§ 4.40 p.m.
§ LORD WILLIS rose to ask Her Majesty's Government whether, in view of the changed circumstances, they will review the decision to move the Royal Mint from its traditional home in London to South Wales. The noble Lord said: My Lords, I think I should start by apologising to the House, because I had this Question down for debate some months ago, but on that occasion as I came in from the tea-room I found that the House had escaped me and gone home. However, I think the matter is of some importance; I decided to keep the Question on the Order Paper, and I am happy to bring it to the attention of your Lordships' House to-day.
§ Perhaps first of all I can give your Lordships a brief history of the background of the affair. In April, 1967, the then Chancellor of the Exchequer announced that the Royal Mint would be transferred from its traditional home in London to new and modern buildings in Wales, and that the present Royal Mint, which has been at Tower Hill for over 1155 700 years, would be closed. The transfer was to be arranged in two stages, to be completed by 1973. Stage one has already been carried out, and the new Mint in Wales, which has so far cost £3½million, is already in production. A number of reasons were given for the transfer, the most important of which were as follows: first, that the world demand for new coinage, plus our own decimalisation programme, would create a huge need for enlarged capacity; secondly, that the Mint on Tower Hill was antiquated and short of space for development, the cost of modernisation would be too great, and even then the capacity would not be adequate to cope with the expected new world demand; thirdly, that Llantrisant in Wales was in a development area, the move would help to reduce local unemployment and was in line with the general Government policy of decentralisation.
§ Those were the reasons which were put forward, and they were accepted by all parties at the time, although, quite naturally, some doubts were expressed—and continue to be expressed—by the workers at Tower Hill. At that time there was a different Government in office, and there was some doubt and some criticism of the proposals made by Members who support the present Government. However, the overwhelming and seemingly irresistible argument was the first that I have mentioned: that of capacity for production.
§ At the time it seemed particularly strongly based. There was a world boom. The order book at the Royal Mint was full to overflowing. A number of factors were responsible for this big upsurge. For example, the American Mint was closed, or virtually closed, for rebuilding, and orders were thus being diverted here. Secondly, a number of newly independent countries required fresh coinage. Thirdly, we were changing our own coinage from silver to cupro-nickel, and we had decimalisation to look forward to. However, my Lords, in the event this world boom was short lived, and by the beginning of 1968 most overseas orders were completed and production had to be throttled back. So the first and most important reason for the transfer of the Mint from Tower Hill to Wales had really been wiped out. There was no more a 1156 world boom. Output in 1968 did not increase; it simply managed to hold its own at about 1,400 million coins.
§ A most significant fact was that in 1966 our own Royal Mint produced about 75 per cent. of total orders throughout the world, but by 1968 this figure had already fallen drastically. In 1968, figures for export were only half the 1967 figures. At present, the programme for the minting of decimal coinage is almost complete and there are few export orders. The Mint at Tower Hill is running at about one-third of its capacity, or less, while there seems little prospect for work at Llantrisant when the programme is finally complete in a few weeks' time. Thus in the past two to three years the main argument for moving to Wales has been, as I say, wiped out. It is regrettable, but world demand has not come up to our expectations and, on the basis of present orders and future expectations, the Royal Mint at Tower Hill would be completely capable of fulfilling all contracts.
§ Of course, the important question is this: is it merely a temporary decline in world demand, or will it continue? This is clearly a crucial question. It has been argued, with some justification, that the demand for world coinage follows a pattern of troughs and peaks and the present sharp decline will be arrested. There was a peak in 1952, which fell away to less than half in 1955, to rise once more to a higher level in 1961. The last Government argued that this pattern would continue, and they based that view on "the evidence of economic and demographic trends". That evidence, we were told, indicated that, in spite of fluctuations, peak demand and average demand would continue to rise.
§ I should like to ask the Minister whether he has studied this "economic and demographic" evidence and whether he could tell us what it is, where it came from, and why it has never—up until a few months ago, at least—been quoted in evidence. Let us assume that the present position is only a temporary dip in the chart and that the figures will start to rise again. I will add, incidentally, that there is as yet no sign of this—not even a tiny glimmer of light on the horizon. Nevertheless, let us assume that to be right. What guarantee have we that 1157 the conditions of 1966, when we produced the vast majority of world orders, will be repeated?
