§ Motion made, and Question proposed, That this House do now adjourn—[Dr. Liam Fox.]
§ 10.1 pm
§ Mr. Barry Jones (Alyn and Deeside)
I have here a petition given to me by employees of the Raytheon factory in my constituency. It is entitled:On behalf of the employees of Raytheon Corporate Jets to the American Ambassador to the United Kingdom.It continues:For the attention of the President of the United States of America.We the undersigned appeal to your integrity to influence the Raytheon Corporation to maintain production in the United Kingdom of the Hawker 800/1000 and Major Variants aircraft.Our commitment to date has been unquestionable and our achievements within aircraft manufacturing unique.
The work force says in the petition to the President of the United States:we can epitomise everything in the UK that the Raytheon Corporation requires.That is what my constituents have given me to give to the United States ambassador and it is simply a way in which to show how strongly feelings are running in my constituency.
I have here the names of the Raytheon board of directors. They operate 4,500 miles away in Lexington, Massachusetts. There they plan to rob my constituents of their jobs and my country of one of its precious remaining manufacturing capabilities. It is a list of lawyers, bankers and captains of industry in the United States who are well isolated and well insulated from the consequences of their policies. There is Charles Adams, a retired chairman, there is Mr. Max Bleck, the president of Raytheon, there is Richard D. Hill, the retired chairman of the board of the Bank of Boston Corporation and the First National Bank of Boston and there is Alfred Zeien, who is chairman and chief executive officer of the Gillette Co., to name but a few. The list also includes Dennis Picard, chairman and chief executive officer of Raytheon. They do not know the consequences of their policies for my constituents.
It may well be known that last year British Aerospace sold its corporate jet company to the United States conglomerate Raytheon. When British Aerospace sold the corporate jet company, it said that it was a highly competitive business with a successful product range, but it mistakenly claimed at the time that the purchase by Raytheon would be good for the corporate jet business and for its employees and that it would enable further potential to be realised. Instead, the Raytheon company now intends to transfer production of the Hawker 800 jet to Kansas and it will be investing in an updated version of the 1000 series in the United States rather than here in Britain in my constituency.
At the time of the sale by British Aerospace to Raytheon, I think, and so do my constituents, that the Government should have acted to ensure a successful future for the corporate jet business at Broughton. They should have anticipated the situation that has now developed. My plane-making constituents believe that they are the victims of asset stripping. It was certainly the breakfast sale of the century and the community that I 119 represent is still grappling with the implications of the sale. The whole community abhors the proposals by Raytheon.
I support the plane makers totally. They ask me questions. They ask me why the board of British Aerospace sold off that magnificent machine. They also ask me why the then Minister with responsibilities for aerospace permitted the sale. They want to know—and know now—why the Government will not intervene and take some action to save their jobs. They ask why, if the aircraft was good enough for a hard-nosed United States company to buy, it was not good enough to keep in our own country. I remain convinced that the Broughton employees have an excellent case and I want the Government to step in and save those jobs. I want the Government, in effect, to join the fight that we have been continuing in Deeside, in Clwyd and in Wales. It is no exaggeration to say that, in this extraordinary case, my constituents have been betrayed. I know that they have suffered a great injustice. They have been sold lock, stock and fuselage. That is what has happened to them and their livelihoods. Raytheon is taking well-paid, highly skilled jobs of considerable status in industry and it is taking them from my constituents. Raytheon is taking those jobs away from Deeside and relocating them in the United States.
That is an incredible story and the cruel irony is that my constituents will be offered 70 of their own jobs if they are prepared to follow Raytheon back to the United States. That is a very sad statement to make and it is unbearable for my constituents to have to face up to those consequences. They are a very young work force. They have the usual family and financial commitments and they are worried sick about the future. In my near 25 years in this House, I have never encountered such a shabby and such a distressing train of events. It is a disgraceful story.
At home, in the constituency, all of us believe that the day of the announcement, 15 September, was a day of infamy in the history of industrial Deeside. Nobody engaged in industry has ever encountered such proposals as those in my part of Wales. I put it on record that all of the Deeside community supports the plane makers. All members of the community are disgusted by this blatant asset stripping and by the duplicity practised against them. They are disgusted by the cynical manipulation of their skills, their discipline, their loyalty and their success and productiveness.
