Leave having been given on Tuesday 22 May under Standing Order No. 10 to discuss:
The announcement by the Secretary of State for Trade and Industry of the closures of Bathgate and C. H. Roe, Leeds.
§ Mr. Speaker
I remind the House that the debate will last for three hours only. There is an extremely long list of right hon. and hon. Members who wish to take part—17 in all—and I make a special appeal for very brief speeches so that the majority of those who wish to participate may be called.
§ Mr. Shore
We asked for this emergency debate on Tuesday after we heard the statement and the increasingly inadequate and irritable replies to questions put to the Secretary of State for Trade and Industry. I am sorry that he is not speaking today. He ought to be. He carries the principal responsibility for these closure decisions. Indeed, it is his unique personal mix of ignorance of economics and indifference to the human consequences of economic decisions that underlay his statement on Tuesday.
From the start the right hon. Gentleman has been a member of a Government whose policies have directly contributed to the deindustrialisation of Britain. The right hon. Gentleman is fast earning for himself in his present post the reputation of being the principal gravedigger of British industry. He acts the part, and there are many who think that he looks it.
I am sorry that this debate has been delayed for 24 hours because of the frivolous, irrelevant and time-consuming interventions of Members of the Liberal party throughout Tuesday night. However, the people for whom I am really sorry are those employees and others concerned with the future of Bathgate and the bus plant outside Leeds who came to London yesterday in the hope of hearing the debate. On behalf of the Labour Opposition I offer them an apology for what happened.
In the past 48 hours we have been able to reflect on what the Secretary of State said, and as we have been able to absorb the documents, including the corporate plan that was put in the Vote Office that afternoon, the more unacceptable and damaging his decisions to close Bathgate and Charles Roe, Leeds, appear to be.
I wish to stress three points. The first is the sheer scale and quality of the manufacturing resource available at Bathgate, which is now to be closed down. They have there the skilled management and men, the sophisticated machine tooling and large-scale and flexible plant investment capable of producing a great range of vehicles and engines, as well as many of the principal components. Of course new models are needed, and I shall say something further about that in a few minutes, but let no one doubt that in Bathgate there is a prime and prize facility from which the revival of British Leyland trucks could be launched.
That is not just my view. From studying the document, it is perfectly clear that it was also the view of British Leyland's management when it signed the co-operative production agreement with the American Cummins engine 1263 firm in 1982. It was a view to which it certainly adhered as recently as August 1983, when it sanctioned the first £10 million of new investment.
Not only was Bathgate to be the major producing centre for a family of new diesel engines — the so-called Family One—but also the principal manufacturing and assembly point for the new seven to 11-ton vehicle, the model 211. But the Government and management got cold feet, and the whole Cummins-related investment was put on ice last December. Looking back, it is now clear that Tuesday's appalling decision to close Bathgate was the inevitable consequence of the failure and faltering of December last year.
The second point that needs emphasis, which shows that we are right to condemn this decision, is that it signals the abandonment, not only of vehicle manufacturing in Scotland, but of the effort to reinstate British Leyland's position as a major manufacturer of commercial vehicles.
When the Labour Government brought into public ownership and rescued the backrupt, private enterprise British Leyland in 1975, they did so because, apart from the hundreds of thousands of jobs that were at stake, they were convinced that a British-owned major vehicle producer of both passenger cars and commercial vehicles, including buses, was in the national interest. We intended to secure the revival of both.
Tuesday's decision signals the abandonment of any serious attempt for the future to restore British Leyland as a major supplier of commercial vehicles of all kinds. the deindustrialisation of Britain can be documented from a score of industries, but nowhere is the story more vivid than in the case of commercial vehicles and British Leyland.
From being the largest producer of commercial vehicles in the world in the 1960s, with an average annual production of 150,000 units a year, British Leyland's output declined steadily until last year, 1983, when production was down to a mere 11,000. It will take a major effort and a long haul to begin to reverse this position, and we know only too well of the difficulties that face exporters, particularly to the markets of the debt-burdened countries of the Third world, but the Government do not intend to make the effort, and that is our major complaint against them.
The third point that must be stressed is that these decisions do not make sense even judged against the financial criteria which the Secretary of State suggested. The savings that are supposed to accrue from the closure of Bathgate are put at only £10 million a year. This has to be seen against a deficit in Leyland Trucks of some £70 million and sales, of course, of well over £450 million per annum. The closure of Bathgate, with a job loss of 1,800 directly employed there and about another 500 whose jobs are linked to continued activity at Bathgate, will cost the Government in social security benefits and tax forgone £10 million to £13 million per annum. In addition, there will be redundancy and terminal payments of some £30 million.
Bathgate already has a male unemployment rate of 21 per cent. It will rise to at least 28 per cent. in the travel-to-work area and 30 to 40 per cent. in some of the smaller adjacent towns. There simply are not alternative jobs for those who will be made redundant at Bathgate.
Of course, there is the possibility that another foreign manufacturer, perhaps a commercial vehicle producer, will be tempted to buy the Bathgate facility. If that 1264 happens, what a remarkable comment it will be upon the Government. It will demonstrate that the facility at Bathgate, contrary to what the Government are alleging, is capable of being viable. In demonstrating that viability, a foreign firm will be competing directly with British Leyland commercial vehicles and other British producers in the British home market.
The heart of the matter is the laissez-faire ideology, and the defeatism that flows from it, that influenced the Government's approach to this and many other industries. Let me illustrate. According to the Secretary of State on Tuesday:Leyland Trucks … faces an exceptionally depressed market at home and particularly overseas, showing little sign of major improvement in the medium-term and severe over-capacity throughout Europe.The same problem faces Charles H. Roe in Leeds. As the Secretary of State told us:Leyland Bus too has suffered from a depressed market at home".Having, as he thought, described the problem, the Secretary of State immediately moved to what is to him the only and obvious conclusion — the need to cut capacity and to close the plants. He managed to get in the statement:The Government, like the company, greatly regret these measures".—[Official Report, 22 May 1984; Vol. 60, c. 830.]The right hon. Gentleman's basic stance is that of a man shrugging his shoulders and saying, "What else can I do?"
All of this was echoed and stressed by Mr. Warton, the managing director of Bathgate, to his employees in a message copies of which have been made available to us. Mr. Warton told his work force that Leyland Truckscontinues to make heavy losses … this cannot go on.He spoke of his review of Bathgate, which he claimed to have been a long and painful task. Then he delivered the resounding judgment thatthere is no solution. Bathgate will have to close.If the view of the Secretary of State and of Mr. Les Warton, the managing director of Bathgate, had prevailed in 1975, there would be no British Leyland in existence today. The crisis that faced a bankrupt private enterprise company at that time could be resolved only—I defy Ministers to disagree — by a Government who were determined to take a long-term, not a short-term, view and to back their judgment with the large financial resources that were necessary.
By investing in new models on the passenger car side, the Government, management and work force have produced a major turn round in the fortunes of British Leyland cars. I willingly pay tribute to all that has gone into producing the fine new range of Metros, Maestros, Montegos and Jaguars, but, given the neglect of the past, very large sums of money indeed have been needed to produce this change.
The truth is that since the public rescue operation began only a relatively small amount of the new investment that was necessary has gone into the trucks division, the commercial division of British Leyland, and only £25 million, as the Secretary of State told us, into Bathgate itself. A substantial new investment would be needed to turn it round.
There was published only this March an extremely interesting report on the future of the United Kingdom in the European motor industry, by Professor Bhaskar and the University of East Anglia motor industry research unit. His findings, which I shall put, are very pertinent: 1265Leyland's choice is between attempting to become a major manufacturer or giving up. But to establish itself as a major commercial vehicle producer, the group will require subsidies for another three or four years.He went on to say:No doubt with all European truck manufacturers in deep trouble"—yes, that is true—it may be tempting to close Leyland Trucks down. Cumulative losses between now and 1987 will be at least £100 to £150 million and the business will require around £100 to £200 million pumped into it if it is to survive as a non loss making competitive business by 1987. Just as BL cars has made a dramatic recovery on the back of market improvement it is probably worthwhile giving Leyland Trucks a breathing space until the UK and world market recover and to allow the company to prove whether it can survive.I think that that is a fair summary of the situation. We know what the Government's choice has been. They are not prepared to find further resources to engage in the battle for viability for commercial vehicles. They have chosen to give up. Indeed, we know very well that they would never have embarked upon the rescue of British Leyland in the first place had the collapse occurred when they were in power.
What is totally unacceptable is that the Government are not even prepared to allow British Leyland the continued use of the financial resources that it at present has. The deficit of over £60 million a year on Leyland Vehicles, which the world recession and the internal British recession have combined to produce, has to be seen against the profit made by Jaguar last year of no less than £55 million. So long as British Leyland remains as a group, surpluses generated in one part of the business can be used to assist in financing the deficits in other parts, but it is the Government's intention, reaffirmed on Tuesday, while denying Bathgate and Leyland Trucks any additional resources, to sell off this year Jaguar, the jewel in the crown, the most profitable part of the whole enterprise, to private ownership. It is this decision that has inevitably posed a major crisis for British Leyland and decisively tipped the scales against any effort by the company, from its own resources, to continue with the Bathgate operation.
That is the direct responsibility of the Government and of the Secretary of State. No less important is their whole laid-back, laissez-faire approach to the problems that still face British Leyland. Has it not occurred even to the right hon. Gentleman and his colleagues that, through their money supply and interest rate policies, they have had the most dramatic and adverse effect of all on the fortunes of the British passenger car and commercial vehicle industry? The only market in which we have clearly prospered abroad since 1979 has been the American market, where the pound has fallen massively against the dollar, thus giving us the sharp competitive edge which, combined with improved quality, has made the fortunes of Jaguar so remarkably strong. Against the European and other world currencies, the pound, compared with the 1979 base, has not been devalued, but revalued. We are still, in international competitive terms, some 16 per cent. more expensive in foreign markets than we were five years ago. Everyone in the motor car industry knows this to be true. It was referred to in this year's corporate plan and in last year's as well.
This basic lack of competitiveness, the over-valuation of the exchange rate, is the direct consequence of the 1266 Government's tight money supply targets and high interest rates, which have pushed up and held up the value of the pound. There is, of course, a world recession in vehicles as in other industries. Has it not occurred to the Secretary of State that between 1979 and 1982 commercial vehicle production in France dropped by just over 5 per cent. and in Germany by 5 per cent., while in Italy production increased by nearly 4 per cent., yet in Britain it fell by no less than 34 per cent.?
Is the right hon. Gentleman aware that between 1978 and 1983 the volume of commercial vehicle imports more than doubled and that there was an increase of more than 51,000? As our exports fell by some 50,000 during the same period, it is hardly surprising that we are in our present difficulties. Does the Secretary of State really believe that he can put the blame for all of this on the world recession and hope to get away with it? If that was the reason, why have not the Germans, the French and the Italians suffered a similar calamity? Is he really unaware, in regard to the decision to close the extremely efficient bus and coach works of C. H. Roe, that the collapse of the British domestic market has been the principal cause? Whereas domestic buying in the United Kingdom was some 18,000 vehicles a year between 1978 and 1980, domestic purchases in 1983 were down to just over half at 10,000.
Is it not plain that the over-capacity and lack of demand of which the Government complain, and on which the Secretary of State seeks to justify his closure decisions, are basically an excuse for inaction and an abdication of the proper functions and responsibilities of his Department and his colleagues?
I shall conclude by offering our proposals. First, there is still a little time. Assembly of commercial vehicles at Bathgate is due to cease in mid-1985, and engine production is due to cease in early 1986. That is time enough to obtain an independent reappraisal of the commercial vehicle market at home and abroad, not just for this dreadfully depressed year of 1984, but for the second half of the 1980s. We simply cannot get decisions right if we take short-term decisions only to find that we have missed out when the world economy revives and we have not the capacity to contribute to it.
Secondly, the Government must resolve to put Leyland Trucks back on the road, to increase its market share, to re-activate the model 211 Cummins engine project at Bathgate and to introduce its new models and engines which are just as important to the future of the commercial vehicle side of BL as have been the Metro, Maestro and Montego to its passenger car revival.
Thirdly, there is an obvious need to complete the model range of commercial vehicles. The main gap is in the replacement for a light van, the market for which is growing and in respect of which our imports are increasing and our exports falling. Can the Secretary of State confirm that General Motors in Portugal is assembling Itzu vans, badging them as Bedford and selling them to Bedford's traditional United Kingdom export market? I believe that to be so and it reinforces the case for a British-built new vehicle based on Bathgate in precisely this range of commercial vehicles.
§ Mr. Shore
No. I wish to be brief, as I know how many hon. Members have been frustrated by the length of time that it has taken to have this debate.
Fourthly, the Government should put the C.H. Roe decision on ice, reactivate the grant for new buses and encourage municipal transport authorities to purchase the vehicles which they certainly need.
Fifthly, the Government should at least postpone, if they will not abandon, the damaging and financially defeating proposal to privatise Jaguar this year. That would make the major contribution needed to finance the revival of the commercial vehicle division.
I commend those proposals to the Government and the House. If all that lies between their acceptance and rejection is the Secretary of State's loss of face, that is a sacrifice which the people of Scotland and the whole nation will be willing to bear.
§ The Secretary of State for Scotland (Mr. George Younger)
As the House knows, British Leyland presented its corporate plan to the Government earlier this year. Thereafter, the Government had to decide whether to approve it. I assure the House that the most careful study of all possible options was made before we came to the conclusion that there are no sensible reasons to reject the company's plan.
We have agreed only, and with the greatest reluctance, to those aspects of the plan that affect BL's truck and bus operations. I welcome this opportunity to outline some of the facts and figures that led us to that conclusion. I should like also to make it clear that this is not a case of closure being due to failures by the work force. In the past few difficult years it has acted responsibly and with full regard to the need to improve productivity to the best of its ability.
§ Mr. Younger
As this is a short debate, I shall concentrate most of my remarks on the effects on Scotland. If he catches your eye towards the end of the debate, Mr. Speaker, my right hon. Friend the Secretary of State for Trade and Industry will cover more fully the non-Scottish aspects.
I should like first to remind the House of the main features of the plan. In 1983, BL achieved its objective of breaking even at the trading level for the first time for five years. Its quality and productivity have improved dramatically. The corporate plan sets out the basis on which long-term viability will be attained. It has also been the company's objective to return the business progressively to the private sector, and BL proposes to do just that with the highly successful Jaguar Cars as a first step.
There has been a dramatic turnround in all aspects of BL Cars. It has moved from a pre-interest trading loss of £78 million in 1982 to an operating profit of £73 million in 1983. The board of BL is to be warmly congratulated on that achievement. The bus and truck business of Leyland Vehicles, however, remains in deep trouble, and the board has been obliged to take a decision to close two important plants. As a result, 440 jobs will be lost at C. H. Roe, near Leeds, and there will be a phased loss of 1,800 jobs at Bathgate.
