HC Deb 04 February 1981 vol 998 cc378-86

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Le Marchant.]

10.9 pm

Mr. James A. Dunn (Liverpool, Kirkdale)

I am grateful for this opportunity to express my absolute opposition to the proposals of the National Freight Company contained in its corporate plan to close and transfer the Roadline depot in Townsend Lane, Tuebrook, within the Liverpool, Kirkdale constituency.

I wish to draw attention to the dire consequences for the commercial and business life of the city if the proposal is to be implemented in accordance with the first proposal. There would be tragic consequences for employment against a background of an already unacceptably high level of unemployment. That would be inflicted at a time when job opportunities are scarce. It would also have a tragic impact upon those with long-standing loyal service to this enterprise. The far-reaching consequences will be a burden not only upon those who represent that enterprise, but upon their families and the neighbourhood.

The city is suffering greatly from high unemployment. The recent figures show that there are 51,000 presently upon the unemployment register. Those figures do not disclose the full truth because a number of people do not register for further employment when they become unemployed. They include those working part-time and the casually employed, and others who would not register for a variety of reasons, including domestic reasons.

I wish to convey to the Minister the anxieties and disquiet felt by the Liverpool city council, and the concern and apprehension of all small businesses in the city, which have always depended upon an effective, efficient and economically based road haulage, parcels delivery and collection service. I also draw attention to the distress that will be caused to other industries which have been dependent upon this form of service, including the mail order stores, of which there have been recent declarations of financial and commercial difficulties.

If Roadline closes at Townsend Lane, that will have other effects upon the National Carriers depot at Wavertree Road. It will have disastrous consequences upon the Huskinson dock freight line services and have a general impact upon Merseyside, and Liverpool in particular. The area would be deprived of a reputable and reliable national road haulage parcels and service and carrier. The rail linkage, which has been built up, will be grieviously affected and no doubt will disappear as a regular service for customers. That would all be to the detriment of the economic future of Merseyside's industry and commerce. It would have disastrous consequences throughout the surrounding area.

British Road Services has operated on Merseyside always in the Townsend Lane-Brick Road area. That enterprise was successfully operated from 1947–48 until a new Roadline depot was started at Townsend Lane. I cannot be certain of the date, but I think that it was either 1959 or early 1960. If I recall events correctly, the transfer was well received at the time and was applauded by the then Conservative Administration as a step forward in a co-ordinated transport policy.

The depot is well located geographically. It is almost on top of an inner city ring road—there is no need to build another. It has the advantages of an urban ring road—Queens Drive—of which the hon. Member for Liverpool, Wavertree (Mr. Steen) will be well aware. It is very close to the M6, and it is a stone's throw away from the M62. If one turns over backwards, one falls over the M58. It is not too far to two Mersey tunnels—we have one to spare. That soon takes traffic to the Wirral. From the Wirral the journey is anyone's guess—to North Wales or Cheshire. One could find oneself at Runcorn in a very few minutes once one reached the M53. In terms of geography and the road network, therefore, the depot is ideally situated.

The East Lancashire road, Southport, Preston and the coastal areas are well served by Queens Drive and the Southport Road. They provide a direct route all the way up the coastline and to Preston. The ease of access has been of great advantage to the undertaking. It has been able to build up a good custom. If National Carriers and the National Freight Company were to relinquish their participation at Townsend Lane, that could cause havoc to the business interests located on Merseyside, and particularly in the centre of Liverpool.

I am reliably informed that the present operation could easily be extended tenfold. I am told that handling and storing of the traffic would cause few problems either long or short term, because warehousing facilities are readily available in the redundant dockside warehouses in the north and south of the city and in Birkenhead. All these facilities that once represented a burden to the business are now an assistance to it because of the closure of the south docks and the reallocation of the warehousing resources.

I am also told that to meet any further requirements for a road-rail link the yard is adjacent to a rail line and is not far from the major marshalling yard at Edge HillSpekeland Road which is not always currently fully utilised. I therefore fail to understand the closure proposals, unless—here I chide the Minister and I hope that he will take it in good part—this is part of the Government's policy to withdraw and leave the lucrative part of a parcels collection and delivery agency for private enterprise to make a considerable success of.

In recent times Labour and Conservative Governments have recognised the very special needs of Liverpool and Merseyside generally and have given it special development area status. It has been accepted that the city cannot overcome the historic imbalance of its infrastructure from its own resources. Hence, the introduction of the inner city partnership with considerable financial investment. The urban development corporation is soon to commence work. Ministers who have answered questions on this topic have shown that considerable resources will be made available to enable it to fulfil its promise.

