HL Deb 24 February 1993 vol 543 cc320-30

9.38 p.m.

Lord Gisborough rose to ask Her Majesty's Government whether they will reconsider their decision to transfer 182 jobs at the Royal Naval Depot from Eaglescliffe to Bath.

The noble Lord said: My Lords, as part of Options for Change the Armed Forces Minister took a decision in December to relocate 182 civilian jobs in the Ministry of Defence establishment at Eaglescliffe to Bath. As most of the people who held the jobs in Eaglescliffe will not have the opportunity to transfer, there will be a total loss of 180 jobs, 120 civil servants becoming redundant, and only 30 moving with their work.

There is no alternative Ministry of Defence workplace in the area and the prospects for re-employment in the Cleveland area are bleak. The social consequences of unemployment and the effects on individuals are well known. But they are particularly difficult to accept when the people concerned have been loyal, dedicated to government service and responsive to the supply line needs of our Armed Forces overseas during recent conflicts.

Cleveland has suffered job losses in heavy manufacturing industry over the past two decades. It has a long record of persistent levels of unemployment which is among the worst in the country. It desperately needs to diversify into white collar areas of employment such as the Civil Service, where the 180 jobs are to be lost.

Unemployment in the county currently stands at 37,000, or 16.7 per cent., compared with 9.8 per cent. in Bath, which is below the national average of 12.1 per cent. There are 47 people for every vacancy in Cleveland, but in Bath there are less than half that number. In the national discussions on the implications of Options for Change, there is an assumption that the worst effects will be felt in the South and the South West, where there are concentrations of defence-related employment. Yet it is the northern region which has the highest rate of unemployment in the country. Thus, while the Department of Trade designates the area for the highest level of assistance under regional policy and the Department of the Environment promotes the highly successful Teesside Development Corporation, the Ministry of Defence is actually removing jobs to Bath—a place with no assisted status and relatively low unemployment.

The recent record of the Ministry of Defence in the Cleveland area does not inspire confidence. In January, after three years of uncertainty, it finally announced the cancellation of the relocation of the Quality Assurance Directorate from Woolwich to Stockton. That is a loss of 1,600 jobs and through the knock-on effect many hundreds more. Plans for the site, which included security facilities and specially designed access provision, had to be discarded and public expenditure amounting to several million pounds was wasted.

On the assumption that the MoD development was taking place, it was decided to divert elsewhere a potential relocation of 2,200 Inland Revenue jobs. It was in April 1992 that the MoD published its proposals to unify Naval Support Command in Bath, relocating jobs from London, the south coast and the Supplies Directorate in Eaglescliffe in a multidisciplinary working group. Those jobs had their origin in Eaglescliffe in 1947.

The background to the proposals for the Naval Support Command lies both in the Options for Change strategy and the financial management initiative for the Civil Service. That seeks greater financial accountability and departmental identity for civil servants, known in the MoD as the new management strategy. The principles underlying the proposals are not in question. But the key proposals for the support command are that all staff should be co-located in a new, expensive building near Bath.

The personnel in Eaglescliffe are already housed in first-class secure office accommodation that will be left empty if the jobs move. Operational savings through a multi-disciplinary group working within the Naval Support Command can be achieved without moving, particularly in these days of modern information technology. Not surprisingly, the proposals for job losses in that high unemployment area have produced considerable local opposition. Elected members and trade union officials met the Armed Forces Minister in May to request full consultation and consideration. All the proper channels have been used to express the strength of local feeling about the proposals, and the campaign has received whole-hearted support from representatives of all political parties.

The Minister received a deputation and letters in support of the response to the consultative document of September 1992 from a wide range of MPs. Yet in December he announced that the relocation would proceed. The MoD consultation document was restricted in its financial appraisal to consideration of the business objectives of the department. The Cleveland response to it made out a strong case that satisfactory costings to justify the argument to relocate to Bath had not been presented, even in a narrow business sense. But the response went beyond that and examined the wider implications of the proposals for public expenditure. The savings predicted by the MoD amounting to £12 million over 10 years are reversed. The Cleveland response suggests a cost to the Exchequer of £10 million over 10 years as a result of the move.