1268 I am sure that the House will understand that, as Secretary of State for Scotland, I am particularly concerned about the closure of Bathgate—
§ Mr. Younger
—but we must examine the board's decision on Bathgate in the context of the plan as a whole and in the light of the success of the board's policies for Austin Rover and Jaguar.
I should like to underline the fact that I do not accept the suggestion made by some hon. Members that the decision to close Bathgate demonstrates that the British Motor Corporation should never have come to Scotland, and that any attempt to establish a vehicle industry in Scotland was always doomed to failure. Anyone who has followed the fortunes of BL's operations in Scotland knows that the real story is much more complex and that the plant has experienced good times as well as bad. The circumstances that have led to the sad but, I believe, inevitable decision to close could not have been foreseen when the plant was established and the truck market was buoyant. The dismay with which the decision has been received demonstrates the value of the employment it has provided and the contribution it has made to the Scottish economy over the past 20 years.
The Government have, as my right hon. Friend underlined, given long and hard thought to BL's corporate plan before endorsing the decision to close Bathgate. It has been suggested that we held up the decision beyond BL's timetable, and I make no apology for that. We had a clear duty to examine all the available options, and we have done so, but the facts proved inescapable. What are they?
The facts are that the truck business across Europe has been severely depressed for several years, that most European manufacturers, including much bigger businesses than Leyland Vehicles, are losing large sums of money and that there is enormous excess capacity. The United Kingdom market has shrunk from 79,000 in 1979 to little over 50,000 in the current year. Leyland's sales fell from 14,000—
§ Mr. Younger
I shall finish my sentence. I wish to put the facts before the House. Opposition Members will find it helpful to hear them, even if they do not agree with them.
Leyland's sales fell from 14,000 in 1979 to 8,000 last year. Abroad, the company's sales fell from 10,000 in 1979 to 2,700 last year. In Nigeria, an important market for the Bathgate plant, sales fell from 2,600 in 1981 to 318 last year.
§ Mr. Robin Cook (Livingston)
Will the Secretary of State acknowledge that if the Bathgate plant closes, Leyland Trucks will not have the capacity to produce its own engine? If he bases his defence of this deplorable decision on comparisons with other European truck producers, will he name one major European truck producer which intends to go into the remainder of this decade without the capacity to produce its own engine and to be entirely dependent on a foreign company providing it?
§ Mr. Younger
Mr. Speaker said that many hon. Members wish to speak, and if I give way I shall never reach the end of my speech.
I come to the point that worried the hon. Member for Livingston (Mr. Cook). Against those declining sales figures—the total for Leyland Vehicles was 11,000 last year—Leyland Trucks has capacity at its very modern plant to produce 24,000 vehicles and capacity at Bathgate, when in full production, to produce at least the same number. That is capacity to produce 48,000 trucks, against sales of 11,000 last year. To put it another way, even if sales recovered to their 1978 level of 24,000, the Leyland plant alone has the capacity to meet the demand.
Let us look more closely at Bathgate. In 1980 the plant produced about 13,500 trucks, in 1981 the figure was 9,000, in 1982, it was 8,200, and in 1983 it was 4,200. The Bathgate plant, as the hon. Gentleman said, also produces engines, and again there is a similar sad story. Capacity is around 700 engines a week; current production is around 200. Again, capacity vastly exceeds both present sales and any likely level of demand in the foreseeable future. Not surprisingly, with that enormous burden of unproductive overheads, Leyland Vehicles has been losing a great deal of money—over £60 million in both 1982 and 1983. No business of the size of Leyland Vehicles, with a £435 million turnover last year, can stand that level of loss for long.
I have been asked by the hon. Gentleman and others about the joint engine project with Cummins. There is no mystery about this. The project was conceived, and rightly so, when sales were much more buoyant than they have been in the past two years. With the lower sales volumes now forecast in every forecast made by the company, the BL board now believes it is cheaper to buy the engine from Cummins than to make it. Of course, the engine will still be made in the United Kingdom, although it is for Cummins to determine whether it is to be made at Shotts or Darlington.
It was evident from our examination of the company's plan that, unless something drastic was done, there was a real risk of losing the entire Leyland Trucks operation, including the 1,200 jobs at the Albion plant in Glasgow. There is some limited recovery in the home market for trucks, but there is no sign of recovery in the overseas markets, particularly in Africa, which Bathgate has traditionally supplied. No amount of new investment would have brought those markets back, and the gap between existing capacity and any foreseeable level of sales is immense. I do not believe that in these circumstances a responsible Government could have overturned the decision of the BL board.
The accusation has been made that the Government starved BL of investment, and that greater investment in the past would have avoided this closure. It is interesting to consider the facts. Since 1975, the Government have pumped £2,300 million into BL. The greater part has gone in since 1979. At Bathgate, £25 million has been spent over the past five years. It is natural, in the circumstances, that people should turn their attention now to supposed mistakes in the past, to new models which should have been introduced, and to facilities which might have been modernised. But the Government are in no doubt that at this juncture further large-scale investment at Bathgate in the face of the facts about the truck market, as has been suggested by the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and others, would be the height of 1270 folly. It would burden Leyland Vehicles — this is of interest for the future—with an added burden of debt which the company could not support, and there seems to be no prospect of it generating the level of extra sales needed to justify the plant's retention.
§ Mr. Geoffrey Robinson (Coventry, North-West)
Is the Secretary of State aware that those are precisely the same arguments as the Conservative Opposition advanced in 1975 against major investment in the motor car industry as a whole? Is he so lacking in confidence in the capacity and competence of British managers to invest again, perhaps not in the old markets but in new markets, as we did in Jaguar and Austin Rover? Why are the Government so afraid? We invested in those markets, so why is the right hon. Gentleman afraid that we cannot do so for the truck market?
§ Mr. Younger
I listened with special care to what the hon. Member for Coventry, North-West (Mr. Robinson) said, because he was involved in the industry and knows what he is talking about. He knows better than most hon. Members that he would never have applied the conclusions of the car market 10 years ago to a different market—the truck market—which has totally collapsed, during his commercial life. If he had, he would have been fired quickly. There may be consequences of that later for his own business.
The decision taken by BL, which the Government have considered carefully, was extremely unpalatable. Anyone who listens to and looks carefully at the facts that I adduce today will be in no doubt that the decision was made on the facts as they are. That is the responsibility of all hon. Members, whatever side of the argument they wish to take. It puts great responsibility on us to do all we can to help in what is undoubtedly an extremely difficult position.
We are now considering what realistic measures we can take to generate new employment in the area before the start of the phased redundancies at Bathgate. The Bathgate Area Support for Enterprise, sponsored by the Scottish Development Agency, Leyland Vehicles, Lothian regional council and West Lothian district council, has as its main objectives the regeneration of the local economy and the stimulation of enterprise. It will be possible to build on the existence of BASE, and the possibility of its playing a wider role is being examined. I was glad to note that Leyland is to extend its support for that scheme for two years beyond its initial three-year commitment. I am happy to say that, at my request, the Scottish Development Agency is to match that contribution. In addition, Leyland will appoint business consultants to identify and prepare an outline for business and other opportunities to utilise the engineering and other skills available. Again, I shall ensure that the SDA will be associated with the study and will have an early meeting with the consultants.
In addition, Locate in Scotland, through its overseas offices, will immediately seek to interest inward investors in the plant and in the area in general. The Manpower Services Commission will do all it can to meet local training and retraining needs, in line with its adult training strategy. By using the machinery we already have, rather than setting up an immediate task force or something like it, we are more likely to secure long-term success.
I should make it clear that it will be far from easy to find another use for the Bathgate plant, but, for those who 1271 have doubts, I remind the House that last December no one believed that there was any chance of finding another use for the Scott Lithgow plant. Yet that was achieved, and the workers at Scott Lithgow were saved from threatened closure. Those who now say that we can do nothing to help Bathgate would do well to bear that in mind.
In the question after the statement by my right hon. Friend the Secretary of State for Trade and Industry last week, several hon. Members drew parallels between the sad position at Bathgate and previous closures, such as those at Linwood, the pulp mill at Corpach, the smelter at Invergordon, and so on. They suggested that those closures were all that had happened in Scotland during the past five years of the Government's economic policy. Understandably, it was not even a complete list, because hon. Members forgot to add companies, such as Singer, Monsanto and Prestcold, which closed within a week or two of the advent of this Government in 1979 —[Interruption.] No one can think for one moment that that had anything to do with this Government's policies. If the closures were due to the policies of any Government, it was the right hon. Member for Glasgow, Govan (Mr. Milian), the Secretary of State for Scotland in the Labour Government, who was responsible for the decline in industry at that time.
§ Mr. Younger
Hon. Members must learn to listen to statements they do not like as well as to ones they like. They will learn in due course that I shall carry on until they do.
The Opposition's thesis does not bear examination, because that has not been the picture of Scotland during the past five years. Although many traditional industries have run into trouble and declined, as they have elsewhere in western Europe, in Scotland there has been a positive and increasing flow inwards of new industry. The list is so long that it would bore the House. Hon. Members mentioned Linwood, Corpach and Invergordon, but I do not have the time to list the alternatives. On the positive side. there have been big new developments—these are only the biggest—including companies such as Hewlett Packard, National Semiconductor, Motorola, Rodime, Fortronic, Future Technology Systems, Wang, NEC, IBM, Burr Brown, Mitsubishi, Shin-Etsu, Caledonian Airmotive, Ferranti, Jetstream and Prestwick Circuits. Most recently, Digital has just announced today—
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
Order. I remind the House that this is a short debate and that many right hon. and hon. Members have a great interest in making their contributions. Exchanges such as this delay the opportunity of calling them.
§ Mr. Younger
Today Digital, which is one such company, announced that it is moving from assembly to manufacturing and is embarking on a £15 million development, which will create 200 new jobs over three years.
In less than three years, Locate in Scotland has attracted inward fixed investments of more than £800 million, 1272 producing 23,000 new and safeguarded jobs. Probably the most successful location of all is just down the road from Bathgate at Livingston. Since 1980, 16 inward investment projects have been attracted to Livingston. They promise a total investment of more than £170 million and about 4,000 new jobs. In the three years since Locate in Scotland was established, it has been actively involved in decisions to locate in the area by major international companies, such as Burr Brown, NEC, Mitsubishi and Shin-Etsu, in the electronics sector, and Gore Associates and Surgikos in the textile sector. Shin-Etsu is investing £38 million, with the prospect of 480 new jobs, and Integrated Power Semi-Conductors Ltd. is investing £15 million, which promises 500 new jobs. Locate in Scotland is currently engaged in discussions with several major multinational companies—
Mr. Bruce Milan (Glasgow, Govan)
On a point of order, Mr. Deputy Speaker. Yesterday Mr. Speaker was specifically asked, given that this was a Standing Order No. 10 debate, whether it would be comparatively narrow, and he so ruled. This is an abuse of the House.
§ Mr. Younger
I understand that the right hon. Gentleman greatly dislikes anything that torpedoes the thesis that he wishes to introduce. He wishes to suggest that in Scotland many firms are closing. That is the reverse of the truth. The vast majority of them are coming in.
The Government greatly regret the closure of the Bathgate plant, but, having examined the facts, we must accept—as would anyone who considers the facts—that the British Leyland board had no other option. I understand that the work force at Bathgate voted this morning to continue the strike that began on Tuesday. I sympathise with the feelings of the workers and their local representatives, but I hope that they will accept that we shall now do all we can to find another business to use the facilities at Bathgate, and that they will not prejudice those efforts by their reaction to the announcement. It is essential that we bend all our efforts during the next two years to finding alternative uses for the plant and other employment in the area, and for that we need all the support that the House and the local community can give.
Last week the Opposition tried to suggest not only that this was a sad and regrettable decision—I agree with that—but that it was the only feature of life in Scotland. Clearly, they do not like new investment in Scotland, and would far rather paint a completely distorted picture of the country.
The right hon. Member for Bethnal Green and Stepney spelt out much of the background to the case, as he saw it, and at the end he proposed some solutions. I am glad that he made some effort to do so. He must have thought carefully about the matter. But what did those solutions amount to? They were that British Leyland, especially the trucks division, which is already in deep trouble and which has had years of sales so low as to cause huge losses—thus requiring Government help to keep it going in the hope against hope of an upturn in the market—should be saddled with further vast investment in new models in a depressed market that already has severe over-capacity. the solution, while no doubt well meant, is a recipe for disaster for all of British Leyland, and it will do no good to anyone at Bathgate or anywhere else
§ 5 pm
§ Mr. Merlyn Rees (Morley and Leeds, South)
On a point of order, Mr. Deputy Speaker. We are all interested in the terrible economic problems of Scotland, but—I asked Mr. Speaker about this yesterday—Leeds is also involved, The loss of jobs in Leeds may be small compared to the position in Scotland, in that only 400 are to go, but it is still important, and the Minister did not even mention Leeds. When are we to get an answer on Leeds? As we have not had one, we have not had a proper Government response to the subject being debated.
§ Mr. Deputy Speaker
I realise how anxious and concerned all right hon. and hon. Members are, but this is a short debate, and the more we engage in such exchanges the fewer views we shall hear. Nothing that has been said has been out of order, and therefore the point raised by the right hon. Member is not a matter for me.
§ Mr. Tam Dalyell (Linlithgow)
On a point of order, Mr. Deputy Speaker. Is not the constituency Member called first in such debates?
§ Mr. Deputy Speaker
The hon. Gentleman knows, as he has been here a long time, that the choice of speakers is difficult. Constituency interests are always taken into consideration.
§ Mr. Harry Ewing (Falkirk, East)
Further to that point of order, Mr. Deputy Speaker. When selecting speakers, should it not be taken into consideration that the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and his colleagues were responsible for us almost losing this debate?
§ Mr. Deputy Speaker
Order. I assure the House that all relevant considerations have been taken into account very carefully.
§ Mr. Steel
It is unfortunate that what should have been the good tone of the debate has been spoilt because hon. Members are not prepared to accept that all parties have a right to put their point of view. I yield to no one in my admiration for the hon. Member for Linlithgow (Mr. Dalyell) and his concern over the years—not just the months—for this plant. I do not intend to abuse the time Of the House by making a long speech. There is no point in wasting the time of the House in further arguments. We have time for a short debate and I suggest that we get on with it.
It is difficult to know what to say in response to the speech by the Secretary of State for Scotland. The kindest thing to say is that I feel sorry for him, because he has been made the fall guy in this story. There is no doubt that Bathgate is simply the latest victim of the Government's economic policy, and the people who should be at the Dispatch Box are the Secretary of State for Trade and Industry and the Chancellor of the Exchequer.
I happened to be in Edinburgh on Tuesday when the news about the closure of Bathgate came through. The House will understand the sense of shock that ran through the whole of Scotland when the announcement was made. 1274 I remember in 1962, when I was a student living in West Lothian, the great excitement when that plant was started. There were even such minor things as the first length of dual carriageway laid between the two cities of Edinburgh and Glasgow to the planned site. It was a significant event in the economy of Scotland, and the closure is an even more significant event for Scotland.
