§ 4.34 p.m.
§ LORD STONHAM rose to ask Her Majesty's Government if they are aware that skilled aircraft workers, now becoming redundant at factories at Christchurch and Belfast, are accepting engagements with Fokker of Holland under a ten-year guarantee, and what steps are being taken to maintain an adequate British aircraft industry capable of utilising British skills in Britain. The noble Lord said: My Lords, no one would dispute that in aero engines, aircraft design and construction this country for decades has led the world or is among its leaders. The very names of the aircraft read like a roll of honour to the men who designed, built and flew them; men who, as designers, technicians and craftsmen, formed teams that were unsurpassed anywhere. We still have the men and the know-how, yet the question I have addressed to Her Majesty's Government lifts the curtain on what I regard as a tragedy: the rundown, possibly the destruction, of out once great aircraft industry.
§ It is a tragedy which, in my view, springs from the unparalleled muddle by the Government, the inefficiency of some managements, and the apparent disregard in some quarters for the well-being of the industry and the men employed in it. It has already resulted, and is resulting, in thousands of human tragedies, homes broken up, a lifetime's effort wasted. Men with high skills and qualifications peculiar to the aircraft industry are becoming virtually unemployable in their spheres, their career snuffed out, as it were, in a puff of redundancy. If they are too old to acquire new skills or to emigrate, they can take their place on the scrap heap. The younger ones, highly qualified technicians and skilled workers, are seeking employment overseas in the factories of our keenest competitors.48
§ No one, of course, can possibly object to a man's going overseas to any country to better himself. But what I object to is the fact that aircraft workers from England and Northern Ireland are going to build aircraft in Holland, not to better themselves, but because they cannot build them here. My information comes from the factories concerned, and it is to the effect that the firm of Fokker of Holland are seeking skilled aircraft workers at Christchurch and Belfast. At Christchurch £18 a week has been offered, which with additional hotel and food allowances make a total of something like £26 a week for a week of 45 hours. These workers have been told that about 80 men can be absorbed per month—I do not know how long that will go on—and that there would be a guarantee of ten years' employment for them. Twenty fitters and sheet metal workers have already been recruited, although my information, as of to-day, is that they have not yet gone to Holland. It is understood that there will be vacancies for staff grades later on.
§ Twenty-five Belfast workers went to Holland for £9 per week plus £4 subsistence and a family allowance, coming to something like £16 or £17 per week. This indicates that the Dutch company fully appreciates the difference between the employment and economic situations in Northern Ireland and in England. I understand that some of the workers have already returned to Belfast, so possibly conditions are not quite what they thought they would be.
§ I note from the newspapers that the Fokker Company challenged the complete accuracy of my information. They say, for example, that it is a few dozen men, not 80. Well, I should not be disposed to quarrel too much with that. It does not take many dozen to make 80. They say they have not offered a ten-year guarantee. They do, however, admit that they wish to engage our redundant workers in order to relieve an acute labour shortage in the Dutch aircraft industry. This proves that a small country like Holland has more aircraft orders than her workers can cope with, whereas we have so few orders, comparatively, that we are shutting down established plants and sacking skilled workers by the thousand. I want to know why this should be.49
§ Some three or four years ago, as the House will recall, Mr. Duncan Sandys, then Minister of Aviation, launched the Government's plan to, in my own phrase, rationalise the British aircraft industry. The strongest pressure was brought to bear on the firms, and as a result we have the two big consortia of to-day, the Hawker-Siddeley Group and the British Aircraft Corporation, each incorporating many formerly independent firms and a large number of factories. Whatever misgivings some of us may have had, we had the hope that these groupings would lead to greater efficiency and thus to a greater volume of business, and, of course, employment. We had seen the tragedies of Squires Gate, the Isle of Wight and Broughton, areas whose existence to a large extent had depended on the aircraft industry, and we hoped that further similar misfortunes might be avoided elsewhere.
For a time, optimistic statements by the directors of various concerns appeared to justify this hope. For example, at the last annual meeting Sir Thomas Sopwith, the Chairman of the Hawker-Siddeley Group, was able to announce that total sales of the group for the 17 months to December, 1960, amounted to £458 million, and, perhaps more important still, that the order book at that date stood at the record total of £366 million. He also said:
We have 125,000 employees and it is on their skill and loyalty that our future depends".
I share with the people of Britain a sense of joy in the knowledge that we are now launched on a journey into tomorrow.
There was nothing in the balance sheet and nothing in the Chairman's statement to indicate that, within a few months, many of those 125,000 skilled and loyal employees were going to be launched into a journey into redundancy, but that is exactly what is now happening.
