§ 12.11 a.m.
§ The Secretary of State for Industry (Mr. Anthony Wedgwood Benn)
I beg to move,That this House authorises the Secretary of State to pay or undertake to pay by way of financial assistance under Section 8 of the Industry Act 1972 in respect of the business carried on by Norton Villiers Triumph Ltd. sums exceeding £5 million but not exceeding £12.872 million.First I will deal, as a courtesy to the House, with some points raised on points of order over the last day or two by the hon. Member for Henley (Mr. Heseltine), in order to put them entirely out of mind.
The motion was tabled on 4th November and it was done because, at that time, agreements between Norton Villiers 1670 Triumph and the co-operative were nearing completion, but there was anxiety among the workers at Small Heath which led to delay. That delay was cleared by discussions which I shall deal with in the main body of my speech, but as we moved into the New Year, NVT appeared to be nearing the limit which would be required to maintain its production for export.
The points of order raised by the hon. Member for Henley were, as usually is the case, wholly spurious in character, because NVT drew our attention to this matter over a period in a series of letters to me, and then, last week, when I saw them I drew the attention of my colleagues to the need for this motion to be debated urgently. My right hon. Friend the Leader of the House, as I made clear in the House two days ago, was anxious not to have the motion coming on at a time which was inconvenient to the House and I therefore spoke to him on Monday, as I have said to the House. The motion was put down for debate tonight. That is the basis on which it has been brought forward.
It is not uncommon, as the hon. Member for Henley will know, for a Minister with industrial responsibilities to have to 1671 urge that a debate should take place at a time not of general convenience to the House.
§ Mr. Heseltine (Henley)
Of course, we fully accept what the Secretary of State has to say, but as he phoned the Leader of the House on Monday morning why was it not possible for the House to hear about the business that afternoon?
§ Mr. Benn
I am describing to the House the events—[HON. MEMBERS: "Answer."]—I am describing the negotiations I had with NVT and my contact with my right hon. Friend about the need for the motion to be debated this week—[HON. MEMBERS: "Answer."]—That is the position. If hon. Members of the Opposition showed any interest in the industry we are discussing instead of trying to make political capital, the House might make further progress. There has not been a single intervention by the hon. Gentleman or any of his hon. Friends that has shown that they have any concern whatever either for the jobs of the people in the industry or, indeed, for the future of the industry.
§ Mr. Fraser
The only point my hon. Friend was raising is that the right hon. Gentleman showed no interest in the convenience of this House.
§ Mr. Benn
That is wholly untrue. The order was tabled in November. For the reasons I have given, which are part of the account that I shall be giving in support of the motion, it was necessary for the order to be debated this week. That is manifestly clear. The point I was making, to which I adhere, is that hon. Members of the Conservative Party, throughout the whole of this story, have been principally concerned with what they wrongly believe to be some political advantage accruing to themselves, and not with the industry that we are discussing.
§ Mr. Benn
No, I shall not give way to the hon. Gentleman, because he has 1672 proved by countless interventions that he is not concerned with the issues that the House is actually debating.
The motion before us tonight is to allow a guarantee for £8 million for NVT, needed to finance its export stock. NVT markets in the United States about two-thirds of its output. The United States market for motor bikes is seasonal and requires an adequate revolving fund. The borrowing level is dependent first upon the level of production and export, and runs at about half the annual rate for export. The banks need an ECGD guarantee or cover for this work, and owing to the uncertainties that there have been surrounding the industry the United States cover, or some of it, has been withdraw, and NVT needs now an extra export guarantee to the extent of the motion before us.
This is the first time that the Industry Act, which we inherited from the previous Conservative Government, has been used to provide a guarantee for exports. The motion is that under the 1972 Act we should provide the necessary guarantees. I might add that though there is a connection—to which I shall come shortly—between the NVT and Meriden position, this is a motion to permit export finance to be made available for NVT itself and not for Meriden as such.
Of course, I only have to remind the House that the support for NVT was made available not by the present Government but by the previous Conservative Government, when under the same section of the Industry Act they made available, and announced nearly two years ago, £4.872 million for the merger of Norton Villiers with part of BSA to produce NVT. One of the intentions behind that merger was to push up production and exportst, and it is these exports that I a mahking the House to support with this motion tonight. That should be made absolutely clear.
I do not know what hon. Members will do at the end of this debate, but I must make it absolutely clear that if the motion is defeated by the House, that defeat will have the following immediate consequences. Anyone inclined to vote against the motion must vote against it conscious of what he is doing.
1673 First, it will mean a shrinkage, a major reduction of exports by NVT—set up by the Conservative Party when it was in power. That would be the first consequence of defeating the order.
Second, it would mean that there would be lay-offs in Birmingham and Wolverhampton in NVT, which would be capable of producing for export but would be denied the necessary export guarantee under the Industry Act. Thirdly, because this is connected with the Meriden arrangements, the availability of money under the Meriden arrangement, to which I shall refer, would not be available for NVT as part of the sale of the assets. In effect, a vote against this motion tonight would do grave damage to the British motor cycle industry
§ Mr. Tim Renton (Mid-Sussex)
The right hon. Gentleman has just used the words "United States cover has been withdrawn". Could he tell the House what that means and why this cover has been withdrawn?
§ Mr. Benn
I have dealt with that, but I will amplify it if the hon. Gentleman requires me to do so. Some of the cover that had been available for NVT in the United States—nothing like as much as is now being provided by this motion—was withdrawn owing to uncertainties not unconnected with the events of Meriden, to which I shall be referring. If the hon. Gentleman wants me to read the account by Mr. Poore of the handling of the Meriden matter by the previous Government, I shall be happy to do so. It is not my wish to go into that chapter because I am carrying forward logically support of NVT initiated by the party opposite when they made their initial arrangement.
Now I come to the linkage between NVT and Meriden. My right hon. Friend the Secretary of State for Trade answered a Question this afternoon about the export provisions for Meriden. This is not covered by this motion. It is being covered under separate arrangements which he announced. But in order to sign agreements, which we hope will be signed tomorrow, between Meriden and NVT, which will bring into production a greater productive capacity for British motor cycles and exports, it is also necessary that this guarantee to NVT made 1674 available in this motion should be granted by the House.
§ Mr. John Stanley (Tonbridge and Malling)
Would the Secretary of State say why the Export Credits Guarantee Department has made available £6 million in the way of export credits to cover the output of the Meriden factory which is not producing, whereas export credit guarantee finance has been denied to NVT which is producing?
§ Mr. Benn
My right hon. Friend the Secretary of State for Trade dealt with ECGD cover for Meriden in his statement this afternoon. The party opposite made support available for NVT below the £5 million limit. Therefore, the House has never had an opportunity until tonight of debating the support for NVT. We thought it right that if £8 million was to be provided in export credit for NVT, it should be added to the £4.872 million that had been provided by the previous Government and that the House of Commons should have an opportunity of discussing the matter. By doing it in this way—the motion which I have tabled makes it absolutely clear—the £8 million is added to what was given by the previous Government, bringing the amount up to £12.872 million in total. We thought it right that the House should have the opportunity of not merely debating it on the Adjournment but of considering it and deciding it, if necessary—although I hope it will not be necessary—in the Division Lobby tonight.
§ Mr. Heseltine
The Secretary of State has misunderstood my hon. Friend's question. The question was this. Why is it necessary for the Government to provide £8 million worth of export credit for NVT whereas the finance for export credit for the co-operative at Meriden can be raised from normal commercial export credit sources?
§ Mr. Benn
But ECGD is a Government agency—[HON. MEMBERS: "Answer."] I have answered the question quite clearly—[HON. MEMBERS: "No."] Hon. Members must contain themselves. By carrying out this procedure under the Industry Act the House of Commons has had an opportunity of discussing not only the NVT export credit, but the support that was given by the Conservative Government to the 1675 company. If there are any further anxieties or questions my hon. Friend the Minister of State will deal with them in winding up the debate. I have explained, therefore, why, as responsible Minister, I urged that the procedure should be carried out under Section 8(8) of the Industry Act.
§ Mr. Heseltine
Will the Secretary of State confirm that the ECGD office did not refuse to grant this cover which is now being permitted under the Industry Act?
§ Mr. Benn
The hon. Member must recognise that in reaching decisions of this kind responsible Ministers take decisions—[HON. MEMBERS: "Answer."]—and then have to defend them in the House of Commons. What the hon. Member has been trying to do throughout his year on the Opposition Front Bench—[HON. MEMBERS: "Answer."]—has been to shield behind official advice and pretend that Ministers can only produce the advice that their officials gave them—[HON. MEMBERS: "Answer."] As the Secretary of State I thought it right to bring this matter forward under the Industry Act and to defend my—[HON. MEMBERS: "Answer the question."]—action in the House of Commons.
§ Mr. Deputy Speaker (Mr. Oscar Murton)
If the right hon. Gentleman does not wish to give way he cannot be pressed beyond a certain point.
§ Mr. Benn
I have answered the question put to me—[HON. MEMBERS: "NO."]—about why I thought it right to bring forward the guarantee under the Industry Act and in that way permit the House to debate NVT's initial support and the export credit guarantee. Under Conservative legislation the House was never permitted to debate the NVT merger. It involved a sum of under £5 million which was announced to the House but was never discussed by the House, and therefore early problems arisings from Meriden, which are fully described in the booklet Mr. Poore has written, were never brought to Parliament.
I now come to the situation which was created by the Government's decision to support NVT. Since so much is made of this perhaps I might refer to what Mr. Poore said about the arrangements made with the Conservative administration. I cannot vouch for it because I have no access to the papers. On page 7 Mr. Poore says:The proposed procedure for announcing the closure was explained to the Industrial Development Unit, who confirmed once more that the company should proceed with the plan as previously agreed and the Department would take care of any political repercussions should they arise.That is to say that it now appears, but was never made clear at the time, that the Government told Mr. Poore that he could close Meriden and Ministers would take responsibility for the political repercussions. [HON. MEMBERS: "Shame."] On page 14 Mr. Poore continues:The company was surprised to learn that the Minister was adamant that there should be no recourse to the law and that he, the Minister, would now see what he could do. It appeared later that he had been under considerable pressure from the Department of Employment not to allow the use of any force at Meriden and had been told that the pickets would be able to mass up to 5,000 supporters from the other factories in Coventry who would arrive on the site in coaches within the hour if there were any signs of the use of police!If Mr. Poore's account is correct, first Ministers say "Leave the political repercussions to us" and then, when it discovers that the men at Meriden are serious and have support, the Department of Employment says "Don't do anything by recourse to the law", because of the degree of support.
1677 The story continues at page 19:the NVT directors were, not unnaturally, loth deliberately to go against the express wishes of a Minister of the Crown, although Mr. Poore tried, unsuccessfully, to impress on the Minister and his officials the danger of the course NVT was required to adopt.Then we read on page 20 thathigh level pressure from the DTI continued to insist that the company must resolve the matter exclusively by negotiation. The words, 'It will be the worse for you if you do' were used when the possibility of recourse to the courts was brought up.I am not confirming what Mr. Poore has said. What I am saying is that he is telling the House, through the pamphlet, that it was the Government that encouraged the closure of Meriden, then said "Leave the political repercussions to us", and afterwards engaged in this secret pressure, which was never reported to Parliament. That was the situation when we inherited the matter last March.
§ Mr. Benn
I am dealing with the Opposition Front Bench.
The hon. Member for Henley was a Minister in the Department of Trade and Industry throughout the period. He had no comments to make then on this basis. He never disclosed to Parliament what pressure was being put on Mr. Poore by the DTI. He never told the House that the arrangement to close Meriden had in a sense been cleared by the Department. He never told the House that he and his colleagues in the Department of Trade and Industry had told Mr. Poore not to worry, because the Government would deal with the problem.
§ Mr. Deputy Speaker (Sir Myer Galpern)
Order. The hon. Member for Henley (Mr. Heseltine) knows full well 1678 that if the Minister does not give way he must resume his seat.
§ Mr. Heseltine
On a point of order, Mr. Deputy Speaker. I believe that it is the convention of the House that when an excessive personal attack is launched on a Member he may be allowed at least, as an act of courtesy, to question the remarks being made about him.
§ Mr. Deputy Speaker
The hon. Gentleman will have an opportunity to take part in the debate. It is entirely a matter for the Member who has the Floor whether he gives way. My only appeal to hon. Members is to put a silencer on the exhaust.
