§ 4.15 p.m.
§ Mr. William Rodgers (Stockton-on-Tees)
This is the fourth debate we have had on Rolls-Royce since the brutal, unnecessary and ill-considered statement of 4th February. We have had only one of those four debates in Government time. Over the last five weeks, Rolls-Royce has occupied the newspapers daily and has been a source of constant anxiety to tens of thousands of men and their families employed in the industry; many firms, many of them small, have been threatend with bankruptcy. At the same time, Britain's commercial reputation has been at stake.
Yet during this whole period the Government have only once provided time for debate, and that was in order that we might facilitate the passage of the Rolls-Royce (Purchase) Act. On 8th February, the debate was on the initiative of the right hon. Member for Devon, North (Mr. Thorpe) under Standing Order No. 9; on 26th February, it was because of the decision of my hon. Friend the Member for Derby, North (Mr. Whitehead) to use Private Members' time. Today we are having a debate on Supply.
For five weeks—I say this reluctantly—the Government have been running hard to escape cross-examination in the House. [HON. MEMBERS: "Nonsense."] I make that perfectly plain at the beginning. Whether hon. Members opposite like it or not, this is a shameful story of evasion.
§ Mr. Robert Adley (Bristol, North-East)
On a point of order, Mr. Speaker. The Leader of the Opposition made it clear yesterday that the Opposition… regard this occasion as purely a sounding debate to express those anxieties and … we do not intend to press the wider question". —[OFFICIAL REPORT, 10th March, 1971; Vol. 813, c. 420.]
§ Mr. Speaker
Order. I can deal with the hon. Gentleman's point now. It does not sound anything like a point of order. It may be a good argument or a bad one, but it is not a point of order.
§ Mr. Rodgers
No doubt hon. Members if they catch your eye, Mr. Speaker, will have time to express their disagreement with what I say. I intend to make my own speech and to keep it as short as possible, since I know that hon. Members on both sides are concerned to ask questions of the Government to which they have a right to get replies.
I remind the Government that on 26th February the Opposition deliberately chose to strike a note of moderation and reasonableness.
§ Mr. Rodgers
If the Parliamentary Secretary does not think that we did, why did he not say so at the time? In fact, the Minister was told before the debate that this was what we would do. The Minister himself paid tribute to my hon. Friend the Member for Derby, North and I said explicitly in the debate that we appreciated the heavy burdens which lay upon the Ministers and that in so far as they were concerned to salvage what could be salvaged they would have our support. I said that they would have our good will as long as they sought a constructive solution. Any fair-minded person listening to that debate would accept that we were virtually bipartisan on that occasion. But despite the tone of that debate, we have had the greatest difficulty in getting from the Government answers to the questions which we asked then and have asked on other occasions. It is not sufficient to say that the Government are involved in delicate negotiations: they are. We on this side will say nothing which could conceivably embarrass the Government in the negotiations. But it would be wrong and would make an institutional eunuch of this House if it were suggested that we should not debate and should not require answers about matters of great national concern.
We appreciate that the right hon. Gentleman and the Parliamentary Secre- 608 tary have had additional and heavy burdens to carry. We have paid tribute to the right hon. Gentleman for what he has done; we have recognised the difficulties he has faced; we have been patient when answers to our questions were delayed. But the great test of any Minister is not that he can perform in this House in normal and quiet conditions, but that when a crisis arises he is successful both in managing the demands of his Department and answering in the House for what he does.
There are many people outside this House, not only those employed by Rolls-Royce, made redundant or living in fear of redundancy, but the sub-contractors too, who still believe that there should be answers to the questions and that these answers should be made public. In our debate on 26th February, I asked nine questions of the right hon. Gentleman. He replied to only a few of them at the end of the debate, but I made no complaint. He eventually replied to most of them in a letter dated 5th March. Yet when I made those answers public he complained to me that I ought not to have done so. This is a story of concealment, and I very much regret that it is necessary to say so in the House. Certainly those who have a regard for the functions of the House and for the need always to check the actions of the Executive, whatever Government is in power, have a right to say this now and to demand that we receive replies.
The Leader of the House has chosen to reply today. We do not know precisely what he is here for, but we hope very much that when the time comes he will give answers to the questions which have been raised and will not hide behind his own special responsibilities as Leader. I will go further and say that I hope he is not here as a nanny to his colleagues. I hope that he is here in his proper rôle as guardian of the interests of this House and that we shall see him acting in that rôle this evening. We have a great deal of respect for him in that rôle and by and large, we have no complaint. I am glad that we have a Law Officer present and a Minister from the Treasury. We would have much preferred if either of them were answering us this evening, because there are questions which we would like to address to them as well as to the right hon. 609 Gentleman the Minister for Aviation Supply.
A White Paper has been promised. When is it to be published? A week ago we were told it was coming and the Leader of the House said that of course it could not sterilise debate. It has not done so, but there will still be many matters after today which we will wish to see on record, so I hope that the White Paper will not be delayed for the whole of another week. We received a statement on Monday and were grateful for it. However, what we were told by the right hon. Gentleman then was only what we had already read in the newspapers or on the tape that day. This is not a satisfactory position, and I find myself bound to return to the charge of evasion.
In the debate of 26th February, I raised first on a point of order and then in an exchange with the right hon. Gentleman the specific and narrow point concerning the understanding between the Government and Rolls-Royce and between Rolls-Royce and the accepting houses. As the right hon. Gentleman knows, I went to considerable trouble, following the normal courtesies of the House to enable him to make a statement after Questions on the following Wednesday so that the record could be set straight, not only for us here but for those outside.
Instead, as he will well remember, he failed to answer after Questions a Question which was originally addressed to his right hon. and learned Friend the Attorney-General but answered it with Question No. 1. In answering it, he still did not face the particular point about the heads of agreement. He said:I do not believe that the condition was specifically referred to, but I think that it was clear."—[OFFICIAL REPORT, 3rd March, 1971; Vol. 812, c. 1681.]He has now had time to check. Was it or was it not referred to in the heads of agreement seen by his Department, and if it was not referred to in what way was it clear, to use his own word?
I hope that the right hon. Gentleman will say more about the question of redundancies. I am delighted to know that it seems to be of general concern on both sides of the House. Will he say firmly that no more redundancies are 610 contemplated if the RB211 contract is successfully renegotiated? Will he say what his estimate is, because there must be one, of the redundancies already taking place among the sub-contractors?
Will he give an estimate—and he was unable to give it on Monday in reply to a question by my right hon. Friend the Leader of the Opposition—of how many redundancies would follow, not at Rolls-Royce, if the RB211 goes? Will he say categorically that there have been no discussions between Ministers and the Receiver that have led or will lead to redundancies? These are specific questions and there is adequate time in which to receive replies.
I hope that he will say something more about the whole relationship between the Government and the Receiver and the Government and the board of Rolls-Royce (1971). Who is running whom? I understand that the receiver is required—there has been no question about this in the House, and if the Attorney-General wishes to correct me he is free to do so—to act for the debenture holders in getting the best price and to negotiate with Rolls-Royce (1971). If this is the case, where do the Government come in? Is there informal contact between the Government and Rolls-Royce (1971)? If so, the right hon. Gentleman will know that over a period of years this House has increasingly taken the views that relations between Governments, any Government, and nationalised industries should be explicit and clear and, if possible, should be published in some form in this House.
It would be wholly undesirable if the right hon. Gentleman or his noble Friend the Secretary of State for Defence were having discussions with the Receiver or Rolls-Royce (1971) and giving instructions or expressing views which led them to take courses of action for which the right hon. Gentleman said he was not responsible in this House. What meetings have taken place and when? What correspondence has passed? The right hon. Gentleman can answer the first question and he can publish the correspondence when we receive the White Paper.
Of course, we wish the negotiations with Lockheed well. I noticed that the right hon. Gentleman said on Monday in reply to his hon. Friend the Member 611 for Cambridge (Mr. Lane) that there would be flexibility. I very much hope that this means that the negotiations are continuing in good faith. We made it clear five weeks ago that we believed that a Select Committee of the House was the best way of enabling the House to judge what had gone on. That is still our view, but if the Government feel otherwise and are not prepared to concede that, surely if they have regard for Parliament they must give us more information than we have hitherto had, they must seek to answer questions today, and questions which they do not answer today they must answer in their own time next week.
We on this side would be content, in so far as all questions are not answered, if the right hon. Gentleman in winding-up gave a firm undertaking that they would be answered, not in correspondence but in the form of a statement in the House next week. It is not much to ask. In the course of our debate so far we have at no time said that the aircraft industry, either Rolls-Royce or the airframe industry, should be in receipt of limitless funds. We did not say that the aircraft industry should necessarily be baled out of all the difficulties of its own making. We do not say and we have not said that the industry, or any part of it, must be maintained primarily to provide jobs in it, although that would be a reasonable point of view at a time of rising unemployment in the country as a whole. In the long run the industry must be judged by its ability to deliver the right goods, at the right price, in the right time. That is and remains our view.
But we do not believe that the Government have handled the unhappy story of Rolls-Royce adequately. We hope that they will now face their responsibilities and end this period of depressing evasion and concealment.
§ 4.30 p.m.
§ The Minister of Aviation Supply (Mr. Frederick Corfield)
The hon. Member for Stockton-on-Tees (Mr. William Rodgers) started his speech by charging me with concealment and with my complaint that he gave certain letters to the Press. Of course I have no objection to his giving my letters to the Press, but it is usual when one is about to publish 612 a letter from someone else at least to notify him, which the hon. Gentleman did not do.
The background against which that was done was that the hon. Gentleman himself delivered a letter to my office on Sunday afternoon. It contained the allegation that the Government had made a condition of certain redundancies before we would take over the assets. That allegation was quite untrue and it was easily checkable, had the hon. Gentleman given time to receive a reply. That was the background and I ask the House to consider who was trying to mislead.
§ Mr. William Rodgers
I should be content if the right hon. Gentleman chose to publish in the White Paper, or in some other way, all the correspondence which has passed between us. I should be content to allow my colleagues in the House to decide.
§ Mr. Corfield
I am bound to say that I think all of it is excessively boring. However that may be, if there are any other bits which the hon. Gentleman would like published, I will certainly pass them to The Times, which seems only too anxious to publish anything,
§ Mr. Rodgers rose—
§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
If the Minister does not give way the hon. Gentleman must resume his seat.
§ Mr. Rodgers rose—
§ Mr. Rodgers rose—
§ Mr. Rodgers rose—
§ Mr. Deputy Speaker
Unless the right hon. Gentleman gives way the hon. Gentleman must resume his seat.
§ Mr. Corfield
I am very willing for the hon. Gentleman to publish the last letter if he wishes. It struck me as being remarkably boring, although I can understand the morbid interest of The Times in other people's bankruptcies.
I was asked again about the situation with regard to the accepting houses. I said that the heads of agreement did not 613 specifically make the proposal that the Government should put forward £42 million subject to the accounting check, and that was right. Nevertheless, I said, "I think it is clear". I still think that it was clear, and I do so because I was of course referring not merely to what was in the document but to the whole circumstances in which these negotiations between Rolls-Royce and the accepting houses and such part as the Government played took place.
What I can say at this stage is that I have put out inquiries to such organisations in the City which, reading between the lines in The Times, one imagines to be the sources of the complaints, to see what they are. I have not had a single intimation to me personally—and, as far as I know, this applies to my right hon. Friends—that anyone in fact felt himself to be misled. If anyone does, no doubt The Times will publish this invitation to him to come to tell me, but this is the truth of the matter, and it is high time that it was made clear.
The hon. Gentleman then referred to the relationship between the Receiver, Rolls-Royce (1971) Limited and the Government. It must be abundantly clear that Rolls-Royce (1971) Limited, being a wholly-owned Government company, depends for its funds upon the Government. As far as I can see, it is absolutely inevitable that some of the negotiations about the assets and the determination of what assets are required should take place on a tripartite basis as well as a bipartite basis, and I do not believe that there is anything wrong with that in any way.
Ultimately the property will be transferred to Rolls-Royce (1971) Limited and the board will be responsible, but the money has to be found, as we all know, from the Exchequer and therefore it is right that the Government should have a say in these negotiations. There is no question of there being negotiations for which nobody is responsible. Such part of the negotiations for which the Government are properly responsible in due course can be made as public as similar negotiations with nationalised industries.
§ Mr. Joel Barnett (Heywood and Royton)
Surely the Receiver is in a tricky legal position in that he is negotiating to sell the assets to Rolls-Royce (1971) 614 Ltd., but is legally obliged to get the best possible price. It may well be that he might get a better price if he advertised these assets and auctioned them. How do the Government regard that?
§ Mr. Corfield
The hon. Gentleman is quite right and I have made it clear myself on a number of occasions, as the hon. Gentleman will accept, that the Receiver is obliged to get and is entitled to get the basis of valuation which gives him the best price—those are the words which I have used. If it so happened that any other organisation—and the hon. Gentleman will admit that it would have to be a fairly large organisation to buy assets of this sort—were in the market, no doubt it would first wish to have a careful study of the books, as a large part of the assets almost inevitably would get the best price, from the Receiver's point of view, as a going concern.
