§ 3.31 pm
§ The Secretary of State for Trade and Industry (Mr. Stephen Byers)
With permission, Mr. Speaker, I shall make a statement concerning yesterday's announcement by General Motors to end car production at its Vauxhall plant in Luton.
As hon. Members will know, over recent months, General Motors has been conducting a worldwide review of its operations. The results of that review were announced yesterday. The decision in relation to Luton is a bitter blow, with the prospect of 2,000 jobs being lost by this time next year. Our efforts must be directed towards assisting the individuals affected, and the local community, through what will clearly be a difficult period.
In this statement I shall outline the steps that the Government will take. But it is important that, before I do that, the House considers the reasons given by General Motors for its decision. The company has made it clear that this is part of a Europe-wide restructuring procedure, which will result in more than 5,000 job losses across Europe. General Motors has stated that the restructuring is a response to overcapacity in the car market and rapidly changing European market conditions, with lower sales than expected and a shift in customer preferences towards smaller vehicles.
The announcement is part of an overall restructuring by General Motors, designed to reduce salaried employment levels by 10 per cent. in north America and Europe over the next 12 months—cutting 10,000 jobs worldwide. Despite yesterday's announcement, Vauxhall will remain an important manufacturer in the United Kingdom. It has confirmed that it will continue with its investment plans for a new van to be manufactured at Luton, and that planned production volumes for the project will he increased. That will secure more than 2,000 jobs.
Ellesmere Port will continue to produce Astra cars and V6 engines, employing more than 4,000 people. Vauxhall also announced yesterday that a study is being made of the possibility of incorporating the next generation Vectra and turning the Ellesmere Port plant into a two-model "flex" plant. It is therefore clear that this is part of a worldwide restructuring by General Motors, resulting in job losses in north America and mainland Europe as well as in Luton.
The challenge is to provide new job opportunities for the future to replace the jobs lost as a result of yesterday's decision. That is why yesterday I, with my right hon. Friend the Minister for Employment, Welfare to Work and Equal Opportunities, announced that the Government would take steps to help those affected and to strengthen the local economy.
The Employment Service, working closely with Vauxhall, local authorities and other relevant bodies, will provide a package of advice and assistance to individual employees. The package will include rapid response units providing a personal service to help people find new jobs, an on-site job shop to offer vacancies, help with job applications and offer a fast-track benefits service, and retraining programmes that will offer guidance on further education and training opportunities.
The rapid response units have a good record in finding new employment for people affected by major job losses. At Fujitsu, in County Durham, a rapid response unit 642 helped to ensure that about 94 per cent. of the work force found new jobs within 12 months. At Siemens, in north Tyneside, the Employment Service played a major role in helping about 90 per cent. of the work force find new employment.
Taken together, the measures will ensure that Vauxhall employees are given the best opportunity for a secure future and that the effects on the local economy are reduced. Additionally, we have asked the regional development agency to take the lead in identifying the action necessary to support the local economy and the employment base. The RDA has already begun that task and, this afternoon, is meeting the local authority and other relevant organisations. It will also establish a planning partnership to identify the practical measures necessary to assist in economic regeneration and job creation.
As a result of decisions taken by the Government, Luton is now part of our assisted areas map and, as such, qualifies for regional selective assistance. That will clearly be an enormous advantage in securing jobs in the future.
Of particular concern must be the position of businesses that supply Vauxhall, for which special support will be necessary. The RDA will therefore help companies in the supply chain to diversify, to find new business and to minimise the impact on the wider local economy.
It is clear that, at a time of globalisation, many sectors of our industry are going through major restructuring. In such circumstances, the Government's role has to be to provide economic stability, and that is exactly what the Government are doing. The underlying strengths of our economy are clear, as two sets of figures published today demonstrate. Today's labour market figures show that the employment level is 300,000 higher than at this time last year, and official figures published this morning show that the stock of foreign direct investment in the United Kingdom has increased by 21 per cent. in the past year, from £188 billion to £227 billion.
I am, however, the first to acknowledge that the figures will be of little comfort for the thousands of workers in Luton. Many hon. Members will understand the sense of anger that they feel, particularly about the manner in which they learned of their fate. This will be a bleak Christmas for those affected by Vauxhall's decision, and we must do all that we can to help them through the difficult months ahead. By working together, I am confident that we will be able to meet the challenges of the next 12 months.
§ Mr. David Heathcoat-Amory (Wells)
I am grateful to the Secretary of State for responding to our request for a statement on this matter and for giving me an advance sight of his proposals.
