People are quick to criticise workers when things go wrong in industry. Even when it needs the exercise of imagination, people seek to blame the industrial relations record of an industry for the decline, and there is a chorus of accusation in the press. In industries with a record of quiet industrial relations. where this accusation cannot be made, those who are so quick to criticise workers do not look to management to see where it has gone wrong but treat the decline as inevitable.
When a work force such as that at Lucas Aerospace constructively plans for expansion, one would think that management would welcome it. But that is not so. Management has been conspicuous in its lack of enthusiasm for the Lucas workers' initiative and their corporate plan. I greatly regret that but do not find it surprising. However, I would expect a Labour Government not just verbally to approve such an effort but to give all possible help to the work force to achieve their plan. There is at last to be a tripartite meeting on Wednesday to discuss the situation and the forthcoming closures and job losses. I hope that this portends a change of attitude and more practical support.
An additional interim report has carried the original corporate plan a stage further. It has considered the situation in the light of the redundancy and closures proposals currently put forward by management. The title of the report "Turning Industrial Decline into Expansion—a Trade Union Initiative" epitomises the attitude of the Lucas workers. They want to turn decline into expansion, and not just any old expansion but useful expansion—as is often said, expanding in the life industry instead of the death industry. I hope that the meeting on Wednesday will be the first of a series to ensure that this work is carried forward.
It is a pity that the working committee has had difficulties in producing the fresh report dealing with the current crisis. I regret that in the report the working committee had to complain that at some sites a direct instruction had been issued by the Management that all information should be withheld. That is extraordinary. It suggests a fear on the part of the management that information is a tool which can be dangerous in the hands of workers. I suggest that information in the hands of workers rather than in the hands of management is more likely to result in constructive proposals. I do not say that from a vague feeling of suspicion of management but because it is shown by the report that the Lucas management has decided to source more production abroad to the detriment of plants in this country.
The people who have a real interest in ensuring that plants in this country are able to do a good job and to expand are the workers in those plants. On the other hand, the management interest can be forwarded by production abroad. Management is interested in the maximisation of profit, which is not necessarily in the interests of the British people.
The working party makes direct statements about secret decisions by the company to source more production overseas in subsidiary and associated companies. The report notes that the hydro-mechanical fuel systems business is thriving, but, unfortunately, it is thriving in one of Lucas's associated companies in Germany. This is very important because this equipment is a product of the Victor works in Liverpool which is to be axed.
It has been put to us by management that the coming of electronics has made hydro-mechanical equipment less able to provide jobs. The workers' rejoinder to this is that, despite the electronic element in this equipment, the hydro-mechanical element remains the most important, and that since the market is expanding the work on this equipment must expand also. It is no use to the workers in Liverpool if this expansion is in Germany. As Lucas is a British-based multinational, it is scandalous that it should divert its production overseas in this way. It is the Government's job to ensure that something is done to prevent this.
The workers have put forward not only the list of product suggestions already outlined in this debate but eight specific product suggestions for the sites that are at present under threat of closure. The report proposes a Government-aided job maintenance programme. We hear a lot about the provision of jobs, and a lot of effort is put in by the Government on job creation schemes of various kinds. Here is a golden opportunity for a real job maintenance programme which will help to maintain an important sector of production. It will in no sense be pretend work or work created for its own sake. It will be very important production.
The working party challenges the company on its facts. It challenges the figure of £500,000 which the company claims is necessary for the Coventry foundry to be modernised. The working party claims that the cost of new equipment to modernise that foundry is £200,000, not £500,000. As a Coventry Member, I am obviously interested in this, even though the Coventry foundry is a small plant, because Coventry needs all the jobs it can get. I am therefore very pleased indeed that the working party's report recommends that, far from being closed, the Lucas Coventry foundry should be modernised and expanded to meet the requirements for non-ferrous castings which exist throughout the whole of Lucas Aerospace.
In seeking information for its report, the working party came across an extraordinary position. It found that most of the technical staff and others associated with the design of castings and the organisation of their production in Lucas Aerospace were not aware of the facilities available at Coventry. That is a fine way to run a company—to have a facility of which one's own design staff are not aware.
The working party points out that there is a general requirement throughout Lucas Aerospace for more non-ferrous castings facilities rather than less, and that the companies at present supplying nonferrous castings to Lucas show a marked reluctance to supply the short runs usually associated with the aerospace industry. Lucas Aerospace's own foundry would be completely geared to whatever kinds of runs were needed in the aerospace industry, whether long or short. Outside foundries cannot be expected to have the same determination to make aerospace needs a priority.
The working party also accuses the management of adopting an unrealistic accounting procedure in working out the hourly rates charged for the Coventry foundry, and, of course, accounting procedures can be extremely important.