There is to be an enterprise zone which it is hoped will rejuvenate and regenerate some of the industries that have been failing on Merseyside. All this investment is dependent on a good road network and communications system. It is no use having roads if there is nothing to run on them, to make the deliveries and to provide the service.

The difficulties, I understand, are that, while the Government may provide the road communications and services that are so desirable, we shall be denied the means of transport, the units that will carry the traffic.

The Departments of the Environment, Industry, Employment and Transport have contributed to and participated in the grand plans for the rejuvenation of the area. I fail to see how they can hope to be successful if they do not have the support of a carrier service by road haulage and the rail and road links that are necessary.

Why is the unit to be closed? If I were to speak honestly, I would say that I believe that it is part of a concerted campaign which has not been well thought out by those who are carrying out some aspects of Government policy. In an indirect way, they are denationalising publicly owned industry. In so doing, perhaps I am making an appeal to the Minister for reconsideration and asking him to stop the closure forthwith. Perhaps my appeal will fall on deaf ears. However, I know that he will have been advised to say, as part of his answer tonight, that the commercial management of this undertaking must be left to resolve some of its own problems and that it is no part of the Government's operation to intervene or to interfere.

I hope that the Minister does not say that, because in any other industry there would be a shareholding. The Minister will be aware from speeches made by hon. Members representing Liverpool and Merseyside constituencies of some of the problems and difficulties in this area. Shareholding rights would have been expressed in such a way as to persuade a board by logic to change its decision. In this case, the shareholders are the taxpayers. They have no direct voice—only through the agency of the Government. The Minister must not neglect to fulfil that responsibility. It would be unacceptable if he decided to plead that the commercial confidentiality and decisions of this enterprise should be left to its own experienced specialists and members of the board. There would be no counterbalance and check.

I conclude by appealing, even at this late stage, to the Minister to cause a complete revision of the proposals. If this unit were to be transferred from Liverpool to another geographical area—perhaps Greater Manchester—there would be an all-round journey of 60 miles. That would be an on-cost, and, with mileage, demurrage and maintenance on vehicles, could soon make a partial service uneconomic to operate on Mersey side. That would be a tragedy for all and would belie what the Government have said about their intentions to rejuvenate Merseyside, and Liverpool in particular.

10.24 pm
Mr. Anthony Steen (Liverpool, Wavertree)

I am grateful to the hon. Member for Liverpool, Kirkdale (Mr. Dunn) for allowing me to intervene in this debate about a matter which concerns all on Merseyside, and in Liverpool in particular. The Minister must realise that the situation in Liverpool is becoming so serious that all of us are increasingly embarrassed to say in the Chamber that there is another closure or another series of jobs being lost. At the moment there is a danger of losing 1,600 jobs in Tate and Lyle. Men will never have the chance to work at those jobs again.

I am told that this unit is a successful road haulage business running above budget which provides an invaluable service in Liverpool. It has already lost 135 jobs in the last two years through redundancies and is now down to 120 jobs. It is the last outpost of the National Freight Company on Merseyside. This would be a serious matter anyway, but it is doubly serious in an inner area of Liverpool which is increasingly resembling a shanty town. There are many people without jobs and many firms are closing. This situation is causing all Liverpool Members great heart-searching.

Whereas the private sector is prepared to compete with all other private sectors throughout the country in fighting for business in difficult times, the Conservative Party must not put any obstructions in the way of small firms or businesses which will prevent them from operating or discriminate in such a way as to make life more difficult for people on Merseyside.

There seems every reason why there should be a National Freight Company presence on Merseyside. Speaking as a Conservative Member for a Liverpool constituency, I urge the Minister to recognise the gravity of the situation not only for this company, which will have another 135 men laid off, but for the whole of Merseyside. If the Government do not prevent this kind of company closing down—a company which supplies a real need in a modern purpose-built plant in Liverpool—there will be nothing to stop the rest of the cards from collapsing.

All Liverpool Members must be equally concerned about the Government intervening to prevent another series of redundancies in favour of Manchester. That is happening time and again. One company in Liverpool or on Merseyside is closed and another company is opened in Manchester.

I urge the Minister to give us some hope that the NFC will continue to have a presence on Merseyside and that more jobs will not be driven out to Manchester.

10.26 pm
Mr. David Alton (Liverpool, Edge Hill)

I wish briefly, knowing that the Minister will want to reply, to endorse wholeheartedly what has been said by the hon. Members for Liverpool, Kirkdale (Mr. Dunn) and Liverpool, Wavertree (Mr. Steen). They have my total support. I hope that the Minister will respond with a message of hope for the people of Liverpool.

