AWD (Bedford) Trucks (Hansard, 15 July 1992)

§ Mr. David Madel (Bedfordshire, South-West)

This short Adjournment debate is an appeal for help to try to save AWD (Bedford) Trucks in Dunstable in my constituency from total collapse. I am delighted to see that my hon. Friend the Member for Luton, North (Mr. Carlisle) is listening to the debate, because he shares with me intense concern about the current position.

AWD (Bedford) Trucks is now in the hands of the receiver. It went into the hands of the receiver on 4 June this year. In my view, the company can be saved if a large order for civilian—I stress the word "civilian"—lorries for Libya can be given the go-ahead.

I shall give a brief history of the company. Bedford trucks have been made in Dunstable for 40 years, and for longer than that in Luton next door, part of which is represented by my hon. Friend the Member for Luton, North. It used to be part of the giant American firm, General Motors, which has owned Vauxhall Cars, manufactured in Luton, since 1925. Over the years, Bedford Trucks has provided employment for thousands of men and women in the Dunstable area. In addition, the prosperity of many suppliers to Bedford Trucks has been sustained by a viable truck plant in Dunstable.

In the 1960s and 1970s, as Vauxhall cars in Luton struggled desperately with huge financial losses and product problems, Bedford Trucks made a substantial contribution to keeping the car plant going.

Bedford Trucks stopped being part of the General Motors group as a result of the collapse of the General Motors-Leyland deal in the mid-1980s. That severe commercial setback had bad economic consequences for Dunstable and the vehicle industry in this country. I am looking forward to reading about what the people at the top thought about it and Lady Thatcher's memoirs on it. I hope that I shall be around 30 years on from 1986 to see the Cabinet papers. I know how keen the Government are to publish more detail of what goes on. Who knows—the 30-year rule may be changed to a 20-year rule.

As a result of that great commercial crisis, General Motors pulled out of Bedford Trucks, which left Dunstable dangerously exposed. Although the David Brown family, who took over the plant, and the work force have made tremendous efforts to keep the plant going, everybody in the Dunstable area knows that the number of people employed in the plant has gone down since the crisis of the mid-1980s.

The present position is summed up in the receiver's letter of 1 July to my right hon. Friend the President of the Board of Trade. It says: Our role, as you will be aware, is to maximise realisations and our view is that a going concern sale of most or all of the business would not only enhance realisations but would also preserve employment and contribute to exports … We have been attempting to encourage interest in the business and it has become clear that prospective purchasers of the business as a going concern have generally required of us, not unreasonably, confirmation of the precise status of the contract to supply trucks to Libya. I understand you are aware of the background to this contract and the current impasse … We now understand that the matter lies with you for a decision. From our analysis of the situation, I should say that we do not accept that the trucks are 'military goods' and 1207 that there is, therefore, any basis on which the contract should not be allowed to proceed … We have been led to believe that governmental approval is required, has not been forthcoming to date, but remains 'under consideration'. The penultimate paragraph of page 2 reads: If we are unable to resolve this issue within the next few weeks"— this letter was written on 1 July, two weeks ago— the chances of a going concern sale will be, in our judgment, much diminished with the regrettable consequences this may entail and I therefore would be grateful if you could give this matter your early attention. That is the current position, and that is why I have raised the matter the day before we adjourn for the summer recess.

The contribution of the Dunstable truck plant to the economic well-being of Dunstable and Bedfordshire over the years has been enormous. The plant's industrial relations have been superb. Indeed, Dunstable avoided the spectacular industrial relations smash-ups of the 1960s and 1970s because of the imaginative and co-operative spirit between management and trade unions.

I am most grateful to my hon. Friend the Minister for Trade and his civil servants for the helpful and courteous way in which, for a long time, they have listened to me pleading the case for the order for civilian trucks to go ahead. I end as I started, with an appeal for AWD (Bedford) Trucks to be allowed to sell civilian trucks to Libya. Time is running out at a terrifying speed. We must save the Dunstable plant from total collapse. I appeal to the Government for help.

§ The Minister for Trade (Mr. Richard Needham)

The workers of AWD in Dunstable have no more doughty champion than my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel). He has done everything possible to assist in trying to resolve the difficult position that the company is now in, not only because of the unfortunate fact that it has gone into receivership but because of the complexities of the order. My hon. Friend and I discussed the order in detail on 9 July.

I have the utmost sympathy with the predicament in which the company and its employees find themselves. My hon. Friend forcefully spelled out the history of that. I understand and share the distress and uncertainty that the employees must feel about the company's future. As my hon. Friend said, that is doubly distressing given the past of the business, which has acted professionally and innovatively and has upheld the high regard in which the vehicle industry has been held. We are all aware of the quality standards that AWD (Bedford) Trucks has set over the years.

It might help the House and my hon. Friend the Member for Bedfordshire, South-West—I am glad to see my hon. Friend the Member for Luton, North (Mr. Carlisle) present—if I give the background to the difficulties that we must jointly try to overcome. The receivers believe that the sale of AWD as a going concern is largely dependent on the export order which has been the subject of protracted negotiations in the past year. AWD has been at pains to draw those negotiations to the attention of the Government so that we know what is going on.

