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Pilkington Group (Merseyside)

Volume 895: debated on Thursday 17 July 1975

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12.37 a.m.

I rise to make the case for the Ravenhead works in St. Helens and briefly to refer to the immediate background to the crisis which lies in the Pilkington Group's intention to close the Ravenhead plant in the town. Such a move would create a job loss of 750, in addition to previous redundancies at that plant and elsewhere in the company in an area where there are already well over 61,000 unemployed.

On 13th May 1975 a meeting was held at the DTI with the then Secretary of State for Industry to discuss the plight of the Ravenhead works. Representatives of the company, the General and Municipal Workers' Union, the Association of Scientific, Technical and Managerial Staffs and the Amalgamated Union of Engineering Workers were present. The company indicated three conditions for ensuring the continuity of glass making at Ravenhead.

They were, first, a load of at least 1 million sets of glass parts per year, of which 800,000 must come from the home market; secondly, realistic prices, giving an acceptable level of return on the capital employed; thirdly, an organisational structure involving Ravenhead and Skelmersdale within which Pilkington would have the ability to influence events and to plan forward in terms of volume, price and manufacturing programme, including sizes, designs and so on, with reasonable certainty.

It was clear, though, in view of the remarks the company made about losses of around £400,000 per month and the effect on group profitability, that only some form of temporary subsidy would ease the immediate situation. The Secretary of State promised to consider this carefully with the aid of a paper to be written by the civil servants at DTI.

A further meeting between GMWU and the Government was held on 22nd May 1975, to discuss the total situation at Pilkington's. Certain major requests were put to the Secretary of State. They were, first, Government help to obtain information from the company; secondly, Government money to aid production; thirdly, immediate aid on Ravenhead, and a rapid decision on the longer term future of television tubes; fourthly, pressure on BLMC and others to use Pilkington's glass; fifthly, urgent examination of the need for television tubes and flat glass, import controls, and immediate action in the Department of Trade on the dumping of television tubes.

I have referred to unemployment in the Merseyside area—which has become a national disgrace and a real social scourge, affecting the image of the United Kingdom—where well over 61,000 people have been unemployed for some time. A further figure of 750 unemployed men in St. Helens alone will swell this huge figure beyond acceptability.

Unless each relevant Government Department shows real determination to retain a fair share of the home market for British industry, and an equally determined effort to stop other countries from exporting their unemployment to Britain, many more jobs will be lost to our people.

Dumping is unfair, whichever firm or country happens to be guilty. It will be necessary to investigate the allegations which have been made about the prices charged and price reductions made by Japanese television tubes and set exporters to the United Kingdom, and I shall return to this problem again. I invite the Minister and his Department to read Appendix 1 to the notes which have been sent to him.

In passing, it will not do any harm to mention BLMC, which, whilst being financed by the Treasury, has imported foreign glass for its buses, cars and lorries since 1972_ We from St. Helens are becoming alarmed at the delay in making the results of the inquiry into this serious matter known to the public.

Horticultural glass is another product imported from foreign sources, and again we cannot obtain the details which would be required to bring a complaint about dumping. I assure the Minister that many of us will be grateful for this kind of information, because since last October 225 jobs were lost at Cowley Hill glass works, 500 jobs at the sheet glass works and 550 jobs at Ravenhead glass works.

The General and Municipal Workers' Union ask for Government help to obtain information from the company. No doubt, the other interested trade unions will be obliged if the Minister will use his good offices to ensure that the lines of communication between his Department, trade unions and management are kept open, in the long-term interests of good industrial relations.

The Pilkington Company has decided upon the closure of Ravenhead because it is said to be losing some £400,000 per month.

In the long term, I believe that it would be economic suicide for the Government to allow not only the loss of 750 jobs but the loss of a British television tube industry—Ravenhead—which is the most modern and efficient television tube works in the world, when there is a strong possibility of a new television industry opening up in the Northern Ireland area during 1976, thus providing new markets.

A plant that has had more than £6½ million invested during the last 18 months to bring Ravenhead up to the highest possible standard of efficiency, deserves Government support. I trust that my constituents will receive more hope of their jobs being saved than has been forthcoming so far. I look forward to the Minister's bringing pressure to bear on Government Departments to save the jobs we have, in the national and regional interests of the country.

12.45 a.m.

I should first like to congratulate my hon. Friend the Member for St. Helens (Mr. Spriggs) on raising this matter tonight. It is not the first time, since I have been a Minister, that he has proved to be a doughty fighter for the rights and interests of his constituents, and I am sure they very much appreciate the points he has raised tonight.