§ Mr. Benn
The hon. Gentleman had better wait until I complete what I shall say about him. He will have a chance to follow me in the debate.
I am putting on record that on the basis of the information that Mr. Poore has made available to the House through his pamphlet it becomes clear if the pamphlet is correct—and I cannot vouch for it—first, that the Government supported NVT on the basis of the closure of Meriden; secondly, that they told Mr. Poore that they would deal with the political consequences of the closure of Meriden; and, thirdly, that when Mr. Poore sought to take action through the courts they told him not to do it. All that happened without any report to Parliament.
§ Mr. Deputy Speaker
Order. Let us get on. I ask the hon. Member for Wolverhampton, South-West (Mr. Budgen) to resume his seat.
§ Mr. Benn
We have a three-hour debate, and I am sure that other hon. Members want to speak. That being so, I shall leave behind the past and turn to the present.
The present position is that NVT and the co-operative have almost agreed—and I hope that tomorrow an agreement will be completed—the asset sale for the Meriden site and a product sale, plus a 1679 marketing link. At a time when the world market for motor cycles is buoyant, that will increase Britain's capacity to produce motor cycles and to sell them abroad. It would be lunatic if the House were to prevent the expansion of that capacity at a time when there is a capacity to produce. The men are ready to produce and the market exists. The Meriden plan is a serious plan and the proposal for a co-operative is one that I strongly recommend to the House.
I now turn to another issue that has been raised by Conservative Members about the view of the Industrial Development Advisory Board. I have been candid throughout in describing the discussions on these matters, and it is the case that the board opposed the proposal for the Meriden co-operative. I said in the House in answer to questions, and I say again, that the board appointed by the previous Government with a job of work to do made a recommendation against the Meriden co-operative, and that the Government, having considered that recommendation, decided that the views of the board could not be decisive. On 29th July I announced in the House that we were ready to support Meriden with £4.95 million—namely, £750,000 in grants and the rest by way of a loan. The overwhelming majority of that sum—that is around £4 million for the co-operative—will go to NVT as a purchase for the factory.
The House will also know that the workers at Small Heath were anxious lest they might be victims of the scheme. I went to Birmingham on 8th November. My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) and my hon. Friend the Member for Birmingham, Small Heath (Mr. Howell), in their constituency capacities, were very much concerned. The Small Heath workers expressed their anxieties to me at that meeting arising out of the past history of the industry. It was only after the Confederation of Shipbuilding and Engineering Unions had come in and called together representatives of the Wolverhampton, Birmingham and Meriden sites that we were clear to go forward with the passage of this measure.
At one time this country had 60 per cent.—
§ Mr. Reginald Eyre (Birmingham, Hall Green)
What the work people in Wolverhampton and Birmingham do not understand about this matter, and particularly in terms of the right hon. Gentleman's visit to the factory at Small Heath, is why the necessary measures of finance which have been discussed this evening were not brought forward much earlier, in view of the intense anxiety that developed about employment which has worsened over the months of delay.
§ Mr. Benn
I do not know what conclusion the hon. Gentleman will draw. I would tell him that I had discussions with the representatives of the workers at Small Heath on this matter as early as June of last year. It was I who gave a pledge that I would not go ahead with this proposal if there were objections from the Small Heath work force. I went to Small Heath personally to satisfy myself as to their views. There was no doubt of the anxieties forcefully expressed to me.
Following that, I took the opportunity to try to get to the bottom of their anxieties and I called in the unions and then met the stewards from the three plants. I hope that the hon. Member for Hall Green will believe me when I say that if I had not been serious in my concern for the anxieties of the Small Heath people, this Meriden co-operative might have come forward many months ago. I think that that is accepted and understood by the Small Heath workers.
Of course I have had representations from them about their anxieties for the future and about their desire for a three-plant solution under public ownership. I have not been able to do more than to say to them that of course any proposals that come forward will be considered. But I believe that the way in which we have handled these matters has shown a proper sensitivity for the legitimate anxieties of the workers in Birmingham. I cannot say more than that.
I was saying that at one time this industry employed 8,500 people and had 60 per cent. of the market in the United States for the superbike. It now employs 2,500 and has only 20 per cent. of the market for the superbike. Without putting blame on anybody, for I see no virtue in that, I believe it to be a great tragedy 1681 that this country, which had such a fantastic reputation for motor cycle production and export, should have found itself, for a variety of reasons into which I will not go now, progressively driven out of that market by the Japanese and others. We intend to go back in with the Meriden production. That is our view. The Government are now engaged in further studies of the development of the market world-wide and the extent to which we can fill it.
However, I cannot finish without saying one word about the workers at Meriden who have now been on the picket lines since 14th September 1973, in my judgment victims of a foolish decision taken by the previous Government at the time they launched Norton Villiers Triumph. They have waited for many months and have worked out their scheme and come forward with a scheme that the Government can support.
I genuinely believe that the contribution made by these people to the industry in which they have lived and worked merits the close attention and admiration of the House of Commons. Whatever may be said by Opposition Members about the Government as a Government, I cannot believe that they will fail to recognise that the workers at Meriden have been attached to their industry and want to see it succeed.
If there is a vote tonight against this motion, it will be a vote against employment in an industry for which there is a market and against even the NVT merger that the Opposition promoted. It will be another fatal blow against the British motor cycle industry, which over the years has suffered from the Conservative Party and from the economic philosophy to which it adheres.
§ 12.45 a.m.
§ Mr. Michael Heseltine (Henley)
As one thinks of those workers on the picket lines at Meriden who have such faith in this project, one wonders whether the faith of the 150 who stayed is not to be compared with that of the 1,600 who took off and got jobs in the neighbouring factories.
It is perhaps indicative of the anxiety that we on this side of the House have about the whole conduct of the Secretary of State for Industry's approach to his responsibilities that he can come to the 1682 House tonight and tell us that it is his purpose that we should have an opportunity to debate this whole issue of the motor cycle industry and, therefore, he has contrived, as I understand it, a motion which enables us to examine the export credit finance facilities for Norton Villiers Triumph. It is a curious contrast that he managed to contrive that the £4.95 million for the Meriden co-operative under Section 8 of the Industry Act was £50,000 below the limit at which he would have had to come to the House, and he managed to get away without opening up the matter as he has done on this occasion.
There was a fascinating insight into constitutional history when we heard that I was supposed to have come to the House as Minister for Aerospace and Shipping, and I was supposed to go to the national Press to leak to every meeting I happened to attend the things that my colleagues were doing in full, collective Government responsibility. I wonder how many other members of the present Government really believe that it is the duty of Ministers who hear what their colleagues are doing incidental to their own responsibilities to reveal that information to the Press and to Parliament despite the vows of secrecy that every Minister takes when he enters the Government.
The reality, of course, is that there is one Minister who believes that that is the responsibility of a Minister of the Crown. Do not take my word for that, Mr. Deputy Speaker. Take the quotation from the late Mr. Crossman's diaries in which he said that he used to have a high regard for the Secretary of State for Industry until he discovered, every time he was going to a meeting of the Cabinet or of a Cabinet Committee, that the whole of the case that the Secretary of State for Industry was going to plead had been leaked to the Press in advance. If Mr. Crossman's diaries want vindication tonight, they have had it from the Secretary of State for Industry.
The matter we were discussing at that time was the establishment of the IDAB, the board which was set up to advise in all humility the Secretary of State for Industry about his responsibilities in this matter. All that it had to do was to give advice: it expected to be consulted. We are told that the House has been fairly treated—"wholly candid" was the phrase 1683 used by the Secretary of State for Industry.
I remember, when the House had adjourned for Christmas and the Parliamentary Press had more or less given up its duties for the Christmas Recess, hanging around the Lobbies and telephoning the Secretary of State's office asking for the Kirby Report to find out what the protest of the IDAB had been. Is that being wholly candid with the House?
In reality, the final act of either delusion or deception was the suggestion that the co-operative could have gone ahead earlier if the Secretary of State for Industry had not cared about the workers in NVT. If the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) had told us this I would have listened with care and attention. He knows, however, that the workers in the Small Heath and Wolverhampton works of NVT would have stopped any attempt to sell the Meriden bicycles through NVT unless their agreement had been achieved. It was not in the hands of the Secretary of State for Industry to go ahead with the co-operative until that agreement had been reached. It was because he fundamentally misjudged the resistance of the right hon. Gentleman's constituents that for 12 weary months this matter has dragged out without coming to the House of Commons.
Let me come to the speech which the Secretary of State for Industry contrived to put into my mouth before I made it. He tries to suggest that if we vote against the motion tonight—
§ Mr. Heseltine
I assure Labour Members that I shall not disappoint them. I simply want to lead logically along the lines to the point to which the Secretary of State for Industry tried to steer my speech.
Now, at ten minutes to one o'clock, on the last day on which the money has to be made available, we are told that we have no choice but to make it available. That is supposed to be the full process of parliamentary consultation and the full involvement of Parliament in the scrutiny of taxpayers' money—something which we cannot refuse. Is that the way in 1684 which the Government believe that the full parliamentary processes that we used to hear so much about from the Secretary of State for Industry should be made effective on the Floor of the House?
I understand, of course, that if help is not available for NVT within the next two or three days, or the next week or so, there would be calamitous results for the employees in that company. I say at once on behalf of the Opposition that we shall give every parliamentary support to a sensible, practical use of the powers of the Industry Act 1972 to make such cash available to NVT to ensure that no man in that factory is made redundant and so that we may have the time to sort out the mess in which the Secretary of State for Industry has landed us.
The issue ceases to be one of redundancy. There is no question but that the responsibility for the present clamitous state of NVT lies with the Secretary of State for Industry. It must follow, just as it did with the Court Line travellers, that the Bill has to be paid by the Secretary of State. The motion does not simply provide export credit for NVT. It is an instrument by which NVT is subjected to the will of the Government to enter into contractual arrangements with the Meriden Co-operative.
The full cost of this exercise is being deliberately hidden from Parliament by the Secretary of State, both as to the amount involved and the extension of public ownership. The whole process of the past 12 months has brought NVT to a stage where the only practical solution for the company is a degree of public ownership.
The motion was first published on 5th November 1974. Why has it taken four months to come to the House? What possible justification is there for that delay in providing export credit finance? The explanation is that the Secretary of State would not provide that finance until he had persuaded NVT to enter into an agreement to sell the bikes to the co-operative. In other words, the Secretary of State pressurised NVT against its commercial judgment.
Why has the matter become so urgent tonight, after all the 'phone calls, after letters of warning and endless discussions 1685 —why so late at night when the national Press is not here to report what is going on? [Interruption.] Hon. Members know as well as I do that the amount of space left in Fleet Street editions at this time of night is limited. The reality is that the agreement was held up until the Meriden agreement was signed. All the assurances given by the Secretary of State to the contrary are phoney.
If that is not the case it is worth asking whether the right hon. Gentleman wrote to his right hon. Friend the Minister of State for Foreign and Commonwealth Affairs saying that he wished to give a general assurance that nothing in the Government's readiness to support the co-operative had been intended to act to the detriment of the workers at Small Heath. Did he write that and, if he did, how does he square that with the four months' delay that has taken place in bringing about the one thing the workers in NVT wanted, which was the security that came from the export credit guarantee?
It was not simply the use of the export credit finance order that the Secretary of State used to put pressure on the management of NVT. There was the question of the grant from NRDC, applied for by the NVT board to develop a new engine for its motor bikes to strengthen the job prospects of the workers in Wolverhampton and Small Heath. As we have had the "Blue Book" quoted already I will quote from page 27. The House will probably be familiar with the words, when the Chairman of NVT describes the meeting he held with the Secretary of State. He says that the right hon. Gentleman:confirmed that he had been deliberately withholding approval to the proposed NRDC contract in order, as he put it, 'to have something in his corner during the negotiations'. NVT was shocked by this apparent attempt at coercion by an action which was so contrary to the vital need of the industry to develop new products quickly to meet Japanese competition, which was supposed to be one of the Secretary of State's prime concerns.