§ Just consider, my Lords, what is now happening at some of our greatest aircraft factories all in the Hawker-Siddeley group, as a result of the policy of concentration and closure. De Havilland's Portsmouth factory, which was opened in 1934 and was their Airspeed Division, is to be shut down in June, except for the toolroom and machine shop. Of the 1,800 men employed there as recently 50 as September last, some 1,500 will lose their jobs, and only about 300 will be left. During the last few years the main construction work at this factory has been on the Sea Vixen and more recently on the Trident, but the plant is capable of all types of aircraft construction, from toolroom to large airframe units. The teams are to be broken up. The plant will be closed. As yet no buyer has appeared, and one of the largest employers in the Portsmouth area will disappear.
§ With regard to Christchurch, this fine factory, which once employed 2,000 operatives, is to shut down by next July. Every week now some workers receive their notice. Its Sea Vixen work is going to the Chester factory and the Trident work is going to Hatfield. A few employees will be transferred to these factories and I am glad to say that those who own their homes will be helped to dispose of them and will receive removal and settling-in allowances. My Lords, the vast majority will get just their three days' to eight weeks' terminal pay according to their length of service, and they then face the grim task of finding employment in an area where there is small demand for their skill. Many have settled there and are buying their homes. This does not mean just the death of a factory; to some extent it is the death of a district.
§ Then there is Chester—I call it the Chester factory, although it is in North Wales, some six miles from Chester. It has a total labour force of some 4,000, including 1,630 so-called direct workers who are paid by hourly rates. It was intended to reduce the figure of 1,630 to 600 by next July, but sub-contracts and the transfer of work from Portsmouth and Christchurch have somewhat modified that position. My Lords, only a super-optimist would regard the future with any confidence, and those men who can find openings elsewhere are not waiting to get the sack.
§ This even applies to the de Havilland factory at Hatfield, which could be described as the hub of the whole enterprise, because it does the initial development work on most contracts before they are farmed out to the other factories. At present this factory has 3,500 employees. They have been on overtime and, so far as can be ascertained, there is work at 51 that factory for at least twelve months ahead. Since there is no apparent plan for the industry, either short-term or long-term, what certainty can the men have about their future when they see what is happening all around them? It is small wonder that even at this factory men are leaving of their own accord.
I think that the saddest and most discreditable story of all is that of one of the oldest and most famous of our aircraft factories, the Gloster Aircraft Company. Last August, the fears of its 3,500 workers were dispelled by the announcement of the Armstrong Whitworth-Gloster amalgamation. Everyone knew it was a shotgun marriage induced by the Government's policy of, as it were, coercing the industry to organise itself into a few large units, but at least their jobs were safe, or so they thought. Even as recently as the November issue, the Whitworth-Gloster News—that is a factory newspaper published for the employees—carried the line:
Whitworth-Gloster is among the better-placed of the British companies in the present situation, and mutual understanding and co-operation can see us through the critical times ahead. Rumours of widespread redundancy are without foundation".
That was in the November issue of the Whitworth-Gloster News, but on November 13 the directors met and subsequently announced that they had
regretfully decided that it would be necessary to close the company's Gloster works by May, 1962".
My Lords, there seems to have been a glaring inconsistency between their optimistic public statements and the state of the order book.
§ Appeals were made to the right honourable gentleman, the Minister of Aviation, but Mr. Thorneycroft said bluntly that he had no intention of interfering with "a purely commercial decision"; or of taking any steps, apparently, to get alternative work into the 600,000 square feet of factory space. My Lords, I think, and I hope, you will agree with me that this just is not good enough. If we were in the midst of a world depression there would be some excuse, but there is no excuse when other countries with less resources are busy while we are idle and doing nothing about it, in this industry.52
Your Lordships may have seen a letter in The Times on February 1 from Mr. Oliver Stewart, who lives on the Isle of Wight. He suggested that:
Britain's aircraft industry will be in a bad way if the placing of Government orders is to be determined by factors having nothing to do with the intrinsic merits of the aircraft. There would be no quicker way to debase technical quality and to put British industry out of the running for future export markets.
He instanced the choice which is apparently to be made between the Handley Page Herald, the Avro 748 and the Canadian Caribou. From such evidence as I can gather, it seems to me that Handley Page have not been allowed to demonstrate their plane or to show its qualities, and it would appear that they are being offered the alternative of amalgamating with or being swallowed up by one of the two big consortia, or of going out of business. That may be necessary—I really do not know: but we ought to be satisfied, first of all, about the qualities of the aircraft that they are offering.
§ Mr. Stewart concludes by saying that Mr. Duncan Sandys's policy of regrouping the aircraft industry in a few large units, far from being a desirable policy, is now clearly seen as being damaging, if not disastrous, to British technical ascendancy in aeronautics. I sincerely hope that Mr. Stewart is quite wrong about that; but I should like to know from the noble Lord, when he comes to reply, whether it is true that this Handley Page company have been denied the opportunity to demonstrate the qualities of their aircraft to a Government Department, and if it is true, as the Sunday Telegraph said only last Sunday, on February 4, that Mr. Thorneycroft would not commit himself when the heads of major aircraft companies asked him to give a clear-cut programme of future projects.
