Stone-Platt Industries (Hansard, 18 March 1982)

§ Mr. Geoffrey Robinson (Coventry, North-West)
I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter that should have urgent consideration, namely, the steps the Midland Bank announced this morning by which to put Stone-Platt Industries into receivership".
I am conscious, Mr. Speaker, that we have had an extended Business Question Time and a ministerial statement, but the effect of this decision on a company of Stone-Platt's size, employing 7, 000 people, with a turnover of £120 million to £130 million, with interests throughout the country, is not a matter of insignificance.
Stone-Platt, like many other companies, allowed itself some years ago to fall behind international competition in vital areas of its product development. But in recent years, spanning the last Labour Government and this Conservative Government, the company has at all levels, with great determination and skill, sought to put the problems right—problems almost entirely due to previous inadequate management decisions on product development.
It is important to note that the attempt to restructure and rebuild this company has taken place under both Labour and Conservative Governments and has had the full support of the Department of Industry under the 1972 Industry Act. Money has been made available by the Government from the taxpayer for a variety of purposes and, most important, for providing grants to accelerate the research and development necessary for the new product programmes.
The Government have played their full role. The Export Credits Guarantee Department has also done its bit. The company's response to date, according to this Conservative Government's own most prized and cherished criteria, has been to face up to the most unpleasant decisions. Confronted with the massive recession in the capital equipment market at home and abroad, particularly for textile machinery, which is its problem sector, it has closed down factory after factory. In Accrington alone two out of three factories have been closed and the work force has been reduced from 6, 000 people to 1, 000. In other areas of the company's activities the recession has also been felt but they have been able to trade at least at a break-even point.
As the right hon. and learned Member for Hexham (Mr. Rippon) said, it was a time when "usury was becoming the only profitable activity". The other companies in the SPI group have good, technically advanced products. They are not household names, because they are not consumer products, but they are world leaders in their field. There is Scragg at Macclesfield with 30 per cent. of the world market in texturising equipment. In Thames and Kent there are factories specialising in air conditioning equipment for trains and underground systems. This company has 50 per cent. of the world market. This one company, put at risk by the decision announced today, is turning over nearly £50 million per annum, with an order book to cover a whole year's forward production. The company has orders for equipping the underground systems of New York, Seoul and Iraq.
These are success stories, by any standards, of companies whose credibility in the market place has by 496 today's precipitate receivership been severely damaged. It reminds one of the enforced receivership, obviously on a much larger scale, of Rolls-Royce, a decision that I am sure the right hon. Member for Sidcup (Mr. Heath) bitterly regrets, as he would say if he were in the House.
Does anyone in the House believe that Japan would put companies that are high technology world leaders through the hoop of enforced receivership with the loss of confidence, doubt and uncertainty that that creates in the market place? Does any Member believe that the French or German banks, working closely as they do in their national interest with their manufacturing industries, would have taken the decision that the Midland bank has taken today? Of course not.
What makes this whole matter even less comprehensible, both from a financial and an industrial point of view, is spelt out clearly in the press release issued at 10.30 this morning by Stone-Platt Industries. I will not delay the House by quoting from it but I would, by reference to it, recapitulate the situation that makes this decision of the Midland bank unacceptable.
Stone-Platt Industries, at great cost to all its employees, has made enormous strides towards viability. This progress has been helped significantly at every stage by both Labour and Conservative Governments, by the Department of Industry and by the Export Credits Guarantee Department. The company is currently breaking even and is operating within its bank facilities. That is a point that is stated clearly in the press release. The company's major shareholders, ECI, FCI, Prudential and M and G are prepared to enter into further commitments and have expressed their willingness further to assist the group. That, too, is clear from the press notice. It is to the shareholders that we must look for their protection, because they stand behind the bank. It is the bank that has jumped in at their expense with this decision.
Despite all that, as I have said, the Midland bank has pulled the plug. If I called this a "bloody shame", I am sure that those sentiments would be echoed by the shareholders, by the board of directors and by everybody who works in the company. Indeed, those words were used to me by one of the parties—

§ Mr. Speaker
Order. Those words may well have been used but they are not parliamentary language and the hon. Member is addressing the House of Commons.

§ Mr. Robinson
I apologise, Mr. Speaker, and, of course, immediately and willingly withdraw them.
I have only two further points to make. First, there are further dimensions that enter into the equation. There will be further redundancies in a group that has been so badly hit. At least 1, 000 other jobs and further productive capacity will be lost needlessly. Secondly, a point that is important in itself and in relation to redundancies created and to the productive capacity that has been chucked to the wind, is the question of bank profits. This year bank profits are 18 per cent. up on what they were last year, which was a record in itself. Curiously, only the Midland has still to announce its figures; they are to be announced on the Stock Exchange at 10.30 am tomorrow, Assuming that the Midland achieves the average percentage increase of the other three major clearing banks, its profits will be in the region of £275 million. It will not have escaped the notice of the House that that is three times the entire turnover of Stone-Platt Industries.
497 I suppose that it is a pure coincidence that the Stone-Platt announcement preceded by 24 hours the announcement of what are bound to be record profits for the Midland bank. Whatever the reason for the indecent haste and pressure, this receivership will be seen as a major black spot for the banking institutions. It will mark a nadir in their ability to understand and cater for manufacturing industry, particularly the medium-sized engineering companies such as Stone-Platt, companies that have decided to leave the old technologies and face the difficult future of the new, but that need banking institutions to stay with them and see the whole job through. It is for that reason as much as for the other reasons I have set out that I consider that this issue should be debated as a matter of urgency in the House.

§ Mr. Speaker
The hon. Gentleman gave me notice before 12 o'clock this morning that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believed should have urgent consideration, namely, the steps announced this morning by the Midland bank to put Stone-Platt Industries into receivership".
The whole House will have listened with concern to what the hon. Gentleman has said. The House knows that under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reason for my decision.
I listened carefully to what the hon. Gentleman said, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.