§ Mr. Heseltine
If the words in the "Blue Book" are open to question as being the opinion of a partial adviser, may I ask the Secretary of State whether he wrote to his right hon. Friend the Minister of State a letter in which he said:The arrangements for research assistance will stand and will continue when the Co-operative has been launched.Did he then, in his own handwriting, go on to say:Once NVT and Meriden reach agreement, Part III of grant quickly available.Did he write that letter? [HON. MEMBERS: "Answer."] Did that lead the Chairman of NVT to write to the Minister of State a letter on 11th September in which he said:The stewards"—constituents of the Minister of State—have received (I understand from you) an additional communication which indicated that the bar to the NRDC assistance to NVT, which has been described as blackmail, would continue until the Meriden transaction has been legally completed.Yet against this background did the Secretary of State for Industry write a letter on 6th November to the convener of the shop stewards at the Small Heath Works? Did he say in that letter:I can, however, give you the firmest assurance that there will be no discrimination by the Government in favour of the Co-operative"—[Interruption.] It is fascinating to listen to Labour Members when the trade unions are treated with such cynical contempt. When the Secretary of State takes such a view, Labour Members only laugh. In reality, the solidarity of the Left wing of the Labour Party here tonight is more important than the jobs of the workers concerned. That is the first criticism of the motion.
The second criticism is that Parliament—[Interruption.]
§ Mr. Deputy Speaker (Sir Myer Galpern)
Order. The House has until only 3 a.m. to discuss this matter. If hon. Members keep yelling at one another, they will become completely exhausted. A large number of hon. Members wish to take part in the debate. Surely we can conduct the debate in a civilised fashion.
§ Mr. Heseltine
The second criticism of the motion is that Parliament has been consistently misled since the Secretary of State for Industry started off with the process of creating a workers' co-operative. He clearly explained on 29th July that the co-operative would not be given more than £4.95 million. When he was questioned by my hon. Friend the Member for Tonbridge and Malling (Mr. Stanley) on 28th November, the right hon. Gentleman said that that figure still stood. In reality since that time Parliament has not had the opportunity to probe the matter at all in depth because of action by the Secretary of State. Help to the co-operative was kept below the line so that it could not be probed. But the £4.95 million, which is supposed to be the ceiling above which support was not to go, has been added to. A figure of £8 million is being provided by way of Government support in the way of export credits. In addition, there was the original £5 million given to the motor cycle industry under the previous Government. We are told that a further £6 million will be provided by export guarantee to the co-operative at Meriden. Again, in addition, a further £15 million will be necessary to attempt to make sense of the scheme which the Secretary of State for Industry is now considering.
Why tonight are we not being told about the full financial implications of the commitment? If the Secretary of State for Industry is seriously saying that Parliament is in full possession of the information without making a judgment, he must tell us about the document which is in his hands known as "Plan Y"—a plan which sets out in detail why it will require a sum of £15 million before this industry can be brought anywhere near viability in the next five years.
If Government supporters doubt that, I shall quote the letter written by the Secretary of State for Industry. In writing to the convener of the Small Heath Works, Mr. Checkley, on 6th November 1974, having been asked what the long-term future of the industry was, he said:You will appreciate, however, that I am not today in a position to give you firm undertakings about possible investment on the basis of the long-term plan just presented by the management of NVT. … Moreover, I can further assure you that I shall make every 1688 effort to see that new plans suggested by NVT are examined urgently.That was four months ago.How can the Secretary of State for Industry say that he is not in a position to tell us anything about the additional £15 million, which he knows is totally and irreconcilably associated with this provision? The House has not been told the facts, and it is not in a position to make a judgment.
The third area of concern is that the way in which NVT has been treated over the past 12 months has brought that company to a position where it is not able to raise export credit finance because it is now so financially weak that it is not able to attract the support of the normal export credit organisations. That is why they turned it down. That is why the motion is being introduced by the Secretary of State.
There is no point in trying to suggest that some sudden crisis has overtaken the company. The Secretary of State has been warned over the months, and by letter in the last fortnight, of the impending collapse of the company. The company will collapse because the Secretary of State has made it impossible for it to obtain its assets which are tied up in the Meriden operation and without which it is not able to meet the working capital requirements or the levels of production needed to make the factory viable.
We have three main criticisms of the motion. There is a deliberate attempt to squeeze NVT into accepting the co-operative. That has left NVT with no alternative since it is financially too weak to turn elsewhere. Parliament has been deliberately excluded from access to information upon which a realistic assessment could be made.
If the House wishes to understand our anxieties over the coming Industry Bill, hon. Members have only to listen to the words used by the Prime Minister on Merseyside to describe our fears, and then to compare the way in which those fears have materialised in practice in the hands of the Secretary of State for Industry. It was said that there would be an all-powerful Cabinet, the Treasury, and Sir Don Ryder. But where were all these instruments of control while these activities were going on? Why are no Treasury Ministers present to explain 1689 where they were when this matter was being debated?
The Secretary of State for Industry deceived his colleagues as much as he deceived the House. Whilst their backs were turned he pushed this decision to the stage where there was no choice but to bring it to the House. Everybody knows that that is the reality. The right hon. Gentleman may be able to fool his colleagues but he cannot fool us.
§ 1.09 a.m.
§ Mr. John Tomlinson (Meriden)
We have listened to yet another example of the mock hysteria to which the House has been subjected recently. The general understanding earlier was that the Opposition would not even divide on this issue. However, there has been so much pressure from the Opposition back benches that we are forced to ask who is leading whom on the matter.
The hon. Member for Henley (Mr. Heseltine) has disgraced his own standards of conduct by his performance tonight. The hon. Gentleman's criticisms of the standards of conduct of the people in my constituency, who for the last 18 months have been fighting in the best British traditions for the right to work, struck me as wholly unacceptable.
In the trivia of his argument the hon. Member for Henley asked why no Treasury Ministers were present. Perhaps one of the reasons is that those Ministers must spend their time tonight blocking up those tax evasion loopholes which are sought by his friends.
To go through this exercise of decrying working men who are fighting for the right to work in a viable industry which is vital to our export trade is an abuse of the standards to which we have become accustomed in this place.
On what does the hon. Member for Henley draw for evidence? The tittle-tattle of somebody's diary is one of the main parts of his argument, a vague innuendo about the candour of hon. Members, and complaints that he had to be in the House on a Friday to get information. The hon. Gentleman complains about having to work a five-day week when hundreds of my constituents have been fighting 24 hours a day, seven days a week, for 18 months for the right to work.
1690 The hon. Gentleman has come before this House in an attitude of bawling arrogance and made a whole string of accusations and, to prove himself an intellectual and a man of letters, he has produced letters one after the other.
The real issue is whether we can afford to sustain a three-plant British motor cycle industry. The hon. Gentleman, who talked about my constituents, is but a moped compared with their Bonneville 750 in terms of ability to make a meaningful contribution to anything.
§ Mr. Tomlinson
Indeed. I agree with my hon. Friend who will no doubt expand on that in more detail later.
The Government have brought before the House a motion that everybody knew would be forthcoming. It is an exercise in nonsense to pretend that they are ill-informed and not in a position to make a judgment. The facts have been eloquently put before the House in detail by my right hon. Friend the Secretary of State for Industry. Unless this money is made available to NVT, we shall be participating in burying not only the employment prospects of a large number of people in the West Midlands, but a vital export earning industry.
Let us make sure that the consequences of tonight's decision are made known to everybody not only in this House, but in the country. I am sure that this House will not fail to pass the motion. It appeared at one stage that hon. Gentlemen opposite would not divide the House on this issue. Then, half way through the speech by the hon. Member for Henley, we understood there had been a reconversion and that they would go into the Lobby. We shall have to wait to see what they eventually decide to do. However, if we go through the Lobbies tonight, I have no doubt that the House will pass the motion because so much depends on it. It affects not only the employment of everybody within the NVT organisation, but possible lay-offs at Wolverhampton and the position at the Meriden co-operative.
We should be clear about the position of the Meriden co-operative. For the first time in our history we have a real example of a large number of people who 1691 will be able to resolve the classic conflicts in industry which have been largely responsible for the developing pattern of poor industrial relations. By getting rid of the "them" and "us" argument which has bedevilled industrial relations in industry for a number of years, we are reaching a situation where workers are combining together to own and control their own industry and future.
This is something which has worked successfully in many parts of Europe. West Germany has developed industrial partnership and industrial co-operative schemes. Conservative Members quote West Germany when they criticise our industrial relations, but when it comes to adopting structures which are working in that country and which it would be useful to emulate they do not have the courage of their convictions to move forward and adopt them.
I hope that the House will reject the churlish criticism of the hon. Member for Henley and pass this motion so that tomorrow we shall be able to get the historic signatures to documents that will start the workers' co-operative at Meriden.
People know my feelings about my constituents, but I cannot sit down without saying that over the past 18 months not a handful, not a mere 150, but many of them—people who in the February General Election rejected a Conservative Minister because they were not impressed with his performance—have fought in a way which is a tribute to the best standards which the Government benches have come to expect from the best of the British working class. We are proud of them. We look forward to the motion being carried tonight so that they can get on with their job of producing motor cycles which will benefit everybody in this community.
§ 1.16 a.m.
§ Mr. Hal Miller (Bromsgrove and Redditch)
I hope that when the Minister replies to the debate he will show a little more courtesy than his right hon. Friend did to a West Midlands Member who has taken an interest in the affairs of this company and who was responsible for ventilating them in the House in an Adjournment debate before Christmas. The Secretary of State must not try to 1692 take credit for rehearsing matters which if he had bothered to read Hansard he would have found I had covered in my previous speech.
I hope that when the Minister replies to the debate he will give us some specific replies to questions instead of the evasions that we have had up to now and the evasive replies that were given to me previously.
On the occasion of my Adjournment debate, I said that we had reached Plan 8 of NVT, but we have heard this evening that it has been rechristened Plan Y. We wish to know why. We want to know why this assistance is being made available under Section 8 of the Industry Act. Why could it not be by normal ECGD cover? Is it merely because there is already £6 million ECGD cover earmarked for Meriden which has not even begun output. Why could not that line of credit be used for NVT now?
Why is there this urgency, when the situation has been known to Ministers since last autumn and was raised in the House on a number of occasions in Questions and in an Adjournment debate? Why has this spurious sense of urgency been introduced by the Secretary of State?
Reference has been made to the document to be signed tomorrow. Why should that be said, when NVT signed it on 31st January? May we have an answer to that question? May we be told why NVT was in need of export credit finance? Was it because its American banks withdrew their credit because of the involvement of the Meriden co-operative? Will the Minister give us a reply to that?
Why have we not been told the full cost of the three-factory industry? Those estimates were given in 1973. They may have been updated subsequently; perhaps they are even more than the figures we were told then, but can we be told what they now are, because at that time an additional £15 million of investment was needed at Small Heath to maintain the jobs of the workers there, in tooling and equipment?
That is not all. An additional amount is needed for export finance for the production from that £15 million. Additional finance will be needed for retooling at 1693 Meriden, because we have been told that the Bonneville is good only for another two years; so can we be told why we have not been given the full figures of the transaction? Can we, further, know why the NRDC grant has been delayed?
Questions have been asked about this with no satisfactory answer, and reference has been made by my hon. Friend the hon. Member for Henley (Mr. Heseltine) to the suggestion that blackmail was being used by the Secretary of State: it was a word used by one of the shop stewards at Small Heath when he paid a visit there. Is it not the case that on his first visit to Small Heath, the Secretary of State left them in such a confused state of mind that they thought that £8 million would be invested in plant and equipment which they needed for their work and that was not merely export finance?
Can we have something more from the Minister on that? Can he explain why in his determination to proceed with this co-operative, he has forced the motor cycle industry of this country to lose two years' exports to the United States of America and two years of development work on the engine, which is likely to place the market in the hands of the Japanese. Will he, further, tell us why a reappraisal of the American market is now needed to show that there will be a future for exports from the three-factory industry, when it is already well-known that the American market is in downturn and that large stocks of Japanese machines are hanging over that market.
Finally, can the Minister, in replying to his hon. Friend the Member for Meriden (Mr. Tomlinson) tell why those 150 or so pickets could not have work for 18 months when there were so many unfilled vacancies for work in the Coventry area?
§ Mr. Miller
The hon. Member for Merident (Mr. Tomlinson) said that the facts are clear, but they are far from clear. I hope that the Minister will give the answers which the House and the country have a right to expect.
§ 1.23 a.m.
§ Mr. Leslie Huckfield (Nuneaton)
If the performance from the Opposition Front Bench was shabby and trivial, it was certainly as synthetic. Tonight we have been dealing with the whole future of what is still a substantial British industry. We have been dealing with the last British motor cycle built in this country.
We have been dealing with the disappearance, or possible disappearance, of skills, which this country has seen gradually receding, with a possible £20 million of exports, and all the hon. Member for Henley (Mr. Heseltine) could concern himself with was when a telephone call had been made and when a letter had been written.