§ Then, is it the case that no new research and development contracts have been placed for two years? Or that Hawkers' Advanced Projects Group was recently broken up? My Lords, can we know why the Minister has so far declined to hold a conference of Commonwealth air lines, by which means sensible arrangements could be made about their future aircraft requirements, and where we could hope to get customers among our own kith and kin? 53 All these things would seem to me to be the most essential things to do.
§ And when, I would ask the Minister, will decisions be taken regarding the many operational Service requirements, to say nothing of urgent needs in the civil field? Take the supersonic airliner, for example, on which we shall possibly collaborate with France and the United States. That represents some 14½ million man-hours, of which some 12 million man-hours will be spent on air-frame construction. It is said in the newspapers that all that work is going to France. It is now being said or suggested that even the engines will not be made here: that the 2 million man-hours on the engines will not be worked in Britain. If we are going to share in this enterprise with two other countries, and presumably share the capital cost and the research cost, surely we ought to have a fair share in the work. That seems a reasonable enough proposition. I do submit, my Lords, that if decisions on this and other projects could be taken soon, it might yet be possible to save these factories and, above all, avoid breaking up the skilled teams which may otherwise be irretrievably lost.
Finally, my Lords, I would submit to the noble Lord, Lord Mills, that there are two minimum demands which, in my submission, the Government must satisfy. The first is that, with the industry, the employers and the unions, they should decide its future size, based on an agreed programme of production. That would at least enable redundancy to be handled in an orderly way, and sufficiently far in advance to find alternative work for the factories which have to become empty. The second minimum requirement, I think, is that the Government should be prepared to apply the equivalent of development area procedure (I cannot think of a better phrase to convey my meaning) to redundant plants, with the object of employing as many of the skilled workers as possible in jobs related to their skills. It must be perfectly obvious to the noble Lord that if 3,000 or 4,000 men, mostly skilled men, become redundant in a matter of a few months, in an area where their factory was the main, if not the only, source of employment, and they started their homes there, it will not be easy for them to transfer themselves, 54 their families and their possessions to other places, even if work is available.
§ The best and most sensible thing is to make special efforts, even with the employment of, as I say, the equivalent of development area procedure, to bring comparable industries to the area where those skills or skills analogous to them can be used. We are tired of hearing of the great shortage of skilled workers and of the difficulty of replacing them. Here are some who are going begging, and if the Government really mean business, if they are determined to recover the economic leeway we have lost, they will, I think, consolidate the aircraft industry and, above all, give it fresh hope, and they will make sure that no skilled worker goes to Holland, or anywhere else, simply because he despairs of a chance to employ his skill in Britain.
§ 4.57 p.m.
§ THE MINISTER WITHOUT PORT-FOLIO (LORD MILLS)
My Lords, I am glad the noble Lord, Lord Stonham, has raised this question, even if it is only because it gives me the opportunity of putting matters into perspective and perhaps dissipating some of the gloom which he seems to have spread. The noble Lord paid a well-deserved tribute to the aircraft industry, and to all those connected with it. But when he said that the present position was a tragedy and was the result of unparalleled muddle, I really suggest he does not know what he is talking about. I should like first of all to deal with the general situation, and then to deal with the position of Fokker's.
Let us just think about this British aircraft industry, and try to make some comparison with the European situation—because Fokker, of course, is part of the European situation. The British aircraft industry occupies a very dominant position in Europe. In the last eighteen months it has increased its labour force from some 280,000 people to 300,000 people; and order books actually have been lengthening. Of course, it is difficult to get fully comparable figures, but I put these figures forward so that your Lordships might have some means of comparison. The French industry, so far as I can establish, employs about 85,000 people; West Germany some 15,000; and the rest of Free 55 Europe some 40,000. I would say that the British industry is, in general, the best equipped and the most advanced technologically. It is powerfully backed by research work in Government establishments, such as the Royal Aircraft Establishment at Farnborough, and by Government spending.
