Below is the text of the speech made by Les Huckfield, the then Labour MP for Nuneaton, in the House of Commons on 7 March 1978.
I am grateful to my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) for giving me an opportunity to speak on an issue which has understandably raised a great deal of concern. That is because the proposal to close Speke No. 2 assembly plant has some wide-ranging implications for British Leyland and for Merseyside. As my hon. Friend has said, I am sure that on both sides of the House we all wish that the British Leyland management did not need to take difficult decisions of this sort.
That need is dictated primarily by the state of British Leyland, which, as the chairman of the company, Mr. Michael Edwardes, made clear in his speech to employees on 1st February, is critical. The company has made no secret of the fact that its performance has been unsatisfactory. That is reflected in the fall in British Leyland’s market share from 33 per cent. to less than 25 per cent. last year, and to 21 per cent. in January.
I am glad to note that provisional indications are that British Leyland’s market share for February has shown some signs of improvement. Nevertheless, one thing is clear: the company needs a period of sustained production accompanied by a major effort to reduce costs so that British Leyland can compete with other European manufacturers both at home and in export markets. This means adjusting capacity and manpower in line with realistic market prospects, taking account of the impossibility of recovering market share overnight and of the fact that British Leyland still has power and manpower levels geared to production on the pre-Ryder scale.
If the company fails to adjust capacity now and its market share continues to decline, the result will be that many more jobs will be lost than those affected by the closure of Speke 2. The collapse of the company would have unthinkable consequences for employment in this country. Not only is British Leyland dirt country’s seventh largest employer; thousands of wage earners in supplier industries are dependent on the survival of the company. As Michael Edwardes has made clear, without realistic measures to improve production and reduce costs, that survival must be in doubt.
This is the task facing the management at British Leyland. It is the management which, in consultation with the National Enterprise Board, must decide on the specific measures necessary to restore the company’s fortunes. The Government have accepted the view of the British Leyland Board and the National Enterprise Board that British Leyland’s capacity, including manpower, must be brought into line with market prospects, but the Government cannot set themselves up as an alternative manager of the company, so that means to achieve this must be left for British Leyland management to decide in consultation with the National Enterprise Board.
As my right hon. Friend the Prime Minister said in the House on 31st January, the Government have full confidence in the new management at British Leyland and are committed to supporting Michael Edwardes in his attempt to improve the company’s performance. A start has been made. As hon Members may know, steps have been taken to restructure the company, and at the meeting at Kenilworth on 1st February Michael Edwardes secured the backing of employees for his proposals. At the same time the British Leyland board has submitted to the National Enterprise Board its corporate plan for 1978 outlining its proposals for a future strategy for the company.
It would, however, be difficult for the Government to justify both to this House and to the public at large further investment in British Leyland, especially on the scale that British Leyland is likely to need, unless the management can clearly demonstrate that firm steps are being taken to tackle the company’s problems. Those steps may be unpleasant and, in the case of the proposal to close Speke 2, they have been made all the more difficult to take by the fact that the plant is located on Merseyside.
I fully understand what my hon. Friend said about the situation on Merseyside. It was because of our concern for Merseyside that we designated it a special development area in August 1974. This means that Merseyside gets regional development grants, Government factories, regional selective assistance, removal grants and grants to encourage the movement of offices and other service industries. In fact, Merseyside is among those places which are given the highest priority in the steering of new investment.
We estimate that Merseyside received about £302 million of regional financial assistance over the five years 1972–73 to 1976–77. The assistance under Section 7 of the Industry Act has safeguarded or created 40,000 jobs since 1972.
As my hon. Friend realises, we had a report from the NEB on investment potential in the North-East and North-West. That report made recommendations particularly in favour of widening the differential in regional selective financial assistance in favour of special development areas. The Government also increased the maximum rent-free periods on Government factories to five years.
The role of the NEB has been strengthened following the establishment of an NEB regional board for the North-West. We have commissioned a firm of consultants to identify the types of business most likely to prosper close to the port of Liverpool. The Liverpool partnership area, which Speke immediately adjoins, will benefit from increased resources under the Department of the Environment’s urban programme, and the greater powers to assist industry given to them under the Inner Urban Areas Bill. I could give my hon. Friend more details about my Department’s small firms information centre in Liverpool and about assistance under Section 8 of the Industry Act.
Under the Hardman decisions on the dispersal of Government work from London, Merseyside probably comes out as one of the best areas. The bulk of the 4,000 dispersals to the North-West, nearly 3,000 posts, will go to Merseyside. The Hardman dispersals will inevitably take some time to carry out, but I am sure that hon. Members will welcome these additional office jobs and appreciate that this shows recognition of the serious problem.
There are achievements on the plus side. I shall name but a few. Vauxhall has recruited 2,000 workers at Ellesmere Port. The Co-operative Bank will provide 600 new jobs at hard-hit Skelmersdale. Cross International has announced a £2½ million investment programme with 200 jobs to come over four years at Knowsley. YKK is recruiting at Run- corn. Tate & Lyle is investing heavily. Shell Chemicals has planning permission for a £50 million plant at Stanlow.
These are a few of the projects in Merseyside.
In co-operation with the Manpower Services Commission, the Government have introduced a wide range of special schemes designed specifically to alleviate increased unemployment. They include the job creation and work experience programmes, the youth employment subsidy, the job release scheme, the temporary employment subsidy and the small firms employment subsidy.
It is estimated that over 41,000 persons, many of them young people, have been assisted by these measures in Merseyside. The temporary employment subsidy has been of particular benefit—with applications approved in respect of over 16,000 workers in the area.
It is difficult to satisfy my hon. Friend in a debate such as this. I fully appreciate the statement that he has made on behalf of his constituents. I and the Department understand the problems of Merseyside.
There are plans for a new 100-place skillcentre to be established in the Wirral and for a smaller 60-place centre for adults and young people in Liverpool itself. Both of these should be in operation by 1980–1981.
It is, as I have already made clear, for British Leyland management to take the difficult decisions necessary for the company’s survival and, in this particular case, to decide whether to proceed with the closure after.