It would be constructive to show the Minister our weekly newspaper, The Chronicle, which ran the headline "Kicked in the teeth". I do not think that that is an exaggeration and the Minister should mark that description well. The evening newspaper, Evening Leader, has bluntly summed up the news with the heading "Jobs disaster". The regional newspaper, The Daily Post used the word "Betrayed". They are not my words but those used in local reportage. I know from my experience that those newspapers have printed fair descriptions.
The constituency is now set to lose approximately 900 of the best jobs in Wales. We make what has long been the jewel in the crown of British Aerospace—a world-beating, two-engined luxury executive jet that can fly the north Atlantic. It outshines the competition and beats all in sight. That, presumably, is one of the reasons that Raytheon has seen it as a bargain and bought it.
120 On behalf of my constituents, I beg for urgent, constructive and imaginative Government intervention. That is what I and my constituents want. We want intervention that will save the jobs of those highly skilled men and women at Broughton. As I catalogue this sorry tale, I should like to see the smile wiped off the face of the junior Minister from the Department of Trade and Industry. To see him exchange grins with the Minister of State as I depict the distress of my constituents is not a good sight. I hope that my comments will engender some sense of shame in them. We make what has long been the jewel in the crown of British Aerospace and I beg for intervention that will save the jobs at Broughton.
The Cabinet permitted the sale. The Government said yes to the board of British Aerospace and told it to go ahead. Once the Government gave their permission, the company's subsequent decision became the Government's responsibility. They should face up to it. The community that I represent hopes that they will.
I recall that shortly after the British Aerospace deal with Raytheon, the then Chairman of British Aerospace stood down and went back home to the United States. I read that he received a golden handshake, perhaps it was platinum, of more than £2.5 million. He had done his job. He put in place a sequence of events that has led to my plane maker constituents at Broughton having no future.
Is not it the case that recently British Aerospace workers have paid with their jobs for the incompetence or otherwise of their board chairman? The chairman of the shop stewards, Roger Smith, has written to me and it is only fair to put on record that he wrote:I believe we at Broughton have been betrayed by Raytheon and our Government.We want the Prime Minister, Mr. Major, to intervene immediately. We were appalled by his correspondence to you"—
their Member of Parliament—in regard of the decision.He continued:The President of the Board of Trade Mr. Heseltine should intervene as he stated 'before breakfast, dinner and tea.' You will recall that it was Mr. Sainsbury who authorised the sale to Raytheon in Mr. Heseltine's absence.
The House may not be aware that last year I took a deputation of plane makers to see the then Minister to beg him not to allow the sale to go ahead. We told him, and certainly the shop floor workers told him, what we feared. What we feared is what Raytheon has recently announced. The Government were told by people who knew what was likely to happen. That is why I plead and beg on behalf of my constituents for Government intervention.
In all fairness and decency, and urgently, the Government should intervene. They should accept responsibility. Mr. Smith continued:We demand Government intervention, no longer can this nation stand by and witness our Aerospace Industry's demise.Their lack of strategy in regard to the Aerospace Industry is appalling.Mr. Smith hopes that there will be a Select Committee hearing and he seeks a debate. At least we are having such a debate on the first day after the summer recess. I am grateful that my colleagues from the Principality and from centres of manufacturing are offering their support in this debate. I am grateful to my hon. Friends the Members for Clwyd, South-West (Mr. Jones), for Wrexham (Dr. Marek) and Delyn (Mr. Hanson) for their constant support for me and the plane makers. 121 The Government seek excellence and best practice. I can give evidence of that. According to a performance summary covering 1992 to 1994, productivity increased by 33 per cent. The overhead costs reduced by $19 million. The labour charging rate was reduced by 16 per cent. The indirect:direct ratio improved by 48 per cent. Product cycle time was reduced by 20 days and the "inventory and WIP" was reduced by $101 million.
We might all agree that it is not a two-bit operation. As the factory is but one mile and 11 fields from my home, I am proud to say that since 1963 the Hawker products have generated $7.5 billion in exports for the United Kingdom. That is a magnificent track record. It is industrial patriotism of a very high order. I am very proud to know the work force who are engaged in making that great product.
The current order for Japan, the air self-defence force maritime search and rescue aircraft, is worth $600 million and is likely to grow to $1 billion. However, in January 1994, Raytheon dismissed 75 per cent. of the established international sales force. Some of my constituents think that their present predicament relates in part to that decision.