One of the key reasons for the turnabout is inaccuracies in the costings in the consultation document. Cleveland is already familiar with inaccuracies in MoD costings. That was one of the main stumbling blocks to achieving the relocation of the Quality Assurance Directorate before its eventual cancellation. Another reason for the turnaround in the costings is the inclusion of estimates relating to the costs of the unemployment that will be created, including income tax forgone. In announcing his decision, the Minister made clear that neither the wider implications for public funds nor the effect on the area had been taken into consideration. If the Minister was advised that he would exceed his responsibilities if he considered those wider issues, the proposals should have been referred to a more senior level for final arbitration in view of the serious local concern.

At the moment there is an impression among local representatives that the MoD approached consultation in a perfunctory manner. The time taken to consider local response was very short, no questions were addressed back to the authors and the comments issued with the Minister's announcement demonstrate that inadequate attention has been given to the detail of the document.

The 180 jobs are due to move in 1995 or 1996, after the formation of the Royal Naval Support Command, until which time posts will become vacant through natural wastage and redundancies. The core of expertise built up over the years will be lost. Only 30 people will move to Bath, the rest being recruited locally. But the planning has only just started. Even the ultimate location is not known. Outline planning is sought for two sites and a decision is expected in the summer. Clearly there is ample time for a change of heart. Many changes are being mooted by the Department of Trade, the Department of the Environment and the MoD. Co-operation between them is essential, particularly in times of public expenditure restraint. The Treasury has a responsibility to ensure that such co-ordination takes place, but evidence from the Eaglescliffe decision suggests that it might be improved.

If the Minister's decision to relocate is irrevocable —I hope it is not—perhaps he will bear in mind that in Eaglescliffe there will be a first rate office block, vacant and on a secure site, with ample room for expansion and excellent transport links, which would be suitable for another MoD or Civil Service establishment. There have been recent reports that there may be interest in relocating there employment within the responsibility of the Department of Education.

Cleveland is a priority area for government policy to tackle urban regeneration. It has benefited from the Teesside Development Corporation, the urban programmes, task forces, the Cleveland Action Team and Middlesbrough City Challenge. There have also been successes under the Civil Service relocation scheme and, for example, jobs within the Inland Revenue have moved to Middlesbrough. All those steps have proved the commitment of the Government. But the loss of the MoD jobs begs the question of whether narrow departmental interests now take precedence over priorities of regional policy.

It is not too late for the decision to be reconsidered at a more senior level where wider issues can be taken into account and unnecessary costs to the Exchequer avoided. The consultation paper can be taken more seriously, the local arguments more carefully examined and the effect on the local area considered. In the light of the important issues for several other departments, I believe that the matter should be raised at Cabinet level so that it might be possible to achieve clarity in Civil Service relocation and in the conflicting priorities of regional policy and urban regeneration compared with narrow departmental considerations.

Let there be no doubt that confidence has been shaken by the decision to move those jobs to Bath and create redundancies for people who have little chance of re-employment and will therefore suffer disruption of their family life. By reviewing their decision, as they did recently for the Army, the Government will give a concrete demonstration of their continuing commitment to Cleveland and help restore confidence.

9.49 p.m.

Lord Crathorne

My Lords, I rise to support my noble friend Lord Gisborough. I hope that the Government will reconsider their decision on this matter. Like my noble friend I live close to Eaglescliffe. We both feel a very personal concern in this matter.

It is an appropriate moment to discuss this Question. Figures for those suffering long-term unemployment of more than a year have just been released. They show nationally the worst position for five years. The plans to move jobs from the Cleveland area to Bath and make approximately 120 local people redundant will add to those figures. And through increased competition in the local labour market, their chances of finding work will be much reduced. The consequences of unemployment are borne by individuals, by families, by communities and by society as a whole. The lack of confidence, the poor sense of purpose, poverty and social problems are the seed-bed for a small minority to indulge in anti-social and unproductive behaviour that affects us all, particularly in urban areas where such behaviour is on the increase. One has only to look at today's papers to see that.

