HC Deb 03 July 1986 vol 100 cc1277-84

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

10.47 pm
Mr. David Madel (Bedfordshire, South-West)

I am grateful to have this opportunity of initiating a short debate on the consequences of the recently announced redundancies at Bedford Commerial Vehicles .1 am especially pleased that my hon. Friend the Minister of State, the hon. Member for City of Chester (Mr. Morrison), will reply to the debate. I am also grateful to my next door neighbours, my hon. Friends the Members for Luton, South (Mr. Bright) and for Luton, North (Mr. Carlisle) for being present.

This is a depressing time for Dunstable and Luton with General Motors' plan to reduce the work force by 1,700 employees. My hon. Friend the Member for Luton, South and myself were most grateful to my hon. Friend the Minister for seeing us on the day the announcement was made.

In my view, if the merger talks with British Leyland had been successful — successful to me would have meant that Dunstable had a secure and proper place for the continuation of production of commercial vehicles as well as Luton—we would not now be having this debate on the redundancies. I do not want to spend too much time answering the critics of General Motors and the merger talks, some of whom, alas, are in the parliamentary Conservative party, but running through their criticisms is a thread of considerable ignorance about the activities of General Motors in the United Kingdom. The sort of things that critics of General Motors forget are as follows. They forget the contribution by General Motors to this country's war effort between 1939 and 1945, in the enormous production of vehicles to help the British Army. They especially forget 1939 to 1941, when America was neutral, and we were virtually on our own, yet General Motors continued with its production in this country, thereby completely contradicting the argument that somehow or other General Motors cannot do anything unless the American Government tell it to.

Secondly, critics forget 1956. We shall learn a lot about that this year, 30 years from Suez, when there was a tremendous row between the American and British Governments, but that in no way disturbed General Motors' production and investment in this country. Thirdly, people forget Vauxhall's move to Ellesmere Port in the early 1960s, to a black spot unemployment area, with considerable investment, providing brand-new jobs. My goodness, were not certain of my right hon. Friends pleased to be able to say at the 1964 general election how delighted they were that Vauxhall had moved to Ellesmere Port. Critics also forget the heavy losses that Vauxhall and Bedford Commercial Vehicles have, alas, sustained over the years, yet General Motors continues to stay with us, and very welcome it is, too.

The present situation is grave. It is summed up by part of the information bulletin given to employees last week at Bedford Commercial Vehicles, at both Dunstable and Luton. The announcement says that General Motors have now announced the 1985 net losses of £73 million, up from £62.4 million in 1984 and £52.5 million in 1983. Bedford's losses continue to run at around Ell million per week and further urgent action must therefore be taken to reverse this trend. In spite of that, I believe that General Motors is here to stay. I want it to stay in Dunstable and Luton in a big way, and so do the people of Bedfordshire, who have confidence in the company as employers.

The present situation poses two challenges for management and unions. For management, maximum information on investment and product development plans, especially how Bedford Commercial Vehicles will now fit into General Motors' worldwide operations, is absolutely vital for the employees at Dunstable and Luton. For the unions, the challenge is that there must be continuing full co-operation with management to work to turn the company round to profitability. I have already mentioned the losses which have been drawn attention to in the information bulletin. They are serious, and they must be reversed. In my view, they can be reversed with the full co-operation and commitment of management and unions.

In that grave situation, the challenge to us three Members of Parliament representing Bedfordshire is to make some suggestions as to what we think can now be done to help Bedfordshire. First, we should be using Dunstable college as a base for further training and training opportunities. Local employers express great confidence in what Dunstable college does on training. I want to see additional places on the courses, and new courses set up to help. As I said, local employers have confidence in the college. I believe that we can build on that and help people who are being made redundant.

Secondly, there is Bedfordshire's structure plan. The emphasis now must be on industry. Where we in Bedfordshire can successfully and sensibly develop land, the emphasis must be on developing that land for industry that will provide new jobs. That is not just me and my hon. Friends who are saying that because the councils are also saying it. Just the other day I had a communication from mid-Bedfordshire district council in part of my constituency. It wants to see sensible industrial development to underpin the community and to provide new jobs.

Thirdly, south Bedfordshire district council has raised a considerable sum of money from its policy of selling council houses. I would like to see a large portion of that money released so that the council can get on with the vitally needed modernisation programme on its council houses. That would provide new jobs and give people confidence and opportunities.

