DUNLOP GOLF BALL FACTORY, SPEKE (Hansard, 18 April 1980)

§ Mr. Malcolm Thornton (Liverpool, Garston)

It is exceptional to have a second debate on substantially the same subject within six parliamentary days, but it is an illustration of Mr. Speaker's desire to protect an hon. Member's constituency interests, when other hon. Members have chosen to flout the long-established and widely respected conventions of 1735 the House. I am indeed grateful, therefore, for this opportunity.

When news appears of a factory closure on Merseyside, the reaction of many is horribly predictable. We have had far more than our fair share of closures, and an unfortunate image of the area exists in other people's minds. Equally, although the effects of such closures have been catastrophic in areas such as Speke in my constituency, there are far more successful companies on Merseyside with records of both productivity and industrial relations much better than we are given credit for. The proposed closure of the golf ball factory at Speke is a tragedy. But, to examine just why it is a tragedy, it is important to go back 12 months.

At that time, Dunlop's tyre factory at Speke was being closed down. The reasons for that closure have been thoroughly debated in this House and elsewhere and they need not form any part of this debate. Suffice it to say that in spite of extensive secondary picketing, and because of management assurances given to the work force and to hon. Members of this House that the other elements on the Dunlop site—including the golf ball factory—were not at risk, the work force at the golf ball factory responded magnificently.

Every effort was made by the workers and by local management to keep production going. That was not just an exercise in self-preservation; it was the result of loyalty to their company. Subsequently, perhaps inevitably, the tyre factory was shut down. That immediately presented a problem for the golf ball factory in that the services were shared by the two plants. A temporary system was set up but it was stated clearly that relocation in a purpose-built factory was essential if the golf ball operation was to continue at Speke. At this stage—immediately after the general election—I became involved. In my maiden speech during the debate on the Gracious Speech, I referred to the tripartite commitment involving the Government, management and the work force.

The estimated cost of relocation in a purpose-built factory was approximately £2¼ million. The offer by the Government—made after a meeting that I had with my noble Friend the Minister of State—amounted to a package worth about £1½ million. An earlier offer made by the previous Administration of £2½ million—including a new factory—was not re- 1736 garded as a serious offer, having been made in the silly season prior to the general election. Hon. Members may draw their own conclusions.

The new offer, representing a considerable proportion of the total amount required by Dunlop, was considered insufficient. The problem was then firmly dumped back into the hands of myself and workers and management at the Speke factory to see whether we could come up with anything. If I say that somewhat cynically, it is because by then I had begun to feel that decisions had already been taken.

Yet, once more, the Speke workers and management rose to the occasion. Every possibility was examined fully. Local authorities were contacted to see whether premises were available, and the EEC was approached in the hope of obtaining regional moneys. Finally, and perhaps most significantly, a full financial reappraisal of the costs of a move to new premises was undertaken. That appraisal was not worked out on the back of an envelope. It was done by obtaining up-to-date estimates of building costs, leasing arrangements, new machines, the moving of existing machinery and everything else that was needed.

That financial exercise revealed a considerable reduction in the estimated cost to a figure of just over £1 million—a substantial reduction on the, Dunlop estimate. Furthermore, the new estimate was up to date. I regret to say that all that work was to no avail. At 11.30 am on 28 March it was announced to the work force that the factory would close on 25 July 1980.

During the whole of this period—a time of great uncertainty and concern—the attitude of everyone at Speke, from John Farrell, the works manager and his fellow managers, to the workers on the shop floor, was magnificent. In the many meetings that I have had with them I have seen their determination to do all within their power to make a success of their plant. Their paramount aim has been to create a springboard for their future. The best example of all has been the fact that productivity in the plant during this uncertain period has been up by as much as 13 per cent.

The closure has brought a feeling of betrayal to the factory. Extremely hard 1737 bargaining, as part of that tripartite commitment to which I referred earlier, took place and resulted in a new agreement on manning and productivity for the future. Now there is no future. The workers were told by Dunlop that they would be looked after in the event of closure, presumably in recognition of their total effort during the difficult period.

