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It was inevitable, when the Government announced their new defence policy in their White Paper, that there would be a great deal of disturbance in industries supplying the Armed Forces and repercussions in other supplying industries. It is not surprising, therefore, that the Royal Ordnance factories maintained and managed by the Ministry of Supply should form the subject of a short debate this afternoon, because, as the Minister has already said, about 7,000 of his employees will be declared redundant over the next two and a half years. Therefore, all the difficulties which go with the transfer of established staff, and so on, will have to be met.
I do not propose to deal with any particular factories, because in the very short time at our disposal many constituency points will require to be put by hon. Members, on both sides of the House who have detailed knowledge of the factories in their areas and will express the considerable anxiety that the proposed changes cause to individuals. Although the unsettlement may not appear to be large in the context of the whole employable population, nevertheless to those affected within their communities it is a matter of grave anxiety.
I hope that hon. Members, recognising that we have only three hours for this debate, will exercise a self-denying ordinance and say what they have to say in the shortest possible time, so that as many constituency points as possible may be put by hon. Members. For my part, I shall do my utmost to set a commendable example by the brevity with which I introduce this subject.
I have already said that there is bound to be a good deal of disturbance, physical and otherwise, to the people employed in these factories. I want to say right away, as one who has had experience in the industrial field, that I always regard it as a very bad principle to move people from the place where they are living and from the factories in which they have been accustomed to work. I have always regarded it as a much better principle to bring the work to where the people live, to where they have their homes and the facilities exist and where the local authorities have provided all the necessary services within the community.
In the organisation of our industry, we ought as far as possible to utilise to 100 per cent. all the factory capacity that we have available. An empty factory in Britain today is, in my opinion, an indication of gross inefficiency on somebody's part whilst, at the same time, vast factory buildings are being erected and others extended in other parts of the country. Therefore, when any factory, whether Government or privately owned, becomes empty, there is no reason why every effort should not be made to bring work to that factory. If possible, the work brought to it should be within the compass of the workers already attached to the factory. In other words, if a factory were to have 1,000 workers declared redundant, it would be wrong to turn it into a warehouse employing only a small number of people, probably mostly unskilled.
All this requires a good deal of planning and effort. Our complaint today is that we do not feel that the Minister of Supply and his advisers have done all that they can to mitigate what I regard as a serious nuisance to those concerned and they have not done all that they can to use efficiently the vacant factory space that is bound to result from their decision. That is why we want to put to the right hon. Gentleman a number of suggestions to help these factories to remain under Government control and, above all, to preserve the teams of workers that have been got together, with great effort, over a number of years and who have learned to work and to use their skills together for the good of the nation. It is important that personnel within the factories should be maintained as far as possible as teams.
The question is: can this be done? Is it possible for these factories, for which there is no further work because of the complete change in our defence methods, to continue with some other production that can maintain the personnel as a team? Let us consider why we have Royal Ordnance factories at all. The Minister will agree that they have two main purposes. The first is to provide for the current needs of the Armed Forces and the second is to maintain a reserve capacity for a military emergency.
I know that the right hon. Gentleman has some views about the second of those purposes, the maintenance of a reserve capacity for a military emergency. He probably holds the view that there would be no long-term war if such an eventuality happened again and that we do not, therefore, need to reserve what we used to call "shadow" factories, working on other productive processes but readily available to turn back to a military purpose. I imagine that the right hon. Gentleman does not believe that that is likely to happen in any future war.
I accept that there might not be the same scale of requirement for the shadow factory as such, but I do believe that it will be necessary to have a reserve capacity for military emergency, and it is highly important that that emergency reserve capacity for the production of armaments should be under Government control and Government auspices. I would regret very much indeed if the Government were to proceed with their schemes for selling or leasing the Royal Ordnance factories, except under certain stringent conditions, with which I shall deal presently.
The assumption in closing the Royal Ordnance factories is not that there will be insufficient armaments work, even under the revised defence programme, for these 23 factories. It would be absurd to suggest that we could not keep 23 factories going on the contracts that will have to be placed, even after the cuts are made. But the traditional work is going out, the work that has been done in these factories—certainly, in the case of Woolwich—for several hundred years, and the new work on guided missiles, electronics, atomic energy, and the rest, has been moving over steadily to private enterprise, where it very largely remains. That is another quarrel that we have with the Government.
I think I would be expressing the views of my hon. Friends if I say that we believe that, while we have to have armaments, they should as far as possible be produced under Government control. That is the principle which we would try to operate ourselves as a Government. We recognise, however, that a good many of the defence weapons are associated with some other aspect of work that is done in factories owned by private enterprise. It has frequently been the case that research work and work on prototypes has been done under Government auspices and then transferred to private enterprise to carry it out.
It is because the Government have neglected to take into consideration the change which is required in the Royal Ordnance factories, if they are to retain control of the manufacture of defence weapons, that they have now reached a situation in which they find that at least seven of the factories under their control are completely obsolete and none of the new weapons can be put into these factories, for the simple reason that the Government have virtually pushed over the whole of the new weapon manufacture into the hands of private enterprise. We think that that is a mistake.
The research teams should have been built up and some of these factories could have provided the nucleus for first-class work on research, prototypes, and so on, which, done in conjunction with private enterprise, because of the scale of production, would enable, at the time when these things were, unfortunately, necessary, a very big speed-up in production to be achieved and would enable the requirements of the Services to be met without let or hindrance.
There are four possibilities that lie before the Government and which were outlined in the recent statement by the Ministry of Supply. First, there is the possibility that if the Government accept the principle that they should keep these factories and the personnel as teams together, they could put into the factories other Government work than armaments. The right hon. Gentleman, as Minister of Supply, is the biggest contractor or supplier to the Government as a whole. Therefore, in the placing of contracts, the question of placing other Government work in the Royal Ordnance factories which he now contemplates closing is a matter within his personal control.
There is no reason at all, as I have previously said, why he should not introduce much more speedily than apparently he is work on the new sort of atom age weapons which inevitably will be required. He has said he will do what he can to place the production of these new weapons in the Royal Ordnance factories. We have talked to officials of the trade unions and representatives of the workers in these factories, and they advise us that they have seen very little of that being done.
