a blueprint against which they can assess future ruthless action, if they desire to take it.
Another reason is that it is easier to put a man out of work than it is to create a future job for him. If the 450 men whose jobs are threatened at Barassie and those whose jobs are threatened at Ashford were to have other employment created for them, the amount of money needed would be enormous.
In Scotland, over the decade from 1957 to 1967, after enormous public investment, the creation of infrastructure, investment grants and enormous private capital, we built up the motor vehicle industry at Bathgate and Linwood. After 10 years' work and hundreds of millions of pounds of investment, we created 19,000 jobs. In the same decade, for natural reasons, including the run-down of only two traditional industries, mining and shipbuilding, we lost 76,000 jobs. That is a ratio of four to one. Despite the enormous investment in the motor vehicle industry, the result was the production of only a quarter of the number of jobs lost in two industries which have run down.
In a period of high unemployment, there is a strong case for preserving jobs of this kind, even assuming that there are no other arguments for so doing. However, I believe that there are other 786 arguments. The last 12 months have shown that, despite the effort which has been put into trying to help the regions by means of investment grants and so on, they remain on a very shaky basis. Over the last few years' of intense effort to help the regions, which include areas such as Barassie, we managed to bring the ratio of unemployment in Scotland to that in the United Kingdom down to one-and-a-half to one. However, over the last year, as soon as we removed one major prop in the shape of investment grants, the ratio went up again to nearly double.
The argument is not simply that a depressed economy means that the regions will suffer and a booming economy means that the regions will do well. It also depends on specific and sharp regional incentives whether we have a depressed economy or a booming one. When this is argued we see the flimsiness of the basis—
§ It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hawkins.]
§ Mr. Buchan
This cannot be done by private industry alone, because we cannot impose upon private industry a proper social responsibility. We can twist the arm of private industry and persuade it, but unless there is social control over industry it cannot discharge the social responsibility which is properly there. The one form of industry which can be made to discharge a social responsibility is public industry.
Over the past week the Government have turned to public industry in an extremity. Panic-stricken because of protests throughout the country and the great demonstration of Scottish local authorities and trade unionists throughout Britain last week, suddenly the Government pump £180 million into the public sector. By so doing they recognise the rôle of public sector. This is the key in the regions. The economy requires a sector of industry which can discharge a social responsibility. Fundamentally this can be only the public sector.
Then there is the question of direction of production towards the regions. We 787 cannot ask private firms to operate in any area at a loss. We try to do it by the carrot of investment grants and by the stick of I.D.C. Policies. Private industry will not operate if it cannot make a profit.
There is a ready-made market for public industry. About £7,000 million a year is spent on purchasing in the public sector by municipalities and by the Government. Cannot this be served by the public sector? The British Railways workshops form an existing manufacturing sector in the public sector and we cannot tolerate that this should go. There is no reason why the necessary employment cannot be pumped into it to keep it going while alternative manufacturing is found for the rest of the manufacturing sector.
A great deal of Government and public money goes on research and development, but it is used to fatten private industry. There is no reason why this money should not be used to enable a manufacturing industry in the public sector to develop for the benefit of the community. There is a prototype for this in the railway workshops which have existed for so long in the public sector.
The right hon. Member for Ashford raised the question of time and of creditworthiness. On the question of Yugoslavia's potential order the Department of Trade and Industry wrote to my hon. Friend the Member for Durham (Mr. Mark Hughes) to this effect, as quoted in the Adjournment debate on the question of Barassie Railway Works:This matter has been under review by the E.C.G.D. and other departments concerned for some time, but it has not yet been proved possible, due to current doubts about Yugoslavia's creditworthiness'—HON. MEMBERS: Shame!Mr. LAMBIE: —'to agree a form of cover which is satisfactory to British Rail Engineering. It is hoped that a final decision will be reached within the next fortnight, and I can assure you that the importance of this order for British Railway Workshops will be taken into account'."—[OFFICIAL REPORT, 9th November, 1971; Vol. 825, c. 969.]That debate was replied to by one of the other Under-Secretaries of State for the Environment—the hon. Member for Tavistock (Mr. Michael Heseltine)—standing in for the hon. Gentleman who will reply tonight, whom we welcome back after his accident.
788 What is the present position? What is the significance of saying that the British Railways workshops will be taken into account? Have they? Has the order been secured? Has a credit guarantee been given. Is the future of Ashford and Barassie secure? If not, there will be savage questions asked throughout Scotland.