§ One of the most significant developments in the past two or three years seems to have been overlooked. The virtual monopoly of our old position has been challenged. The American Mint has been modernised and reopened, and is now challenging for world orders. New Mints have been opened in France and Australia. Other countries are considering doing the same. So we have to face the fact that competition is becoming fierce, and will become fiercer yet. We do not need to be afraid of it—we have the best craftsmen in the business, with generations of experience behind them—but we should be whistling down the wind if we imagined that we could ever again be in a position to claim three-quarters of the available orders in the world. It just cannot happen.
§ If we were to take a realistic assessment of the situation to-day, if we were starting from scratch, what kind of Mint should we go for? What kind of operation would give us the maximum viability in the long run, on the basis of present world trends? We should go for a medium-sized operation—one which was capable of making largo runs but which was also geared to small runs too and which could fulfil small orders on an economic basis. We certainly should not want to go for a huge plant which depended on massive production.
§ We have just such an operation at Tower Hill, one we are proposing to close down and we are proposing to disperse the skilled craftsmen on which really the Mint depends. The building at Tower Hill is, admittedly, an old-fashioned one, but in 1966 something like half-a-million pounds was spent on modern presses, and a further half-a-million pounds was spent on overhead spacing of rooms. And it managed to turn out in that year a record figure of orders—a figure which is unlikely to be repeated. So, old-fashioned or not, it cannot be so antiquated as some would have us believe. As for space, I understand that the Government owns land around the Tower Hill site and has recently acquired more. But, even so, I doubt whether this land would be necessary, because, as I have indicated, the 1158 present Mint at Tower Hill could carry out all that is necessary and no vast extension seems to be likely to be required in view of the decline in world demand, which seems to be reasonably permanent.
§ Therefore, what I am saying in brief, my Lords, is that a decision which seemed right in 1967, seems to be wrong—and very wrong—in 1971. I am not here to start a fight between the Welsh and the Cockneys, and I do not want to make invidious comparisons between the workers at Tower Hill and those at Llantrisant, but I think we ought to accept the fact that the men at Tower Hill have a long history of association with the Mint and have developed not only special skills but a special kind of spirit. They are not simply electricians or toolmakers, or trained men of other kinds, who can move easily from one factory to another: they have a special expertise which is associated with coinage. And it goes without saying that if this transfer finally goes through we must lose some of that special skill and spirit—something that cannot be replaced. We shall be losing something, and this, in itself, will not help our fight for world orders.
§ The last Government were generous in their offer to fit all skilled men up with a job at Llantrisant and to give financial assistance towards house purchase and moving. But the last Government, and the present Government, can consider themselves fortunate that not all the men who were covered by this offer accepted it, for had they gone down there there would have been very little work for the Welsh people on the spot because of the decline of orders. The men concerned had these grave doubts and did not go—and for very good reason. They took the view that if the decline in the world demand for coinage continues there will not be enough work for the people already working dawn in Wales, let alone those people who might go from Tower Hill. And some of them might find themselves in a position that, having moved from London, they then found that they had to be laid off. This certainly would not help the unemployment situation in Wales.1159
§ So I come back to this basic point. It is difficult, I know, for Government Departments to go into reverse, but there seems to have been an error in estimation here. In these circumstances, and in view of the many doubts, would it not be reasonable to hold a fresh inquiry into the whole business, and to ascertain, in the light of present and future prospects of coinage demand, whether the move can be justified—because the situation seems to have changed? It will help nobody if the policy is wrong. It will not help the country; it will not help the export trade; it will not help the men at Tower Hill, and it certainly will not help the people at Llantrisant. It does not make sense to send a non-developing industry to a development area at enormous cost in materials and wastage in human terms. There is a case for reconsideration, and I ask the Minister to make that reconsideration.
§ I would ask him also to remember, as I know he does, that we are not talking simply of coins; that a large number of human beings are involved here, and for a long time now many of those human beings have been living in a state of uncertainty about their future. They face special problems because many of them are classified as civil servants and the redundancy payments for which a worker in private industry qualifies may not apply to a skilled worker at the Royal Mint. He may have to wait until the age of sixty before getting a pension, or a payment in lieu of pension.