All I can say is that, so far as I am aware, there is absolutely no sign of any such organisation coming into the market. I indicated in an earlier debate that if it should be necessary to prevent an automatic topping of an alternative bid, it might be necessary to come back for compulsory powers, in which case one would base the price on the ordinary rates of compensation, complicated as those are when applied to assets of this sort.
This is a short debate and I hoped to deal with what I took to be its main purpose, namely, the redundancy problems, fairly quickly and without this rather long preliminary. I assure the House that in all the considerations which the Government have given to the Rolls-Royce problem and its aftermath we have been deeply concerned with the problems of redundancy and what is generally known as the social cost. These have been among the most important factors which have determined the Government's course on the RB211.
As I told the House on Monday last, Rolls-Royce has estimated that if the RB211 does not go ahead, the redundancies may be between 12,000 and 18,000. I noted that in his party political broadcast the following evening, the right hon. Member for Bristol, South-East (Mr. Benn) said that if the RB211 did not proceed, another 18,000 workers would have their livelihoods affected. 615 There was no indication whatever that this was an estimate, let alone that it represented the top end of the bracket given to me by Rolls-Royce and reported by me to the House as such. I must ask the right hon. Gentleman whether he thinks that it helps anyone to exaggerate in circumstances of this sort.
§ Mr. Anthony Wedgwood Benn (Bristol, South-East)
I fully take the point. When asked about the figures he gave—12,000 to 18,000— the right hon. Gentleman admitted that it did not include Redundancies among sub-contracting firms.
§ Mr. Corfield
I am coming to that. When the matter was discussed in the House, the right hon. Gentleman referred to the "normal" five to one ratio. I have made considerable inquiries and can find no evidence of the use or existence of a normal ratio of five to one or any other ratio. Indeed, such information as I have been able to compile shows that a ratio of five to one would be far higher than anything which is likely to apply in this case. That again is an exaggeration which does no good—
§ Mr. Phillip Whitehead (Derby, North)
It might be of more help to the House if the Minister would give us his estimate of the figure.
§ Mr. Corfield
My estimate of the figure would be rather less than one to one at present. What I am trying to impress upon the House is that there is no normal ratio. I shall be coming to that in a minute.
§ Mr. Corfield
I should have thought that that was on the high side, but if that is what the right hon. Gentleman was referring to, I agree that I was referring to a different multiplier—namely, a multiplier by which one could relate the direct to the indirect, which is more relevant at this moment. I am reluctant to be committed to a figure, for a perfectly straightforward reason. There are about 500 sub-contractors and suppliers 616 for the RB211. Each is a separate firm with its own problems and resources. Of course some will be hard-hit and perhaps even forced out of business, but others will carry on although some will no doubt have redundancies, some of them substantial.
My latest information is that about 6,800 redundancies have so far been attributed, outside Rolls-Royce, to Rolls-Royce difficulties. But each firm can only make its own appraisal. It is impossible to formulate a standard formula or ratio. This is a complex task, and it is bound to take some time, particularly for the managements concerned.
As I have said before, right from the start of this tragedy, my Department, in conjunction with the other Departments concerned, has done its best to keep a running assessment of what might be called the overall economic costs of the multiplier effect. The methods used no doubt are not wholly accurate or wholly satisfactory. All I can say is that they are the best which exist, and have been used by successive Governments for many years.
Again, I do not propose to be tied down to any figures, but even taking the more pessimistic range of redundancies and unemployment, and the period before which unemployment will begin to be absorbed, the cost in these figures is significantly less than the cost of going on with the RB211 on the terms which we offered to Lockheed. Of course I appreciate that one cannot put a financial sum on the human hardships and that if one tried to do so it would be purely arbitrary, but even if one doubled these sums for economic cost so as to make allowance for that, there would still be a substantial margin above that before one got to the likely cost—
§ Mr. Dan Jones (Burnley)
On a point of order. With all due respect to the redundancies and the social cost, can we not hear from the Minister in this short debate what is being done?
§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
The hon. Member knows very well that that is not a point of order for me. I have every sympathy with him, but he cannot raise it like that.
§ Mr. Corfield
I am sorry, Mr. Deputy Speaker, that you expressed that sympathy, because this is something which I have been pressed about on a number of occasions. The hon. Member for Stockton-on-Tees, accused me of failing to answer these questions, and I am now trying to do so.
As for the 4,000 or so redundancies announced by the receiver on 8th February, which I announced in my statement to the House on that day, I want to make it clear again that the allegation which was made by the hon. Gentleman is quite untrue, and that the Government gave no instructions whatever to the receiver to carry out redundancies; nor, of course, did the Government make it a condition of any of our actions in that connection.
Referring now to the relations between the unions and the receiver, I understand that the Receiver made himself available to the trade union representatives a week or two ago to answer questions which they might put to him, and, in response to questions, undertook to inform the unions as soon as possible of any prospective redundancies. I understand that he did that, that he communicated at national level with the union leaders and that he gave an opportunity for questions to be asked and considered.
So it is fair to say that the receiver gave notice of his intentions and that he was prepared to hear from the union representatives such representations as they thought they should make. I understand that the situation at the moment—
§ Mr. Walter Johnson (Derby, South)
The Minister said the other day that there had been full consultation with the unions concerned, and on a point of order I said that there had been no consultations, that the unions had been drawn together and presented with a fait accompli. I have since had that confirmed by the unions in Derby—that all they have had presented are the actual figures of redundancies in the various parts of the factory, and that they have had to come to terms with those figures, without knowing just who would be made redundant. This has caused widespread despondency in the factory. There has been no consultation at all with the unions. I suggest that the right hon. Gentleman—
§ Mr. Deputy Speaker
Order. The hon. Gentleman must keep his interventions short when this is such a short debate, and so many hon. Members wish to speak.
§ Mr. Corfield
It was precisely because I wanted to make clear what had happened between the Receiver and the unions, as I understood it, that I put this piece into my speech to make it clear, because I was aware since Monday of the complaints which the hon. Member had made. I therefore thought it right to tell the House, as I understand it, the procedure which was adopted by the receiver.
§ Mr. Whitehead
Would the right hon. Gentleman not agree that the difference between this and other consultations which the unions have had in the case of previous redundancies, notably in 1970, is that then there was discussion about the phasing of the scheme? This time, there was none.
§ Mr. Corfield
I am sure that the hon. Gentleman will appreciate that there is inevitably a difference of procedure where a receiver is in office, who, as the hon. Member for Heywood and Royton (Mr. Barnett) just said, has a difficult dual duty in these matters. This inevitably makes it more difficult for him to have the sort of consultation which one would expect of an employer company which is a going concern and is rightly likely to continue to be so. This is absolutely inevitable and restricts the sort of consultations which are possible.
I now turn to the sub-contractors. Of course, their fate, both financially and in terms of workers—
§ Mr. Corfield
I thought that I had been assured by the Leader of the Opposition the subject of redundancy was the main purpose of the debate. But if the House wishes me to speak for another 20 minutes about the negotiations, I certainly will.
With regard to the sub-contractors, as I said in the debate on 26th March, of course everybody is very conscious of their difficulties and anxieties, but the payment of debts owed by Rolls-Royce Limited before the appointment of a 619 Receiver is, and I am afraid must be, a matter for discussion with the Receiver.
At the same time, the Government have taken certain measures which will be of substantial practical assistance to subcontractors, both directly and by restoring their confidence in their present and future activities. There was first our immediate decision to acquire the Rolls-Royce assets which I enumerated in my statement, broadly to continue the main part of the aero and marine engine operations. That holds out a reasonable expectation that the sub-contractors involved in them can continue trading with the new company. Secondly, we are indemnifying the receiver to permit the RB211 work to continue, pending negotiations on the possibility of a new contract. This indemnity has today been extended for a further fortnight. This obviously benefits sub-contractors who might otherwise have lost work from Rolls-Royce immediately.
Perhaps I can satisfy the hon. Member for Burnley (Mr. Dan Jones) on the question of the negotiations without listing again the more detailed terms. I can only say to the hon. Gentleman that I have not heard from Mr. Haughton since I made my statement on Monday. I very much hope that we shall hear in the very near future an indication of whether he can accept our terms or whether he is prepared to come back with the counter-proposals which I made it clear that we would consider.
§ Mr. Jeremy Thorpe (Devon, North)
Without going into the difficulties and details of the negotiations, the right hon. Gentleman will be aware that both our American competitors have working teams in California at the moment. Can he say whether we have a comparable team there?
§ Mr. Corfield
I understand that a senior director of the new Rolls-Royce board either left last night or is leaving today. I have not had time to check that. There have been more junior members there. But the difficulty is that, in a sense, the Rolls-Royce (1971) board is not yet the employer officially of all the Rolls-Royce executives. So we thought it right to send a senior director of Rolls-Royce there.
§ Mr. Dan Jones
There are responsible people who really feel that time is distinctly not on our side. For that reason, can the Minister be prevailed upon to send a high-powered team to Burbank with the least delay in order to facilitate these negotiations?
§ Mr. Thorpe
But the Americans have been there 10 days with high-powered teams. The right hon. Gentleman says that one man may have gone out last night or this morning, but he is not certain.
§ Mr. Corfield
The right hon. Gentleman is being quite unfair. We had Mr. Haughton over here on two successive occasions for three days at a time, with a high-powered team of our own and one of his own. He was in this country with the ability, which he would not have had if we went there, of going round the Derby Works, seeing for himself, and studying books and technical facts as he wanted. That is the reason why we did not go there—[Interruption.] I must apologise to the House. I am told that the Rolls-Royce director has not yet left. It was my understanding that he had gone last night or this morning. It was arranged last night and, as far as I knew, he had gone. However, I said that I had not been able to check whether he had actually left.
§ Mr. Barnett
One gathers that the right hon. Gentleman has asked Lockheeds to obtain, either from banks or from the U.S. Government, an open-ended commitment for some 20 years. In view of what has been said by Her Majesty's Government about not wishing to give open-ended commitments themselves, are we to take it that they are prepared to give an open-ended commitment to maintain supplies and services for 20 years?
§ Mr. Corfield
It must be clear to anyone who is concerned with this industry that, if a company is to sell engines to an airline, there must be a reasonable guarantee that they will be serviced. In the normal course of events, the airlines accept the reputation and so on of a company. In the case of a new company, it is not unreasonable to ask that this sort of service will continue. However, it is 621 certainly not open-ended. We told Mr. Haughton firmly that, while we understood the necessity for it, if we gave it, as we were willing to do, he must look to his own banks or his own Administration for a cross-warranty to ensure that, if by chance the Lockheed 1011 programme was abandoned, there would be an underwriting of the new money put in by the British Government. That seems to be anything but open-ended and a reasonable quid pro quo. I hope that the hon. Gentleman agrees.
As for the negotiations, I cannot add anything to what I said on Monday. We have not had a response but, of course, we are in close touch. The idea that we should all be queueing up with G.E. and Pratts when we were doing exactly the same thing a week ago seems to be a remarkably naive argument.
§ Mr. Benn rose—
§ Mr. Deputy Speaker
Order. I feel that I must draw the attention of the House to the fact that this is a short debate. Although I cannot possibly curtail the undoubted right of hon. Members to endeavour to interrupt the Minister if they wish, I beg them to restrain themselves as much as they can in order to allow the large number of hon. Members who are intimately concerned with this matter and who want to speak to do so.
§ Mr. Benn rose—
§ Mr. Scholefield Allen (Crewe)
On a point of order, Mr. Deputy Speaker. You have expresed the view that a large number of hon. Members wish to make speeches. What my constituents want is as much information as possible from the Minister. I do not care if he goes on speaking for another hour. My constituents want to know what the right hon. Gentleman is doing about the situation.
§ Mr. Deputy Speaker
If that is the wish of the House, the House must have its way. That is its right. But it is my duty also to protect the interests of those hon. Members who wish to take part in the debate.
§ Mr. Onslow
Even if there were anything in the record of right hon. and hon. Members on the Opposition benches or that of the Leader of the Liberal Party to suggest that they could negotiate their way out of a rice pudding, there is nothing in the points that they are raising which is in any way likely to increase the prospect of success in the negotiations. Would not it be more in the interests of hon. Members on both sides and their constituents if we concentrated on the matters that this debate was originally supposed to be about, which is the effect of redundancies and the position of the sub-contractors, and left this unprofitable bickering about the negotiations?
§ Mr. Corfield
It seems to be the wish of the House that this should be a prolonged question session—
§ Mr. Corfield
Perhaps I might be allowed to go through the formality of winding up my remarks and bringing the threads together, so far as that is now possible.
On the subject of the redundancies that have occurred and have been notified, I must repeat that they are redundancies which were, so to speak, in the pipeline before the receivership. They are necessary, and I believe that they are thought to be necessary by Cooper Bros. and others, in order to cut the overheads and costs of Rolls-Royce which have been such a major factor in the problem facing us today. This is an operation which I believe was essential, and it would have taken place without the receivership. Although I believe that the main operation is already more or less complete, I cannot and will not give an absolute guarantee that there will be no more redundancies of this nature.