In my area, the foundry of Babcock and Wilcox is due to close next January. I am bringing pressure on a private firm to keep it open. We cannot continually keep on doing the job that every Scottish Member is doing—fighting closure after closure and redundancy after redundancy in the private sector if, willy-nilly, the Government allow the great nationalised industries, to run down in this way. There are one million unemployed in the country who expect action from the Government. The Government can start tonight by giving a positive answer on the retention of the railway workshops.
§ 10.6 p.m.
§ The Under-Secretary of State for the Environment (Mr. Eldon Griffiths)
This debate, generated by my right hon. Friend the Member for Ashford (Mr. Deedes), has been turned into a much wider ranging debate, including such larger issues as unemployment in Scotland and the immediate railway forebears of the right hon. Member for Kilmarnock (Mr. Ross). I am glad my right hon. Friend obtained this opportunity for a debate because I know his special interest in the Ashford workshops. Indeed, he has recently been in close contact with various members of the Government, including attendance at a meeting, together with representatives of his local authorities, with my hon. Friend the Under-Secretary of State for Trade and Industry, when the unemployment position at Ashford was discussed. I want to say in passing how much I admire the able, sensible, responsible and fully documented way in which he made his speech. All his speeches are that way but this one was in particular.
We also had a speech from the hon. Member for Glasgow, Woodside (Mr. Carmichael), who, making no bones about it—I respect him for it—said that if it was necessary for him to plead a special case on behalf of the people of his area, he would do so. I do not complain about that. But I think it only fair to say in 789 passing that it is not easy to see how both Barassie and Ashford can be kept.
We had as well an intervention by the hon. Member for Renfrew, West (Mr. Buchan), who is not in his place for the moment, although he may have gone out for a perfectly good reason. His essential case was that if there is to be reflation of the economy the best way is through the public sector. This is a matter which the House could debate at length on some other occasion, but I am entitled to draw to his attention, that over recent weeks and months the Government, far from squeezing the railways as the right hon. Gentleman suggested, have provided an additional £40 million or more in infrastructure grant to the railways and that my right hon. Friend the Minister for Transport Industries has recently brought forward work on some £5 million worth of new passenger rolling stock which will be built much earlier than had been planned.
Hon. Members asked about help for Scotland. I am advised by my hon. Friend the Under-Secretary of State for Home Affairs and Agriculture, Scottish Office, who is sitting beside me, that the Government will be providing for the whole of Scotland, under the additional public works programme, not less than £60 million, and I understand that in the area adjacent to Barassie there have been, of course, the recent naval orders, worth £70 million, nearly three-quarters of which go to the Clyde. In addition, there has been the order of 100 Beagle Bulldog aircraft to Scottish Aviation at Prestwick. These orders, and the large public works programme which my right hon. Friend the Secretary of State for Scotland is pushing into Scotland, give the answer to the suggestion of the hon. Member for Renfrew, West that the Government are failing to provide adequate public works and stimulus in the nationalised sector.
I think the House will understand that the gravamen of this debate is the narrow question of the railway workshops, and in particular it is my right hon. Friend's speech to which I must primarily reply.
The background is the fact that British Railways are having to take some difficult decisions arising from surplus capacity in their workshops, and I want to say clearly, 790 right at the start, that taking those decisions is a management function. It is a function which must be exercised by the British Railways Board. It cannot be exercised by the Government, and I can say on behalf of the Minister for Transport Industries that he has no desire, and no intention, of intervening in the board's discharge of its proper statutory functions.
Under the 1968 Transport Act, for which hon. Gentlemen opposite bear the responsibility, British Railways have a statutory duty to balance their accounts. That is their duty, laid upon them by this House, and hon. Gentlemen opposite voted for the Bill which made it so. Following that Act, the board no longer receives general deficit grants. There is no power for the Government simply to hand the board money and hypothecate it for use for one particular workshop, or for any other function.
The board is bound by law to view all its activities in a commercial light. It is for that reason that the board has been carrying out a comprehensive review of its future requirements for workshop capacity, and it has been taking into account such factors as the decline in coal traffic, the decline in rail sundries traffic, and it has also had in mind this year's shortfall—which no one can dismiss—in the levels of a freight movement generally.
