Rover Group (Hansard, 12 May 1988)

§ Mr. Dave Nellist (Coventry, South-East)

My hon. Friend the Member for Coventry, North-East (Mr. Hughes) had intended to be here and we had arranged with the Minister that he would also make a contribution to the debate. Unfortunately, his wife, Ina, has gone into hospital today for an operation and he cannot be with us.

This short debate is a continuation of the debate that began last Thursday on the privatisation of Rover. For the Minister's information, it is also a prelude to the further debate that we shall have on Rover after which I hope we shall have the opportunity to oppose the shabby deal in a Division.

As The Guardian put it, if you. Mr. Deputy Speaker, wanted to buy a Rover 800 it would set you back about £12,000. If you took the rest of the company as well you would get it for nothing and the Government would throw in £650 million and extinguish most of your debts.

About a year ago The Economist produced a pamphlet that cost about £90 entitled, The United Kingdom as a tax haven. Clearly it did not have in mind Government bribes of such a scale as the one for Rover. Frankly, the deal stinks. It is a massive theft of working people's money. It is the industrial equivalent of the Tory Westminster council's 5p cemeteries. The Financial Times, hardly a Militant newspaper, stated: British Aerospace is making off with United Kingdom taxpayers' money on a scale which makes the Great Train Robbery look like loose change. As my hon. Friend the Member for Bolsover (Mr. Skinner) said in the debate last Thursday, the role of the right hon. Member for Chingford (Mr. Tebbit)—the ex-Tory party chairman—has never been satisfactorily explained. In last week's debate it is instructive to note that, according to the Chancellor of the Duchy of Lancaster, British Aerospace first approached Rover and then the Government. I refuse to believe that the right hon. Member for Chingford had no part to play in those exchanges.

Thirteen years ago, Rover, then British Leyland, had to be rescued by the Labour Government because it had failed under private ownership and become virtually bankrupt after four years of Tory Government. Its book asset value on collapse, with numerous plants and hundreds of thousands of workers directly and indirectly dependent upon the success of the company, was less than the London office block Centre Point.

After those 13 years and £2,900 million of public investment, the company is now back in profit. For the Government, with so many of their Back Benchers opposed to public investment, the role of that money has been to finance the decline of a car industry that private investors would not properly support. Now that the company is just profitable, with pre-tax profits of £28 million, it will be not the taxpayer, who provided the cash, or the work force, which made sacrifices in jobs and working conditions, who will benefit, but the spivs and the speculators who will cream off the possible gains.

The problems of Leyland in private ownership stemmed essentially from the failure to invest. There are grave fears that in the years ahead, especially with the merger, the 578 same problems could arise again. Immediately before nationalisation—if we want to be pedantic, when the Labour Government took over 99.7 per cent. of the shares—British Leyland was still paying dividends while desperately needed investment was being neglected. I remember a study that took place in the late 1970s of the assets per worker in the British car industry and the comparisons that were drawn with Germany and Japan. The study revealed that for every British car worker there was £7,000-worth of machinery, compared with £23,000 in Germany and £32,000 in Japan. The difference between Britain and Japan could be illustrated by giving one worker a spade and another a tractor, asking both to turn over fields and then berating the worker with the spade for taking two weeks to complete the task while congratulating the other with the tractor for finishing the job in two hours.

The result of that lack of investment, which was decided by management and approved by shareholders, who were raking in dividends, was that the British market share of British-owned car companies fell between 1968 and 1987 from 40.6 per cent. to 15.5 per cent. The blame for that fall was heaped on the backs of car workers by the press, management and Tory Members. However, the car workers never controlled and never managed. They never decided where the wealth that they had created was to be invested.

We were told last week that there was no alternative to the privatisation of Rover and the gift to BAe, but there is a Socialist alternative: first, total opposition to the privatisation of Rover; secondly, nationalisation of Ford, Vauxhall, Peugeot, Jaguar and Nissan, for example, to form an integrated, publicly owned car industry capable of matching the production levels of General Motors, Ford and Nissan on a world scale, with the workers in the driving seat.

