§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ottaway.]
8.26 pm§ Mr. Gerald Kaufman (Manchester, Gorton)I am grateful, on behalf of my constituents, that Madam Speaker has selected this subject for discussion. I should like to associate my hon. Friend the Member for Manchester, Central (Mr. Litherland) with what I am about to say. He wished to be present for the discussion, but compelling circumstances have prevented him from being here.
East Manchester, and my constituency in particular, used to be a national centre of heavy engineering. We had many famous names in Gorton, and one can still go to the railway museum in York and see the great engines that were manufactured there. But now my constituency is an industrial graveyard, and out of 634 constituencies in Great Britain, Gorton is 30th in terms of unemployment.
We have almost double the national level of unemployment, and male unemployment, at 21.3 per cent., is more than twice the national average. In the Manchester area, we have lost 30,000 jobs in recent years, and now local unemployment is about to be increased as a result of a wanton action by GEC, which has decided to close down the Long and Crawford factory in Gorton road.
Long and Crawford manufactures switchgear. It has a high reputation. GEC bought it in 1988, and the productive efforts of the work force resulted in a profitability that meant that, by 1993, GEC had recouped the money it had paid for the company. Now, having used that company and its dedicated and skilled work force for its own convenience, and having turned my constituents and those of my hon. Friends into industrial pawns, GEC intends to close the company. The death sentence will be carried out on 16 August.
There is a work force of 234, and 127 are to be thrown on the scrap heap. The 107 remaining staff will be transferred to another site—which 107, it is not yet known. When they are transferred to the other site in Higher Openshaw, it will be at standards much inferior to those they now have, and on a much more precarious basis.
The men who will lose their jobs—the 127—are, in theory, eligible for redundancy compensation of up to £20,000. However, the maximum redundancy compensation available will be £17,000, and the median compensation will be only £8,000—and that is for men who have 25 years' service. Even the largest sum would not be of much help to men with mortgages to pay and with children to feed and clothe—particularly as there is an extremely unpromising prospect of new employment.
The closure notice that was distributed to the work force promised:
Assistance will be given to those affected in seeking alternative employment.What good will that be in an area with such high male unemployment? One hundred and seven men will be transferred—in the inelegant language of GEC, they will be relocated. While keeping their jobs will be better than nothing, they will not keep their present pay and conditions.664 A notice issued by N. F. Collins, director and general manager, said:
All 'relocated' employees will relocate on GEC ALSTHOM T and D Long and Crawford Limited contracts of employment. Terms and Conditions of Employment will remain unchanged with the exception of those employees who are covered by the payment by results (PBR) scheme.The notice continued:The Company proposes to remove the existing outdated PBR scheme and replace it with an improved basic rate, paid monthly, which will be more comparable with those elsewhere in the industry, thereby helping to ensure the long term viability of Long and Crawford.The "long term viability" of Long and Crawford means that the company is shutting down the Long and Crawford factory and transferring the name and some of the work to GEC at Higher Openshaw. The scheme is outdated simply because GEC has decided to scrap it—and for no other reason. What does this mumbo-jumbo mean? It is GEC doublespeak for an ultimatum to the transferred workers.Mr. Collins said in his notice that workers will be "invited" to agree to these changes. It means compel and force—they will have no choice. It is GEC doublespeak which means that the workers will be forced to agree to the changes.
Ending the payment by results scheme will cut the wages of the men who will be lucky enough to be transferred by some £60 a week—that is a severe pay cut. Management will buy out the scheme for a lump sum, but will not compensate workers for the loss of their bonus scheme over much more than a 12-month period—particularly as, even if transferred, they will have no guarantee of job security. They are subject to blackmail.
Another note was distributed to the work force. Under the heading "Co-operation", it stated:
The scheme is conditional on full co-operation which includes the working of such overtime as is both required and approved.Any instance of industrial action will result in the immediate withdrawal of the scheme.Co-operation is not a matter for agreement between the company and the work force—it is an ultimatum imposed on the work force by the management, including compulsory overtime if management so decides. The workers will have no power to defend themselves, because if they try to do so, the scheme will be scrapped.Apprentices will not be transferred as the sub-contract work at the new site will carry no apprenticeships with it. The skilled workers of the future will not be trained at the new site. What hope does that bring for Britain's industrial future if an area of high skill is not to train young people who can succeed and continue to do the work?
I am informed that the same applies to inspection. Inspection standards are high at the present Long and Crawford site. At the new site—where the work will be sub-contract work—inspection may be little, inadequate or even non-existent. We are talking about extremely important matters, because both supply and safety are involved. Several hundred thousand switchgear units may have to be refurbished at any time.
