HC Deb 16 May 1985 vol 79 cc491-7 3.33 pm
Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (by private notice)

asked the Secretary of State for Transport if he will make a statement on the announcement of job losses in British Rail Engineering Ltd.

The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell)

At a meeting of its joint consultative committee on 15 May, the management of British Rail Engineering Ltd. informed the unions that it had reluctantly come to the conclusion that it would be necessary to make further reductions in manpower within BREL. A year ago, the management had already informed the unions at the equivalent meeting of proposed reductions. Its latest evaluation of work load, however, shows a further reduction of 13 per cent. in repair work. The company has therefore concluded that it needs to reduce manpower by a further 1,300 over the next 'two years.

It may be helpful to the House if I explain these work load projections. The demand for railway repair and maintenance has declined because of British Rail's decision to invest in new rolling stock. In particular, investment in new diesel multiple units with higher performance means that the same frequency of service can now be provided with fewer trains, and each of these fewer units requires less maintenance. Major programmes of refurbishment, particularly the stripping of asbestos from older vehicles, are also nearing completion, and this has been a significant part of the recent work load.

In the light of this reduced demand, British Rail and BREL have, with considerable regret, decided that they must propose to the unions a sizeable rundown of the Glasgow Springburn works and some further manpower reductions at other works, particularly Doncaster and Eastleigh. Most regrettably of all, they have decided, after considering the position carefully, that there is insufficient work to maintain the BREL works at Swindon after March 1986.

I know that these proposals will be a hard blow to the communities concerned, particularly to Swindon, but British Rail and BREL have considered the matter carefully and concluded that a reduction of capacity of this scale is unavoidable. There will, of course, be an opportunity for all the possibilities to be re-examined fully in the consultations with the employees which now follow BREL's announcement.

British Rail and BREL will do all that they can to find alternative work for redundant employees by offering opportunities to transfer to other works and by encouraging business development and job creation at both Swindon and Glasgow.

Mrs. Dunwoody

Is the Minister not aware that it is a disgrace to come here and make announcements that represent a drop of 18.8 per cent. in the work force by the end of March 1987 —1,000 more jobs lost than was proposed by British Rail to the unions last year—and the total closure of the Swindon works?

Why is it that, when the Ayrshire electrification programme is to be completed, the Glasgow works is to be reduced, because there is to be no more refurbishment of DMUs, to the level of a mere regional workshop? How does the Minister explain to the trained engineers who are to lose their jobs the reason for reducing the amount of maintenance that British Rail has undertaken throughout the regions since the Government came to power? Why has there been no estimate of the work load to the end of the corporate plan? Is it the intention of the Government to proceed even faster with the cuts that were proposed in the Serpell report? That appears to be the reason why there is no clear indication of how much work will be left at the end of 1987.

The Serpell report made various suggestions for BREL: that it should be forced to remain within British Rail, and not compete for work outside: that it should be privatised—

Mr. Speaker

Order. I am sorry to interrupt the hon. Lady but this is a private notice question, not the response to a statement.

Mrs. Dunwoody

I want to make it quite clear to the House that what the Government are insisting on is a rundown in the existing stock in BR. Will the Minister tell us whether it was ever made clear to the electorate in the constituencies that are to lose a highly skilled work force what the real effect of Conservative government would be on employment in BREL workshops? How does the Minister defend the fact that none of his efforts to obtain contracts overseas have been sent to British Rail, where they are desparately needed? Will he ensure that the new contracts go to BR and not to foreign workshops? If not, how dare he try to defend cuts in necessary jobs?

Mr. David Mitchell

The hon. Lady asked whether I knew of the job losses. Yes, of course I know. I am painfully aware of the job losses and deeply concerned about them. However, the reality is that when British Rail invests in new diesel multiple units and new rolling stock, that rolling stock requires much less maintenance than the old rolling stock. For that reason, the more investment it undertakes in new rolling stock, the less work there is in the old refurbishment and maintenance work which has been going on.

I shall give the House the facts. The average replacement rate is two new vehicles for three old vehicles. Each vehicle needs 30 to 40 per cent. less annual BREL maintenance than the older ones. Therefore, overall, to have a new fleet means a 50 to 60 per cent. reduction in the maintenance work which follows. That is an inevitable consequence. Nothing that the hon. Lady can do by blustering to the House alters the fact that the work load does not warrant the maintenance of the entire system as it now stands.

Mr. Simon Coombs (Swindon)

Is my hon. Friend aware that, if the closure takes place, it will increase male unemployment in my constituency and the sorrounding areas by up to 50 per cent? Is he further aware that the Swindon railway works has been run down for more than 20 years, during which time there have been both Labour and Conservative Governments? Nothing has been done to reverse that trend, which was brought to an end yesterday.

In the circumstances, will my hon. Friend press British Rail to seek redeployment for as many of the work force in the railway works as can be achieved?

Mr. Dennis Skinner (Bolsover)

The hon. Gentleman will be redeployed.

Mr. Speaker

Order. This is a serious matter for the hon. Gentleman's constituency.

