Below is the text of the speech made by Lewis Stevens, the then Conservative MP for Nuneaton, in the House of Commons on 26 February 1986.
I am grateful for the opportunity to discuss the unemployment level in my constituency which could be worsened by the proposed closure of an iron foundry at Sterling Metals, with the potential loss of 700 jobs. I am grateful for the fact that my hon. Friend the Parliamentary Under-Secretary of State for Employment is here to reply. This is my first opportunity to speak with him on the Front Bench.
The proposed closure of the iron foundry with the subsequent loss of 700 jobs raises several issues. I shall deal with the origins of the closure and the effects it will have in my area. The impact of the redundancies must be taken in the context of the travel to work area of Coventry and Hinckley and not just in my constituency. I am pleased that my hon. Friend the Member for Warwickshire, North (Mr. Maude) is in the Chamber, and I know that, if his office did not prevent him, he would share my concern and support me in the debate.
The unemployment rate is 15·7 per cent., and male unemployment is about 50 per cent. higher than female unemployment. That is similar to the west midlands average of 15 to 16 per cent. All 700 redundancies would not be in my constituency, but they would have a significant impact on an already high unemployment rate. Recently the general position has to some extent improved. In my constituency we had a 12 per cent. improvement between December 1984 and December 1985 which amounts to about 600 jobs. They will be virtually wiped out by the closure, if it occurs.
The foundry industry has obvious peculiarities. It is an old industry and mainly male dominated. Therefore, most of the redundancies would he among male workers with a skill which is not easily translated to other industries. Certainly, the retraining facilities available would help people to find new jobs, but as there will be so many of them, their needs must be considered specifically.
As the foundry industry has declined, those people cannot expect to find jobs within the industry either locally or further afield. That puts them in a special position. The magnitude of the disaster locally would be more than one might initially imagine. There are only a few companies of that size in the immediate area, and the company would be reduced to 400 people.
The foundry industry faces fierce competition from abroad. A few months ago we expected an investment of £5 million in the foundry which would have been welcome and given it a future. The bombshell out of the blue was to find that, instead of that substantial investment, we were to face closure. It has been put down to the fierce competition from abroad, including so-called subsidised competition from Spain, Brazil and elsewhere. My hon. Friend the Minister has agreed to investigate the matter again. It is not a new problem because it was raised with the Government in May 1983 by the Association of Major Casting Manufacturers, but no action appeared to come from that.
The company makes the decision on its commercial viability. The foundry lost £500,000 last year, and because of price difficulties it is not thought to be viable in future. That is extremely worrying. It bears out the association’s point that many automotive foundries have been closed, but continuing contraction will result, not in the rationalisation of duplicated facilities, but in the elimination of specialised plants. The plant is largely concerned with the tractor industry. It is the last independent casting unit for selling blocks in the United Kingdom. There will inevitably be a transfer of more work abroad, which will raise our imports. The penetration of imports is considerable.
In answer to a parliamentary question recently my hon. Friend the Minister for Trade gave me figures which showed that between 1978 and 1984 the imports from Spain increased 5·5 times, and from West Germany 2·5 times. There are now imports from Brazil and that means another competitor.
The foundry faces fierce competition, but it is a high quality foundry and its customers are prepared to continue taking supplies from the company, admittedly at the correct price—a price that they think they can afford. As a consequence, we are not talking about a lack of work, skill or facilities. Although investment is needed we are dealing with the viability of the foundry.
I ask my hon. Friend to pass on to his colleagues and Ministers in the Department of Trade and Industry the hope that they will make every effort, and perhaps a special effort, to help the company to consider possible restructuring of the facilities. That could save, if not all, at least a lot of the jobs. It is also reported that there is a possibility of interest in a takeover for the foundry, and I ask the Ministers at the Department of Trade and Industry to give serious and careful consideration to the possibility of help by way of advice and financial support to anyone who keep the foundry open.
A considerable amount of restructuring may be necessary and that may involve help over an interim period to restructure and try to make the foundry viable again. I am not asking for unlimited and indefinite resources for the industry, because it is largely for commercial interests to take a decision, but help from Government sources could avert the closure and give an opportunity for the foundry to be reorganised or restructured financially. That would save some of those jobs and leave a viable iron foundry in the area. It is a worthwhile cause because our foundry industry has gradually been eroded by foreign competition, and more and more of our foundry work goes overseas. The jobs lost are never replaced, although the work is still needed.
My request is for any possible help that the Government can give, especially from the Department of Trade and Industry, to save the foundry or at least to provide an opportunity to discuss the possibility of saving the jobs of the people at the foundry. If that does not happen, 700 jobs will go and in many cases it will be difficult for people to transfer to other work. That will put a serious load on the budgets for unemployment and possibly on the budgets for social security as well. That must be balanced against the money which could be used to support the foundry for a short time.
It is necessary in this case for the Department of Employment to consider giving some special attention to the needs of people affected by this sort of redundancy. The people who may be made redundant have good skills and are retrainable, but many of them have been in that type of manual industry for many years and there are few comparable industries in my area, in neighbouring areas or elsewhere in the west midlands. The benefits we have had in recent years have come from small companies setting up and taking advantage of Government schemes and local help. We have had some considerable success, but those are largely small companies who employ a few people and only gradually get bigger. The substantial effect of such numbers as these wipes out that advantage.
People need advice on what is available to them by way of retraining and new careers. It will be helpful if my hon. Friend can say that some special help will be available. Certainly my local department could not cope easily with that number of people coming to it so quickly.
We have an iron foundry which produces for the tractor industry. It is successful in the quality of its production and the satisfaction that it gives to customers. It has competed successfully in the market, particularly in West Germany, and so it must have some future, either by takeover or in some other way, perhaps restructured and losing some jobs.
I hope that my right hon. and learned Friends at the Department of Trade and Industry will do everything that they possibly can to explore the possibilities that exist and to give the foundry any support that they can. If the foundry cannot be saved I ask that every effort will be made to give the best help and advice to those who would suffer from redundancy.