Orders of the Day — British Leyland Motor Corporation Limited

Part of the debate – in the House of Commons at 12:00 am on 18th December 1974.

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Photo of Mr Maurice Edelman Mr Maurice Edelman , Coventry North West 12:00 am, 18th December 1974

I will not follow the hon. Member for Henley (Mr. Heseltine) in the more historically contentious part of this speech. My purpose is to support the motion that some bridging aid should be given to British Leyland.

British Leyland is a national asset, and what is at stake now is the future of the only wholly-owned British motor company, our biggest single exporter, and the employer of 200,000 workers, which really means that probably more than 500,000 people are directly dependent on the prosperity of the company.

Only today, the company's cash difficulties were underlined by the unhappy financial report issued by Lord Stokes. What is clear from it is that the bankers have given a vote of no confidence in the present administration of the company in existing circumstances.

The real question for this House is why we should make a contribution of £50 million worth of preliminary support to the company unless there is some structural change within the company, and some assurances that its future strategy will be in accordance with the country's needs and will be designed to promote the prosperity not only of the workers most intimately concerned but also of the nation as a whole.

When I say that this is a preliminary contribution, it is clear that the £50 million which the company is immediately asking for is merely to replenish stocks which cannot be replenished at present, first, because the bankers will not give the necessary support and, secondly, because of inflation there is not the cash flow available to provide the stocks required. If we look further ahead, we see that something like a further £350 million of support will be needed to re-equip the company if it is to be able to compete with the giants of the motor industry.

There is something slightly ominous about this order. It reminds me unhappily of cash handouts in the past which ultimately dribbled away into the quicksands. Some people regard public support as being some sort of bran tub, and it can become a bottomless pit, which the Concorde eventually became, into which public money is poured, without accountability and without public control. When money is asked for in these circumstances, without the guarantees which I have talked about, I regard it as being a great confidence trick played upon the public.

It is wholly improper to extract money from the taxpayer unless there is a proper organisation capable of supervising the expenditure of the money and accounting for it, so that the Minister can come to the House and say, "The money which you voted to support the company has been paid out not simply as a sort of dole for those who have fallen on hard times, not as a kind of Christmas stocking to be filled by the taxpayer because of the season of the year, but as a constructive contribution to the future of the British motor industry".

We have to consider some matters of future strategy. We have to consider, for example, how to raise the productivity of the industry which at present is one of the lowest in the Western industrial world. I quote some figures from the Economist. Last year in Britain, the number of cars produced was six per worker. In Europe, it was 12 per worker. In Japan, it was 37 per worker. These are sinister, disturbing figures, wherever the fault may lie. It means that the amount of horsepower and the amount of investment put behind each worker is very much lower here than it is abroad.

If we are asked to invest money in the motor industry, a second question must be answered. What will labour relations be like in the future? The hon. Member for Henley (Mr. Heseltine) very properly drew attention to the fact that industrial disputes have resulted in a lowering of output, inevitably. But the profounder question concerns the cause of these industrial disputes. It takes two to create a dispute. It is not unilateral Management has a great responsibility in this matter, and I revert to the question whether the management of British Leyland has been or is adequate to deal with this new investment of public money and to produce the results that we all want to see.

Finally, there is the question of competitiveness of the British motor industry and whether, in the world as it is, we really are in a position to tackle the big three or even the big four of the motor industry.

Tonight is the moment of truth for the British motor car industry. The oil crisis and the deepening world recession have plunged the industry everywhere into difficulties. A figure worth remembering tonight is that one-third of Detroit's labour force is either laid off or on some form of short time. That has relevance to Coventry, too. It used to be said that if Detroit sneezed, Britain's motor car industry caught pneumonia.

The symptoms are already there. Chrysler is already laying off men. Five of Chrysler's six American assembly plants have been shut down until after the New Year. There is redundancy and short time in Europe. Governments are intervening desperately to restructure their industries to deal with the already deepening recession. In the last year output has fallen by about 25 per cent. Perhaps the most disturbing figure is that European motor manufacturers now have over 800,000 new cars in stock, which is about half the number of our likely production this year.

These are symptoms of a very grave situation in our motor industry. This is a moment not for slogans, but for a real examination of the industry's problems.

I believe firmly in the public ownership of the motor industry, and that belief is reinforced by the fact that we are now being called upon to provide this trailer, so to speak—perhaps my right hon. Friend will confirm it—of £50 million for what ultimately might rise to an investment of about £400 million. If so, this vast expenditure of public money should have an adequate form of public accountability and control, and I believe that public ownership must be the answer.

Having said that, I should add that, even if British Leyland were nationalised tomorrow, the industry's problems would not be solved by the wave of a wand. Nationalisation will not cure the malaise in the industry. Still less do I believe that my right hon. Friend's proposal—I take issue with him here—of bringing in Sir Don Ryder as the magic man of the industry, complete with his hatchet, will provide the urgent action required for the industry.