At the same time the board is improving its working methods, and I am sure that we are all in favour of that. But as it improves its working methods, it is achieving in particular a very much higher utilisation of its existing wagon fleet. About 70,000 wagons have been withdrawn from service this year, and within four or five years the board expects to be carrying about the same amount of traffic as today in a wagon fleet half the present size.
This improved wagon utilisation is one of the benefits which have come from the computerised wagon control system, which I understand the board has recently decided to develop, and from better management techniques. All of us who care for industry in this country, and in the public sector in particular, will want to congratulate British Railways on achieving this more efficient utilisation of their stock of wagons.
791 British Railways' review has already taken account of improvements in workshop techniques, which I accept can be seen not least at Ashford, and it has also achieved greater efficiency, because modern rolling stock can, and does, cover a higher mileage and requires less maintenance than the previous older types.
My right hon. Friend mentioned the noticeable growth of privately-owned wagons. In some quarters this has been a matter of contention, but it is very welcome to the board that there should be this growth of privately-owned wagons because, for one thing, it saves the board's own capital investment, and for another it ties the traffic of those private industries to the railways.
All these developments—better utilisation of wagons, the fact that they do not have to repair modern types as much as they used to—mean that British Railways need far fewer wagons to do the job. There is consequently a greatly diminished requirement both for the building of new wagons and for the repair of old ones.
In these circumstances British Railways have reached the conclusion that the best road for them to take in the interests of the railways and, in their judgment, in the interests of the country, is to close down a number of those workshops which deal specifically with wagons, rather than to make general reductions of staff throughout the workshops organisation.
British Railways have taken this view because closures save the heavy costs inherent in fixed overheads, particularly at smaller workshops. That saving, in their view, will be positively achieved by closures—in contrast with trying to make the economy by way of staff reductions spread across all the workshops but without complete closure. This would fail to achieve the savings in overheads which the board seeks to make.
I assure the House that the board's conclusions in this review have taken fully into account the need for capacity to deal with any additional workload if this becomes necessary as the economy picks up and more freight movement is generated.
§ Mr. Buchan
How can one take account of future developments if the 792 workshops have been closed? That is impossible.
§ Mr. Griffiths
The hon. Gentleman could not have been listening to me carefully. In its review of these workshops the board has taken into account the prospective increase in traffic and, therefore, the prospective increase in the need for new wagons and for repairing old ones, and the board is satisfied that in all the circumstances it can meet that prospective demand.
In considering how best to trim its surplus capacity, the board has to my knowledge shown the fullest awareness not only of economic and operational factors but of social factors as well. Unfortunately workshops at a distance from the main centres of railway activity, such as Ashford and Barassie, inevitably tend to be less economic because of the dead mileage, not to speak of the operational problems, involved in moving defective wagons there for repair.
I acknowledge that Ashford builds as well as repairs wagons, but the fact that Ashford has been named as a workshop which may have to close, or at any rate be extensively run down, cannot to looked at in isolation from the problems of the British Railways workshops organisation as a whole.
I understand from British Railways that they are likely to need in the longterm only one main workshop to build new wagons. The only workshop other than Ashford which builds wagons is at Shildon in County Durham, where four-fifths of the drop stampings for British Railways are produced. I understand that British Railways consider that there are sound technical reasons why Shildon should be retained.
Shildon is in a special development area where the unemployment rate is much higher than the national average, whereas at Ashford it is lower. Thus, in addition to technical considerations, which British Railways find convincing, there are strong arguments on social grounds for retaining Shildon, if need be in preference to Ashford.
A word about Barassie. The right hon. Member for Kilmarnock suggested that British Railways were somehow being peculiarly unfair to Scotland. There is 793 no evidence whatever to support that suggestion.
During the reduction and modernisation of the railways' main workshops organisation under the plan begun in 1962 under a Conservative Government, continued through five years until 1967 under a Labour Government, the British Railways workshops staffs were reduced nationally from 66,000 to 40,000. But of the 16 workshops that were closed, only one during that programme was closed in Scotland, Cowlairs, one was closed in Wales and 14 were closed in England. Similarly, the rundown entailed a reduction of the workshop labour force in Scotland by 9 per cent., whereas in the country as a whole the reduction was 32 per cent.
In British Railways' new investment in workshops, the expenditure per man employed as a whole was £487. In Scotland it was £675. So to suggest that British Railways are picking out Scotland to damage the economy is grossly unfair and quite inaccurate.