There are some grave allegations that a great deal of the work which was being done in those factories and could be done in those factories has been transferred from the Royal Ordnance factories to private enterprise. I am not saying that these allegations are right or wrong. I am asking whether they are right or whether they are wrong, because it is important that matters such as these should be cleared up.
The second possibility is to provide brand new work for the factories but entirely on Government account or on account of the nationalised industries. A vast amount of supplies is required by the Government in one way or another, and a vast amount of supplies is required by the nationalised industries.
The third possibility is to lease the factories to private enterprise. I regard that as most unsatisfactory. In the first place, in leasing a factory to private enterprise there is no guarantee that the labour associated with the factory will be the labour the new tenant of the factory requires. If it is not, then that labour team will be broken up. In the second place, the right hon. Gentleman is not in a position to give anybody security of tenure. At any moment, he may have to say, "I am very sorry, but within a month this factory must make atom age weapons and we must get it back to the work it was doing."
The right hon. Gentleman shakes his head, as much as to say that that is not so, but I can tell him that H. J. Heinz and Company are leaving the factory at Standish and building a new factory because they cannot get security of tenure. A firm will not develop its organisation at a factory it leases unless it can be guaranteed the tenure of the premises it is occupying and can know that it may remain in possession of the premises for a considerable time. If these factories are to be regarded as "shadow" factories, to revert to Government work if an emergency arises, then, of course, no security of tenure can be given to the premises, and the tenant must be ready to get out quickly. Indeed, if the factories are to be "shadow" factories that is a reason why they should remain under Government control and not be leased, even if that means that they are employed on work other than that which they are now doing.
The fourth possibility is that the Government should sell the factories to private enterprise. I understand that the right hon. Gentleman has stated that he is thus disposing of a factory in Scotland to a well-known firm of boiler makers. I would myself consider that to be a great mistake, for some of the reasons which I have explained.
If the right hon. Gentleman is anxious to maintain these factories at a high level of employment, and with the skilled labour they have, it will be his duty to make a great deal of extra effort to try to bring that about. He will remember that a number of these factories, including some which, he has announced, he is about to close, were specially placed in areas where there was a high degree of unemployment. It would be quite wrong at this stage to close a factory in an area where there may be unemployment.
My hon. Friends who represent the Potteries have made this point in defence of the factory at Swynnerton, where unemployment is higher than the average. Why add to that unemployment? To close that factory will only add to the unemployment in that area. The established staff will have to be found jobs elsewhere, and if, for instance, they were to be sent to the North-East for jobs—and that area has an unemployment problem—that would mean that, say, 300 established staff already in the North-East would have to be pushed out to make room for 300 established people from Swynnerton. This means simply pushing the unemployment round the country. That is not a very sensible thing to do.
I shall not say much about the Swynnerton factory, because so much has been said about it already in the House by hon. Friends of mine——
—and if my hon. Friends catch the eye of the Chair they will say a good deal more yet about Swynnerton.
There is, however, one question I would ask the right hon. Gentleman about it. I understand that this factory is well qualified in pyrotechnics, and I would ask the right hon. Gentleman whether that work is to be sent out to private enterprise. That is one of the allegations to which I referred a little while ago, and it is extremely serious. I cannot understand why, when a nationalised industry like the coal mining industry uses an enormous amount of explosives, a factory like this cannot do some of that explosives work for the nationalised industry.
I understand that the British Oxygen Company is building, with Government aid, a huge new plant for the production of new-style weapons which, I am advised, could be produced, if some small changes were made in the factory, at one of these Royal Ordnance factories which is to be closed. Perhaps the right hon. Gentleman will tell us whether that is right or not. I am also told that an immense amount of money is having to be spent on adapting the most difficult of these factories to other production, but the layout of explosives factories and their machinery are not dissimilar from those employed on making fertilisers, and it would seem that that could be another way in which the right hon. Gentleman should be able to use his factory space.
Because of the time limit that there is on this debate I have tried to put the case for the Royal Ordnance factories in the shortest possible time, and now I will summarise what I have said. First, we are clear that these factories should remain in Government ownership. We are clear that the factories and their manpower should be kept together for useful production for the benefit of the nation as a whole. We think it is important to keep their productive capacity in being. We are satisfied that useful work can be found for the factories.
I would ask the right hon. Gentleman to consider this suggestion. If he really believes, as we do, that he ought to keep these factories under his control for the reasons which have been stated, why does he not use the machinery in which he sometimes takes a pride, machinery in his own Department, the Ministry of Supply Joint Industrial Council, which represents the workers in the factories, on the one side, and his officials and himself on the managerial side, to inquire into the future of the factories? Why does he not set up a joint working party representative of both sides to examine carefully the proposals he has made, and to consult the nationalised industries and other Government Departments, which are purchasers of a tremendous amount of equipment?
I said other Government Departments, but I am thinking not only of the General Post Office, for instance, but of the Atomic Energy Commission, and, also, I am thinking of the vast electrical programme of the Central Electricity Generating Board. Then there is the railway modernisation programme. The productive capacity of many factories will have to be increased to deal with the orders to help with that programme. There is a vast number of outlets. There would appear on the surface to be a vast number of opportunities available of useful work for the Royal Ordnance factories, work which they can do while being maintained under Government control and remaining as production reserves in time of emergency.
I believe that the workers at the Royal Ordnance factories have a point of view which should not be ignored. I suggest to the right hon. Gentleman that he set up a working part of the Joint Industrial Council, giving it a reasonably free hand to consult the other Government Departments and public authorities. They will know precisely what can be done, what adaptations in the various factories may be required to enable them to do the work which is readily available. There is time for this, because under his own programme he is not to close the factories for some considerable time.
These factories can make a very valuable contribution to the nation's economy. I urge the right hon. Gentleman to utilise this factory space which is available, to keep these teams of skilled people together, and so to keep always this adequate and useful production reserve for the Government in time of emergency. I hope that in replying to the debate the right hon. Gentleman will say he is quite prepared to have such a working party examine the proposals he has made.