We have just heard quite a to-do on water. The Anglian water authority must look carefully at the amount it spends in Bedfordshire to make sure that it is not denying us the infrastructure needed for industrial development. We do not want to lose jobs and curtail the expansion of industry because the Anglian water authority cannot provide the necessary supplies and drainage that will allow new industry to come in and develop and provide new jobs.

Each time we have more scheduled airline services at Luton airport it provides welcome new jobs. Luton airport is a major employer in Bedfordshire and things must be done by the Civil Aviation Authority and by others to provide more scheduled services. As I say, the more scheduled services there are in the airport, the more jobs are created, and that helps our area.

I welcomed yesterday's statement on TVEI by my right hon. and learned Friend the Paymaster General. He said: We also need to improve the vocational qualifications system to encourage more people, young and old, to improve their skills when they have left school."—[Official Report, 2 July 1986; Vol. 100, c. 1004.] That obviously means that the Government are moving to provide more opportunities for Bedfordshire. The "Action for Jobs" publication by the Manpower Services Commission is sub-titled, "Opening more doors". I appeal to the Government to make sure that all doors in Bedfordshire are open to provide those opportunities.

In my short speech, I have called for maximum cooperation in the county because I want to see people working together to get us out of this difficulty. My final plea to the Government is please to do all they can by their economic and purchasing policies to encourage and help General Motors. Through the Government helping and working with General Motors we can start to turn around this difficult unemployment situation.

General Motors is a most welcome employer in Bedfordshire. We want to find more opportunities for new employers and industries to come in and help us out of our difficulties, but above all we want to do things that will make General Motors say that the United Kingdom, and especially Bedfordshire, is a good bet for investment and that it intends to increase its investment in the county of Bedfordshire.

10.53 pm
Mr. Graham Bright (Luton, South)

I am grateful to my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) for the opportunity to take part in this debate. The bulk of the redundancies announced by General Motors, some 1,000, were in my constituency. We face the unpalatable prospect of losing 660 jobs in the van plant and 340 from the press shop.

There is chronic overcapacity in vehicle production in Europe and that has been known by the trade and by the House for many years. There are too many vehicle producers competing in a depressed market and Bedford Commercial Vehicles has suffered badly. Until 1979 it was profitable, but in 1980 it incurred a record loss of £83 million. Since then, it has lost a further £300 million and losses are currently running at £1·5 million a week.

Bedford Commercial Vehicles and its parent company General Motors recognise the scale of the problem and have acted to meet it. They have invested over £70 million since 1983 restructuring the whole of the van operation in Luton and reorganising heavy truck production at Dunstable. Bedford's heavy vehicle production capacity has been reduced and two imaginative new light vans, the Midi and the Rascal, have been introduced, both at the Luton plant. The company has been actively seeking partners and I thought that it was an extremely imaginative idea that it should join forces with Leyland to produce a base in the United Kingdom commercial vehicle market of some 26 per cent. The company has also been talking with MAN and Renault in an attempt to get together for future operations. None of those ideas have come to fruition.

I still hope that we get General Motors and Leyland back together. I believe that that is the only solution which will help United Kingdom limited. I fully support GM's efforts in seeking deals because it must get together with someone else. As my hon. Friend the Member for Bedfordshire, South-West has said, GM has played a major part in the British motor industry and it has sustained the economies of Luton and many other towns in both good and bad times. Many other companies would have been driven out of the United Kingdom as a result of the losses it has endured both at Vauxhall Motors in the 1970s and now at Bedford since 1980. However—and I stress this—GM has kept faith in Britain. It has put its industrial relations, product range, and marketing for Vauxall Motors right. I am sure that the same can be done for Bedford Commercial Vehicles.

The first steps—tighter control of manpower, better stock control and greater production efficiency — are under way. These will restore the company to profitability. It would be a grave mistake to underestimate GM's determination to rationalise its heavy truck and van operation. It is perfectly capable of reviving them and taking first place in the European truck and van market, just as we have seen it revive its motor car section in Britain.

Unfortunately, the re-shaping of the GM strategy is likely to he at the expense of others. The deal which the Government sought a few months ago — to transfer Leyland Trucks and Range Rover to GM—would have ensured that Britain was the centre piece of the company's European production. The marketing and the production resources of the companies would have meant an overall increase in jobs, not to mention the prospect of new engines being designed and produced in Britain.

