HC Deb 24 June 1981 vol 7 cc352-60

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

11.15 pm
Mr. Norman Hogg (Dunbartonshire, East)

The new town of Cumbernauld celebrates its silver jubilee this year. Thoughout a 25-year period, Burroughs Machines has been the town 's largest employer. At one time it employed about 3,000 people. At the beginning of this year, it had a payroll of 1,600. This figure will be cut by half if the proposed redundancies go ahead.

In February 1981, 442 people lost their jobs. They will be joined by a futher 403 on 31 August if the company is not persuaded to pursue another course. The redundancies take place against a background of mounting unemployment in Scotland. On Tuesday, it was announced that 305, 801 Scots were without jobs. That is 13.5 per cent. In Strathclyde region the figure is 177,835, which is 16.1 per cent. The figure for the United Kingdom is 11.1 per cent. In Cumbernauld there is an acute problem of youth unemployment and the rate of adult unemployment has reached very worrying proportions.

The latest figures available demonstrate the serious situation that prevails in the town. For example, 1,691 males are registered with the Department of Employment as unemployed. In additition, 317 boys are registered as unemployed with the careers service, 1,025 females are registered with the Department of Employment as unemployed and 239 girls are registered with the careers service. The town mirrors the rate of unemplyment for the Glasgow travel-to-work area pattern. For males, that pattern can be seen in terms of 18.7 per cent. and for females 10.2 per cent. That is an average of 15.1 per cent. In all of this, the position of Burroughs is of primary importance. It is a major manufacturer of electronic business machines. Scotland and its new towns have a major share of that industry. Cumbernauld's claim to having a significant presence in that industry is established by Burroughs Machines. The company's diminishing size in Cumbernauld is, therefore, extremely worrying to the new town, which is anxious to maintain and expand a manufacturing base founded on new high-technology industries.

The loss of jobs at Burroughs represents a loss of skills that are not easily replaced and a loss to the community as a whole. The company's explanation of events at Cumbernauld follows the standard pattern—namely, falling markets and the trading position caused by the recession. However, that is less plausible when account is taken of the fact that Burroughs is in the process of setting up a plant 30 miles from Cumbernauld, in the new town of Livingston.

According to The Times of 10 September 1980, the company is also expanding at Milton Keynes in Buckinghamshire. The Times reported: Burroughs, the American owned computer company, is to invest £10 million at Milton Keynes, Buckinghamshire which means the creation of several hundred jobs in its first phase. A 400 place residential training school is being built for completion by early 1983. It will be used to train Burroughs marketing staff from the United Kingdom and continental Europe and also customers' staff. Mr. Eric McGlone, Chairman of the company's Europe/Africa division, said yesterday that in Europe and Africa in general and in the United Kingdom in particular, Burroughs had more than doubled its business during the past five years. Despite the worldwide economic situation, the company had every confidence that demand for its products would continue to grow. The new training school would supplement educational centres in France, the Netherlands, South Africa and Scandinavia. Burroughs also plans to set up a major European distribution centre for the export of computer systems to world markets and a large computer centre for the training school and an on-line database system for international communication". That statement was contained in The Times.

Burroughs at Cumbernauld contrasts starkly with the confidence of Mr. McGlone and the developments at Livingston. It is not unreasonable to ask why there is expansion in at least two of the country's new towns and contraction at Cumbernauld, which has served the company well for over a quarter of a century. In addition, we learnt recently, in an article contained in the Electronic News of 10 June 1981, that the Japanese factory, announced last month, will be making small business systems for the European market, among others. In choosing new town locations, the company qualifies for various grants. The sums paid are made public some time after payment in a business news publication from the Department of Industry. The people of Cumbernauld want to know all the facts, not just the current grants being paid for current development by Burroughs but how much in grants has been paid to this multinational company by successive Governments.

All our new towns are in the fight to secure new inward investment. That is understood by everyone, but is it right that a company which in one town is receiving grants can expand while it is contracting its operations elsewhere?

Mr. Dennis Canavan (West Stirlingshire)

Many of my constituents also work at Cumbernauld. In fact, the convener of shop stewards, Mr. Arthur Donaghy, is a constituent of mine. I know that he and the other trade union leaders are fighting hard to prevent these redundancies. Does my hon. Friend agree that when we went to the Minister, the hon. Member for Edinburgh, North (Mr. Fletcher), it was almost a waste of time, because he is the lackey of a Prime Minister who is married to an economic policy which means that she refuses to intervene in such problems?