This is a shabby and a synthetic performance and it does the Conservative Party no justice, or credit. I hope that those responsible for the Centre for Policy Studies can do better. The right hon. Lady the new-found Leader of the Opposition the right hon. Member for Finchley (Mrs. Thatcher) goes on television or radio tonight and says that the country needs new leadership, but we shall not get it from the hon. Member for Henley.
§ Mr. J. W. Rooker (Birmingham, Perry Barr)
It is even more shabby, because since last Thursday, hon. Members have known that tonight we would be debating this motion, because it has been pinned up in the "No" Lobby. The fact that my right hon. Friend forgot to read it is neither here nor there.
§ Mr. Huckfield
I leave those who have read the recent Bullock report on literacy to draw their own conclusions.
§ Mr. Huckfield
I should prefer to make my own points. I am sure that the hon. Gentleman, who intends to speak later in the debate, will have a far greater opportunity than I shall have.
I declare my interest in this matter, in that I was one of those who, along with Bill Lapworth, the divisional organiser of the Transport and General Workers' Union in the Coventry area, suggested to workers at Meriden, many of whom are my constituents, that they 1695 should attempt to negotiate with Mr. Dennis Poore for the possible formation of a workers' co-operative. That took place in September 1973.
I have always had faith in the viability of this project. I still have faith in it. I still have faith in Triumph motor bikes and in my constituents and those of my hon. Friends and those of hon. Members of the Opposition. Even if Opposition Members do not believe it, at least our constituents believe that their crafts, skills and products have a future.
However, we are not talking merely about making motor cycles. We are talking about a highly important experiment. We are talking about whether men have a right to participate in the decision taking and the management of the companies in which they work. We are talking about a development, an articulation, of a tradition of shop-floor management which has existed in the Coventry area for a long time. We are talking about a very carefully developed strategy which has been evolved over the past 18 months for the management and working of this co-operative and for the marketing of the motor cycles. We are talking about a very carefully evolved plan.
Even if hon. Members cannot accept that this is a carefully evolved plan, why can they not accept that it would cost money in redundancy benefits and social security payments for all the men who would be made redundant if this proposal does not go through tonight than it would cost to keep this experiment in being? [Interruption.]
If the hon. Member for Bridgwater (Mr. King) has not been listening to what my right hon. Friend the Secretary of State has been saying, he ought to have been.
What is at stake is not merely the jobs of those at Meriden but also the jobs of those at Small Heath and Wolverhampton. I repeat that it would cost more in redundancy payments and social security benefits to cope with the catastrophe which would follow if the motion is not approved than it would cost to see this experiment, I hope, succeed.
We have not heard a word tonight about the run-down of this industry. 1696 What has happened to all those famous British names such as Francis Barnett, AJS, Matchless, Royal Enfield and Indian? Why the disappearance of a once-famous British motor cycle industry over the past 20 years?
Are not the new Conservative Opposition at all concerned about this? Do they really want the names of BSA and Triumph to be added almost automatically to this catalogue of run-down, disaster and inefficient management? Do they really want to perpetuate the kind of position started by Sir Bernard and Lady Docker? Do they honestly want to continue down that road until we have no British motor cycle industry at all? Do they want to see the police riding around Westminster on Honda motorcycles, and the police and local authorities having to equip their staff men and workmen with Hondas and BMWs?
That is the kind of thing that we ought to be talking about. Instead of talking about the run-down of the whole industry, all that the hon Member for Henley talks about is when a particular telephone call was made and when a particular letter was written. It was a shabby, trivial and synthetic performance.
I want to pay tribute to my constituents, many of whom have given up everything just because they believe in this particular motor-bike and this particular project. Indeed, if the dedication of the constituents of my hon. Friends and myself to their product was matched or could be matched by the dedication of some of the managements represented by hon. Members of the Opposition—my word! We would not have the balance of payment difficulties, the lame ducks or our chronic record on increases in productivity.
The dedication, fortitude and courage of our constituents who have stood at the picket gate at Meriden is something to be admired not only on the Government side of the House but by the House as a whole and by the people of this country. It is a tribute, and it deserves to go down in history. We were told once upon a time that Mr. Dennis Poore was supposed to be the great white hope of the British motor cycle industry. We were told that he was the only man in this country who could possibly save it.
1697 What has not been referred to tonight is that even after the original closure was announced, the constituents of my hon. Friends and of myself were willing to make any kind of financial sacrifice just to keep the Meriden factory going. They were prepared to agree to a plan of voluntary redundancy. They were willing to agree to a plan for short-time working. They were willing to agree to a plan for work sharing. They were willing to agree to a reduction in the rates they were paid for waiting time when there was nothing to do. Our constituents were willing to make all these sacrifices to keep the industry in being. What sacrifices have Mr. Dennis Poore or the Norton Villiers Triumph management, or hon. Members opposite, been prepared to make to keep the industry in being?
It is interesting to note that not only was the Industrial Development Advisory Board concerned about the strategy of the Meriden co-operative but it was also concerned about the original strategy that Mr. Dennis Poore had provided for the British motor cycle industry. A very interesting fact is that all the economic and financial correspondents of various newspapers who visited Meriden just after the closure expressed even more doubt about the strategy which Mr. Poore had evolved than about the strategy of the Meriden co-operative. It is interesing to note the remarks made by the Industrial Development Advisory Board about Mr. Poore's own plan to try to save the industry.
We have heard various innuendoes about my right hon. Friend's attempts to conceal the real facts of the situation from the House. It is interesting to note some of the comments which were made when an earlier application for money was made. I quote from Hansard of 19th March 1973 when the Minister was asked:Will he bear in mind the fact that the £4.8 million falls tantalisingly short of the £5 million figure which would require to come before the House under the provisions of Section 8 (8) of the Industry Act? Will the right hon. Gentleman represent to the Leader of the House the anxiety in many quarters that we should have a full debate on this topic at the earliest opportunity?"—[Official Report, 19th March 1973; Vol. 853, c. 40.]
§ Mr. Huckfield
I am glad the hon. Gentleman cheers, because those were his remarks to the then Minister for Industrial Development, Mr. Christopher Chataway, when he made the original grant of the £4.8 million and he made absolutely sure that the sum was suffisiently under the £5 million limit so that it would not have to be debated in the House.
We were faced with a situation in which this money was given to Norton Villiers Triumph by the previous administration without any kind of guarantees from Mr. Poore. The only condition imposed on the grant of that money was that Mr. Poore was to remain the chairman. There was no consultation with the unions. There was no debate in this House. There was no participation by anybody else involved with the company. The Government were not prepared to put any kind of Government appointee on the board of NVT. Above all, it was all done under exactly the same legislation as that under which we are discussing the matter tonight. What humbug, what hypocrisy, when everything we have been discussing tonight is being done under the legislation and under safeguards which the Conservative Party introduced.
The other matter which hon. Members opposite have not been keen to mention is that the strings that were put on the grant or the loan to the Meriden workers and the strings which were put on this export credit guarantee are far tighter than the strings which were put on Mr. Poore. The previous Government did not put any strings on Mr. Poore. They said he could have £5 million to reorganise the British motor cycle industry. He could spend the money as he wished. They would take care of the consequences.
I can only compare the lack of strings imposed by the Conservative Government with the strict financial controls imposed by my right hon. Friend on the Meriden co-operative and the ECGD guarantee. I visited the United States at the end of 1973 and I returned, after talking to American dealers for one week, with orders for 5,000 motor cycles. I talked to a mere 20 out of more than 450 dealers on a coast-to-coast basis, and I returned with immediate declarations of financial guarantees for more than 2 million 1699 dollars. I believe that that kind of market still exists for Triumph motor bikes in the United States.
At the time of closure in 1973 there were outstanding orders for the Meriden factory for more than 2,000 motor bikes for the rest of the world, excluding the United States. While I was in the United States I learnt of the fear of the American motor cycle dealers that they would be completely dominated by the Japanese. They wanted Norton Villiers Triumph to succeed because that would give them at least an element of freedom from Japanese monopoly. When one sees the police in Washington D.C. riding around on Honda motor bikes one can appreciate the domination that American dealers fear. That is why the American dealership network wants the return to the market of the Meriden-made Triumph twin cylinder motor bike.
We are concerned here with a very important experiment. We have a product and an industry which will succeed. The industry can make a very important contribution to the export performance of this country and to the balance of payments. If all the Conservatives can worry about tonight is phone calls, letters and the nitpicking that we had from the hon. Member for Henley, when the whole of this British industry is at stake, I hope that the people of this country, like the House of Commons, will draw their own conclusions.
§ 1.38 a.m.
§ Mr. Richard Wainwright (Colne Valley)
The opening speeches from the two Front Benches did shamefully little to help the House in its proper task of trying to assert parliamentary control over this large and possibly very useful sum of money. I beg the Minister of State to answer some of the key questions which would at once be asked in any commercial undertaking if the money belong to that undertaking or if it sought the money from the financial institutions.
Of course, the wholly trivial and synthetic uproar about the debate having been allegedly sprung on the House is absolute nonsense. All my colleagues received in their weekly circular from my hon. Friend the Liberal Whip last Friday a clear indication in writing that 1700 the debate would almost certainly be held tonight. I am puzzled by the approach of the Secretary of State, however, when in opening he repeatedly indicated that he had intervened in order to have this financial matter so framed that it would give the House an opportunity to have the debate.
Is he saying that he put the company and its workers at risk by framing the matter in this way and that he chose to run the risk of defeat in the House, of which he spoke, in order to provide us with the debate? There is still a mystery in my untutored mind about why he makes this claim and whether he is implying, as it seemed, that there were other ways in which this export credit could have been obtained, but that he intervened to frame it in this fashion. It is still bewildering to me. I hope that the Minister of State will, if it is possible, clear the matter up before the end of the debate.
The question asked by people like me, hon. Members who do not pretend to have experience of this important industry, with its magnificent traditions, is: can we have a proper commercial statement of the prospects for a three-factory motor cycle industry? Can we have a marketing assessment of whether there is a prospect of sustained demand in the United States and of recapturing against extremely powerful competition, with extremely advanced designs and products, almost the extent of the market which we had nearly 10 years ago?
We must report to our constituents on a matter of this sort, because they are now very cynical about the way in which Government estimates of financial requirements are always proved to be grossly under-stated. Therefore, we must have a frank asssessment of the total expenditure likely to be required to give a three-factory industry a chance of being viable. That is the information that the ordinary layman in the House requires. The debate will have been fruitless if we do not get it.
§ 1.42 a.m.
§ Mr. Ian Gow (Eastbourne)
I begin by examining the Secretary of State's suggestion that in these matters he has treated the House with the utmost candour. In the early hours of Tuesday mornings, when the Leader of the House 1701 first told us that we would have the debate this morning, that right hon. Gentleman said:It is because the Chairman of Norton Villiers Triumph has informed us today that this money must be forthcoming this week, otherwise there will be redundancies. This is the first that the Government have heard of the urgency of the matter."—[Official Report, 3rd March 1975; Vol. 887, c. 1227.]That afternoon he said:I have now found that my right hon. Friend the Secretary of State for Industry met Mr. Poore, the Chairman of Norton Villiers Triumph Ltd., on Thursday of last week. My right hon. Friend telephoned me yesterday from Bristol, and said that this matter must be dealt with this week, otherwise there would be great difficulties in the firm. I pointed out to him the great inconvenience to the House in debating the matter this week. However, he insisted that the matter must be dealt with this week, otherwise there was a danger of redundancies. Therefore, I announced the matter last night."—[Official Report, 4th March 1975; Vol. 887, c. 1275–1276.]If the Secretary of State had his discussion with the Chairman of Norton Villiers Triumph last Thursday, why was it not until Monday that he had his conversation with the Leader of the House? We know that many members of the Cabinet are not on speaking terms with one another, but one would have thought that it would be possible to deal with the matter earlier if it was of such urgency, between last Thursday and Monday.
Secondly, I wish to quote with approval the following passage from page 36 of the "Blue Book":if there is to be a system wherein public money is to be used, … then the administration and control which follows this investment must be divorced from any subsequent political pressure from the Ministry concerned with that industry.It is precisely because from the present Secretary of State there will inevitably be great political pressure that my hon. Friends and I will vote against the motion. I must also say that I am uneasy at the extent to which the example which the Government are setting is likely to be followed by other industries. It is a great mistake to think that there is some bottomless purse which the Government can use to bail out ailing British industry.