Mr. Coombs

Will my hon. Friend press British Rail for redundancy payments on the same level as those granted this year to people in other nationalised industries? Will he press British Rail to increase the sum available through British Rail Holdings—the enterprise agency recently created in my constituency — to redeploy workers and to create new businesses there to take up the work force who will be made redundant following the announcement? Will he further press British Rail to offer the Swindon works on the open market, as a going concern with a large pool of highly skilled engineering workers who would be a proud addition to any company in the world?

Mr. Mitchell

Last May the forward projection showed an anticipated work force at Swindon of just under 700. Those jobs are now going as a result of yesterday's announcement. Some of the men will be relocated within BREL, as a result of natural wastage throughout the organisation. My hon. Friend will be aware that, whatever Government were in office, it would have made no difference to the need to balance the capacity and the demand within BREL.

Redundancy payments and the funds available to help create work in those areas will be pro rata to those at Horwich and Shildon. My hon. Friend asked me to press the management of British Rail to offer the works as it stands on the open market, and I shall certainly draw that suggestion to the attention of the chairman of British Rail.

Mr. Michael J. Martin (Glasgow, Springburn)

I seek assurances from the Minister that British Rail will not put any orders for new locomotives overseas, and that any new stock will be built by British Rail engineering workers in my constituency and throughout the country. Will the Minister come to Springburn and see the impact that the decision has had on my community? Since the turn of the year we have had three major closures involving redundancies, yet we are only in the month of May. If the Minister seriously believes that he can find alternative employment, why was he not having discussions with the unions a year ago, and looking for alternative work then, instead of waiting until the announcement was made?

Mr. Mitchell

The hon. Gentleman raises the question of British Rail's purchases of locomotives, possibly from overseas. I must tell him that British Rail is in a competitive market. It has no monopoly, and is in competition with air and coach services and private cars. It must give its customers the best service and value that it can. Therefore, it must buy as competitively as it can. British Rail and I hope that it can do so from British engineering.

Mr. James Hill (Southampton, Test)

Does my hon. Friend agree that this evolution was almost inevitable from the steam age to the diesel age, because the carriage works were started in the early part of this century? Is it not clear that the decision had to be made one day? With the inevitability of the decision, will he ensure that every sympathetic consideration is given to the employees who will be made redundant? Will he ensure that British Rail realises how emotive the issue is and, in every case, will he bring it to the attention of the board that those employees must receive every consideration for the many years of loyal service that they have given to British Rail?

Mr. Mitchell

My hon. Friend is right to draw attention to the valuable service given to British Rail, especially by the workers at Swindon, who had an especially good productivity record. I wholly support the point that he made. When the BREL works were closed at Shildon and Horwich, I explored with British Rail every way of helping to create jobs. Of course, I shall do the same for Swindon.

Mr. Stephen Ross (Isle of Wight)

In view of the deplorable state of much of the rolling stock in the southern and eastern regions, where we are constantly told that, due to a lack of rolling stock, trains will have only four or eight coaches, it is hard to believe the Minister's statement. The rolling stock on the Isle of Wight goes back to 1924. Is the Minister sure that he is not destroying a railway industrial base which, in three or four years' time, we shall desperately need to produce the rolling stock that I believe is needed now? Is he sure that we will not be importing it from America?

Mr. Mitchell

I have to say that Swindon is net geared to the sort of work which the hon. Gentleman describes. There is no intention to close the works at Eastleigh— [Interruption.] There is absolutely no intention to close the works there. There has been a small reduction in the work force, which is deeply regretted. The precise programme for the refurbishment of Southern region's rolling stock is a matter for the management of British Rail, not for Ministers.

Mrs. Edwina Currie (Derbyshire, South)

Does my hon. Friend recognise the excellent work that has been done at BREL and at British Rail workshops in Derby, especially the tremendous efforts made by management and men, many of whom are my constituents, to modernise the works and improve productivity? Does he agree that the action taken by BREL workers in other parts of the country—to go on strike—is exactly the wrong approach, for if we are to win more customers, we need a work force that is not only competent, but reliable?

Mr. Mitchell

My hon. Friend is absolutely coma. BREL can be proud of the way in which it has succeeded in recent months in winning orders in open competition. Indeed, it has just won the first competitive contract for freight wagon repairs, for which 13 companies had tendered. That fully bears out my hon. Friend's point: that BREL has become an efficient operation with an efficient work force and can compete successfully.

Dr. John Marek (Wrexham)

Can the Minister demonstrate to the House that he is not acting like a modern Pontius Pilate, and tell the House what he proposes to do and what measures he will take to help BREL to compete in the export market and to regain some of the export orders that it has lost in recent years?

Mr. Mitchell

It is not for politicians to undertake the work of manufacturing and exporting — that is for BREL. I have told BREL that I am available to help it in any way that I can in support of its export programme. It has had a considerable number of export inquiries for the railbus and the international coach and we shall do all that we can to help it succeed in that way.

Mr. Michael Hirst (Strathkelvin and Bearsden)

Does my hon. Friend think that the Caley works at Springburn, Glasgow, where a number of my constituents work, will have a viable future with only 460 employees? Is he satisfied that the work load of BREL is shared fairly throughout the United Kingdom? Can he assure me that the BREL management is attaching adequate priority to the important job of winning vital export orders?