The chief issue is whether the strategy that has been adopted for the cars division of British Leyland could have succeeded in the trucks division. I believe that it could. Four or five years ago there was a mood of apprehension in the House about the future of British Leyland. Few of us could have put our hands on our hearts and predicted the turnround that British Leyland cars division has achieved, with its new models capturing the market and doing precisely what an efficient automobile firm should do.
In the trucks division ther has been no such application of investment and no such introduction of new models, and we have watched the market being penetrated by imports in an unprecedented way. Leyland Trucks used to be the firm which, more than any other, had a worldwide reputation. However, Leyland's export market has been threatened by the artificially high exchange rates maintained by the Government's economic policies—that is one reason for the success of the export market.
As for the internal market, in the past couple of weeks we have all heard interviews on the radio with consumers of the vehicles complaining that they have had to buy foreign because those that they wanted from BL were not available. The message that has come from the successful cars division could and should have been applied to the truck division. There is no reason why there should not be a similar turnround in the production of trucks.
A few weeks ago I met a deputation of shop stewards from Bathgate. In the many years that I have been listening to such deputations I have rarely been so impressed as I was on this occasion by the careful documentation which they brought and the long story of false promises on investment and of investment unused—no doubt some of that mentioned by the Secretary of State. More important — here we can see the difference between Bathgate and Jaguar in Coventry—there has been a lack of long-term management throughout. There appeared to be no authority in Bathgate capable of dealing with the work force, answering its questions and making decisions. No authority is invested in Bathgate as it has been, for example, in the last few years at Jaguar in Coventry. There is a strong contrast in the way in which the two have been treated within the combine of British Leyland.
§ The Secretary of State for Trade and Industry (Mr. Norman Tebbit)
The right hon. Gentleman is missing out one other point of difference between the two cases. He knows as well as anyone that I was among those who backed the car business and the Jaguar business and I have done my best to back the truck business as well. However, the car market has been expanding, but the truck market has been diminishing. The loss of the Nigerian market has nothing to do with the level of sterling, and everything to do with the economic collapse in Nigeria.
§ Mr. Steel
The Secretary of State keeps mentioning the Nigerian market, as if the whole of Leyland Trucks depends on Nigeria. Clearly, it does not. No one denies that there has been some loss in the overall market and that 1275 there has been more import penetration of trucks over the past five years. The Secretary of State should consider that, as the value of the pound has something to do with it.
§ Mr. Geoffrey Robinson
In 1975 the Secretary of State for Trade and Industry voted against the rescue of Leyland, which was needed after a massive decrease in the car market. Despite that decrease there was massive investment, and the thing now is to do the same for the trucks division.
§ Mr. Steel
That is the point, and I have no doubt that the hon. Member for Linlithgow, with his detailed knowledge, will be able to give more information to the House, such as that which I was receiving a few weeks ago about the detailed failure of the internal management of Leyland Trucks to deal with the problems at Bathgate and to deal fairly with the work force. This is a story of almost criminal negligence in the treatment of these works.
§ Mr. Peter Shore
The right hon. Gentleman has made an important point, and it will be helpful if the point is driven even further home. Perhaps when the Minister winds up the debate an answer can be given on this issue. There is a big difference in timing between the big slump that hit the car industry and the later slump that hit the commercial vehicle division, not only in Britain, but in world markets. If people look at that dispassionately, they will find that what the right hon. Gentleman says is true. The truck industry collapse has come much later in the day. The present situation is indeed gloomy, but if we had accepted the situation in the car industry in 1975–76 with the same pessimism as now, it would never have revived.
§ Mr. Steel
I entirely accept that. If one believes Ministers about the upturn and the lead from the United States, far from being pessimistic, we should say that there is a chance for industry to invest in trucks. Ministers should match their optimistic words on the general economic front with some activity to restore BL's trucks division.
On 22 May the Secretary of State told the House:Leyland Bus too has suffered from a depressed market at home".—[Official Report, 22 May 1984; Vol. 60, c. 830.]He said that as though it were like the weather and just happened. In fact, we know perfectly well that the Government ended the system of bus grants and reduced investment in new buses throughout Britain. It did not just happen as a law of nature; it happened as a result of deliberate Government policy.
§ Mr. Michael Meadowcroft (Leeds, West)
I note what my right hon. Friend says about the reduction in the transport supplementary grant and the bus grant. Is he aware that the managing director of Leyland Bus put it even more starkly when he said:Apart from the economic recession, the efforts which are being made to limit public expenditure have resulted in public sector operators drastically cutting back their requirement for new buses. The immediate prospects for the industry as a whole are not good and the position could deteriorate sharply if the"—
§ Mr. Deputy Speaker
Order. The hon. Gentleman should not make long quotations in an intervention. This is a short debate.
§ Mr. Steel
My hon. Friend is from Leeds and I have seen a copy of that letter. The point that the BL bus 1276 division is making is that the deregulation of buses will reduce the orders which the public sector will achieve. Again, that is another act of policy.
The proposed sale of Jaguar will do nothing to boost the finances and continued international reputation of BL. It leaves the impression that in the Government's eyes the public sector is only for lame ducks — that anything successful is to be returned to the private sector. Given the statement of the national executive committee of the Labour party that anything privatised by the Government may be renationalised, with or without compensation, it is time that we called a halt to this irrelevant see-saw.
If the Government came forward with a scheme to distance Jaguar from the main board of BL, as has already happened in part, if they came forward with a scheme for BL to retain a 49 per cent. stake and let the other 51 per cent. go to the workers and customers of Jaguar, that might be different. Conventional privatisation with an employee's shareholding limited to what the investing protection committee will allow in its guidelines is not an answer to BL's problems.
§ Mr. Nicholas Fairbairn (Perth and Kinross)
Will the right hon. Gentleman remind the House who made the bus in which he went round during the election? Was it British Leyland?
§ Mr. Steel
As the hon. and learned Gentleman has raised that matter, I shall tell him exactly. I inquired whether a BL bus of the kind that I required was available and— [Interruption .] This is exactly the point of the story. This was a year ago. I was told that it would be available in October. Unfortunately, the election was in June. Therefore, I, like many others, had to take what was available. That is the whole point of my argument. The models were not available from BL's truck and bus division. I am grateful to the hon. and learned Gentleman for allowing me to make my point clear.
Various hon. Members have referred to the deindustrialisation of Britain, and Scotland in particular. That charge is true. If one looks at the trade figures published the other day by the Department of Trade and Industry for 1982–83, one finds an alarming trend. In 1982 the oil trade gave us a surplus of £4.5 billion, and non-oil trade a deficit of £2 billion. By 1983 the oil surplus was £7 billion and the deficit on non-oil trade had risen to £7.5 billion. That is a serious picture for Britain. The truth of the matter is that our oil trade and our sale of assets together provide the Government with an income greater than the whole of the public sector borrowing requirement.
What is lacking from the Government is a commitment to invest in Britain's industrial future. The Dutch are investing £32 million in DAF. Look how many DAF lorries we have on the road at the moment. The Spanish are investing £53 million in their motor vehicle industry. Yet the British Government are proposing to invest £12 million in lengthening the dole queues at Bathgate and Leeds. The Government say that they are bringing 450 Nissan jobs to the north-east, but they are losing three times as many as a result of their announcement this week. It is not just the number of jobs that is important, but the quality. Will the Government reduce us to a kit assembly economy, or will they agree to engage in public investment and let the people of Britain earn a living?
§ Mr. Deputy Speaker
Order. The right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) has finished his speech. I remind the Secretary of State that he spoke for 26 minutes
§ Lord James Douglas-Hamilton (Edinburgh, West)
As this is a short debate, I shall not follow all the comments of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel).
I want to take up one point that was made by the hon. Member for Linlithgow (Mr. Dalyell) on 23 January. He and everybody who spoke in the debate confirmed that in no way could any fault at any time recently be charged against the work force at Bathgate. Everyone accepted that. Therefore, the statement made two days ago was extremely traumatic for the 1,750 men concerned.
Two questions remain. First, what went wrong and what lessons can be learnt? Secondly, what can now be done? Three factors relate to what went wrong. First, in the 1970s the 500 engine was not an unqualified success. Recently, Mr. Sam Newton, the newly elected chairman of the Leyland Truck Distributors Association said of the engine:It was out of date when it was launched. It was designed when the average truck travelled 30,000 miles a year but was launched when 100,000 miles became the norm because the motorway system was opening up rapidly.Apparently, there were problems with engine trouble. Not only had that, but the share of the domestic heavy truck market contracted from 30 per cent. in 1973 to 13.4 per cent. in 1982. That appears to have been an undeniable factor in making BL more vulnerable.
The second factor, which my right hon. Friend the Secretary of State covered, is that the recession has led to a substantial reduction in sales of heavy trucks, which slumped from 80,000 to about 44,000, and last year it was only about 11,000.
The third factor was the collapse of the export market, not only in Nigeria but in Iran after the revolution. Last year, only 2,700 trucks were exported.
The lesson to be learnt from the 500 engine is that an engine that does not respond to future consumer demand can reduce the market potential, with eventual adverse consequences for employment.
At present, the company is losing about £70 million. Unfortunately, there was no evidence of a sufficient upturn in the market to keep two plants open. Even with the closure of one of the two plants, there will be substantial capacity at Leyland, which can double its output and still have further capacity over and above that. Bathgate was mainly in the export market, exporting 10,000 trucks in 1979, but in 1983 only about 2,700. Part of that collapse was obviously due to the loss of the Nigerian market.
That brings me to the question of what should and could be done. The decision to close Bathgate is phased over a two-year period, and half the work force will be employed into 1986. I ask my right hon. Friend to confirm the rate at which the slimming down of the work force will take place, that the redundancy terms will be generous, who will be offered more than £9,000 and who more than £7,000, and what the arrangements will be.
Leyland is to extend its support for the Bathgate Area Support for Enterprise scheme for an extra two years over and above its present three-year commitment. I think that BL is right to offer to appoint business consultants to develop alternative job prospects in the Bathgate area.
1278 That leads me to my next point. I hope that full use will be made of that two-year phasing period to investigate employment uses for the Bathgate factory. In particular, I hope that the prospect of another operator or consortium will be examined closely. I suggest that my right hon. Friends should work closely with the Scottish Development Agency. Bearing in mind that Bathgate is a highly integrated factory with a skilled labour force, firms from abroad may well have an interest in taking advantage of this opportunity. If so, Leyland should not stand in the way of a potential competitor coming into the market place. No opportunity, possibility or option should be disregarded by my right hon. Friends.
My final point arises out of the statement made by the hon. Member for Livingston (Mr. Cook) regarding the difficulty facing a person of 50 who is made redundant. I ask the Government to request the Manpower Services Commission to give priority to ensuring the provision of adequate retraining schemes directly related to the job opportunities of the future.
Contrary to what the right hon. Member for Glasgow, Govan (Mr. Millan) suggested, I think it is highly relevant that 4,000 jobs in the same travel-to-work area in Livingston have come in since 1980. Those jobs will grow, and more firms will come in. The right hon. Gentleman mentioned the firms concerned—Shin-Etsu, Mitsubishi, Burroughs Machines Ltd., and Integrated Power Semi-Conductors Ltd. About 16 of them have become involved since 1980. These are the jobs of the future. That will, of course, be of considerable benefit to the service industries. Therefore, I hope that the Manpower Services Commission will give top priority to providing the retraining facilities necessary in this connection.
It is important to remember that the microelectronics industry in Scotland is now playing a leading role not only in Scotland, but throughout the world. Since this is the same travel-to-work area, I do not think that Opposition Members should scoff at it. They should not belittle the successes of their countrymen where they exist, but should build on those successes. What is more, those successes will grow.
§ Mr. William McKelvey (Kilmarnock and Loudoun)
Is the hon. Gentleman aware that there are now fewer jobs in Scotland in the electronics industry than there were five years ago? While we all applaud the new jobs that have come to Scotland, they are not, and never will be, the answer for the hundreds of thousands of unemployed.
§ Lord James Douglas-Hamilton
I question the accuracy of the hon. Gentleman's figures. There are more than 40,000 jobs in Scotland in the electronics industry. In this particular area in Livingston, some 3,900 jobs are coming in. Those jobs, with the efforts of Locate in Scotland, will increase. I stress that this will have a substantial impact on the service industries. Success in the area has come from the natural evolution of the indigenous talents and industrial skills of those concerned. I hope that my right hon. Friend will take every possible advantage of the two-year phasing period. Two years is a long time not only in politics, but in industrial economics.
I believe that Bathgate, with its labour force, has a great deal to offer if Scotland is seen as a good place for firms to operate and where Government and labour can, and will, co-operate. I hope that every effort will be made to maximise the employment opportunities for the future.
§ Mr. Tam Dalyell (Linlithgow)
If, as the constituency Member of Parliament for Bathgate, I speak briefly, it is because British Leyland at Bathgate is not just a constituency problem for my hon. Friend the Member for Liverston (Mr. Cook) and myself, but an issue for central Scotland, for all Scotland, as was witnessed by the statement of the General Assembly of the Kirk and the moderator this very morning. Indeed, it is a national issue.
I say to my hon. Friend the Member for Manchester, Blackley (Mr. Eastham), who is the secretary of the Amalgamated Union of Engineering Workers group, that it is a national issue because his own trade union national committee has given definite instructions to the union's members affecting the whole of the United Kingdom on the Bathgate issue. This is an issue on which hon. Members from all parts of Britain, not least Scottish Conservatives, should have as much time as possible to speak during the three-hour debate.
On Saturday morning 26 May, at the offices of the West Lothian district council in Bathgate, there will be a series of crucial meetings, sponsored by the Scottish Trades Union Congress, of parliamentary colleagues, West Lothian district council, Livingston development corporation, Lothian regional council, shop stewards and others. It would be helpful, particularly in the wind-up speech, but certainly before Saturday, to have a Government response to the following questions, of which I gave notice to Ministers yesterday.
First, do present Ministers accept that they have any residual obligations for the actions of Harold Macmillan, Rab Butler and kin Macleod in bringing the motor industry to Bathgate by Cabinet diktat?
Do they recollect the motives of that Conservative Government which perceived the dangers of the division in our country between the employed home counties and the unemployed north in days when unemployment figures of 7 per cent. were thought to be alarming?
Should Governments really distance themselves from the actions of their predecessors since Ronald Hancock —and I pay a personal tribute to the hard work that that man has put into Bathgate over the years; I believe that he himself has behaved honourably in all the discussions at British Leyland — has made it clear that only the Government, not the company, can save jobs in Bathgate?
The unreality of the speech of the Secretary of State was symbolised possibly by the reference to BASE — the Bathgate Area Support for Enterprise—which was also mentioned by the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). Do the Government realise that BASE is a small organisation of three people who work hard? The hon. Member for Eastwood (Mr. Stewart), the Under-Secretary of State, opened BASE, and some of us were present. The Minister must surely know, having read the brief, that it is just not realistic to think that BASE can deal with the problem when 1,800 people are to be without work, with knock-on effects throughout Scotland, and, indeed, throughout the United Kingdom. This is an example of cosmetic politics. The very idea that BASE can cope with this situation, worthwhile though it is, is unreal, on top of over 20 per cent. unemployed already.