Exports are actively encouraged by the Government. Indeed, most of my work involves the promotion of exports. Having said that, everyone in government and in 1208 the House will accept that some exports need to be controlled because of the nature of the goods or because of the countries to which they are being exported. The Export of Goods (Control) Order 1989 lists goods which are prohibited for export without an export licence from my Department. The list of goods is extensive and is included in the order for a variety of foreign policy or defence reasons.

I shall not weary the House by giving a long list of the prohibited categories of goods, but, subject to certain conditions, the export of civilian lorries to any destination is not prohibited by the current EGCO which came into effect on 31 December 1991. My officials have made the position clear to the company and have been in regular contract with it since the proposed export of civilian lorries to Libya was raised with the Department.

On 16 January, Mr. Coolican, who is the head of the export control organisation, wrote to the company stating that the export of civilian lorries to Libya does not require an export licence under the EGCO. As with all such inquiries, the letter from Mr. Coolican also warned that the advice was conditional on the lorries not being used in contravention of the article within the EGCO with regard to activities associated with weapons of mass destruction.

The letter also warned that the order is subject to change very quickly. To be able to make such changes is, of course, essential if one is to be able to respond quickly to different and changing threats. All exporters of goods covered by the EGCO are or should be aware of the dynamic way in which the order can be changed. My officials constantly remind companies of that.

For those not usually involved in export controls, I accept that such qualifications may seem rather heavy-handed, but when advice about licensibility is sought, it is important that the Department should make those points plain to alert exporters as regards the way in which the controls operate and the way in which things could change. Mr. Coolican wrote in similar terms to one of the former directors of AWD on 13 August 1991, when the issue of exports to Libya was first raised.

I said that my Department advised that civilian lorries for export to Libya did not require a licence under the EGCO. Unfortunately, as we all know, that is not the end of the matter, and we now come to one of the complex issues I mentioned. The House will be aware that, from time to time, trade sanctions are imposed on various countries. The United Nations sanctions imposed on Libya are not the same as those imposed on Iraq or Serbia and Montenegro. The key difference is that the sanctions imposed against Libya are selective. To put it another way, the United Kingdom does not have a complete trade embargo against Libya.

The House will recall that the United Nations adopted Security Council resolution 748 on 31 March 1992, following Libya's refusal to abide by resolution 731, which called on Libya to, among other things, hand over the two suspects for the Lockerbie atrocity. On 15 April 1992, an Order in Council came into effect which implemented the sanctions adopted by the Security Council under resolution 748.

The two key elements of the sanctions against Libya are, first, an arms embargo and, secondly, an aviation-related embargo. The precise prohibition in United Kingdom law is on the provision of arms and related material of all types, including the sale or transfer 1209 of weapons and ammunitions, military vehicles and equipment. I suggest that the aviation issues are not relevant to this debate in any case.

When my Department was first made aware of AWD's proposals to sell civilian lorries to Libya, it was not clear that some of the items were to be used by the Libyan armed forces. Subsequently, in September 1991, we were advised that some were for use by the Libyan armed forces. It has never been entirely clear, however, precisely who was the intended customer or end user of the lorries.

There have been various indications by the company, as negotiations continued, of changing demands ranging from some to none to all of the lorries being used by the military. The use of lorries by the Libyan military has naturally and understandably caused concern and increased the complexity of the issue, althought it is important to stress, as I have repeatedly done, that these are civilian vehicles—open trucks, trucks with winches, cesspit cleaning vehicles and ambulances—and that none are to any military specification of which we are aware; nor have any military adaptations been requested by the Libyans.

I remind my hon. Friend and the company that the responsibility for deciding whether to apply for an export licence under the Libya Sanctions Order rests with the exporter. A key decision that the company will need to make is whether the export of the lorries requires a licence under that order because the goods are arms and related material. My officials are perfectly prepared to offer help and guidance but, at the end of the day, it is only the exporter who has all the relevant information and only the exporter who therefore knows whether the goods will be caught by a control. That is the normal procedure for all exporters. If the company believed that to be the case, it would need to make an application for a licence which 1210 would be considered in the same way as any other application for a licence under the Libya Sanctions Order. As my hon. Friend knows, no such application has been made.

I should point out at this stage that there is still a considerable amount of trade with Libya which is unaffected by sanctions. In 1991, the United Kingdom's total exports to Libya were £225.7 million. That figure represented approximately 10 per cent. of all Libya's imports. Although it is too early to say, it is expected that only a small proportion of the goods that the United Kingdom trades with Libya are likely to fall within the scope of the current sanctions order. It has been Government policy for some years neither to encourage nor to discourage trade with Libya, but clearly many United Kingdom companies are continuing to do business with Libya in areas unaffected by sanctions.

It is only recently that I became aware that the receivers believe—as my hon. Friend read out from the letter—that Libyan order is crucial to the company continuing as a viable business. That has never been made crystal clear to my Department, but we now understand this to be the case, and we understand it doubly having listened to my hon. Friend's powerful speech.

In conclusion, there is no requirement for an export licence under the EGCO. Whether a licence should be sought under the Libya Sanctions Order is a matter for the company to decide in the light of its own legal advice and after speaking to my Department.

As for Libya, it is impossible to say what will happen in the future. Much will depend on the Libyan Government and, in particular, on Colonel Gaddaffi. I can assure my hon. Friend that I and my Department will continue to do all that we can to assist him to find a way for the company to get its trucks through this especially difficult minefield.