HC Deb 09 February 1979 vol 962 cc639-45
Mr. Norman Lamont

(by private notice) asked the Secretary of State for Industry whether he will make a statement on the current situation at British Leyland.

The Secretary of State for Industry (Mr. Eric C. Varley)

The House will know that the management of BL Cars has announced that payments due this month under the agreed parity programme and the national engineering agreement cannot be made because required productivity targets have not been met. Trade union officials and shop stewards representing hourly paid employees have recommended strike action, and employees at each BL Cars plant are expressing their views on this recommendation at meetings during the course of this week.

I deeply regret the decision by the Longbridge work force to stop work immediately. Whatever view is taken of current problems, it is all too prevalent a philosophy in the motor industry of striking first and talking afterwards. That is a recipe for permanent decline. I hope very much that the Longbridge work force will recognise their responsibilities to their fellow trade unionists in BL Cars, and will on reflection agree to observe the agreed procedure for dealing with this recommendation.

The latest position, according to the company, is that the hourly paid work force at 22 plants have considered the recommendation, and nine have voted for strike action and 13 against. The outcome will not be clear till Monday, when shop stewards are due to meet to consider the position in the light of the views expressed by the plants. I hope that yesterday's meeting between management and unions has at least served to clear up some of the misunderstandings which have arisen between the two sides over the terms of the agreed settlement and over the company's recent performance.

It would not be appropriate for me to intervene in the discussions currently taking place. Sir Leslie Murphy, chairman of the NEB, will be keeping in close touch with developments. I very much hope that every individual employee in BL Cars will therefore weigh carefully the serious consequences of the strike at this critical stage in the company's recovery.

Mr. Lamont

Is the right hon. Gentleman aware that we agree with the general tenor of his remarks? Does he agree that it is unthinkable that, after £846 million of public money has been spent in four years on British Leyland, even more public money should be provided by the National Enterprise Board, as some trade unionists have suggested, just to pay wage increases unmatched by productivity improvements? In that connection, will the Secretary of State say how far the improvements in productivity last year met the target in British Leyland's corporate plan of 6.40 vehicles per man per year?

Finally, does not the right hon. Gentleman agree that, whatever the rights and wrongs of the dispute about parity payments, one thing is certain—that British Leyland cannot afford a long strike, and that, if its market share falls even further, no Government, Labour or Conservative, will be able to do anything to rescue it?

Mr. Varley

On the first part of the question, after two days of strike—which I very much regret, and I hope that the agreed procedures will be observed—it is too early to talk about future funding, especially as the corporate plan of British Leyland has only just been lodged with the National Enterprise Board and has not been considered by that body. Certainly we must look at it at some stage, but it is much too early to come to firm conclusions about that. It is true that British Leyland could not sustain a long strike, nor could the Government sustain a long strike on the basis of providing further public funds.

Productivity has been patchy over the last few months. That is the reason why the parity payments have not been made, as I understand it. For the month of November, production was very low—about 3.8 vehicles per man, which is very bad. Contrary to some reports that I have seen, production in 1978 was down 30,000 vehicles from the 1977 figure.

Mr. Litterick

The House will be grateful to my right hon. Friend for the information that he has provided to us, particularly the fact that the workers of British Leyland are still in process of deciding their course of action. Does my right hon. Friend agree that it is highly unfortunate that hon. Members should seek to intervene in a complicated and potentially very damaging situation for purely political motives? The hon. Member for Kingston upon Thames (Mr. Lamont) said nothing constructive or helpful in his question.

Mr. Varley

I agree with my hon. Friend. The discussions are taking place. That is why I have decided that it would be inappropriate for me to intervene at this stage. I hope that all hon. Members will weigh their words very carefully so that the situation is not inflamed in any way.

Mr. Eyre

Is the Minister aware that the collapse of British Leyland would have a devastating effect on the economy of the West Midlands and on jobs in that area? Will the Government redouble their efforts to bring the reality of the facts home to the people working at Long-bridge so that they fully understand the position under the corporate plan, and the position of the Government, so that when the secret ballot takes place the men will have full knowledge of the true position and of its desperate nature for the future?

Mr. Varley

The hon. Gentleman is right to the extent that it is not only a question of public funding. It is really a question whether cars are produced regularly and consistently, whether they go into the showrooms and whether British people and our overseas customers decide that they want to buy them. That is crucially important, as well as the vast amount of public money that has been poured in.

I think that there have been genuine misunderstandings. From discussions I had last evening to bring me up to date with some of these problems, I think that some of the misunderstandings have now been cleared. There is a better relationship between management and unions about this—I am talking about representatives of the Confederation of Shipbuilding and Engineering Unions. I hope that, when all the voting has taken place, decisions will be taken, perhaps on Monday, to resume normal working so that the normal process of conciliation and bargaining can take place.

Mr. William Hamilton

Does my right hon. Friend agree that considerable numbers of British Leyland workers who are very sensible, moderate and responsible workers recognise that a prolonged strike would cause enormous social and economic chaos? Will he underline that by emphasising that the patience of the taxpayers is coming to an end and that taxpayers are not willing to finance any further inefficiency on the part of this firm?