The right hon. Member for Blyth (Mr. Robens)has expressed himself with brevity and temperateness and I hope that I shall succeed in following his example. He confined himself to issues of general policy. Again, I will try to follow him, and possibly, later, my hon. Friend the Parliamentary Secretary will deal with points raised in the debate. I do not agree with all the points of view put forward, but perhaps it would be better if I started with the area of agreement and proceeded insensibly to areas of disagreement.
First, I agree that, certainly in the short term, the most important industrial effect of the Defence White Paper is on the Royal Ordnance Factories. In the longer term its importance to the aircraft industry is much the greater, but in the immediate future I agree that it is the Royal Ordnance factories that receive the heavier blow. The whole history of the Royal Ordnance factories since the war has been an extremely fluctuating one, reflecting the fluctuating demand for arms. I do not want to bore the House, but the history is somewhat relevant to the points at issue between us.
When the war ended, there were 44 Royal Ordnance factories. The post-war Labour Government decided to retain 21 for the two purposes mentioned by the right hon. Member for Blyth—to meet the current demands of the Services and to provide a reserve of capacity for emergency. It so happened that, on the morrow of the war, the Services no longer needed equipment. They were choc-a-bloc with it and, at the same time, there was a great dearth of civil goods. Since the whole problem of moving over from war to peace was rather formidable it was thought right, and I am not disposed to question it, to mitigate the problem by introducing civil production into the Royal Ordnance factories, but, and this is very relevant, only five years later we had the Korean war and with it the threat of a still bigger conflict.
Civil production was hastily thrown out. Machinery was discarded, even before it had amortised itself, and civil production gave way once again to the production of arms. Indeed, the demand for arms arising out of the Korean War overflowed the Royal Ordnance factories, and private industry had once again to be pressed into arms production. Not only was this happening at home, but foreign countries were rearming, too, and certain export orders came the way of the Royal Ordnance factories. All in all, the Royal Ordnance factories were fully employed, but in the last two or three years a change has been taking place.
One cannot indefinitely go on with rearmament when there is no war. Demand for armaments has been declining on all the counts that I have mentioned. This change was in being before the Defence White Paper was issued, though I grant that the Defence White Paper has aggravated the change. The decision to move from a large conscript force to a smaller volunteer force, for instance, aggravates the change, but the decline was already there. This is not the only change, and for my part. I do not think that it is even the change of greatest significance.
There is a still more significant change. It is a change in our conception of the size of the reserve capacity which ought to be held against a state of emergency. When the Labour Government, in 1945–46, decided on the retention of 21 factories—it was only later that the number grew to 23—the emergency which they had in mind was a repetition of the 1939–45 war. In such a war, the first brunt of arms production would fall on the Royal Ordnance factories. They would hold the breach, as it were, until private industry had moved over from peace to war and subsequently come to their aid.
How many of us really believe that the emergency facing us now is of that kind? The right hon. Member for Blyth tended to the view that I thought that no reserve capacity ought to be held against an emergency at all. I do not take that view. We need a reserve of capacity for limited war. If I may express a personal view, I would deprecate so great a preoccupation with total war that we failed to provide for the needs of a limited war.
I am not in any way disagreeing with my right hon. Friend, but the reserve of capacity needed for limited war is much smaller than that appropriate to the last war.
As to major global wars, we hope that they do not come—God forfend—but, if they do, they would be fought with nuclear weapons. In that case the war, instead of moving up to a climax as did the last war, would show its violent phase in its opening, initial period. In other words, the old conception of the Royal Ordnance factories holding the industrial breach, so to speak, while the rest of industry came to help them, is now out-of-date. That is the real change.
Some hon. Friends of mine, a few years ago, blazoned on their shield, "Change is our ally". I do not think that I would go so far as that in this context, and I am not sure what the phrase means, but when a change in circumstances like this takes place we ought to adjust ourselves to it. I agree with the right hon. Member for Blyth that we ought to do what we can to mitigate the change, and I should like to examine what we can do.
When I made my statement on the Royal Ordnance factories I was asked by the right hon. Gentleman the Leader of the Opposition whether, for the conventional arms, those factories would be given preference. The answer is, "Yes". The right hon. Member for Blyth, without quoting details, referred in general to the fact that certain contracts were with outside private firms. I am perfectly happy to examine individual cases, but what happened was that, at the height of the Korean rearmament boom, private industry was brought into arms production. There still may be relics of that state of affairs, and orders then placed not yet fully discharged.
The policy now is that the Royal Ordnance factories shall be given preference, with one important qualification. I have a duty, and I fully accept it, to the Royal Ordnance factories and those employed in them, but I also have a duty to the Armed Forces. It might well be that occasions might arise when, for instance, the interests of the Services were better served by a design developed by an outside firm. Were that to be the case, it would be right that production should follow. In other words, the Royal Ordnance factories must not get into the habit of thinking that they have an automatic protection.
Subject to that, other things being equal, they will be regarded as preferred sources and, granted a lessened demand for arms, I think that private firms would accept that.
Does the right hon. Gentleman's statement mean that, from now on, if in a Royal Ordnance factory a weapon was developed it would not then be handed over to private enterprise for contracts?
By and large, yes. The right hon. Member for Blyth made the point. As far as I am concerned, design and development, on the one hand, and production, on the other, ought to go together. There may be exceptional instances, but, generally, I see no reason why they should be segregated.
The right hon. Member for Blyth spoke about the newer weapons, and he asked whether they could be introduced into the Royal Ordnance factories. To some extent, they already are introduced. Royal Ordnance factories are already producing rocket launchers and rocket components, and have started electronic repair work, but I hope that none of us will fall into the mistake of thinking that guided weapons can be a substitute for the mass production of the conventional arms which we have had in the past.
The hon. Member for South Ayrshire (Mr. Emrys Hughes), who is not present today, is always asking probing questions about the price of guided weapons. Obviously, I cannot always give details, but the fact is that they are extremely expensive. We cannot, therefore, produce the expensive en masse. But that is not the only difficulty. I think the right hon. Gentleman who opened the debate accused me, not in so many words, but certainly by implication, of ideological prejudice in placing orders for guided weapons with private firms.