As for the sub-contractors, I have tried to explain that the "ripple" effect is almost impossible to forecast in advance. All that I can say is that, of the approximately 1,000 firms which are creditors of Rolls-Royce, some 500 are specifically or mainly concerned with the R B211. Their debts amount to a relatively small proportion of the total of £50 million or so trade debts.
§ Mr. Tam Dalyell (West Lothian) rose—623
§ Mr. Corfield
The hon. Gentleman must allow me to finish the odd sentence now and again.
As I said, their debts represent a relatively small proportion of the total. Nevertheless, if the RB211 does not go on, the necessity for amortising equipment which they may have introduced for this special contract is bound to add to their costs considerably more than their existing debts. I do not want to mislead anybody.
For the future, the main problem must be whether we can successfully conclude a contract with Lockheed. This is something, as I am sure the House appreciates, which we cannot negotiate in public. But I have given the House—
§ Mr. Dalyell rose—
§ Mr. Corfield
I should like to finish the sentence. I have given the House as broad and detailed an indication as I can of the kind of terms which we have suggested to Mr. Haughton. I have indicated that we are prepared to meet the actual figure per engine negotiable and we are prepared to listen to counter-proposals whether within that broad scheme or within some other basis. I do not think that I can take that further today, or indeed until the negotiations are finally completed.
I shall now give way to the hon. Member for West Lothian (Mr. Dalyell), but I intend to sit down afterwards.
§ Mr. Dalyell
The right hon. Gentleman is very courteous. Does the right hon. Gentleman recognise that a real worry among sub-contractors is that they do not know whether they should go on supplying, because if certain, what I can only call maverick firms, take advantage of United States law, the whole operation could be put in jeopardy? Could something be said in the winding-up speech about the study which the Government have made? For example, what would happen if one or two firms, disgruntled by their own situations, press against the interests of the many? This is a subject which perhaps the Minister might care to deal with now or leave to the wind-up.
§ Mr. Corfield
My right hon. and learned Friend is here and perhaps he might intervene later to deal with that point.
624 The hon. Gentleman has reminded me of a passage which I should have put in—namely, to remind the House that Supplementary Estimates were laid today providing for, I think, £30 million to be spent on the purchase of Rolls-Royce assets in this financial year. I want to make it clear to the House that that £30 million is to provide for advances to Rolls-Royce and in no way prejudices the final valuation or the total sum. It is on account, in the national interest, to meet the purchase by Her Majesty's Government in the United Kingdom of the worldwide patents of Rolls-Royce Ltd., which we intend to license freely to Rolls-Royce (1971) Ltd., or, indeed, to any other purchasers of the assets where that may be appropriate.
§ 5.3 p.m.
§ Mr. Raphael Tuck (Watford)
I should like to ask the Minister whether he will reassure me about the 4,000 workers in the small engine division at Leavesden in Watford. The Minister gave us some assurance and assuaged our fears a short time ago when I headed a deputation, but he did not give any definite commitment. Is the right hon. Gentleman prepared, through his right hon. Friend in the winding-up speech, to give an assurance that those jobs will continue and that there will be no redundancies? The small engine division deals with engines for helicopters. It is the only branch of the former company which was making a profit. Therefore, I should be grateful for that assurance.
I want to give the Minister some information for his consideration. There has been a meeting recently, initiated by the Coventry group of stewards, which was attended by nearly all the Rolls-Royce groups. Derby was a notable exception. The object was to try to co-operate union-wise so as to force the receiver to co-operate with the unions regarding their fate. This body had no power to force any view on the unions. However, it recommended the representatives to report back to the members on all sites and, if possible, to get the unions to agree to a joint meeting of all the members of the unions on all the sites with a view to endorsing the recommendations of that representative committee.
625 The representative committee made certain recommendations and these were endorsed by the unions at Leavesden.
The first was that there should be no worsening of working conditions. The second was that there should be no transference of work as a result of bankruptcy or the break-up of the company without prior consultation with the unions on it, and the delegates' conference in London was to set up a permanent working committee as the spokesman on behalf of them all.
The third and most important recommendation of the representative committee was that there should be nationalisation of the whole of Rolls-Royce. I have stated before that in my view there should be no hiving-off of various parts of Rolls-Royce but that the whole thing should be taken over lock, stock and barrel.
I should inform the Minister in this context that the diesel division had heard—whether correctly or incorrectly—that it was likely to be hived-off to a competitor with spare capacity. That would mean that these people would lose their jobs. The competitor with spare capacity would get the jobs and they would be given to other people. The workers in the diesel division were afraid that this would happen. Therefore, I warn the Minister against hiving-off and ask for an assurance that this kind of thing will not happen.
The Minister has always eschewed the setting-up of a Select Committee in answer to Questions by my right hon. Friend the Leader of the Opposition and others. What have the Government got against the setting-up of such a Select Committee? What do they fear? Surely they cannot fear that the findings of such a Select Committee will disclose something which is awkward to the Government. What is the Government's fear? What are they afraid of? I urge the Government to set up this Select Committee so that we can have full consideration and judgment on what has happened.
§ 5.8 p.m.
§ Mr. James Scott-Hopkins (Derbyshire, West)
I said yesterday that I thought it was a mistake to have this debate this afternoon. What I have heard so far 626 from the hon. Members for Stockton-on-Tees (Mr. William Rodgers) and Watford (Mr. Raphael Tuck) has not changed my mind.
The speech of the hon. Member for Stockton-on-Tees in opening the debate was the biggest non-event which I have so far heard in this Parliament. It was merely a reiteration of charges which do not seem to have been substantiated. There was nothing concrete in it. I made two notes of the whole of the hon. Gentleman's speech, and I need not have made those. They were that there were redundancies and the need for flexibility of future negotiations. That was really all that the hon. Gentleman had to say.
I am glad that we have not so far talked about the negotiations. I do not believe that this would do any good, because no decision has yet been reached on the RB211 contract, and my right hon. Friend urged us not to press him on that subject.
I was delighted to hear my right hon. Friend's reiteration of the Government's determination to see through any RB211 contract, should it be renegotiated, for the 20 years of its future life.
I was also glad to hear from my right hon. Friend that a director of the new Rolls-Royce (1971) Ltd. is either en route or will be en route to the west coast of America today. This is essential for these negotiations to be pushed to a successful conclusion.
Turning to redundancies, which, after all, seems to be the main point of the demand for the debate, two points arise. First, 4,000 redundancies have been announced in Derby. I understand that about 2,300 of these apply to Derby proper, and this represents a terribly heavy unemployment problem for this area. Indeed, the position is becoming crucial.
My second point concerns the seven weeks' extra redundancy pay which the receiver has decided should be given to these 4,000 redundant workers. This decision has caused some apprehension among the unsecured creditors. They feel, and I appreciate their view, that this money could have gone into the general pool to be paid out at a later stage when the liquidator winds up the assets.
On the other hand, one must accept that Rolls-Royce had an excellent labour 627 relations record. Indeed, good labour relations were pioneered in Derby, particularly bearing in mind such things as three-month contracts. I am sure that these extra redundancy payments—that is, payments in addition to the normal redundancy payments—should be made. I trust that my right hon. Friend will bear this anxiety in mind because some of the creditors, and especially the smaller ones, feel that the money should have gone into the general pool.
I hope that the RB211 discussions will prove successful because if they are not my anxieties will have come to a head. Some of the best advice I have been given leads me to believe that the total works in Derby will not be able to survive as an economic and viable unit without the RB211 contract. In this context I am not talking about 4,000, 12,000 or even 18,000 redundancies. I have in mind the entire complex in Derby.
Should this come about, would we find Rolls-Royce disappearing altogether from Derby? It would be a tragedy if this were to happen to what is the centre and heart, and what was the birthplace, of this great company. I am sure that neither the Government nor the new Rolls-Royce Board want this to happen.
There appear to be only two solutions. Should the RB211 contract unhappily die, then one solution would be to switch some new engine work—perhaps work on the 119—from Bristol to Derby, where work on that project was originally initiated and designed. I appreciate that this would be expensive and would not necessarily be the right decision. However, something of the sort would have to be done if my first solution were adopted.
A second possible solution would be to initiate new work on new types of engine, though I appreciate that many research and development troubles would be thrown up if that were done. Whatever happens, I appreciate that no decision can be made today, and that probably one cannot be made this week.
§ Mr. Scott-Hopkins
I accept that the new Rolls-Royce Board and the Government, because they are in partnership, must reach a decision on this issue. They must allay the fears that exist as quickly 628 as possible. I beg them not to cast Derby on the scraphead.
§ Mr. Scott-Hopkins
Because we have not reached the moment when a decision can be made.
I hope that the new Rolls-Royce Board will not continue to hide its light under a bushel and be retiring. The sooner it meets the trade unions and suppliers the better. We had a fiasco yesterday—I will not go into the reasons why—when we tried to arrange a meeting among the three parties. Everybody interested must get together, and the sooner that happens the better because until it happens the present vacuum will remain. The trade union leaders are in a vacuum because they do not know with whom they will be negotiating in future. The suppliers are in a vacuum for obvious reasons.
I am worried about what might happen to the patents applying to the RB211. I do not pretend to appreciate how our patent law, let alone American law, operates. I have been told, however, that these patents are in danger, and I appeal to the Attorney-General to assure us that there is no question of them being pirated under United States bankruptcy law. I gather that there is a danger of this happening. It would be a tragedy if in three or four years' time we found the RB211 or its counterpart being manufactured in the United States under American patents.
Many difficulties lie ahead and anxiety surrounds this whole matter. People are worried. Though worried, too, I am content to leave the matter in the hands of the Government. I can do no more. I am sure that they will do their best, not only for the R B211 but for the whole future of the new Rolls-Royce company.
§ 5.15 p.m.
§ Mr. Raymond Fletcher (Ilkeston)
I have given you an assurance, Mr. Deputy Speaker, not to speak for more than 10 minutes. In view of the evident desire of my hon. Friends to subject the Government to rather closer questioning, I am perfectly willing to give up the whole of my time and to make no speech at all if, by general agreement, that time will be added to the time which the right hon. and learned Attorney-General intends to take in dealing with this issue. I 629 pause to enable the right hon. and learned Gentleman to tell me whether or not he accepts my offer.
§ Mr. Fletcher
Apparently my offer is not to be accepted. I will, therefore, make the speech that I had intended to make.
§ The Attorney-General (Sir Peter Rawlinson)
I apologise to the hon. Gentleman. Was he making the offer directly to me?
§ The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw)
Perhaps I can help the hon. Gentleman. I have obtained advice from my right hon. and learned Friend the Attorney-General regarding the question of patents, and I will be dealing with this subject in my speech at the end of the debate, when I hope to make the position abundantly clear. I hope that that satisfies the hon. Gentleman.
§ Mr. Deputy Speaker
On behalf of the whole House, I thank the hon. Member for Ilkeston (Mr. Raymond Fletcher). In view of his attitude and his decision not to speak, I will call next to address the House an hon. Member from his side of the Chamber. Mr. Whitlock.
§ 5.17 p.m.
§ Mr. William Whitlock (Nottingham, North)
I am grateful to you, Mr. Deputy Speaker, and to my hon. Friend, though I regret that I cannot follow his example because the matters to which I wish to refer may not be known as fully as they should be to the Leader of the House.
On Monday the Minister of Aviation Supply said that the whole of the announced redundancies were due to overstaffing and were not affected one way or another by the future of the RB211. On that very day, at Hucknall in my constituency, 260 redundancies were announced out of a total staff of 1,900. These are skilled engineers and technicians.
630 Another announcement was made on Tuesday. It was to the effect that the flight testing side of Hucknall's activities would be closed by the end of the month. That was a shattering blow to my area, though it was made clear that the redundancies made necessary by the closure of the flight testing facilities were included in the figure of 260 already announced.
I suggest that, far from it having nothing whatever to do with the RB211, this proposed closure is the tip of the iceberg which will crush Hucknall, Derby and the RB211. The closure was decided upon without consultation with local management or staff at Hucknall. A Rolls-Royce spokesman said on Tuesday:The economics of having only one flight testing establishment dictated that the choice had to be made between Filton and Hucknall, and Filton has been selectedI believe that economic considerations do not enter into this. The announcement has caused amazement and great bitterness in Hucknall, because the argument about the respective merits of the two flight establishment was decided long ago when it was agreed that, since both Hucknall and Filton are in close proximity to engine centres, they were both needed. Now that the choice has fallen on one of them I want to give the information which I have been able to obtain about the differences between Hucknall and Filton.
Hucknall is carrying out tests on the Spey-engined Phantom, and it has for that purpose de-tuners, ground silencing equipment, which Filton does not have. Hucknall is geared to carry out tests on the Jaguar, in that it has a computer interfaced to read Jaguar-type data, and that facility is not available at Filton. The flying test bed for the RB211 is the VCIO which can be housed in hangars at Hucknall, but no hangar at Filton is big enough to take the VC10.
