Orders of the Day — Industry and Commerce

Part of the debate – in the House of Commons at 12:00 am on 8th November 1977.

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Photo of Mr Stanley Crowther Mr Stanley Crowther , Rotherham 12:00 am, 8th November 1977

The hon. Member for Worcestershire, South (Mr. Spicer) appears to be opposing intervention in industry but to be in favour of intervention in housing, education and elsewhere. That is illogical. I suggest that the problem of declining manpower in manufacturing industry will be solved eventually by reducing the working week. But that is a subject for another debate.

I was sorry that my right hon. Friend the Secretary of State for Industry was not able to be a little more specific about the Government's attitude to the future of the steel industry, which is a matter of very great concern to my constituency. I appreciate the support that the Government and the House have given to the British Steel Corporation in its capital investment programme—I remember that we sat up all one night during the last Session to put the necessary Bill through.

However, I am unconvinced that the Government have yet fully grasped the desperate seriousness of the crisis through which the steel industry is passing—I use the word "passing" in a rather loose sense, because there is no evidence yet that the industry is coming out of the crisis. It appears to be stuck in the middle of it, and it is the worst crisis since the 1930s. It is not, as the right hon. Member for Leeds, North-East (Sir K. Joseph) appears to think, just a financial crisis.

I suppose it would be easy for the BSC to get out of its financial difficulties by sacking 60,000 to 70,000 people and reducing its production targets to perhaps 15 million or 16 million tons a year, but that is not the real crisis. The real crisis is an industrial one, and not so much a financial one. I accept that the loss of £10 million a week is serious, but let us not forget that nearly half of it is due to interest charges that have necessarily been incurred because of the enormous amount of new investment that is needed just to catch up with our foreign competitors.

What worries me most is that the Government are not implementing any policies that are positively and directly aimed at stimulating demand for steel in the home market. There are many areas within which Government policy could have a considerable influence on steel demand. If we do not see an upturn in the home market in the fairly near future, we shall be in danger of finishing up with a large number of modern plants working half time or less.

It is not part of my duty to anticipate the discussions that are to take place between the BSC and the trade unions on the future manpower requirements of the industry. I, as a Socialist and a trade unionist, do not want to see any plants closed, or any men made redundant anywhere in the country. But it is my duty to represent the interests of my constituency, and we have lost 8,000 jobs in the steel industry in the Rotherham area over the past 16 years—the great majority of them from two plants which now form the Rotherham works of the BSC.

That was part of the cost of making the Rotherham works one of the most productive and profitable in the country. It was not easy for the trade unions or the community to accept sacrifices of that magnitude, but they were accepted because that was in the long-term interests of the industry and the country. The effect on the social fabric of the area has been serious. It is one of the main reasons why the level of employment that now applies to the country as a whole has been afflicting the Rotherham area for nearly 10 years.

Even now we have not stopped the process. Another bar mill is to close in February, and my constituents are saying "Enough is enough. We have made all the sacrifices that we can stand." There is a widespread suspicion that BSC is deliberately shunting less profitable contracts to the more efficient works, such as Rotherham, and giving the more profitable work to less economic plants in order to spread the load and to disguise to some extent the difference in performance.

I do not know whether that is true, but many of my constituents believe it to be so, and my advice to the Government and to the BSC—though I do not for a moment suppose that they will accept it—is "Put your money on the record breakers ". The steel workers in my area have shown every possible cooperation in creating an efficient and profitable works. They have never yet let the industry or the country town, in peace or in war, and they are entitled to rather more support than the BSC sometimes appears to be giving them.

I now turn briefly to another matter that is of some concern in my constituency, although the problem is of a very much wider nature. I was pleased to see in the Gracious Speech that it is intended to introduce legislation to amend the Companies Act. The Gracious Speech did not say what kind of amendment is proposed, but I hope that there will be a measure to prevent a recurrence of disgraceful recent events in Rotherham. I mention this, not because it is special, but because it is all too typical.

A small firm known as Gummers Ltd. had operated in Rotherham for well over 100 years. It had a world-wide reputation for the excellence of its products It had a number of items, but it specialised in manufacturing valves for the water industry, and for other industries, too. One can find Gummers valves all over the world. It was a profitable firm until about two and a half years ago when it was taken over by a conglomerate group called Pentos Ltd., and it has now been closed down.

The announcement of the closure was made without any consultation with the trade union concerned. A couple of weeks before that happened a notice had been put on the company notice board saying: No decision has been made regarding the future of Gummers Ltd.", and it added No preparations are in hand for the transfer of any of the Gummers products elsewhere. About a fortnight later the employees were handed a notice saying that the works would close on 23rd December and that part of the work would be transferred to another Pentos subsidiary in Birmingham.

The works were closed eight weeks prematurely. That occurred on 28th October, which happened to be just five days before my hon. Friend the Member for Rother Valley (Mr. Hardy)—who also has constituents working at these works —and I saw my right hon. Friend the Minister of State to discuss the possibilities, if any, of saving some of these jobs. The meeting had been publicised, but the works were closed, with those concerned being given 24 hours' notice.

The group claims that Gummers Ltd., although it had been profitable up to 1975, had been making losses in 1976 and 1977. I am assured by the former managing director, who is one of seven senior executives of Gummers Ltd. who have been sacked or forced out by Pentos since it took over, that the company was forced to sell some of its products to another subsidiary of the same group at up to 40 per cent. below the proper market value. If that happens, it is not surprising that losses appear on paper.

A lot has been said recently, including during today's debate, about the importance of small firms to our economy. I agree with all that has been said, but the greatest danger to small firms arises, not from policies followed by the Government, by local authorities or by trade unions, but from the activities of bigger firms which gobble up small firms, squeeze them and then toss them callously away. That is what happened to Gummers Ltd.

When the right hon. Member for Leeds, North-East talks about companies being milked, he should understand that the most efficient and expert milkmaids in the world are big companies. This once proud and profitable company which carried the name of Rotherham all over the world has been thrown into the dustbin of history.

I mentioned earlier that Rotherham has lost thousands of jobs in the steel industry. We lost them because that was part of the price of technological advance. The tragedy of Gummers Ltd. is a different matter altogether.