On 4 May, the Chancellor of the Duchy of Lancaster said: the board of Rover Group has always looked forward to the day when the businesses of the Rover Group could be returned to full private ownership. A future Labour Government must ensure that the boards of public companies are staffed by those who are committed to full public ownership, management and control. That can be guaranteed only when a majority of seats on the boards are occupied by trade unionists from within the industry and the trade union movement generally. Nationalisation plus Lord Robens, Ian MacGregor and Sir Michael Edwardes has never equalled Socialism.

In the two months since the deal was first announced, and despite Tory Members' assertions last week to the contrary, doubts and fears have filled the minds of car and aerospace workers. They are apprehensive about the future, especially when it comes to continuity of employment. There has been no discussion or consultation with the trade unions, despite two letters, dated 1 March and 29 March, from Graham Day, the chairman and chief executive of Rover, each of which contained three or four paragraphs. I checked that yesterday and today with the conveners of two major plants. There have been no ballots on the proposals among the work force. Those Tory Members who spoke last week about the delight of workers at the takeover were making up those assertions.

There are no guarantees for jobs in this shabby deal. Last week the Chancellor of the Duchy of Lancaster said: 579 were British Aerospace to decide for some reason to relinquish … any substantial part of the undertakings of those subsidiaries"— the Rover subsidiaries— British Aerospace could be required to repay any net economic benefit. When asked by my hon. Friend the Member for Oxford, East (Mr. Smith) to define "substantial", the right hon. and learned Gentleman replied: We have not defined that aspect in any substantial or quantified terms—it will be a matter of judgement at the time. In the next column the right hon. and learned Gentleman said: we have not made the conditions inflexible. It is not necessarily the case that they will be insisted upon by the Government. He added: Circumstances might arise in which British Aerospace wished to dispose of a subsidiary company. Therefore, we leave open the possibility that the Government might waive the condition. For the moment, British Aerospace has no intention of doing any of the things I have talked about".—[Official Report, 4 May 1988; Vol. 132, c. 930–33.]

I have quoted those passages at length so that there can be no misunderstanding by workers at Rover or BAe. I could have put it more simply by merely quoting the unelected Lord Young on Channel 4's "Business Programme" on 6 March. He said: We will not impose conditions about manufacture at Cowley or Longbridge.

Do workers look to BAe for confidence in the future? Since privatisation in 1980, BAe has axed 11,000 jobs and realised land assets in the south, notably at Weybridge and Hatfield. Since the announcement of this sale, BAe has said that one sixth of the dynamics division will go before 1990–3,000 jobs—and that a further one third of aircraft division jobs are to go before 1992. That is hardly very inspiring for midlands car workers.

BAe has to ask the Government for launch aid for aircraft each time it wishes to initiate a major project. Will BAe be capable of generating investment to keep Rover even in the second division of the European car league when, at the end of March, it had to set aside almost £400 million to cover the expected losses on civil aircraft orders as a result of the falling dollar?

Do car workers, or aircraft workers, look to Rover's management for job guarantees? Since 1977, Rover has systematically reduced its work force from 172,000 to 60,000. Thousands upon thousands of those redundancies were in Coventry. My city has suffered more, perhaps, than any other city from the collapse and decline of the car industry. The apparent strategy—I say "apparent" because Graham Day has abandoned it in the last two years—during that period was to increase the share of the market and to boost profitability by reducing wages and increasing production. From 1980 to 1987, the productivity of the British car industry increased by over 100 per cent. In 1977, each Rover worker produced 6.5 cars. Last year that figure had risen to 16. During those 10 years, four assembly plants and 13 components factories were closed, yet production is still not much more than half what it was in 1972.

In order further to control the increasingly exploited work force, Rover's management has sought to undermine the organisation of workers and their ability to defend themselves. [Interruption.] They have been ably abetted 580 —apparently, judging by the laughter of the Government Whip and the Minister, with some enjoyment—by the panoply of anti-trade union legislation that has been enacted by this Administration.