The plans to move jobs from Eaglescliffe to Bath are not an isolated example of decisions taken by the MoD that adversely affect the northern part of England, as almost 2,500 jobs will go from York, Harrogate and Eaglescliffe together. The planned investment of 120 million over five years at Catterick by the Army is of course very welcome, but this will create no new civilian jobs. The move to Bath will involve public expenditure on new accommodation in that area, while first-class secure offices exist at Eaglescliffe.

Other government departments are spending public money to try to bring jobs to Cleveland which, as my noble friend has emphasised, is an area of very high unemployment. The cost of unemployment to the Exchequer was illustrated recently by the release of figures by the Treasury showing the growth in the numbers of civil servants. In the employment service an extra 9,000 staff were required in the last two years to pay benefits, counsel the unemployed and run schemes for the long-term unemployed—that is an increase of 27 per cent. The Ministry of Defence has stated that costs of this type and local implications have not been taken into account in arriving at the decision on Eaglescliffe. This seems to me to be a misguided policy, when the Ministry of Defence has not really looked at the picture as a whole.

The Ministry of Defence has a good record in reducing the numbers of civil servants, and this is no doubt reflected in public expenditure savings. These current plans, however, threaten to be wasteful when public spending by all government departments is viewed as a whole. There is a clear case for the Treasury's recently announced public expenditure review to include identification of the scope for savings through better policy co-ordination and means of putting those policies into effect.

The Government's general election manifesto promised to strengthen the machinery for co-ordination in the English regions and reflected a need to look at cross-department issues. The importance of looking at these issues is becoming more evident through, for example, City Challenge. In this context, the Association of Metropolitan Authorities has recently suggested a new Cabinet committee to resolve differences between ministerial policy, regional and local needs. I believe this is an idea that should be carefully looked at.

It is not too late for a change of heart on the Eaglescliffe issue, but if the jobs do go to Bath there must be opportunities for the use of the accommodation by some of the civil servants whose numbers are now increasing once more. There must be only a limited number of first-class offices offering security with excellent transport linkages; and because of the security implications, the accommodation does not lend itself to disposal to the private sector. I feel that the best solution and one that would actually save public expenditure would be a change of heart by the Ministry of Defence. I look forward to hearing what my noble friend on the Front Bench will have to say, and of course I very much hope that he will agree to look at this matter again.

9.54 p.m.

Lord Graham of Edmonton

My Lords, we have heard very reasonable speeches by two Members of your Lordships' House who clearly are close to the action. They are certainly closer than I am, although I must profess that when it fell to my lot to speak on the matter it looked a very timely issue in the context of the MoD and of the national economy. As a Member for many years of another place and having raised in adjournment debates there matters vital to my constituents, I can easily see that the two noble Lords are acting in the same way. They are speaking on behalf of their "constituents", although they do not actually represent them in that sense. However, they are speaking of people they know and love and they are here as part of a campaign. I applaud the energy and the initiative of the campaign fought through the columns of the Northern Echo for many weeks, through the Stockton council and through the civil servants. My very good friend Frank Cook and Tim Devlin, parliamentarians in another place, have also been involved. Now the campaign has been brought here. Both noble Lords conclude in a reasonable state.

I have looked at the project. We all understand, as did the noble Lord, Lord Gisborough, the totality of Options for Change and the fact that the Government have difficult decisions to make. I like to feel that the Minister will not merely repeat what has been said before because since then the position has become worse for the people in the area. There is greater unemployment and greater depression among those people. I say, having been a council leader and a Member of Parliament, that at the end of the day we have to be realists. If the solution the Minister brings is that there is a grand plan of which this forms a part —for the life of me, I cannot understand why it should —the next best thing is that which has been canvassed so far.