The Filton airfield is owned by B.A.C. and may not readily be available to Rolls-Royce in all circumstances. The Hucknall airfield is owned by the Ministry. Filton is very vulnerable as a base for flight testing, because it is dangerously close to major air routes, and there can, therefore, be inconvenience, danger and difficulty in flight testing the Jaguar and the Spey-engined Phantom at Filton.
631 In spite of all these merits of Hucknall and drawbacks of Filton, the choice has fallen on Filton, and I want to ask the Minister why. Is it because Rolls-Royce (1971) is Bristol-orientated? The Derby Engine Division, which includes Hucknall, and which is so concerned with the RB211, does not have a representative on the Board at present. Is that the reason for the choice of Filton and the fact that the redundancies are all within the Derby Engine Division? Or is it because secretly the Government have decided that the RB211 must go and that therefore all the facilities that support the RB211, wherever they may be, shall be allowed to wither away?
The closure of Hucknall for flight testing facilities affects the long-term ability of the Hucknall factory to make tests on the RB211 because the flight testing facility is central to Hucknall's activities. Its closure will make it difficult for the Hucknall factory to continue, and that in turn will create difficulty for Derby, for which it is an essential and conveniently nearby outpost. The closure of the Hucknall flight testing facilities is a hasty move which the Government will come to regret, assuming that they are genuinely interested in seeing that the RB211 goes ahead and in the success of the Spey-engined Phantom and the Jaguar. I beg the Minister of Aviation Supply to take a longer look at the decision on Hucknall, because a longer look will produce an entirely different answer.
On 11th February I paid tribute to the splendid personnel at Hucknall and to the wonderful team spirit between management and men which exists there. It was at Hucknall that during the war Merlin engines were fitted to Mustangs in a way which won the admiration and praise of Winston Churchill in this House. The world's first jet engine flew at Hucknall, when Rolls-Royce took over the development of the Rover W2B gas turbine, which flew in a Wellington bomber in 1942. In 1954 a contraption known as the "flying bedstead" took off on a vertical flight which led to the development of the first vertical take-off plane in the world, the SC1 made by Short and Harlands, a plane which could have produced for Britain years of lead in the vertical take-off field.
632 The closure of the flying test facilities at this factory is a great tragedy which the Minister will come to regret. Before it is too late I beg him to look at this again. I hope it will be possible for him to reverse the decision and to keep Hucknall going in every one of its present activities.
§ 5.25 p.m.
§ Mr. Michael McNair-Wilson (Walthamstow, East)
I wish that this afternoon's debate could have brought some comfort to the 4,300 people who will be made redundant. I also wish that the 12,000 people who are now under threat of the axe could also know where they stand. But the one fact that we seem to wish to ignore is that we are dealing with the affairs of a bankrupt company being run by a Receiver. It is not being run by the Government. The Government do not own Rolls-Royce. They do not even know the price they are going to be asked to pay for the company. Until they do, and until they have paid it, the company is not run by the Government Therefore, however much we may dislike it, it is the Receiver to whom we should be directing our questions.
If we sense, as I have sensed in some speeches this afternoon, a considerable implication of criticism of the receiver, we should remember what his job is. He has a most difficult and disagreeable task. He has the task, on the one hand, of trying to get the best deal for the debenture holders and, on the other, of trying to do it as humanely as possible. Therefore, it is not in this place that we can make the decisions or indeed answer the questions. It is the Receiver who has that task.
We can be alarmist about the number of people who will be affected if the RB211 engine is cancelled. The Economist suggests the figure might be 20,000, which is a great deal lower than anything we have heard before. How much I hope the Economist is right—and fortunately it is a journal which is often right.
What I want to ask this afternoon is, why this debate, when a White Paper is so soon to be presented to us? Last night I had the privilege, with some of my colleagues, of meeting shop stewards from Derby. We were enormously impressed by their fair-mindedness, by their 633 desire to see this thing as it is without any party prejudice, and by their anxiety to do the best for the people who look to them for help. I suspect that they came to us because they believed that this afternoon's debate might somehow change the course of events, and that one of my right hon. Friends, by saying something at the Dispatch Box, could give back to those men the jobs they will lose. If we are responsible for feeding them a will o' wisp of hope, we should be ashamed of ourselves, because we cannot do that. Those men will lose their jobs, and our pious speeches can make no difference—
§ Mr. Dan Jones rose—
§ Mr. McNair-Wilson
I cannot give way, I have not enough time. We must hope that the deal presented by Her Majesty's Government to Lockheed to set up a joint company to develop the RB211 will be successful. I am sure we all wish that the Rolls-Royce director who is said to be on his way to Burbank will achieve the success which rightly belongs to him and to his great company. If he is not successful, we must still hope that this complicated technology which Rolls-Royce has pioneered will not be lost to this country, and that it will be available for the new engines to be built for short and vertical take-off aircraft.
It is easy to turn Rolls-Royce problems, which are problems of bankruptcy, into a party political issue. That is why I and some of my hon. Friends felt obliged to put down an Early Day Motion deploring the Opposition's action in trying to make political capital out of this appalling industrial catastrophe—
§ Mr. McNair-Wilson
I say that with a great deal of feeling, because just as this debate, as my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins) has said, is a non-event, so the Opposition are fostering false hopes for political gain—[HON. MEMBERS: "Rubbish") Hon. Members opposite may not care to hear what I have to say, but I intend to say it just the same.
This contract was negotiated between Lockheed and Rolls-Royce and the right hon. Gentleman the Member for Bristol, South-East (Mr. Benn) also had a hand in 634 it. It was a great contract, but he is culpable in the sense, and his culpability must never be forgotten, that if his advisers did their job properly they must have told him that if the contract was unsuccessful it could bankrupt Rolls-Royce. In other words, it was the sort of contract that no company in its senses could possibly enter into. If, on the other hand, the words he used in November last are true, that he saw us and Lockheed and Rolls as partners in the same venture and that was also suggested to Lockheed, no wonder that Lockheed never queried whether the money might be forthcoming to keep the engine going.
As far as I know, the right hon. Gentleman is the only person in the House who knows what the I.R,C. told Rolls-Royce about the company. He knew, and, he was pressed by hon. Members on this side when we were in Opposition about it, whether sufficient financial resources were available to complete the engine and for a more powerful version. So far as I can find out, he never said whether the company was in financial difficulties of any sort. Nor did he give a straight answer as to whether more money was going to be needed. For six months from the beginning of 1970 he did absolutely nothing, and then the General Election came, and we shall now never know what he had intended to do.
§ Mr. Benn
The hon. Gentleman must know that the I.R.C.'s report was not available to me though, of course, a summary of its recommendations was. He must also know, for I told the House, that at no time until, as far as I know, November of last year—or September-October—did Rolls-Royce seek further assistance for the RB211. Those two things have been said in the House, and thus the whole of the hon. Gentleman's argument falls totally to the ground.
§ Mr. McNair-Wilson
I am grateful for that intervention. Last night, one of the Rolls-Royce trade unionists said, and I shall not forget it, "Two years ago we knew that Rolls-Royce was in financial difficulties." If the men knew, the management knew, and if the management knew I cannot believe that the Government of the day did not know. Why did not the right hon. Gentleman come forward with some financial assistance when things could have been altered? Why did he allow the situation to drift 635 Yet now he has the nerve to put his name to a Motion the effect of which is to criticise the Government which are doing their best for the company in these most unfortunate circumstances.
§ 5.34 p.m.
§ Mr. Alexander Wilson (Hamilton)
I should have preferred in making my brief speech to follow an hon. Member prepared at least to state a truthful premise. As it is, I must say that I can only agree with the hon. Member for Walthamsow, East (Mr. Michael McNair-Wilson) in saying that, irrespective of the outcome of this debate, there will be redundancies. It is redundancies with which I am concerned. In just about one week some 360 highly skilled and highly trained men in my constituency will be thrown on the scrap-heap. We in Scotland have never been very fond of Conservatives, and I can certainly say that after this mishandling of the Rolls-Royce affair we will be even less fond of Tory Governments.
My constituency will suffer the first total closure of a Rolls-Royce establishment—the research and development unit—and I want to put on record what that will mean to us in terms of unemployment. In addition, I have questions to put to the Ministers to which I should like categorical answers. Assuming that the redundancies cannot be avoided, what are the Government prepared to do? Are they prepared to take emergency measures to provide in this area and in other areas enough replacement job opportunities for the high skills available? I particularly ask the Secretary of State for Trade and Industry and the Secretary of State for Scotland—who, unfortunately, does not see fit to take part in this debate, or is perhaps occupied elsewhere—what part they played in these decisions, and what they are doing now—
§ The Under-Secretary of State for Development, Scottish Office (Mr. George Younger)
Perhaps the hon. Member will allow me to point out that I am here now for the express purpose of hearing what is said in the debate. I am glad to be here, and I am listening with great interest to what he is saying.
§ Mr. Wilson
I appreciate what the hon. Gentleman has said. I have no doubt that he is speaking sincerely, that he will 636 listen to the debate, and will carry back to the Scottish Office what I feel about these events in my constituency.
What emergency measures are the Government thinking about if, indeed, they are thinking about them at all? Are there any plans at all for continuity of employment for these highly-skilled technicians? Will the progress we have been making in the central belt of Scotland continue as it has done over the last several years or will it just be a dead end? What provision is being made for alternative employment after 19th March, when these men lose their jobs? The Rolls-Royce establishment in Hamilton meant stability of employment, reasonably high wages and jobs in which the men could take a pride. Yet all those men will lose their jobs.
The matter does not end in Hamilton. Men will lose their jobs in the production factory in Blantyre. Ministers may not care to comment on sub-contracting. When I and some of my colleagues met the Minister just the other week I put the point that the value of continuing the RB211 contract should be set against the social consequences of not continuing the contract. The Minister must consider the full social consequences to the families of those who are losing their jobs. Wives and families will suffer a reduction in their standard of living. Men who transfer to other establishments will also suffer a reduction in their standard of living because, among other things, of the increased costs of travelling. They are losing all round.
I want the Government to make a true balance, if that is possible, of the cost of the Rolls-Royce collapse in relation to social consequences. They should put on the debit side the capital loss to local authorities in these areas, because for Hamilton this is akin to situations which I have faced many times in Scotland when collieries have been closed and dereliction has resulted in the district.
This very serious situation should not be treated with levity. We in the Central Belt were congratulating ourselves on stability of employment and on the fact that new industries were coming in to replace the old. The new industries demanded high skills in management and on the production lines.
Hamilton had the only research and development unit in Scotland. That unit 637 was devoted entirely to work on other than the RB211 contract. It was devoted to work on the Avon and Dart engines. There is no connection between the redundancies in Hamilton and elsewhere in Scotland and the RB211 contract. These jobs need not have been lost if the Government had decided to overturn their recently declared lame duck policy.
This means that over 400 men in my area will be thrown out of work. This must be set against the background of escalating unemployment. Even before these redundancies, 10.9 per cent. of the male population, most of them highly skilled, are unemployed. What hope have most of the 10.9 per cent., much less those declared redundant next Friday, of securing a job commensurate with the skills they have gained over a lifetime?
The loss of job opportunities in the area is such that the jobs will not be replaced unless emergency measures are taken. Ministers should frankly and seriously accept their responsibilities. I ask them not to hide behind the receiver in this tragedy but to come out into the open, forget their lame duck speeches, and save all these jobs. The Ministers have been granted by the House all the powers for which they asked. They appointed the new board. When they took those decisions did they have it in mind to sack so many men all over the country?
Not many days ago my right hon. Friend the Member for Kilmarnock (Mr. Ross) and I saw the Secretary of State for Scotland in another part of the building. The Secretary of State evinced interest in this problem and in the dangers which could arise in the near future and which have arisen only too soon. I only hope that the Secretary of State follows up that interest by taking direct action within the next day or two and tells us what emergency measures he is prepared to take and what arguments he is prepared to use with the Government to cease the hiving off of parts of Rolls-Royce and save the jobs and technical skills which Scotland so badly needs.
However, what has happened in Scotland does not make us feel confident that those things will be done. Ministers promised protection and confidence for the future for the other employed in Rolls-Royce. Can the Ministers now tell 638 us what we can tell our constituents who are still employed in the mutilated remains of the Rolls-Royce company?
§ Mr. Wilson
Can I tell those that I wait to meet at the weekend that the Government are prepared at least to provide stability and employment for the remaining workforce in Rolls-Royce?
§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
Order. The hon. Member for Hamilton (Mr. Alexander Wilson) has undertaken to make a very short speech. I should be glad if the hon. Member for Skipton (Mr. Drayson) would not intervene in that way.
§ Mr. Wilson
I never answered for myself when I was a delegate or a shop steward. I always believed in the men making the decisions themselves.
§ Mr. Wilson
Are any steps being taken to provide adequate alternative employment in the Hamilton area, in the Hillington area, in the Blantyre area, and in the other Rolls-Royce establishments which are suffering? These men require jobs appropriate to their skills. The reputation of this Government has never been high in Scotland.
