§ Motion made, and Question proposed.
§ That this House do now adjourn.—[Mr. Brooke.]
§ Mr. Bill Homewood (Kettering) rose—
§ Mr. Speaker
The hon. Gentleman should wait a moment. I shall time the debate from when I call him.
§ Mr. Homewood
I am grateful that you, Mr. Speaker, and the Minister are here because I felt such an idiot on the last occasion and I thought that again today I might be standing here addressing an empty House in ethereal circumstances.
It is a source of constant irritation that when the media reports on the terms offered to steel workers when they are asked to agree to a closure, the top figure which applies to only a small number of workers who are being made redundant, is quoted. As a result, £17,000 is the magic figure. That was the figure used for Bilston and Corby. It is also being used in headlines about the Port Talbot and Llanwern arrangements. Perhaps I should not find that so objectionable if other industrial and social statistics were quoted in the same way. However, for those instances the average is always used.
Steel workers' compensation for job loss after closure is made up of a number of elements, one of which is the State redundancy payment. There is also the ECSC 1822 readaptation scheme, guaranteeing a wages make-up for two years for those under 60 years of age and for two and a half years for those over 60. It is paid to those drawing unemployment pay if they are over 55 years of age, but only to those who obtain a job if they are under 55. Severance pay is the subject of negotiations between the British Steel Corporation and the trade unions. I fear that that will settle down at about 62 weeks' pay, based on the average earnings of the last 13 weeks of normal work and including all accrued holiday money.
On the subject of Corby, I understand from a councillor that the average pay-out will be between £7,000 and £8,000, which is hardly the grandiose position portrayed by the media. It is not generous for the majority of those who have spent much of their lives in the industry and who now find themselves thrown out of work at 35 or 40 years of age in a town like Corby, which will be an employment desert for at least the next four years.
Seventy two per cent. of the population of Corby live in public housing. For many, the prospect of moving to another area for work is not bright. For those who are prepared to purchase a house, the severance pay will almost certainly be swallowed up. The average price of a house is more than £23,000. In addition, there are the iniquitous transfer and moving costs.
The debate concerns those who will not be anywhere near as fortunate as those in circumstances that I have described, even though they have lost their jobs for the same reason as the BSC workers, namely, the closure of a steelworks. Throughout the steel industry there is, and always has been, a substantial and necessary amount of work that the main employer, be it BSC or a private employer, has subcontracted to other undertakings, mainly under the headings of civil engineering, furnace wrecking and rebuilding, industrial painting, lorry hire, the production of byproducts, scrap cutting and burning. They subcontracted those jobs on the basis that it is easy to hire and fire subcontractors if they are there only in respect of a specific job.
Unfortunately for those with whom I am concerned, it has never worked out that way. People came into the steelworks to do contract work, have become 1823 highly skilled at that operation, and during the course of their employment at a steelworks have become permanent. There is one contractor in Corby who has a specific works contract with his employees that states quite specifically that they will never be employed outside Corby. I know that that does not apply only to Corby, but to a great number of steel undertakings in Britain. It will become a problem in Port Talbot and Llanwern in the near future.
In Corby, although it is difficult to get exact figures, many contractors have yet to determine their attitudes. I suppose that when the iron and steelworks finally depletes its employment resources, some of them may find jobs in other places, but the common assumption is that no fewer that 500 people indirectly employed by the BSC will lose their jobs as a direct consequence of the closure of the iron and steelworks.
Trade unions in the steel industry have for many years argued that the employment of contractors in iron and steel works should be restricted to work of a temporary nature and that all other work should be carried out by direct labour. For reasons known only to themselves—there have been many guesses, but I shall not repeat them, because I should be reluctant to shelter behind parliamentary privilege—the employers have always resisted these advances. In consequence, in Corby 5,500 people directly employed by the BSC will leave the industry on one set of terms and 500 people indirectly employed by the BSC will leave on substantially worse terms because their employers will not provide severance pay to the extent of that provided by the BSC.