The onslaught against shop floor organisation has involved victimisation—for example, of the conveners Derek Robinson at Longbridge, Ian Schofield at Solihull and my hon. Friend the Member for Coventry, North-East at Unipart. They were all sacked for carrying out their trade union responsibilities. [Interruption.] If the Minister wishes to intervene, he ought to investigate the facts surrounding the sacking of Derek Robinson. He will find that he was sacked because, as convener of shop stewards, he put his name to a trade union document that argued for the expansion of the car industry and the protection of jobs. I remember that clearly, because I was working for a subsidiary of British Leyland at the time. It also involved Rover in using that insidious organisation, the Economic League, to blacklist good trade unionists—a practice that has now spread to other car firms, such as Peugeot-Talbot in Coventry.

Sir Michael Edwardes, the former BL chief, was appointed by a Labour Secretary of State and knighted by the Tory Government in 1979, within days of gaining office. But he is hardly unique. Last week the Chancellor of the Duchy of Lancaster praised Graham Day, the current boss of Rover. Mr. Day was brought in to speed up privatisation; he was brought in as an undertaker disguised as a physiotherapist. While his knighthood might now be just a formality, for my money the man is a butcher. After he had been three years in charge of British Shipbuilders, the work force fell from 65,000 to 10,000. Since May 1986—[Interruption.] Again, the Minister and the Government Whip seem to find the poverty, the misery and the unhappiness that redundancy has brought to the families of workers who lost their jobs in the north-east and other areas due to the decline of British Shipbuilders extremely funny. That may well be something, with the luxury of ministerial and Whips' salaries, from which they can be insulated. Having come down from the north to this palace of varieties called Westminster, I view it from a different perspective.

Since May 1986, with only two years at the helm of Rover, Graham Day has sold 18 businesses. With privatisation, the Tories are now ransacking the rest of the cupboard to please their friends in big business. Mr. Day does not particularly care about jobs or producing goods. He said, in another direct quotation: We want to make money. People keep talking of market share, but the objective is to become profitable. That is capitalism in a nutshell. It is not about making goods or safeguarding jobs; it is about making money. With Day and Smith in charge, profit will be king. The jobs of car or aerospace workers will come a very poor second.

All that would be true on the basis of the status quo; but the future of the car industry is tied up with the health or otherwise of the economy as a whole. With the onset of recession in the United States of America—and no doubt next Tuesday's trade figures from the United States will give further evidence of that—the world's largest car market will begin to contract. Companies like Jaguar and Range Rover, which export 50 to 60 per cent. of their output to the United States, will be particularly hard hit.

581 The rapidly falling dollar, which is both a cause and a symptom of the disease of American capitalism, is already causing them to feel the pinch.

In January this year, the West Midlands enterprise board produced a sector review on the motor vehicle and components industries. Quotations from that are illuminating. The world and European car industries are heading for a period of global over-capacity in which competition will intensify and some plants or parts of plants will face closure for two reasons; firstly, the build-up in Japanese capacity both in the US and increasingly in Europe, and secondly, the fact that most of the major manufacturers will be retooling and introducing new models at an accelerated rate in the next few years … Japanese companies will have the capacity in North America to produce 2.3 million cars annually by the early 1990s either independently or through joint ventures … Such is the capacity build-up in the US, along with the fall in the dollar, that Japanese exports to Europe from the US in the 1990s is becoming a possibility … implications of this are that European manufacturers will face increasing difficulty in exporting to North America.

