HC Deb 28 February 1977 vol 927 cc28-34
Mr. Ridley

(by Private Notice) asked the Secretary of State for Industry if the Government will continue to finance British Leyland in view of the current strikes.

The Minister of State, Department of Industry (Mr. Gerald Kaufman)

Last August the House approved the provision of £30 million loan finance as the Department's contribution to the £100 million loan authorised by the Government. A decision about the provision of further finance beyond that will depend upon a thorough assessment of performance, on the basis of the criteria that have been announced.

Mr. Ridley

Does the Minister remember that the CPRS said that further money should depend on performance and that the NEB has said many times that further tranches of finance should depend on improvements in industrial relations at British Leyland? As this is clearly not happening, has the Minister discussed with the NEB a breaking point beyond which the Government are not prepared to go? What is that breaking point, and are the Government prepared to stick to it this time?

Mr. Kaufman

The criteria upon which further finance will be made available to British Leyland were laid down not by the CPRS but by my right hon. Friend the Member for Huyton (Sir H. Wilson) when he was Prime Minister, when he said, in announcing the rescue of British Leyland, the release of further stages of Government funding will be determined in the light of the contribution being made to the improvements in the performance of British Leyland by better industrial relations and higher productivity. This is a condition to which the Government attach great importance."—[Official Report, 24th April 1975; Vol. 890, c. 1746.] That remains the position.

A breaking point is more likely to come through the failure of internally-generated finance within Leyland because, as the personnel director of Leyland Motors pointed out on the radio yesterday, the problem for Leyland is that it has to provide at least half its money from internally-generated finance. This money is not coming forward because of the failure in production, and because of that, as Mr. Whalen, the personnel director, said, the future investment content in the 10-year Ryder Plan must be in doubt.

I do not wish to put any particularly unpleasant connotations on what was said by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), but he seemed to be calling for some kind of summary execution. The danger to Leyland is of bleeding to death.

Mr. Heffer

Is the Minister aware that many of us regard the statements that are being made by the Opposition as absolute hypocrisy? Does he realise that while the Tories say that there should be more incentive for the higher paid, when the workers who are higher paid want more incentive they are accused of disrupting industry because they go on strike? Does the Minister agree that there is a serious problem at Leyland and that there should be early negotiations and discussions with the work force involved, that it is a longer-term problem and that there ought to be a national negotiating machinery in that company? Is that not the way in which the matter ought to be discussed rather than by threats of closing Leyland or anything of that kind, such as the Opposition suggest?

Mr. Kaufman

These problems will not be solved by threats. They will be solved only by sensible action by all those involved.

Of course my hon. Friend is perfectly right when he says that for the toolroom men this is a problem of incentives and differentials.

I discussed this with the convener and the shop stewards of British Leyland at Solihull when I visited them on Friday, and I fully understand the problems that they put forward. But there is a machinery through which this can be discussed, and that is the established trade union machinery. I know that my hon. Friend would agree with that. The AUEW has such established machinery and has called upon the workers involved in the unofficial dispute to return to work so that established procedures can be followed. Surely my hon. Friend will agree that that is the right course of action.

Mr. Norman Lamont

Is the Minister aware that we regard the strike as extremely serious? Is not the news that toolroom workers have today refused to meet AUEW officials regrettable?

Has not the social contract inevitably exacerbated the old problem of differentials? Will the Minister, therefore, give the assurance that in the next round of wage restraint—if a next round there be—the Government will at least make sure that the policy will go some way towards restoring differentials?

On the point made by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), will the Government seek to disabuse Leyland workers of the comfortable and apparently widespread idea that the withholding of funds is a sanction that no Government would dare to use? Will the Government, as my hon. Friend urged, stick to the targets of the NEB and make it clear that if workers are implacably determined to destroy Leyland, no Government can save them from their folly?

Mr. Kaufman

The criteria that my right hon. Friend the Member for Huyton laid down in April 1975 remain the criteria on which future finance will be allocated to Leyland. The hon. Gentleman can be sure about that. It is important for all those involved to realise that while, of course, the problem of differentials is a serious one, nevertheless the question now is the survival of Leyland. The issue in April 1975 was not differentials but the dole. That could be the issue again unless the bleeding of British Leyland is stopped quickly.

Of course, when I meet shop stewards—whether at Leyland, British Steel Corporation, Ferranti, Alfred Herbert or wherever—they all make clear that the problems of differentials and anomalies caused by the current pay policy are problems that trouble them very much. The joint letter that was sent to the Secretary of State by Mr. Whittaker and Mr. Robinson will be taken into account by the Chancellor of the Exchequer and by other relevant members of the Government when any future stages of the pay policy are considered.

But it has to be accepted that, while differentials are a problem, not only in Leyland but in organisations such as the British Steel Corporation and the others that I have mentioned, other workers have not sought to emphasise the problem of differentials by disrupting production.

Mr. Richard Wainwright

Since the strikers have now said that they will not meet even their own union leaders, will the Minister consider some means of reinforcing the general truths that he has stated by making it clear to everybody in Leyland that the Government have taken off the table and are not willing even to consider any further negotiations or plans for financing British Leyland until some discipline is restored?