This debate is designed to bring the matter to the Government's attention. I urge upon them the necessity to correct something that on two moral counts is utterly wrong. First, it is necessary to bring it to the Government's notice, because on two occasions the Prime Minister has defended severance payments to steel workers—once in the House and again on "Panorama" on television—without apparently being aware that many steel workers do not get such payments.
There should be no doubt that the people about whom I am speaking are steel workers. It will come as no surprise to the empty Government Benches tonight, but it may come as a surprise to right 1824 hon. and hon. Gentlemen who contributed to the debate on the appointment of the new BSC chairman that steel cannot be produced without furnace workers, furnace builders, civil engineering squads and scrap cutters and burners. I say that it would come as a surprise, because the more I listen to Conservative Members the more I realise that they have trouble in distinguishing between a steel ingot and the back of a bus and a steel worker and the Abominable Snowman.
I said that there were two moral issues. The first is the Under-Secretary's argument, when we discussed the matter with him, that the Government could not accept the responsibility of employers. We know that during every steel debate in the past 12 months—and we have had many—the Government have stuck like a leech to the concept that they were not prepared to intervene in the BSC's affairs.
There has never been any concealment of this duplicity. When the Government talk about aid to the BSC, it must be remembered that it is the taxpayer who is funding the buying out of the steel workers' jobs. It has been admitted on numerous occasion that £300 million of the £450 million earmarked by the Government for expenditure on the BSC in the current financial year will meet the redundancy and severance payments that have been agreed between the trade unions and the BSC management. It is not the employer—the BSC—who is funding the buying out of jobs, but the Government, and, in effect, the taxpayer.
It is immoral that one steel worker living next door to another steel worker can lose his job in the same circumstances and receive £5,000 or £6,000 less, simply because his employer is not the BSC, although in a number of cases he will have given more service to the steel industry than his BSC counterpart.
Another immorality stems from the reason why the BSC negotiated, and the Government funded steel workers' severance pay arrangements. It was purely and simply because without the main trade unions in the industry being induced by their membership to accept the position, steel closures would have been inordinantly more difficult than has been the case so far. Indeed, many people would argue that steel workers have been seduced into accepting situations that will, not only in the medium term but in the 1825 short term, prove to be seriously to their disadvantage, as is already being admitted in places such as Hartlepool and East Moors.
Of course, the people about whom I am talking now have little trade union muscle. They are small, fragmented groups, incapable of embarrassing their employers, the BSC or the Government plant closures. Over the years there is do doubt that their employers have taken substantial profits from their efforts. This is obvious from their reluctance to lose their involvement. But the workers can now be discarded. No doubt their previous efforts have already been spent by the shareholders, and the Government know that the infamous policy of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) can be exercised without fear. But surely, when people are losing their jobs, that is cavalier to the point of being iniquitous, immoral and obscene.
I ask the Government to assist in alleviating the awful bitterness that will be felt if nothing is done for these people. I estimate that the amount of money involved in Corby is £2½ million, or 0.81 per cent. of the amount that has already been allocated for redundancies in the current BSC financial year. It is a once-for-all payment, and it is, of course, only £700,000 more than the all-for-one payment that we shall be making to the new BSC chairman.
§ The Under-Secretary of State for Industry (Mr. Michael Marshall)
I think that the hon. Member for Kettering (Mr. Homewood) was. in a sense, selling himself a little short tonight. He made a number of points as if it were the first time that this argument had ever been pressed upon the Government. I pay tribute to the hon. Gentleman for being assiduous in the extreme in arguing this matter. I have had meetings with him. We have corresponded. He and some of his Friends have been to see me and have put a number of these points to me before. I appreciated the amiable way in which he opened the debate. I understand why he was not able to be with us when we hoped to discuss this matter a couple, of weeks earlier.