§ Some men came to the Royal Mint from Woolwich Arsenal when it closed, on the understanding and with the hope that they would have long-term employment. Are they to be two-time losers? There is the position of the coiners, the specially highly skilled men. They have been told that they might be able to safeguard their pension rights by transfer to other Government Departments. But in most cases the transfer would involve the taking of semi-skilled work, at semiskilled rates. And as their pensions are calculated on the rates of pay for the last three years of service, they would stand to lose considerably. The same applies to certain shift workers. So there is a case here, too, for urgent consideration 1160 in order to remove some doubts from the minds of these men.
§ I know that the Minister, had he had his own way, would pursue a generous policy. But it is not just a question of generosity; it is also a question of wisdom. I have spoken to some of these men, and I have read some of the correspondence between their representatives and Government Departments, and it is difficult to escape the conclusion that these workers have been made the victims of mistaken policy, of a piece of overestimation; and they are naturally bitter about it. They are victims also of a policy which sees them as units of labour, by people who talk of labour mobility. I often wonder what goes on in the heads of these miraculous planners and experts, whose record, I must say, in economic terms in this country does not seem to be a particularly successful one. Do they really expect middle-aged craftsmen to be mobile, to pull up roots and move around like pawns in some economic game? Would they themselves do it?
§ I should like, finally, to ask the Minister the following questions. If this transfer goes through, can he give the workers a firm date for the closing of the Royal Mint, so that they know where they are? Secondly, can he give firm assurances that workers made redundant will be treated not less fairly than those in private industry? Thirdly, can he give an assurance that men who transfer to other Government Departments, and who may be forced to accept semi-skilled and lower paid work, will not lose financially in terms of their eventual pension?
§ 4.55 p.m.
§ BARONESS PHILLIPS
My Lords, it is always a pleasure to listen to the noble Lord, Lord Willis; and, as usual, the way he has presented his case is most interesting, very factual and compassionate. My intervention will be a short one because it is my duty merely to make a statement of the situation as the official Opposition sees it. The decision concerning this move was taken by the previous Government after very long and careful deliberation. I remember that when the Statement relating to it was repeated in your Lordships' House it was warmly welcomed by those Members of the House who come from Wales. In fact, there was no dissenting voice, as Hansard 1161 shows—neither from those likely to be affected by the move into Wales, nor from those who were concerned with the workers at Tower Hill. This decision of the previous Government may well also be, so far as I know, in line with the policy of the present Government—to decentralise and to spread employment throughout the country, particularly to those areas where the opportunities for work are not as good as they are in the Metropolis.
I must say that I spend a large number of hours on committees and organisations telling people that there is a great, pulsing world outside London and that there are many opportunities which should be provided for the people who live in various parts of the United Kingdom, particularly those which in the past have not had a very good record for work. I wonder whether the noble Lord, Lord Willis, read just this week the statement in the Press that certain trade unions from South Wales were seeking an opportunity to talk to the Minister for Wales on the question of further employment. I notice that he said that it was changed circumstances which made him feel that there was a reason to reconsider the original decision.
I shall be interested to hear what the Minister has to say on several points, but I am not sure that he has completely made out the case of these changed circumstances. He will know as well as I that we live in a system where we are subject to slumps and booms, and as I understand it there is not at present any sign of people at Llantrisant, certainly, being without employment—but this is subject to any reply the Minister will give us. As the noble Lord knows, employees who lose employment in the circumstances he has described come under the scheme for redundancy payments. The questions he has put are very pertinent, and I hope they will receive a very full reply.
My Lords, I would certainly not want my noble friend to feel that there is any lack of sympathy for the workers at Tower Hill. I am sure that he knows this to be the case from our side of the House. I shall listen with great interest to the Minister who is to reply, because I am certain that he will deal with this point and several others that have been raised. But I should like to repeat that, 1162 so far as Her Majesty's Opposition is concerned, we stand to the decision originally arrived at by the previous Administration.
§ 5.0 p.m.
§ BARONESS WHITE
My Lords, naturally anyone must listen with great sympathy to the case that has been put forward by my noble friend Lord Willis. Where one is dealing with transfers of workers, whether they are transferred out of London or out of South Wales, one recognises that there are many human problems and one must think of them with sympathy. But I must say that, having listened to Lord Willis, one would almost suppose that nothing had yet happened at Llantrisant and that this matter was still an open question on which no concrete action had ensued. This, of course, is far from the case. In fact Llantrisant is in full production. I am told that peak production was reached last September; and there is a fine new factory there, with new plant and machinery.
