HL Deb 20 December 1990 vol 524 cc917-20

11.33 a.m.

Lord Molloy asked Her Majesty's Government:

Whether they will consider having discussions with British Aerospace and the relevant trade unions and professional associations with a view to helping those who will be made redundant by British Aerospace in the near future.

The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)

My Lords, local officials of the Employment Department, Employment Service and relevant Training and Enterprise Councils have held discussions with representatives of the plants concerned to discuss how best to help those affected by the restructuring recently announced by British Aerospace.

The Employment Service has already announced a package of help and advice which will include mini jobcentres on site, special redundancy counselling and a vacancy canvassing service. The Training and Enterprise Councils will focus on the training needs in their particular areas consequent upon their restructuring.

Lord Molloy

My Lords, I am grateful to the noble Viscount for that reply. I know that he will understand that everyone will hope that something will be achieved as a result of what is being done for British Aerospace. However, does he agree that it does not appear that that will be possible, bearing in mind the statement made this week by the Chancellor, Mr. Lamont, that unemployment figures will rise dramatically? Does the Minister not agree that behind the word "figures" are human beings—people with families—whose standards of living will be drastically reduced and who will have grave worries imposed upon them because unemployment is rising to its highest level for nine years? Does he agree that what may be done for British Aerospace will be trivial in relation to the massive unemployment that will result unless there is a dramatic change in the Government's policy?

Viscount Ullswater

My Lords, the noble Lord will appreciate that staffing levels and company structure are a matter for the commercial judgment of companies themselves. It is inevitable that companies must rationalise to maintain their competitiveness. It would be counter-productive for the Government to interfere in such a normal commercial practice. However, government programmes exist to alleviate the effect of job losses and to ease adjustments. They include measures by the Employment Service, the DTI Enterprise Initiative and the Department of the Environment urban programmes.

Lord Carter

My Lords, is the Minister aware that there is considerable anxiety that the BAe factory sites at Preston and Kingston may be sold off for property development, in which case they would not be available to provide alternative employment? Since it is a Government decision which has caused the problem, does the Minister agree that it would be appropriate for British Aerospace to use part of the very substantial sweetener it received from the Government when it bought the Rover Group to finance alternative employment for its extremely skilled workforce?

Viscount Ullswater

My Lords, the noble Lord touched on the most important point at the end of his question. We do not have any information about those who will be made compulsorily redundant by the company. However, it has said that it will close a works in the Preston area—at Warton—and at Kingston. It will release people onto the labour market. Those people will be mostly skilled workers. The noble Lord is no doubt aware that in some areas of the country there is a shortage of skilled workers. It is very much hoped that the greatest proportion of those involved will have no difficulty in finding further employment.

Lord Boyd-Carpenter

My Lords, is my noble friend aware that the Kingston works are served by a highly experienced workforce which has been in the aviation industry for a very long time, and that its dispersal would amount to real damage to our economy?

Viscount Ullswater

My Lords, I thank my noble friend for his comments. I hope that the skills that the workforce in the Kingston works has in abundance will not be lost to the economy or to the country. Kingston is an area of very low unemployment and there should be great opportunities in that area for redeployment.

Lord Taylor of Blackburn

My Lords, it is all very well to give answers in the way the Minister has this morning but is he aware that it is not easy, even for skilled people, to uproot their families, sell their houses and move, especially when mortgages are so high and there is widespread difficulty in obtaining houses? There is also the question of children's education. One cannot just move overnight. Does the noble Viscount not recognise that the difficulties in the Preston area of East Lancashire are tremendous?

Viscount Ullswater

My Lords, I agree entirely. I did not seek to downgrade the problem. Of course there will be great difficulties in an area such as Preston, where up to 3,000 people may lose their jobs. However, we do not know the precise numbers yet. I suggested that those with skills will have a very much better chance of finding work. I also said in my first Answer that the Employment Service is now taking steps to make certain that other jobs are available. That is in addition to the trouble being taken by British Aerospace to try to alleviate the problem.

Lord Nugent of Guildford

My Lords, does my noble friend agree that we should be indebted to the Government for disposing of Rover to British Aerospace to enable the company to diversify to some extent from being a single product industry? Does he agree that the company is succeeding to a significant degree, and that that will undoubtedly help to ameliorate the cuts on the aircraft side which are inevitable and to preserve some employment?

Viscount Ullswater

My Lords, that is entirely true. My noble friend has put his finger on the point. The company is anticipating the reduction in orders for Tornados. However, the anticipated loss is only some 7 per cent. of the amount that it received from the Ministry of Defence and it has diversified into other areas as well.

Lord Molloy

My Lord, is the noble Viscount aware that leading figures in banking, commerce and industry have expressed grave apprehension about the possibility of our nation sliding into a serious slump? Is he further aware that only today the adviser to the Prime Minister, Sir Alan Walters, said that if there were not to be a dramatic change in government policy we should be into a very serious slump in a matter of months rather than years?

Viscount Ullswater

My Lords, the Government have already taken serious steps to combat the high inflation which is the root cause of many of the problems that we face. The RPI is now coming down and will come down in the months to come. That is the best way to cure the problems and leave industry in a much better position to face the future.

Lord Mellish

My Lords, will the Minister say something about the allegation made on television, which the general public has to take as its guide and mentor, to the effect that British Aerospace sends a great number of orders overseas for other people to do the work although its own workforce could do it? Is that true or not? If the allegation is not true, does the Minister agree that it ought to be denied?

Viscount Ullswater

My Lords, I am not aware of the problem that the noble Lord brings to my attention. However, I shall make inquiries and certainly write to him.

Viscount Caldecote

My Lords, is my noble friend aware that exports of aerospace products exceed imports by some £3.5 billion a year and that British Aerospace contributes a very large proportion of those exports? In view of that fact, will he and his right honourable friends do everything possible to help British Aerospace obtain new contracts and so continue that important contribution to the balance of payments problem which is so significant at the moment?

Viscount Ullswater

My Lords, of course British Aerospace is a major contributor to our exports. The company is in good shape. Obviously all the contracts put forward by the Ministry of Defence are made on a competitive basis. However, I expect that British Aerospace is in a good position to win contracts.