We have a multinational company given free rein by the Government to trample on its work force. That is at the heart of the matter. It is a waste of time going to see that clown of a Minister, who stands with his hands in his pockets refusing to intervene while jobs are destroyed in Cumbernauld and other places in Scotland by multinational companies such as Burroughs.

Mr. Hogg

I thank my hon. Friend for his helpful and colourful intervention. I agree substantially with much of what he said. I shall deal with the response that I received from the Minister on the occasion that my hon. Friend mentioned when we met him to discuss a problem involving the same company. When we met the Minister, he carefully explained the practice of the present and previous Administrations. He also explained the various criteria that apply for the payment of grants.

My complaint and the complaint of my constituents is that there is a fundamental flaw and weakness in the Government's dealings with companies that can, with such apparent ease, expand at one location and contract in another, causing much anguish and misery in the process. That cannot be right. The time has come for the rules to be changed.

In the midst of all that has happened this year in Burroughs, the work force and the trade unions have acted with the utmost concern and responsibility. The company, the employees and the trade unions at Burroughs have a good record of industrial relations. The trade unions have the greatest confidence in the product. They know that the Cumbernauld-manufactured machines are of the highest quality. The encoder and the B80 and B90 series of computers were designed, developed and produced there and they have been in production since the middle and late seventies. The encoder has a successful sales record in Holland and West Germany and I understand that there have been recent inquiries from Austria. The workers believe that this success can be built upon, and I agree.

The confidence of the Burroughs workers is shared by my constituents. Several thousand have now signed a petition of support, and there will be even more support for the workers in the immediate future. A committee representing Cumbernauld and Kilsyth district council, Cumbernauld trades council and the work people has resoved to resist these redundancies. The Cumbernauld development corporation is also extremely concerned at the possible loss of jobs and the consequences and has, I believe, communicated directly with the Minister.

All who have addressed themselves to this issue have concluded that the need now is for an approach at the highest ministerial level to the top management of Burroughs in the United States of America. Such a visit to the Detroit headquarters of Burroughs is essential in the interests of Cumbernauld. The jobs must be saved and the company's future intentions for Cumbernauld clarified. The community is entitled to that.

I want everything possible done to save the jobs at Burroughs. This is necessary for the confidence of existing and potential employers in Cumbernauld. The unanimous view of everyone concerned for the future of the town is that Burroughs must expand, not contract. It is to that end that I ask the Minister to visit Detroit and meet the president and board of Burroughs. I offer myself to go to the United States to meet the company's chief executive. I know that the trade unions would also be willing to take that step. However, the seriousness of the situation demands action at the highest level. In this, the Government have a clear responsibility and are best equipped through all their agencies to do so.

I am interested to hear what my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) has to say on this point, because he has taken a considerable interest in the problems of Cumbernauld.

My constituents and I expect a favourable and constructive response from the Minister tonight.

11.27 pm
Mr. Harry Ewing (Stirling, Falkirk and Grange-mouth)

I am very grateful to my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) for allowing me a few minutes to intervene before the Minister replies.

I commend my hon. Friend for raising this subject on behalf of his constituents, as I do my hon. Friend the Member for West Stirlingshire (Mr. Canavan), who has his own constituency interest in Burroughs at Cumbernauld. Some of my constituents from Stirling are also employed at this factory.

I intervene for the Opposition because we regard what is happening at Burroughs as symptomatic of what is happening to the whole Scottish economy. I must take up the point made by my hon. Friend the Member for West Stirlingshire. However unkind the Minister may consider it, there is a feeling that, whenever these major redundancies and closures take place, the Government sit back and wash their hands of them.

As my hon. Friend the Member for Dunbartonshire, East said, we expect the Minister to make every effort to persuade the board and the chief executive of this company not to go ahead with the planned redundancies in August. With the 442 redundancies in February, the threatened 403 on 31 August will give people in Cumbernauld the impression that this factory is bleeding to death. That will result in a complete lack of confidence on the part of the people in Cumbernauld in the Burroughs Corporation unless the company, inspired and encouraged by the Minister, does something to restore the confidence of the people of Cumbernauld. What it can do is to be persuaded by the Minister to withdraw any threat of further redundancies.

It is significant that this is the second U-turn in Scotland to be seriously affected by major redundancies. We have seen what happened at Linwood once the plant there was allowed to close. The Minister stands condemned because of the Government's failure to save Linwood. I plead with him to do something about Burroughs to ensure that the planned 403 redundancies do not go ahead.

The Minister must appreciate the situation because I know that, early in his ministerial career, the Burroughs factory was one of the plants that he visited. I remember the photographs in the newspaper and the eloquent tributes paid by him to this modern company. We were given all the assurances that the people of Cumbernauld had naturally hoped for—that Burroughs, which has been there for quarter of a century, would remain there for a long time to come. But, lo and behold! A short time later the threat is that the company will not he there for long.