When the Secretary of State talks about the turnround—the £73 million —and the £72 million—one might ask, "All right, but who carried Austin Morris and the rest of BMC in its uncomfortable and difficult days?" There are 1280 people who work for Leyland Vehicles who say, "In their difficult times, we carried them. Can we not have some help now?" The Government's response is to sell off profitable Jaguar. That really is a scandal.
The Secretary of State talks about enormous excess capacity throughout Europe. I wonder whether the Japanese would accept the contraction syndrome, which leads me to the second question of which I have given notice to the Scottish Office.
What is the Government's attitude to the number of unemployed in the Bathgate travel-to-work area in 1986 if closure were to take place? On 5 April, the latest date for which information is available, there were 9,931 unemployed claimants in the Bathgate travel-to-work area. Ministers have had the corporate plan, not, as the Secretary of State said in his speech, since early this year, but, as I understand it, since December 1983. Surely they must at least have made some calculation of the number who are likely to be unemployed. Indeed, they have had 36 hours notice of that question, so I hope that I receive an answer to it at the end of the debate.
My hon. Friend the Member for Livingston and I are particularly concerned about men aged between 40 and 50, who have no prospect of obtaining work in our area, and whose redundancy terms are a good deal less generous than those in the coal and steel industries. What hope can the Government extend to them?
I must say to the hon. Member for Surrey, North-West (Mr. Grylls)—absent, alas—who seems, these days, to be Brian Redhead's pundit-in-residence, that I practically burst a blood vessel at 7.15 yesterday morning when he criticised those of us who had the day before yesterday raised the issue of the deindustrialisation of the north, and told us that we should be grateful for the electronics industry.
I cannot refrain from telling the hon. Gentleman, in his absence, and the hon. Member for Edinburgh, West in his presence, that for all the millions of pounds that Nippon Electric at Livingston has had from the Government, it takes on few miners, steelmen or motor vehicle engineers who are in their thirties, forties or fifties. Therefore, to say that the electronics industry has arrived is no answer to the problem that we face.
Thirdly, in cold financial terms, leaving aside the human misery and injury to self-respect, what is the estimated cost of the extra unemployment and related benefits that the Government would have to pay out in the Bathgate area if Leyland ceased production? Those who have had the corporate plan since December should at least have made that calculation.
Fourthly, in the concordat between the Government and Leyland, dating from the days of Sir Michael Edwardes, it was agreed that "political and social consequences" would be considered by the Government before putting a ministerial imprimatur on any major decision arising out of the BL corporate plan. Has that been done? If not, why not? If so, and it was indeed done, could the House be told what judgment Ministers arrived at? The Secretary of State for Trade and Industry is apparently asleep. However, during the course of the most insensitive statement to be made by a senior Minister in my 21 years as a Member of Parliament, he said to my hon. Friend the Member for Livingston, who had complained about wine lakes, that he wanted a lorry park. But, in reality, that is inaccurate and is not the full story.
1281 Following the Secretary of State's intervention, I have a direct question for him. Are we to believe that oil-rich Nigeria will never recover during the next decade or so, so that it can buy such trucks? Is that the Government's assessment of Third-world prospects?
§ Mr. Tebbit
Not at all. Furthermore, under the plan, Leyland Vehicles will be well capable of meeting that market.
§ Mr. Dalyell
In that case, the long-term assessment should be spelt out. We are talking about the largest concentration of machine tools in Europe. The right hon. Gentleman says that that is not the Government's assessment. That highlights the point that in the coming months, we must talk much more about the future market possiblities for developing countries. Many developing and Third-world countries are crying out for good products, such as those made at Bathgate. Without transport, and that means trucks, they will not recover.
To put it at its lowest, the West of the present day has neglected its own self-interest towards the Third world. It may be that of 2,600 trucks, as I understand Ministers to say, only 300 now go to Nigeria, but, if things look up, the story will be quite different. Who then will have the capacity to supply Nigeria, the Cameroons and many other countries in Asia, Africa and South America? If, first by trade and, secondly, by aid we had done more to help developing countries, we would have been more easily able to use our unemployed skilled resources. Does the Government's acceptance of this corporate plan indicate that they see no upturn in this decade in the Third-world countries' ability to purchase? Are the Government resigned to that? Ministers have also had notice of that question.
I promised to be brief, but I should point out that when the Secretary of State prides himself on the fact that the Government have invested £25 million, that is the equivalent of what we spend in the south Atlantic in eight days. I shall not say any more than that. I say only—1,800 Falklanders, 1,800 Bathgate workers.
§ Mr. Dalyell
I am sorry, but I shall not give way, as many other hon. Members wish to speak.
Reference has also been made to the sit-in. I have had the privilege to represent the Leyland workers at Bathgate for many years, and I know that they are not hotheads, but extremely serious, responsible people. Time and again there has been praise from unlikely people for Jim Swan's attitude and that of his colleagues. Their actions may now seem extreme, but they are prompted by what they see as the activity, or inactivity, of an unjust Government. Unemployment is not an act of God. As gently and as seriously as possible, I must tell Ministers that they are dealing with very serious and determined people, who are not taking action lightly or frivolously.
I have discussed Bathgate in various contexts and at various times with previous senior Conservative Members. Mr. Speaker, your predecessor but two, Mr. Selwyn Lloyd, who was my first Chancellor of the Exechequer, Reggie Maudling and Iain Macleod all said that they favoured the vehicle industry having gone to Bathgate— in their opinion justly at the time—because of Harold 1282 Macmillan's "Stockton experience". I remember them all using that phrase. Harold Macmillan's "Stockton experience" prompted the then Government to set up the motor industry in Scotland.
I conclude by asking Ministers and concerned Conservative Back Benchers, as unvituperatively and seriously as I can, whether they do not think that the time has come when the Government would be wise, in their own interest and that of the country, to show just a little more "Stockton experience".
§ Mr. Hal Miller (Bromsgrove)
Anyone from the west midlands can well understand the sense of disappointment, shock, bitterness and perhaps even anger at the announced closure of a motor manufacturing facility, particularly that at Bathgate. Those emotions have been fully reflected by Opposition Members. Indeed, perhaps there has been rather too much emotion and rather too little thought about the problem.
The Secretary of State for Scotland was criticised for not doing anything, but when he announced the action being taken immediately following the closure announcement it was criticised as a political gimmick. Indeed, that emotion led Opposition Members to run down Scotland as a deindustrialised desert and wasteland. How will that attract new investment? Why will new firms want to move in, given the sort of climate that Opposition Members trumpet abroad? Surely Opposition Members should accent the positive.
We have had experience of this in the west midlands and I shall put the matter into context. The losses about which Opposition Members talk do not begin to measure up to what we have experienced in the west midlands. Scotland has the benefit of oil. New industries have been established backed by a grant regime which has not been available to us, and backed by Scottish Development Agency funding which is not available to us. Scotland has been backed by a political economy which ensures that carpet firms and foundries which might go under are rescued, whereas their counterparts in the west midlands which might have been successful in competing have not been rescued. Scottish industry has had a pretty good ride — [Interruption.] We are in one country and hon. Members will have to listen. The unemployment statistics reflect what is happening in the central belt of Scotland compared with the west midlands.
What depressed me, apart from the emotion generated, was the lead by the right hon. Member for Bethnal Green and Stepney (Mr. Shore) who accused Conservative Members of being ignoratnt of economics. He went through a litany of Socialist shibboleths. He started with the theory of production at any cost and the value of production, irrespective of the market. The right hon. Gentleman went on to Socialist egalitarianism and said that it was wrong to sell Jaguar. Indeed, the hon. Member for Coventry, North-West (Mr. Robinson) said on Tuesday it was wrong to take care of Jaguar, the transport of the toffs, while ignoring the buses, the transport of the working class. That was the sense of the hon. Gentleman's remarks and he nods in agreement. The hon. Gentleman totally ignored the fact that many of his constituents are proud to work at Jaguar and are the first to want its future secured. In their egalitarian way Opposition Members ignore the fact that successful firms can be strangled by having to give life support to unsuccessful activities.
1283 The right hon. Gentleman made it plain that Jaguar should be kept inside so that its surplus can be used to fund the losses on commercial vehicles. He entirely ignored Jaguar's development needs and the new products that it needs to secure its market. He ignored the initiatives and decisions held up by the BL board because of the drain on the vehicle side which has shackled and threatened to hinder Jaguar's development to such an extent that in two or three years it also might not be viable. That way brings down the whole house of cards. That is why it is right that Jaguar should be released to the private sector.
The Liberal leader, the right hon. Member for Tweedale, Ettrick and Lauderdale (Mr. Steel), made a transparent leap on to the bandwagon of the debate. His was a lightweight performance if ever there was one.
The right hon. Member for Bethnal Green and Stepney referred to the Ryder plan. He ignored the money that this Government put in because the Ryder plan was overextended, concentrated solely on production and ignored markets. The same old recipes have been trotted out—the same old policies that lost the Labour party the 1979 and 1983 elections and will lose them the next election.
We need to send a message of hope to the constituents of the hon. Member for Linlithgow (Mr. Dalyell). I urge them to reflect that our experience in the west midlands has shown that only by a concentration of the facilities of production can the burden of overheads be reduced to an acceptable level to enable the product to be internationally competitive. All the doom and gloom about BL does no good. The hon. Member for Linligthgow shakes his head, but he knows that the truck industry worldwide is in terrible trouble. Bedford, the United States and Japan have been mentioned. Truck industries throughout the world are in trouble. There is an endemic over-capacity in the world production of commercial vehicles. The major firms are suffering just as much as the others. The smaller firms have to seek tie-ups.
The Government should be asking the BL board what it is doing about co-operation in commercial vehicle production to which it has been driven on the car side. That is the only long-term way of survival. It is idle to suppose, with the volumes involved, that success can be achieved without a tie-up in marketing and technology.
§ Mr. Miller
I shall not give way, although I am happy to debate the matter with the hon. Member for Coventry, North-West. I know his record with Jaguar and the paint plant.
It is important that the constituents of the hon. Member for Linlithgow should have some idea about the future and consider their position relative to others living in the same country. That is what I have tried to set out.
Mr. Bruce Milian (Glasgow, Govan)
My hon. Friend the Member for Linlithgow (Mr. Dalyell), in his excellent but in the circumstances remarkably restrained speech, said that we are not just debating another closure in the long list of closures with which we have become so depressingly familiar. The debate is about Bathgate, but I am sorry that no mention has been made of other closures. I hope that that will be remedied before the end of the debate.
1284 We are talking about another psychological blow to Scotland's economy. Bathgate, with a number of other developments, including Linwood, was supposed to help in the industrial regeneration of Scotland. We are not simply losing 1,800 jobs, but seeing the end of another of the hopes for industrial recovery in Scotland.
The figure of 1,800 is misleading, because, as recently as 1978, Bathgate was employing 5,600 workers. Since then there has been a remorseless and steady rundown of capacity and work force. On every occasion on which a redundancy has been announced the workers have been assured, "This redundancy is necessary to give you an assured future." That is what they were told at the time of the reorganisation in November 1981 and at the time of the Cummins engine contract.
The workers have been given repeated assurances. That explains the deep sense of bitterness that they now feel. Their bitterness is felt throughout Scotland. The workers do not trust a management whose strategy for the tractor division has been so misguided and misconceived. They do not trust a management which in the past has given them so many assurances which have not been borne out.
This time we have a corporate plan, the copy of which issued to the Library does not even mention the closure of Bathgate, far from giving any explanation or argument for what is happening. The significant aspect of the corporate plan is that the first priority laid down for 1984 is privatisation. There is not a single line dealing with the merits of Bathgate and its closure.
We know that the truck industry worldwide has been going through an extremely difficult period. However, in the domestic market the figures have been picking up very well, although admittedly from a depressed base. A good deal of the improvement has, given the general state of British industry, inevitably come from imports rather than from British production.
As has already been said, it is foolish to be overoptimistic and plan only on the basis that the market will expand mechanically every year for ever and ever. But it is equally foolish to be so pessimistic that capacity is run down simply because the industry is going through a bad period. We should not assume that that bad period will continue for ever. Unfortunately, that is not only the basis on which this corporate plan has been prepared, but it has been the attitude of British Leyland management towards the trucks section during the past few years. Each time that BL has contracted, it has said that that will provide a springboard for expansion—but each case of contraction has led to another. We are concerned not only about: the closure of Bathgate but about the demise of the whole truck division.
An element of rationalisation is involved. Not all the work carried out at Bathgate will disappear; some will be transferred to other parts of the Leyland truck operation. I do not take a nationalist view of the matter. I am glad that the workers in Leyland Trucks have given their wholehearted support to the workers in Bathgate. In a period of recession and decline, there is a difference between spreading the burden and closing a major facility. If a major facility is closed, it will never be reopened. That is the tragedy of what is proposed at Bathgate—once it is closed, it will never be reopened. The Secretary of State has admitted that even the possibility of selling it to some Japanese car manufacturer is unlikely. If it had been saleable to the Japanese, it would have had to be maintained as part of Leyland Trucks.
1285 The corporate plan has been in the hands of the Government for five or six months—
§ Mr. Roger King
On a point of order, Mr. Deputy Speaker. The hon. Member for Edinburgh, Leith (Mr. Brown) is reading a newspaper. Is that allowed?
§ Mr. Millan
The Government have had the corporate plan for five or six months. The Secretary of State for Trade and Industry said that the Government had considered all the options. Yet he did not say a word about the alternatives considered by the Government during the past five or six months. I hope that the Minister will say something about them when he replies.
The Government have dismissed out of hand the proposals put forward by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore). Nothing has been disclosed—but we will ensure that it is disclosed sooner or later—about the alternatives considered by the Government. We want to know what the options are. The closure of Bathgate will produce a saving of only £10 million a year—less than the expense of unemployment benefit in the Bathgate area alone. Even from a strict financial and economic viewpoint, the closure is a scandal and a tragedy.
There is still time to consider alternative proposals, whether those put forward by my right hon. Friend or any others. If the management believes that it will have a comfortable, easy ride during the two-year rundown, it has completely misjudged the position. It has not helped to have the despicable blackmail in the closure announcement that if the workers do not co-operate in their own execution their redundancy payments will be reduced. The workers at Bathgate will not co-operate with the closure — why should they? Nor will the remainder of the workers in Leyland Trucks co-operate.
I hope that the alternatives will now be considered. The Opposition will do everything possible—the fight has only just begun—to ensure that Bathgate and C. H. Roe are kept open.
§ Mr. Gerald Malone (Aberdeen, South)
I have listened with great interest to what has been said in the debate. I was hoping that the right hon. Member for Bethnal Green and Stepney (Mr. Shore) would give us some sound economic reasons for keeping open Bathgate. Despite the shouting from the Opposition, Conservative Members are concerned that we have reached an impasse at Bathgate. It is a sad failure of what was once a proud prospect in Scotland. It is exceptionally regrettable.