Can the Minister say what direct consultations have taken place with the people affected about what will happen to them when they lose their jobs? I congratulate the Northern Echo. I have an extract from that newspaper which says that 30 people are likely to find jobs. The timescale is such that it will not happen next week. We know that in a year's time more people will be unemployed in this area. That is what the Government are telling us. They are not putting figures on it but more people will be unemployed. They expect it. What are those people being told about their job prospects?

I come from Tyneside. I was born on the Scotswood Road many years ago. I am not unfamiliar with the closure of pits, shipyards and factories. We understand that these things do happen. What steps have the Government taken to provide jobs? I hope the Minister will not say that there are schemes and plans. What promises have been given to the people who are going to lose their jobs as a result of government action? Are there comparable jobs available for them to look at?

I have looked at the financial aspect of the marvellous building that will be vacated and the lack of a use for it. I am sure that the leader of Stockton council, Bob Gibson, would be less strident in his condemnation of the plan if there was a promise that that building would be used, that other work would be provided and that the people who lose their jobs would be retrained or dealt with fairly and adequately.

I know that the Minister has a difficult task and I do not want to add to it. What I hope he will understand is that the people I have mentioned—the leader of the civil servants, my colleagues in another place and the noble Lords who have spoken today —are neither fools nor knaves. They are doing an honest job representing the people they live among.

Reference was made by the noble Lord, Lord Gisborough, to the Teesside Urban Development Corporation. On my side of the House we have a very good friend, the noble Lord, Lord Dormand of Easington, who, I am sure, given the opportunity, might have been here this evening to say a word or two. I have not discussed this matter with him—I have not had the time—but I am absolutely certain that his Teesside Urban Development Corporation will be anxious at all times to be helpful. I believe that tribute was paid to it by the noble Lord, Lord Gisborough.

I hope that the Minister will be able to tell us that there is some space and room. If the Minister tells the noble Lord that the door is closed, that will be very sad and will cause bitterness. There is time and opportunity for the Minister to say something helpful. Those involved have given their time. They want to be constructive. Politics per se do not enter into the matter at this stage. Political arguments are not involved. We are talking about the fear and concern of ordinary people whose lives can be blighted either if they have to move, or alternatively, if they lose their jobs. I know that the Minister will do his best and I look forward very much to hearing what he has to say.

10 p.m.

Viscount St Davids

My Lords, I must begin by thanking my noble friend Lord Gisborough for introducing this most useful debate. Your Lordships will, like me, have been impressed by the concern that he has shown for those in his local community; a concern which is perfectly understandable and proper in view of my noble friend's tenure of the office of Her Majesty's Lord Lieutenant for Cleveland.

Before I address the specific subject of the noble Lord's Question, that of jobs at the Royal Navy store depot at Eaglescliffe, it might be helpful if I were to assist your Lordships by putting it in the context of the wider restructuring of the Armed Forces.

The Options for Change exercise was designed to create smaller forces, but forces which are more mobile, more flexible and better equipped. The Government are determined that at least proportionate reductions should be achieved in the support area as those being made in the front line. That aim was extended to cover the headquarters of the Ministry of Defence, and was conducted by means of the so-called PROSPECT study—PROSPECT being an acronym for the Post-options Restructuring of Support Project.

The aim of the PROSPECT study was to seek to define the roles and functions which will be appropriate to the United Kingdom's defence Ministry and headquarters in the context of recent defence policy developments emerging from Options for Change and to establish the minimum structure to support them.

In 1991 the Government accepted the recommendations of the PROSPECT study. Central to the study's recommendations were the conclusions that only a small core headquarters should be retained in London, with the remaining functions being redeployed, and that headquarters' manpower savings at all levels of at least 20 per cent. should be found.