The ending of car production by Vauxhall at Luton is indeed a terrible blow to the work force there, to supplying companies and to many of the other companies in Luton that depend on the buoyancy of the local economy. It is a particular blow that the massive redundancies were announced without warning just before Christmas. I agree with the Secretary of State that everything must be done to help those who are affected by the redundancies, including help to find jobs and, when necessary, to obtain retraining.
643 It is not, however, an isolated closure: it is part of a very damaging pattern of closures that has been accelerating in recent months. Ford has announced that it is ending car production at Dagenham, with the loss of thousands of jobs there. The Nissan plant in Sunderland is also threatened. During the Rover fiasco earlier this year, we saw how out of touch the Government had become with the motor industry and its problems.
Of course there is an overcapacity problem in the motor industry. We all know about that, and the Government cannot cure that problem. However, the Government can cure their own tax and regulation policies. Since the general election, they have piled on layer upon layer of extra business taxes and regulations, which have particularly damaged manufacturing industry and undermined its success in difficult world markets. We warned the Secretary of State about that; we have been telling him about it for months, but he has done nothing about it and we are beginning to see the results of that complacency.
The Secretary of State gave an employment figure for the economy as a whole. What he did not tell us is what is happening to manufacturing employment. Can he confirm that, since May 1997, manufacturing employment has fallen by 206,000, having risen under the previous Government? I am grateful to the House of Commons Library for providing me with that figure.
Can the right hon. Gentleman explain why motor manufacturers such as Nissan, Toyota and BMW came to this country? They were attracted to Britain under the previous Government, but under the present Government, they have left or they are engaged in massive and damaging cost and employment reductions.
Can the Secretary of State tell the House what he is doing, not to cure a problem after it has occurred, but to help the industry and prevent more closures in future? Specifically, where is the aid for Nissan in Sunderland that he promised months ago? The application is sitting on some desk in the European Commission. When is that aid to be paid to Nissan? Will we be faced with another catastrophe if that plant moves to France?
Lastly, when will the Secretary of State start to roll back the tide of escalating taxation and regulations, which the CBI estimated will cost British industry an extra £32 billion over the life of this Parliament? Specifically, what will the Secretary of State tell the Chancellor of the Exchequer to do about the new energy tax that is to be paid by all businesses in the United Kingdom from 1 April—the so-called climate change levy? That will be particularly damaging to the motor industry, unless the industry relocates to another country that does not have the tax.
Can the Secretary of State tell us at last what he will do, not to go on taxing and regulating British businesses and the motor industry, but to start to help those industries and all who work in them, to stop such catastrophes happening in the future?
§ Mr. Byers
1 regret that the right hon. Gentleman did not address the present difficulties being faced by workers at Luton. He paid lip service to that and spent much of his contribution speaking about issues that were not related to the announcement that General Motors made yesterday with regard to Luton.
644 General Motors made it clear yesterday why it was taking action in relation to Europe. It was because of overcapacity in the car market and, as the General Motors press notice stated,rapidly changing European market conditionswith lower sales than expected. Those were the reasons given for the decision, which related to Europe. If the right hon. Gentleman cares to read the statement made by General Motors, he will see that it reflects exactly those points. It was a worldwide issue and it was being addressed by the worldwide review. It would have been interesting had the right hon. Gentleman dealt with the real history behind the decisions being taken by General Motors, because it is far more complicated than he would lead the House to believe.
The right hon. Gentleman talks about more than £10 billion of burdens being imposed on business. What he does not tell the House is that that includes the right for people to have four weeks paid holiday a year as well as the national minimum wage. For most people, those are not red tape or administrative burdens but decent minimum standards for people in the workplace. The shadow Chancellor endorsed the national minimum wage without consulting his shadow Cabinet colleagues—many who sit on the Opposition Front Bench still disagree with the principle of a national minimum wage.
The reality is that the tax burden—corporation tax—has been reduced for companies in the United Kingdom. The right hon. Gentleman talked about employment levels in manufacturing. He is right to point out that, to be precise, 206,000 manufacturing jobs have been lost since May 1997. He did not tell the House about the record under the Conservative Government when, on average, 150,000 manufacturing jobs were lost for each of the 19 years of Conservative rule.
Economic stability will be the way in which we shall create the framework within which manufacturing can prosper—not turning the clock back 10 years to inflation at 10 per cent., interest rates at 15 per cent. and more than 1 million manufacturing jobs lost in one year as a result of the policies that the Conservative party pursued. We shall remain firm to our economic commitment of stability. In the medium and long terms, that is the only way to create the climate in Britain for more employment growth and prosperity in manufacturing.