As a matter of fact, guided weapons did not begin with me. They did not even begin with a Tory Government. They began long before, in 1948–49, when right hon. and hon. Gentlemen opposite were in office. It was right hon. Gentlemen opposite who took the decision to place the design and development of two aspects of guided weapons—flight and guidance—with the appropriate industries, aircraft and electronics. They could not, in the circumstances of those days, have done differently, because the Royal Ordnance factories were reasonably fully employed and the Ministry of Supply's own establishments were fully engaged on basic research.
If it is now suggested to me that I should reverse the procedure, let us look at the difficulties I shall get into. The Royal Ordnance factories will have to re-man themselves with a new type of technician such as they have not got, and re-equip themselves with facilities which they do not possess, and they can only do this by duplicating what is already present elsewhere. In other words, to do this, I would plug the hole in the Royal Ordnance factories at the cost of creating holes elsewhere in the aircraft and electronic industries. With the best will in the world, this suggestion does not make sense.
On the question of research and development and production going together, which I understand to be the principle which the Minister has ended by favouring, is it not a fact that, as far as rockets are concerned, a tremendous amount of research and development is going on at his own Ministry of Supply establishment at Pyestock? Where does the gap arise between capital expenditure devoted to research and development needed for such processes and the manufacture on licence of the actual weapons themselves?
I think there is some confusion here. The basic, fundamental, theoretical research is going on in Ministry of Supply establishments, but the development of weapons and engines, for that is what we are talking about in the main guided weapon field, is done by private firms. My establishments are not equipped to do it. There is a distinction between theoretical research and applied research.
I was seeking ways and means of mitigating the problem of excess capacity in certain limited ways, and I concede that we can mitigate it, but I would emphasise that the ways are limited. We are still faced with the question that we have more Royal Ordnance factories than is warranted in the changed strategic circumstances, even admitting the need to retain a certain reserve, which I do admit. The problem is what do we do with the factories? Do we retain them in Government possession and turn them over to civilian production, or transfer them to private firms already engaged in civilian production?
I was not clear about the point of view which was being put by the right hon. Gentleman opposite. As I understood him, he was saying that the factories should be retained primarily for defence, but that temporarily they should be switched over to civilian production. It is a very interesting point of view, but it leads to the very difficulties which the right hon. Gentleman pointed out—the very difficulties which arose, in fact, in 1950. None of us knows when these factories will be required once again for defence purposes. When the day unexpectedly arrives, the civil machinery will once again have to be thrown out and arms production substituted for it, but what chance do I have in these circumstances of attracting civilian work in competition with private firms entering into long-term contracts? There is a real, practical difficulty here.
If, on the other hand, we look at the other alternative of switching them over permanently to civilian production, I think that there are difficulties here, too. I am not trying to be ideological about this. We ought to look at it as a practical issue. What does a private firm do in similar difficulties with its surplus manufacturing capacity? Clearly, it looks round to see whether it can find a new product, and it may find one, but the right hon. Gentleman never suggested one to me today. As a matter of fact, the Government are in great difficulty in hitting on a new product which has been totally neglected by the outside world. [HON. MEMBERS: "Why?"] Because it is the function of industry constantly to scan the horizon for a demand for a new product, and to provide for it.
That is something quite different. I am talking about new demands and new products totally neglected elsewhere. There may well be cases where the capacity for a particular thing is insufficient, but for Royal Ordnance factories to undertake production of such a thing would be to enter a field where they have no experience, where they would be putting themselves in competition with firms which have experience, and where they would be duplicating organisations already exising. This is a misconcepion.
If the hon. Gentleman will bear with me, I should like to quote from the Fourth Report of the Committee on Public Accounts for the 1950 Session, which adverts to the production of civilian goods in Royal Ordnance factories between 1945 and 1950. This is what the Committee said:
In his Report on the Trading Accounts for 1948–49 the Comptroller and Auditor General called attention to a number of orders for civil work on which the Ministry had incurred heavy losses. They attributed these partly to disproportionate overheads attaching to low levels of production and partly to other causes, such as inexperience of manufacture, short-runs and use of unsuitable plant.
I can appreciate, from a technical point of view, that Royal Ordnance factories starting on somebody else's production might conceivably not do it efficiently, but is there any reason—if their surplus capacity is required by other firms—why particular firms should not send their experts into the Royal Ordnance factories to supervise and guide production with their "know-how", so that the goods could be efficiently produced?
As a matter of fact, something of that kind, though not entirely, has already been agreed with Messrs. Babcock and Wilcox in the Dalmuir factory, pending the change-over.
The right hon. Gentleman also talked about the nationalised industries, and referred to them as though the Government had control over the orders placed by them. He and his hon. Friends ought to know, as the authors of the nationalisation Statute——
This direction is used with great rarity, and so far as commercial matters are concerned the nationalised industries are free agents. I doubt whether any Government would, even in the public interest, instruct a nationalised industry to place an order where, on purely commercial grounds that industry would not otherwise have placed it.
I am not throwing away the strategic reserve. I did say that we have to maintain a certain reserve, but the point is what is to be the size of that reserve. It is no good trying to maintain a reserve such as we have now, which is related to the conditions of the last war.
It is not an admission of defeat.
Let us take the Dalmuir acquisition of Babcock and Wilcox. It means that firms all over the country are moving into the field of nuclear power, which we want them to do. Babcock and Wilcox find that, having regard to all their activities, their present facilities are inadequate and unsuitable. The facilities at Dalmuir are suitable for their purpose and they are, therefore, taking the factory over. Is it not a far more sensible thing that Babcock's should take in this factory in the course of their expansion rather than that the Government should set out to copy and rival that which Babcock and Wilcox already do?
The hon. Member was talking about the factory in Dalmuir and about the processes established by Babcock and Wilcox—the techniques which they can undertake and which cannot be undertaken by Government agencies. That can be done in the factory in Dalmuir, but it cannot be done in any of Babcock's factories. That is why a lot of Babcock and Wilcox's and Weir's work was done in Dalmuir.