§ Mr. Wilson
I ask the Government for some assurance that they will provide some stability of employment for those still left in the Rolls-Royce establishments and that they are prepared to take emergency measures this week to find alternative employment for those being displaced in my constituency. The Government should treat this matter as an emergency and give us some cause for hope. They may not be able to make some or any political capital out of it in Scotland, but at least they would be saving these families some heartbreak over the next several months.
§ Mr. Carter
On a point of order. Can we be told where the Leader of the House is? He is due to reply to the debate and should be here to listen to 639 every contribution if he is to make an adequate reply.
§ Mr. Whitelaw
On a point of order. I apologise for my absence. I have been in urgent discussions to get some information which it is desirable that I should have in replying to the debate. That was my reason for being absent.
§ Mr. A. E. Cooper (Ilford, South)
On a point of order, Mr. Deputy Speaker. There are twice as many Members present on the Government side as there are on the Opposition side, and it is the Opposition's debate, but there is still not a quorum.
§ Notice taken that 40 Members were not present;
§ House counted, and 40 Members being present—
§ 5.51 p.m.
§ Mr. Peter Rost (Derbyshire, South-East)
Many of those being made redundant live in South-East Derbyshire. All those in my constituency to whom I have spoken over the past few months, at all levels of Rolls-Royce, have admitted that redundancy was inevitable. It is now accepted that a certain amount of overmanning and overstaffing existed at all levels of the company. It is to the credit of the unions and their leaders that they have accepted this severe hardship without complaint—[HON. MEMBERS: "Without complaint?"]—without complaint, and they have adopted a realistic attitude towards the situation.
All at Rolls-Royce realise that greater efficiency is urgently necessary if there is to be any prospect of the RB211 contract being successfully renegotiated. All at Rolls-Royce realise that any boost to morale which could come from streamlining at management level as well as at all other levels of staff can only be beneficial to the long-term prospects for our aviation industry.
§ Mr. Dan Jones
The hon. Gentleman has spoken of the attitude of the shop stewards, and he has done so with grace. Will he tell the House what the shop stewards at Derby told his deputation yesterday, as they told our deputation, 640 about the need for a high-powered delegation to go from the Government to Burbank because time is not on our side?
§ Mr. Rost
—have all been helpful and mutually respectful, and I have no reason whatever to quarrel with the hon. Gentleman about any matter which was raised by any union deputation.
I come now to one or two points regarding the redundancies which I wish to be considered. First, I question whether "Last in, first out" is the best method of arranging the redundancies. If we are pruning and creating greater efficiency, we ought to be removing dead wood rather than working on any other basis.
Also, I support the hon. Member for Nottingham, North (Mr. Whitlock) in his suggestion that, perhaps, there is a Bristol bias rather than a "Preserve Derby" attitude. In particular, should we not consider spreading some of these redundancies into the Bristol area, particularly if there are to be more of them?
Third, there is the danger of breaking up the team spirit and the technological brain power at Derby, which is the centre of the company's technological research.
We all accept that there is bound to be some hardship, so I make a further plea—I have done it previously in the House—for the worker-shareholders who are now losing their jobs and their savings as well. We have had assurances from the Minister that this matter is being given consideration, but I should like to feel more confident about it.
There will be hardship for those in my constituency who have to move to other parts of the country to seek fresh employment, and there will be some problems in arranging house sales. This will involve the banks in considering the provision of facilities so as to allow those sales to be made on a reasonable basis.
641 We should keep in mind, also, the older employees who are being made redundant, whose problems will be particularly severe because they will find it far more difficult to readjust to other forms of employment or to move to another area. We must ensure that their pension rights are fully protected.
There is still a great deal of anxiety among the creditors and sub-contractors, because there is still a lack of consultation and no representation with the receiver. I am particularly concerned that the danger of a forced liquidation of the old Rolls-Royce company should be prevented. The creditors really have no other form of representation open to them at the moment, apart from the appointment of a liquidator.
I have been pleased to hear in the debate today that the Government have taken urgent steps to protect the patent rights which are so essential for the continued prosperity of the company and its future in the aviation industry. The right measures have been taken there.
Because of the pressure of time, I shall summarise the remainder of what I wanted to say. I have been most impressed by the evidence of co-operation among the unions at all levels.
§ Mr. Rost
I regard it as essential, therefore, that the board of the new company should take all necessary measures of consultation with the union representatives at an early stage so that we may rebuild or maintain the good will so essential for the company and its future.
Next, we must consider not allowing the redundancy compensation to come from the creditors' account. This is one of the creditors' fears at the moment, that the receiver, in an obvious desire to provide generous compensation to those made redundant, is having to pay out funds which are partly on the creditors' account. Perhaps the Government will look at that again.
We must all make sure that every action which is taken does not prejudice the future of the RB211 contract but helps towards a successful renegotiation. It should, nevertheless, still be the Govern- 642 ment's aim in this whole matter to try to achieve a reconstruction under private enterprise rather than a liquidation and nationalisation. I believe that our options are still open for this possibility to be carried into effect if the RB211 contract can be successfully renegotiated. That is the only acceptable solution to the dilemma that will repair the commercial reputation of the company and the country and ensure a prosperous future for Derby and Britain's civil aviation.
§ 6.10 p.m.
§ Mr. Phillip Whitehead (Derby, North)
In the few minutes at my disposal I would associate myself with some of the remarks of the hon. Member for Derbyshire, South-East (Mr. Rost), certainly with what he said about the remarkable willingness of the trade unions to cooperate with an extremely painful and brutally short timetable imposed upon them, and with what he said about the position of the worker-shareholders, which is still anomalous and has still not been fully explained. Perhaps we may hear something about this from the Leader of the House, who is to reply to the debate.
On patents, I would go rather further than the hon. Gentleman and some other hon. Members who have spoken. The problem is not merely to safeguard the RB211 patents. There is also the question of the position of the other patents of the old Rolls-Royce company under American law. I hope that we shall be told today what the position is, and whether these patents may be seized in the course of court actions under New York State law, for example, by U.S. creditors of the old Rolls-Royce company.
There is also the question referred to in section 7 of the famous letter the Minister of Aviation Supply sent to my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers), which referred to the possible sequestration of imports into the United States from Rolls-Royce (1971) Limited by creditors of the old Rolls-Royce company. The right hon. Gentleman said that many complex questions were raised by this, but he did not answer them. I hope that we shall have some answers today.
§ Mr. Whitehead
Not a word has been said on either side of the House which has imperilled the negotiations.
Reaffirmation of the importance of the RB211 contract to this country's aerospace industry is valuable now. It may be that this debate will save a vote of censure later, though, looking at the Government benches, I have some doubt about that. But I have a hope that mention of the RB211 contract in the debate will once again force the Government's attention with more urgency to the need for the renegotiations to be continuing and meaningful.
We speak with some emotion in the debate, because the successive low-key approaches referred to by my hon. Friend the Member for Stockton-on-Tees have not been particularly fruitful. In the debate on 26th February, which I had the good fortune to initiate, hon. Members on both sides spoke with moderation and looked for constructive answers from the Government. Unfortunately, we have all too often since then received further obfuscation of what the Government's attitude and the attitude of Rolls-Royce (1971) may be.
This is serious for all who are deeply concerned for the Derby Aero-Engine Division. A total of 4,300 men have just been declared redundant. Taken in conjunction with the redundancy scheme operated over a period of 12 months last year, that means that 10,000 men have now left the Derby Aero-Engine Division in 15 months. This is a seriously weakening blow to the future of design teams and the aerospace industry. My hon. Friend the Member for Derby, South (Mr. Walter Johnson) and I understand that the Receiver's attitude is that those redundancies had to be declared now, with a short timetable, because it was essential that a slimming-down, which I think is the current euphemism, should be achieved before any bid from Rolls-Royce (1971) would be received. If that is so, the important question is not whether such statements were originally made by Lord Carrington or other Ministers to the receiver or his representatives, or whether such statements came from the board of Rolls-Royce (1971). The fact is that we do not yet know enough about the relations between this curious trinity, and where responsibility lies.
§ Mr. Scott-Hopkins
I am sure that the hon. Gentleman does not want to be discourteous to the House and the Minister. He will remember that what my right hon. Friend said was that there was no leaning on the Receiver, no instructions to him either from the Government or the new board, to do the slimming-down. It was arranged beforehand, and the Receiver has carried it on.
§ Mr. Whitehead
I accept the right hon. Gentleman's statement. I hope that the Leader of the House will tell us that that extends to all Ministers, and particularly Lord Carrington and the board of Rolls-Royce (1971). It seems that in the interim period, in which people have been thrown out of work and subcontractors are going bankrupt—which is a matter of fact and not speculation or hypothesis—Rolls-Royce (1971) and the Government and their spokesmen have to some extent hidden behind the skirts of the Receiver.
The hon. Member for Derbyshire, West (Mr. Scott-Hopkins) said earlier with his usual exquisite politeness that he did not wish to refer in any detail to what happened yesterday, when a delegation of Derby trade unionists, that same delegation that the hon. Member for Waltham-stow, East (Mr. Michael McNair-Wilson) referred to, came to the House. They came because they were part of a meeting called by the hon. Member for Derbyshire, West and myself of sub-contractors, trade unionists, creditors, unsecured creditors and all other people affected by the fall-out of what is happening to Rolls-Royce, to meet representatives of the board of Rolls-Royce (1971). We were told at extraordinarily short notice, too late for me to tell the Derby trade unionists, that the meeting was off, that the board had decided yesterday morning that it could not meet those people because it was all a matter for the Receiver. That is precisely the kind of situation, clouding the issues, staying at one remove from the people vitally concerned, because of their assets, their jobs or the firms they control, that is making life impossibly difficult not merely for people in Derby but for people all over the country.
It is said that the assets of Rolls-Royce may be rather more valuable to Rolls-Royce (1971) if the company is slimmed down. It is said that work on the RB211 645 may be more cost-effective if this is done. I seriously question whether the assets of Rolls-Royce will be more valuable when they are bought by Rolls-Royce (1971) if they are so slimmed down that many of the design teams and many of the projects upon which those teams are working have been broken up.
I have seen the detailed list of redundancies in Derby. It is my information that many of the technicians, designers and draughtsmen who have been declared redundant, and who were told personally yesterday, were working upon those projects, and some of them on the R13211. Once again we have seen design teams decimated. The people concerned have been thrown out of work when the Government are still supposedly looking at the whole future of civil aviation and the British aerospace industry, and the rôle that Rolls-Royce (1971) will have in it. The breaking up of the teams seems premature and unnecessary. It is almost impossible that the Derby Aero-Engine Division will be able to recover from the blows now being inflicted upon it.
The hon. Member for Derbyshire, West said that he hoped that work would be diverted to Derby and perhaps therefore away from Bristol. The reverse is happening. The consequence of things like the closure of the airfield at Hucknall cannot but lead us to imagine that the intention of the Government and the board of Rolls-Royce (1971) is that the effective work of the Division based at Derby, and also in Scotland and Sunderland, should be wound up. I hope that we may have an assurance about the continuation of work on future projects in Derby and district from the Leader of the House.
In the short time left to me I should like to say a little about the future of the RB211 negotiations. We have been asked whether discussing them is of any value, whether we have any right to talk about them while they are in progress. The problem is that no hon. Member on this side has yet received any adequate assurance that the Government really know where the negotiations stand —whether they are waiting for Mr. Haughton to come back to them, whether they know which Rolls-Royce director is going to the United States, and whether he has left. We have not been told whether there has been a continuous reevaluation of the RB211 engine by a 646 joint Rolls-Royce (1971) Government team in Burbank, California, competing with the teams from General Electric and Pratt and Whitney which have been there throughout. This is the point we reiterate to the Minister.
There are Rolls-Royce men in Derby raring to go. There are men with suitcases packed who would like to go on the next plane. There are men who are convinced that a fresh approach from the Government should be made even at this late stage. Hon. Members opposite who saw certainly the technicians amongst the delegation yesterday and the telexes which they brought—which I do not propose to rea—will know the note of strain and urgency in them about the timetable now for further meaningful negotiations. The irony of this is that the negotiations could meaningfully be taken a stage further at a point when not only are four main airline customers of Rolls-Royce still miraculously held in line by Lockheed but other airlines, particularly All-Nippon, are looking at the TriStar with a view to placing orders for it which would enable it to break into new markets.
As I said on 26th February, we want to know whether the Government are negotiating meaningfully and are not negotiating simply in the sense of a poker player staying in the game but throwing away a card with each hand.
§ Mr. Kenneth Warren (Hastings)
I draw the hon. Gentleman's attention to the fact that there have been replies to the delegation from the United States which indicate the extreme willingness of Rolls-Royce to go out there and negotiate. I hope that this will be followed up.
§ Mr. Whitehead
Perhaps the hon. Gentleman was not present when the Minister said that he was still waiting to hear from Mr. Haughton. Interventions from this side of the House then were to the point that they were waiting to hear from us. I hope that the Leader of the House will emphasise that the Government are willing to associate themselves with a fresh bid to Lockheed.