Neither at the beginning of the debate nor since have we heard any valid reasons for any possible alternative. The right hon. Member for Bethnal Green and Stepney and other Opposition Members have stated the simple belief that a market may transpire in the future that can take the over-production from British Leyland—not only from its plant in Lancashire but from its plant at Bathgate.
The problem is that there is enormous over-productive capacity that cannot be ignored. We cannot simply say that things might turn out all right at the end of the day. It is worth considering the scale of the problem. The decline 1286 in the overseas market has taken place since the 1960s. In 1962 we exported 60,000 vehicles per annum, but in 1983 the figure was only 2,700. There is an interesting comparison between British Leyland's share of the domestic market and that of other United Kingdom manufacturers—not only importers. Whereas BL's share of the market has dropped by 17 or 18 per cent., other United Kingdom manufacturers have lost only 2 per cent. of their share.
I make those points simply to show that it is difficult to envisage how the position will be reversed. The Opposition have given no reasons why it should be reversed, and I would be interested to hear their reasoning. It is an impossible mountain to climb. It is all very well to say that over-capacity can be tolerated in the short term, but where are the commitments from the Opposition about what they would do if they had to make the decision now being made by the Government? How long would they be prepared to tide over the industry? How can they seriously suggest that the world market will expand to the extent that it could ever hope to take up the production of British Leyland? We are not even talking about a rise in world demand taking up the production from Bathgate; we are talking about the capacity that will remain in BL, which manufactures two to two and a half times what can reasonably be expected to be the demand for trucks throughout the world.
We should look at other arguments for keeping Bathgate open. I look to two sources — the paper submitted by Lothian regional council, and the document submitted by the Scottish Trades Union Congress. The STUC simply suggests two reasons for keeping Bathgate open. One is that to close it would threaten Leyland Trucks' revival in the rest of the country, and the other is that it would kill our presence in export markets. It is clutching at straws to make such points, which illustrate that the priority to be reached in the decision that BL is now making is that truck-making facilities in the United Kingdom must be preserved in the most viable way possible.
It is regrettable that Bathgate no longer has a viable life, but there is nothing more realistic than facing facts.[Interruption.] When will Opposition Members learn that the piecemeal preservation of individual manufacturing units when their viability is no longer in prospect cannot contribute to the long-term benefit of the economy?
This is not a decision which BL or the Government have taken with joy or ease. It is regrettable for those who will be put out of work. However, it is inevitable, and unless Opposition Members can show that there will be a market for which BL in Bathgate could successfully produce they will not have made their case. BL's Bathgate workers are not well served by histrionics. If Opposition Members can adduce arguments of substance, very well. Histrionics provide nothing.
§ 6.2 pm
§ Mr. Derek Fatchett (Leeds, Central)
This debate is about job losses in Scotland and west Yorkshire. Those losses represent human misery and personal devastation and are yet another chapter in the deindustrialisation of Britain. They are avoidable and they are a direct result of Government policy.
My constituents will be insulted by the remarks which the Secretary of State for Scotland made today. At no time did he refer to Leeds and the 440 people who will lose their 1287 jobs. No Conservative Member who represents west Yorkshire is in the Chamber now. Why have not Conservative Members had the courage to face the arguments and support the Government's policies?
Some of us felt strongly yesterday about the tactics of the Liberals. They made sure that this debate did not take place when workers from Bathgate and Leeds were in London. I am appalled by the fact that the hon. Member for Leeds, West (Mr. Meadowcroft) has not even deigned to be in the Chamber when perhaps issues relating to his constituents would be discussed. If he had more interest in the substance of politics and less in the game that the Liberals played on Tuesday night, he would have been present for this debate.
The closure of C. H. Roe is another example of the futile face of monetarism. In 1982, that firm increased its share of the market. That market though decreased as a direct result of Government policy, and C. H. Roe's production fell by 10 per cent. The overall production of buses fell alarmingly as a result of Government cuts in the capital available to county councils and passenger transport authorities. In 1979, 3,026 new buses were completed. By 1982 the figure had fallen to 1,944. I see the Secretary of State smiling. For my 440 constituents and those who work at C. H. Roe, those figures mean suffering, misery and no hope in the future. How disgraceful to see a Minister smiling at such misery. It is about time that Conservatives came into the real world and recognised what people are going through as a result of their policies.
On Tuesday, the Secretary of State for Trade and Industry said that he regretted to announce the loss of 440 jobs. That loss will cost the Government in public spending more than £3 million in the first year, apart from the redundancy and severance payments that will be made to those workers. The madness of it is that we cut public spending to increase public spending. It is cut to stop productive and useful activity and is increased at the other end to ensure that we have the money to keep people idle as they suffer because of unemployment.
We now need from the Government a recognition of the futility of monetarism. They are using money deliberately to keep people idle. [Interruption.] I did not hear what he mumbled, but if the hon. Member for South Ribble (Mr. Atkins) wishes to intervene I will willingly give way to him, though I suspect that an intervention from him on his feet would be no better than his sedentary one.
Monetarism follows the path of waste, despair and pessimism. It is the policy of a Government who are prepared to keep people idle rather than give them an opportunity to contribute to society. The result is de-industrialisation and human suffering. As my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) said, we in Leeds, the people of Bathgate and the people of Britain generally who contribute to the wealth of the nation need from the Government action, imagination and a long-sighted view. My fear is that we shall not get it and that the Conservative policy of creating misery by deliberately keeping people idle will continue.
I hope that tonight we shall see at least some courage from Conservative Members who represent west Yorkshire and Scottish constituencies. They must tell the Government, "Stop this futility and stupidity, reverse the present policies and show some imagination."
§ 6.7 pm
§ Mr. Donald Stewart (Western Isles)
The hon. Member for Bromsgrove (Mr. Miller), who is no longer in the Chamber, said that Scotland had the benefit of oil. That is exactly what we do not have. The Treasury has taken all its benefits. For Scotland, the home of oil in Britain, there is no benefit.
The hon. Gentleman went on to say that the Bathgate plant had not been feasible from the start. If, looking at the globe of the world, one examines the locations of the markets for those vehicles in the various countries and one notices what a pimple the British Isles represent on that globe, the idea that a plant can be viable in the midlands of England but unviable a little further north, across the border, is the most arrant rubbish, and it is regrettable that one needs to fall back on such a lame argument.
§ Mr. Ron Brown (Edinburgh, Leith)
Is the right hon. Gentleman aware that if the argument which the Government have advanced for closing Bathgate is true, it means that the Albion plant is not viable and that it will be the next to close?
§ Mr. Stewart
The hon. Gentleman is right. Indeed, I would regard it as the greatest danger signal of all if the Albion plant is receiving assurances about its future.
In an effort to retrieve something from this disaster, the Secretary of State gave a list of firms active in Scotland. I appreciate that he was pressed for time. I had intended to intervene to say that according to the only barometer by which people can measure a return to prosperity in Scotland—a drop in the unemployment figures—there is not the slightest sign of an improvement in the economy. If the firms to which he referred are operating in Scotland, they must be manned by robots because there has not been a drop of any significance in the unemployment figures.
Tuesday's deplorable statement came as a shock. The shock was not that it was made—because the intentions of British Leyland and the Government had been known for some time—but its timing. The work force and the shop stewards, at the plant had known of those intentions some time ago. There was a planned campaign of deception to fool the work force that the plant had a considerable life ahead of it. The Government attempted to allay the fears of the work force.
Following the 1981 BL corporate plan, the models manufactured at Bathgate for the home market were taken away and given to other plants in England. The right hon. Member for Glasgow, Govan (Mr. Millan), a former Secretary of State for Scotland, said that he was not taking a nationalist line, but I am. It would have paid the Bathgate work force better if they had done so. There are 648 hon. Members who will fight the British corner, but I and my hon. Friend the Member for Dundee, East (Mr. Wilson) will fight the Scottish corner.
The manufacture of panel vans was transferred to Freight Rover Ltd. in Birmingham, and the Golden Harvester tractor was transferred to Track Marshall in Gainsborough. Production of the MT211 truck, developed at Bathgate, was given to Leyland in Lancashire. The work force was led to believe that, in return for the withdrawal of domestic market models from the production line at Bathgate, the new engine development with Cummins and the export truck lines would guarantee the future of jobs at the plant.
The promises given to the work force were cynically betrayed. The Scottish Office is leading the campaign in 1289 the excuses for the collapse of the Bathgate factory with allegations about the non-profitability and non-feasibility of the export market. I emphasise in the strongest possible terms that the export market angle is simply a red herring — or, in the case of the Secretary of State, a blue herring. Bathgate has been systematically run down for many years and its lucrative home market production has been taken away. Bathgate was deliberately left with only the unprofitable export models. This calculated decision has given the Government and BL the convenient excuse they want to close the plant.
In February 1984 I warned of what has now come to pass. I stated that Bathgate must demand a share of home market production. I said that the MT211, which was taken from the Bathgate plant, should be returned. My hon. Friend the Member for Dundee, East and I have reiterated that call, and a motion to that effect stands on the Order Paper. There has been a deliberate and progressive rundown of the plant. It has been left holding the unprofitable baby of the export market which was once only a small part of the whole operation at Bathgate. The rundown has been engineered from the beginning. In many ways, we are seeing a complete reversal of the regional type of industrial policy in the 1960s which leaned towards the dispersal of jobs. The present trend is to concentrate jobs in certain parts of England.
This disgraceful affair has left us with and highlighted three Scottish tragedies. The first is the loss of jobs, and I shall not go into that matter because it has already been dealt with eloquently. The second tragedy is Scotland's reliance on the centralist policies of London government. Over the years forced closures have been experienced. They started in the 1960s, and have been compounded with the closures at Linwood, Corpach, Invergordon and so on. Bathgate is the latest in a long line of closures, and perhaps not the only one that we shall see, as the hon. Member for Leeds, Central (Mr. Fatchett) has said. Scotland, under Westminster control, is bound to continue to suffer, and we shall continue to drive that message home.
The third tragedy is the betrayal of Scots by the Labour party. At every election, Labour Members have given the same message, assuring the Scottish voters that Labour can protect the rights and interests of Scotland from the ravages of the Tory Government, which are real enough. We thought that the district election results would be a warning to the Government, but within a couple of weeks of those elections the Bathgate plant was closed.
It is plain that Labour in Scotland is powerless and unwilling to use the mandate that the Scots have given it. If the Scottish National party had won that mandate, Bathgate would not have been closed. If there were 41 SNP Members of Parliament, the position would have been different, and a Scottish Parliament would have been in existence.
There will be more Corpachs, Invergordons and Bathgates, except that Scotland is fast running out of them. While the country burns, the political Neros of the Labour party are fiddling away and the Government who have no mandate continue to destroy the industrial base of Scotland.
§ Mr. Speaker
Order. I remind the House that this is a short debate. The Front Bench speeches will begin at 7.10 pm. If right hon. and hon. Members speak for five minutes each, I shall be able to include in the debate most of those who wish to speak.
§ Mr. Roger King (Birmingham, Northfield)
The failure of Bathgate is one in a long line of retrenchments by the British motor industry. During the 1960s the aim was to expand at all costs and to develop the motor industry in areas which hitherto had not enjoyed the questionable advantage of having the industry in their locality.
Because of its location, Bathgate inherited a number of problems which were never resolved by the management. We had the white heat of technology and reorganisation of the British motor industry, because big was beautiful. We ended with Leyland, Scammell, AC, Guy, Austin and Morris commercial vehicles. For one reason or another, the management resolutely refused to rationalise correctly what it should have done. That did not happen in the old motor industry. Old names such as Wolseley, Riley and, latterly, Triumph, have almost disappeared from the books of motoring terminology, but commercial vehicles remain almost intact in the old way. That has resulted in a lack of investment in plants all over the country and the failure to grasp the nettle of overseas competition.
Some of the arguments of the right hon. Member for Bethnal Green and Stepney (Mr. Shore) cannot go unchallenged. He said that during the 1960s total commercial vehicle output by the British Motor Corporation was 135,000 units, but the figure was nothing like that in the heavy and medium-goods vehicle range. Under the old BMC setup, commercial vehicles included mini, Austin, J4 and J2 vans and formed the bulk of production. The equivalent figure of 12,000 units, which was also cited, more directly related to the medium and heavy goods vehicle range. The two items cannot be compared at the same time.
The right hon. Gentleman said that there was no new van for the BL group, but that statement can be open to challenge. The Sherpa van is made at Washwood Heath in Birmingham. Recently, the new wide-bodied Sherpa van has been introduced. It is enjoying a great deal of business, which has resulted in the plant taking on extra workers.
The organisation has not been negligent. It has invested. The new Leyland truck range—the T45 series — is proving popular. Although that truck does not necessarily have its own in-house engine like other competitors, that can be looked upon as an advantage, because it means that the prospective purchaser can build to his specification a bespoke truck using either a Rolls-Royce diesel engine, a Cummins diesel engine or some other manufacturer's engine. That is a distinct advantage for many hauliers.
The main problem is that people still fail to buy British. All too often local authorities plump for the alternative—overseas competition. Only a few months ago we had a visit from many disabled groups, who turned up in Mercedes and Renault vans. That was difficult to understand. Those groups were among the authorities under the control of the GLC. We must pursue the 1291 objective of buying our products, even if they prove to be the second choice, or we shall find that we are not producing anything.
The other side of the debate is about the bus body factory of C. H. Roe. During the last 15 years there has been a massive change in the bus industry, with the switch from the conventional driver-conductor bus to one-man operation. That has resulted in authorities buying rear-engined front-entry buses for one-man operations. Manufacturers expanded to accommodate the demand from authorities for the changeover to this type of product.
Commensurate with that were better engine and gear box designs which resulted in the vehicles lasting longer. In addition, they are now being used to better advantage. Many authorites are now finding that their bus services, which once had between 800 and 900 units, can be operated efficiently with 600 units. Indeed, the Select Committee on Transport visited Newcastle last week and was told that that authority had managed to reduce its overall bus usage by about 200 vehicles. That authority had not wanted to buy any vehicles for the last two or three years, and it would probably be in that position for another two years.
The bus range has changed. The Leyland national bus built at Workington is an extremely strong vehicle, and some of the first that entered service 10 or 11 years ago are still as sound as they were on the day they were put into service. That is an integral type of bus, not the old coach-built type, which C. H. Roe and many other manufacturers continue to produce.
There is now a choice, a changeover in design and usage, greater use of vehicles and a reduced demand requirement. We must grasp the nettle and make sure that the products we produce are acceptable to the customer and built in the right quantity. As with the British Leyland motor car industry, we shall find that in the end jobs will then be created.
§ Mr. Robin Cook (Livingston)
I shall endeavour to be as brief as possible, but in my 10 years in this House I have never participated in a debate which has such profound and devastating consequences for the constituency that I represent, nor have I discussed an issue that has aroused so much bitterness among my constituents.