My right hon. Friend has named an eminent panel of investigators who are to inquire into what went wrong at British Leyland, and presumably to make recommendations for the future. I have known Mr. Harry Urwin for a very long time. He is an outstanding trade unionist with remarkable—indeed, unequalled— experience of the motor car industry who will obviously bring great expertise and benefit to the investigating committee. But that is not the point. If Sir Don Ryder is to apply a Beeching-like process of rationalisation to British Leyland —a sprawling, amorphous company which grew haphazardly without any logical and integral relationship between one part and another—if he is to apply that kind of Malthusian process of cutting down, I must warn my right hon. Friend and the House that there will be great resistance by those workers who, in this arbitrary way, are to be done out of their jobs.

I recall that in Coventry, when automation was first introduced, there was what was called an anti-automation strike. Some people called it the Luddite strike. Whatever it was, it was the immediate response of men, and women too, who felt that their jobs were in danger from new processes being introduced arbitrarily without consultation with them. They felt that they had not been allowed proper consultation, and therefore they objected. If that sort of process were to take place there would not only be anti-redundancy strikes but sit-ins on a massive scale which, by definition, would be profoundly detrimental to the future of the industry.

I am speaking tonight because I want not only to tell my right hon. Friend about this but to suggest to him a means by which it would be possible so to consult those who are involved in this industry that there would be an assent that would in turn enable British Leyland to be the strong, productive and efficient industry which, with its managerial experience and skilled workers, it has been in the past and can be in the future.

I have urged my right hon. Friend to call a conference of all the interests involved, and I mean the Government, managers and shop floor workers, because it is not enough to pluck out a few established trade unionists, much as I respect them, and say that they are the people who will make the decisions, they are the people who will decide what will happen to the livelihood of so many men. I do not think that is the way to do it.

In reply to a Question of mine, my right hon. Friend said that he was already having discussions with the interests concerned. I do not believe that that kind of bilateral discussion is the way to do it. The first thing that is necessary is to have this general national consultation to create the right psychological climate in which people will feel that they are having some part in deciding what their destiny will be. If my right hon. Friend feels that the term "psychological" is too strong, let me tell him that this is the preparation for any pragmatic decisions that will have to be taken.

The sin of right hon. Gentlemen opposite in their policy of confrontation was that they made a unilateral diktat directed against workers with the Industrial Relations Act which produced the three-day working week and all the unhappiness and the disadvantages which flowed from it.

Let my right hon. Friend consider this question of a tripartite national conference. Let him not think that just because it involves so many people and there may be so many delegates it may turn into a national jamboree. I know that I can speak for the shop floor workers in Coventry with whom I am in close touch and with whom I have had consultations on this subject. I am certain that they will not be prepared to receive a kind of ukase from outside that will tell them what they have to do, unless they are taken into the confidence of those concerned.

My right hon. Friend said that he will not publish the report because of conditions of commercial secrecy. It is in saying that that he is showing the weakness of his approach to this matter. If issues are to be shrouded in secrecy, if workers on the shop floor feel that facts are being kept from them, how on earth can my right hon. Friend expect to have their co-operation? How on earth can he expect to have their participation? What is necessary at British Leyland is not only a statement on the general facts, but a clear statement that if there is massive public investment there must be public ownership and accountability. In the interim, there must be a new deal at the top, and not only on the floor.

I have the greatest respect and admiration for Lord Stokes. I think he is a superb salesmen and I hope that, come what may, his talents will remain at the disposal of the company, but there comes a moment when the failure of a company —and tonight we are engaged in an inquest into the failure to obtain the proper cash flow of the company and the fact that it has run into its present difficulties, which I believe have been produced by top management—must lead one to say that there should be a change at the top. No person is sacrosanct in that respect. No person can be said to hold his position freehold, and that applies not only to politics but to an important national company such as British Leyland. I hope that my right hon. Friend will consider, as a condition of the contribution that we are being asked to make tonight, an urgent inquiry into the top management at British Leyland.

Some of the workers who live in my constituency have summed up the situation very simply. They have said that there are more sheriffs than cowboys at British Leyland. That is a matter which should be investigated. How has the management been conducted? Is it being conducted properly in a financial sense?

I ask this specific question of my right hon. Friend. Is it true that if Lord Stokes were to retire he would receive a terminal payment of £400,000? I ask that question because that statement has been made. If there is any truth in it, there is something seriously wrong with the financial organisation of a firm which can vote its top management, however indispensable it may seem, such a fantastic figure. I hope that question will be answered tonight. If hon. Members are being asked to vote £50 million, we ought to know whether almost half a million pounds of that sum may be paid to one manager as a golden handshake.

In conclusion, may I say that I want to see a new mood of co-operation and purpose both at the top and on the shop floor. The Opposition are fond of talking about co-operation. The workers of British Leyland want nothing more than to have the opportunity of working on, and producing, cars. They want to help exports. They want to participate in a great national effort. Let them make a new start in promoting a state of affairs where strikes will be a thing of the past. That new start can be made only if the workers are brought into consultation and given the chance of participation. I hope and believe that eventually, out of the restructuring of British Leyland, the workers will have a participatory place on the board, and that they will be able to feel integrated into a firm of which they are an essential part. In that way I hope that, with the assent of the 200,000 workers of British Leyland, we can make a new beginning in which this great national firm will be able to work in the interests of the nation as a whole.