I quote again from the historical summary of Norton Villiers Triumph Ltd. in page 36. The second paragraph reads:An attitude is gaining ground, fostered by many unions, that a man or woman has not 1702 only a right to work but a right to work in the same job in the same place doing the same thing, for a reward increasing year by year.The House should be extremely wary of Government hand-outs of this kind. They shield the British people, and notably the employees of the industries concerned, from the harsh truths of economic reality. Once precedents of this kind have been set there will be mounting pressure on the Government to hand out more and more money to industries which become less and less profitable. I am bound to say that my unease at the passage of the 1972 Act has not been in any way alleviated by the conduct of the Secretary of State.
§ 1.46 a.m.
§ Mr. J. W. Rooker (Birmingham, Perry Barr)
I shall keep my remarks short. I intend to make a few quotations from the so-called "Blue Book". I take up the quotation from page 36 which the hon. Member for Eastbourne (Mr. Gow) did not finish. After Mr. Poore says that people expect to work in the same place and in the same job making the same products year in and year out, he continues:No change is allowable unless by agreement.He is criticising the fact that he has to get the agreement of the workers before making changes. I go back to page 2 where Mr. Poore deals with the start of the whole fiasco. He refers to the plan that was constructed some eight or nine months before the BSA share quotation was suspended on 15th March. The paragraph reads:The plan called for 60,000 superbike category motor-cycles in year 1, comprising 35,000 from full Meriden production, mainly Bonnevilles, 10,000 Tridents from Small Heath and 15,000 Commandos from Wolverhampton. In year 2, Meriden would close…That closure was planned during the initial discussions which Mr. Poore had with the Department of Trade and Industry some eight months before the whole matter became public. How can there be agreement with the workers that Mr. Poore was criticising and moaning about in page 36 when an agreement had already been made in secret discussions to close Meriden?
A farcical and bogus argument has been put forward tonight. As I have already said by way of intervention, any 1703 Member could have seen since last Thursday that in the early hours of this Thursday morning we would be likely to be talking about NVT. It is not right to suggest otherwise.
§ Mr. Rooker
My hon. Friend has the description. Another part of the "Blue Book" is worth looking at regarding the concern that was voiced by Norton Villiers prior to the public disclosures The second paragraph in page 3 reads:Concern was expressed by Norton Villiers that the investment by government in a plan involving the closure of a factory might give rise to adverse public comment and might not be seen in its intended light… The Department was, however, able to confirm that there were no political objections to this course since the factory was in an area where labour was scarce and surplus labour generated by the closure could be readily absorbed.That shows how little is known about the problems of the West Midlands.
This is a long, sad history. It is wrapped up with the BSA motor cycle factory and goes back to the days of Sir Bernard and Lady Docker. It is a history that does not say much for British management and its techniques. The history passes through the days of Mr. Eric Turner. When he left or was dismissed, however people care to put it, he was given so much money in the form of a golden handshake that he admitted in the Press later that he could not afford to take a job for 12 months. We do not know how much he got, but it was so much that he could not afford to work for 12 months. Yet we all know what has been happening at Meriden for the past 18 months.
The last illustrious figure to pass through BSA was Lord Shawcross, and then the whole thing crashed into fiasco and 3,000 workers lost their jobs in Small Heath, and all this was long before the problems that we are discussing tonight arose.
It will be interesting to see how the Birmingham and Wolverhampton Members on the Opposition side vote tonight. The crux of the matter is that tonight we shall be voting not about Meriden but about NVT, which is in Birmingham, Wolverhampton and Meriden.
§ 1.51 a.m.
§ Mr. John Stanley (Tonbridge and Malling)
I hope that in his winding-up speech the Minister of State will be much more candid than was the Secretary of State in explaining the reasons for bringing this order under Section 8 of the Industry Act 1972. The Secretary of State gave no explanation for it. He tried to suggest that the reason was that he wished the House to have a debate on the Meriden Norton Villiers Triumph situation, but he must not be that disingenous with the Opposition, for it is clearly open to the Government at any time to debate that subject.
Equally, we have not so far been told why NVT has not been able to get export credit from ECGD, especially when such arrangements have been made for the Meriden co-operative. I hope that the Minister of State will appreciate that we are as aware as I hope he is that export credit has been applied for from ECGD by Norton Villiers Triumph for many months and that ECGD has consistently refused to make that credit available. It is the view of the company—and we shall be interested in what the Minister has to say about this—that export credit has been deliberately blocked because that was the one weapon that Ministers had to ensure that those who were working in NVT and those at Small Heath in particular were forced into a position in which they had to accept the three-factory arrangement for the industry, whereas if credit had been forthcoming that would have eliminated the one sanction Ministers had to make certain that their policy went through. I hope that the Minister will comment on that, because it is fairly clear that it is one reason why tonight we are discussing this order under Section 8 of the Industry Act.
§ Mr. Anthony Nelson (Chichester)
Does not my hon. Friend agree that it should not be just a matter of our hoping that the Minister explains why this finance was not arranged under alternative provisions? Does he not have a legal requirement to do so when for assistance to be provided under Section 8(8) of the Industry Act 1972 it is necessary to show under Section 8(1)(c) that financial assistance cannot appropriately be provided otherwise than by the Secretary of State?
§ Mr. Stanley
I am grateful to my hon. Friend for that intervention. He has made an extremely important comment on the legality of the motion, and no doubt the Minister will have carefully noted what my hon. Friend has said.
I should like to know how much public expenditure is involved in going down the three-factory route. It is common ground that there would have been no need for the motion and for this public expenditure had not Meriden been backed by the Government. I disagree with the hon. Member for Birmingham, Perry Barr (Mr. Rooker): I believe that this motion is essentially about the decision to back Meriden, not about NVT. There is no doubt that if the Meriden sit-in had not taken place and had not some £7 million of assets of NVT been effectively sequestrated by the co-operative, production at Small Heath and at Wolverhampton would not have been seriously undermined and NVT would not have experienced its present financial difficulties.
Indeed, if NVT had been able to continue on the two-factory basis as originally envisaged, there is no doubt in the minds of the management—and of the workers of the company—that no further call on public funds would have been required over and above the £4.872 million provided under the last Government. Therefore, it is clear to us that the only reason why additional public expenditure is required is the present Government's decision to support the Meriden co-operative.
What is the cost of the decision to support the Meriden co-operative, and what sort of return is it yielding in terms of jobs? The cost to public funds of the decision to back the Meriden co-operative represents the additional cost to public funds of supporting NVT plus the cost to public funds of supporting Meriden itself. Briefly, I suggest that on the best evidence we have those sums are as follows.
The cost to public funds of providing additional support to NVT arising directly from the decision to back the Meriden co-operative is the £8 million that we have before us this evening, in addition there had been the £4.95 million which has been made available already to Meriden in principle by the present Government and also the further £15 1706 million which, in the company's assessment, will have to be injected fairly shortly if there is to be any possibility of getting a return—not immediately, but in 1979—out of three-factory operation. [Interruption.] I am referring, if the hon. Member for Nuneaton (Mr. Huckfield) will kindly listen, simply to the additional cost to public funds arising out of the decision to go for a three-factory solution and support the Meriden co-operative.
Aggregating those figures, it is clear that the total additional cost to public funds as a result of the decision to support the Meriden co-operative is approximately £30 million.
How many additional jobs will be provided in the constituencies of Labour Members who have spoken? Despite the fact that only 150 people of the original work force are still available for deployment in the factory, I understand that the co-operative is working on the basis of approximately 880 employees at Meriden.
§ Mr. Stanley
Let us round that up to 1,000 employees at Meriden. Given the fact that £30 million of expenditure will be required, that amounts to a cost to public funds of backing the three-factory solution of £30,000 per job. I suggest to the Secretary of State that on that basis he could happily have paid £5,000 or £10,000 to each of those people, whether gratis or in retraining, and still have made a substantial saving to public funds. That is the financial equation concerning jobs, and it is jobs which is the sole justification for proceeding with the motion.
Therefore, in voting against the motion tonight we are doing so simply because we can see from the figures that the Secretary of State is behaving in a totally irresponsible way financially and is putting ideology ahead of any sort of practical financial responsibility.
§ Mr. Heseltine
On a point of order, Mr. Deputy Speaker. May I seek your guidance on the point raised by my hon. 1707 Friend the Member for Chichester (Mr. Nelson)? In introducing the debate tonight the Secretary of State said that he had decided to use this method of providing support to afford us an opportunity to debate the Meriden co-operative venture on the one hand and the NVT situation on the other hand. Section 8(3) of the Industry Act 1972 reads as follows:Financial assistance shall not be given under this section in the way described in subsection (3)(a) of the last preceding section unless the Secretary of State is satisfied that it cannot, or cannot appropriately, be so given in any other way,".If the Secretary of State has not tested whether it can be given in any other way, albeit for the motive he claims of giving us the opportunity of debate, the question arises whether what he is doing is within the law. If it is not, what price tomorrow the jobs he claims will be saved by this action?
§ Mr. Deputy Speaker (Sir Myer Galpern)
I can only assume that the Secretary of State has given consideration to the matters raised by the hon. Member and has come to the conclusion that he cannot do it in any other way. The Secretary of State accepts responsibility. He knows what is the position under the Act on which he is taking this course of action, and he must have come to the decision that this is the only way in which he can do it.
§ Rear-Admiral Morgan-Giles (Winchester)
Further to that point of order, Mr. Deputy Speaker. Is it reasonable for the Chair to assume that? Would it not be right for the Secretary of State to confirm that point himself rather than that the Chair should assume it?
§ Mr. Deputy Speaker
I do not think that there is any need for him to do so. I have sufficient faith in the Secretary of State to believe that he has made that decision. If the Secretary of State wishes to make a statement, I am willing to allow him to do so.
§ Mr. Benn
These phoney points come up so regularly that it might be better if I said plainly to the House in answering the question that I took the responsibility for bringing it forward under the Industry Act. That meant that in my judgment as Secretary of State under the 1708 provisions of the Act it was right to bring it up under that section, and that was the beginning and end of the matter.
§ 2.2 a.m.
§ Mr. John Biffen (Oswestry)
I understand that my right hon. and hon. Friends will be inviting a Division at the conclusion of the debate. I very much welcome that gesture because I am sure that it will be appreciated on both sides of the House that it will be more than early morning symbolism and will mark a substantial gesture of reserve and of suspicion about the use to which the powers of Section 8 of the Industry Act are being put. The longer this episode is drawn out and revealed to the House the deeper those suspicions become.
The intervention made by my hon. Friend the Member for Chichester (Mr. Nelson) is the latest point. Although the Secretary of State says that he takes full responsibility, I hope that when the debate is being wound up it will be made clear whether there was at any time an attempt to seek this credit guarantee from any source other than in accordance with the exercise of Section 8. That question is central to the whole consideration of the debate, in which our constituents are cast in the rôle of captive export credit financiers. On that basis no attempt has been made to justify to us, acting in trust on their behalf, the use that will be made of their funds. So far, no attempt has been made to demonstrate that there is a North American or other export market which may be satisfied with the scale of production which I assume is implicit in a three-factory solution for the motor cycle industry.
We want to know first why the Secretary of State has been so anxious to exercise his powers under Section 8 without seeking any other alternatives. Secondly, as our constituents are to become captive financiers, we should like to know a little more about the export prospects that have been assessed by the Secretary of State and the commercial arithmetic that lies behind this decision.
I will not detain the House long because I know that many of my hon. Friends wish to register their reserve and 1709 unease about this enterprise. Anyone tracing the whole story of the NVT association with BSA cannot but be uneasy on two points. In retrospect I believe that many would now consider that receivership would have been the best solution when the crisis broke upon us in 1973. That view seemed to be sustained by the much-quoted report published by NVT.
Secondly, there is an unhealthy nemesis in the lawless work-in, the lawless sit-in, the lawless possession of the site at Meriden. I do not think we should suppose that this sort of success will pass unnoticed. The Secretary of State, when he was reproving my hon. Friend the Member for Henley (Mr. Heseltine), quoted from page 14 of the NVT story "Meriden: Historical Summary". Page 14 says:The company was surprised to learn that the Minister was adamant that there should be no recourse to the law and that he, the Minister, would now see what he could do.That was in the context of the position of the Meriden works. I do not think that, although the right hon. Gentleman quoted that reprovingly, anyone is under any illusion about the moral encouragement that was given from the Labour benches to those who possessed the works at Meriden. I believe that this carries serious moral implications.
