Rolls-Royce plc

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 25th March 1987.

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Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East 12:00 am, 25th March 1987

asked the Secretary of State for Trade and Industry what arrangements he has made to discuss with the trades unions of Rolls-Royce plc the consequences of privatisation.

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

None. Relations with the Rolls-Royce trades unions are a matter for the company.

Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East

Why will the Minister not meet the Rolls-Royce trade unions if, as other Ministers have stated, they believe that most workers in the company are in favour of privatisation? Why will he not meet them to explain that the Government are writing off £645 million of company debt effectively to give away Rolls-Royce, and that the management is planning to close the East Kilbride works, threatening 2,500 jobs, and generally to run down the business's dependence on aero engines, threatening thousands of jobs? Why will he not meet the unions to explain those real consequences of privatisation?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

At the press conference last week the chairman of Rolls-Royce specifically denied the East Kilbride allegations as having no foundation in fact. The answer that I gave to the hon. Gentleman still stands—relations between the trade unions and Rolls-Royce are a matter for the company. The Rolls-Royce employees are well aware that their order book is now standing at higher levels than ever before. The prospects are better than they have ever been.

Mr. John Mark Taylor:

Does my hon. Friend agree that it would be more useful if the trade unionists from Rolls-Royce met their brothers from Jaguar and had a word with them about the privatisation experience?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

That is a sensible suggestion by my hon. Friend.

Photo of Mr Ian Wrigglesworth Mr Ian Wrigglesworth , Stockton South

Does the Minister accept that there is a national interest here which must be protected and which led to Rolls-Royce being brought into public ownership in the first place? Will he therefore reconsider his plans and retain at least 50 per cent. of the shares in public ownership, thereby enabling the employees to have a share of their own company and enabling private capital to be brought in as well?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

No, there is no case for that. I notice that the hon. Gentleman is sitting on the 50 per cent. fence in this case. Rolls-Royce needs to be free of public sector control to be able to make its way successfully in the private sector, and we have every confidence that it will do well.

Photo of Mr Kenneth Warren Mr Kenneth Warren , Hastings and Rye

My right hon. Friend is well aware of the excellent relationships that generally exist between the trade unions and management of Rolls-Royce. Referring to the order book that he mentioned, will he assure me that, as privatisation approaches, there will be a clear declaration by the Government, heard by the employees, managers and shareholders — the public — that the contracts into which Rolls-Royce has entered, such as those for the V2500 and the Superfan engine, will be indemnified by the Government against any consequential problems?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

The V2500, as my hon. Friend well knows, is the subject of launch-aid already; and that should effectively dispose of his question on that matter.

The Superfan is the subject of a later question on the Order Paper.

Photo of Mr George Park Mr George Park , Coventry North East

As the employees of any company determine its success or failure in the final analysis, has the Minister no concern for the fact that Rolls-Royce has made no attempt to explain the possible implications of privatisation?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

That is not the in Formation that I have. The management of Rolls-Royce has assured me that it has carried out an extensive programme in all its plants of explaining exactly what the implications of the policy are, by means of fortnightly employee meetings and printed material. I shall be happy to obtain some of that material and send it to the hon. Gentleman if he wishes.

Photo of Mr Robert Jones Mr Robert Jones , Hertfordshire West

Will my right hon. Friend draw a distinction between the official position of the unions on this matter and the steady stream of employees from Rolls-Royce who have come to my surgery and to the surgeries of hon. Members representing neighbouring constituencies wanting to know when they will get the opportunity to buy shares in their own company?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

I am sure that my hon. Friend is giving only the latest example of what has happened in other privatisations. The work force will seize the opportunity to participate in an undertaking, which is, after all, something in which it is involved.

Photo of Mr Stanley Crowther Mr Stanley Crowther , Rotherham

Before proceeding with the privatisation of Rolls-Royce, is it not essential for the Government to introduce legislation requiring the disclosure of voting rights in shares? Such legislation should be on the lines suggested in an earlier report, which I shall not mention. If the Government do not, how can they guarantee the undertaking that they have already given — that not more than 15 per cent. of the shares in Rolls-Royce will be allowed to pass into foreign ownership—if foreign companies acquire shares through British nominees?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

We shall he taking steps in the privatisation to ensure that there is a 15 per cent. limit on any single shareholding, be it foreign or domestic.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

Does my right hon. Friend agree that the history of privatisations has been one of great benefit to the companies that have been privatised, to their work forces, to the economy and to the taxpayer, who gains twice: once when the shares are sold and secondly when the increased profits of privatised companies are taxed?

Is it not true that privatised companies do not have the monopoly of job losses? After all, under previous Labour Governments, nationalised industries, such as steel and coal, took more than their fair share of job losses.

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

My hon. Friend is right. The list of successful privatisations in which productivity, performance and employee participation have increased to a remarkable extent bears eloquent testimony to the success of the policy.

Photo of Mr Terry Davis Mr Terry Davis , Birmingham, Hodge Hill

Will the Minister confirm that although Rolls-Royce has denied that it is actively considering the closure of its East Kilbride plant, it has been revealed that the document referring to that has been superseded by another, which refers to rationalisation at several places in the United Kingdom? Will he confirm that there is a widespread fear that such rationalisation will inevitably lead to redundancies?

If the Minister is to commend the suggestion by the hon. Member for Solihull (Mr. Taylor), that the trade unionists of Rolls-Royce should talk to their brothers at Jaguar about privatisation, should not the same trade unionists also speak to their brothers at Coventry Climax about their experience of privatisation?

Photo of Mr Geoffrey Pattie Mr Geoffrey Pattie , Chertsey and Walton

The hon. Gentleman will be aware of the press reports which I also saw last week referring to East Kilbride. As I said in my original answer, the chairman of the company went to great lengths to deny these allegations and to say that the document was no more than a management exercise by someone at a rather junior level in the company.