However, only today I have received letters which are self-explanatory. One of these letters, addressed to the managing-director, Mr. Lord, says: As spokespeople for the loyal labour force of the International Sports Company at Speke, we find it difficult to think that you are aware of what is happening here. For the past 15 months this labour force has worked damned hard to retain their jobs. For a considerable period we had to run the gauntlet of hostile Tyre Division pickets, suffered abuse, photographs being taken of so-called 'offenders'; glass thrown on the roadway in front of cars, installing boilers in the middle of the night, women working with numerous sweaters because of the cold damp conditions, and all for what? Not for any monetary award but for a new factory with jobs. Our productivity and excellent industrial relations impressed Sir Keith Joseph to the tune of over£1 million—all this, only to be told we are closing down. But the ultimate insult is the appointment of a Personnel Director to conduct the negotiations. This man was responsible for sending out letters of notice from an address list which was over 15 months old. This resulted in a large number of people who had left the company receiving letters and people who had joined the company or changed their address in that period not receiving letters at all. Added to this, after two meetings with Mr. Dobson he has offered enhancement to the Company's Severance Scheme as follows: (1) No enhanced redundancy. (2) People who wished to leave before July 25 may do so. (Yes, he actually said this.) (2) He would be prepared to enhance average earnings during the period in such a way that as people left to go to other jobs the people remaining could earn more money, thereby enhancing the cheque in the final pay off. The committee found this totally unacceptable—the people who would have to go to make it all possible would get nothing over and above and we were not led to believe that this was your intention in the event of a closure. We have broken off negotiations with this man and urgently request a meeting with you because Mr. Dobson has done one good thing in that he has made us want to fight for our jobs and it could get very nasty. We urgently await your comments. I believe that two parts of the tripartite commitment have been utterly fulfilled. The third part, that from the parent com- 1738 pany must be questioned. I do not believe that it is the function of the Government to buy jobs if the future of those jobs is unviable. I do not believe that companies can always keep factories open with economic factors pointing heavily towards their closure. However, I am firmly convinced that when big multi-national companies, such as Dunlop, underpinned by vast assets in Malaya, are faced with the sort of decisions as those at Speke, they must have regard to the effect of their decision on their loyal work forces and on the local community.

Dunlop has been well served by the people of Speke. The people of Speke deserve the best possible terms from Dunlop. I trust, even if there is no hope of retaining the jobs, that the terms of redundancy for the work force will reflect the loyalty and effort that they have shown.

§ The Under-Secretary of State for Industry (Mr. Michael Marshall)

I am grateful to my hon. Friend the Member for Liverpool, Garston (Mr. Thornton) for raising this subject and for concentrating on the closure of the Speke factory. I understand his concern to get all the facts of the case on the record. He has done so in an admirable manner, from his own personal standpoint of the situation, as he sees it. No one can be said to have seen it better.

Anyone involved in a closure deserves to know why it has come about. This case has a long history. My hon. Friend has been extremely diligent, energetic and conscientious in exploring every option open to the company. I say this not in the normal courteous way of this House but to reinforce what I know is the view expressed by the trade unions at the plant that no one could have done more than their local Member of Parliament. That is a tribute that any hon. Member of this House would be happy to receive. It is certainly a tribute to a new hon. Member. I pay tribute to my hon. Friend that he has established that kind of relationship with the local trade unions concerned with this problem.

As my hon. Friend the Member for Basingstoke (Mr. Mitchell) said in an Adjournment debate on 3 April, the Government are extremely concerned and look at the problem in the wider aspect 1739 of unemployemt on Merseyside and other parts of the country. My hon. Friend the Member for Basingstoke is sorry that he cannot be present. My right hon. Friend the Prime Minister is visiting his constituency.

I am grateful to my hon. Friend for expressing the view that the Government have been thorough in seeking solutions. I can confirm that a series of discussions between the company and my Department have taken place since 1979. These discussions have been detailed. They span a period in which there has been a change of Government. It is entirely fair that my hon. Friend should raise, as he did, questions relating to offers made by the previous Government. I would pick him up on one point. It is right to say, having talked to the company—not being privy to the actions of the previous Administration—that there were a number of detailed discussions but that these did not realise a final offer, although, as my hon. Friend pointed out, the kind of discussion going on in that particularly "silly season" raises its own image.

We must talk about the degree to which we have looked with the greatest care and have sought to give particular, specific and direct help if that would help resolve the problem. My hon. Friend, I think, is in no doubt, but I can confirm that discussions have covered the whole range of assistance under the Industry Act 1972. Dunlop was offered maximum assistance available for modernisation projects under the Government's regional policy and within the EEC limit.

The company, as my hon. Friend said, decided that, even with the offer of £975,000 assistance for a modernisation project, with regional development grants, with temporary employment subsidy and the possibility of a European Investment Bank loan, and despite already having received public funds totalling £300,000 in the form of regional development grants and temporary employment subsidy, relocation in Speke was not a commercially viable proposition.

My hon. Friend has been fair minded in referring to the assessment of the economic viability of the plant. He is fully aware that a company such as Dunlop, facing substantial international competition in golf ball manufacture and sales competition in this country in what is one of the free trades of the Western 1740 world, has to weigh up, as I understand it has done, the two plants at Speke and at Normanton, and make a market assessment in relation to those twin operations. I think that my hon. Friend was reflecting that situation when he said that he appreciated that one could not sustain plants if there was no economic viability. He stated that in the fairest way.

Neither I nor any other Minister is competent to challenge a commercial judgment such as the company has made. The company has struggled against considerable odds. There have been a number of difficulties at a time when the market has been in a state of change—with cheap imports vying with high-quality imports available in substantial quantities from the United States.

The golf ball market has increased, but it seems that there will have to be a more united future for Dunlop to feel that there is an opportunity to maintain traditional levels of output.

I do not wish to make facetious comments, but it must be said that part of this sort of problem reflects some of the substantial changes and challenges that are facing many of our industries that have had had high standing and almost automatic acceptance in the market place for many years.