Secondly, I can well understand my hon. Friend's regret, which he expressed in his speech, that a modern plant should close when there has been recent investment in modern equipment, where there are good industrial relations, where despite the downturn in trade, there remains a large home market, and where there should be opportunities both for important saving and for export potential.

The proposed closure at the Ravenhead factory, which as my hon. Friend said currently employs about 750 workers is, of course, a serious blow not only to Pilkington's and to St. Helens, but above all a direct and serious blow to all those men and women who work there. It is also, I know, a matter of concern to other workers employed in different sectors of the glass-making industry in St. Helens, who are naturally concerned about their jobs.

The glass manufacturing industry, of which Pilkington's forms an important part and on which St. Helens depends for almost one-third of its jobs, has, like other industries, been going through a difficult time in recent months. The present downturn in the building industry has led to a reduction in the demand for building glass and a reduced demand for cars has meant that less glass is needed for windscreens, while the situation in the British colour television industry has resulted in the proposed closure of the Ravenhead factory.

As regards the factors which have led to the closure, the proposed closure of the Ravenhead factory must to some extent be seen against the background of the current world recession in demand which has affected employment in virtually all industrial countries. This recession has affected employment in nearly all industries in this country. Nevertheless, as my hon. Friend has pointed out, there were a number of special factors which have contributed to the proposed closure of this factory.

The whole production at Ravenhead in recent months has been devoted to the manufacture of glass parts for colour television tubes, and Pilkington's had invested heavily in equipping the factory. It did so at a time when there were thought to be good prospects of a growing market at home and abroad. Since then, the general recession both at home and abroad, together with the necessity in this country to reintroduce credit controls and more recently to increase VAT, has changed the situation markedly.

In addition there has, as my hon. Friend said, been a high level of imports of colour television tubes from Japan and more recently from the United States of America, and this again has adversely affected the market for Ravenhead's products. Because of this decline in the market requirements, the company had earlier cut back the number of employees to 750. Even so, the factory has continued to make heavy losses and the company could no longer see its way to continue production at the current low levels of throughput.

There have been the fullest discussions between the management and the unions since September 1974, and more recently with the Department of Industry, as to ways in which these difficulties could be overcome, but I am sorry to say that despite the most detailed investigations the Government saw no practical way of saving the Ravenhead factory. Accordingly, at a meeting on 1st July, the Minister of State, Department of Industry, my hon. Friend the Member for Rutherglen (Mr. Mackenzie) informed representatives of the management and workers that he could find no justifiable basis on which the Government could help to keep the factory in operation.

The management informed the shop stewards and union officials on 2nd July that there was no alternative to stopping the manufacture of glass parts on 11th July. This is now being considered by the several negotiating bodies. The factory has large stocks and will be kept open for several months, possibly until March of next year, while the stocks are disposed of.

I cannot deal at length with all the matters raised by my hon. Friend because some of them, as he will recognise, are not within my field of responsibility. What I undertake is that those matters which I cannot deal with personally will be drawn to the attention of my hon. Friends in other Departments.

Our main concern tonight must be with the workers directly affected by the closure, and in the limited time available I want to say something about the employment situation in the St. Helens area, the prospects for those affected by the closure and the general measures the Government are taking to reduce unemployment.

Before doing so I shall comment on imports from Japan and the United States of America. It has been suggested that action should be taken to restrict the import of television tubes. As my hon. Friend knows, there are formidable difficulties in taking this course. Under international trading agreements such as GATT, to which we are a party, the imposition of import restrictions would require the offer of compensation to the countries affected or invite the risk of retaliation and escalation. Quite apart from this, the import of colour television tubes was only one factor in the complex situation surrounding the proposed Ravenhead closure, and action to restrict imports would not on its own have been a solution to the problem.

My hon. Friend knows that the Secretary of State for Trade has recently announced an investigation into the alleged dumping of imported television tubes, and he hopes shortly to announce the results of this investigation. I am sure that my hon. Friend's remarks will be drawn to his attention. My right hon. Friend also mentioned other forms of help which might be given, and my hon. Friend will be aware of the discussions which have taken place about help under the Industry Act.

My hon. Friend mentioned an employment subsidy to assist in keeping jobs available. The precise details of the temporary employment subsidy have yet to be finalised, and it is not, therefore, possible to say whether this factory will be eligible for payments when the TES has been introduced. I hope that I am not out of order in saying that my hon. Friend might care to look at the report of the proceedings tonight on the Employment Protection Bill, where details of this matter are spelt out.

