HC Deb 20 December 1974 vol 883 cc2058-67

1.30 p.m.

Mr. Hal Miller (Bromsgrove and Redditch)

I welcome the presence of the Minister of State, who has been particularly concerned with the subject of this debate throughout his period of office and to whose knowledge and experience the House will certainly join me in paying tribute. I thank him very much for delaying his recess to be present on this occasion.

It is fitting that the House should have this opportunity of debating the effect of the Government's actions on Norton Villiers Triumph before rising for the recess. During recent months there has been a considerable state of uncertainty about the future of this great concern, and puzzlement has been occasioned to hon. Members by the sudden withdrawal of an order from the Order Paper.

I should make it plain that my interest in this matter arises solely from my specialisation on the Industry Committee of the Conservative Party, to which I have the honour to belong, and an approach by some of my constituents who are employed at Norton Villiers Triumph. I assure the Minister that I was completely unaware when I applied for this Adjournment debate that the management of NVT would be producing its historical summary this week.

I am also pleased to have this opportunity of engaging the Minister in a debate, because I hope that he will elucidate some Parliamentary Answers which —I will not say that they were inaccurate —have certainly appeared misleading.

I make no party political point in considering this matter. I have no intention of raising the merits or otherwise of public ownership, of workers' co-operatives or of industrial relations problems. My intention is to explore the effect of the Government's actions on NVT, because I consider this matter to be an important illustration for us all of what happens when the Government—my remarks are addressed to Governments of both parties —intervene in the economy to pursue other than strictly economic objectives. I hope to illustrate that, in pursuit of those objectives, the Government—I am trying to choose unprovocative words—sink to methods and measures which, by normal standards, would not be regarded as acceptable and frequently achieve results opposite to those that they originally intended.

I speak with some experience, having been a civil servant in a department dealing with commerce and industry, of which I was deputy director for some years, and understanding the pressures on civil servants and their attitude towards industrial questions and the development of policy.

I think that I should begin the main body of my remarks by giving a short account of why Norton Villiers Triumph was set up by a Conservative Government under Section 8 of the Industry Act to save or to safeguard for this country valuable motor cycle exports of 40 million dollars and to preserve a great body of skills and design knowledge, to say nothing of an enthusiastic and talented work force.

It is ironic that the stated intention at that time was to procure an early and lasting solution to the problems of the motor cycle industry. That arose because of the failure of that great concern, BSA, which, in the last year of its existence suffered a loss of about £4 million at its Meriden plant. That led in the autumn of 1972 to the initiative to set up Norton Villiers Triumph in which the Government would invest on a 50 per cent. basis—I am giving broad figures— with the injection of nearly £5 million to produce 60,000 motor cycles a year from two factories. The alternative considered at that time was for three factories with an investment of £30 million to £40 million, which, it was estimated, would take six years to come into profitability. An announcement was made in March 1973, and Norton Villiers Triumph came into being in July.

Consequent upon industrial disputes at Meriden—I am trying to choose my words carefully—and the institution of a blockade following the announcement of the proposal to close the factory over a period of about one year, a proposal about which the company had consulted the Department and taken advice on how it should conduct itself, the company's immediate reaction—we must bear in mind that the company had nearly £5 million of public money invested in it— was obviously to protect the money of its shareholders, including the Government, and to seek legal redress for this position. However, it was subjected by the then Conservative Minister to considerable pressure not to take legal action. Indeed, it is surprising to read of the Minister threatening the company quite openly and saying, It will be worse for you if you do. That is an actual quotation from remarks addressed by the Minister to the company at that time. The hon. Gentleman is looking alarmed. That was a Conservative Minister. However, I have quotations from his right hon. Friend in very much the same sense.

At the same time the Minister announced that he would take over the negotiations with the Meriden leaders. Indeed, he conducted those negotiations in the Department and, by so doing, gave an appearance of legality and status in the eyes of the public to those with whom he was negotiating. We should also bear in mind that the Minister was acting as a shareholder, although he was overruling the board which was attempting to represent the interests of all members of the company.

Therefore, to my mind there was a considerable departure from the standards of behaviour to be expected of Ministers, and we were entering an area of confusion about the operation of the Department, of shareholders, and of the board. It is partly for that reason that I have sought this debate.