1826 The hon. Gentleman was perhaps verging a little on the extravagant side. He made a number of points that we all understand. When there is a need to carry the party-political battle, sometimes one lets fly. I understand that very well. But I hope that the hon. Gentleman will at least discharge me from any suggestion that I do not know a steel ingot from the. back of a bus. After 20 years in the steel industry, if I did not know the difference between the two I certainly should have been given my redundancy very much earlier than I was.
There are many hon. Members on the Conservative Benches who take the keenest interest in the industry. I am glad to see my hon. Friend the Member for Harborough (Mr. Farr) in his place, because I know that he, too, is concerned about the situation at Corby, as indeed is the hon. Gentleman.
§ Mr. John Farr (Harborough)
I thank my hon. Friend for mentioning my presence. I was seeking to intervene. Because of the shortage of time, I shall not do so fully. However, I should like to endorse fully nearly all of what has been said by the hon. Member for Kettering (Mr. Homewood). As the Member for an adjacent constituency, I have admired the way in which the hon. Gentleman has struggled with these very difficult problems. Indeed, the question of the subcontractors is one that has caused concern to hon. Members on both sides of the House. I hope that my hon. Friend will give the hon. Gentleman a sympathetic reply.
§ Mr. Marshall
I appreciate that my hon. Friend has given cross-party support on this argument. I should like to make it clear that I cannot help but be sympathetic towards many of the basic arguments that are put forward.
I have to be somewhat brief in the time remaining. I have only about 10 minutes, so I may not be able to deal quite as fully as I would wish with this matter.
It is true that contract workers frequently work side by side for many years with BSC employees. They do as thorough and dedicated a job. In many senses they are as loyal to the BSC as the corporation's own employees, but of 1827 course there are differences. The earnings vary, according to the particular job that they do, and in a number of cases the salary earnings may well be comparable.
To all intents and purposes, therefore, I take the thrust of the hon. Gentleman's point in saying that they may seem to be identical to the BSC employees. In that sense, in a closure situation, I can well understand the feeling that they may have that the situation is unfair from their point of view. Indeed, when the hon. Gentleman came to see me, on 1 April, I think, with the hon. Member for Blaydon (Mr. McWilliam), I was very much moved by the argument that was put and by the feelings of bitterness that this situation creates within a small community. I understand the point perfectly well.
I want to make it quite clear that I start from a position of great personal sympathy for the argument that is being put forward. Indeed, I have great personal sympathy for the hardship that arises in these situations. I hope very much to have an opportunity of seeing this in the wider context of what is happening at Corby, the remedial actions, and the whole future for Corby when I visit it some time next month. I shall be writing to the hon. Gentleman to advise him when the date of that visit is confirmed.
However, before we come to the question of the BSC's payment I should make clear the considerable role that the Government play and continue to play wherever they see that they have an action open to them. I think that the Government was trying to suggest that the Government had within their hands greater powers than I believe is the case. I have consistently argued that the question of severance pay is a matter for settlement between the BSC and its employees. As for the payment of benefits for contract workers as well as for the BSC's employees, under the terms of the European Coal and Steel Community—an issue on which the hon. Gentleman and I have corresponded—he will know that we are actively pursuing the opportunities open to us. We expect that about 200 of the 600 contract workers at Corby will be eligible for those benefits. Some contract workers at Shotton will probably also qualify, taking the total number of contractors' 1828 employees who will be eligible to nearly 600. That is a sizeable number.
I hope at least that after all our discussions and correspondence the hon. Gentleman understands the logic of our position on the BSC payments. We do not feel that we can intervene in such negotiations without undermining much of the role of management and the trade unions. The hon. Gentleman, knows very well that that view has been taken by successive Governments. It is not a new view. The previous Labour Government had to face the same situation during closures at Ebbw Vale, East Moors and Shelton, where redundancies included contract workers. Like us, they decided that they were unable to intervene in terms of severance payments, and that they were for the BSC and its employees to decide. When one considers the wider question of the taxpayers' funding—as the hon. Gentleman said—one finds that the same attitude prevailed during the period of the previous Labour Government.