Mr. Varley

My hon. Friend is right. The vast majority of those who work in British Leyland, workers and management, want to see the company succeed. Of that I have no doubt. That is expressed, too, in the votes that have already taken place during the current dispute.

It is much too early to talk about future funding, save to say this. I shall have to come back to the House later this year with further proposals for funding for British Leyland, and the House will have to take into consideration everything that is taking place now and what occurs over the next few weeks.

Mr. Eldon Griffiths

Has the Secretary of State seen the figures produced last night by the Society of Motor Manufacturers and Traders which make it clear that over the past 10 years Toyota's production has risen from 964,000 to 1.8 million, and Datsun's production has risen from 697,000 to 1.6 million, while British Leyland's production has dropped from 830,000 to 650,000? Will he undertake to make known to the very responsible workers throughout British Leyland that figures of that kind are suicide for their industry?

Mr. Varley

I have not seen the latest figures to which the hon. Gentleman has referred, but I am familiar with many figures concerning the British motor car industry. It is one of the most serious problems that faces us in the Department of Industry.

Over the past 10 years the British market share has dropped from 80 per cent. to less than 50 per cent. British Leyland, at the time of the rescue, had a market share of over 30 per cent. That has gone down to about 25 per cent. Last year the market for motor cars in Britain was up by 20 per cent., but production was down by about 7 per cent.

These are pretty devastating figures. I keep trying to get them over, time and again. I think that they are well understood by the majority of people in every motor car firm in Britain. It is really a question of continuity of production, and of talking rather than walking—which is the main problem affecting our industry.

Several Hon. Members


Mr. Speaker

I propose to call those hon. Members who have been standing.

Mr. Bidwell

Does my right hon. Friend agree that it is vital to get an early settlement to this problem in British Leyland if Britain is to remain in the motor car production industry at all? As he knows, I have a bus factory in my division which is about to close under the rationalisation programme. This must necessarily bring about a feeling of unease throughout British Leyland, when Mr. Michael Edwardes is faced with the problems of wholesale rationalisation throughout the combine, which was brought into being substantially when it was under private ownership.

Does not my right hon. Friend agree that there must be a deep sense of frustration to bring about a situation of this kind? He has referred to patchy productivity. That suggests that many of the workers have addressed their minds quite seriously to the problem of British Leyland. Does not he agree that it is no good looking at past productivity figures—the Opposition seem to dote on this—and that what must be examined is the current situation and what is potentially likely to occur? That is the essence of the dispute.

Mr. Varley

It is of vital importance that Britain has a viable and competitive motor car industry. For all the other reasons given by my hon. Friend, part of the problem in the British steel industry or in the tyre industry relates to our motor car industry, and power generation and all the other factors with which the House is familiar.

I say only this to my hon. Friend, and I know that he accepts it. When the House originally agreed to the proposals to rescue British Leyland, and put money into other motor car companies, it was on the basis that we would move towards internationally competitive levels of productivity. That is the only basis on which we could have a motor car industry, and I hope that everyone in the industry understands it. I know that my hon. Friend does.

Mr. Grylls

Rather than describe the production efforts as rather patchy, would it not be more straightforward of the Secretary of State to tell the House that the truth, very sadly, is that the productivity achieved during 1978 has been a disaster? It has actually been the lowest ever in the history of British Leyland—4.4 vehicles per man year, averaged over 1978. It must be got across to the people in British Leyland that this must be improved.

Would the Secretary of State also tell the House what has happened about the internally generated profits during 1978 of British Leyland? It was understood that half the investment plan was to come from internally generated profits and over £200 million was the target for 1978. What progress has been made in that respect?

Finally, may I ask about Lord Stokes? Is it really sensible for British Leyland to offer him a contract at £50,000 a year for two years as honorary president for doing nothing in retirement? I wonder what the work force thinks about that.

Mr. Varley

I shall not go into all the problems of the motor car industry, nor shall I pick up some of the points raised by the hon. Gentleman concerning individuals in British Leyland or those who have had past associations, or loose associations, with that company. The question was about the current dispute. I have already answered the question about funding. It is too early to come to conclusions about that matter. In due course I shall report whatever I have to say to the House about further funding for the remainder of this year.

Mr. Lawrence

Further to the question asked by my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre), which I do not think the Secretary of State completely answered, is he not aware that accusations have been made through the media that wrong information about the state of British Leyland has been passed to trade unionists prior to their vote? Will he specifically undertake to make sure that there can be no question about the accuracy of the information that is conveyed to the trade unionists before they make any secret ballot or whatever other way they come to their conclusions?

Mr. Varley

In the first instance, it is for British Leyland management and the union negotiators to agree on the information and to make sure that it is made known. I understand, as a result of the meeting I had last night, that that is what the chairman of the National Enterprise Board and the chairman of the company, Mr. Michael Edwardes, propose to carry through. The meeting that I referred to in my statement helped to clear up some of those misunderstandings.