Because of short-sighted and ill-judged criticism, that opportunity has been lost. I have no doubt that, sooner or later, Bedford will find another partner, if it is not BL. If the partner is French, the design, manufacturing and the new range of trucks that GM requires—let us remember that it abandoned its world truck concept only last week —could shift to the continent.

I believe that Luton and Dunstable will continue to build vans and trucks, but I wish to issue a warning about the after-effects of the failed GM deal. It may well happen that the component manufacturers situated in the Birmingham and midlands area will lose their trade if a source of manufacture was started on the continent and the centre of gravity moved to France. Those Members and the people who scuppered the GM/Leyland deal could suffer far more than we have in Luton.

Leyland is too small to survive on its own indefinitely and it will be left out in the cold. In Luton we have paid the first instalment of the price to be met for rejecting the Bedford/Leyland merger … Other companies will have to face the realities of not supporting that deal. I regret the fact that that has happened and only hope that there is a chance of getting GM to base itself in Britain with possibly, Leyland, as its partner.

10.58 pm
Mr. John Carlisle (Luton, North)

I am grateful for the opportunity to make a short contribution in support of my hon. Friends the Members for Bedfordshire, South-West (Mr. Madel) and for Luton, South (Mr. Bright) in this important debate.

The absence of any representative of the Labour, Liberal or SDP parties is regrettable. Indeed, we would not be gathered here, on this sad day for the Luton and Dubstable district, but for the posturings of the right hon. and learned Member for Monklands, East (Mr. Smith). He was one of the prime movers in scuppering the deal that was laid out between General Motors and British Leyland. For the right hon. and learned Gentleman not to have the courtesy to the House, to the people of Luton and Dunstable and to the unions from which he so regularly sought advice at the time of the intended merger, to be present tonight is disgraceful. He should be here to make a speech or, at least, to hear about the anger and frustration of our constituents at General Motors having to lay off 1,700 men because of the decision made. There is no doubt in my mind, nor, I think, in the minds of my constituents, that that is a direct result of the fact that the merger did not take place.

I am sure that my hon. Friend the Minister will share our disappointment that the Government did not see fit to go ahead with the original recommendation. Although I understand the pressures that they were under from Opposition parties and from Conservative Members, particularly my right hon. Friends the Members for Old Bexley and Sidcup (Mr. Heath) and for Henley (Mr. Heseltine). it is to he regretted that the jobs were lost because the merger did not take place.

At the time we were extremely worried about the antics of the right hon. and learned Gentleman. Having had the nerve to turn up at Ellesmere Port in a Japanese car to talk to the unions at General Motors, he had the utter cheek to come to Luton to stir up the unions to such an extent that many of their members who came to lobby in the House turned up with pro-BL and pro-Land Rover stickers. In effect, it was like turkeys voting for an early Christmas. Now that Christmas has arrived in Luton and Dunstable, the results of his efforts and those of the Opposition parties is that we could well see the end of the United Kingdom truck industry as we know it.

My hon. Friend the Member for Luton, South gave a warning. I repeat the warning that I gave in an Adjournment debate some weeks ago that there is now a real chance that that industry will disappear. The Opposition parties do not care about the needs of their members which is why we are present to help our constituents and to help rectify the matter. It is good to see my hon. Friend the Minister in stout defence of what we have sought to do in the Luton and Dunstable area, and I thank him for the assistance that he gave us at that difficult time.

There is still a chance for our truck industry if the Government would go back to GM and say, "All is not over". If GM returns to the table with the sort of genuine proposals which it made at the time, something could be salvaged from this sad affair. It seems that those 1,700 jobs may have gone for ever, but we have absolute confidence in GM making an extremely generous settlement to those unfortunate people who have lost their jobs because that is it's history as an employer in our area.

We face an overcapacity market and extreme difficulties, and GM will need every assistance. That is why I fully endorse the comments of my hon. Friend the Member for Bedfordshire. South-West when he asks the Minister, if it is within his power, to provide every opportunity for more training, investment and assistance from the Government to our area to help those who have lost their jobs and, more important, those who now will not have the privilege of working for GM.