§ Ms Margaret Moran (Luton, South)
I thank my right hon. Friend for his statement. Does he agree that now is not the time for political posturing, for tearing up workers' rights, as those on the Opposition Benches seem to advocate, or for returning to the economic and employment policies that caused such devastation to businesses and the economy in Luton during their term of office? Does he understand the anger felt by the work force and the community in Luton, and the need for an urgent response from the Government?
I thank him for the package that he outlined and put in place so swiftly, and also for the responsiveness of this Government to our call for objective 2 and assisted area status funding, which will help those people who may be facing unemployment in Luton. Does he agree that, if General Motors feels that it has a right to close car plants, 645 it also has a responsibility to consult workers and to ensure that it takes full responsibility for their future livelihoods and for the regeneration of the local economy?
§ Mr. Byers
I thank my hon. Friend for those comments. I am sure that the House has great respect for the way in which she and hon. Members with neighbouring constituencies are dealing with a difficult set of circumstances. She is right to point out that we have put in place measures to give Luton objective 2 status and ensured that our assisted area map applies to Luton, which was not the case, so that there are greater opportunities to lever new investment into the town and the surrounding area. I also understand—I referred to this in my statement—the anger that the workers must have felt about hearing their fate on a local radio news station. That is no way, at the beginning of the 21st century and in a spirit of partnership in the workplace, to treat dedicated and hard-working employees.
What we need to do is look carefully at how the European works councils and the collective redundancies directives are operating to see whether they can be improved to ensure that we do not see a repeat of yesterday's events.
§ Dr. Vincent Cable (Twickenham)
May I add to the sympathy for the workers who have lost their jobs in these sad circumstances? There seems to be common ground between all participants in the debate about the peremptory and insensitive way in which the management have handled the matter. Has the episode in any way changed the Government's attitude towards the European directive on worker consultation, which they have hitherto resisted but which might have mitigated some of those effects?
Does the Secretary of State see a common thread in the decision of four car companies to relocate production to the core euroland economies? Does he share the judgment of Nick Reilly at Vauxhall that the persistent and substantial overvaluation of the pound against the euro, although not decisive, was certainly a factor? Does he share the view that John Monks expressed yesterday at the Trades Union Congress that continued uncertainty over British participation in the euro is influencing long-term investment decisions? As there is continued uncertainty about Rover, will the Secretary of State give a progress report—if he has one—on the company's effort to secure a long-term global strategic partner for its operations?
§ Mr. Byers
The information and consultation directive that is being discussed in Europe at present is flawed in a number of ways. As the House knows, the Government have concerns about the principle of subsidiarity and the fact that it is not respected in the directive in its current form. We are not convinced that the directive will work effectively in the United Kingdom. However, especially in the light of yesterday's announcement and the manner in which it was made, we accept that there is a need to look carefully at provisions that currently apply within the UK. That is why I mentioned the directives on collective redundancies and European works councils, which apply within the UK. We need to reflect on how they can be improved or, perhaps, on the need for us to come up with our own domestic arrangements. That will ensure that, in the spirit of partnership in the workplace—which, we believe, assists productivity—there is a better way of doing things.
646 On the single European currency, all that I can say is that yesterday's announcement by General Motors and Vauxhall made it clear that that was not a significant factor in their decision. When an announcement is made that affects 2,000 jobs in Luton, 3,000 jobs in mainland Europe and, I understand, 5,000 jobs in north America, it is clearly not a matter that relates to the single European currency. On the situation at MG Rover, I understand that it is still on course to meet the targets that it set when it took over from BMW.
§ Mr. Kelvin Hopkins (Luton, North)
May I thank my right hon. Friend for his statement and especially his assurances about measures to help workers who have lost their jobs to get new employment in the future? Hundreds of my constituents have been affected and are unemployed. This morning, I was outside the plant, where there were a lot of extremely angry people. Will my right hon. Friend condemn the company for the way in which the announcement was made, as it was leaked to the press before the workers and trade unions were told? Will he also condemn the decision itself, which is not justified? Two years ago, with the assistance of the Government, the trade unions, local Members of Parliament and the council, we got an agreement to keep production at Luton to bring the new car in. Only three months ago, an agreement with the trade unions was reached that was predicated on the new car. That is not going to happen now.