Mr. Mitchell

On my hon. Friend's point about the future of the Glasgow works and whether the number of employees will be viable the work fulfilled in the past at the Glasgow works is changing. However, I have every reason to believe that the numbers that have been projected will be enough for a viable future for the works. As to the share of the work, it is not a case of sharing it fairly but of allocating it within BREL's management to where it can be done most efficiently and cost-effectively.

Mr. John Evans (St. Helens, North)

Will the Minister acknowledge that, if British Rail places a major order for locomotives abroad, he will be coming back to the Dispatch Box to announce further redundancies and closures in BREL? Will he also acknowledge that, if such orders are placed abroad, he will be putting a large knife through the heart of some of Britain's biggest locomotive manufacturers?

Mr. Mitchell

I understand the hon. Gentleman's point; that is why it is so necessary for the British firms that manufacture such products to do so as cost-effectively and competitively as their competitors elsewhere. On that basis, British Rail will order, and will be delighted to order, from British firms.

Sir Kenneth Lewis (Stamford and Spalding)

Is my hon. Friend aware that this is but another example of the many that we have had, and will yet have, of the private and public sectors doing away with jobs because of increased efficiency and increased technology? That is not the Government's fault, but is my hon. Friend aware that the Government must be concerned with how we re-allocate our employment resources, so that, either by reduction in hours of working or years of work, or by earlier pensions we can make up for the jobs that are being lost month by month and year by year?

Mr. Mitchell

My hon. Friend is correct. Increased efficiency often reduces jobs, but a huge British Rail investment programme stretches out ahead of it. In the next five years, we expect some £2,200 million to be in invested by British Rail, which will create many jobs.

Mr. Gordon Wilson (Dundee, East)

Will the hon. Gentleman reconsider his answer to the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) about the division of work? Does he not know that allegations were made to me by the trade unions at Springburn two months ago that those works did not get a fair share of the work coming from the Scottish area of British Rail, never mind the work coming from other areas? Will he look at that, because Springburn has borne an extremely heavy proportion of the redundancies involved?

Mr. Mitchell

The hon. Gentleman will know that there were certain difficulties at Springburn last year. I shall draw his comments to the attention of BREL management, but it must be for it to decide where it can best carry out the work that it has to do both cost-effectively and efficiently.

Mr. Dennis Skinner (Bolsover)

Why does this Minister, like the rest of those on the Tory Front Bench, glory in putting people on the dole? When will this bleeding stop? Is it not just what the railwaymen have been saying? What does one expect from this Government, with a Prime Minister who will gallivant all around the world but does not have the decency to travel on a British train?

Mr. Mitchell

I bitterly resent the hon. Gentleman's suggestion that I or any other Minister glories in people being put on the dole. My hon. Friend the Member for Swindon (Mr. Coombs) will confirm that I have been as anxious as anyone to try to retain the jobs involved. It is force majeure. The hon. Gentleman should know that if there is no work available, factories cannot be kept empty.

Several Hon. Members

rose —

Mr. Speaker

Order. I shall call those hon. Members with a direct interest in this matter.

Mr. Martin Redmond (Don Valley)

Thank you, Mr. Speaker. Would it not be common sense—I know that the Government are a little short of that—to bring about a movement of heavy freight from road to rail, thereby generating demand and doing a service to the environment and the country?

Mr. Mitchell

The hon. Gentleman makes a very sensible point, and I shall make two points in reply. First, the Government already give grants to seek environmental improvement by the transfer of traffic from road to rail. Secondly, nothing has given a larger boost to the movement of goods by road than what happened on the railways during the miners' strike.

Mr. Tam Dalyell (Linlithgow)

Here is another sensible point. When the Minister answered my hon. Friend the Member for Glasgow, Springburn (Mr. Martin), did he reflect whether the French railways would ever place an order for engines outside France or whether the Japanese railways would ever place an order outside Japan? What other countries can he name, which have major railway engineering industries, that place orders outside their own industries?

Mr. Mitchell

Hon. Members on both sides of the House have called for encouragement and help for BREL in its exporting work. If other countries manufactured everything that they wanted themselves, there would be no exports for Britain. The hon. Gentleman cannot have it both ways.

Mr. Ken Eastham (Manchester, Blackley)

Now that the Minister has expressed his grave concern and sorrow at the predicament of the engineers at BREL, may I remind him that the recent publicity engendered through British Rail by Mr. Bob Reid about the possibility of placing orders for 1,500 locomotives abroad could mean the loss of £1.5 billion-worth of business? I have been in correspondence with the chairman on behalf of the Amalgamated Union of Engineering Workers reminding him of the difficulties that that sort of policy would create. Does the Minister recognise that such action would not only affect the workshops that he has mentioned today, but, if we do not have a share of the orders it will affect GEC, Hawker Siddeley, Metro-Cammell and BREL? They will then come to the Minister to tell him that they have massive unemployment. What will the Minister do about it?

Mr. Mitchell

It is not for me to do anything about it —it is for the firms in British industry to be competitive and to win orders.