The hon. Gentleman said that we should intervene because, by allocating the money for severance payments, we already have a major stake. As he knows, we have not allocated a set amount of money to the BSC for redundancy payments. It is important that this aspect is made clear to the House. It is true that the nationalised industries are constrained by statute from raising money to finance their operations. The Government therefore provide directly the bulk of their financial requirements, including money required to fund redundancies within the cash limits. However, the private sector does not operate under those constraints and has access to commercial markets to raise finance if it cannot generate all its immediate requirements internally.
We have therefore allocated a global sum, leaving the corporation to assign that money according to its perceived priorities. Much of the hon. Gentleman's argument stems from the assumption that there is a loss-making situation. I recognise that at present that assumption is realistic. However, he must also recognise that when—as we all hope—BSC returns to profitability, redundancy payments will need to be self-funded.
Most contract workers at BSC sites have separate employers and are not BSC employees. The hon. Gentleman has raised 1829 several wider questions. I accept that they show that contractors' employees often work entirely on BSC sites. When they lose their jobs it is as poignant as it is for a BSC employee. However, it is not for me or for the Government to say to whom BSC should make severance payments.
I also have sympathy with BSC's point of view. It would be asking a great deal of an employer to extend severance payments to employees of another company. Even if the Government could intervene, and if we were to tell BSC to make payments to contract workers, other inequities would follow. We should have to draw another dividing line that would leave several sections of workers on the wrong side. There would then be pressure to make payments to the suppliers of goods and services. What about the contract workers who have been made redundant in the past? I have already cited those made redundant in the lifetime of the previous Labour Government. Surely they would feel that they had been treated unfairly. What about those employees of BSC who leave shortly before the works close either by chance or in order to get into the local jobs queue first? They would no doubt press for equal treatment and say that, like contract workers, they were directly affected by the closure, even if they were not actually employed by the BSC at the time.
Looking beyond the BSC, we should be opening even bigger floodgates. If we put pressure on the BSC we should be creating a precedent for other nationalised industries. The hon. Gentleman needs to consider only for a moment the case of British Shipbuilders and the closure of shipyards to realise that the parallel would be argued and all the same difficulties would apply.
Having said that we will not interfere with the BSC's arrangements, let us consider the alternative suggested by the hon. Gentleman, namely, that a Government-funded 1830 scheme might include contract workers. Alas, that would open the floodgates to similar groups of employees in other industries, who would want similar schemes. As the House knows, the constraints on public expenditure simply do not allow for that possibility.
Redundant steel workers, including many contract workers, already benefit from the two statutory schemes, for redundancy payments and for payments under ISERBS within the European Coal and Steel Community. A further statutory scheme could not take into account the local variations that are a feature of severance payments negotiations. Furthermore, it seems unlikely that the level of severance pay under a statutory scheme could match that recently agreed by the BSC.
Therefore, while I regret that I cannot offer the hon. Gentleman any prospect of a change in our policy in this matter, his representations and his genuine concern at the predicament of this group of workers have prompted me, out of sympathy and a long-standing personal connection with the industry, and because of my past knowledge of Corby, to consider whether there is any room for manoeuvre. I have to tell the hon. Gentleman that I find that there is no such room. The precedents that I have cited and the difficulties that would be raised are insuperable. They are the reasons that prompted the previous Government to take the same view.
It is with no sense of satisfaction that I have to come to that view. If we could assist—I understand the hon. Gentleman's arguments—we should be glad to do so, but I see no room for manoeuvre, and I regret that the hon. Gentleman must take the answer that I have given him tonight, and that he has had in recent weeks.
§ Question put and agreed to.
§ Adjourned accordingly at eighteen minutes to Eleven o'clock.