The right hon. Member should reveal the fact that for the last two years the Atomic Energy Authority has advertised in Scotland for mechanical engineers to evolve mechanical means of using atomic energy, and that those means evolved by the Authority have been handed over to Babcock's to have manufactured. But Babcock's cannot do it and they have sub-contracted to another company. Why not take it direct to Dalmuir and keep Babcock's out of it?
The hon. Member is under the impression that Babcock and Wilcox are to undertake atomic work in the Dalmuir factory, but that is not so. They propose to produce quite conventional equipment—cranes and large vessels The atomic work is being done elsewhere, and they do not consider the Dalmuir factory suitable for their atomic work.
In other words, I have a moral obligation to the workers in the Royal Ordnance factories, but I do not consider that I should discharge that moral obligation by embarking upon the hazardous and risky course which the right hon. Gentleman has suggested. The best way to discharge my moral obligation is by integrating the factories in concerns which have the experience and are well-established.
I have already given way a certain amount, and I do not want to protract the debate.
Since we have been talking about Dalmuir there is one aspect of that transaction to which I want to draw attention. Babcock and Wilcox will feed in their work gradually as the defence work declines. There should, therefore, be every prospect of ensuring a stable level of employment in that factory, and I hope to be able to contrive similar arrangements in other cases.
If we succeed in passing over most of these factories to existing firms most of the displaced workers will be found an alternative home and the back of the redundancy problem will be broken. I agree that there will still be some redundancy and that it will be worse in some areas than in others. My right hon. Friend the Minister of Labour is very conscious of that fact and it is precisely to mitigate the resulting redundancy that I have decided to give notice of the closures a long time ahead, and to give as long notice as possible of the discharges to come.
I think that that will help. I do not want to underrate the problem. On the other hand, we should not exaggerate it. We are talking of 7,000 workers out of a total labour force of about 21 million or 22 million, and an unemployment percentage of 1·5. Surely, with those figures, the economy ought to be able to absorb the displaced workers. Indeed, only last week the Opposition were criticising the Government for inflation. They cannot both complain about inflation and at the same time complain that there is likely to be an insoluble problem of redundancy.
They can, but it is not a legitimate argument.
I want to say a word about the factories to be retained. I think that the duty of any Minister in charge of these factories is to try to provide for the people in them well worth while careers, but to do that the factories must be well equipped. They have to be up to date; they have to be technological leaders in their field, and their rate of utilisation must be reasonably high. It is precisely to ensure that that rate is reasonably high that I have decided to dispense with certain factories. I do not rule out civil work completely in the factories to be retained. I do not admit it in a big way because—I do not want to develop the argument ad nauseam—if I tried to enter into it in a big way I should be in exactly the same difficulty that I mentioned earlier.
The ordnance factory is primarily an arms factory and would, therefore, be in the greatest difficulty in attracting civil work when everybody would know that it would be only temporary. But I admit it in a limited way. If defence demand is temporarily lowered it would be perfectly right to feed in an amount of civil work so that the nucleus of management and labour which would be needed later for the discharge of defence work could be kept in being. I accept that the factories can suitably do civil work when they can eke out a shortage of capacity in general industry.
The burden of maintaining the reserve of capacity for defence must clearly fall upon the State—and I use the word "State" instead of saying that it will fall on the general body of taxpayers. It would be quite wrong to try to shift the burden of carrying this reserve of capacity on to general industry by hurling the reserve into competition with general industry, but when the reserve is short in general industry and the factories can eke out the shortage the undertaking of civil work is perfectly legitimate. That is consistent with the primary defence purpose of the Royal Ordnance factories.
To conclude, I think that we would all agree that arms production should be cut down. I hope that we are all agreed that we ought to try to find an alternative civil home for the displaced workers. The dispute between us, therefore, is as to which is the better method of securing this objective. The right hon. Gentleman has put his point of view which, as I understand it, is that the sacred fact is that I, the Minister of Supply, have so much labour and so many factories and, therefore, I should adapt my purposes and my organisation to these factories and this labour, even though it means entering into fields where I have no experience, pitting myself in competition with firms which have the experience and introducing complications and divisions of purpose into the organisation of the Royal Ordnance factories.
The Government, on the other hand, take a different view. The primary thing is the purpose which the factories ought to serve, and the primary purpose is a defence purpose. Their organisation and capacity should, therefore, be compactly related to their purpose—that is the best guarantee of efficiency—and any resources in the way of assets and labour not required for this purpose are best placed in other organisations, which have clearly defined purposes and which, for that reason, have a much stronger chance of commercial survival.
I submit that it is the second of these views which is in the better interests of the country, and I venture to say that in the longer term it is also in the better interests of the employees who now happen to be under my care.
We on these benches have learned over a period of years to have considerable respect for the Minister because of his defence, in particular, of the fuel and power industries against ignorant, outrageous assaults by the hon. Member for Kidderminster (Mr. Nabarro), but my hon. Friends and many people throughout the country—hundreds of thousands of them—will be extremely disappointed with his speech today, and especially with some of his more flippant remarks. One example was his statement a moment ago that he had no advisers to direct his attention to various projects. The Ministry of Supply have as good technicians, in my submission, as have Babcock and Wilcox.
My interest in this matter is that I represent the constituency of Crewe in which is situated one of the finest organisations and factories in the country, Radway Green. When the statement was made by the Minister a few weeks ago, the hon. Member for Southend, East (Mr. McAdden)said:
Would he suggest to hon. Gentlemen opposite that it is rather hypocritical of them to argue that there ought to be a run-down in armaments and then to argue that people ought to be continually employed on producing them."—[OFFICIAL REPORT, 15th July, 1957; Vol. 573, c. 764.]
That raised a cheer from the crowded benches opposite. Those benches are not crowded now, because hon. Members opposite are not as interested in providing employment as in laughing at suggestions from this side of the House.