It is a very considerable public investment, which is already working, and a considerable amount of money and effort has been put into training workers in South Wales in these new processes. So we are not speaking of a decision that has not yet been implemented. The first phase of the move from Tower Hill to Llantrisant has already taken place; and if it is the fact, as the noble Lord, Lord Willis, suggests—and I do not for one moment dispute his argument—that the position in the market for coinage, and particularly in the export market, is at the moment less active than was perhaps calculated in 1967, that does not mean that there is not work to be done. If any adjustment has to be made, surely the adjustment should be in modifying the second phase.
May I draw the attention of your Lordships to the employment position at the present time at Llantrisant? I am told that there are some 147 staff and 354 industrial workers now employed there. Of the staff, approximately 70 of the staff are local persons; others have moved from London to give their expert advice and skill. On the industrial side, out of the 354 workers now working at Llantrisant, 325 are local. Therefore, as I have said, they are already trained 1163 and doing the job. As I understand the position, if stage 2 were fully carried out it would involve some 250 staff and some 550 industrial workers. I am not sufficiently conversant with the immediate prospects to know whether stage 2 needs to be modified in any way. All I am saying is that stage 1 has already been carried out. There is this very fine new factory complex, and from the point of view of those of us who are concerned with employment in South Wales it is extremely important that we should keep it.
The Llantrisant factory is just South of the Rhondda Valley, and anyone who knows South Wales will know that the Rhondda Valley has been a problem, so far as employment is concerned, for many years. Therefore we rejoiced unreservedly when we heard that the Royal Mint was to be transferred to South Wales and was to bring there a new industry which would provide skilled work in modern conditions within reasonable travelling distance of the Rhondda Valley.
If those who had come from London had been asked to live in the Rhondda Valley, I could have understood that they might have hesitated. Those of us who are familiar with the Welsh valleys appreciate that, although they are not beautiful, the hearts of the people who live there are warm, and there is a very close community life—though, of course, it might not appeal to those who have come from London. However, I believe that those who have made the transfer from London have for the most part been able to settle happily in new housing and in pleasant surroundings—and that applies particularly to the children. They are only some eight or nine miles from Cardiff, so that they have ample opportunities for shopping and entertainment, and so on. They are not by any means in the wilder parts of Wales.
It seemed to all of us who are concerned in any way with South Wales that the transfer of the Royal Mint was a tremendous encouragement, after years and years of our trying to find suitable modern employment for those for whom the coalmining industry no longer offered opportunities. At the present time, we still have more than 5 per cent. unemployment in the Rhondda and Pontypridd exchange area, and therefore, although 1164 we are delighted to have the employment which the Royal Mint has already provided, it will be appreciated that we are anxious that there should be, if possible, further expansion there and further opportunities.
The Royal Mint is not isolated. There are other modern factories on this estate, and therefore there are other opportunities. But we feel that the Royal Mint is a very important element in the opportunities provided in Llantrisant. There is discussion as to whether or not there should be a New Town in Llantrisant. I do not know whether the Minister wishes to say anything about that. I have a notion that perhaps his Administration is not quite so keen on New Towns as we were. But, be that as it may, it is an area to which I think one can go with satisfaction for one's work, and with the pay and conditions available.
So I can only repeat that, while we have great sympathy for the individuals concerned at Tower Hill (and it is always difficult when one has a period of change of this sort), nevertheless I think it is fair to say that the burden of unemployment which has been carried for a generation or more in South Wales is such that the people at Tower Hill should have some imagination and sympathy with their fellow workers in the South Wales valleys. The rundown of the coalmining industry and the rationalisation in the steel industry have meant that, despite all the effort that we have put into South Wales within the last few years, we have been running very hard indeed to keep in the same place: because, however much industry one was able to introduce, all the time one has had the outflow of people from the coal and steel industries, in particular, and also, to some extent, the transport industry—the railways and the docks—which is so much dependent upon the heavy industries.