There is bitterness at the frustration of knowing that for six months the corporate plan rested with the Government without those most intimately affected by it knowing what was in it. That was a frustration aggravated by regular and contradictory rumours as to what the plan contained. It was a piece of refined cruelty for the BBC only last Friday to run a speculative story that the plant had been reprieved. The denial of that story caused unimaginable distress within my constituency.
There is something wrong with a system that keeps the work force in the dark and excluded from comment while a decision is taken over such a prolonged period. Indeed, every hon. Member knows in his heart that the chance of changing the decision and influencing the outcome of British Leyland's recommendation would have been immeasurably greater had we had this debate before the Government came to a final conclusion rather than only learning what was in the corporate plan after they had reached their decision on it.
There is also bitterness in my constituency at the suggestion that commercial pressure has forced this 1292 closure. It was not commercial pressure that resulted in the loss of the work in the cab workshop at Bathgate, in the removal of domestic volume trucks from Bathgate or in the closure of the tractor line and its sale to a private sector firm. These decisions were not taken as a result of commercial pressure. They were quite deliberate managerial decisions.
Understandably, there is now a considered view in my constituency—I have great sympathy with the interpretation—that what we are witnessing is the final stage in a long pre-arranged, pre-designed plan to close the Bathgate plant.
In addition, the latest suggestion that we must close the engine line and wind down the export model line because of commercial pressure does not stand up to examination. The Secretary of State was perfectly correct to say that there is over-capacity in truck production throughout Europe. Every major truck producer has over-capacity. But the relevant point overlooked by the Secretary of State is that our situation is unique because only we are closing down our truck products engine line. Only we are attempting to be competitive in a highly competitive market without the capacity to produce our own engines for our own trucks.
The Secretary of State for Trade and Industry agreed that the Nigerian economy would recover. I am glad that he did so, but when it does it will be no thanks to assistance or aid from the British Government. Even if Nigeria gets no aid, it will claw its way back to recovery and one day it will reopen its markets to the trucks that it needs for its development. I shall make a different prediction from the one made by the Secretary of State for Trade and Industry. When that happens, and trucks again run on the Nigerian roads, they will not be trucks from other areas of Leyland's truck division, because if we continue this industrial retreat they will be trucks from Sweden, Germany and Japan.
I wish briefly to reflect on the social environment of the community that is afflicted by this decision. I now see poverty at my surgeries of a kind that I have not seen in my 10 years as a Member of Parliament. In particular, I see the poverty of men struggling desperately to reconcile long-term unemployment with short-term benefit rates. The most harrowing cases that I see are those of men over 40 who are humiliated by constantly being told that they are too old to work and too old for the job for which they have applied. These men still have children at school. They still have 20 years of work left in them.
One of the tragedies of the proposed closure of Bathgate is that it has a mature work force—70 per cent. of the men there are over 40, and 37 per cent. are over 50. In all, 750 men are affected. The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) talked about the electronics firms coming to Livingston. I appreciate the sincerity with which he made that observation. I know those firms well and welcome them. God knows, I am glad to have them in my area. But not one of the firms that the hon. Gentleman listed will touch one of the workers over 40 who are to be made redundant. They all want young, untrained labour which they can adapt — what the Japanese call "virgin labour". If this closure goes ahead, most of these men will never work again unless we can radically alter the labour market of west Lothian. That is the fate which awaits them.
The work force that is being exposed to this fate has, as all sides agree, been responsible and reliable. It has 1293 accepted changes in working practices. It has tried hard—and it needed to do so—to make sense of the many different production directions imposed on it by the management at Bathgate. That work force has achieved further gains in productivity. Indeed, I have in my files a letter from the Secretary of State for Scotland praising the Bathgate work force for an improvement in productivity. It has done everything that the Government constantly ask of our industrial work force, yet as a result it is sacked to a man.
I shall vote against the Government tonight because the proposed closure at Bathgate is wrong. It is wrong for the British motor industry and for the social environment in my constituency as well as the community around it. I shall also vote with sorrow at what the decision, unless we can reverse it, will mean for my constituency. I shall vote with anger at a Cabinet which is so fixated with the financial flows involved in the decision that apparently it cannot comprehend the cost in human terms.
§ Mr. Edward Leigh (Gainsborough and Horncastle)
I wish to speak solely on a narrow constituency matter which I hope will not detain the House for long. A company in my constituency has been mentioned twice, and it is about that that I wish to speak. In doing so, I hope that I shall speak not just of recrimination in the past but of hope in the future.
In 1981, Track Marshal of Gainsborough learnt that the British Leyland tractor line at Bathgate was doomed. That line was acquired by Marshal of Gainsborough against stiff opposition from the local trade unions and the hon. Member for Linlithgow (Mr. Dalyell). At the time wild accusations were thrown around about that acquisition. The hon. Member for Livingston (Mr. Cook) said that the acquisition was made not as a result of commercial pressures. It was Model development had been neglected on the tractor line and plant capacity was too large for the market, just as plant capacity is too large in the truck section. Productivity had been neglected and management was weak.
§ Mr. Dalyell
The hon. Gentleman is making wild allegations. I have in my hand the 20th report of the Committee of Public Accounts, the comments of the Department of Industry. The PAC, a senior Committee of the House, did not think that anything that I had said was a wild accusation. In the light of the PAC report, published by the Stationery Office, will the hon. Gentleman withdraw the wild accusations he has made? Will he also tell us how much Track Marshal paid for its part of the tractor line?
§ Mr. Leigh
I shall be happy to reply to the hon. Gentleman, because I, too, have read the 20th report of the PAC. I have in my hand Cmnd. 8759, the comments of the Treasury and the Department of Industry on that report, in which they saythat they are satisfied that the sale cannot be said to have been made at 'knock-down prices'; and note and share the Committee's concern that a number of unspecific allegations of impropriety were voiced for which no supporting evidence could be produced, either to BL or to the Committee.I have talked to Track Marshal of Gainsborough, and a commercial price was paid. Not one penny of Government money was involved.
§ Mr. Leigh
The line was preserved. My constituents are worried about the situation at Bathgate because the 98 series engines used in the tractors now being constructed at Gainsborough are made at Bathgate. Marshal of Gainsborough would like now to acquire that tractor line. I should like the Minister to comment on that possibility. I have been around the factory in my constituency. It is an example of tight management—
§ Mr. Leigh
It is not asset stripping. It is providing jobs for my constituents. We have 18 per cent. unemployed in Gainsborough and my constituents have as much right to jobs as those of the hon. Gentleman.
Two models are planned for the future. The company cannot relax for a moment. It is working in tight commercial conditions, but it will survive because it is a free market company. There is life after death. Nothing can be saved by feeding a crippled giant. I hope that the Government and the Prime Minister will give a new lease of life to the company in my constituency.
§ Dame Judith Hart (Clydesdale)
A number of my constituents will lose their jobs at Bathgate, and others have already become redundant from it during the last few years.
I want to underline the general economic analysis made by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) and other hon. Friends. I wish to direct attention to a constructive point. I am extremely sorry that the Secretary of State for Trade and Industry is not taking part in the debate. That is utterly incomprehensible and disgraceful. It is equally disgraceful that he cannot even spare the time to attend the whole of this short debate. That is an indication to Scotland of the concern of the Government. With all due respect to the Secretary of State for Scotland, he should have made sure that his colleague the Secretary of State for Trade and Industry sat through the debate.
When the Secretary of State for Trade and Industry made the announcement he talked aboutover-producing trucks for which there is no marketand said:The fact is that there are not sufficient customers coming forward to buy the trucks that are being produced."—[Official Report, 22 May 1984; Vol. 60, c. 833–34.]The right hon. Gentleman was talking about the market economy. One understands that. I want to make my remarks within the Government's conceptual framework of the market economy. Of course I should prefer import controls and many other things, but they are likely to be unacceptable to the Government.
Taking the Government's conceptual framework of the free market economy, we know that the Nigerian market 1295 has collapsed. We know also that only about 100 trucks went from Bathgate to West Africa last year. We also know, and I shall only skate over this, that there is a tremendous crisis in the Third world because of increased oil prices, diminished commodity prices, a world depression, shrinkage of aid, protectionism and the starvation of foreign exchange.
When there is talk of the market having collapsed and of trucks being produced for which there is no market, it has to be realised and understood that Africa is littered with vandalised trucks because the people cannot afford to buy the spare parts. There is a desperate market for trucks all over Africa—Nigeria is a special case, of course; everywhere in Africa, from Kenya to Tanzania, Zambia, Botswana, Lesotho, Ghana, and the Gambia there is a market for trucks. Then there is Asia as well. It is nonsense to say there is not a market for trucks, but there is not the foreign exchange to pay for them.
It will be within the recollection of some hon. Members that during the term of the Labour Government, out of the aid programme, and totally in conformity with "More help for the Poorest", a White Paper which we produced during my term, there were activities which greatly assisted the shipyards on Tyneside and which kept Scott Lithgow going for six months. I remember a mining machinery order for India for Anderson Mayor and, although not through the aid programme, an order for trucks for Kenya which kept British Leyland going at a time when it was in difficulty.
In this case, very poor countries could be helped under the aid programme and this would be totally in accordance with its objectives, even under this Government. If one considers the loss of tax revenue and the amount to be spent on social security benefits, which may be £12 million to £15 million per year, one realises that that would buy about 1,200 trucks. We are at the beginning of the new financial year, when the aid programme has a good deal of uncommitted money. It is only much later in the year that the aid programme has committed itself and cannot find flexibility and room to manoeuvre. At this time the great need of many of the poorest countries is for what we call programme aid—that is, the financing of goods which they need.
My figures are very rough; I should like the Minister to check them and tell me if I am wrong. I estimate that at a cost from within the aid programme of some £18 million, added to the amount involved in tax and social security payments, an order could be given to keep British Leyland going at Bathgate. I shall pursue this. I shall not be content until I hear that the Government have considered this possibility and that there have been discussions between the relevant Departments.
If nobody else will do it, the Secretary of State for Scotland must contact the Foreign Secretary—I do not expect much of an initiative on this to come from the Foreign Secretary—and the Prime Minister, who, if she cares one atom about this, as I think she probably does, will convene one of her MISCs. It is possible to provide orders to keep British Leyland going until the Third world depression is over to such an extent that it can itself place orders.
I appeal to the Secretary of State for Scotland not to say that closure is inevitable, but to say, "Here is a stone that we have not yet looked under. Let us see what we can do in this direction."
§ Mr. Charles Wardle (Bexhill and Battle)
You have instructed me to be as brief as possible, Mr. Speaker, but I should like to ask the right hon. Member for Clydesdale (Dame J. Hart) whether she is aware, from BL's corporate plan, that Leyland Trucks has sufficient capacity at Leyland to supply present demand in the United Kingdom market and an increase of more than 400 per cent. in its export sales. In view of that, what she said hardly provides an adequate argument for continuing with Bathgate.
I should like to declare a recent interest in the management of a company which for several years supplied small quantities of components to Bathgate from the midlands. Since coming to this place I have ceased to be involved in the management of that company and it has ceased to be a supplier to Bathgate. Based on that experience as a supplier, I believe that it would be folly to have a three-hour debate without examining the realities of the creation of Bathgate and some of the unhappy factors in its life which must be set aside if the rest of BL is to be the success that we know it can be.
As a supplier in the midlands, it was common knowledge that when the grandiose scheme in the name of regional assistance, which I believe was misguided, to open Bathgate was announced, the supply of components would immediately become uneconomic and therefore impractical.
§ Mr. Wardle
That might be the case, but it is not economic regularly to send small quantities of components 300 miles to Bathgate.
§ Mr. Ron Brown
If what the hon. Gentleman says is true and Bathgate is not viable, how can the Albion plant be viable? Is he saying that the Albion plant should be closed?
§ Mr. Wardle
I am not saying that for one minute. My point is that if existing demand for trucks is satisfied by Leyland in Lancashire and Bathgate, there is no doubt which of the two plants is more suitable for the sourcing of components. There were opportunities in Scotland for components in stampings, pressworks and fasteners to be provided locally, but they could not be provided in sufficient quantity, so the plant has always been on a shaky basis. For years, employees, management and everyone in the trade has predicted that Bathgate would run into difficulties. In view of the market development of the 1980s, the collapse in demand from Africa and Third world countries, the arrangement between Renault and Bedford and attacks on the market by the likes of Mercedes, it comes as no surprise that the sad news of Bathgate has had to be visited on the workers and management there.
I ask that one message be drawn from the experience of Bathgate. The midlands has already learnt the lesson. It has experienced far worse pain in the past two years in the motor industry and the component manufacturing industry. The message is that, in the face of the ravages of inflation during the 1970s, we must bear in mind that whatever plants we continue to run—whether BL or private industry—they must be run competitively. We 1297 cannot carry excess capacity for ever and a day. Doing that debilitates the entire enterprise, and that could involve the rest of BL, in which many jobs are at stake and in which prosperity can be preserved.
§ Mr. George Park (Coventry, North-East)
As has been said, the depression hit the passenger car sector of British Leyland and the rest of that industry before hitting the commercial sector. The depressing thing is the Government's blinkered approach.
Tuesday's announcement is the latest attempt by Leyland Vehicles to deal with the recession in its market by slashing the labour force. That is a well-trodden path o in BL. The car division had to go through the same trauma, as the west midlands knows to its cost. Accepted wisdom in BL, which is aided and abetted by the Government, is that if products do not gain a sufficient share of the market, one declares that the company is overmanned. The axe then falls on the work force. Social implications are not taken into account. In the jargon, it is called matching resources to market realities.
The result of the policy that I have described is that design teams are scattered—never to be reassembled—help must be asked for from foreign companies, and our industry becomes ever more a screwdriver operation which, in turn, is replaced by robots, the human beings they replace being thrown on the scrap heap of unemployment as, for most of them, there is no alternative work. Driven by the Government's desire to privatise, Leyland Vehicles cannot wait for the process of improvement in the product to gain a larger share of the existing market. That would enable it to maintain its work force, or even to augment it. According to the corporate plan, that processenabled Leyland Trucks to increase their market share to 15 per cent. from 13.4 per cent. which compared very favourably with its competitors".That method would not be attractive to the profit takers who might be willing to get back into the companies that they left in chaos. The Government are prepared to add once again to their public sector borrowing requirement by adding to the dole queues.
The Chancellor does not help either as he keeps adding to the taxation charge. The corporate plan says that it has increased from £6.3 million in 1981 to £6.8 million in 1982 to £7.2 million in 1983. In that context, Jaguar Cars is now a much tastier morsel. I do not want to detract from the tremendous efforts that have brought the company back on course. The shop floor has shown that, given good parts, it can build good cars efficiently and cost effectively. The money this earned provides better facilities that contribute to that process. Better communications and job security encourage good industrial relations and the acceptance of modest wage increases. It cannot be denied, however, that a favourable exchange rate between the pound and the American dollar has also helped. It is not certain whether Jaguar Cars can continue to generate the resources that are necessary for continuous improvement of its products—the lifeblood of the motor industry — especially if exchange rates move adversely.