It is an episode which will not just be an historical oddity. It will be repeated, and it is being repeated in the case of Imperial Typewriters. Sure enough, we will have the argument as to whether it is to be a one-site or two-site solution. I pay tribute to the hon. Member for Nuneaton (Mr. Huckfield) who has established standards of political virility in this area which are now being emulated, or sought to be emulated, by his hon. Friend the Member for Kingstonupon-Hull, East (Mr. Prescott), somewhat to the discomfort, so I observe, of his hon. Friend the Member for Leicester, South (Mr. Marshall).
We can detect some of the tensions that will necessarily arise once we allow this kind of sit-in to be the lever and the pressure for trying to obtain a politically-contrived solution, using the funds of constituents of those representing the rest of the country. Although I pick relatively modest instances, I do not think 1710 that there can be any doubt but that this is the precursor for the real trial of strength which will attend what will be the outcome of the increasing Governmental involvement with British Leyland.
§ Mr. Benn
I am following the hon. Gentleman's remarks with great interest. He will recall that the most classic, successful, and justified work-in, was at Upper Clyde Shipbuilders, after a Tory Government had sought to close it down and then, as a result of the work-in, funded Marathon, Govan and the successor yards.
§ Mr. Biffen
We may draw conflicting conclusions from that episode. Many of us believe that, whatever the justifications at the time, this episode in the 1970–74 Conservative Government, led to much regret.
I will not be distracted from my main thesis—namely, that the happenings at Meriden, and the typewriter factory in Leicester and/or Kingston-upon-Hull are but skirmishes as a prelude to the battle which I think will be conducted over the location of investment with regard to British Leyland.
§ Mr. Biffen
That "Hear, hear" from the hon. Member for Nuneaton informs us that he agrees with my analysis. All the objectives, although they can be dignified as a highly important experiment—the words used by the hon. Member for Nuneaton—are designed to sustain the innate forces of industrial conservatism in this country.
At the end of the day we must take note of one of the conclusions in the NVT history of Meriden which, referring to the doctrine of "no-change" referred to by my hon. Friend the Member for Eastbourne (Mr. Gow), said… if the doctrine is to be observed in an industry requiring a contracting labour force in any place for any reason, there will never again be any possibility of a rescue operation which of necessity involves changes …I hope that has been noted by Sir Don Ryder, because in his own right when dealing with the printing unions and the printing works within IPC he showed a degree of decision and action which contrasts with what we are perceiving in the motor cycle industry.
§ Mr. Biffen
No. I am bringing my remarks to a conclusion, and I do not want to enter into disagreement with the hon. Gentleman, after having carried him with me so far in agreement.
We deceive ourselves if we think that the closer association of politicians, industry and commerce can be the midwife of change. It will not. Those who believe that this country has to accommodate itself as best it can to the changing fortunes of international commerce should take this counsel and conclusion: the more Government are associated with industry in decline, the more they compound the difficulties of that decline, the more they postpone and exacerbate the final moment of truth.
§ 2.14 a.m.
§ Mr. Tim Renton (Mid-Sussex)
It is always a pleasure to listen to the lucid remarks of my hon. Friend the Member for Oswestry (Mr. Biffen). I wish to take up his point about possible abuse of power by the right hon. Gentleman the Secretary of State for Industry in coming to the House tonight. I wish to make brief reference to the question of ECGD and the possibility that the assurance given to the House recently about ECGD by a Minister may have been abused in the course of the Meriden events which have brought us here tonight.
I should like briefly to recapitulate the problem. We have been told that the Meriden Co-operative already has ECGD facilities amounting to £6 million which evidently have not yet been used. In addition, the Secretary of State said that NVT needed a guarantee to finance its export stock, presumably to finance the stock held at its factory. He also said that NVT's United States cover had been withdrawn. He did not amplify that. I take it that he meant that the banking facilities available to NVT in the United States had been withdrawn.
§ Mr. Stanley
Since the Minister of State referred to the matter without being specific, he may wish to confirm that the Bank of America, which until now had an export credit finance arrangement to the value of 1.5 million dollars, recently discontinued that arrangement because of the uncertainties created for NVT because 1712 of the Government decision to support the co-operative.
§ Mr. Renton
My hon. Friend has, with his usual accuracy, provided those detailed figures which the Secretary of State failed to provide earlier.
The withdrawal of cover brought NVT to such a parlous financial condition that an additional £8 million was required. Perhaps the Minister of State will amplify that matter when he winds up.
Having obtained the additional £8 million tonight, NVT will go to the ECGD for the export credit guarantees which it needs in addition to the £6 million ECGD guarantee available to Meriden. Will that guarantee be made available under Section 2 or Section 1 of the 1968 Act? Presumably it will be made available through Section 2, since that section permits loans and guarantees in the national interest. That situation has developed gradually over the years.
Speaking about the setting up of the ECGD, the Prime Minister, when he was President of the Board of Trade, said:We have no intention of trying to guarantee exporters against unduly hazardous or quite crazy risks."—[Official Report, 8th February 1949; Vol. 461, c. 259.]But the concept developed that it was right for loans and guarantees to be made available to exporters when these were considered by the Treasury, acting in concert with the Board of Trade, to be in the national interest. This opens up a wide area which is capable of abuse, especially with the present interventionist Government in office.
During the debate on the Second Reading of the Export Guarantees Amendment Bill my hon. Friend the Member for Worthing (Mr. Higgins) and I asked for a specific assurance from the Under-Secretary of State for Trade that Section 2 would not be used for political purposes in any way by the Government. The Under-Secretary gave an assurance that that was so. He said:There can be no question of this Bill's being intended or used to enable the Government to circumvent assurances previously given to the House about ECGD operations and the avoidance of unduly hazardous risks.Later he said:The hon. Member for Gosport also suggested that the Government were using ECGD facilities for their own purposes. I give him 1713 a categorical assurance that that is not so."—[OFFICIAL REPORT, 10th February 1975; Vol. 886, cc. 156, 159.]Will the Minister of State tell us whether that is correct, because it seems to me that, under the Industry Act, money is being made available to NVT, which, being then put in a commercially viable position, can go to the Export Credit Department and ask for export guarantees? The ECGD can then hand these to NVT with a clear conscience because it sees a reasonably safe balance sheet. How is that balance sheet safe? Because the Secretary of State for Industry has put the money there. If that is not using ECGD for political purposes, what is it? This is a plot hatched out in Victoria Street between the Secretary of State for Trade and the Secretary of State for Industry; it is robbing Peter to pay Paul and is in breach of the assurances that the Minister gave to the House.
§ Mr. Stanley
In case hon. Gentlemen opposite should be tempted to suggest that this was done by the Conservative Government, my hon. Friend will recall that the existing ECGD finance which Norton Villiers Triumph has already got and which has just run out was export credit properly obtained in the normal way through ECGD under Section 1.
§ Mr. Renton
Again, I thank my hon. Friend. There is an essential difference here, as I have tried to explain, between Section 1, which covers ECGD finance made available on a commercial basis only, and Section 2, which is in the national interest.
I do not wish to detain the House longer on this matter. I think that the Minister of State, in replying to the debate, should give a specific assurance that this availability of export credit facilities to NVT will be submitted to and looked at by the advisory council of the ECGD. I realise that is not what normally happens with Section 2 facilities, but in this instance there must be a clear suspicion that ECGD has been leaned on or that money has been withheld from NVT until this point when, with the money now coming forward from public funds, NVT can go to ECGD and credit facilities that have not been available to it for export will be made available, thanks to the assistance of the 1714 Secretary of State for Industry. We need the advisory council of the ECGD to tell us that this has not happened. Until then, we must be very suspicious of the pressures that have been put on ECGD through the Secretary of State for Trade.
§ 2.22 a.m.
§ Mr. Graham Page (Crosby)
I am anxious to know what the House is being asked to authorise tonight. The motion is very brief. It is on the Order Paper because it is necessary to have this authority under Section 8(8) of the Industry Act 1972, which provides:The sums which the Secretary of State pays or undertakes to pay by way of financial assistance under this section in respect of any one project shall not exceed £5 million, except so far as any excess over the said sum of £5 million has been authorised by a resolution of the Commons House of Parliament.Therefore, this House is asked to authorise a specific excess sum which must be paid by way of financial assistance in respect of any one project. The motion does not give any indication of the way in which the financial assistance is to be given nor to whom it is to be paid. It does not specify the project nor properly limit the sum.
There is a precedent for the right form of motion. Indeed, it is a precedent in the name of the Secretary of State for Industry. On the Order Paper of 18th December 1974 there appeared a motion in what I think is the right form. It indicated to the House exactly what it was asked to authorise. The motion, which related to the British Leyland Motor Corporation Ltd., started in the same way as the present motion, but it had these words explaining what was to be authorised:a guarantee or guarantees to be given to the bankers of British Leyland Motor Corporation Limited and any of its subsidiaries covering borrowing facilities made available by the bankers to those companies".There was a clear statement of what the House was asked to authorise—a guarantee or guarantees—a clear statement relating to whom it was to be paid—the bankers—and a statement of the project.
In the motion before the House tonight there is no indication of the method of financial assistance. The Secretary of State gave us some indication in his opening speech, but if we authorise him to make a payment in accordance with the motion we shall provide a blank 1715 cheque in terms of to whom it may be paid and the way in which he may offer that assistance.
§ Mr. Nelson
Will my right hon. Friend go further and agree that the motion does not give any indication, first, whether there has been any counter-indemnity for this guarantee; secondly, whether there will be security or transference of security in the exercise of that guarantee; thirdly, of any time limit when the guarantee will expire; fourthly, whether the principal sum relating to the guarantee covers rolled-up interest? Finally, does my right hon. Friend agree that the rolled-up interest might amount to another £4 million over three years?
§ Mr. Page
I am grateful to my hon. Friend for that intervention, but perhaps I should stick to the point of what should be in the motion.
As it is a motion authorising payment, or undertaking to pay by way of financial assistance, one looks at the earlier part of Section 8 of the 1972 Act to find out what is meant by "financial assistance". Subsection (2) says:Financial assistance under this section may, subject to the following provisions of this section, be given in any of the ways set out in subsection (3) of the last preceding section.If one turns back to Section 7(3), one sees that there are four paragraphs, (a), (b), (c) and (d), which set out the different ways in which financial assistance may be given, The first isinvestment by acquisition of loan or share capital".Secondly,investment by the acquisition of any undertaking or of any assets".Thirdly,a loan, whether secured or unsecured",and, fourthly,any form of insurance or guarantee.I understand from what the Secretary of State said that in this case it is by way of a form of guarantee, but this is not what the House is being asked to authorise.
This is not just a technical point of procedure, because unless there is in the motion the way in which financial assistance is to be given the House has no opportunity of knowing whether it is 1716 being given lawfully or unlawfully. Section 8 contains restrictions on the use of these various methods of providing financial assistance. One has already been referred to; namely, thatFinancial assistance shall not be given under this section in the way described in subsection (3)(a) of the last preceding section",and that is the acquisition of loans or shares in the company.
We have the precedent of a previous motion. [Interruption.] It is a little difficult to shout down the Secretary of State all the time while I am speaking. I do not mind doing it for part of the time. I am sure that the right hon. Gentleman wholly lacks interest in whether or not the motion is legal, but I am endeavouring to protect the House against establishing a precedent which is wrong. If the right hon. Gentleman has not heard before, let me tell him that I am using his precedent to show that this one is wrong. He should have used the precedent in setting out what the House was asked to authorise. I do not know whether there is any sinister motive in this, but we do not know what method of financial assistance we are being asked to authorise. We do not know to whom the money will be paid, and this should appear in the motion.
I am suspicious merely on the drafting. I do not know whether there is anything sinister about this, but the drafting is terrible. The last line of the motion authorises the provision ofsums exceeding £5 million but not exceedingsomething over £12 million. As I read that, any number of sums could be paid if they came within that limit. It should be the aggregate sum. In fact, that is used in the Act itself. So not only is the motion badly drafted but it is not in accordance with the appropriate section of the Act. This is a bad precedent, and I for one would never vote for a motion of this sort even if I thought the merits were good.
§ 2.30 a.m.
§ Mr. Peter Viggers (Gosport)
The Secretary of State has come to ask us for votes but has not give us any facts. The hon. Member for Nuneaton (Mr. Huckfield) has made clear that full investigation has been made of the viability of the Meriden project, but we have not been told any of the facts 1717 which one would expect of any commercial project: detailed plans for proposed or expected turnovers, of sales targets or profits, or of return on capital employed, the capital of people who pay taxes.