It is the Government's firm belief that the reductions in the front line must be matched by savings in support to the Armed Forces. If we failed to do that, we would face the need for even further reductions in the front line to pay for the cost of maintaining expensive excess support facilities. I am sure that your Lordships will agree with me that that would not be a sensible or an acceptable alternative. The PROSPECT exercise, and other measures adopted by the Government, carry forward the policy of making the reductions in the support area proportional to those in the front line. They are an essential part of ensuring the best use of our defence resources and providing a structure appropriate to the needs of our Armed Forces in the 1990s and beyond. That is the broad background, and I will now seek to address my noble friend's primary concern.

As part of the restructuring of the Ministry of Defence brought about by the PROSPECT study, the Government agreed to the relocation of the three single-service personnel and logistics functions out of London and merging, where appropriate, with their relevant support commands. Included in all this was the proposal to concentrate the fleet support functions of the Royal Navy in a new Naval Support Command, under the Chief of Fleet Support and with its headquarters based in the Bath area, where over 70 per cent. of the workforce of the new command is already based.

The intention of this move is to bring together those in-service support functions relating to ships, weapons and equipments which are currently dispersed, both organisationally and geographically, in order to improve the service to the Fleet and make best use of reduced manpower resources. This bringing together will involve the amalgamation in one command of functions currently undertaken by the Chief of Fleet Support, by the Sea Systems Controllerate of the Procurement Executive; by the Commander-in-Chief Fleet and by the Commander-in-Chief Naval Home Command at the naval bases, and will involve a collocation of headquarters' staff who currently work in London, Bath, Corsham, Portsmouth, Weymouth and Eaglescliffe.

This collocation of staff will be concentrated in the headquarters of the Naval Support Command in a structure of multi-disciplinary groups containing all the necessary support skills such as engineering, materials, management, contracts and finance. Such groups have already successfully improved the efficiency and effectiveness of the MoD's Procurement Executive. Their creation, and their concentration within the Naval Support Command's unified and collocated headquarters, will be critical in achieving the streamlined, taut and responsible Command which is envisaged, and in providing an improved service to the Fleet from reduced resources.

I mentioned that one location where headquarters staff of the new Command are currently working is at Eaglescliffe in Cleveland. Here, Branch 42 of the Royal Navy's supply and transport service handles the commodity management functions for the many smaller marine equipments, sub-assemblies and components, totalling some 350,000 in all, which are familiarly known as MES, or marine engineering spares. The staff of Branch 42 carry out the tasks of inventory and stock management through reprovisioning, basic technician support, contract acquisition and finance.

The opportunity provided by the creation of the Naval Support Command and the formation of a unified, collocated headquarters will produce a number of benefits, which the Government believe will only be achieved satisfactorily by the introduction of multi-disciplinary group structures. The transfer from Eaglescliffe to the new Naval Support Command of the Branch 42 headquarters posts, totalling 182 in all, will provide the expertise in the commodity management of marine engineering spares which the new multi-disciplinary groups will need.

As part of the preliminary planning work undertaken to prepare for the creation of the Naval Support Command, Ministry of Defence officials carried out last year a detailed financial appraisal of the proposal to transfer Branch 42 from Eaglescliffe to the new headquarters in the Bath area. This appraisal also included studies of two alternative options, one of maintaining the status quo, and leaving Branch 42 at Eaglescliffe, and the other of moving more posts to Eaglescliffe so as to form a dispersed outpost of the Naval Support Command headquarters. The result of the financial appraisal was conclusive. In cost terms, the status quo, or do nothing option, would have denied the Ministry of Defence discounted net benefits of some fl 2 million over 10 years, allowing for potential redundancy costs. The dispersed outpost option would have involved the same operational disadvantages as the status quo, associated with trying to operate the Naval Support Command on two sites, and would have produced benefits of only about £7 million.