In their haste to privatise, the Government cannot wait. Nor will their backers, who are eager to get their hands on 1298 the assets that have been created by public money. Since the Secretary of State's announcement on Tuesday, when I interrupted to make a point about the interdependence of BL companies, I have had the opportunity to question a member of the BL board. He agreed that there is considerable shared know-how on what is mutually beneficial in production, components, purchasing, banking and finance. On the latter point, the Minister will have noted that a highly paid executive has just been appointed by Jaguar to look after the City side of its affairs.
No one knows for certain what the effects of present and future announcements will be on BL as a corporate body. If there is mutual benefit as at present, taking it away by privatisation or by dismantling parts of that corporate body can only be to the detriment of that corporate body as now constituted.
If the Government achieve their aim and sell off the whole of BL and history repeats itself and the resultant private companies again get into difficulties because they take out more than they put in, we had better ensure that there is a Labour Government in power as the Tories will undoubtedly let them go to the wall. The effects of that would be even more disastrous than those which will be suffered at Bathgate and elsewhere because of this announcement.
§ Mr. Donald Dewar (Glasgow, Garscadden)
The annnouncement about the corporate plan was bad news for many hon. Members, especially for those who represent Leeds and are interested in the future of C. H. Roe. My hon. Friend the Member for Leeds, Central (Mr. Fatchett) put its case effectively and strongly. I hope that he and his collegues will forgive me if I concentrate on Bathgate.
The final decision on Bathgate rested with the Government. It was their responsibility and, to be fair to them, they have not tried to escape it. They accept it. When my hon. Friends the Members for Livingston (Mr. Cook) and for Linlithgow (Mr. Dalyell) and I met senior management there it became clear that if there is to be a recovery the Government must play a part in it. I make it unequivocally clear that the Opposition expect something to be done and believe that the plant should be saved. Despite recognising the difficulties in the market and those which face the company, the whole point of the concordat between British Leyland and the Government was that wider social implications should be taken into consideration. If ever there were a case for doing that, it is this one.
The House will agree that the Bathgate plant has been murdered by the recession. When the Government came to power in 1979 the domestic market for trucks was 80,000 a year, but by 1982 it had dropped to 45,000 a year. That catastrophic slump did not happen like a spell of bad weather, but had much to do with the Government's economic policies. The Government should not try to duck that responsibility.
The Minister may be glad to hear that there have been signs of economic recovery in the area. The market for 45,000 vehicles has increased to almost 50,000, and people in the industry talk of a requirement of 60,000 to 65,000 units in the domestic market. Ministers bolster that argument because they talk about stumbling on economic recovery round every corner and spying it out in every disaster. If they genuinely believe that a recovery is under way, the classic capitalist philosophy, which should 1299 appeal to them, is to invest in the bottom of the trough as we begin to climb out of our recession, and to give Bathgate the chance to secure its own future and that of its work force.
The Bathgate case is not hopeless. It has not been an albatross round Leyland's neck for ever and ever. Until 1978 it made profits. In 1975 it had 26 per cent. of the domestic market, although now it has only 15 per cent. Even if we recognise the damage that has been done by import penetration, we can hope that, given a chance, it will repel the import invasion and get a bigger share of the market. If we accepted the sort of Conservative philosophy which we have heard today and had they been the masters in 1975, we could only assume, as my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) said—this point is of real importance—British Leyland would have gone to the wall and we would have been told there was no other option.
British Leyland should think long and hard before sourcing out its Family One engine and becoming the only major manufacturer in Europe which does not have its own, engine production facilities. There are opportunities—I cannot outline them all in a short speech—in the model range, especially to exploit the gap regarding medium-sized vans.
To leave aside my points about recovery and investment, and take the narrow accountancy view, Leyland Vehicles says that by closing Bathgate operating costs will decrease by more than £10 million. But as a result of the closure the Government will spend significantly more than £10 million if a reasonable multiplier for the costs of supplementary benefit and unemployment is taken. There will be a continuing drain on funds because of the age structure of the work force and the lack of employment prospects.
My hon. Friend and, I suspect, in their hearts, many Conservative Members will agree that this should never be regarded as a narrow accountancy exercise. It is not to be regarded as a neat financial calculation where one tots up the figures, balances the ledger and comes to uncomfortable conclusions. The Government cannot afford to scatter a skilled work force and allow the morale of an entire area in central Scotland to be sandbagged. They cannot allow a vast plant which once employed more than 6,500 men and which shelters 1,500 machine tools under its roof to become a vast echoing monument to failure.
I know, though not with the knowledge of the hon. Members who represent the area, what the impact will be on Bathgate, Armadale, Whitburn, Blackburn and even Livingston. They cannot provide alternatives. There is nothing academic or abstract about watching male unemployment rise inexorably from 21 per cent. to 40 per cent. That will happen over the next two years while this lingering closure is implemented, unless the Government prevent it. It is not just another closure, one of the many which we have seen in Scotland, but it is the last of a line. In 1979 before the Secretary of State took office we had Corpach, Invergordon and Linwood. They were a legacy from a Conservative Government, when the Conservative party was committed to the Scottish economy. Under the right hon. Gentleman every one of them has gone. It has been a shame and a shock for Scotland.
I found the way in which the Secretary of State for Trade and Industry buried Bathgate with a sneer offensive. Such callous indifference is the trademark of the man. I 1300 wish that hon. Members had shown a little more compassion during this debate. The speeches of the hon. Members for Edinburgh, West (Lord James Douglas-Hamilton) and for Aberdeen, South (Mr. Malone) were all too typical of the performance of Conservative Members in the House. Tory Back Benchers are a lickspittle lot, fushionless, feckless and loyal to their Government to the point of folly. Their inadequacies and failure to speak cut about local democracy and unemployment were sadly recorded in an article in the Glasgow Herald on 11 May. The Tory convenor of the Lothian region, Councillor Brian Meek, who is probably the most prominent Conservative and local government councillor in Scotland, said of the Conservative MPs:With few notable exceptions if you ordered them to jump in the river only a handful would pause to take off their trousersTheir performance during this debate fully justifies their Conservative colleague's judgment.
The Secretary of State's speech was a lamentable performance. At times it sounded like selected readings from Leyland Vehicles' press handouts and at other times like selected readings from Conservative Central Office press handouts. At no time did he face up to the realities of his action. He is totally inadequate for his task and his only other characteristic is that he is spiced with panic. I read carefully what the Secretary of State says. Two or three weeks ago he said to the faithful in Perth at the Scottish Conservative party conference:The Scottish Office is now a positive force in United Kingdom Government in a way that it has not often been before".Journalists told me that that earned him a standing ovation. Two weeks after that he kills Bathgate, which, had he won his battles in the Cabinet, he could have saved. If that is the right hon. Gentleman trying, all that I can say is that he should pray that he can stop trying, because matters could not be worse.
The Secretary of State said in a statement after the anouncement last week that he had enormous admiration for the work force at Bathgate. If he so admires them, he must recognise that his actions will leave a bitterness that eats into the soul of entire communities in that part of Scotland. Ministers may be well-intentioned, but they are ineffective, and they have been left lamenting on the sidelines while at the same time supporting policies that are the root cause of this disaster.
There is an alternative to closure, and there can be no alternative only if one accepts the ground rules of this Government and their limited vision. In the Glasgow Herald today I was accused by a Conservative candidate of being a doom and gloom merchant. What I find depressing is that the loyalty of Conservative Members to the mistakes of their Government means that they have become doom and gloom merchants in an effort to justify the damage that has been caused. I ask the Secretary of state to think again for the sake of those men and their families and the townships in west Lothian, much of whose future has been put in danger by this Government and by the cruel news that they announced this week.
§ 7 pm
§ The Minister of State, Department of Trade and Industry (Mr. Norman Lamont)
The hon. Member for Linlithgow (Mr. Dalyell) put a series of questions to Ministers. I hope to cover some of them in my speech, although I did not receive a copy of them in advance, but, 1301 if I do not manage to answer some, I shall, of course, write to the hon. Gentleman and give him as much information as I can.
I listened carefully to the right hon. Member for Bethnal Green and Stepney (Mr. Shore)—
§ Mr. Dalyell
A list of questions was given to the Secretary of State for Scotland yesterday morning. Is this the degree of co-operation in the Government?
§ Mr. Lamont
I listened carefully to the right hon. Member for Bethnal Green and Stepney, but I must say—I am sure that my hon. Friends agree—that it was difficult to believe that he believed the conclusions to which he came. If we had a Labour Government now, they, too, would be worried about the future of Leyland Vehicles, and they would have had to make hard decisions about Bathgate.
The first point that the right hon. Gentleman sought to dispute was that there was a problem of over-capacity in the truck industry other than in Britain. He tried to say that it was simply a United Kingdom problem, but the right hon. Gentleman must know that truck production in Europe—he gave some figures relating to commercial vehicles, including light commercial vehicles, although we are talking about trucks weighing more than 3.5 tonnes—has decreased by about 30 per cent. The right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) mentioned what was happening in Spain with Enasa and what was happening to DAF trucks in Holland. Those companies are in precisely the same sort of difficulties as is Leyland Vehicles. It is not just a matter of a reduction in the domestic market, sharp though that has been; there has been a reduction in markets in Europe and in the Third world, to which Leyland Vehicles has sold much in the past. My hon. Friend the Member for Aberdeen, South (Mr. Malone) said that in Europe lorries have been used much more productively and intensively for longer periods. It must be doubtful whether Europe will return to the level of commercial vehicle and truck sales that it enjoyed a few years ago.
The leader of the Liberal party berated my hon. Friend the Member for Tayside, North (Mr. Walker) for quoting the figures for sales of Leyland Vehicles to Nigeria, and he said that there must have been many sales on other parts of the world. I should tell him that 40 per cent. of Leyland Vehicles' production used to be exported to Nigeria, other African countries and the middle east. I could give him a list of the Third-world countries where there has been a reduction in purchases similar to that in Nigeria, as my right hon. Friend the Secretary of State for Scotland said. The only overseas market that has remained constant—the right hon. Gentleman will probably not welcome this —has been South Africa.
There is no doubt that our industry has considerable over-capacity. Leyland in Lancashire has the capacity to produce 24,000 vehicles, but last year it produced only 11,000. As my hon. Friend the Member for Bromsgrove (Mr. Miller) said, British Leyland must take action to reduce its fixed costs. Unless it does so, there will be no hope of its becoming viable.
The right hon. Member for Bethnal Green and Stepney said that the closure of Bathgate would save only 10 per cent. of British Leyland's costs. That is an argument for deeper cutting and more retrenchment if the corporation 1302 is to become viable. But that is not the direction in which the Government have gone. The Government decided to support the board's recommendation to continue with the production of trucks in Britain. Many of my hon. Friends, including my hon. Friend the Member for Aberdeen, South, might think it surprising that the Government hung on for so long after such losses. Last year Leyland Vehicles lost £70 million; the year before it lost £60 million; and the year before that it lost a similar sum. Those are the figures before interest.
However, the Government decided to back the recommendation of the board. I stress that it was its recommendation to close Bathgate but to continue lorry production at Leyland Vehicles. Unless we closed Bathgate, jobs and production elsewhere would have been endangered.
§ Mr. Shore
What information does the Minister have about the future of export or domestic markets that makes him confident that he can sustain losses of £60 million a year in the rest of the Leyland truck division, but also makes him confident that he is right to close the major facility at Bathgate, which would save only £10 million?
§ Mr. Lamont
We accepted the view of the board about the future truck demand in Britain and overseas. The board believes, based on the overseas and domestic markets and on other cost-cutting measures that it will take in its plants, that there is a prospect of viability for the industry in a few years' time.
Opposition Members have said that we should do the same for Leyland Vehicles as we did for British Leyland Cars—invest more and develop more models. But we have done precisely that. The leader of the Liberal party was way off the mark when he referred to the need for new models. Leyland Vehicles has developed new models at the heavier end of the market. The small MT211 truck will come on stream this year, and the Sherpa light van has already obtained more than 23.5 per cent. of the market. Leyland Vehicles has invested in new models and throughout this period has been supported with large sums of money by the Government. I wonder what a Labour Government would have done? Under the Labour Government nearly 30,000 jobs were lost in British Leyland, which is equivalent to the closure of Bathgate every four or five months. Opposition Members talk about import penetration. This year, for the first time for many years, Leyland Vehicles increased its share of the market. However, every single year that the Labour party was in office, British Leyland's share of the truck market declined.
Right hon. and hon. Gentlemen have said that they intend to fight this closure. I hope that they do not mean those words too literally and that they will not give encouragement to people who want to obstruct the continuity of production at Bathgate, which will go on for some time yet. If they insist on following that course, they will endanger jobs elsewhere in other parts of Leyland Vehicles. It is a serious matter if the engines cannot be got out of Bathgate for other parts of Leyland Vehicles. Therefore, I hope that Labour Members will use restraint and encourage the work force at Bathgate to behave responsibly.
It was interesting that, during the debate, whenever my right hon. Friend the Secretary of State for Scotland talked about new jobs and new investment in Scotland, Labour 1303 Members did not want to know. They could not take the words. Sometimes—perhaps I can say this as a Scot—I have the feeling that many Labour Members want Scotland to masquerade as an under-privileged and underdeveloped region. The truth is that unemployment in Scotland is lower than in many of the assisted areas in England, and lower than in the north-east and the north-west of England. It is also interesting that GDP per head in Scotland is higher than in any region of England, other than the south-east. Right hon. and hon. Members still insist on portraying the image of Scotland as a backward region, dependent on old, traditional industries. They do not want to know the good news and they do not want to know about the new investment.
The closure of Bathgate is regrettable, but I believe, on the basis of the facts that have been spelt out, that it is the only—
§ Mr. James Hamilton (Motherwell, North)
rose in his place and claimed to move, That the Question be now put.
§ Question, That the Question be now put, put and agreed to.