We do not know precisely what aerospace rôle the Government envisage for Rolls-Royce (1971) Limited. This, too, is left in serious doubt whilst all these 647 uncertainties remain. What rôle does Rolls-Royce (1971) Limited want in the aerospace industry in the future, and what rôle will the Government allow it to have? Is it true that negotiations have been going on with other American civil aviation companies and aero-engine companies—I shall not mention names—about the disposal of the civil aviation side of the old company? If it is true, it is a serious matter in terms of the continuation of at least the civil aviation side.
I would like Rolls-Royce to go on. We come back to this matter time and again because we are not convinced that the Government want to see Rolls-Royce go on to the full extent and range of its development, sales and export potential. I hope that we shall get this assurance. I hope that we shall hear from the Government that they are not, in the words of the recent article in The Guardian, "practising the economics of the dust bowl." From the position of my constituents it looks, if the RB211 contract is not renegotiated and work brought back to Derby instead of being taken away from it, as if Derby at least will become a dust bowl.
§ 6.14 p.m.
§ Mr. Robert Adley (Bristol, North-East)
I shall be very brief. No one in this House can have wanted the RB211 contract to have gone wrong. It is unfair and unhelpful of hon. Members opposite to suggest that anyone can seriously want Rolls-Royce not to continue as successfully as possible.
I feel bound to answer my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) about wanting to spread redundancies to Bristol. The RB211 was Derby's contract. The hon. Member for Derby, North (Mr. Whitehead) referred to the "blows inflicted on Derby", but these wounds were self-inflicted. To try to unload the redundancies onto those who were not responsible for their creation is neither fair nor helpful.
Rolls-Royce went into bankruptcy and the Government are trying to save the situation. When one has said that, one has stated the situation as it is. It has not given any of us on this side any pleasure to see the merciless harrying 648 which the Minister has had to face. [HON. MEMBERS: "Cut it out."] I will not. The harrying has been unhelpful and unfair. It is wrong to suggest that it is his fault or the present Government's fault.
The right hon. Member for Bristol, South-East (Mr. Benn) has generously admitted that he had some part in all of this, and I do not think that it is helpful in any way to the future of either Rolls-Royce or the present negotiations to muckrake over the responsibility of this Government or the last Government for the contract. We are in the midst of having to learn a very uncomfortable lesson, as my hon. Friend the Member for Walthamstow, East (Mr. Michael McNair-Wilson) has said. No one is enjoying the present experience. If there is anything that we can do, it is perhaps to learn from our mistakes and try to avoid them in future. We must, in the words of the hon. Member for West Lothian (Mr. Dalyell), try to avoid "grey area contracts" in future. Without trying to be funny, I ask for fewer harriers in the House and a little more concord. I think we might get a lot further.
§ 6.17 p.m.
§ Mr. Dan Jones (Burnley)
I say at the outset that during the whole of this most unfortunate business I have not sought to make a political point out of it; nor do I seek to do so now. I am concerned simply and solely with the continuation of the RB211 engine. I think that the Minister was dealing with the embroidery and not with the garment. I want to deal exclusively with that.
Hon. Members referred to the delegation which came from Derby yesterday. It was accompanied by very knowledgeable executives. They were responsible people; they knew precisely what they were talking about. The negotiations have now reached a most delicate stage—indeed, a stage at which time is definitely not on our side. I hope that the Minister will tell us whether or not a high-powered member of the Government can go to Burbank to assist our people out there in the negotiations. I say that deliberately because knowledgeable people know that General Electric and Pratt and Whitney have at Burbank very high powered teams which would be delighted to 649 squeeze Rolls-Royce and the RB211 out of the picture. It must be remembered that they have financial autonomy which the Rolls-Royce people at Burbank do not possess. For that reason—and I do not mind if I am alone in expressing this—I believe that it is time that a high-powered Minister went there to assist the Rolls-Royce people with this project. I say openly that if such a Minister could go, I at any rate would give him my heartiest blessing on that very important voyage.
While not wishing the Government to be involved in any open-ended financial agreement, I hope that they will immediately indicate that the first figure is a negotiable figure. Many responsible people feel that it was only part of what has been described as, and what I believe to be, an unfortunate poker tactic. I hope they will say that so that the maximum goodwill on the other side can be ensured.
I join with my hon. Friend the Member for Derby, North (Mr. Whitehead) in saying that these negotiations are going forward at far too pedestrian a pace. We would like to see the kind of urgency which this matter deserves. In the telex message that we had the privilege of seeing, from Burbank, there were reports to say that the TriStar had completed her trials satisfactorily, so satisfactorily that Nippon, the Japanese airline, had taken an option on six planes. There surely cannot be a more able negotiator than the Japanese, and if they believe that the plane is satisfactory surely the British Government should be encouraged. I hope that the Government will take the opportunity and give to these negotiations the kind of urgency they demand.
§ 6.20 p.m.
§ Mr. Cranley Onslow (Woking)
I want to make three brief points. First I believe that the desire of hon. Members opposite, expressed first by the hon. Member for Watford (Mr. Raphael Tuck), for a Select Committee to inquire into the affairs of Rolls-Royce is absolutely and wholly wrong. What the House needs is the full White Paper, going back to the beginning of the affair in 1968. We are prepared to wait for the facts. They may take some time to prepare but we must have them in full. I must ask 650 hon. Members opposite, particularly the right hon. Member for Bristol, South-East (Mr. Benn) to remember what happened when the P.A.C. held what was virtually a Select Committee inquiry into the Bristol Siddeley affair, when it was perfectly clear that there were grave party divisions within the Committee.
§ Mr. Onslow
Yes there were, and anyone who has read the report can be in no doubt about it. What was much more reprehensible was that grave personal injustice was done to Sir Reginald VerdonSmith. The lesson of that should be remembered, and the House should refrain from putting itself into a situation where anything of that kind can recur.
§ Mr. Onslow
The hon. Member can be quite sure that I want nothing covered. I want it all out, every single piece of it. I want it out by judicial, impartial and exhaustive inquiry, not one in which party politics can have any place.
Next, I would ask my right hon. Friend if he can say anything about the Government's view of the likely redundancies in the work forces of sub-contractors in the aero-engine industry. The bankruptcy of Rolls-Royce has had the effect of removing £50 million worth of resources from this industry which is one of national importance. The Government must come to terms with this in some way, and I hope that we can be given some indication of their thinking.
My third point concerns the genuineness of today's debate. The Leader of the Opposition was at great pains yesterday to stress that this was only to enable us to express concern about redundancies. He said it twice; if he had said it three times we would have known that it must be true. What has happened subsequently, and the way in which the hon. Member for Stockton-on-Tees (Mr. William Rodgers) opened the debate, suggests that the true concern of the Opposition Front Bench is to make party politics. It suggests that they are not really concerned that the negotiations should succeed; they are simply putting themselves into a position where they can claim political advantage when negotiations fail.
§ Mr. Onslow
I say that the behaviour of the Opposition lends itself only to this construction, that they believe the negotiations will fail and they want to be in an advantageous position when this happens. I say this particularly to the right hon. Member for Bristol, South-East, who recently visited New York in company with my hon. Friend the Member for Bristol, North-East (Mr. Adley). In the Bristol Evening Post of 1st March he is clearly reported as having been personally responsible for bringing the RB211 affair and Concorde into the same court. This is a most unfortunate action for the right hon. Gentleman to have taken.
The Opposition, who are in no way responsible for negotiations, are not only seeking to make the negotiating position of the Government more difficult: they are, in effect, standing behind the Government, trying to find out what cards they hold, calling out that these cards are not as strong as they should be and then going round to the other side of the table and trying to tuck aces up the sleeves of the other party. [HON. MEMBERS: "Rubbish."] If the Opposition are so confident of their righteousness they would have done much better not to have had this debate, because nothing that comes out of it from the Opposition benches will do other than convince the parties with whom we are negotiating that there is a kind of death wish emanating from that side of the House and that all their other pretensions are bogus.
§ 6.28 p.m.
§ Mr. Ray Carter (Birmingham, Northfield)
I have never heard so much cant, hypocrisy and humbug compressed into such a small amount of time in any debate that I have heard in this Chamber, as I have heard listening to the hon. Member for Woking (Mr. Onslow). One gets the impression that we on this side were responsible for the complete mess in which the Government find themselves.
§ Mr. Carter
Not too enlightened, either. If we go back to 8th February when this dreadful saga started and look at the way in which the Minister sent abroad his message about how confident he was of the future of the RB211 we can see that he said:Even if one were rash enough to discount the financial cost of going on with this engine and developing a more advanced version, whether it be the—61 or the—50, we must ask ourselves what can now be the prospect of such an engine being available in time to compete with versions of the CF6 and JT9". —[OFFICIAL REPORT, 8th February, 1971; Vol. 811, c. 99.]Clearly, this was not a statement by a Minister over-enthusiastic about the project which he now tells us he is trying to save.
§ Mr. Corfield
Surely the hon. Gentleman will accept that if we are to consider putting in these enormous sums of money it is right to look at the possible market? One of the things which we discussed very much with Mr. Haughton was whether he saw this very large market which was mentioned by hon. Gentlemen opposite. He certainly gave no indication that there was such a very large market at the moment.
§ Mr. Carter
That may have been the case but I would have thought that all of these matters would have been given very careful consideration—
§ Mr. Carter
—before the announcement was made. Surely it is not good enough for the Government now to be saying "We wish to save the RB211" when they were so critical of its future prospects and even its technical capacity.
As to the question of redundancy, with which we are supposedly exclusively dealing, I wish to speak solely for the employees of sub-contractors living and working in my constituency. The Government may be concerned. They are not responsible for the redundancies announced this week in the Rolls-Royce company, but they are responsible for every redundancy which has been declared by the sub-contractors over the 653 past few weeks. More than 7,000 people have been made redundant simply because the Government, and particularly the Minister, did not declare from the outset that they had the utmost faith in this project. It is clear that Lucas and the other manufacturers in Birmingham are laying off their people in the belief that the Government have taken a clear and calculated decision to scrap the RB211 project. I say that unequivocally, and I do not hide behind the evasive language of the hon. Member for Walthamstow, East (Mr. Michael McNair-Wilson).
I speak on behalf of thousands of people in Birmingham who depend for their livelihood on the future of the RB211 contract. Five people are scrambling for every vacancy now in Birmingham. In Birmingham, as in Derby and many other places, people want to hear that the Government believe in the RB211 firmly and completely and that they will try, try, and try again to renegotiate the contract. Unless we can get that unequivocal assurance from the Government this evening, work people in Birminham and Rolls-Royce workers elsewhere will have no faith in the efforts of the Government to secure their future.
§ 6.32 p.m.
§ Mr. Anthony Wedgwood Benn (Bristol, South-East)
This has been an important debate which has given many hon. Members the opportunity briefly to express the anxiety of their constituents about the redundancies which have already occurred and, even more, the possible redundancies which may occur if anything goes wrong with the RB211 engine. Hon. Members on either side of the House have paid a very proper tribute to the way in which the shop stewards, many of whom I have met myself, of course, have been concerned particularly about the future of the company rather than with any political argument which may centre around the handling of this matter by the Government.
Many questions remain to be answered. My hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) referred to some. I do not want to go over that ground again. I should like to say something about redundancies and move on to discuss the prospects of the RB211.
654 The receiver has duties placed on him by the law which must guide his actions, but it is not realistic to think of the value of Rolls-Royce solely in terms of its physical assets, for any company doing advanced work must derive a high proportion of its value from the skill of its workers, including managers, scientists, engineers, draughtsmen and technicians, working together in teams on design, development, production and marketing and after sales repair, servicing and maintenance. If those teams are destroyed by redundancies imposed to reduce costs in the short run, the value of the company may be sharply reduced and, with it, its capacity to earn the revenue necessary to pay the debenture holders and the creditors.
I want to say that at the beginning of my speech, because it is important for the House to recognise that when we talk about the RB211, or any other advanced machine of that kind, we are talking about the accumulated skill of the people who built it. That is why we are concerned with the workers not only for humane reasons, which would be dominant in our minds, but, frankly, because, despite all that is said about technology, the only thing that is ever interesting about it is the quality of the people who make it and the people who are able to use it. I wanted to take the opportunity at the beginning of my speech to say that.
Compared with the redundancies announced by the Minister on Monday, the problems which would arise if the RB211 negotiations were not successful would be much graver. I therefore want to turn to the linkage which my hon. Friends and I see between the RB211 and the whole future of the Rolls-Royce company.
If I am responsible, as I am, for one major part of this story, it is for believing in 1968, as I believe even more firmly now, that without the RB211 engine in that family there is no effective future for Rolls-Royce in the aero-engine business. Therefore, in turning to the question which must necessarily be the central question, I take the opportunity to reiterate to the House the central importance of the RB211.