The Minister must appreciate the devastating effect that this move would have on the new town of Cumbernauld. This factory is not the kind of building that can easily be adapted to some other type of industry. It is a purpose-built factory for manufacturing the machinery and equipment my hon. Friend described.

I plead with the Minister to give us an assurance that he will not sit back and allow the redundancies to take place. I ask him to say that he will go to Detroit, that he will make every effort to encourage the chief executive and top management to come here and meet him, so that he can persuade them not to go ahead with their plan. The company cannot use the argument about market demand. As my hon. Friend has said, the company is expanding in other parts of the country. Any pretence that the markets are disappearing has been crushed by this expansion elsewhere. Yet the company plans drastically to reduce its operations at Cumberlaud.

Speaking on behalf of the Opposition and the Labour Party, I can say that we would give every encouragement to the shop stewards and the work force at Burroughs in Cumbernauld to do everything in their power to resist those planned redundancies. If we do not protest when the company comes for the 403 on 31 August, it will try to come back for more. We want to give those workers every encouragement to resist the redundancies. We hope that we shall have the type of reply for which my hon. Friends have been asking.

11.33 pm
The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)

I shall respond first to the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing). I do not wish, at this time, to go over the ground covered in today's debate, but the hon. Gentleman began by suggesting that the Government were unconcerned about the effect of the unemployment taking place at Burroughs, in Cumbernauld. The hon. Member for West Stirlingshire (Mr. Canavan) mentioned this point in his usual robust way.

What struck me about the main body of the unemployment debate this afternoon and evening was the complete absence of any Back Bench Labour Member representing a Scottish constituency. Scottish Members were scarcely present in the House for the main part of the debate and, as far as I could judge, not one tried to intervene. There are 43 Labour Members representing Scottish seats, and it seems shocking that they showed such a lack of concern over a debate which the Leader of the Opposition pleaded with the Prime Minister to hold. When the debate took place, Scottish Members were so unconcerned about unemployment in Scotland that they could not be bothered to attend.

Mr. Norman Hogg

On a point of order, Mr. Deputy Speaker. An Adjournment debate does not afford much time. Surely it is not in order for the Minister to deal with a debate that took place earlier today. All the points that he is now raising are relevant to what happened earlier. He is not answering the points that I and my hon. Friends have put before the House.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

That is not a point of order. The Minister is relating what he is saying to the problem of unemployment.

Mr. Harry Ewing

On another point of order, Mr. Deputy Speaker. It is singularly unfortunate that this should happen when we are dealing with a problem that will affect 403 families in Cumbernauld and the surrounding district. May I ask you to guide the Minister on to dealing with the problem and not treating the matter frivolously?

Mr. Deputy Speaker

I long to guide many Ministers and Back Benchers, but it is not part of my job.

Mr. Canavan

On a different point of order, Mr. Deputy Speaker. Is it in order to ask that it be placed on record that some of us, including me, sat through the speeches by the Secretary of State for unemployment and the Prime Minister and learnt nothing?

Mr. Deputy Speaker

An Adjournment debate is very limited. We must not waste time.

Mr. Fletcher

I think that I have made my point, Mr. Deputy Speaker, that the Labour Party has no standing when it accuses the Government of lack of concern about unemployment. That is shown by the fact that those Labour Members now present could not be bothered to attend, or to try to speak in, the debate on unemployment this afternoon.

I turn to the specific point raised by the hon. Member for Dunbartonshire, East (Mr. Hogg), with the assistance of his hon. Friends the Members for Stirling, Falkirk and Grangemouth and for West Stirlingshire. I well understand the concern that the hon. Gentleman expressed about the Burroughs factory, which I visited last August so that I would know at first hand what progress there was.

The hon. Gentleman asked that there should be a top-level meeting in Detroit. I visited Detroit last October to call on the headquarters of the Burroughs Machines Corporation so that I could establish contact with the senior executives and have access to them at any time. They equally have access to me and to my right hon. Friend th Secretary of State for Scotland at any time when matters concerning the Scottish factories arise. I received an assurance from the top management of Burroughs that it was entirely satisfied with its United Kingdom operations and with the Scottish manufacturing plants, and indeed with Cumbernauld, which is the largest factory in the Burroughs Corporation outside the United States, and the largest in Europe.

There are rapid changes in technology and in the market place in the electronics industry, and Burroughs is not immune. As it develops one product and one piece of technology in Cumbernauld, and as the market may change, it develops other products there and in other plants in Scotland.