In any event, it is not the submission of this party that there should be no reduction in armaments. Obviously, we all support a reduction in armaments. What we are demanding is that there should be a full use of Government-owned factories. The principle for which we stand is that of keeping the production of arms in the public sector of industry, wherever that is possible, rather than in the private sector.
One can hardly imagine a private company, with a factory and labour facilities for producing an article which it requires, ordering that article from a competitor or from a Government-owned factory. The private company would see to it that it produced the article itself in its own factory. That is what we are asking the Government to do in this case. It is bad for business for the private man to sub-contract, and it is equally bad for business for the Government to subcontract. Yet we know that there is a great deal of sub-contracting and that some of it comes back into the Royal Ordnance factories.
Radway Green is one of the most up-to-date engineering establishments in the country. It is exceptionally well sited, it is four miles only from Crewe, it has adequate sidings and marshalling yards, it is on the main line between Crewe and Derby and the new Birmingham-Preston by-pass is to pass its door. There has been considerable modernisation recently for the production of small arms ammunition. The plant is second to none in the country.
What has been the fate of this factory? The fate of the factory has caused considerable local disappointment and apprehension about the future. From October, 1956, to February of this year no fewer than 570 industrial workers were declared redundant. In May or June of this year 610, and 50 non-industrial workers, were declared redundant, making a total of 1,230 workers discharged from this small area. One must add a wastage of about 300 people, who in normal circumstances would have been replaced and who have not been replaced. I make that a total of 1,530 workers discharged in that area in less than twelve months. The wind-down is from 3,500 to 2,000 workers in a factory which, I understand, during the war employed about 16,000 people.
The level of unemployment in the adjacent Potteries, which is the district which relates to Radway Green, is above the national average; it is 1·9 as against 1·5. I am sure that my constituents and those hon. Members who represent the adjacent constituencies were very relieved when they heard that Radway Green would not be axed completely. The Minister has told us that Radway Green is to be "a preferred source." That is not good enough; it does not go far enough. Government contracts are being given to private firms. I have sent instances to the Ministers, supplied to me by my constituents working there. The answers which I have received are far from satisfactory. Recently I called attention to a case in which a contract which could have been carried out in Radway Green was contracted out to a private firm and then sub-contracted back to Radway Green. That is a process of which we totally disapprove.
The other example of which the Minister is well aware arises from the fact that there has been installed at Radway Green equipment to manufacture 30 mm. drawn steel shells. I am told that the cost of that equipment was nearly £1 million. Yet those shells, which could be produced at Radway Green, are at the moment being manufactured by private enterprise. I have given the Minister the name of two firms, which I will not repeat now, and another firm about which the information is doubtful. I am informed that the cost of those shells under private enterprise—being paid for by the Government—is from a half as much again to twice as much as the cost of production in Radway Green.
If my hon. Friend will allow me to read it, I have in my hand the Minister's reply, dated 12th June this year. The letter does not deny that fact. That is a very significant omission. The Minister writes:
It is perfectly true, as your correspondent says, that there is capacity in private industry as well as in the R.O.F. for the production of 30 m.m. D.S. shells, and it is true that some of that is being done by private enterprise.
There is not a word in that letter denying the allegation which was made in the letter which I forwarded to the Minister—the allegation that the shells cost half as much again or twice as much as they would cost if they were produced at Radway Green. If that statement was not true, it was extremely neglectful of the Minister not to deny it, but it probably was true, and, therefore, it was ignored.
That is an unfair allegation. My first query was to elucidate a point concerning the relative production orders. I am not defending the Government. I am merely listening. If the hon. and learned Member waits, he will, I hope, hear my remarks in due course.
If the hon. Member is assisting us to get from private enterprise into Government factories work which ought not to be in private enterprise factories, so much the better. I hope he will devote a large part of his speech to that aspect.
What we say is that the Royal Ordnance factory should not be a preferred source, but that it should be the only source of all that is capable of being produced in Royal Ordnance factories. These factories cannot go out, as private enterprise can, and canvass work. They are in the same position as members of the Bar waiting for briefs to be brought to them. Private enterprise can go and wait on the Minister's doorstep. It can take steps to get the orders. The least that the Government can do with their own factories is to make them, not a preferred source, but the only source for goods which they can produce.
Another aspect of the matter which, I hope my hon. Friends will develop concerns Admiralty contracts. I am told that the Admiralty, being the senior Service—the Board of Admiralty is a very ancient body——
—does not act through the Ministry of Supply, but goes out for contracts on its own. I notice that the Parliamentary Secretary agrees with me. In my opinion, it is about time that the Admiralty fell into line with the other Departments and made the Ministry of Supply the source of its contracts. I do not want to develop that theme, because there may be Members representing deck-yard constituencies who know the whole story, but I hope that the Government will note that it really is time that the Admiralty fell into line and placed its contracts through the Ministry of Supply.
I have pledged myself not to speak too long. [HON. MEMBERS: "Go on."] Very well, I am encouraged. I do not want to sit down without putting the viewpoint of the Radway Green factory and what it is capable of producing. We believe that it can make a contribution to the nuclear power stations. Because it has the means to do so, the factory is manufacturing what, I understand, are called fuel channels. That name means nothing to me, but it means a lot in power stations. There is considerable skill at Radway Green. It can be used for that purpose, and I hope that the Minister will develop this possibility of work at Radway Green, work which it is already doing, and doing well.
The next project on which it is engaged and from which more work could flow is the modernisation plan of British Railways. The Radway Green factory is very well sited. It is four miles from Crewe and it has sidings, marshalling yards, main roads and everything to link it up with the modernisation plan. One particular aspect concerns wagon braking. Wagons are being converted from hand-operated to vacuum braking and it is considered that this kind of work could well be carried out at the factory. There are other aspects of the same kind of work. The workers at the factory consider that they have all the means of undertaking part of the electricity plant, for instance, for the Manchester to London line.