If the Secretary of State seriously expects us to vote in favour of his proposal he must realise that when a workers' co-operative or some other project found favourable by him comes before the House the normal laws of gravity are not suspended, apples do not cease to fall from trees, and we must know the basic commercial facts of return on capital employed.
§ 2.31 a.m.
§ Mr. Nicholas Fairbairn (Kinross and West Perthshire)
Is it not extraordinary that when we are discussing in Parliament the concept that we should make British industry more efficient, which we are discussing in the Industry Bill, the Government should ask us to provide funds to a company to enable a co-operative to produce products which neither economically nor on any commercial basis are viable? Is that not an extraordinary way of behaving in the present financial situation of the country, to show contempt for the principle in which the Government pretend they are interested? There is no criticism of the work force. Is it not extraordinary, in our present plight, that this muddled and asinine proposal should be upstairs and downstairs at the same time?
§ 2.32 a.m.
§ Mr. George Park (Coventry, North-East)
I rise to speak because I was surprised tonight at the hon. Member for Oswestry (Mr. Biffen). I would never have thought to accuse him of double standards. He did not use them in previous excursions in Coventry. He may not remember me, but I remember him.
The hon. Member seemed to be saying that it was entirely wrong for a group of work people to fight tooth and nail to retain their right to work, to retain their pride in their craft. That was wrong, apparently, but during the proceedings on the Finance Bill, and in Committee, it is all right for hon. Members opposite to fight tooth and nail for the way of life they think right and to behave in an abominable way. I was 1718 rather surprised to hear that comment from the hon. Member for Oswestry. He tried to deal with some of the industrial aspects, however, whereas his colleagues cannot get past the financial considerations.
Right at the root of the Norton Villiers Triumph shambles was the accountants' decision that they did not want three factories any more. They needed only two, and one was to be shut and, in the time-honoured word, rationalisation brought in and the Meriden men thrown out of work. While hon. Members opposite are considering the financial aspects, it would do them some good now and again to think about the human beings who lie behind the balance sheets about which they are so concerned.
When one looks at the motor cycle industry—and my hon. Friend spoke about the super-bike part of the market—let us not forget that it was the same motor cycle industry which calmly and tamely handed over the rest of the market for smaller-engined bikes to any who like to come into this country. This selfsame industry, which hon. Members are so interested in protecting now financially, is still making no effort to try to get back into that part of the market.
As I understand it, the motion is an endeavour, at any rate, to retain a toehold in the super-bike aspect of the market, but I hope that it is the forerunner of a vigorous drive towards recapturing that part of the market which we formerly held.
§ 2.36 a.m.
§ Mr. Tom King (Bridgwater)
I shall intervene in the debate only briefly because what has emerged clearly from all the speeches, certainly those from the Opposition side, is that we want to allow plenty of time for the Minister of State to reply to some very direct and specific questions.
I entirely agree with the hon. Member for Colne Valley (Mr. Wainwright) that we have not heard anything about what we really need to know in relation to the uncertainties that have been aired. There is a very nasty feeling in the House at present that what has been put before us is not really what it is all about. It is a matter of great importance that this matter is properly explained by the Minister.
1719 I start by laying one lie—that the Opposition are not interested in the motor cycle industry. The company which is the subject of the motion was set up by my right hon. Friend—as he then was—the former Member for Chichester, Mr. Chataway. This was our attempt to restructure the British motor cycle industry—not because we were not interested in it but because we realised the contribution it could make and its export potential, and the skills that existed in the industry. It was our attempt to harness them.
But what is the situation that we face tonight? We face a tragedy that affects every person in this country. As my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) said, we have lost, effectively, two years of motor cycle exports to a market which is still buoyant and has been expanding very rapidly in the United States. In our present balance of payments situation, where exports are increasingly difficult to obtain, that is a luxury that we cannot afford.
I refute the suggestion that the Opposition are not concerned about employment. We share the same concern for employment as the employees at Small Heath, as to whether this superficial attempt to protect employment initially at Meriden—for that is what is behind the motion—will jeopardise the future employment of a considerable number of people.
It is against that background that we are concerned about employment. The hon. Member for Meriden (Mr. Tomlinson) said that people were fighting for the right to work. Mr. Poore has been quoted frequently. He seems to be everyone's best friend tonight. I should like to quote from page 16 of his report:The majority of the … employees at Meriden were making arrangements to accept other employment … It was clear that ample vacancies existed in the Coventry area.…Furthermore, NVT had received no less than thirty-two enquiries evincing interest in purchasing the Meriden factory.Obviously there must be concern for people who lose their jobs, but in that situation all the evidence shows that the risk was not so great. The fact was—this is the point to which the Minister will have to address himself—that, while, unfortunately, it was necessary to consider 1720 the closure of Meriden, this did produce a viable two-factory activity. What has now happened, with the encouragement of the Secretary of State, is that the co-operative has been encouraged to continue and now the viability of the whole lot is in question, and there is a threat to the employment of everyone concerned.
The hon. Member for Nuneaton (Mr. Huckfield) referred to the history of the matter and spoke about the lack of controls in the offer made by the Conservative Government. I would merely refer him to Hansard of 11th June 1973 in which is spelt out very clearly by Mr. Christopher Chataway, who was then the Minister for Industrial Development, the terms and strict conditions under which that money was made available.
My hon. Friend the Member for Eastbourne (Mr. Gow) rightly raised a matter on which I do not propose to dwell. I think it is the unhappiest incident that I can recall since I have been in the House, but it is not fundamental to the problems of the motor cycle industry. I refer to the extraordinary way in which this motion has come forward. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) said that the motion is in the "No" Lobby and that anybody who cannot read it is an illiterate. One person who must be included in that description is the Leader of the House, because for some reason we have never had explained the piece of paper which the Leader of the House had in his hand—the hon. Member for Colne Valley referred to it—apparently contained a sentence which he did not read out during the Business Statement on Thursday. So among the more famous illiterates in the House must be the Leader of the House.
This has all added to the strange feeling we have had about the way in which the order has come forward. Many believed that it might come forward on Wednesday, but it was not mentioned by the Leader of the House. Then the matter proceeded, when allegations were made which, when the chairman of the company was telephoned, were found to be quite incorrect. This has added to what the hon. Member for Perry Barr has called the history of this fiasco. That is a description which I would accept.
I am reminded of a remark made by my hon. Friend the Member for Oswestry 1721 (Mr. Biffen) on the previous occasion when my party was in government and he said that he did not wish to see the taxpayer becoming a pillion passenger to Mr. Dennis Poore. I remember that phrase well. But we now face a whole host of taxpayers being made to climb on the same motor cycle.
§ Mr. King
The hon. Member has not been here for most of the debate. I am anxious to conclude my remarks because it is important that the Minister should have ample time in which to reply.
My hon. Friend, in a most impressive speech, gave a very clear warning of the way in which we are going and the dangers which are implicit in this situation, of illegal sit-ins being subsequently funded by Government funds. The problems of industrial conservatism which it will raise are very real indeed.
§ Mr. King
There are some important questions which need to be answered. As my hon. Friend the Member for Oswestry said, the Secretary of State failed to explain any of the real issues at stake. What is behind the whole issue is a statement that the right hon. Gentleman made on 29th July 1974:I have made it clear to the co-operative that this offer is the limit of the financial assistance the Government are prepared to make available."—[Official Report, 29th July 1974; Vol. 878, c. 16.]That refers to the original £4.95 million. This is where the problem has arisen. The Secretary of State has found that that was not enough. He had not got the export credit guarantee finance. He found that with a three-factory solution he would need still more money. Now we have a situation in which surprisingly—the statement has apparently been made today, although my hon. Friends have not been able to see it—in some way, without seeking parliamentary approval, the ECGD cover has been obtained for the finance for Meriden. So the right hon. Gentleman has to come to this House only under the NVT umbrella and in the name of 1722 NVT. He is, by the side door, achieving the finance which the creation of the co-operative, if it is to operate, has made inevitable. That is a further distortion that the right hon. Gentleman has set before the House tonight.
The Minister of State must answer certain specific questions. Is it correct that this export credit guarantee was refused by ECGD? Is it correct that the Secretary of State is taking this action because it is not open to the company to obtain the money through ECGD and there is no alternative source of that money? What is the position of the three-factory solution? What can he say about the prospects of future employment for all those who work in these three factories? Is the £15 million still going to have to be made available, and is it true that on this basis this will not be a viable and profitable activity until 1979? What is the security of job employment for those who work at Small Heath?
It is against this background and in view of these specific questions that we shall vote against the Government tonight. We do so not because we are against the British motor cycle industry or because we do not want it to succeed. We do it because we know that there are other ways in which this money can be brought forward and because of the deceitful, irresponsible and dilatory way in which the Secretary of State has handled this whole matter.
§ 2.47 a.m.
§ The Minister of State, Department of Industry (Mr. Eric S. Heffer)
The Conservatives have tonight delivered an interesting series of speeches which have ranged over a wide area. I think that about 136 questions have been asked, all of which I am apparently expected to answer in the next 20 minutes. I shall endeavour to answer what I regard as the most important questions. Others which are not answered will have to continue to be put to Ministers, probably in the form of priority Written Questions. That is the way in which similar questions about this and other co-operatives have been tabled in the past.
The hon. Member for Henley (Mr. Heseltine), in one of his usual moderate speeches, said that the amount that was to be granted to the Meriden co-operative was below £5 million. He suggested that 1723 the Government were, therefore, deliberately trying to avoid discussion of this issue in the House. The hon. Member and certain of his hon. Friends made a great deal of that point. He must understand, therefore, that the amount of money that was pushed into NVT was also less than £5 million. There was no discussion in the House on that. Even Conservative Members complained about that because they did not like the 1972 Act.
§ Mr. Heseltine
I stand to be corrected, but I seem to recall that we arranged for a statement in the House at the time of the injection of funds into NVT so that the House could discuss it.
§ Mr. Heffer
The hon. Gentleman must know that a statement is not the same as a debate. Under the 1972 Act there is no need for a debate. The hon. Gentleman made a great point that the Government were providing less than £5 million to a worker co-operative when his Government did precisely the same in relation to NVT, with no discussion whatsoever.
The hon. Gentleman made a number of of other statements which we have discussed before. He referred to the advice IDAB gave to the Government. I thought that we discussed that matter the other evening, when we made it clear that the Government were always willing, quite rightly, to accept the advice of IDAB or anyone else, but that in the last analysis Ministers must be prepared to take their own decisions, because they are the elected representatives of the people, and that they must be prepared to answer for their decisions in the House. That is exactly what we are doing on this matter.
The Opposition have seen something sinister about the question of the ECGD cover. It amazes me how they get so upset about matters which they would find to be simple if only they would look at the facts. The Government could have given the entire cover, but Ministers discussed the matter and decided that the £8 million should come as a guarantee under the Industry Act. I sometimes think that the Opposition believe that my right hon. Friend takes all the decisions on every matter, as though he is not part 1724 of a collective Government. [HON. MEMBERS: "Oh."] That is what they wish to believe. Then when my right hon. Friend the Prime Minister explains, in a speech made in my part of the world, that we take our decisions collectively, they say "This is done only because the Secretary of State is trying to do things on his own."
The hon. Gentleman, who has been in government, knows that no Minister takes decisions off his own bat. They must be discussed with his colleagues. When a decision is taken, it is taken on that basis. Conservative Members know that as well as I do. The Government's collective decision was that £4 million should be guaranteed under the ECGD, but we believed the other further guarantees should be under the Industry Act.
§ Mr. Heffer
Let me make the position quite clear. We are talking about guarantees. Some Conservative Members seem to think that they are loans or grants. They get the whole situation confused. We are dealing with guarantees that may never be drawn upon.
§ Mr. Heffer
Of course, they may be drawn upon. I was telling the House why the extra guarantees are required.
§ Mr. Heffer
Yes, I will. I shall not quote the relevant letter because it is a private letter. Apparently the hon. Member for Henley quotes private letters. It is clearly understood by the management that because of the intervention of my right hon. Friend and the trade unions production at the NVT plant has increased. Therefore, it can sell much more on the American market than in the past. Incidentally, it is not right to suggest that the American market has gone down. The American market has gone up. What has happened is that our share of the market has gone down. It is now possible for us to regain a greater share of the American market—[Interruption.] It is all right for Conservative Members to laugh. Some of them are 1725 interested not in production but in finance. They are not interested in production and in the workers in the industry.