I have two specific questions. The first is about the strength of the pound. The company studiously avoided reference to that in its statements. That is understandable, as it negotiated a deal with the trade unions that specifically mentioned the strength of the pound. The workers accepted a lower pay rise, predicated on the possibility of the pound depreciating. When that happened, they would have a higher pay rise. Although the company did not mention the strength of the pound, Nick Reilly, the chairman of the company, mentioned it on television last night. That may be factor, and we want to know which of those voices is the correct one.
Secondly, there may be overcapacity in the car industry in the world, and even in Europe, but there is not overcapacity in Britain, because we are still net importers of car products. It is about time that we defended what remains of our car industry in Britain, because if we do not, it will all disappear, with terrible damage not just to employment and the balance of trade, but to Britain's economic future. Manufacturing matters and we should defend it.
§ Mr. Byers
I understand the anger felt by the work force and by those Members of Parliament who were closely involved in securing the deal two years ago, which all felt would give the Luton plant a long-term future. That was the intention of the deal and, just six months ago, Vauxhall committed itself to a significant investment in Luton, which, once again, most people thought would secure the plant's future.
Yesterday, Vauxhall said that the losses incurred in Europe in the third quarter of this year, running to $181 million, with even further losses projected in the final quarter of this year, were such that immediate steps had to be taken. As a result, it made yesterday's announcement affecting 5,000 jobs throughout Europe. It did not pray in aid the strength of the pound as a reason 647 for its decision on Luton. We will have a debate on the effect on manufacturing of not being within the eurozone and of the strength of the pound in relation to the single European currency, but today's statement on Vauxhall at Luton is not the time for that debate. When it is announced that jobs are to be lost in Belgium, Germany and north America, the pound and the single European currency are clearly not factors on this occasion.
Car plants in the United Kingdom trade in Europe and, increasingly, globally. For example, Toyota in Swindon is looking to export an increasing number of its cars to north America. Therefore, the issue is not one of overcapacity in the United Kingdom. Those companies deal at a European level and are often organised at a European level, and they will look at the market in European terms and make a decision based on overcapacity in that market. That is the decision that has been taken by GM in relation to Vauxhall at Luton.
§ Sir David Madel (South-West Bedfordshire)
This is terrible news for Luton, but equally terrible news for the adjacent towns of Houghton Regis and Dunstable. May I take it that the help that Luton will get will be applied to Houghton Regis and Dunstable as well?
Does the Secretary of State agree that, first and foremost, the news should have been given to the work force by the president of General Motors Europe, not by whoever it was who leaked it to the BBC?
The Secretary of State is aware of job losses and possible job losses in Dunstable and Houghton Regis at TRW Steering, BTR and Trico Products. We need to modernise our automotive base in south Bedfordshire. We need drastically to improve the infrastructure to make the area more attractive to new employers so that they will come and help us.
I am sure that the Secretary of State will understand if I say, after battling for 30 years in the House to help Vauxhall, that this is a terribly sad day. If only the Luton plant could have had the new Corsa, it could have been a flexi-plant, which I sincerely hope Ellesmere Port will be and so be able to help in the employment of some of those who will lose their jobs.
§ Mr. Byers
The hon. Gentleman makes an important and strong point about the wider implications of the announcement, not just for Luton, but for the surrounding towns and other areas throughout the United Kingdom. There are two ways in which we can address that. First, we need to ensure that individual employees who may be located outside Luton, in Dunstable or elsewhere in the hon. Gentleman's constituency, have the tailored advice and support that I mentioned in the statement.
Secondly, we need to give clear help to the supply chain. Many companies and businesses in the hon. Gentleman's constituency will have been major suppliers to Vauxhall at Luton. We know the first tier suppliers and, with the agreement of Vauxhall, we shall contact them to ensure that they are given short-term help to diversify and help with retooling and reskilling, if that is appropriate. We have very much in mind the needs of the businesses in the supply chain and we shall do all that we can to assist them.
There may well be a wider issue about how we can modernise the auto industry in south Bedfordshire, and I shall draw that aspect to the attention of the regional 648 development agency and the other partners who are drawing together the practical proposals on how we can move forward.
§ Mr. Patrick Hall (Bedford)
Will my right hon. Friend take it from me that the feeling of shock and uncertainty is being experienced in Bedford and Kempston, as well as in Luton, Dunstable and other neighbouring areas? People are asking where the problem will lead and where it will end. Despite the welcome announcement, as I understand it, of an extra 1,000 jobs for the Vauxhall-IBC Vehicles plant in Luton, will my right hon. Friend do his best to address that feeling of uncertainty? In particular, when will a programme of effective action be prepared, published and implemented to support companies in the supply chain and underpin the local economy?