We have had a rundown in all our basic industries, and therefore I hope that no one will begrudge us this particular industrial opportunity that has been offered to us. Were it the position that nothing had been done, I think there would be far greater cause for my noble friend's plea; but in fact, as I have said, a substantial start has been made. People have been trained; the plant is there, and the people are working there, and in my 1165 view it would be a retrograde step to reconsider this move.
§ 5.8 p.m.
§ THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE)
My Lords, I am grateful to the noble Lord, Lord Willis, for giving us this opportunity to discuss the Royal Mint. It is the second occasion on which he has attempted to raise this question, and I think perhaps his case has lost some of its strength by virtue of the time that has passed and also by virtue of the fact that we now have in this House the noble Baroness, Lady White, who has just made a most powerful speech. I know that the noble Lord has raised this matter because he has sympathy with some of the difficulties of the workers at Tower Hill, but in the course of my speech I hope to satisfy him on some of the points which he has raised.
My right honourable friend the Chancellor of the Exchequer has already given very careful consideration to suggestions that the decision to move the Royal Mint to Wales, which was announced in April, 1967, should be reconsidered. Indeed, a review was carried out by the present Government as soon as we came into office and we concluded that the decision made by the previous Government was right and that the transfer of the Mint to Wales should proceed.
May I now come to some of the arguments put forward by the noble Lord, Lord Willis, and first the one on which he placed the greatest emphasis; namely, the argument in relation to exports. He claimed that the Tower Hill Mint is capable of coping with the lower volume of export orders which he predicted. The pattern of export orders is naturally not static but it is possible to detect a general trend. The Mint undertakes coinage for some sixty countries. We must take into account the fact that some countries have had two or three re-coinages within a matter of ten years, and it seems fair to assume that re-coinages will continue to make a considerable contribution to demand. In terms of total world orders, demand has about doubled every six and a half years, and increases in population and rising standards of living are likely to support this trend. The use of coinage is far 1166 higher in developed than in developing countries, and this also suggests an expanding world market in the future.
The Estimates Committee, which looked very closely at the Royal Mint's affairs in 1968, reported that in their view the Royal Mint's estimates of this upward trend might be considered modest, and certainly nothing of significance has occurred in the sphere of coinage since 1968 to invalidate that view. It is significant that although export orders handled by the Royal Mint and its subcontractors fell to about 700 million coins in 1968 and 600 million in 1969, the figure for 1970 was over 850 million, and I would suggest to the noble Lord that this is more than a tiny glimmer of light.
It has been suggested that the long term will show a decline in export prospects now that some newly independent countries have Mints of their own. The fact is, however, that although a few customers of the Royal Mint have built Mints of their own, most of these rely on imported blanks. The effect on the Mint's export trade could be in part a switch from coin to blanks rather than a total loss. Moreover, none of the new Mints is large enough to deal with a recoinage in reasonable time, and re-coinages have always accounted for about half the Royal Mint's exports.
It has also been suggested that the Royal Mint has failed to undertake any proper market research and that its forecasts are mere expressions of hope. On the contrary, I can assure the House that considerable market research has been undertaken by the Royal Mint, and also by one of the private mints with which the Royal Mint co-operates, and by Messrs. Thomas De La Rue International Limited, who act as the Royal Mint's agents in many parts of the world. On this evidence the Government consider that there are reasonable grounds for optimism about export prospects, and there is no reason to suppose Chat domestic demand will not also continue to grow. Of course demand will fluctuate, as it always has, but the Government are satisfied that there will be enough work over the years to keep the Llantrisant Mint busy.
May I turn now to the argument that the valuable skills which have been built up at the Tower Hill Mint are being 1167 dissipated and that the lack of skill at Llantrisant will make it impossible for the new Mint to maintain a successful export effort. I should like to pay tribute to the workers at Llantrisant. They have done a fine job in producing some 3,000 million decimal bronze coins in a little over 18 months, which is substantially better than the management had expected. Nor does the reject rate for coins at Llantrisant differ significantly from that at Tower Hill. The management are satisfied with Llantrisant's ability to cope with normal exports, most of which are round coins that do not present significantly different problems from those of the United Kingdom decimal bronze. There is, of course, the difference that most export orders are much smaller than large decimal production, but dealing with this is mainly a matter of organisation.