I am running short of time, so I will move on to the Labour Government. There have been a number of misleading public announcements on the subject of this co-operative. I refer only to a Press release of 29th July issued by the Department setting out the proposal to make a grant to the co-operative and containing the phrase: under the present pattern of industrial organisation there has been a failure to recognise the interests of the labour force in running the business. This accounts for much of the friction between management and workers, and seriously reduces the ability of industry to achieve efficiency and productive capacity. There is no evidence of such friction at Small Heath or Wolverhampton. I consider that to be a thoroughly misleading announcement, just as I do the replies to which I have referred that I was given in the House about whether conditions had been imposed on the National Research and Development Council's grant or on export credit guarantees. The information was distinctly misleading, bearing in mind that I had evidence in letters from the company, in a letter from the right hon. Gentleman, in a letter from a trade union and in depositions by my constituents—some of the shop stewards involved in the discussions—that the grant was withheld until an agreement had been reached on the establishment of the co-operative. Indeed, one of the shop stewards at that meeting used the words "This is blackmail ", to which the Secretary replied, he informs me, that that was not a word that he liked but that was the position.

Apart from these improper pressures, there have been considerable delays. The House needs only to reflect that NVT was set up in July 1973 and we are now approaching January 1975 to realise that that is so. We still have no solution. Two years of exports have been lost. From Meriden alone that would be nearly 35,000 machines a year, never mind from the rest of the Norton Villiers Triumph plants.

There have been changes in policy following the change of Government, but that makes it no better from the point of view of the company, the enterprise, the work force or the management. There have been changes between the three-factory and the two-factory ideas. We understand from an announcement in the newspapers today that the Government are once more considering going back to three factories and a larger measure of public ownership. I think that is now plan 8 in NVT's history.

The result of these changes, delays and administrative pressures on a company in which the public already own 50 per cent of the investment is a loss of £0.5 million on duplicating the tools blockaded at Meriden, and a loss of £1 million in interest charges on the assets of that factory, for which it received 33 inquiries from other firms willing to acquire the premises. The losses now amount to about £3 million in this company in which there is public money, and these losses have only just begun because the company is losing its exports over the next year and is unable to finance its production.

The lesson that I draw from this is that the Government must have regard to the means as well as to the ends. They must try to reach a decision with reasonable rapidity and adopt a consistent and continuing policy. We hear so much about accountability, yet the Government have recently been acting in contradiction of the advice of the Industrial Advisory Board and have not come to the House to explain their policy.

1.44 p.m.

Mr. John Stanley (Tonbridge and Malling)

The House will be grateful to my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) for giving us a belated opportunity to consider the situation at Norton Villiers Triumph and Meriden.

I shall be brief. I ask the Minister of State to take careful note of the fact that the House has been treated in an extraordinary way in the lack of information that has been made available to us about the Government's policy towards this industrial situation.

I believe I am right in saying that the last formal ministerial statement to the House was by way of a Written Answer on 29th July, since when there has been no statement of Government policy. All that we have had is a Notice of Motion on the Order Paper every week from the beginning of this Parliament to increase the amount of public money to be provided under Section 8 of the Industry Act by about £8 million. It must be one of the longest-running Notices of Motion before an opportunity is given to debate the motion, and it is significant that it is still staring us in the face during the last few hours before the Christmas Recess begins.

My hon. Friend highlighted one point with which we should like the Minister to deal. Is it still the Government's policy to try to pursue the three-factory solution, or do they accept the two-factory solution? What choice do the Government intend to make? The three-factory solution requires public expenditure of £30 million to £40 million, and it will take at least six years before there is any profitability from that investment.

The two-factory solution, on the other hand, requires expenditure of just under £5 million, which was made under the previous Conservative Government, and that was postulated on the basis that there would be profits by the end of year 2. There is a clear commercial choice, and we want to hear this afternoon what choice the Government propose to make.

1.46 p.m.

The Minister of State, Department of Industry (Mr. Eric Heffer)

I first thank the hon. Member for Bromsgrove and Redditch (Mr. Miller) for being so kind as to talk about my industrial experience. It has not perhaps been on the managerial side, but at least it is recognised as having been fairly vast on the other side of the fence. It is a good thing if Ministers have some industrial experience, on whatever side of the fence they find themselves.

It is nice to hear an hon. Member express appreciation for my staying here when everybody else has gone, but that is also true of the hon. Gentleman. It is important that he has raised this matter and that we are having a debate about it.

The hon. Gentleman rightly said that the Government inherited this situation. If I may make a personal point, it is that a document issued by the company talks about my having chaired innumerable meetings. That is not true. I sat in at two meetings. The matter arrived, as it were, "plonk" on our desk. We realised that there was a difficult and longstanding problem that had to be solved, and we set our minds to endeavouring to solve it in the quickest possible way.