§ Question put accordingly:—
§ The House divided: Ayes 177, Noes 281.1306
|Division No. 336]||[7.11 pm|
|Abse, Leo||Douglas, Dick|
|Alton, David||Dubs, Alfred|
|Archer, Rt Hon Peter||Eadie, Alex|
|Ashdown, Paddy||Eastham, Ken|
|Ashley, Rt Hon Jack||Edwards, Bob (W'h'mpt'n SE)|
|Atkinson, N. (Tottenham)||Evans, John (St. Helens N)|
|Barnett, Guy||Ewing, Harry|
|Barron, Kevin||Fatchett, Derek|
|Beckett, Mrs Margaret||Faulds, Andrew|
|Beith, A. J.||Fields, T. (L'pool Broad Gn)|
|Bennett, A. (Dent'n & Red'sh)||Fisher, Mark|
|Bermingham, Gerald||Foot, Rt Hon Michael|
|Boothroyd, Miss Betty||Forrester, John|
|Boyes, Roland||Foster, Derek|
|Bray, Dr Jeremy||Foulkes, George|
|Brown, Gordon (D'f'mline E)||Fraser, J. (Norwood)|
|Brown, Hugh D. (Provan)||Freeson, Rt Hon Reginald|
|Brown, N. (N'c'tle-u-Tyne E)||Freud, Clement|
|Brown, Ron (E'burgh, Leith)||Garrett, W. E.|
|Caborn, Richard||Gilbert, Rt Hon Dr John|
|Callaghan, Jim (Heyw'd & M)||Godman, Dr Norman|
|Campbell, Ian||Golding, John|
|Campbell-Savours, Dale||Hamilton, W. W. (Central Fife)|
|Canavan, Dennis||Harman, Ms Harriet|
|Carter-Jones, Lewis||Harrison, Rt Hon Walter|
|Clarke, Thomas||Hart, Rt Hon Dame Judith|
|Clay, Robert||Hattersley, Rt Hon Roy|
|Cocks, Rt Hon M. (Bristol S.)||Haynes, Frank|
|Cohen, Harry||Healey, Rt Hon Denis|
|Coleman, Donald||Heffer, Eric S.|
|Conlan, Bernard||Hogg, N. (C'nauld & Kilsyth)|
|Cook, Frank (Stockton North)||Holland, Stuart (Vauxhall)|
|Cook, Robin F. (Livingston)||Howell, Rt Hon D. (S'heath)|
|Corbett, Robin||Hoyle, Douglas|
|Corbyn, Jeremy||Hughes, Dr. Mark (Durham)|
|Cox, Thomas (Tooting)||Hughes, Robert (Aberdeen N)|
|Craigen, J. M.||Hughes, Roy (Newport East)|
|Crowther, Stan||Hughes, Simon (Southward)|
|Cunningham, Dr John||John, Brynmor|
|Dalyell, Tam||Kilroy-Silk, Robert|
|Davies, Rt Hon Denzil (L'lli)||Kinnock, Rt Hon Neil|
|Davies, Ronald (Caerphilly)||Kirkwood, Archibald|
|Davis, Terry (B'ham, H'ge H'l)||Lambie, David|
|Deakins, Eric||Lamond, James|
|Dewar, Donald||Leighton, Ronald|
|Dixon, Donald||Lewis, Terence (Worsley)|
|Dobson, Frank||Litherland, Robert|
|Dormand, Jack||Lloyd, Tony (Stretford)|
|Lofthouse, Geoffrey||Rooker, J. W.|
|McCartney, Hugh||Ross, Ernest (Dundee W)|
|McDonald, Dr Oonagh||Ross, Stephen (Isle of Wight)|
|McGuire, Michael||Rowlands, Ted|
|McKay, Allen (Penistone)||Sedgemore, Brian|
|McKelvey, William||Sheerman, Barry|
|Mackenzie, Rt Hon Gregor||Sheldon, Rt Hon R.|
|Maclennan, Robert||Shore, Rt Hon Peter|
|McNamara, Kevin||Short, Mrs R.(W'hampt'n NE)|
|McTaggart, Robert||Silkin, Rt Hon J.|
|McWilliam, John||Skinner, Dennis|
|Madden, Max||Smith, C.(Isl'ton S & F'bury)|
|Marek, Dr John||Smith, Rt Hon J. (M'kl'ds E)|
|Marshall, David (Shettleston)||Soley, Clive|
|Martin, Michael||Spearing, Nigel|
|Mason, Rt Hon Roy||Steel, Rt Hon David|
|Maxton, John||Stewart, Rt Hon D. (W Isles)|
|Meacher, Michael||Stott, Roger|
|Meadowcroft, Michael||Strang, Gavin|
|Mikardo, Ian||Straw, Jack|
|Millan, Rt Hon Bruce||Thomas, Dafydd (Merioneth)|
|Mitchell, Austin (G't Grimsby)||Thomas, Dr R. (Carmarthen)|
|Morris, Rt Hon A. (W'shawe)||Thompson, J. (Wansbeck)|
|Morris, Rt Hon J. (Aberavon)||Thorne, Stan (Preston)|
|Nellist, David||Tinn, James|
|O'Brien, William||Torney, Tom|
|O'Neill, Martin||Wainwright, R.|
|Owen, Rt Hon Dr David||Warden, Gareth (Gower)|
|Park, George||Wareing, Robert|
|Parry, Robert||Weetch, Ken|
|Patchett, Terry||Welsh, Michael|
|Pendry, Tom||White, James|
|Pike, Peter||Wigley, Dafydd|
|Powell, Raymond (Ogmore)||Williams, Rt Hon A.|
|Radice, Giles||Winnick, David|
|Randall, Stuart||Woodall, Alec|
|Redmond, M.||Wrigglesworth, Ian|
|Rees, Rt Hon M. (Leeds S)||Young, David (Bolton SE)|
|Richardson, Ms Jo|
|Roberts, Allan (Bootle)||Tellers for the Ayes:|
|Roberts, Ernest (Hackney N)||Mr. James Hamilton and|
|Robertson, George||Mr. Lawrence Cunliffe.|
|Robinson, G. (Coventry NW)|
|Adley, Robert||Buck, Sir Antony|
|Aitken, Jonathan||Budgen, Nick|
|Alexander, Richard||Burt, Alistair|
|Alison, Rt Hon Michael||Butler, Hon Adam|
|Amess, David||Butterfill, John|
|Ancram, Michael||Carlisle, Kenneth (Lincoln)|
|Arnold, Tom||Chalker, Mrs Lynda|
|Atkins, Rt Hon Sir H.||Chapman, Sydney|
|Atkins, Robert (South Ribble)||Chope, Christopher|
|Atkinson, David (B'm'th E)||Churchill, W. S.|
|Baker, Rt Hon K. (Mole Vall'y)||Clark, Dr Michael (Rochford)|
|Baker, Nicholas (N Dorset)||Clark, Sir W. (Croydon S)|
|Baldry, Anthony||Clarke, Rt Hon K. (Rushcliffe)|
|Batiste, Spencer||Cockeram, Eric|
|Bellingham, Henry||Colvin, Michael|
|Bendall, Vivian||Conway, Derek|
|Benyon, William||Coombs, Simon|
|Berry, Sir Anthony||Cope, John|
|Best, Keith||Cormack, Patrick|
|Biffen, Rt Hon John||Corrie, John|
|Biggs-Davison, Sir John||Couchman, James|
|Blaker, Rt Hon Sir Peter||Cranborne, Viscount|
|Body, Richard||Crouch, David|
|Bonsor, Sir Nicholas||Currie, Mrs Edwina|
|Boscawen, Hon Robert||Dicks, Terry|
|Bottomley, Peter||Dorrell, Stephen|
|Boyson, Dr Rhodes||Douglas-Hamilton, Lord J.|
|Braine, Sir Bernard||Dover, Den|
|Brandon-Bravo, Martin||du Cann, Rt Hon Edward|
|Bright, Graham||Dunn, Robert|
|Brinton, Tim||Edwards, Rt Hon N. (P'broke)|
|Brooke, Hon Peter||Eggar, Tim|
|Brown, M. (Brigg & Cl'thpes)||Evennett, David|
|Bruinvels, Peter||Eyre, Sir Reginald|
|Bryan, Sir Paul||Fairbairn, Nicholas|
|Fallon, Michael||Lilley, Peter|
|Farr, John||Lloyd, Ian (Havant)|
|Favell, Anthony||Lloyd, Peter, (Fareham)|
|Finsberg, Sir Geoffrey||Lord, Michael|
|Fookes, Miss Janet||Lyell, Nicholas|
|Forman, Nigel||McCurley, Mrs Anna|
|Fowler, Rt Hon Norman||Macfarlane, Neil|
|Franks, Cecil||Maclean, David John|
|Fraser, Peter (Angus East)||Madel, David|
|Gale, Roger||Malins, Humfrey|
|Garel-Jones, Tristan||Malone, Gerald|
|Gilmour, Rt Hon Sir Ian||Maples, John|
|Glyn, Dr Alan||Marlow, Antony|
|Goodhart, Sir Philip||Marshall, Michael (Arundel)|
|Goodlad, Alastair||Mather, Carol|
|Gow, Ian||Maude, Hon Francis|
|Greenway, Harry||Mawhinney, Dr Brian|
|Gregory, Conal||Maxwell-Hyslop, Robin|
|Griffiths, E. (B'y St Edm'ds)||Mayhew, Sir Patrick|
|Grist, Ian||Mellor, David|
|Ground, Patrick||Meyer, Sir Anthony|
|Grylls, Michael||Miller, Hal (B'grove)|
|Gummer, John Selwyn||Mills, Iain (Meriden)|
|Hamilton, Hon A. (Epsom)||Mills, Sir Peter (West Devon)|
|Hamilton, Neil (Tatton)||Miscampbell, Norman|
|Hampson, Dr Keith||Mitchell, David (NW Hants)|
|Hargreaves, Kenneth||Moate, Roger|
|Harvey, Robert||Monro, Sir Hector|
|Havers, Rt Hon Sir Michael||Moore, John|
|Hayward, Robert||Morris, M. (N'hampton, S)|
|Heddle, John||Morrison, Hon C. (Devizes)|
|Heseltine, Rt Hon Michael||Murphy, Christopher|
|Hickmet, Richard||Neale, Gerrard|
|Higgins, Rt Hon Terence L.||Needham, Richard|
|Hind, Kenneth||Nelson, Anthony|
|Hirst, Michael||Neubert, Michael|
|Holland, Sir Philip (Gedling)||Newton, Tony|
|Holt, Richard||Nicholls, Patrick|
|Hordern, Peter||Normanton, Tom|
|Howard, Michael||Norris, Steven|
|Howarth, Alan (Stratf'd-on-A)||Oppenheim, Philip|
|Howarth, Gerald (Cannock)||Osborn, Sir John|
|Howell, Rt Hon D. (G'ldford)||Ottaway, Richard|
|Hunt, David (Wirral)||Page, John (Harrow W)|
|Hunt, John (Ravensbourne)||Page, Richard (Herts SW)|
|Hunter, Andrew||Parkinson, Rt Hon Cecil|
|Hurd, Rt Hon Douglas||Parris, Matthew|
|Irving, Charles||Patten, Christopher (Bath)|
|Jackson, Robert||Patten, John (Oxford)|
|Jenkin, Rt Hon Patrick||Pawsey, James|
|Jessel, Toby||Peacock, Mrs Elizabeth|
|Jones, Gwilym (Cardiff N)||Percival, Rt Hon Sir Ian|
|Jones, Robert (W Herts)||Pollock, Alexander|
|Jopling, Rt Hon Michael||Porter, Barry|
|Kershaw, Sir Anthony||Powell, Rt Hon J. E. (S Down)|
|King, Roger (B'ham N'field)||Powell, William (Corby)|
|King, Rt Hon Tom||Powley, John|
|Knight, Gregory (Derby N)||Prentice, Rt Hon Reg|
|Knight, Mrs Jill (Edgbaston)||Price, Sir David|
|Knowles, Michael||Prior, Rt Hon James|
|Lamont, Norman||Proctor, K. Harvey|
|Lang, Ian||Pym, Rt Hon Francis|
|Lawrence, Ivan||Raison, Rt Hon Timothy|
|Lawson, Rt Hon Nigel||Rees, Rt Hon Peter (Dover)|
|Lee, John (Pendle)||Renton, Tim|
|Leigh, Edward (Gainsbor'gh)||Rhodes James, Robert|
|Lennox-Boyd, Hon Mark||Ridley, Rt Hon Nicholas|
|Lester, Jim||Robinson, Mark (N'port W)|
|Lewis, Sir Kenneth (Stamf'd)||Roe, Mrs Marion|
|Lightbown, David||Rossi, Sir Hugh|
|Rost, Peter||Thomas, Rt Hon Peter|
|Rowe, Andrew||Thompson, Donald (Calder V)|
|Ryder, Richard||Thompson, Patrick (N'ich N)|
|Sackville, Hon Thomas||Thorne, Neil (Ilford S)|
|Sainsbury, Hon Timothy||Thornton, Malcolm|
|Sayeed, Jonathan||Thurnham, Peter|
|Scott, Nicholas||Townend, John (Bridlington)|
|Shaw, Giles (Pudsey)||Tracey, Richard|
|Shaw, Sir Michael (Scarb')||Twinn, Dr Ian|
|Shelton, William (Streatham)||van Straubenzee, Sir W.|
|Shepherd, Colin (Hereford)||Viggers, Peter|
|Shepherd, Richard (Aldridge)||Wakeham, Rt Hon John|
|Shersby, Michael||Waldegrave, Hon William|
|Silvester, Fred||Walden, George|
|Sims, Roger||Walker, Bill (T'side N)|
|Skeet, T. H. H.||Walker, Rt Hon P. (W'cester)|
|Smith, Sir Dudley (Warwick)||Waller, Gary|
|Smith, Tim (Beaconsfield)||Wardle, C. (Bexhill)|
|Soames, Hon Nicholas||Warren, Kenneth|
|Speed, Keith||Watson, John|
|Speller, Tony||Watts, John|
|Spencer, Derek||Wells, Bowen (Hertford)|
|Spicer, Michael (S Worcs)||Wells, John (Maidstone)|
|Squire, Robin||Wheeler, John|
|Stanbrook, Ivor||Whitfield, John|
|Steen, Anthony||Wiggin, Jerry|
|Stern, Michael||Winterton, Mrs Ann|
|Stevens, Lewis (Nuneaton)||Winterton, Nicholas|
|Stewart, Allan (Eastwood)||Wolfson, Mark|
|Stewart, Andrew (Sherwood)||Wood, Timothy|
|Stewart, Ian (N Hertf'dshire)||Woodcock, Michael|
|Stokes, John||Yeo, Tim|
|Stradling Thomas, J.||Younger, Rt Hon George|
|Tapsell, Peter||Tellers for the Noes:|
|Taylor, Teddy (S'end E)||Mr. Douglas Hogg and|
|Tebbit, Rt Hon Norman||Mr. John Major.|
|Thatcher, Rt Hon Mrs M.|
§ Question accordingly negatived.
§ Mr. Nellist
On a point of order, Mr. Speaker. We have just had an extremely important debate, during which the anger against the Government's announcement on 22 May of those hundreds of workers in Scotland who now occupy the Bathgate plant was reflected in speeches from the Labour Benches.
You will recall that that announcement was made as part of the statement of the Secretary of State for Trade and Industry on BL's corporate plan, which did not mention the closure of Bathgate or C. H. Roe and gave only three lines to the privatisation of Jaguar. It is my understanding that once a statement is made and questions asked on it, apart from your decision to accept the application under Standing Order No. 10 for the debate that we have just had, no further pressure can be brought to bear on the Government to answer questions on that statement. May I make it clear that the workers of Coventry, who support the opposition to the plan of those in Bathgate and Leeds, will also want the Government to answer questions on the privatisation of Jaguar?
§ Mr. Speaker
Order. The hon. Gentleman is making the speech that he might have made had he been called, he has made his point.