The reasons for this are evident to anyone, even a layman, who looks at the future of the airline business. There is a rapidly rising volume of air traffic, and 655 congestion round the major airports alone would have led to the move to the bigger, wide-bodied aircraft requiring a larger engine.
§ Mr. Scott-Hopkins rose—
§ Mr. Scott-Hopkins
I interrupt the right hon. Gentleman on this very point. He is contravening what his right hon. Friend the Leader of the Opposition said yesterday, which was that the discussion today would not be about the future of the RB211. The right hon. Gentleman is now developing an argument which is out of keeping with the debate today so far.
§ Mr. Benn
My right hon. Friend the Leader of the Opposition said that nothing would be said to embarrass the Government in the negotiations. I am now arguing that the future of Rolls-Royce and the people who work in it depends on the successful conclusion of the RB211 negotiations, and I am putting forward my arguments in that way.
I am glad that a Treasury Minister is here, because I want to say something about the Treasury's attitude. Certainly the future of the aircraft industry depends on being able to supply wide-bodied aircraft and the engines for them. Secondly—and no one should be in any doubt about this—noise as a factor in determining the acceptability of aircraft is a major consideration, not only in the United States but in this country, as we have seen from the problem of the third London airport. Noise is such a problem that it is now widely argued that unless existing aircraft can be re-engined with quieter engines, there is a possibility that restrictions will be put on them which would prevent them from entering the world's major airlines.
Therefore, on the grounds of the need for both bigger aircraft and quieter aircraft, one can clearly see that without Rolls-Royce having an engine in this family to offer it would not be in the big aero-engine league. I believe this to be a view shared by everybody in Rolls-Royce, a company now without a voice because of its position in the interregnum between being a private company and a publicly-owned company.
656 I also want to say—and this bears on the attitude that the Treasury and other economists must adopt towards it—that the jump from existing jets to the RB211 size of thrust is a jump as big as from propellors to prop jets and from prop jets to jets. The profit that comes from this new family of aero-engines will come from other applications and from spares, and it must not necessarily be assumed to come from the very first aircraft to use this engine. Therefore, the time scale on the return on a Government investment in this engine is longer than might appear if one were thinking in terms only of the Lockheed 1011.
With the RB211, Rolls-Royce has a foothold in the American market, and all the forecasts of the growth of airline traffic indicate that the major growth is inside the United States. I speak subject to correction, but I believe that I am right when I say that for the first time in the whole history of the aircraft industry there is an exclusive, original British engine launching a United States airliner. Anyone who has experience of selling British aero-engines or aircraft abroad will know what a fantastic achievement it was to get that engine into the 1011 in 1968.
§ Mr. Benn
It was not only the price; it was the quality of the engine. The hon. Member is being less than just to Rolls-Royce in what he says. I am anxious not to engage in an argument. I am making a constructive case, and saying that if these negotiations fail and the RB211 is withdrawn from the 1011 it will be desperately difficult to get back into the United States with another European engine. There is powerful competition from Pratt and Whitney and General Electric, as there was in 1968—then to see that Rolls did not acquire the contract and now to try to get Rolls-Royce out, if possible.
We have one advantage—it may be only temporary—and that is that the American trade unions working in Lockheed's, where there is considerable redundancy as a result of the present difficulty, are now ready to support Rolls-Royce in providing the engines for the 1011, because it is their best prospect of being restored to work as soon as possible.
657 But there is a strong basic case for the RB211, and I thought it necessary to refer to it again. I come to the question of the attitude of the Government, and the problems of our relations with the European aero-engine industry, in the initial debate the Minister said that he could see some value in a European partnership in aero-engines, and with the approach to Europe and the whole industrial approach towards international linkages this seemed to be a valuable idea.
But its value lies in the technical supremacy of Rolls-Royce, which is the only advanced manufacturer in the aero-engine business, and the only one, at the moment, with a foothold in the American market. If we throw this away Rolls loses its value to Europe, and to Britain in Europe. If we ask the Europeans about this we will find that they do not place too much value on the RB211. I believe that at the back of the thinking of the Government is the influence of French and German advice, in respect of which I feel quite sure that the dominant factor is simply that the A300B, for which they are prepared to pay an enormous premium, is challenged by the Lockheed 1011 with the Rolls-Royce RB211 engine in it.
Our European colleagues have had two objectives. The first was to kill the BAC311, because it was a formidable competitior to the A300B. The Government decided that they could not proceed—one reason being the Rolls-Royce engine. The second target of our European colleagues is the 1011. They want to kill it because it is a competitor of the A300B. The reason why the Europeans do not mind if the RB211 goes—indeed, they would welcome it—is that they see it as a British subsidy, via Rolls, for Lockheed, and they find that very unattractive. They would like to see the 747 four-engined aircraft; the DC10 three-engined aircraft, and the A300B two-engined aircraft all equipped with American engines—because the A300B itself has an American engine. The Europeans are quite content to use their Government's money to subsidise the airframe to hang the American engine on, but they do not want us to put our money, through Rolls, into the Lockheed 1011.
I am putting forward the argument that just thinking European in a vague 658 and woolly way at the moment is no case for being critical of the RB211. Some statement from Europe now about the desirability or possibility of supporting the Rolls-Royce engine in Lockheed's as part of a wider arrangement with Europe would be quite sensible, but please do not let the Minister tell the House that the Europeans do not care whether the RB211 goes or does not go; of course they do not care. It is a competitor to a project that they have put up.
§ Mr. Stanley McMaster (Belfast, East): rose—
§ Mr. Benn
I am coming to the question of the position of Short's. I know that that is what the hon. Member wants to speak about. First, I want to refer to some of the considerations that must affect the Treasury. It is inconceivable that in the negotiations now in progress the voice of the Treasury will not be dominant. Nobody is interested in an unprofitable investment. The argument against the old, traditional Treasury view is that it looks at the possibilities over too short a time scale. If we consider the question only in terms of the return on a single engine in a relatively short period we are taking a view that takes us out of advanced technology altogether.
The cost of the Concorde has escalated by £95 million, in terms of its estimates, from October, 1969, to October, 1970, but there has been no hand-wringing, no bankruptcy and no collapse, because the Concorde is funded on a different basis. I am not arguing that the RB211 should be funded like the Concorde, and although the Concorde treaty was signed by the present Government in a previous manifestation I say that it is not selfevident—if we want to be in advanced technology—that we have to do it the RB211 way or that it is self-evident that we have to do it the Concorde way.
We have basically to decide whether we feel that this is or is not central to the aero-engine business, where there is a market, and then we have to look at it from that point of view. I do not want to go over the argument that was put forward in the Guardian on Monday, and that has been referred to today, but in making calculations about whether or not to proceed with a project it is always necessary to look at the cost of not going 659 ahead—the cost of redundancies, the cost of losses in terms of redundancies in Rolls-Royce and the sub-contractors; the loss of tax revenue; the loss of the levy on the engines; the general effect on the economy of a downward spiral; and the impact of buying foreign aircraft for B.O.A.C. and B.E.A. They are all quite proper calculations for the Treasury to make.
What I want to be satisfied about—I am not asking for answers from the Leader of the House today—is that the Treasury is not just putting to the Minister the question of the cancellation charges and telling him, "You can play about with the cancellation charges, and that is all", because if that is so we should be leaving out of account the longer-term consequences if the RB211 engine does go forward.
The House knows that the terms are negotiable, but I want to know whether they are negotiable as to the amount of money that the British Government are prepared to make available or simply in terms of the way in which the question is being negotiated within a certain sum of money.
I am entitled to put upon the record the views of the Opposition on the central question in a way that is wholly without criticism of the Government. I am entitled to put our views upon the record because this is possibly the last chance that the House will have to debate the matter before the negotiations come to a conclusion.
I want to ask the Leader of the House one or two other questions, one of which I raised on Monday, when the Minister made his statement. My question concerns the nature of the Government's offer. First, how is Lockheed to be asked to place its money at risk in a company that it does not control and in a technology that it does not understand? This is a question which has been put to me, and it is right that I should put it to the Minister.
May I also ask the Leader of the House to say in winding up how the contract vis-a-vis Lockheed will differ from the contract which many hon. Members opposite criticised us for reaching with Rolls-Royce; namely, the placing 660 of a fixed sum with the ultimate and total responsibility being taken on the other side.
There was an impressive speech made in an earlier debate on Rolls-Royce on the nature of the companies we are dealing with in these matters—hybrid corn-panics partly governmental and partly private. It is clear from the experience of Galaxy with Lockheed and RB211 with Rolls-Royce that it is not now possible to hinge a whole contract on staking out a sacrificial shareholder and saying "This is the basis of the deal" This is a Government-to-Government matter—certainly in regard to Britain because, if the negotiations succeed, we are offering a 20-year warranty on these engines. Similarly, if a cross-warranty is to be effective, it must involve and engage the United States Government in some service.
The time for these negotiations is unquestionably very short, and this is why I sought the Standing Order No. 9 debate on Monday when the statement was made. The real people who dictate the timetable are the airlines themselves. If they are the customers they know that whether one goes in for another engine or another aircraft, the financial risk of delay suffered by the airlines determines a great deal of the timetable in negotiations.
Lockheed, not unlike Rolls-Royce, faces real difficulty and also is under pressure, but the Government are unable to answer the difficult questions we have put about their relations with the receiver until they know the situation in regard to RB211. The 1971 Rolls-Royce company knows that it is buying Rolls-Royce either with the RB211 engine or without it, and it is a totally different sort of company in those two circumstances.
I must reiterate what was said by my hon. Friend that it is hard to understand why there is no Minister now engaged in discussions in the United States with the American Government on the terms of the cross-warranty or, for that matter, no senior Government team in discussion with the airlines in Burbank at this moment. The negotiations are being conducted at a distance and to some extent in the open. It is not clear to me why General Electric and Pratt and Whitney 661 should be working away with the airlines in Burbank if we do not yet know whether a senior Rolls man has left to go to Burbank to present the Rolls case. I say this simply as an expression of view that there must be evidence that this matter is being taken seriously.
In the end this company, as any other company, must have orders. One of the proposals which were made and considered was that B.E.A. should buy some 1011s to provide a long-term market for this aircraft. To the best of my knowledge, no firm influence or pressure has been brought to bear in that direction.
These are questions I put to the Leader of the House, and they are questions which, as the negotiations proceed, are surely being asked in Whitehall. I am certain that the answers to these questions determine not only the survival of Rolls-Royce but the survival of the men who are working for the company and the future of the European aero-engine industry. They are questions which could determine within a day or a week, certainly within a week or two, the future of key sectors of British industry. I hope that in answering the debate tonight the Leader of the House will he able to give us some answers, since this will be the last opportunity on which we shall be able to give our views before the negotiations are concluded.
§ 6.55 p.m.
§ The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw)
In opening the debate the hon. Member for Stockton-on-Tees (Mr. William Rodgers), appearing to regard my presence with some distaste, asked me why I was here. I will tell the hon. Gentleman and the House why. I am here to answer the debate because I believe that it is my duty and responsibility to do so as a member of the Cabinet and as Leader of the House.
This House is always rightly concerned when social and human problems arise. The commercial collapse of Rolls-Royce has produced such a situation. In this case, too, there is the added emotional feeling we all share that such a disaster should have overcome the company which almost seemed part of Britain.
I hope that hon. Members opposite will not mind my saying that sometimes I slightly resent it when it is suggested 662 that there is a monopoly of care about this situation. Anyone who went through the experience just before the company collapsed and immediately after and had to call in the Receiver will have experienced, as I did, feelings of intense care and worry. Therefore, I am entitled to rebut some of the rather unfair accusations which have been made.
The hon. Member for Stockton-on-Tees also accused the Government of evasion and concealment. I do not accept those charges. The hon. Member for Watford (Mr. Raphael Tuck) asked the Government to set up a Select Committee. Last week I promised a White Paper and said then, and must repeat today in answer to the hon. Member for Stockton-on-Tees, that the timing of this White Paper must depend on the course of the negotiations. As was announced at the time of the collapse, the old Rolls-Royce company has asked for a Board of Trade inquiry, and no doubt that will be granted. In a commercial collapse surely such an inquiry is preferable to a Select Committee of this House. I would agree with my hon. Friend the Member for Woking (Mr. Onslow) that a Board of Trade inquiry would be much fairer to people whose reputations may be at stake in regard to commercial considerations.
I shall now try to answer some of the other points which have been made in the short debate, and in doing so I wish to reinforce what has already been said by my right lion. Friend the Minister of Aviation Supply.
The main purpose of the debate was made clear by the Leader of the Opposition yesterday; namely, to consider the redundancy situation caused by the commercial collapse of Rolls-Royce. Inevitably, this has led to the discussion of the future of the RB211 contract, on which, I agree with the right hon. Member for Bristol, South-East (Mr. Benn), much employment depends. Naturally, the House will appreciate that it would not be helpful for me to comment in any detail on some of the suggestions which have been made while the negotiations are in progress.