The hon. Gentleman drew attention to the fact that much of this took place under the previous Conservative administration. I am not prepared to enter into criticisms or make statements of any kind about what happened under the previous Tory Government, and certainly not about what Ministers may or may not have done, or what others may or may not have done. It would be wrong of me to say anything one way or the other because I was not there, nor was any other Labour Minister present at the discussions that took place at that time. All we have are the statements by people on both sides of the fence who were there.

I thought that there were difficult problems in the world until I met this one. Meetings seemed to go on and on. Information was given from all sides which Ministers who were trying to sort out the problem found it difficult to clarify. We have tried to do our best, and we finally came up with the three-factory solution. Even at this moment it could be accepted, but it has not been accepted. One problem is the understandable feeling among other workers that Meriden might affect their employment. We have been considering the situation in the light of the feeling of the work force in all three factories.

Mr. Stanley

I take it that that means that Government policy is a three-factory solution and that, therefore, they have accepted that there will be a substantial public sector capital injection, which will approximate to the previous estimate of £30 million to £40 million.

Mr. Heffer

The Government, after general discussion, proposed the support of the Meriden co-operative. We always said that there would have to be the fullest discussion with everyone concerned in Meriden, Small Heath and Wolverhamp-ton. My right hon. Friend met the other workers and found some disagreement among other sections. He met the CSEU this morning and received a statement agreed last Monday between the workers at all three factories with a view to resolving their differences. I should have been at the discussions had I not been at the House, but I am told that they were helpful. My right hon. Friend has agreed to let the CSEU have his formal comments on the statement as early as possible.

Mr. Hal Miller

Could the Minister give us an assurance that the Small Heath stewards in particular were completely reassured that Government backing for the three-factory system would not lead to a loss of employment at Small Heath or threaten the planned expansion of output there? They have been on short time for a long time.

Mr. Heffer

The Government are deeply concerned that we should have a viable motor cycle industry. It is regrettable, but our industry could be put in a small corner of the Japanese motor cycle industry. In the past, some time ago of course, we led the way, and we believe that we still can lead.

Mr. Hal Miller

This was one of the concerns that I did not have time to express. The shelving or conditioning, whichever word we are trying to use to be neutral, of the NRDC grant, originally by a Conservative Minister but continued by a Labour Minister, has led us into the grave danger of losing our technological design lead and not being able to keep the Japanese out of the big bike market. That is one of my great objections to the present situation.

Mr. Heffer

The fact that the grant was temporarily deferred or held back while the Meriden and other discussions went on in no way affects future development. We are trying to maintain a viable British industry. On the evidence given to us and the discussions that we have had, we believe that there can be a good, healthy industry with Small Heath, Wolverhampton and the Meriden cooperative. We believe—this is why we are discussing the position again with workers from the three factories, the unions, the NVT management and the cooperative—that a healthy and viable industry is possible.

It is regrettable that it has taken so long to solve this problem. The hon. Member for Tonbridge and Mailing (Mr. Stanley) made something of the fact that a motion had been on the Order Paper for a long time. We should have liked to solve the matter within two weeks of taking office, but there was a long history, which usually means that a long time afterwards is taken up in sorting the matter out and getting it right. We believe that we are working along the right lines, trying to solve the problem sensibly and intelligently.

I do not have time to deal with all the points raised; in fact, I have not dealt with any that I intended to mention. But anyone who wants to understand the complications should read the document issued by the company, which is interesting reading. We have not had time properly to study it and weigh it up, but there is no question that the matter has been complicated. We want to settle it as early as possible. I have a great deal of information that I should have liked to bring out but time and constant interruptions do not allow me to do so.

Mr. Stanley

Is it the Government's view that, in going for a viable motor cycle industry on a three-factory basis, public expenditure will be required of £30 million to £40 million, which is unlikely to show a profitable return for at least six years?

Mr. Heffer

The hon. Member must not try to draw me into accepting positions until all the discussions have taken place. The matter is still being discussed. Obviously, we cannot at this stage give any concrete answers to the points that the hon. Gentleman has raised. No one would know exactly how much finance would be required. All that I can say is that, based upon the discussions which have taken place this morning, moves are going ahead to try to get this matter resolved at the earliest moment.

I think that the hon. Member for Bromsgrove and Redditch said that we owned 50 per cent. of the shares in NVT. That is not true. We certainly have a shareholding in it, but not 50 per cent.