§ Mr. Byers
That was one of the specific points made in the package of measures announced jointly yesterday by me and my right hon. Friend the Minister for Employment, Welfare to Work and Equal Opportunities. We are conscious of the vulnerable position into which many supply chain businesses will be put, often by cash-flow problems, which might hit them very quickly. The present situation involves a relatively slow run-down of production at Luton. The bulk of the jobs will be lost at about this time next year, so we have an opportunity to put in place some robust measures. I hope that those measures will overcome many of the difficulties and lift the uncertainty that must be felt by many people and businesses.
I am conscious of the wider implications, which extend to areas such as the constituency of my hon. Friend the Member for Bedford (Mr. Hall). The brief that we have given to the regional development agency states that although concentrated issues may need to be dealt with in Luton, the wider implications will also need to be addressed.
§ Sir Nicholas Lyell (North-East Bedfordshire)
In seeking to alleviate the unhappy position of people whose jobs and businesses will be affected by the problems in Luton and in Bedfordshire more widely, will the right hon. Gentleman consult carefully with the Department of the Environment, Transport and the Regions? Will he also take note that infrastructure between the M1 and A1 in Bedfordshire is poor and ask for higher priority to be given to the roads programme to improve that infrastructure, so that businesses can build and develop?
§ Mr. Byers
I have no doubt that infrastructure must be one of the key issues when the groups that we have established consider the measures necessary for the economic regeneration of the area. The right hon. and learned Gentleman mentioned difficulties in relation to the M1 and A1. I shall draw that point specifically to the attention of my right hon. Friend the Deputy Prime Minister. As we consider the steps that are necessary to create further jobs and employment opportunities in the United Kingdom, the need for an infrastructure that can be responsive and meet the demands of business is becoming increasingly clear. I understand that my right hon. Friend the Deputy Prime Minister will make an announcement 649 tomorrow about the roads programme. I believe that economic growth and stability will be a key theme in that announcement.
§ Mr. Tony Lloyd (Manchester, Central)
My right hon. Friend's action in rapidly establishing practical steps to at least ameliorate the problem is welcome and is in sharp contrast with the outrageous behaviour of General Motors. Will that company now pick up any responsibility for the rescue package? It has an obligation to the work force. Also, my right hon. Friend mentioned information and consultation. It is obvious that General Motors has ridden roughshod over the natural rights that the Vauxhall work force should have had. He commented on the draft European Union directive, but will he reconsider the issue? It is clear, especially in comparison with other parts of Europe, that there is a huge lack in our law, which fails to protect British workers.
§ Mr. Byers
Clearly, there will be discussions with General Motors about what contribution it can make to help with the regeneration of Luton and with the consequences of its decision.
On the information and consultation directive, the Government's position is very clear. We believe that the directive is flawed and that it will not be applied in the United Kingdom in a way that will bring the benefits that some people have suggested. However, my hon. Friend makes an important point, which we need to consider, namely, how to improve our procedures in such a situation. The Government believe that, rather than looking at what may come out of Europe, it would be far better to examine what we can do in our domestic arrangements. That means looking closely at the collective redundancy situation and the European works council provisions. By doing so, and perhaps altering them to reflect the United Kingdom's national position, we will be in a far stronger position to deal with the concerns that were raised by my hon. Friend—but address them we will. That is why we intend to review those two areas.
§ Mr. Jonathan Sayeed (Mid-Bedfordshire)
In Europe during the last quarter, GM lost $181 million. Such losses are not sustainable in the long term. A good part of those losses were incurred outside the United Kingdom, which demonstrates that the decision has little or nothing to with the weakness of the euro, and is not the fault of the work force, who have become increasingly productive—they produce good quality goods and have been extraordinarily flexible in their work practices. I trust that the Secretary of State will endorse those points.
During the past year and a half, I have talked to representatives of the manufacturing industry with greater frequency. It has become clear that they find that their costs are increasing dramatically. That is why inward investment in manufacturing is going down and national investment in manufacturing is going down—or, at least, it is not increasing at the rate that it has maintained in the past. The so-called environmental taxes, which are being imposed by the Government, are one reason for that. I say "so-called" because they have little to do with the environment and a lot to do with taxation. The non-wage costs of employing people is another factor. I ask the Secretary of State, in a non-party political way, to examine the costs of manufacturing and the costs of 650 employing people. If we could reduce them, we could reverse the trends in this country involving a decline in inward investment and a decline in investment in manufacturing.