I declare an interest as an occasional golfer, and I know at first hand of your expertise, Mr. Deputy Speaker. I am sure that you will support my view that Dunlop is a household name. It is a highly competitive industry, and I do not want to advertise, but the Dunlop 65 ball was produced for the world market after a famous round of 65 by Henry Cotton in the 1934 Open at Sandwich.

We are talking about the problems that face a household name with a history that goes back to the time when British skills and pioneering ability in golf, in a commercial sense, was recognised world-wide.

Challenges have arisen, and the business has become internationally competitive, bringing formidable challenges from the United States and countries such as South Korea and Hong Kong. It is right to put the problem in the context of the sort of challenge facing much of our manufacturing industry.

I should like to turn from the undoubted problems and the sense of tragedy 1741 to which my hon. Friend referred to the future and Government action, and what hope we can offer for those who are to be made redundant. In fairness, and without appearing to be complacent, we can suggest that there is a great deal to encourage them for the future.

I cannot let the opportunity pass without reinforcing what my hon. Friend the Under-Secretary of State for Industry said about our commitment to alleviating the problems of Merseyside. It was because of that commitment that we decided that all of Merseyside, apart from the St. Helens local employment office area, would remain a special development area.

Regional development grants will continue at a maximum rate of 22 per cent. on plant, machinery and buildings, and regional selective assistance under section 7 will continue to enable projects that promote more productive and secure employment to go ahead.

In that regard, there has been a common view among successive Governments. Since 1 April 1972, a total of about £95 million has been offered in grants, under sections 7 and 8 of the Industry Act, to companies in the area. It can be reasonably argued that that has been a key element in the creation of more than 25,000 new jobs.

In the financial year 1978–79, £48.5 million in regional development grants was paid to companies in the Liverpool area, and in the nine months ending in December last year, for which the present Administration has prime responsibility, a further £32 million was paid to the area.

As my hon. Friend the Member for Basingstoke said in the Adjournment debate on 13 April, Liverpool was designated a partnership area under the Inner Urban Areas Act 1978 and has been allocated about £17 million at 1980–81 outturn prices for that year. This will be used to continue development of the area by building advance factories in collaboration with the private sector. Under the Act, local authorities also have powers to give loans or grants to firms in the area and to declare industrial improvement areas. The purpose of these is to secure stable employment in older areas where there would otherwise have been continued decline.

1742 I want now to touch on the work of the urban development corporations. I believe that the Government's continued commitment to Merseyside is illustrated by the announcement of my right hon. Friend the Secretary of State that the south docks is one of the two areas for which urban development corporations are proposed. This will mean programmes of land acquisition, reclamation and disposal, housing, and assistance to industry in the form of the provision of sites, buildings and infrastructure.

My hon. Friend the Member for Basingstoke has already cited examples of how the Government's continued commitment to Merseyside has resulted in projects moving into or expanding in the area, providing several thousand jobs. I see no reason why this should not continue as the Government's policies take effect and create the right environment for businesses to start or, indeed, to grow. Nor do I see any reason why this should not happen on Merseyside, which, as has been said, has been maligned as an industrial environment.

The way in which my hon. Friend put this argument was entirely valid. It is sometimes unfortunate that certain industrial problems are attached to certain areas because of the nature of the reporting which highlights the problems, while the other side of the story, the success of the day-to-day activities of an area, often goes unsung. Such activity is not perhaps given the balanced treatment it deserves. As a result, the high unemployment of certain areas is equated with the problems, which may be typical of problems elsewhere and, in the aggregate, no better or worse than elsewhere in the country.

My hon. Friend also made a number of critical remarks about the activities of Dunlop and its handling of this matter. I am sure that he will understand that it is not for me, when redundancies and payments are still to be settled, to say anything that would be unhelpful in the resolution of his problems. But I am sure that his remarks will be weighed carefully by those with responsibility in these matters.

Having had an opportunity to discuss these problems with the Dunlop company, it is important for me to stress that it is still maintaining a presence on Merseyside. Indeed, some part of its activities 1743 continues in the constituency of my hon. Friend. I see from the figures before me that Dunlop still employs 2,000 people on Merseyside, with industrial smelting at Speke; printers' fabrics at Skelmersdale, employing just under 700; footwear at Walton, employing 900; and approximately 150 with United Reclaim, on tyre reclamation, an activity within my hon. Friend's constituency.

There is this wider activity of Dunlop, and I should have thought that one thing that my hon. Friend can fairly claim to have done today is not just to draw attention to the problem, as I believe he has done with force and fairness, but to highlight the fact that for a company such as Dunlop, with substantial commitments on Merseyside, the arguments that he has put forward will be of benefit in the 1744 continuing debate that must inevitably take place with that company and with the trade unions in the area.

In the general sense, I see every reason to hope for a turn round in Merseyside's fortunes in the next few years. I am sure that in his many contacts with the work force, my hon. Friend has conveyed the basis for some of that optimism. Not only has he done a good constituency job this afternoon; he has assisted in the broader dialogue and debate that is continuing about the problems and, I believe, the more hopeful future for Merseyside. It is in that sense that I thank him for raising the matter in the way in which he did.