Here is some bitter-sweet information. The Department of Trade and Industry carried out a formal assessment of Raytheon at Broughton in my constituency and confirmed its status as a "Centre of Excellence" under the "Managing in the 90s inside UK Enterprise" initiative. Even the BBC chose Raytheon Corporate Jets to feature in a new film illustrating leading edge working practices.
The decision, which I hope may be changed, also has a very serious consequence for British Aerospace Airbus which is also located in my constituency across the tarmac from Raytheon. Airbus has the contract to make the jet's fuselage. Works convenor Mike Nesbitt tells me of his despair. In just two years, he has seen the loss of 2,000 aerospace jobs in that location in my constituency. He does not want to see any more jobs lost. The Raytheon decision may undermine the financial viability of the Airbus site at Broughton in my constituency. We regard that development as being of the utmost seriousness.
The plane makers want urgent Government intervention—that is for sure. They want the Prime Minister to send the President of the Board of Trade to the United States to tell Raytheon that that industrial knifing is not on and that Raytheon must rescind the decision. The work forces look to the Secretary of State for Wales to take the lead in the Cabinet and fight its corner. I will fight on for my constituents. I will not surrender the interests of my constituents. I will work for the changing of the decision—whatever.
Work force leaders want Mr. Denis Picard, the chairman and chief executive, to visit the factory and to engage in discussions with them. So far, all efforts to persuade Mr. Picard to go to the factory and, either in America or in the constituency, to meet shopfloor leaders, community leaders and leading councillors have failed. I ask the Minister to attempt to use his good offices to unlock the door to the chairman of Raytheon, Mr. Picard.
Under the leadership of Mr. Nicholson and Mr. Wanham, there has been tremendous achievement at Broughton. The aircraft assembly has been radically transformed into a very efficient best-in-class manufacturing operation. We have much to be proud of so far. However, I have found Whitehall and the 122 Government to be irresolute and incapable of saving those precious jobs. That is the very daunting truth that I have learnt.
Time is no longer with me. I ask the Minister to step to the Dispatch Box and say that the Government will intervene and try to save my constituents' jobs.
§ The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones)
I readily acknowledge the importance of the debate that the hon. Member for Alyn and Deeside (Mr. Jones) has secured. It means much to people in Wales. It is also a matter in which the hon. Gentleman has taken a long, close interest.
The Government share the deep regret that is felt at Raytheon's decision to move its manufacturing facility away from Broughton in north Wales. We fully appreciate what a blow that news has been to the workers at the Broughton plant. Raytheon makes an important contribution to the economy of that part of north Wales. There is a long tradition of aeroplane manufacture in the hon. Gentleman's constituency. That, of course, will continue. It remains, though, a serious loss.
It is important, therefore, to start from a clear understanding of what Raytheon has decided, its reasons for doing so, and the part that the Government played during that difficult period. Regrettable though it is, the company has made it clear that the decision was taken on purely commercial grounds. Only the company was in a position to be able to take that decision. Raytheon has explained that it is a reflection of the current state of world markets.
In its discussions with my right hon. Friend the Secretary of State, the company made it perfectly clear that its decision was in no way a reflection of the high regard in which it holds its highly skilled and committed work force in north Wales. The company has only praise for the way in which the work force has sought to improve productivity over the past year.
I stress also that the company has made it clear that the decision is no reflection of any lack of support—financial or otherwise—from the Government.
It is because we have realised the importance of this matter that Ministers and the chairman of the Welsh Development Agency have remained in close touch with the company over the past few months. My right hon. Friend the Member for Hove (Mr. Sainsbury), who was then a Minister in the Department of Trade and Industry, visited the headquarters of Raytheon Corporation in America in April; so, too, in June did David Rowe-Beddoe, the chairman of the Welsh Development Agency. In April, my right hon. Friend the Secretary of State for Wales visited the plant at Broughton. He and my hon. Friend the Parliamentary Under-Secretary of State at the Department of Trade and Industry met the president of Raytheon before the announcement was made in September. My hon. Friend at the Department of Trade and Industry demonstrates his keen interest in this matter by being present on the Front Bench. I know that he is looking forward to meeting the hon. Gentleman later this week, as is my right hon. Friend the Secretary of State.