The work force have told me that a new product is coming, and that it will presumably be manufactured at the new site. I am informed that it will be developed only for the home market, and that potential export markets in Jordan, Saudi Arabia, the other Gulf oil states and South America are to be thrown away.
§
As for the Gorton road site, the closure notice states:
The Gorton Road site will be decommissioned and sold for industrial development which should lead to the creation of some alternative jobs for the area.
§ Again, that is GEC doublespeak. GEC has every intention of selling off the site and realising what money it can from getting rid of it—that is part of a classic asset-stripping operation.
Talk of creating alternative jobs is meaningless at best and hypocritical at worst. Just what are these alternative jobs going to be in an area with such high unemployment? I have asked GEC this, and it has been unable to give me any information that is meaningful in any way. If a powerful combine such as GEC is destroying jobs, who will be able to come along and create the new jobs that it says are possible?
I raised this matter at Question Time last week, and the President of the Board of Trade responded to my question. With respect, the President of the Board of Trade knew nothing of the matter—I do not criticise him for that, because I raised this matter as a supplementary question. However, in response to my question, the President of the Board of Trade immediately launched into a panegyric of praise for GEC. In Manchester, we know GEC all too well—we know it as a ruthless employer and as a company that has made a practice of shutting factories, sacking men and making money out of methodical asset-stripping.
Long and Crawford is not the first closure that GEC has inflicted on people in the area, but I hope that it will be the last—but with GEC's record, one cannot be sure. From my encounters with the people at the very top of GEC, I know them as arrogant and uncaring. GEC is run on the basis of a quick turnover and fast profits at the expense of its workers and products. Unlike other companies that I can think of, the record of GEC is a telling explanation of the industrial decline of this country and the transformation of much of Manchester from a centre of excellence and innovation into its present state, with all too many closed factories, and all too many derelict sites.
Manchester is a city of innovation and energy. Our people create things; we are the home of the computer; we have done things in Manchester that the rest of the country should envy. Nevertheless, because of the actions of GEC and companies like it, we have high unemployment, and the skills that my constituents would be only too happy to deploy are not used.
What hope is there for these men when the Confederation of British Industry and the Association of British Chambers of Commerce have said that there are signs that firms expect to shed labour in the coming months? Despite the response by the President of the Board of Trade last week—which I realise was an off-the-cuff response—I hope that the Minister of State who will reply to the debate will offer some hope to my constituents.
We need not sympathy—we will provide our own sympathy in Manchester—but practical action, which we in Manchester would be happy to provide for ourselves if we had the opportunity to do so. My constituents, the people of Manchester, are proud, skilled and dedicated men, whose wish is to work for their country. They ask the Government to work for them so that they can work 666 for their country. As their voice in the House of Commons, I ask the Government to take action for them, for the city of Manchester and for Britain.
8.40 pm§ The Minister of State, Department for Education and Employment (Mr. Eric Forth)I congratulate the right hon. Member for Manchester, Gorton (Mr. Kaufman) on obtaining this Adjournment debate, with its obvious importance for his constituency and the surrounding area.
Of course it is unfortunate for Gorton and the surrounding area that GEC Alsthom has decided to transfer its work from its Long and Crawford site in Gorton to Openshaw, but that does not mean that that was the wrong decision, or avoidable. From time to time, companies must make tough decisions of that type to ensure that they have a sound long-term future. Even in a healthy economy, jobs will inevitably be lost. The important thing is that more jobs are created to replace them.
As the right hon. Gentleman pointed out, GEC Alsthom has been hit by a drop in demand for its switchgear. Changes from oil to gas-based products and changes in technology that are vital to the company's international trading position have meant that only half as many people as previously are needed to produce its gas-insulated switchgear. As the right hon. Gentleman observed, the company has therefore decided that, in its judgment, relocating to another of its sites in Openshaw can help it to remain, in the overall sense, competitive.
It would be commercial suicide to keep on high numbers of staff in industries where automation had reduced the demand for labour, and it would put businesses at the mercy of overseas competitors. Where efficiency savings from merging two parts of a company might be made, it would make no sense not to adjust staffing levels.
My contention is that it is not for Government to seek to interfere with or second-guess commercial decisions of the type that have been described. If we tried in any way to force companies to keep unprofitable sites open, we would add intolerable burdens to their businesses and risk destroying jobs in the long term, as firms went out of business or chose to relocate overseas.
However, having said that, and in reply to one of the questions that the right hon. Gentleman reasonably asked, agencies and services exist to help those who become redundant as a result of actions such as have been taken on this occasion, to try to ensure that everyone involved has the best chance of a speedy return to work. For example, the Employment Service and Manchester training and enterprise council have contacted GEC Alsthom to offer help.