There remain the shaped and other special coins. Clearly, skill in this work cannot be achieved overnight, and the Government accept that much valuable skill still resides at Tower Hill. However, the plan always has been to transfer work in stages and on the whole to leave the more complex jobs until last. Past evidence on the ability of the men at Llantrisant to learn new skills encourages the Government to believe that, given time, they will master these higher skills also, although, of course, the transfer of a few more craftsmen from Tower Hill would be helpful. I cannot give the noble Lord the precise date for which he asked for the closing of Tower Hill. This will depend on stage 2 at Llantrisant, and we are still considering, as the noble Baroness, Lady White, suggested we should, what stage 2 should comprise and when it should come into operation. Now may I finally say a few words about the human problems involved?
§ LORD WILLIS
My Lords, will the noble Lord allow me to intervene? He will appreciate that the problem facing some of the workers at Tower Hill who do not want, for various reasons which the noble Lord will understand, to go to South Wales is an acute one, not helped by the overhanging uncertainty about what stage 2 will consist of and when the Mint will be closed. May I ask the noble Lord whether he could give any 1168 possible date when the review of stage 2 will be completed so that the uncertainty overhanging these workers can be ended?
§ LORD ABERDARE
My Lords, I am sorry that I cannot give any specific date. I should have thought, however, that for certain reasons the longer Tower Hill continues the more satisfactory it will be for some of the workers there. So far it has been possible to run down the programme at Tower Hill in a gradual way, and I should have thought that was greatly to everybody's benefit.
If I may turn now to the human problems, the move to Wales must have consequences for individual members of the staff and their families. The Government appreciate the problems that arise, but these must be balanced against the economic and practical arguments, and also against the social consequences for the people in Wales if the move were cancelled. Vigorous efforts have been made by the management to find alternative jobs for Tower Hill staff who do not wish to move to Wales. So far there has been no compulsory redundancy at Tower Hill, nor is any expected in the immediately foreseeable future.
Some 220 of the present staff on Tower Hill were recruited after the decision to move to Wales was announced and were expressly informed at the time of their appointment that the employment offered was strictly temporary. If it were necessary to introduce compulsory redundancy at Tower Hill it is this group who would be affected in the first place.
The noble Lord asked about redundancy terms. Those who leave Government service on redundancy are at present enabled to draw benefits for which they are eligible either under the Superannuation Act or by analogy with the Redundancy Payments Act, whichever is the more favourable. But in the meantime representations have been made by the trade unions that better terms should be forthcoming. The treatment of civil servants who may become redundant is at present the subject of negotiations between the Civil Service Department and the National Staff Side and Trade Union Side. Royal Mint staff will benefit from any improvement in any new terms which may be agreed centrally. A deputation from the trade unions at Tower Hill saw the Chancellor of the Exchequer on November 19 last and pressed for an 1169 improvement in the redundancy terms. In his reply the Chancellor expressed the expectation that the new arrangements would meet most of the points which were causing concern to the Tower Hill staff. He pointed out that compulsory redundancy was unlikely at Tower Hill in the immediately foreseeable future, so it should be possible for the trade unions to await the conclusion of the central negotiations without any harm to the interests of their members. But he undertook to look at the position again should the situation change.
The noble Lord also asked me about pensions and whether Royal Mint staff who transferred to other Government Departments will be able to maintain their pension entitlement. The payment of pensions is governed by the Superannuation Acts, which provide that the qualifying figure is the average pay over the three years preceding the formal date of retirement. It is not, therefore, possible to guarantee that Mint employees will necessarily retain the same pension entitlement on a change of employment within the public service. Every effort, however, will be made to place staff in jobs carrying a rate of pay commensurate with their pay in the Royal Mint. In calculating pension entitlement, service in the Royal Mint will be aggregated with service in the department to which the Mint employee transfers, provided that service is continuous.
To sum up, the view of the Government is that it is right to concentrate production at Llantrisant which is in a development area and where there is new machinery and room for an efficient layout of all processes. The necessity of replacing the premises on Tower Hill, which are congested and out of date, was recognised nearly a quarter of a century ago when output was very much lower than is now required.
The Government have every sympathy with the men on Tower Hill who face difficulty because of the move. But the detailed review that we undertook immediately after coming into office convinced us that the transfer of the Royal Mint to South Wales should go ahead and we remain of that view. Further inquiry would serve no useful purpose and would only create uncertainty where none should now exist.