There are more than 100,000 people out of work on Merseyside and the social and economic implications are incredible. This set of redundancies will add to an enormously growing picture of redundancy.

I hope that the Minister will tell the House that there is hope for Merseyside. I hope that, having listened to the hon. Member for Kirkdale, he will be prepared to intervene and do something about the matter.

10.27 pm
The Under-Secretary of State for Transport (Mr. Kenneth Clarke)

It was with great regret that I heard that the National Freight Company had announced the forthcoming closure of the Roadline depot at Townsend Lane, Liverpool. No date has yet been fixed for the closure, but the company expects to close the depot within the next three months, and operations from that depot will be transferred to Manchester. That closure, if it is carried out, will involve the loss of 115 jobs in Liverpool.

I appreciate what has been said by the hon. Members for Liverpool, Kirkdale (Mr. Dunn) and Liverpool, Edge Hill (Mr. Alton) and my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen). This is a matter of grave concern for Merseyside, which has already suffered great blows. I fully understand the concern that led the hon. Member for Kirkdale, for whom I have great respect, to raise this matter. Indeed, he has won all-party support.

The fact is that the NFC has taken the decision, not the Government. There is no question of the Government intervening. The company is now discussing the matter with the unions with the aim of minimising redundancies. It has apparently been agreed that the Liverpool employees will be offered such jobs as will be available in Manchester when the transfer takes place, but I regret that not many jobs can be offered in that way.

All three hon. Members who have spoken have asked me to explain the Government's role and to ask the Government to intervene because of the impending closure. Roadline is a subsidiary of the NFC. That is now a Companies Act company. My right hon. Friend the Secretary of State is the owner of all the shares. It is the Government's present intention to float the company in the near future. When we float the company, we probably will sell the Government's interest so that it becomes a fully private operation. But, even when it was a nationalised corporation, the rule was, as the hon. Member for Kirkdale anticipated, because he once stood at this Box and therefore knows the situation, that Ministers did not intervene in the day-to-day management of the corporation or seek to override the business judgment of the professional management. When they attempted to do so they invariably made a mess of it. When it was a nationalised corporation, that had no effect on the trading position or the job security of those who worked for it.

The National Freight Company and its subsidiary, Roadline, have found themselves in difficult times in recent years because of their falling profitability in a very competitive market. Before this Government came into office, and before there was a change of policy, the number of employees in Roadline nationally fell from 11,200 in 1969 to 6,775 in 1979—a loss of 40 per cent. of the total jobs in the operation over 10 years, when it was a fully nationalised corporation under two successive Governments of different parties. That is not a happy story. It is an unfortunate history of lost jobs and dwindling business. I hope that that helps to refute the suggestion that lay behind the speech of the hon. Member for Kirkdale that the present problems arose out of a change of policy by this Government or other underlying political aims.

Roadline has been going through a difficult time as a trading company, and there will be no job security and no long-term future for the company until it returns to profitability and it is put on a sound trading basis. Therefore, we have to leave the matter to the business judgment of the managers and not interfere in the day-to-day management decisions that they must make, even when they face difficult decisions, as they do at the moment. That is not to say that we intend to act irresponsibly on behalf of the taxpayers, who are the 100 per cent. owners of the shares. Of course, we exercise control over the investment and borrowing of the company in order to discharge my right hon. Friend's responsibility for the shares that he owns to Parliament and to the public, who are the real owners of the company.

In addition to being responsible for the sound management of the assets and the money, we as Ministers, are also concerned about the well-being of the work force. If they are to have secure jobs with a real future when they become privately owned, the NFC and Roadline will have to be turned round into profitability and established as strong competitive commercial undertakings.

I am glad that the National Freight Corporation as a whole has made impressive strides in recent years and is rapidly turning itself round to become a competitive and profitable enterprise. That has to be done, and anything that deters it will threaten more jobs in the long term than are involved at the moment. As a loss-maker it has no future, and none of its subsidiaries can provide secure job prospects for those who work within it. It is necessary to pursue a strategy that gets it back on to a sound footing. I am satisfied that the management of the NFC is now doing that.

I turn to the difficulties of Roadline, which have given rise to this particularly worrying problem in the inner city area of Merseyside. It is in the parcels business and, unfortunately, that is a very crowded, fiercely competitive part of the road haulage industry. There is a large amount of parcels traffic in Britain—about 210 million parcels a year—with a total expenditure by customers of about £500 million. But if we leave aside the Post Office, there are at present nine large national parcels carriers in the market, including Roadline and National Carriers, which are both owned by the NFC. There are a number of significant small operators. The recession has reduced business, and there is intense competition, with a need for greater efficiency.