I am told that the company has appointed a firm of employment consultants to advise its workers on employment issues, and has pledged to do everything possible to support those who will lose their jobs in the reorganisation. Following discussions with the training and enterprise council, the affected workers will be given immediate access to the training for work programme and other adult training programmes.
As part of that package, Manchester TEC also offers training grants to employers who are prepared to recruit and train those who have suffered from redundancies. The 667 TEC has been working with the Trafford Park development corporation to help local firms there recruit and upskill engineering workers to meet their current and anticipated labour needs.
For those affected by a decision of the type that we are discussing, the prospects are not necessarily as gloomy as the right hon. Gentleman appeared to suggest. We know that most spells of unemployment tend to be short. Of people who become unemployed, about half leave unemployment within three months, two thirds within six months and 80 per cent, within a year. If we add to that help of the type that I have described—from the Employment Service and its programmes, or the training and enterprise council, or the actions that I am told that the company is taking—there is good reason to believe that the people affected by such a decision can expect, directly or after retraining or other support, to find other work in the foreseeable future.
I do not want in any sense to underestimate, or not to have regard to, the pain and problems that are caused to those affected and their families. That, I fear, is a common experience for those who lose their jobs, but I believe that it is much better to look on the more positive side of these matters and have regard to the measures that can be taken to help them.
The overall picture in the Greater Manchester area is certainly more positive than that. To paraphrase, the right hon. Gentleman asked, "What hope is there for people who are thus affected in Gorton?" I wish to mention some examples, which are by no means a complete list.
Nynex is creating 4, 500 jobs with a £1.1 billion investment in the north-west as a whole. Four hundred and twenty-five jobs are being created in Stockport with the Co-operative bank's new telephone banking centre. Three hundred jobs are being created in Warn with Omega Engineering. Six thousand short and long-term jobs are coming in the new £127 million Lowry centre in Salford.
There will be two thousand jobs from a new concert hall next to the G-Mex centre, 1,000 new jobs in Cheadle with John Lewis and Sainsbury's, and 6,000 jobs in the new Trafford shopping centre. I could add to those the many thousands of jobs and inward investment that will result from Manchester hosting the 2002 Commonwealth games.
The right hon. Gentleman is probably thinking, "But what relevance do these have to the people who have been affected at GEC Alsthom?" In the world we face today, as I said earlier, jobs may be lost and others may be created, and sometimes that will require people to be prepared to retrain or reskill or alter their career direction to take up opportunities like those that I have mentioned, which may at first glance not be immediately relevant to the people who have lost their jobs and to the skills that they have acquired.
668 There is a wider and general recognition that this is likely to be the pattern of the future; that people, perhaps regrettably, can no longer expect to do the same or a similar job throughout their working lives; that we must find ways to help people, by education, training, and support of different kinds, to make the career changes that may be necessary to give them better prospects for the future. Increasingly, that must be understood and accepted.
We and our agencies want to do everything possible to help. Training programmes such as the training for work programme, work trials, jobfinders grants—at least for the long-term unemployed—and various job-finding measures that we have on offer, are the sort of things that may come to the rescue of those who find themselves out of work for a longer period.
The new jobs that are coming along may not be the same as the old ones, and may not be in exactly the same location—they may not even require the same skills—but, with some flexibility and a preparedness to contemplate career changes and new directions, there is real hope for the people who have been affected by the changes that the right hon. Gentleman has described, and for others of his constituents. They should be prepared to consider changes in employment or perhaps be willing to travel some distance to work elsewhere.
The lessons of other large-scale engineering redundancies in the Greater Manchester area suggest that those wishing to remain in engineering are often successful in finding work within a few weeks or months of being made redundant. As the right hon. Gentleman said, more than 100 of the 236 employees of Long and Crawford will be transferred to Openshaw. There is also a distinct possibility that some of the staff who have been served with redundancy notices may be redeployed elsewhere within the group.
I cannot agree with many of the right hon. Gentleman's comments about GEC. I believe that we must exercise some good will on such occasions. Government agencies and the company must be willing to work together to try to maximise opportunities for the people involved and affected. By adopting a positive outlook and by working together co-operatively, we can help those who are affected by difficult decisions such as this.
I hope that the right hon. Gentleman will accept that there is real hope for his constituents. The Government are always prepared to work with the company and with local authorities to try to maximise the opportunities available to those affected by redundancy. I am sure that Government agencies also will be prepared to listen and to offer positive assistance. Therefore, I hope that he will take from this brief debate a more hopeful and positive outlook. He may be assured that the Government, their agencies and all those involved will continue to work positively to assist his constituents.
§ Question put and agreed to.
§ Adjourned accordingly at nine minutes to Nine o'clock.