Further work that the factory could do is in connection with civilianisation. The Wolfenden Report, as we all remember, suggested that a lot of work now being carried out in the Services could be undertaken by civilians. Under the new dispensation, a great many people will be discharged from the Forces and a lot of work that is now done by National Service electricians and technicians could, we submit, be done at Radway Green. I hope the Minister will consider the possibility that when the Royal Electrical and Mechanical Engineers cease to function as part of the Armed Services, the overhauling and reconditioning of equipment could be done cheaply and efficiently at Radway Green.
I turn now to civil work which could be undertaken at Radway Green. We have there a foundry and rolling mills—a self-contained unit—which could be exploited. This unit is capable of producing non-ferrous material for the defence programme and there is also surplus capacity which could, and should, be used for the production of high grade commercial sheet and strip up to a width of 16 ins.
It is suggested that that plant should be used for commercial purposes and to extend the work which is done at the factory. It can make, and is making, small non-ferrous castings. This is a technical matter, but I hope that the Minister will inquire into the possibility of extending the use of this plant for the benefit of the men in the area.
Other civilian work which could be undertaken is the mining mechanisation programme and the making of sparking plugs, neat flame burners for gas cookers, multiple sprinklers and reflectors for electric fires, in addition to coal-mining equipment for the Coal Board and machine tools.
These are concrete suggestions which have been made, not by me, but by the highly technical committee which sat at Radway Green, consisting of the staff side as well as workers, and compiled an excellent report. I hope that the Minister will study it and that before long something will be done, not only to bring an end to the redundancies at Radway Green, but to add to the labour force there. I end as I began. In my submission, it is the duty of the Minister to employ nationally-owned and equipped factories first and foremost for Government work.
I promise not to delay the House long and I hope that some of the hon. Members opposite who are concerned with north Staffordshire may also catch your eye, Mr. Speaker. To those who are concerned with that area, it must, of course, be a heavy blow that the Swynnerton factory should be closed down. No blow is ever heavier to a politician than the blow around the parish, because people know what it means and it is a big matter for us in the area.
Nevertheless, as a general case, I think that we must take the broader view on the question of these factories. I see no possibility of a large filling factory such as Swynnerton being maintained at its present level. It would be wrong of hon. Members on either side of the House to give the impression that that can be done. I and one of my colleagues have spoken quite openly about it with the responsible representatives, and I think that the first duty of a politician is to attempt to say truly what can be done. Swynnerton has been a filling factory for fourteen years, but it does not now fit into the new military pattern following on the White Paper.
I wish to turn to the two problems which have been raised, and I will deal first with the human problem which must arise from the movement of 2,300 people. As the House is aware, of these 2,300 people roughly 1,000 of them are established and about 1,300 are not established. This is typical of all filling factories. I want to put to the Minister two ways in which to mitigate the inevitable hardships which the movement of these people will involve, and, first of all, in connection with the non-established persons.
As the House is aware, a filling factory is not without its dangers, though, of course, the dangers which existed during the 1914–18 war of various types of poisoning have largely been eliminated. However, it is true to say that there are still certain dangers connected with filling factories. Certain persons who are not established have worked in Swynnerton for many years and they feel outside the general scheme.
I congratulate the Minister on making it possible for people to receive a gratuity after five years instead of seven years. That is an improvement, but I would ask the Minister to do what every good employer does, and that is to give special consideration to the cases of what I might call the "Old Joes" in the factory who are in their fifties and sixties. Such people should be given this special consideration in precisely the same way as people employed by private employers are given it when a factory is closed down. I believe that is quite a problem.
Has the hon. Gentleman also noted the answer given on Monday by the Minister that since 1950 some 250 of the personnel in this factory have been declared to have suffered from dermatitis or some other form of industrial disease? As that is a high figure, will the hon. Gentleman extend his plea for special consideration to those still left and who have so suffered?
I agree with the hon. Gentleman, and I hope that they also will be given special consideration.
One does not wish to exaggerate the cases, and the National Health Insurance scheme looks after the more desperate cases which can be registered. But I think that the cases of these persons who have been employed in the factory for many years should be given particular attention by the Minister, the cases which cannot be covered by the general rules and regulations which apply to industrial civil servants.
I now turn to the established civil servants. With the movement or dismissal of some 7,000 people, the Ministry will undoubtedly be faced with a difficult problem in finding employment for those who have the right to establishment. The problem facing the Minister is how these people can be fitted in. Contrariwise, there is the matter of the hardship in certain categories of those who are established. What will happen to them?
I want, first, to take the case of those people whom one might call the partially established and to whom the Ministry has a duty to give employment, but who, because they may have failed to pass the necessary medical tests, cannot receive pension rights. Theirs is a hard case, especially when it is going to be difficult to find employment for them within the Ministry's establishments.
There are, I believe, between 30 and 100 such people in the Swynnerton factory and they will definitely suffer hardship. The Ministry will find it extremely difficult to place them. Of course, if these people say that they will not accept the Ministry's offer of further employment, which may involve the down-grading of their rank and a reduction in pay, they will be faced with the fact of only receiving the gratuity and not what I believe is technically known as the phased pension on reaching the age of sixty.
Then there is the question of the married women employed in the factory. Married women have been employed in the factory for a long time. Undoubtedly a lot of them came forward to help when 20,000 people were employed at Swynnerton in war-time. Many of the women have married and have settled in the district. It will be very difficult for some of them to accept the Ministry's offer of further employment when it means breaking up their homes and moving elsewhere. Here, again, it is a question of about 100 people, and I have tried to keep the figures in proper proportion.
There are other obvious cases with which I hope my hon. Friends will deal, but I have mentioned three categories employed in a factory which has done well for the country, which has been operating for some forty years and in which the average age of the women employed is around forty years and the average age of the male workers is around fifty years.
I believe there is a chance that a certain use could be made of the existing factory and that its use is only limited as far as the Ministry of Supply is concerned. It is possible that the firing ranges could still be used and that something could be done on the pyrotechnical side and, possibly, that some sort of use could be made of the factory for the strategic storage of munitions which are now stored in the south of England in a place the name of which escapes me, but in which they are not stored so effectively. I am told that there are better storage facilities in the Swynnerton area.
