Caterpillar Co., Uddingston (Hansard, 25 February 1987)

§ 4. Mr. Fatchett
asked the Secretary of State for Trade and Industry if he will make a statement on what action the Government propose to take as a result of the announcement of the proposed closure of the Caterpillar factory at Uddingston.

§ 15. Mr. Stan Thorne
asked the Secretary of State for Trade and Industry when his Department was informed about the proposed closure of the Caterpillar factory in Scotland.

§ 17. Mr. Wareing
asked the Secretary of State for Trade and Industry when any representative of his Department last met any representative of the Caterpillar Co. Ltd. to discuss the future of the company.

§ The Minister of State, Department of Trade and Industry (Mr. Giles Shaw)
My Department was informed on 13 January. I attended the meeting between my right hon. and learned Friend the Secretary of State for Scotland and the president of Caterpillar on 20 January. DTI officials, together with Scottish Office officials, last met senior representatives of the company on 2 February. While I greatly regret the decision, and the manner in which it was taken, it is ultimately a commercial issue for the company to resolve. I have no plans at present for further discussions with Caterpillar, but in the time available before the planned closure takes place the possibilities for maintaining manufacturing operations and employment at Uddingston will be urgently explored. To this end, my hon. Friend the Parliamentary Under-Secretary of State for Scotland has put in hand a study of the facility and its marketability.

§ Mr. Fatchett
While it is possible to understand the desire of Trade and Industry Ministers to hide behind the embarrassment of the Secretary of State for Scotland, is it not about time that the Minister did something in these circumstances and took some action? Is this another case of the Department washing its hands of British manufacturing industry, and a further sign of the Government's planned retreat from manufacture?

§ Mr. Shaw
No, Sir. I robustly deny those accusations. I make it clear that we stand solidly behind the actions of 254 my right hon. and learned Friend the Secretary of State for Scotland, in seeking to persuade the company to review and reverse its decision. It is not just my right hon. Friend the Secretary of State for Trade and Industry and my right hon. and learned Friend the Secretary of State for Scotland but my right hon. Friend the Prime Minister who has written to the Caterpillar company on this issue, seeking a review of the decision. As the hon. Gentleman fully understands, at the end of the day the company has to arrive at a decision in relation to its assets.

§ Mr. Thorne
What public funds were put into this company and how were they used?

§ Mr. Shaw
There is another question on the Order Paper which relates to that. The hon. Member will be aware that when public funds are invested in a company and when closure takes place, rules apply for the recovery of such funds as are then extant.

§ Mr. Wareing
Is the Minister aware that it is less than four months since the executive vice-president of Caterpillar promised that there would be a £1 billion funding of schemes at all of the company's 30 sites throughout the world, and that that included a £62 million investment at Uddington? Is it not an absolute shambles when the Government are prepared to be a doormat for the Americans and to resign their public responsibility? Are we now to see all such machinery imported into this country? Do the Government not have a responsibility, if only for the balance of payments implications?

§ Mr. Shaw
I cannot agree with the hon. Gentleman. I must remind him that there is massive investment in Britain by American companies to provide jobs in most important parts of our manufacturing industry. In this case the company took a decision to make the investment in good faith last Sepetember and then apparently reviewed again its worldwide capacity. That is what gave rise to a change in the decision that the company announced. My right hon. and learned Friend the Secretary of State for Scotland rightly took the view that the company's review of capacity was hardly compatible with the decision about the investment. I wholly share that view.

§ Sir Hector Monro
In this serious situation created by Caterpillar, will my hon. Friend bear in mind that, proportionately, some areas where there are factories supplying major components to Caterpillar are equally severely hit? Will he extend the area of the inquiry by his hon. Friend the Under-Secretary of State for Scotland to those areas as well?

§ Mr. Shaw
I am grateful to my hon. Friend for that observation, and I shall certainly pass it to my hon. Friend the Under-Secretary of State for Scotland.

§ Mr. James Hamilton
As the Minister has correctly said, he met the president of Caterpillar in London about the proposed closure. Since that meeting has he made any overtures to the Americans, because there is no possible chance of anything happening if he does business with the local management? Their jobs are also on the line. Does the hon. Gentleman not think that at this stage the Government should try every possible way to get a meeting with the Americans to try to persuade them to keep the factory open in the interests of the 1,221 workers who are employed there?