A more recent article in The Independent by the industrial editor, Jonathan Davies, says: The Japanese motor industry is going through its worst year in recent memory. Of the seven leading manufacturers, only two, Toyota and Honda, are operating profitably—and they expect their profits to fall by at least a half in the current year. The others are faring worse. The reason is not hard to find. All the Japanese are struggling to live with the rapid appreciation of the yen over the last 18 months, which has wiped out most if not all of the profit on the 3.7 million cars which are exported … Yet nobody in the European or American car industries is rushing to gloat at the unusual spectacle of their Japanese counterparts running to the Government in Tokyo with appeals for help. For one thing, the outlook for their own performance this year is far from inspiring. Demand for cars looks certain to fall quite sharply from last year's record levels in Europe and the US, and competitive pressures from both domestic and foreign manufacturers will pare margins to the bone … the Japanese have been stepping up their investment in overseas car production. Nissan's decision to build its green field assembly plant in north east England is just one example of a trend towards overseas production which began in the US and has been replicated in most European countries. The logic of that is that in the next two or three years, managements will continue, and most likely intensify, their attacks on workers and their organisations.

The recent speed-up of track speeds and the increased exploitation of car workers have led to two things. On the one hand they have led to increasing stress and strain, which I mentioned last week in an intervention. For example, 17 shop floor workers in a six-week period towards the end of last year at Jaguar in Coventry died either from stress-related diseases or from strokes. When I put that to the hon. Member for Birmingham, Northfield (Mr. King), he said: The facts speak for themselves. If they are to survive, the productivity and performance of companies must be of a high standard. The output of Jaguar is still nowhere near the level of some of the European factories, which seem to manage perfectly well. I cannot comment on the physical standards of shop stewards and employees."—[Official Report, 4 May 1988; Vol. 132, c. 949.]. That speaks volumes for the synthetic concern that we hear in this Chamber from Tories about health and safety in the industry.

The second point that has come from the increased exploitation of workers has been the return of militancy to the car industry. I refer to Ford, Land Rover, Vauxhall and Jaguar. Again, virtually the whole car industry has been involved in strikes and overtime bans, or has come 582 close to them, as pressures of exploitation increase and workers take the opportunity—soon to disappear—of relatively full company order books.

In last week's debate, Tory Members hypocritically attacked the Transport and General Workers Union at Ford in Dundee for an alleged loss of jobs, yet, in the past seven years, the millionaire directors of Ford have presided over the cutting of 30,000 jobs in Britain. Their plans for Dundee included workers on half the wages of other Ford workers. They wanted to emulate Nissan, where it is not so much a one-union deal as a no-union deal. Fewer than 10 per cent. of the 1,400 workers are members of the AUEW. That was achieved by Nissan interviewing 30,000 workers for the original 500 jobs and weeding out any workers with a trade union history.

I shall finish with sonic questions that were not answered in last week's debate. Why were there no consultations with the trade unions in the car industry or in British Aerospace? Why was there no ballot of the workers to be affected by the merger? What is the future of Longbridge, Cowley and the existing Aerospace plants? Does the five-year guarantee cover all existing plants within BAe and Rover? Where will the new large-scale investment come from to continue producing volume cars? What guarantees exist for jobs? The Minister offered half an inch of hope in the last sentence of his contribution last week, when he said: We are exceedingly proud of the deal and more than content for it to be subjected to scrutiny when it is completed".—[Official Report, 4 May 1988; Vol. 132, c. 971.]

On 28 October last year, I asked his boss, the Chancellor of the Duchy of Lancaster, if he will introduce a comprehensive system of departmental monitoring of privatised concerns.

That is after the hundreds of jobs lost at Alvis after privatisation from Rover in Coventry, and after the 20 per cent. cut in jobs within six weeks of the privatisation of Self-Changing Gears from Rover in Coventry, and after the 80 per cent. cut in the original 3,000 work force of Coventry Climax after privatisation from Leyland in Coventry. The Chancellor of the Duchy gave me a rice, simple answer: No, Sir."—[Official Report, 28 October 1987: Vol. 121, c. 297.]

I hope that the Minister wins the battle in the Department and that monitoring takes place.

This deal stinks. The future for car workers, particularly with the chill winds of economic recession blowing across the Atlantic, is again looking bleak. If the deal goes through, trade unions in Rover and Aerospace will have to come together at shop steward level and build a stronger, combined organisation to resist the cuts that Day and Smith and the Government obviously have in mind.