§ Mr. Byers
I agreed with the first part of the hon. Gentleman's question, about the work force at Luton. There is no doubt that they have been flexible and hard working and that productivity has improved as a result. Yesterday's announcement is no reflection on the commitment and motivation of the work force at Luton. Other factors came into play. As I said, General Motors conducted a worldwide review.
I regret, however, that the hon. Gentleman had to move into party-political mode in relation to costs. Examining yesterday's announcement makes it clear why General Motors moved to close car production at Luton—its decision was based on overcapacity and on models not selling as well as it expected them to do.
It is worth reflecting on the fact that if the situation in the United Kingdom was as bleak as the hon. Gentleman portrayed, why are record levels of investment coming into the United Kingdom—this morning's figures show that in terms of direct foreign investment—and why have we got a million more people in work now than there were when we took office in May 1997?
§ Mr. Andrew Miller (Ellesmere Port and Neston)
I informed my hon. Friends the Members for Luton, North (Mr. Hopkins) and for Luton, South (Ms Moran) and those Opposition Members who represent seats in that area of the calls that I have received this morning from my constituents, who send their heart-felt sympathy to people in the Luton area. My constituents have known mass unemployment.
What discussions is my right hon. Friend having with his opposite numbers in other European countries to address the serious problem of overcapacity in Europe and elsewhere? On a more local level, is he aware that, unlike the rest of mainland Europe, all interplant transfers by GM in the UK go by road, not rail. Will he urge the Deputy Prime Minister to lean on rail companies to encourage them to put a decent deal together so that we can lower the cost of interplant transfers?
§ Mr. Byers
Those issues are discussed at the Industry Council of the European Commission, and no doubt they will be discussed when it next meets.
I am interested by what my hon. Friend said about ways of reducing costs. I was aware of GM's policy of using road rather than rail, and there may well be merits in drawing that to the attention of the rail companies to see whether a deal can be put together.
I know that my hon. Friend is especially concerned about the implications that the announcement may have for Ellesmere Port. He will know that Nick Reilly in particular has made strong and supportive statements about the position there. I am sure we are all pleased that Ellesmere Port at least has not been affected by yesterday's announcement. We must find ways of strengthening the plant's position, so that it can go from strength to strength in the future.
§ Mr. Peter Lilley (Hitchin and Harpenden)
Hundreds of my constituents who were employed by Vauxhall or its 651 suppliers are deeply shocked by this body blow. Their shock is compounded by the fact that, despite rumblings in the past about the possibility of such a decision, the Government seem once again to have been taken unawares.
Is the Secretary of State aware of the system of contingency planning that I established when I held his job, to prepare for and if possible avert problems of this kind? Will he tell us what discussions were held with Vauxhall about the impending decision, and when they were held? Will he also tell us what plans he has—if this sad decision is irrevocable—to expedite planning procedures on the site and the land around it, to ensure that that land is made free for the generation of jobs in the area to create work for those who have been displaced?
§ Mr. Byers
The right hon. Gentleman makes an important point about planning procedures. I shall ask the groups that have now been set up to look closely at the question of regeneration and job creation opportunities.
The right hon. Gentleman asked about mechanisms and procedures in the Department. We announced our package within five minutes of Vauxhall's making its announcement.
§ Barbara Follett (Stevenage)
I thank my right hon. Friend for his speedy response to this terrible situation, which has affected hundreds of workers in my constituency, and will affect many firms in Stevenage and elsewhere in Hertfordshire. Will he do all he can to ensure that the remaining van and jeep production at the Luton plant is secured for the future, and that in future Vauxhall will take its workers into its confidence?
§ Mr. Byers
Yesterday's announcement included a positive commitment to confirming and maintaining Vauxhall's earlier decision to invest in the new van facility at Luton. We must obviously ensure that it remains true to that statement, but I have no doubt that, having reviewed the position in considerable detail and having now made a decision, it will do so.
I understand my hon. Friend's concern. No doubt many individuals, families and communities in Stevenage and, indeed, throughout Hertfordshire and Bedfordshire, will be affected by yesterday's announcement. What we as a Government must do is work alongside those people to take them through what will a difficult and painful period of change. I have no doubt that—although it will be a difficult time—because of the economic climate that we have been able to create in the United Kingdom, we are in a far stronger position to deal with this body blow than we would have been five or 10 years ago.
§ Mr. John Redwood (Wokingham)
Why will the Secretary of State not accept that we are seeing factory closure after factory closure and job loss after job loss throughout British manufacturing? There is a crisis in manufacturing in this country. The Government are over-regulating: they are taxing and regulating industry to death. Why will the Secretary of State not take some responsibility? Why will he not make it cheaper to make things in Britain? Why does he show such persistent callous indifference to the manufacturing crisis that he and his colleagues are creating?