I believe that I can best help the House and hon. Members such as the hon. Member for Derby, North (Mr. Whitehead) by setting out once again the proposals put to Lockheed by Her Majesty's Government. In parentheses I wish to say 663 to the hon. Member for Birmingham, Northfield (Mr. Carter) that the Government certainly want to renegotiate the RB211 contract, if that can be successfully concluded. Of that there should be no doubt. I would also like to state categorically, in answer to the right hon. Member for Bristol, South-East and the hon. Member for Burnley (Mr. Dan Jones), as emphatically as I can that the proposals put forward by the Government are negotiable and that we are prepared to consider counter-proposals. Lockheed, of course, appreciates this, and knows that there has been no question of a last word or a "take it or leave it" attitude on the part of the Government. It is important to say that, and I do not think the right hon. Gentleman would wish me to go further than to make that point abundantly clear.
§ Mr. Whitelaw
I do not think that at this stage I want to go on to the proposals, but it would only be sensible for me to reply to the hon. Gentleman that in the conduct of the negotiations no initiative or move can ever be ruled out.
These proposals were, first, that a joint company should be established in the United Kingdom by Rolls-Royce (1971) Limited and by Lockheed for the management of the RB211 project. The detailed execution of the programme would be sub-contracted to Rolls-Royce Limited. There were two main reasons for this proposal. The first was that it would offer Lockheed an opportunity to take a full part in the management of the project and to ensure that all possible economies were made in its execution. In answer to the right hon. Member for Bristol, South-East, I do not think that some of the difficulties he foresaw from Lockheed's point of view are problems, given these proposals. The second reason is that, taken together with the rest of the proposals, Lockheed's risk under any new contract would be for the most part confined to those elements in the cost which Lockheed had disputed, the remainder of the cost being made up by the British Government.
Secondly, on development costs, the British Government would contribute a further £60 million in addition to the 664 £100 million already spent. This £60 million was the figure to which, on the Lockheed view, the further development costs of about £120 million estimated by the Government should be reduced. Any additional cost of development to the present specification of the engine should therefore be borne by Lockheed, it being Lockheed's view that there need be no further cost above the £60 million.
Thirdly, on production costs, a new contract would be negotiated with Lockheed for the purchase of the RB211 engines at a mean increase in price not exceeding £150,000 each. If the production cost of the engine exceeded this figure, the loss would be borne by the new joint company; that is to say, shared equally between Rolls-Royce and Lockheed. The reason for this proposal was that the Government's estimate of the production loss on these engines would be considerably higher—perhaps as much as £190,000. In view of Lockheed's opinion that the loss should be substantially less, perhaps as much as 40 per cent. less, and in view of the need to meet price competition on the engine, the Government made it absolutely clear to Lockheed that the amount of the increase was negotiable, and also provided that half of any loss incurred above this figure would be borne by the Rolls-Royce side of the new company.
Fourthly, profits from the sale of spares for the engine as at present specified, and any costs and profits resulting from further development of the engine, would be for the account of the new joint company; that is to say, shared equally between Rolls-Royce and Lockheed.
Under the former head, Lockheed estimated the profits, discounted to 1971, at £75 million. The Government estimated them at £50 million. The sharing proposal diminished this difficulty, and offered Lockheed a substantial offset against any risks it might be incurring under a new contract. Under the latter head—further development—the prospects were too speculative to require much discussion at this stage.
Penalties for late delivery under the original contract with the old company would be formally waived by Lockheed and the airlines. New arrangements would be negotiated on the basis of no penalty for six months' delay and only light penalties for three months thereafter. 665 The six-month delay referred to is, of course, that which has arisen in Rolls-Royce's operation under the old contract, and thus a fact of life which has to be faced in making a new contract.
Arrangements would have to be made with the United States bankers to assist with the cash flow problem in the early years, for example, by means of appropriate progress payments. The cash flow problem is clearly related to the estimates of losses and profits, and the proposal was that the financing burden should be appropriately shared by the usual means.
The British Government—and here I accept what the right hon. Member for Bristol, South-East said—through Rolls-Royce (1971) Limited, would provide a warranty for servicing and spares support during the life of the engine. The United States Government, or banks, would provide a warranty to recompense the British Government for the money they had invested from the date of the new agreement if the TriStar programme should subsequently be abandoned.
This condition is essential against the contingency, which cannot be ruled out, that if the TriStar project had for any reason to be discontinued, the British Government would be faced at that time with a position in which it had invested a further very large sum in the development and production of the engine, and this would be entirely lost. In addition, the risks of unemployment would be as great as or greater than they would be if the project had to be discontinued right away. Some insurance against this contingency, as a counterpart to the British Government assurance to continue support for the project, is surely a reasonable and equitable requirement.
Under the arangement announced to the House by my right hon. Friend the Minister of Aviation Supply on 11th February, the Government are continuing to indemnify the receiver against the expense of carrying on the RB211 work while negotiations with Lockheed proceed. Already more than £5 million has been paid to the receiver. This is substantial evidence of the Government's sincere wish to negotiate a satisfactory basis for the continuance of the project.
The right hon. Member for Devon, North (Mr. Thorne), the hon. Member for Burnley and others have raised the question of a high-powered dele- 666 gation in America. I was criticised at one moment for having left the House. I did so to get the absolutely clear position on what is happening at the present time, the most up-to-date one I could, because I thought this would be helpful to the House. Lord Cole was in touch with Mr. Haughton last night and discussed the possibility of a director of Rolls-Royce going out to Burbank. As a result of that conversation, the Rolls-Royce senior representative in the United States is coming back this weekend for consultation. In the light of the discussions it will be decided whether or not to send out a Rolls-Royce director.
One of the Rolls-Royce directors is already in the United States and will be seeing our Embassy in Washington. Although I think most hon. Members appreciate this, there has been some misconception. There is already a Rolls-Royce team of top experts in Burbank. Therefore, the suggestion that G.E.C. and Pratt and Whitney are operating on their own and Rolls-Royce is not represented is not true, and I do not think the House would wish to give that impression.
I said in answer to the hon. Member for Burnley that the Government will not rule out any helpful initiative at any time, but it must be remembered that we have put forward our proposals to Mr. Haughton who has undertaken to consider them and, through Lord Cole, we have been in contact with him since then.
I now turn to the important point raised by the hon. Member for West Lothian (Mr. Dalyell), my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins), and the hon. Members for Ilkeston (Mr. Raymond Fletcher), in his classic speech, which I hope will frequently be repeated in this House, and Derby, North (Mr. Whitehead), about patents.
The Government have paid to the receiver the sum of £20 million to meet the acquisition by Her Majesty's Government in the United Kingdom as a necessary act of official policy of all the patents previously held by Rolls-Royce Limited and its subsidiaries. They have done that in order that the use of the patents should be secured against any interference which might prejudice the development and production of aircraft and other engines 667 for use for military and civil purposes in Britain and throughout the world. Some engines are being developed in collaboration with foreign Governments. Any impediment to the use of the patents would be gravely damaging to British defence interests and foreign policies. That is why, in the national interest, Her Majesty's Government have so acted. It is our intention to license the use of the patents to the new company and, where appropriate, the purchasers of other assets.
§ Mr. Dalyell
Let us give credit where credit is due. For my part, I must congratulate the Government on this aspect of their policy. But may we be assured, perhaps by the Attorney-General, that no hardware or software can be sequestered by American firms once it is in the United States? This is a matter of very complex American law, but it is very important to the sub-contractors, who see it as one of the matters about which they have to be assured before they decide to continue supplying.
§ Mr. Whitelaw
I have been most careful, in consultation with my right hon. and learned Friend the Attorney-General, to explain the position to the House in specific words. Though I am no expert in these matters, I believe that my words are important, and I must stick to them. The hon. Gentleman has raised a different matter. Perhaps I might ask my right hon. and learned Friend to get in touch with the hon. Gentleman about it.
I now turn to some other aspects of the problem. As my hon. Friends the Members for Walthamstow, East (Mr. Michael McNair-Wilson) and Bristol, North East Mr. Adley) pointed out. Rolls-Royce having applied for a Receiver, the Government made statutory arrangements to put themselves into a position to take over those assets of Rolls-Royce which are essential to the national interest, to set up a new company with a very strong board to take over those assets, to negotiate, in consultation with the new company, with the received for the purchase of those assets and, meantime, to reimburse the Receiver for additional expenses incurred in maintaining essential work on the RB211 project, pending the outcome of the negotiations.
There can be no question that these are the steps which are necessary, if not 668 essential, if the national interest in the many defence and civil activities of Rolls-Royce is to be preserved and properly managed. What is important is that the Government, in consultation with the new company, are making arrangements designed to put the nationally essentially parts of the Rolls-Royce enterprises on a sound footing for the future.
I turn now to the redundancies which have rightly concerned many hon. Members. On the latest estimates which we have of the scale of redundancies, some 4,300 Rolls workers are likely to be dismissed between now and 26th March. In the main, these are engaged on work other than the RB211. The main areas affected are Derby 2,000, Glasgow 1,700, Barnoldswick 240, and various Midlands plants 400. What I think is necessary to emphasise is that these redundancies are directed at eliminating overstaffing and are an essential part of the reconstruction of the company on a sounder footing. The figure of 4,300 was announced by the Receiver on 8th March, and these decisions are for him in consultation with Rolls-Royce (1971) Limited.
I ought perhaps to answer the point raised by the hon. Member for Nottingham, North (Mr. Whitlock) about Hucknall. I have been seeking to investigate the position. I have not been able to ascertain the full answer, but my right hon. Friend the Minister of Aviation Supply will write to the hon. Gentleman giving him the full position. I can assure the hon. Gentleman that there is no question of any bias in favour of Bristol and against Derby. That certainly will not be a factor in any of the decisions which are taken.
My hon. Friend the Member for Derbyshire, West put forward some helpful and important points about redundancy and the action which might be taken by my right hon. Friend the Secretary of State for Employment. I am grateful to my hon. Friend for his suggestions, and I will see that they are passed on to my right hon. Friend. I should make it clear that my right hon. Friend will ensure that all the services of his Department are made available on the spot so as to deal with redundancies as they arise. It is fair to say that the majority of those likely to be made redundant will be 669 highly qualified or skilled. Inevitably, employment prospects are always better for such workers, and there is unlikely in their case to be an extensive requirement for retraining. However, there may be scope for refresher or similar training. The Department will be ready to arrange this where practicable in Government training centres or, alternatively, on employers' premises or in technical colleges. I know that a number of hon. Members have been greatly concerned about the position of apprentices. The Department has been in touch with the Engineering Industry Training Board about making provision for redundant apprentices.
§ Mr. McMaster
As my right hon. Friend knows, I am anxious about the position at Short Brothers and Harland. Can he, possibly through my right hon. Friend the Minister of Aviation Supply, give an assurance that, if the worst comes to the worst, the Government will consider ways of finding alternative employment for the 2,000 men working there on the pods of this engine, in view of the crisis situation in Northern Ireland?
§ Mr. Whitelaw
I fully appreciate the problem which my hon. Friend raises, if I may say so, very fairly. The position in Northern Ireland is extremely difficult. However, I prefer to deal with the point by suggesting that my right hon. Friend the Minister of Aviation Supply should speak to my hon. Friend about it.
I want now, in conclusion, to summarise the Government's position. Under the terms of the Rolls-Royce (Purchase) Act, the negotiations are continuing with the Receiver for the acquisition by the Government of the necessary assets of the aero-engine and marine and industrial gas turbine divisions of the old Rolls-Royce. The new board has been appointed, and it will be its purpose to run this part of the enterprise on a successful and expanding basis so that substantial employment will continue to be provided both by Rolls-Royce and by sub-contractors in this vitally important area of the old Rolls-Royce company's 670 operations. I can assure my hon. Friend the Member for Derbyshire, West and others who have raised the question about contracts and discussions with the trade unions that once the new board is in position it will, I know, carry out such discussions in the same careful manner that will have been adopted by the old Rolls-Royce company.
Secondly, the Government have made it clear that we should like to negotiate a new, workable and economically sound contract with Lockheed on the RB211 engine. We have stressed repeatedly that the figures which we put forward are not our last word but are negotiable, We shall also be ready to receive any counterproposals. But we shall not sign an economically unsound contract which, while it might buy off trouble in the short term, would only arouse false hopes and end in another disaster in the long run. As the right hon. Member for Bristol, South-East knows, such a course can land a company and the whole nation in grave difficulty and distress.
Thirdly, the Receiver is seeking to find a purchaser for the remaining divisions of the old Rolls-Royce, such as the car division. There is every reason to suppose that these divisions will prosper under new ownership and so continue to provide substantial employment.
Fourthly, where there have to be redundancies my right hon. Friend the Secretary of State for Employment is making all the services of his Department available for help in finding alternative employment.
Finally, I wish to assure the House and all right hon. and hon. Members who have taken part in the debate that the Government recognise fully the important points which they have put forward on behalf of their constituents and, where they have the power, will seek to take action as appropriate.
§ Mr. Paul Hawkins (Lord Commissioner of the Treasury)
I beg to ask leave to withdraw the Motion.
§ Motion, by leave, withdrawn