Mr. Kaufman

Negotiations about a further tranche for British Leyland are not required to take place until later this year. The hon. Gentleman has spoken about discipline. While of course we want orderliness within British Leyland—that is essential if Leyland is to be saved from the bleeding that will otherwise kill it—discipline is not something to be imposed upon workers by a Government as if they were children but something to take place between the workers and their union. The AUEW is the most appropriate body to apply discipline to its members in the industry.

Mr. Litterick

Is my hon. Friend aware that adequate negotiating machinery does not exist at British Leyland to cope with the present toolroom dispute? Will he make it as explicit as he knows how that the Government will on no account mobilise the power of the State against the workers of British Leyland, bearing in mind that this was the basic tactic of the German Nazis to destroy the German trade union movement?

Mr. Kaufman

The power of the State was mobilised two years ago to save 170,000 jobs in British Leyland. The power of the State rescued those jobs, and the money of the State—the taxpayers' money—has been used to save those jobs. Without wishing to use such words as "discipline" and "threats", I should say that it is important for all workers of British Leyland to realise that the power of the State has saved their industry and that a response to what the State has done is very important if British Leyland is to go on producing the cars that are needed and making the money that is needed.

It is my hon. Friend's view that the negotiating machinery is not satisfactory, but yesterday Mr. Terence Duffy, the Midlands executive member of the AUEW, the union to which the toolroom workers belong, said that he had told the leaders of the strike that they should call it off. He pleaded with them to help the union to help them get back to work. He said that they were putting all their jobs in danger and that it was impossible for the toolroom to have a separate negotiating procedure. The AUEW has negotiating procedures and Hugh Scanlon and the rest of the executive committee have called on its members in the tool room to go back to work. These are unofficial disputes, and the workers have a union that is fighting for their interests.

Mr. Eyre

Is the hon. Gentleman aware of the strong feeling in the West Midlands that the Government should have required further undertakings on production when Government aid was made available in 1975 and subsequently? Will he consider asking Mr. Len Murray and the TUC to review urgently the whole system of trade union organisation and representation at British Leyland? Is he aware that 17 unions are involved and that the present system cannot be said to be working satisfactorily when skilled workers, such as the toolroom operators, feel that the present system of representation does not allow their case for differentials to be properly taken into account?

Mr. Kaufman

There is an established procedure within the union for dealing with all these matters. If the TUC can help in any way, we shall welcome its help. The AUEW has its own procedures and has made clear that it should represent the interests of its members through the established negotiating procedures.

If the hon. Gentleman is criticising the structure of worker involvement in British Leyland, he should remember that we have evolved within the firm the most advanced scheme of worker participation in British industry. It is a pity that not all the workers there have availed themselves of the participation system.

Mr. Rooker

Will my hon. Friend treat with great suspicion the motives of hon. Gentlemen opposite who seek to undermine British Leyland and who drive into our underground car-park every day in foreign-built motor cars? Is he aware that two weeks ago, when the leaders of the present strike came to the House to talk to some of my hon. Friends and myself, they showed themselves to be the most moderate and sensible bunch of shop stewards and that they gave us chapter and verse on what they had done in the past two years, through the machinery within their own trade union and with the company, to avoid the situation that has now arisen?

Is he aware that internal negotiating procedure at British Leyland has broken down and failed them and that, in many respects, their own union has failed them because they have been refused meeting after meeting—

Mr. Speaker

Order. This is not the time to argue the case. It is a Private Notice Question. I propose to allow only two more questions, because there is a lot of other business. May I say to the House as a whole that hon. Members are increasingly tending to argue the case instead of asking a question?

Mr. Kaufman

I agree with my hon. Friend that the motives of the Opposition are, at best, obscure. For example, I recall that when the Leyland rescue took place two years ago, the solution of the hon. Member for Cirencester and Tewkesbury was to put the whole company into receivership. [Interruption.] It is a great pity that hon. Members opposite, with their bogus pretence of treating this matter seriously, do not stop their idiotic mutterings while I am trying to answer a serious question.

I agree that the shop stewards are arguing a serious point. When I met the shop stewards at Solihull for more than an hour on Friday we had a serious discussion about this problem. No one would dispute that the problem is serious. We are saying that if there are problems within a union about negotiating procedures, the appropriate way of dealing with them is not for the workers to put 30,000 of their fellow workers out of a job but by sorting out the procedures within the union and, in the meantime, allowing full production within Leyland. Last week, the company produced only one third of its scheduled programme. If Leyland does not achieve its programme, it will not be a question of heavy-handed punishment from the Government. Leyland will bleed to death.

Mr. Stokes

Is the hon. Gentleman aware that, despite the general unpopularity of car workers, I believe, from personal experience, that there are many good Englishmen working in British Leyland? Is he aware that they need better management and better shop stewards and that they will not get the latter unless the mass of the work force takes the trouble to turn up at trade union meetings?

Mr. Kaufman

Wider participation in trade union activity is very much to be welcomed. The hon. Gentleman is correct in saying that it is wrong to depict the mass of Leyland workers as work-shy people who do not want to get on with the job. Anyone who watched television yesterday will have seen workers being interviewed and saying time and again "We want to work." The vast majority of workers want to attain the production targets and to make the company viable. We hope that their colleagues who are on strike will use the established procedures and allow full production to be resumed.

Mr. Anthony Grant

Can the hon. Gentleman assure us that the directors of the company are not in breach of their statutory obligations under the Companies Act by trading while insolvent?

Mr. Kaufman

Yes.