When the factory is closed I think that it should be offered to private enterprise. I will not pursue the debate that we have had on that point, but I believe that an opportunity should be given to the City of Stoke-on-Trent and to other people to make use of the factory space. Whilst that is being done it is essential that the factory should be maintained in a proper state and I suggest to the Minister that those employees of the factory who become redundant should, as far as possible, be employed in the maintenance of the factory.
This is a deep human problem for many in my division and in the divisions of my hon. Friends and neighbours. Those who will suffer real hardship are, I think, comparatively few. I believe that it merits the investigation of the Minister or his officers to see, without any breach of the general agreement for the superannuation of civil servants, whether it is possible to do certain things in an ex gratia manner which would enormously help the men and women who have served their country so well.
The hon. Member for Stafford and Stone (Mr. H. Fraser)made a number of constructive points which I think, will be generally acceptable to both sides of the House, and I reinforce his plea to the Minister to look into them urgently. If I may say so, the hon. Gentleman stated his case a great deal better than the Minister, whose speech was extremely disappointing, and I agree with what my hon. and learned Friend the Member for Crewe (Mr. Scholefield Allen)said about it. Not only did the principles of the Minister's policy seem doubtful but, in addition, there is a great gap between the priniciples which he laid down this afternoon and the practice we see going on' in our own constituencies, in the R.O.Fs.
I am speaking for Woolwich Arsenal and many of my hon. Friends will give other instances. The Minister made the important point—important for Woolwich Arsenal—that where a new weapon or process is developed by a R.O.F., its production should go to the R.O.F. The right hon. Gentleman also said that the Services had given contracts to private industry because it had produced the design and development and therefore should get the production contract. I will give the Minister one instance. Recently a number of R.O.Fs. and private firms were asked to produce a steel cartridge case to be drawn out of a solid steel disc, which is an exceptionally difficult task. All the competitors failed, including one or two R.O.Fs. which shall be nameless. Woolwich alone succeeded in this difficult undertaking and produced a steel cartridge case which passed the test.
What happened? These processes cannot be kept secret in a R.O.F. as they can be in private industry. The production orders went to private industry and not to Woolwich, which could perfectly well do the work. They went to private firms which were already over-employed when Woolwich Arsenal is under employed. How does this square with the principle laid down by the Minister at the Box this afternoon, that where a ractory develops something, it gets the production contract? I would like this specific case looked into, and I urge the Minister to reconsider the matter in the light of what I have said. [An HON. MEMBER: "Did they make it under licence?"] I do not know. That is not the only case. In Woolwich we have all the necessary facilities for this development work.
I am anxious that the point of view of the oldest R.O.F. should be heard. I promised that I would not take long. And I intend not to take long, as well as promising not to do so. I mean this, because I know that there are hon. Members with R.O.Fs. in their constituencies which have greater problems than Woolwich Arsenal. However, we are the oldest R.O.F., and I can say without exaggeration that we have probably done more for the nation, over a longer period, than any other industrial unit in the country. We are equal to any industrial unit in our record of skill and good spirit. I have said before, and I repeat, that far more battles have been won for Britain on the broad acres of Woolwich Arsenal than on the playing fields of Eton.
First, I want to stress that we are not asking here to be given work on the basis of the past. All that Woolwich people ask is to be given a fair and equal chance of adapting themselves to the new situation side by side with private industry. We want to be given a chance to be proved on our merits, and unless we can show that we are more efficient, or equally efficient, I do not urge that we should be given contracts on any basis of past performance.
I am not reassured by what the Minister said today. I am not satisfied that we shall not be ruled out of our opportunities for production because we are Government owned and not privately owned. The Minister put it this way. He said that he would permit civil work in R.O.Fs. when it was needed to keep them as reserve defence capacity. But I ask whether it would be fair, simply because a R.O.F. is not needed to be kept for reserve defence capacity, to rule it out from civil work even though it could do /that as efficiently, or more efficiently, than private industry? The only real test is whether it can do the job efficiently. If it can do that, it should get the job whether or not it is needed for reserve capacity and, indeed, whether or not there is a great shortage in that industry.
I may be getting a little confused, but the Minister himself was not clear. The right hon. Gentleman also said that he would allow civil work for R.O.Fs. where there was a shortage of capacity in private industry. This must be looked into more carefully. Which industries has he in mind?
As I have said, I am speaking for Woolwich Arsenal, which is the most versatile R.O.F. in the country. For instance, it has even produced oil-drilling machinery. I want to be sure that Woolwich Arsenal gets the chance of entering an industry for which it is suited.
On the arms point, again I am not satisfied. Like my hon. and learned Friend. I feel that it is not enough simply to say that R.O.Fs. are a preferred source. Over and over again we find arms contracts going to private firms while we get the little sub-contracting jobs. For instance, a contract for nine six-inch naval guns was given to Vickers recently and Woolwich Arsenal made the barrels. Yet we were making guns more efficiently than Vickers centuries ago. Why should Woolwich be under-employed when Vickers, I believe, is fully employed, and why should the Minister give a contract for naval guns to Vickers and ask us to carry out the sub-contracting work on them? That policy needs to be looked into and changed.
Finally, may I ask a specific question? In reply to a Question of mine recently I was told that there would be redundancy in Woolwich this year. I ask the Minister how much redundancy will there be, and in what trades?
I shall also be brief, because the case I want to put has already been well stated by my hon. Friend the Member for Stafford and Stone (Mr. H. Fraser). The factory he was talking about is similar to one in my constituency which is being closed, the T.N.T. factory in Irvine. I do not think that anyone can believe that there is any great future for any Royal Ordnance factory at present manufacturing T.N.T., and the Irvine factory has not been making it for some time but has been employed only on dismantling ammunition.
My first point is to maintain that a dying factory should not be kept in being. If a factory is dying it is far better to close it and put a new and expanding industry in its place. However, the Minister must be a little more specific than he has been so far. The people working in each Royal Ordnance factory want to know why that particular one was chosen to be closed. In this case, I know that the amount of ammunition to be dismantled is decreasing—war stocks are going down—but there is still a certain amount which has to be dismantled and I understand that, in the future, ammunition which has been dismantled at Irvine—