The general intention is that the TES scheme should relate to large-scale redundancies—this area has large-scale redundancies—in areas of high unemployment, and St. Helens is undoubtedly an area of high unemployment. The scheme is intended for situations where early recovery offers a sure prospect of economic employment in the firms concerned. In these cases it would obviously make good sense from every point of view that the workers should be kept in productive employment rather than become unemployed. In other cases the extra time can be used to arrange for their redeployment into more valuable jobs. When the scheme is introduced, doubtless Pilkington's will wish to consider whether it will be eligible for assistance and whether it wishes to apply.

My hon. Friend mentioned disclosure. He will understand that in redundancy situations of this kind my Department is most anxious that there should be the maximum disclosure, and the maximum discussion with the trade unions. It is for that reason that we are introducing in the Employment Protection Bill proposals about mass redundancies.

My hon. Friend referred to British Leyland Motor Corporation, and suggested that the corporation should buy more glass windscreens and other glass products from Pilkington's. He will be aware of the difficulties about competition and the problems that arise, but I am sure that his remarks will be studied by the appropriate Department.

I come back to what can be done for the workers who are affected. I understand that the production of glass for television screens at the Ravenhead factory ceased on 11th July. I understand that it is likely that a fair proportion of the 750 workers at present employed at Ravenhead will be offered jobs at other Pilkington factories at St. Helens, though this is still subject to discussion with the unions and is, of course, dependent on the demand for other glass products.

For those who do unfortunately lose their jobs, I should be less than honest if I did not say that redeployment prospects at the present time in St. Helens are poor. The current unemployment rate for St. Helens is 6·3 per cent. compared with 3 per cent. a year ago. It is estimated that about 3,000 jobs have been lost in the town since last September, and in the present economic climate openings are relatively few. However, although unemployment in St. Helens over the past year has increased I suppose it is a slight consolation to know that it is still lower than that of the Merseyside special development area of which it forms a part. St. Helens is, of course, heavily dependent on the glass-making industry and the Department of Industry is aware of the need to encourage other industries to move to St. Helens and to widen the existing industrial base.

As far as my Department is concerned, I need hardly say that all the facilities of the Manpower Services Commission will be available to help workers find new jobs and to provide training for those workers who wish to learn new or different skills. The local office of the Employment Services Agency has been in close touch with Pilkington's about this redundancy and a job team will be going to the factory shortly, along with representatives of the Training Services Agency, to give help and advice to any of the workers needing assistance.

There is currently a skillcentre at St. Helens, with about 220 places offering courses in a good spread of trades, and there are other skillcentres in the North-West where places will be available for St. Helens workers. In addition, about 100 places are currently available for courses under the Training Opportunities Scheme, mainly in clerical and commercial subjects, in the St. Helens College of Technology, and further short industrial courses leading to semi-skilled status are planned for St. Helens in the latter part of this year and in early 1976.

The need for training courses is kept constantly under review by the Training Services Agency and new courses are set up wherever practical. The ESA and the TSA are also running a seminar, shortly, for senior personnel staff in the Pilkington Group in St. Helens, to explain the wide range of services which the Department of Employment group can offer.

Finally, although I realise that it is of little immediate consolation to those affected by the closure of the Ravenhead plant, I should like to say something about the employment situation at Merseyside generally and the steps which the Government are taking to alleviate the present position.

The Government fully accept that unemployment in the St. Helens area is too high. St. Helens is part of the Merseyside Special Development Area and thus enjoys the full range of regional incentives. Nevertheless, Merseyside as a whole has for long experienced persistently high unemployment, despite the efforts of successive administrations to encourage the creation of alternative employment opportunities in the area. When the National Enterprise Board and the planning agreement system come into operation, we shall have an instrument whereby more can be done for areas such as this.

The current employment situation is exacerbated by the fact that the world is currently in the middle of a major depression and unemployment is high in all industrial countries. In order to alleviate the effects of current high unemployment, the Chancellor announced in April increased opportunities for training and retraining steps to assist people to move to new employment and to strengthen the employment services and a plan for a temporary unemployment subsidy to help firms located in areas of high unemployment which face redundancies.

The Government are committed to bring down the rate of unemployment. They have been prevented from taking further action this year because of the excessive rate of inflation. The policy put forward in the recent White Paper "The Attack on Inflation" are designed to reduce inflation to a level where the Government can employ effectively all the weapons which they have at their disposal to end the present unacceptable level of unemployment. This the Government have pledged themselves to do.

As I said at the beginning, I cannot cover all the points which my bon. Friend has raised, some of which may involve other Department. I recognise the seriousness with which my hon. Friend views this situation and the sincerity which prompted him to raise this matter on the Adjournment. I shall ensure that the matters that I have not dealt with personally are considered elsewhere.

Question put and agreed to.

Adjourned accordingly at two minutes to One o'clock.