§ Mr. Heseltine
If it is so much to the credit of the Secretary of State that the extra finance guarantees are required, why is it that Mr. Poore and Mr. Chataway discussed the need for an additional £8 million before the Conservative Government left office?
§ Mr. Heffer
I suggest that the hon. Gentleman puts that question to Mr. Poore and Mr. Chataway. I have only the hon. Gentleman's word for that. I do not know whether such a discussion took place.
The hon. Members for Henley and Bridgwater (Mr. King) have suggested that all the difficulties faced by the motor cycle industry in the past 12 months have been the responsibility of my right hon. Friend and the Government because of our apparent encouragement to the workers at Meriden to set up a co-operative. I draw the attention of the House to the famous "Blue Book". We have had plenty of pages quoted and I do not see why I should not quote page 15. It reads:On the morning of 30th November, 1973, the meeting opened in the office of Mr. Chataway. Mr. Poore and Mr. Fawn represented the company, Mr. Urwin and Mr. Lapworth came for the T&GWU. The AUEW had apparently declined the invitation. … By midday, the suggestion had been made by the Minister that work should resume at the factory on the basis of a labour only contract, commonly described as 'the lump', although in this case without the inference that there was any avoidance of income tax in prospect. This arrangement would carry on until July, 1974, which was the date originally planned by NVT up to which production would continue. … This proposal, which became Plan 5, was accepted in principle by those present, subject to confirmation by the Meriden pickets.It is said that we are the people who have been encouraging the workers and that at the time there were no discussions with Conservative Ministers, but the quotation goes on:It did not occur to anyone at the time that the Minister's decision to negotiate directly with the men who were illegally occupying NVT's premises at Meriden would be seen both by the pickets and by others as giving a government seal of approval to the illegal action.1726 When we came into office a year ago, this problem came right on to our desks. It was going on then. We had to pick up the pieces of the situation and sort out matters. That is precisely what we have been doing in these past 12 difficult months during which we have been dealing with the problem at Meriden.
I was asked about the NRDC. I have been asked a great many questions and apparently I am expected to reply to all of them in about 20 minutes. It has been said that my right hon. Friend held back NRDC assistance as a form of blackmail. The true position is that last year a proposal was submitted to my right hon. Friend for approval. It concerned the development of new designs of motor cycle. By agreement between the NVT and the NRDC, the proposal was withdrawn. [HON. MEMBERS: "Get to the point."] It is no good hon. Members asking questions and then saying "Get to the point" while I am in the process of answering those questions. Either they want the answers or they do not. I was saying that a new submission was likely to be made. If it is, we shall give it great consideration and sympathy.
The hon. Member for Mid-Sussex (Mr. Renton) asked a question concerned with the export guarantee legislation and the £8 million. It is not coming under that legislation. It is coming under the Industry Act 1972, and I have explained why. There is nothing sinister about this. This is a decision by the Government to assist the development of exports to the United States, to win a large share of the American market for British motor cycles.
§ Mr. Tim Renton
Does the Minister agree that he has just said that he could have told the ECGD to provide the £8 million, but that he and his fellow Minister decided not to do so? How can he have done that in view of the assurance of one of his colleagues that the Government would not use ECGD for political purposes?
§ Mr. Heffer
The hon. Gentleman must know that if the guarantees were given under ECGD there would not have been this sort of discussion in the House. It was considered by the Government that this was the right way to get authority to deal with it. It was not the only way. We considered that it was the right way, 1727 and that is why we are now having a discussion of this matter in the House because it comes under Section 8 of the Industry Act. It gives the House an opportunity to debate and discuss the position and finally to take a decision on it.
§ Mr. Nelson
The hon. Gentleman has said that the money could have been provided in some other way. I tried to make the point specifically that if it can be provided in some other way than under the terms of subsections of Section 8, it cannot be provided under that Section of the 1972 Act. Therefore, it is not legal to put this motion before the House. It is a simple assurance we seek. If the hon. Gentleman gives it, it is illegal.
§ Mr. Heffer
I have tried to explain to the hon. Gentleman that the Government considered that this was the right and appropriate way.
§ Mr. Heffer
I do not say it was the only way. I said that it was the appropriate and the right way. [Interruption.] I do no know whether the hon. Gentleman now puts himself above the authority of the Government—[Interruption.]
§ Mr. Heffer
The point I am making is that this was a decision of the Government because it was considered to be the appropriate, correct and right way for this guarantee.
The hon. Gentleman, like many of his hon. Friends, has been nit-picking on this question the whole of the evening. Either they are concerned with genuinely assisting our motor cycle industry and with winning markets and with keeping the workers in employment at Small Heath and Wolverhampton and with
§ developing the Meriden site, or they are not.
§ It will be very interesting for the people to know that for three hours the Tory Opposition have opposed the Government in coming forward with guarantees in order to help the motor cycle industry and the workers in it to win exports in the United States of America.
§ Mr. Heffer
I think that the hon. Gentleman and the House will accept that I give way a great number of times to interventions. I am often criticised by my hon. Friends who think that I give way much too often. But because I am basically a courteous Member I give way to hon. Members who intervene. But I am not prepared, within the last minute of the debate, to give way at this stage.
I say to the hon. Gentleman that in my view the people of this country will take very serious note of the fact that there has been all this nit-picking by hon. Members on his side of the House. I am convinced that when the people in the Midlands understand the nature of the opposition to the motion and the Opposition's almost pathological hatred of the workers' co-operative, they will recognise that the Opposition are no longer a serious Opposition but are far more concerned with financial aspects than with genuine production.
§ Mr. Walter Harrison (Treasurer of Her Majesty's Household)
rose in his place and claimed to move, That the Question be now put.
§ Question, That the Question be now put, put and agreed to.
§ Question put accordingly:—
§ The House divided: Ayes 116, Noes 76.1729
|Division No. 130.]||AYES||[3.11 a.m.|
|Armstrong, Ernest||Callaghan, Jim (Middleton & P)||Cryer, Bob|
|Ashton, Joe||Campbell, Ian||Dalyell, Tam|
|Atkinson, Norman||Canavan, Dennis||Davidson, Arthur|
|Bagier, Gordon A. T.||Carmichael, Neil||Davies, Ifor (Gower)|
|Bates, Alf||Clemitson, Ivor||Deakins, Eric|
|Bean, R. E.||Cocks, Michael (Bristol S)||Dean, Joseph (Leeds West)|
|Benn, Rt Hon Anthony Wedgwood||Cohen, Stanley||Dempsey, James|
|Bennett, Andrew (Stockport N)||Coleman, Donald||Doig, Peter|
|Blenkinsop, Arthur||Conlan, Bernard||Dunn, James A.|
|Boothroyd, Miss Betty||Cook, Robin F. (Edin C)||Edelman, Maurice|
|Bray, Dr Jeremy||Cox, Thomas (Tooting)||Ellis, John (Brigg & Scun)|
|Buchan, Norman||Craigen, J. M. (Maryhill)||Evans, John (Newton)|
|Ewing, Harry (Stirling)||Mackenzie, Gregor||Silverman, Julius|
|Flannery, Martin||McMillan, Tom (Glasgow C)||Skinner, Dennis|
|Fletcher, Ted (Darlington)||Madden, Max||Small, William|
|Forrester, John||Marks, Kenneth||Smith, John (N Lanarkshire)|
|Garrett, John (Norwich S)||Marshall, Dr Edmund (Goole)||Snape, Peter|
|Golding, John||Meacher, Michael||Spearing, Nigel|
|Grant, John (Islington C)||Mikardo, Ian||Stallard, A. W.|
|Hamilton, James (Bothwell)||Morris, Charles R. (Openshaw)||Stewart, Rt Hon M. (Fulham)|
|Hardy, Peter||Newens, Stanley||Stoddart, David|
|Harper, Joseph||Noble, Mike||Summerskill, Hon Dr Shirley|
|Harrison, Walter (Wakefield)||Ogden, Eric||Taylor, Mrs Ann (Bolton W)|
|Hattersley, Rt Hon Roy||O'Halloran, Michael||Thomas, Ron (Bristol NW)|
|Heffer, Eric S.||Ovenden, John||Tinn, James|
|Hooley, Frank||Palmer, Arthur||Tomlinson, John|
|Howell, Denis (B'ham, Sm H)||Park, George||Wainwright, Edwin (Dearne V)|
|Hoyle, Doug (Nelson)||Parker, John||Walden, Brian (B'ham, L'dyw'd)|
|Huckfield, Les||Parry, Robert||Walker, Terry (Kingswood)|
|Hunter, Adam||Pendry, Tom||Watt, Hamish|
|Jackson, Colin (Brighouse)||Prescott, John||White, Frank R. (Bury)|
|Jackson, Miss Margaret (Lincoln)||Price, C. (Lewisham W)||White, James (Pollok)|
|Kerr, Russell||Radice, Giles||Whitehead, Phillip|
|Kinnock, Neil||Richardson, Miss Jo||Wise, Mrs Audrey|
|Lambie, David||Robertson, John (Paisley)||Woodall, Alec|
|Lamond, James||Roderick, Caerwyn||Young, David (Bolton E)|
|Leadbitter, Ted||Rodgers, George (Chorley)|
|Lyons, Edward (Bradford W)||Rooker, J. W.||TELLERS FOR THE AYES:|
|McCartney, Hugh||Sedgemore, Brian||Mr. Laurie Pavitt and|
|McGuire, Michael (Ince)||Sillars, James||Mr. J. D. Dormand|
|Alison, Michael||Howe, Rt Hn Sir Geoffrey||Rhys Williams, Sir Brandon|
|Benyon, W.||Joseph, Rt Hon Sir Keith||Ridley, Hon Nicholas|
|Berry, Hon Anthony||Kimball, Marcus||Roberts, Michael (Cardiff NW)|
|Biffen, John||King, Tom (Bridgwater)||Rossi, Hugh (Hornsey)|
|Bowden, A. (Brighton, Kemptown)||Kitson, Sir Timothy||Rost, Peter (SE Derbyshire)|
|Brotherton, Michael||Knight, Mrs Jill||Royle, Sir Anthony|
|Buchanan-Smith, Alick||Lawrence, Ivan||Sainsbury, Tim|
|Butler, Adam (Bosworth)||Luce, Richard||Scott-Hopkins, James|
|Carlisle, Mark||Marshall, Michael (Arundel)||Shaw, Michael (Scarborough)|
|Churchill, W. S.||Mayhew, Patrick||Shepherd, Colin|
|Clarke, Kenneth (Rushcliffe)||Miller, Hal (Bromsgrove)||Silvester, Fred|
|Cope, John||Moate, Roger||Sinclair, Sir George|
|Dodsworth, Geoffrey||Monro, Hector||Stanley, John|
|Durant, Tony||More, Jasper (Ludlow)||Stradling Thomas, J.|
|Eden, Rt Hon Sir John||Morgan-Giles, Rear-Admiral||Tebbit, Norman|
|Edwards, Nicholas (Pembroke)||Neave, Airey||Viggers, Peter|
|Emery, Peter||Nelson, Anthony||Wainwright, Richard (Colne V)|
|Fisher, Sir Nigel||Onslow, Cranley||Warren, Kenneth|
|Fowler, Norman (Sutton C'f'd)||Oppenheim, Mrs Sally||Weatherill, Bernard|
|Fox, Marcus||Page, Rt Hon R. Graham (Crosby)||Wells, John|
|Gilmour, Sir John (East Fife)||Parkinson, Cecil||Winterton, Nicholas|
|Goodhart, Philip||Pattie, Geoffrey||Younger, Hon George|
|Gorst, John||Penhaligon, David|
|Gow, Ian (Eastbourne)||Percival, Ian||TELLERS FOR THE NOES:|
|Griffiths, Eldon||Powell, Rt Hon J. Enoch||Mr. Spencer Le Marchant and|
|Grylls, Michael||Raison, Timothy||Mr. Russell Fairgrieve|
|Heseltine, Michael||Renton, Tim (Mid-Sussex)|
§ Question accordingly agreed to.
That this House authorises the Secretary of State to pay or undertake to pay by way of financial assistance under section 8 of the Industry Act 1972 in respect of the business carried on by Norton Villiers Triumph Ltd. sums exceeding £5 million but not exceeding £12.872 million.