We are not downhearted, but, obviously, extremely disappointed. We look forward to the future with great optimism, but the Minister's help and guidance will be imperative if we are to survive these traumatic times and put GM back where it belongs, at the top of the motor and truck industry.

11.4 pm

The Minister of State, Department of Trade and industry (Mr. Peter Morrison)

I am glad that my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) has had the opportunity to raise this difficult, awkward matter on the Adjournment this evening. Nobody could do more for his constituents than my hon. Friend and my hon. Friends the Members for Luton, North (Mr. Carlisle) and for Luton, South (Mr. Bright). I am grateful to my hon. Friend for his kind remarks about my meeting with him. He has been very helpful to me in the nine months for which I have held my present position in terms of keeping me fully abreast of the position in his constituency and in Bedfordshire as a whole. For that I am grateful. Indeed, I hope and that he and his constituents, and the constituents of my hon. Friends the Members for Luton, North and for Luton, South will be aware that their calls and their concerns are constantly brought to the attention of the Department of Trade and Industry.

My hon. Friends have reminded the House of the long and important history of General Motors in the United Kingdom. My hon. Friend the Member for Bedfordshire, South-West asked me to do all that I can to encourage General Motors. Of course I will do everything that I can to encourage General Motors — how could one do otherwise. Vauxhall, for example, as my hon. Friends the Members for Luton, South and Luton, North will know, was established in 1903, and it was merged in 1925. so that its history in the country is very long and significant.

I believe that I am right in saying that some 3.5 million commercial vehicles have been built in Britain for worldwide markets. But, as my hon. Friend the Member for Bedfordshire, South-West reminds us, it remains a major supplier of trucks to the British Army. That supply has gone on through what have been awkward and difficult periods in the course of the previous decade.

We forget at our peril that over 80 per cent. of the content in Bedford Vehicles is United Kingdom sourced. Vauxhall's United Kingdom content is increasing to 6(1 per cent. this year, while 64 per cent. of the cars and vans sold here in 1986 will be built in the United Kingdom. Not only does General Motors' investment in the United Kingdom continue; it has gone on for a long time, and General Motors currently employs directly some 27,000 people.

Like my hon. Friends, I very much regret that the redundancies have proved necessary. But, as my hon. Friends have reminded the House, I regret to say that in the European truck industry there is some 40 per cent. overcapacity so that rationalisation is necessary.

I agree with my hon. Friend the Member for Luton, South that, listening to what happened in debates and at Question Time in the earlier part of this year, one would not have noticed that the Opposition realised that rationalisation of the truck industry was at all necessary. I regret to say that they are burying their heads in the sand if that is what they continue to believe. Rationalisation — and I am sorry that no Opposition Members are present this evening in what is an important debate—however it comes is bound to come, and it is bound to be better if it is on a planned and rational basis rather than as a result of putting off what will be awkward and difficult decisions. Redundancies are bound to be unpleasant, but in terms of getting rationalisation they are part of a total package. That package includes lower inventory costs, the raising of efficiency and better marketing.

The final solution—as all my hon. Friends who know the Bedford and Vauxhall situation will agree—is that management and work force act and co-operate. I have no doubt that that can and will be the case, despite the fact that the industry has a difficult and complicated decision to take. I understand that a considerable number of applications have been made for voluntary redundancies. Given that quite a considerable number of the workers are aged over 55, I hope that the company will be able to meet its job reduction objectives without having to have recourse to involuntary redundancies.

My hon. Friends have mentioned at some length the general employment position in south Bedfordshire. I agree about the schemes that have been installed there, not least because in a previous incarnation I had something to do with the youth training scheme, the community programme, with the original launch of the TVEI, and with the adult training programme.

Like me, my hon. Friend the Member for Bedfordshire, South-West has considerable confidence in Bedfordshire's future. Given what the public sector is doing through the Manpower Services Commission to help with training and education, and the entrepreneurial initiative that has always been evident in Bedfordshire, I am sure that the county will continue to grow. My hon. Friends have raised a matter that is very important to them. This debate has not come as a surprise to me, because we have already had endless discussions, letters and telephone calls, as all my hon. Friends take their constituents' position very seriously, and wish to keep me fully informed of what may be best for the future. I can assure them that I shall do everything that I can, having carefully considered the advice that they give me.

Question put and agreed to.

Adjourned accordingly at twelve minutes past Eleven o'clock.