There is a fascinating passage in the report which will, I hope, be probed deeply at the tripartite meeting on Wednesday. It is the passage in which the working party challenges the claim by the company about the figures which result from maximum utilisation of existing facilities. The company's figures show the extraordinary position that maximum utilisation apparently increases the overhead cost for each unit of output. The whole basis of telling workers that they can have wage increases if they increase productivity is the notion that overhead costs per unit of output go down if there is maximum utilisation of capacity and increased productivity.
Although I am very often suspicious of productivity agreements, there is a certain logic in that general statement. One would expect maximum utilisation of capacity to reduce the overhead costs per unit of output. There must be something very peculiar indeed about the organisation of Lucas Aerospace if it actually increases its overhead costs per unit of output when it has maximum utilisation. If that is so, there must be something very seriously wrong in the company, and it must be reflected in all sorts of ways.
There are other cricitcisms of the conduct of the company in Birmingham. It might be claimed that management has the right to manage, that Lucas Aerospace belongs to Lucas Aerospace, and who are we to poke our noses into the way that it is run. I start from the proposition that Lucas Aerospace does not simply belong to Lucas Aerospace. The build-up of wealth in the company, as in others, comes from the labour of the workers in it. If their labour is wantonly wasted by bad management practices, they have every right and duty to complain and to be heard. As an hon. Member who tries to represent the workers, I think that I have the right and duty to give voice to their criticisms.
There are serious faults in Birmingham. My hon. Friend the Member for Birmingham, Selly Oak (Mr. Litterick) may seek to discuss specifically the situation in Birmingham, and therefore I shall not pursue it unduly. However, it is most serious that young graduates have been allowed to leave Lucas Aerospace in Birmingham with the result that there are now insufficient designers to handle even the existing work load. That is bound to result in customer dissatisfaction, which will lead to a fall in orders and production. I leave my hon. Friend the Member for Selly Oak to pursue the matter in more detail.
There is often a lot of pious talk about industrial strategy, about the need to maintain production and to re-equip industry, and about the need for workers to co-operate in that process. Here we are discussing proposals which are enormous in their scope. They have been described tonight as a moral crusade. They express the desire of workers that their labour should be used constructively for the benefit of the workers in the company and of people generally.
So in one dimension the Lucas Aerospace corporate plan and the new interim report are enormous general structures. But they are also specific plans, and the point which concerns us here tonight, and which will arise for Ministers from the Department of Industry on Wednesday, is that this is not only about grand plans but also the need to maintain the jobs of specific workers in specific places.
I share the hope expressed by my hon. Friend the Member for Keighley (Mr. Cryer) that there will be the maximum ministerial involvement in the meeting on Wednesday. I was present at a meeting at which the Secretary of State for Employment met the Lucas combine committee. It was a good meeting, and it was appreciated by the shop stewards concerned. As employment is directly concerned in this matter, as the Department of Employment is expert at creating jobs and knows how to spend money on that to get a reasonable return, and bearing in mind that the Department is familiar with the general points of the Lucas workers' plan, it would be both courteous and efficient if the Department of Industry invited the Department of Employment to the meeting.
As my hon. Friend the Member for Keighley said, a similar consideration applies in relation to the Department of Energy, given the importance of energy conservation. I understand that at that Department one Minister is given the job of handling the subject of proper energy utilisation and conservation. The Department would surely be charmed to receive an invitation to Wednesday's meeting, and I am sure that it would be happy to co-operate. The shop stewards, who have undertaken their work in a most constructive way, feel that a fruitful meeting on Wednesday will show that the Government are at last taking their proposals seriously.
I am very much afraid that, if the meeting appears to be cursory and formal and does not go into matters in depth, there will be enormous disappointment on the part of the workers, which will have serious repercussions on morale in the factories. People can go on for so long making constructive suggestions, but they feel most frustrated if their suggestions meet with no response. Speaking as somebody who is very anxious to see the maintenance of the Coventry foundry, as is recommended in the interim report, and since I wish to see Lucas Aerospace expanded, I very much hope that Wednesday's meeting will be the first of many meetings to ensure that the job is properly carried out.
Close relationships exist between the company and the Department of Industry and the Treasury. Looking at Lucas Industries as a whole, I am fascinated to note that the amount of tax paid by Lucas Industries appears to be balanced almost exactly by the amount of money which that organisation has received in grant. If there is that kind of neat and tidy financial relationship between Lucas Industries and the Treasury to the good fortune of the company, it is particularly important that in relation to Lucas Aerospace workers and the Government there should be an equally close relationship which will be fruitful not only for the company but for the nation as a whole.