§ Mr. Byers
I welcome the right hon. Gentleman back to Department of Trade and Industry issues. He last had 652 enough time to attend such a debate when he thought that Rover was going to collapse with the loss of 8,000 jobs. However, he was absent when I made the statement in the House that that was not the case. He is like a vampire at the blood bank—he appears if he thinks that there is a difficulty for British manufacturing.
If the right hon. Gentleman reads yesterday's statement by General Motors, he will see that none of the issues to which he referred is relevant. Redundancies were announced in Germany and north America, a region that he holds up as a good example. In reality, 10,000 jobs are being lost at General Motors worldwide. That has nothing to do with the issues that he raised. The sooner that he begins to talk about what we can do for individuals who are affected by the decision, the sooner he will have more respect, certainly from Labour Members.
§ Mr. Dale Campbell-Savours (Workington)
My right hon. Friend will know that the knock-on consequences of closures in the motor industry can be devastating for smaller and isolated communities. The recent announcement of the closure of Johnson Controls, a car seat manufacturer, in Silloth in my constituency is causing the death of the community and town. Can the Department of Trade and Industry establish a unit to look specifically at small and isolated communities that have little chance of attracting industry and replacing jobs, because otherwise the long-term prospects for such communities are dire?
§ Mr. Byers
My hon. Friend makes an important point about the vulnerability of communities that are based on one or two types of production. A diversified economy gives a community the strength to deal with such announcements, but it is very vulnerable if it is committed to one employer. We need to consider how we can assist those communities. The idea that my hon. Friend advances of having a unit or group of people to examine ways to help areas diversify into growing sectors of the future will be a useful and practical step for the Government to take.
§ Mr. Michael Jack (Fylde)
In the light of the Secretary of State's surprise at having to make today's sad announcement, what steps will he take to improve the way in which his Department monitors the reaction in the motor industry and other vulnerable sectors to the tax and cost increase factors that must have led to the decision by General Motors? Did he receive, at any time in the past 12 months, an approach by General Motors about state aid so that car production could remain at Luton?
§ Mr. Harry Barnes (North-East Derbyshire)
This is a very important statement for the workers at Vauxhall who have lost their jobs and for Members of Parliament in the Luton area and elsewhere who are able to cross-examine the Secretary of State on the matter. There have been job losses in other firms such as Biwater in my constituency and Coats Viyella in the constituency of my hon. Friend the Member for Amber Valley (Judy Mallaber), and it is a pity that we have not had an opportunity to ask similar 653 questions. In fact, this is the first time since the problem emerged in the summer that I have had a chance to question the Secretary of State in this Chamber.
On Vauxhall, will the Secretary of State explain in more detail the regional selective assistance that is to be provided to the Luton area and whether it will be available to areas in the east midlands that are suffering in a similar way?
§ Mr. Byers
Regional selective assistance is available for Luton because of the changes that we have introduced to the assisted areas map, which is one criteria that needs to be satisfied before such assistance is made available. Some areas in the east midlands are on the new map. Indeed, the hon. Gentleman wrote to me the other day about two of his constituents in Clay Cross who are trying to establish a new business. As it is now in an assisted area, they could qualify for regional selective assistance.
§ Mr. Ian Bruce (South Dorset)
The Secretary of State was right to condemn the fact that the news was leaked. Will he investigate a report that I heard this morning about the leak coming from the Department of Trade and Industry after it was told the news on Monday? I hope he will take that matter seriously.
My main question is on the role that was played by the rip-off Britain campaign, in which the right hon. Gentleman's Department successfully attacked the motor industry and caused it to bring down prices. How has that affected the motor industry and the Vauxhall announcement?
§ Mr. Byers
The media will know where the leak came from, and they will say that it was not from the Department of Trade and Industry. On the substantive point about the price of new cars in the United Kingdom, a Competition Commission inquiry into that matter produced a clear report and we accepted its recommendations. Having had such clear recommendations from the Competition Commission, it would have been a terrible folly to ignore its precise findings. As a result, car prices in the United Kingdom are down by about £1,100 on average, which means that there will be a competitive environment. If we look at the reasons given by General Motors worldwide for the decisions taken yesterday, we can see that the United Kingdom Competition Commission report was not a major factor.