British Rail is making enormous losses on its collect and deliver parcels service, and it has been forced into a decision to withdraw from the market, which has left the other parcels operators competing to gain the extra business and to put themselves on a profitable and successful footing.

Roadline was formed in February 1976 from the parcels division of British Road Services. I am afraid that over the years its trading results have deteriorated badly. It used to be profitable to a small extent. It first went into a loss in 1976, it has been making losses for the last two years and it is expected to make losses this year. But I am glad to say that the NFC has decided on a rehabilitation strategy for Roadline which is designed to reduce costs, improve financial performance and achieve a reliable delivery service for the customers.

The present strategy is designed to provide a guaranteed 24-hour service for the bulk of the company's traffic by 1982. The NFC regards this as necessary to compete effectively and is having to rationalise its business in order to achieve that. It shows that the company is planning a future for the business. It is looking at the financial problems it faces which have led to such a dramatic loss of jobs in Roadline over the last 10 years. It is trying to halt the bleeding away of business and jobs and to provide a secure future for a number of employees who really can be supported by the business. I am afraid that the Government cannot interfere with that commercial judgment and start trying to make the company take short-term decisions under political pressure which will interfere with the recovery of the business.

I therefore have to resist what has been put to me. I appreciate that this kind of response is bound to come from Merseyside, where there has been so much bad news for the last two years, with job loss after job loss. The firm of Tate and Lyle was mentioned by my hon. Friend the Member for Wavertree. I have visited the plant and know the part that it has played in Liverpool and in the clocks for so long. It must be a very bad blow in the city, and it is very hard for Merseyside to take another loss of this kind as part of the reorganisation of a national business.

But the Government certainly have not intervened to take the jobs from Liverpool and put them in Manchester. The constant Government involvement in Merseyside is to try to stop this job loss and to regenerate the area. The whole purpose of the policy underlying the urban development corporation, and the reason for the constant ministerial visits to Liverpool that are going on at the moment is to try to establish a basis for the local economy to begin to revive and for jobs to be won back, for derelict land to be used and for new investment to take place to offset losses of this kind.

Mr. Eric Ogden (Liverpool, West Derby)

Will the Minister at least recognise the inconsistency? He has said that the Government are trying to help Merseyside. He has listed some names. At the same time, a company in which he and his Ministers are major shareholders is doing exactly the opposite privately, as it were, to what he and his Ministers claim that it is doing. Roadline is running as a city centre to city centre major operation in order to make a profit. In the meantime, the Minister has an area which is being denuded of the real competitiveness of private parcels.

Mr. Clarke

As I have tried to explain, looking at it nationally, as one must first of all, Roadline is a business which is losing over £1 million each year. It has no future as a business anywhere in the United Kingdom if it cannot stop that rate of loss.

The process of decline that I have described as taking place over the last 10 years would continue to the point of the company's extinction. The company is trying to reverse that and to turn itself round, but it is having to reduce the number of depots and rationalise its business in order to get a streamlined 24-hour service to its customers. I wish it success in that effort.

It is my very deep regret that one of the losses which have resulted from that rationalisation has fallen on Merseyside. But the future of Merseyside must depend on the efforts that the Government are putting in to regenerate the economy in other ways by the winning of new investment and improving the infrastructure of the city bringing all the derelict land in the south docks and so on back into use. I am afraid that the future of Merseyside will not be secure if the Government step in and keep one depot going for a month or two more in totally loss-making and futureless effort.

Mr. James A. Dunn

Perhaps the Minister will have a quick look at the real commercial prospectus of Townsend Lane. On the basis of 2,500 parcels daily pick-up, if it is a commercial proposition, and if it has not made losses itself, will he consider the matter and readvise Roadline accordingly?

Mr. Clarke

That involves the Government having to check the commercial judgment of Roadline, which says that the depot is contributing to the losses, and that the closure of the depot would contribute to the revival of the business.

I hope that the discussions going on between Roadline and the unions will produce some easement in the redundancy figures, and that some of the staff will take jobs in Manchester. But the future of jobs in the parcels business depends on putting the business back on a sound competitive footing. Ministers cannot take the decisions to do that and civil servants cannot take them, but I have every confidence that the management will eventually.

All these disasters will redouble the efforts of the Government to do something about the underlying problems of Merseyside and bring some new investment back into the area.

Question put and agreed to.

Adjourned accordingly at twenty-one minutes to Eleven o'clock.

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