§ Mr. Shaw
The hon. Gentleman will be aware that in response to the pressure applied by the Secretary of State for Scotland there was a meeting with the president and a team from Peoria who came over here for these discussions. He will be further aware that as a result of that meeting the company was asked to review and reverse its decision. That request was backed up by a letter from the Prime Minister. The company reviewed the matter but, unfortunately, it decided to confirm the decision. As far as I am aware, no further meetings are planned at the sort of level to which the hon. Gentleman referred.

§ Mr. Hirst
Does my hon. Friend agree that Caterpillar has behaved dishonourably and deplorably, first in accepting a generous offer of financial support for its major investment programme and, secondly, in abruptly cancelling the programme and announcing the closure of the plant? Bearing in mind that no Government can oblige a multinational company to remain in the United Kingdom, will my hon. Friend remind the Opposition that Ministers from the Prime Minister down have done all that they possibly can to persuade Caterpillar to change its mind, and that the Government have acted with commendable speed in putting in contingency plans to maintain manufacturing operations and employment at Uddingston?

§ Mr. Shaw
There is no doubt that my hon. Friend makes an eloquent case, and by raising the matter recently on the Adjournment he demonstrated his commitment to this issue. I can assure him that my right hon. and hon. Friends at the Scottish Office and others have played a significant part in trying to reverse the Caterpillar decision. As my hon. Friend says, this is ultimately a matter for the company. Having met, in company with my hon. Friend the Under-Secretary of State for Scotland, representatives of the Caterpillar work force who came to the Ravenscraig plant on Monday, I can quite understand the real anger that they have been evincing.

§ Mr. Wilson
Does the Minister not fully understand the utter outrage and lack of comprehension in Scotland about the fact that this factory, which was supposed to have been boosted by a £62 million investment programme and which is already very modern, is now to be closed? Does he not realise that this may well be a consequence of the cut in regional development grant affecting Scotland? Furthermore, as there is now a Scotland-England divide in terms of unemployment, will the Government do something to prevent yet another plug being pulled on the Scottish economy?

§ Mr. Shaw
I understand the hon. Gentleman's intemperance on these issues, but he will know that much of the last part of his question is a matter not for me but for my right hon. and learned Friend the Secretary of State for Scotland. With regard to his first comments, there has been a full discussion of the issues involved in this case and there is no question but that this issue has raised a very real question mark over the extent to which such investments can be guaranteed by those who are making the decision. However, it is a fact that manufacturing industry in this country is subject to major competitive pressures, and certainly the manufacture of heavy equipment such as this is not exempt from those pressures. The review of worldwide capacity has nothing to do with regional grant policy in Scotland.

§ Mr. John Smith
Does the Minister believe for one moment that an assessment of worldwide capacity changed so dramatically in a matter of weeks? Does he not appreciate that the Caterpillar company has deceived the Government, the unions, the work force and the local management in a wholly calculating and ruthless manner? Surely it is not tolerable for a multinational company to abandon the interests of a work force and community which has given 30 years' service to that company. Does the Minister not understand that only a week or so ago the Secretary of State for Scotland was assuring Scottish Members that the decision was not accepted by the Government, and that only yesterday the Under-Secretary of State for Scotland confirmed that? The hon. Gentleman appears to be taking a different line today. What is the Government's policy, and what action do the Government propose to take in the face of a company which has deliberately and calculatingly deceived them and this country?

§ Mr. Shaw
I note the right hon. and learned Gentleman's comments. I take it that he is making an extremely strong attack upon the way in which the investment was made and the consequences in the light of the decision that the company has taken. I feel that I should warn the right hon. and learned Gentleman about whether those remarks will have a beneficial effect on American investment in Scotland. There are very real issues at stake. The fact is that my right hon. and learned Friend the Secretary of State for Scotland does not believe that the end of the road is nigh. He has not been persuaded of the company's statement that ultimately it has to close. Not many people can be persuaded of that. However, the realism has to be faced. The company has taken that decision, it has been asked to review it, has reviewed it and has confirmed it. In the statement issued by my hon. Friend the Under-Secretary of State for Scotland he makes it clear that while my right hon. and learned Friend the Secretary of State remains unpersuaded regarding the company's decision to close at Uddingston, it is most important now to use the time available before the planned closure takes place to explore all possibilities for maintaining manufacturing operations and employment at the Uddingston facility. That is the policy being pursued, and it is the correct policy.