§ Judy Mallaber (Amber Valley)
Will my right hon. Friend confirm that the same package of help is being made available to the 2,500 workers who have been made redundant from the clothing division of Coats Viyella, including 500 in my constituency which were announced on Monday? Those workers have also been treated shabbily by the company in terms of consultation and information. Tens of thousands of jobs have been lost in the clothing and textile industry, 500,000 of them under the Tory Government. My constituents and others in the industry are angry that they do not get the same attention as others in the national media. They feel that it is because the industry has a majority of women workers.
§ Mr. Byers
It is a question of national media attention. As my hon. Friend knows, largely because of the work that she and other hon. Members who represent textile constituencies have done, this is an issue in which I have 654 been involved for some time. I can inform her that the full range of services and facilities will be made available from the Employment Service to help those who might be affected in the way that she has outlined. As I told her at Question Time last week, we always stand ready to meet constituency Members of Parliament to discuss continued Government assistance.
§ Mr. Christopher Chope (Christchurch)
The Secretary of State has been at pains to avoid any personal responsibility for this disaster for British manufacturing. Will he show his sincerity and his belief that we need to protect British manufacturing by assuring the House that, when the Health Council meets in Europe tomorrow, he and the Government will vote against the tobacco workers directive, which will threaten between 2,000 and 10,000 jobs in tobacco manufacturing in this country? If he votes in favour of the directive, he will be voting in favour of abolishing 10,000 jobs in tobacco export and manufacturing.
§ Mr. Richard Burden (Birmingham, Northfield)
I can tell my right hon. Friend and my hon. Friends in Luton and surrounding constituencies that, with Longbridge in my constituency, the people of the west midlands well understand what they will be going through and the anger that will be felt about the way that General Motors announced its decision. I imagine that they will take as dim a view of the cheap political point scoring that we saw from the Opposition spokesman, the right hon. Member for Wells (Mr. Heathcoat-Amory), as they did over Rover where the official Opposition had nothing constructive to say.
The motor industry will remain a strategically important industry for this country and, if multinationals are making this sort of decision, we need to find ways of playing to our strengths. We must look at niche and medium-volume production, as we are doing successfully in Longbridge and look to an expansion of work in telematics, motor sport engineering and high performance engineering. Those are areas in which Britain already leads the world and we can do a lot more to build on and reinforce our motor industry, which is so strategically important to Britain.
§ Mr. Byers
My hon. Friend makes an important point about not neglecting the fact that there are areas of strength within the car industry in the UK—not only the niche markets to which he has referred, but companies such as Peugeot, which is doing well in Coventry, and Ford with Jaguar and with Land Rover in Solihull. There are some solid areas of car production in the UK. We need to build on those strengths.
My hon. Friend makes an important point about how we can develop beyond simple car production and manufacture to look at new areas and new techniques, genuinely playing to our strengths. There is real potential to do that, but there is little that the House can do today apart from reflect on the difficult situation that will be faced by thousands of hard-working people and their families in Luton and the surrounding communities. What the House must do, and what the Government certainly 655 will do, is ensure that we are at their side through this difficult period. We will not walk away from the problem. We will not leave it just to the market. We will work with those people to provide them with new opportunities for the future.
That is an active role for Government to play. It is the right role for Government—not second guessing commercial decisions by multinational companies, but working with people who are affected by the changes that have to take place in a global economy.
§ Mr. Lindsay Hoyle (Chorley)
I am a member of the Select Committee on Trade and Industry, which has met with Vauxhall and Nick Reilly. As late as October, there was absolutely no hint of restructuring, or possible closure of Luton.
Obviously, everyone is amazed by the sudden announcement and the sheer volume of jobs that will be lost not just in Luton, but throughout the supply chain, which will affect the whole of the United Kingdom. I hope that my right hon. Friend will ensure that there will 656 be help not only to Luton, but to all the suppliers within the chain. I still believe that we should not roll over so quickly. We should take up the challenge with Vauxhall and see what else can be put there—see if other production can be moved in. After the success that he had with Rover, I do not think that we should give up quickly.
§ Mr. Byers
The supply chain will be an important area. Our experience in other situations, whether Ford at Dagenham or Rover at Longbridge, showed that, often, the supply chain was the most vulnerable sector; it felt the immediate consequences of a major announcement. Because of the relatively long lead-in period in relation to the announcement on Luton, there are greater opportunities to ensure that the difficulties elsewhere do not occur on this occasion, but my hon. Friend is right to make the point. Obviously, our attention is focused on Luton and on those directly affected by the announcement. That is understandable and right, but we need to be conscious of the impact that the announcement will have on the supply chain, which is why we are specifically putting in place a programme to help suppliers to diversify, to reskill and to retool where it is appropriate for them to do so.