§ Mr. Carmichael
I think that the hon. Gentleman will agree that the figures which he gave for the cost per man in England and Scotland were before the considerable modernisation in the works at St. Rollox in Glasgow. The figures seem to show that productivity in Scotland was a good deal less, whereas in fairness we should point out that the capitalisation in that period was also a good deal less.
§ Mr. Griffiths
The hon. Gentleman will forgive me if I get on to Ashford. I was about to say that the only other workshop which was closed after that was Inverurie, which he quite fairly mentioned. It did not lie in the mouths of hon. Gentlemen opposite to use this strong language about Barassie when they closed Inverurie at a time when there were relatively few jobs in that area either.
§ Mr. Griffiths
I must now protect my right hon. Friend's Adjournment debate. He mentioned the problems of heavy 794 lorries and suggested that more freight should be sent by road. I do not disagree. He will know that the Minister for Transport Industries recently rejected proposals to increase the maximum lorry weights from 32 to 44 tons. But it is important to see this question of road haulage versus rail freight in perspective.
Even if the railways were to increase their freight tonnage by a half, the total vehicle traffic on the roads would drop by a tiny amount—probably 1 per cent. This amount is made up in about four months' growth of the new vehicles on our roads.
My right hon. Friend also suggested that, if the Channel tunnel went ahead, Ashford works would be well placed to construct and maintain these specialised rolling stock. He asked for an early decision. I wish I could give him that decision tonight, but I must be content with telling him how things now stand.
The British and French Governments had a meeting in London in March and chose a private international group as the instrument for the further pursuit of this project. We also agreed on the final studies, technical and financial, which would need to be made. These studies, with which the two Governments are closely associated, are going well. My right hon. Friend is anxious that the decision on this great Anglo-French project should be taken as early as possible. But, given the amount of work which still remains to be done and the complex issues involved, the Government do not expect to be able to take a decision and to bring it to Parliament, as my right hon. Friend has undertaken, before 1973.
I recognise that the delay with the decision has an important bearing on the future of the Ashford workshops but, with the best will in the world, no one at this stage can guarantee that work on the special tunnel rolling stock will automatically go to Ashford. The placing of contracts for rolling stock and, indeed, the placing of all the contracts in connection with Channel tunnel construction will be a matter for the bodies which eventually build and operate the tunnel. If we assumed that the rolling stock contracts were to be obtained by British Railways it would then be for the British Railways Board to decide where the work should be undertaken. It 795 might well be sent to Ashford but this cannot at this stage be a foregone conclusion. It is in any event a matter of management and not a matter for me.
I can nevertheless, assure my right hon. Friend that my Department and the board are in close touch on all the relevant aspects of tunnel planning and the board is a member of the private group conducting the studies. The board has all the information it needs when considering the relationship of the tunnel and the future need for Ashford workshops.
My right hon. Friend also raised the question of rail wagons for Yugoslavia. British Railways have been taking this possibility fully into account in their plans. It is because of that that they have deferred a definite decision on Ashford's future pending the outcome of the negotiations. This, of course, is a commercial matter, but the Government are providing all possible assistance to enable British Railways to win this useful order. Earlier this week the E.C.G.D. informed B.R.E. Metro that credit cover for a period of eight years would be available, and this will cover up to 85 per cent. of the cost of the proportion of the contract to be built in this country. There is no suggestion known to E.C.G.D. from the B.R.E. Metro organisation that the terms of the cover now offered are anything other than satisfactory.
Yugoslavia cannot of itself save Ashford. The order, if it is obtained by the board, would be sufficient only to keep part of the Ashford works in operation and the work force would still have to be run down, some provision being made for the possibility of the Channel tunnel requirements. The Government hope that by the time the Yugoslav order, if won, is completed, the 796 position regarding the Channel tunnel requirements will be clearer.
This afternoon my right hon. Friend explained all this more fully to representatives of the union side of the Railway Shopmen's National Joint Council and the Transport Salaried Staffs Association. The unions were listened to carefully and courteously but no new factors have been brought to light to change my right hon. Friend's view that these proposals are essentially a matter of railway management for the board.
My right hon. Friend the Member for Ashford considers that special circumstances warrant special measures. The Government have taken special measures to help nationalised industries but there is a limit to what can be done. The measures so far taken will, I believe, help British Railways, but beyond what I have said about the Yugoslav order I cannot promise that they will keep Ashford open.