Based on the results of the departmental study, it was decided to begin consultation on the basis that the relocation of the Branch 42 posts from Eaglescliffe should go ahead. A consultative document, which sought to argue the case for the relocation, and which included full details of the department's financial costings, was issued on 8th September last year, and a 10-week period of consultation followed, giving all those with an interest adequate time to consider and respond to the Government's proposal. I am very glad to say that a considerable number of constructive and useful representations were received by way of response to the consultative document from a number of your Lordships, including my noble friend Lord Gisborough, from Members of Parliament, from representatives of local commercial, industrial and training interests, and a formal response produced jointly by the trades unions and the local authorities most closely affected by the proposal.

All the comments and representations made in response to the consultative document were considered very carefully indeed. Other government departments were consulted at ministerial level. Many of those representations sought to widen the debate by addressing broader issues, such as regional development, the undoubted social implications of unemployment and public expenditure issues. However, none of them overturned or affected to any real extent the Government's conclusion that the proposed relocation of 182 posts from Eaglescliffe to the new headquarters of the Naval Support Command to be established in the Bath area offered by far the best cost and operational benefits. Based upon that clear assessment, the Government announced on 10th December last year that the move of the posts in question would begin in 1995–96 and that discussions will take place between management and trade unions on the details of implementation.

I am very well aware of the disappointment which that decision will have caused, not just to the staff involved and their families but also to those involved in and responsible for the local economy and the community. There will inevitably be disruption for some. While we might all agree on the need for smaller Armed Forces and the streamlining of their support, I recognise clearly that those aims cannot be achieved without disruption and possible redundancy for some and temporary damage to the local economy.

Your Lordships will, I hope, be reassured to hear that everything possible will be done to minimise any adverse effects upon the staff concerned. Employees in those grades with a mobility obligation will, where appropriate, be transferred at public expense, and transfers to other government departments or to other MoD establishments will be considered, especially for staff in grades with no mobility obligation. I can assure my noble friend that discussions will take place with other government departments on the possible use of the accommodation being made available when the posts are transferred.

Lord Graham of Edmonton

My Lords, I am grateful to the noble Viscount and appreciate the fullness of his reply. But will he say something about trying to match the jobs lost in the area with facilities which will provide replacement jobs? If local people are left with a generalisation that will not be good enough. Even if the noble Viscount cannot give us the answer now, will he say that there should be some direct consultation on how the jobs lost in the locality —not MoD jobs—will be replaced by a comparable number of jobs?

Viscount St. Davids

My Lords, I cannot answer the noble Lord's question tonight. I shall see whether some means can be found of giving him the information that he seeks.

The Ministry of Defence will establish close contact with other local employers, and any staff leaving prematurely under voluntary or compulsory redundancy terms will be able to use the services of the Ministry's outplacement counselling service which will be available to help identify new opportunities. Such staff would also get compensation under the terms of the appropriate pension scheme. I can also confirm that those moves will affect only the staff of Branch 42. The Royal Navy Stores Depot itself will not be affected and will continue to provide a considerable number of employment opportunities at Eaglescliffe.

We owe a debt of gratitude to my noble friend Lord Gisborough for representing so eloquently the interests of the community in the Cleveland area, and especially of the workforce at Eaglescliffe, some of whom will regrettably be affected by the Ministry of Defence's action that I have explained. The end of the Cold War, which your Lordships and, indeed, the whole country will have welcomed, means that we can reduce the share of our national resources devoted to defence. That is an example of the so-called peace dividend. But that dividend has a price which is that the Government have to look very carefully indeed at the support facilities available for defence and to reduce them where more cost-effective ways can be found.

Taxpayers are due a share of the peace dividend and they expect, quite rightly, to receive full value for money allocated to the defence task. Equally, the Government have a very clear duty to Parliament and to the country at large to provide defence in the most cost-effective way. I readily acknowledge that hard decisions have had to be made and that those decisions will cause some difficulties for those affected. But I am also convinced that the transfer of the posts from Eaglescliffe to the integrated headquarters of the Naval Support Command offers by far the best advantages in terms of cost and operational benefits. The decision announced in December represents the best solution for the Ministry of Defence, for the Royal Navy and for the taxpayer.

House adjourned at fifteen minutes past ten o'clock.