In turn, there has been regular contact between Raytheon and officials of the Welsh Office and the Department of Trade and Industry. 123 Against a background of weak world markets, the Government have lost no opportunity to promote sales of corporate jets overseas. Department of Trade and Industry Ministers have been briefed on Raytheon in advance of overseas trade visits. My right hon. Friends the Secretary of State for Wales and the President of the Board of Trade have used their direct contacts with Governments and businesses overseas to promote sales of the jets. We are continuing with those efforts. It has been stressed that if attempts to secure further sales are successful, we would expect those aircraft to be manufactured at Broughton.
In his most recent meeting, my right hon. Friend invited the president of Raytheon to consider whether the Broughton plant might be allowed to bid for further work within the group. The work force has, after all, demonstrated its commitment to the company over recent months. I am pleased to say that the president agreed to consider that.
My right hon. Friend will now be writing to the president to reiterate those points. We all hope that the company's response will be favourable, but the hon. Gentleman will appreciate that I would not wish to hold out false hopes to the House about our prospects of success. The decision to relocate the manufacture of corporate jets to the United States is, ultimately, a commercial matter for Raytheon. To the extent that the Government are able to bring their persuasive powers to bear, it is clear that we are doing just that. The final decision, however, is for the company alone.
I know that the hon. Gentleman will be as pleased as I am that the economy in north-east Wales is showing encouraging signs of strength. Unemployment in Clwyd now stands at 7.9 per cent. In the hon. Gentleman's constituency, it has fallen by nearly 16 per cent. over the past year.
The strength of the local economy is clearly demonstrated by the companies that have chosen to locate in the area. Companies such as Toyota, Sharp and Kimberly-Clark are household names. I am sure that the hon. Gentleman will agree that others such as Hamilton Oil, Shotton Paper, Optical Fibres and Warwick International are having an equally important effect.
The Government recognise that they have a continuing role to play in promoting further economic growth. We are anxious to attract more companies to north-east Wales. We are investing in the infrastructure and we are offering companies carefully targeted financial assistance. I am pleased to say that in the six months to the end of September, Clwyd attracted 12 investment projects. Those projects are expected to bring 910 jobs and capital expenditure of almost £71 million in due course. The county has, therefore, attracted more projects than any other county in Wales during this financial year, and the second highest level of jobs and capital expenditure.
The area also benefits from ever-improving communication links. The Government's massive £700 million investment in the north Wales coastal route is the clearest possible commitment of our desire to see 124 improved access to the whole of north Wales. That is not the record of a Government who do not believe in providing carefully targeted support for industry. However, what all these examples have in common is that they facilitate the operation of the markets, rather than interfere with it. In the long run, it is only through healthy competition that companies in north-east Wales and, indeed, throughout the whole of the United Kingdom can prosper and thrive.
I certainly appreciate the desire of the Raytheon work force to fight as hard as it can to persuade the company to change its mind. The hon. Gentleman will appreciate that the Government must have regard to the consequences of a closure. If the closure goes ahead, it will be important to ensure that an effective range of support services is made available to those who lose their jobs.
The fact that job losses are phased offers some assistance. It provides an opportunity for local agencies to work together to establish how the needs of workers made redundant can be met most effectively.
The North-East Wales training and enterprise council will have a crucial role. I understand that it has already decided to use its powers to allow workers made redundant immediate access to retraining, thereby waiving the normal requirement that adults should be out of work for six months before being eligible for training for work. A full range of wider training and enterprise council training programmes will also be available to workers who might need them.
The Welsh Development Agency has also been active locally and we expect it to continue to play an important role. North-east Wales has a strong tradition of a highly skilled work force. The closure does nothing to alter that fact. That crucial resource can only be of assistance to the agency as it promotes the area as a site for inward investment. It is equally relevant to local companies that are contemplating expansion.
The Government fully recognise what a blow the Raytheon decision has been for the people of north-east Wales, which is why we stayed in touch with the company throughout the past year and Ministers used their contacts with Governments abroad and businesses overseas to try to attract new orders.
The company's decision to close its manufacturing facility was taken on commercial grounds. We did all that we could to persuade it, but it remained a matter for the company alone.
I am confident that the strengths inherent in the north-east Wales economy will help to overcome that blow. The area has an impressive record of attracting inward investment. It enjoys the benefits of an excellent work force and good communications. If the area is to be provided with effective support in the wake of closure, it is essential that all organisations with a contribution to make work closely together. The Government will do all that they can to make sure that is the case.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-nine minutes to Eleven o'clock.