I spoke to your Lordships in our civil aviation debate on November 22, 1961, and you will see that in column 929 I dealt with this question. I pointed out that the industry, on the strength of the pledges of Government support which were announced on February 15, 1960, had organised itself into groups—two fixed-wing aircraft groups, two engine groups, and one helicopter group—and was busy in streamlining these organisations to get full benefit from this plan. Then I went on to say [OFFICIAL REPORT, Vol. 235 (No. 11) cols. 929 and 930]:Unfortunately, there are bound to be some redundancies … but the Government will … keep in mind, as they always do, the needs of those who are affected. I do not think we should be surprised or dismayed, however, that for a time we shall have to grapple with this problem of redundancy. It is something that the industry must work out and with which they are competent to deal.So there is nothing new in the situation which Lord Stonham has painted in such graphic terms. I went on to say:The Government are still convinced that a substantial aircraft industry is necessary in the national interest, and that Government help is essential for the launching of new transport aircraft and aero-engine projects.Now, the object of the rationalisation of the industry was that it could become more efficient in every way, and it is not surprising that here and there it is taking steps to co-ordinate its resources. The noble Lord, Lord Stonham, said how important it was to decide with the industry what its future size should be, having regard to a five-year plan, or something of that kind. I suggest it is wrong to think of this industry as having to be of any predetermined size. The right size of the industry will vary from time to time, having regard to military and commercial needs. Government orders cannot be placed, nor can the industry be forced to run itself uneconomically, merely to maintain a labour force of a particular size. That would be gross waste of manpower and effort.
56 I should like to say here that direct Government support to the industry is on a massive scale. Expenditure on the production of military aircraft is running at the rate of some £200 million a year. In addition, large sums are being spent on research and development of military aircraft, and we are supporting transport projects to the tune of some £10 million a year. The position is not a static one; nor do I think it can be in this industry. We cannot really expect to have a five-or ten-year plan and stick to it; it is not the nature of the industry to do so.
I should like to refer to this particular case of the workers who have gone to Fokker. They are being recruited privately by the Fokker Company, but my information is that not more than twenty workers have been recruited from Northern Ireland, and none has yet been recruited from Christchurch. The Fokker concern is, in a general way, aware of the situation in these factories, and it is trying to recruit a limited number of people from them as a temporary measure. The men would receive, I am informed, British rates of pay, with lodging allowances and travelling expenses in addition; but there has never been any question of a ten-year guarantee, as mentioned in the Question. As I say, to the best of my information at present recruitment is limited to not more, and probably fewer, than twenty men.
I should like to explain to your Lordships, with your permission, the situation at Christchurch and Belfast. The Christchurch factory has been occupied by the de Havilland Aircraft Company—
§ LORD STONHAM
My Lords, might I be permitted to interrupt the noble Lord for a moment? My information from the men to-day is that twenty men at Christchurch have accepted contracts; none has yet gone. However, I hope the noble Lord will agree that that is not the limit of the Fokker Company's requirements for labour.
§ LORD MILLS
No, my Lords, I understand it is not the limit, but the number of recruits they are seeking is not large; it is quite small. I have to-day made inquiries on the subject. I was saying that the Christchurch factory has been occupied by the de Havilland Aircraft Company, which is a member of the 57 Hawker Siddeley group. They have been engaged in the production of Sea Vixens for the Royal Navy. Substantial numbers of these aircraft have been delivered, and the remaining requirements are not sufficient to keep the factory economically employed. Hawker Siddeley, therefore, decided to give up this factory, as part of their plan to rationalise their productive capacity. The Government understood and welcomed that. We think it is right that the newly formed aircraft groups should streamline their production wherever that adds to their efficiency and power to compete. At the same time, we are doing all we can to ensure that any hard-ship among the Christchurch workers will be minimised.
There is an important development here—namely, that the Beagle Aircraft Group, who have a good chance of helping our exports by the sale of light aircraft, have asked to take over the Christchurch factory and airfield. Provided that negotiations can be satisfactorily concluded, I suggest that this will result in the best use in the national interest of the assets and labour skills which are available there, although I do not disguise the fact that it will take some time for the Beagle Group to build up their production and get together the full labour force they may eventually require.
§ LORD STONHAM
My Lords, I think that I am right in saying to the noble Lord that this is not only a very welcome move, but is also immediate—almost as of to-day: it has just been announced. This is the kind of thing, that I had hoped Her Majesty's Government would try to do.
§ LORD MILLS
Yes, my Lords, it is a very recent announcement. Meantime, the Ministry of Labour have opened a special office in the Christchurch factory to do everything they can to help surplus workers to find other jobs. Shortt Brothers and Harland, in Belfast, whose labour force has remained more or less stable over the last year, are engaged in the manufacture of Belfast freighters for the R.A.F. and on a variety of other projects.
I think that we shall all agree that it would be a matter of the greatest regret 58 if skilled workers had to look for or accept work overseas because of the lack of productive jobs at home. The number we are talking about in this case, compared with the number employed in the industry, is, of course, negligible. The general situation, which is the important one, arises from our decision—or rather the industry's decision, perhaps at the Government's prompting—to streamline itself in order that it can be more powerful to engage in the research necessary and in production, and to meet what is an increasing degree of competition. Our aircraft industry, on both the airframe and air engine sides, is much too valuable for us to let it slide away. It is big; I believe that it is efficient, and the Government have already said that they will do everything to support it.