Milton Keynes is indeed a customer training centre, as the hon. Gentleman told the House, and presumably it will be used to expand the company's customer base. Far from criticising that, he should agree that that can only be helpful to the Scottish factories, because in so far as the company expands its customer base it clearly provides more opportunities for the factories in Scotland to provide goods and services to those customers.

The hon. Gentleman said that he objected to the company reducing numbers in one new town and expanding in another. As for the expansion in Livingston, the hon. Gentleman will know, because he takes a keen interest in these matters, as I do, that an entirely new product range is being produced at Livingston. I can tell the hon. Gentleman from my knowledge of the electronics business and of what is happening in Scotland, which does not require any expert knowledge, that it is common for electronics companies to wish to develop different products and processes in distinct and different plants. There is sufficient evidence of that taking place in Scotland, not only in Burroughs but elsewhere.

I do not wish to minimise how serious it is for the new town of Cumbernauld and the surrounding area to lose jobs in these numbers. As I have already said, we have learnt over the years that the electronics industry and the companies involved in it are ones in which there is rapid change. The same experiences have taken place with Honeywell in Lanarkshire and with National Cash Register in Dundee, particularly in the period when they have moved from electro-mechanical devices to electronic and microelectronic devices, which has changed the whole nature of the product and the processes in the factories, and the skills required of the work force. [Interruption.] When hon. Members sit and mutter constantly—not least the right hon. Member for Glasgow, Craigton (Mr. Millan)—while any business of the House is being conducted, I am sure that at least the right hon. Gentleman will realise, if his hon. Friends do not, that Burroughs, like other companies in electronics, is dependent on world markets. [Interruption.] So when they sit and mutter and say "What are the Government going to do about it?", they must realise that the customer orders on which the company depends are entirely related to the world market and to the business that the company is able to obtain in Europe, in Africa and elsewhere.

Mr. Bruce Millan (Glasgow, Craigton)

The reason we are muttering is that all we have had so far is a series of generalities. The question was what have the Government done by way of discussion with the company since the redundancies were announced to try to prevent them happening? We want an answer to that question.

Mr. Fletcher

If the right hon. Gentleman would mutter less and listen more, he might be aware that I answered that question immediately I began my reply to the debate, because I made it clear that I had visited the factory, that we have direct contact with the factory at Cumbernauld, that I visited the headquarters in Detroit, and that we have direct contact with the headquarters of the company in Detroit. [Interruption.] The whole point of these relationships, as the right hon. Gentleman should know, is that we are in constant communication with the company and discuss with it, in advance of any unfortunate redundancies of this kind, what the position is and make sure that the company or any such company is fully aware of the support and assistance that the Government make available.

The Burroughs company is fully aware of this because under successive Governments, as the right hon. Gentleman will know, it has received a substantial amount of Government grants and Government assistance. [Interruption.] What I want to say in the time that is available is that Burroughs still maintains a very substantial manufacturing operation in Scotland in three factories—at Glenrothes, at Livinston and at Cumbernauld.

It is a great disappointment to the Government, as it is to the hon. Members, that the number of people employed at Cumbernauld has been reduced so drastically in a relatively short time. But it is not peculiar to this company, despite the comments of the hon. Member for West Stirlingshire, because the numbers have reduced as the change from electro-mechanical to electronics and microelectronics has taken place, and the numbers have reduced in a similar pattern in other electronic companies in Scotland. I have mentioned two already—Honeywell and National Cash Register.

Our contact with the company assures us of its commitment to continue its operations in Cumbernauld. But equally the company assures us—if the right hon. Gentleman thinks he can get further assurance he is welcome to try—that it has no alternative, in the interests of continuing the operations at Cumbernauld, Livingston and Glenrothes, but to take these steps. It gives the company no pleasure to take these steps and it certainly gives the Government no pleasure to know that these redundancies have taken place.

We recognise in particular the sad disappointment that this is to the new town, and the chairman of the development corporation has been in touch with us about it and is anxious that the resources available to the new town should try to make up for these job losses and find new job opportunities in the new town in every way possible. In that regard the development corporation has the full support of the Scottish Economic Planning Department, of the Scottish Development Agency, and of the new Locale in Scotland office that we have set up with the distinct purpose of increasing the inward investment in Scotland. So we have to bear in mind the position that the company has itself expressed, and the president of Burroughs Corporation has personally pledged to all Cumbernauld employees that there are no plans for the closure of the factory. Burroughs said that it has no complaints about the performance—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at fifteen minutes to Twelve o'clock.