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Mr. Frank Field (Birkenhead): On behalf of the hon. Members from the Wirral area, one of whom has had to take a trappist vow for the debate, may I draw to the attention of those following our proceedings the fact that there are more hon. Members present in the Chamber than there often are for debates subject to a three-line Whip? We could obviously take up the whole day debating the issue if that were possible. That is how seriously we take the problem.

We in Wirral have suffered from huge job losses--not just any jobs, but jobs paying decent wages. I want to stress the link between wage levels and families. Much emphasis in public debate is put on the desire for stable families. It is difficult to have stable families without decent family wages. For many of us, my hon. Friend's speech has another dimension. Jobs are important, but people usually require them so that they can nurture children, so it is also a blow for them.

Mr. O'Hara: I shall make some observations about the point my hon. Friend has raised later in my speech, when I turn to the direct financial costs of supporting an additional 1,300 unemployed people. I am sure that my hon. Friend and all hon. Members are aware of the indirect costs of unemployment and its associated deprivation.

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The prognosis for Halewood is difficult. We want the MAV to be a winner in its niche market, but we also want the new Escort. The MAV represents only half the future that we would expect if Halewood were to produce the new Escort. Virgil's expression,

"Timeo Danaos et dona ferentes"

is apposite in respect of the MAV. It means, "I fear the Greeks when they bear gifts," and refers to the Trojan horse. Arguably, the Trojan horse was the first ever people carrier.

Why then was Halewood singled out for an uncertain future? What can be the reason for effectively exporting 1,300 jobs from my constituency to Spain and Germany in order to manufacture the new model Escort for import into the United Kingdom, the market where the Escort is the second best seller, where it sells in greater volume than any other market, and where, in a declining trend, its sales have held up better than elsewhere? The United Kingdom is the only country that exports more Escorts than it produces.

Can the reason be productivity levels at Halewood? I have referred to the heroic achievements of the Halewood work force in improving productivity to the point at which the Escort is cheaper to produce per unit than in Saarlouis. I am advised that production costs per unit are cheaper in Valencia. That depends on how one calculates the statistics, and one would expect that of such a relatively modern factory.

It should also be remembered that current assessments of productivity at Halewood are based on a long period of single-shift working during the depressed car market, when Halewood had to carry the costs of down-time payments and the other diseconomies of scale when a production line designed for double-shift working is reduced to a single shift. The factories at Valencia and Saarlouis did not suffer the same disadvantage when productivity assessments were made.

If Escort production capacity has to go--I shall qualify that "if"--there is a strong case in terms of productivity for consolidating production at Halewood instead of cutting it there.

If the problem is not productivity, can it be quality? Again, there have been heroic achievements by the work force at Halewood, leading to the award of Q1 status in 1995. That was also against a background of single-shift working and interrupted production runs which can affect quality, as the management told us last week. Despite that disadvantage, the work force achieved Q1.

Thus, in terms of commitment, productivity, quality and sales, the work force at Halewood are not agents of their own misfortune as has been suggested in some misguided sections of the press; they are innocent victims.

Can the reason be over-capacity across the three plants at Halewood, Saarlouis and Valencia? Some journalists have suggested that Ford has half a plant too many producing the Escort, that the company needed to amputate one plant, and that Halewood was the weakest. My evidence on productivity, quality and market performance of Halewood Escorts gives the lie to that. In any case, the argument about over-capacity is open to question. If the new Escort is as successful as Ford intends it to be, the capacity of the plants at Saarlouis and Valencia will probably be inadequate to meet the expected demand.

Mr. Peter Kilfoyle (Liverpool, Walton): My hon. Friend mentioned over-capacity. Did he hear the

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reported comments of Mr. Jac Nasser on Radio 4 today, when he said that Ford Halewood has to compete not only with southern Europe, but with eastern Europe? Is there not an argument to be made about the fact that Ford is increasing its capacity in areas that do not have the same employment and working conditions that are expected in western Europe?

Mr. O'Hara: My hon. Friend has raised an interesting point that I hope the Government will bear in mind in discussions with Mr. Nasser, when considering their commitment to production in Britain.

I return to over-capacity, and the inadequacy of the Saarlouis and Valencia plants to meet expected sales of the new model by possibly 100,000. If Halewood were to lose the new Escort, the 1,300 jobs would be exported to provide expanded production--possibly a third shift in the factories in Spain and Germany--to produce cars for import into the United Kingdom.

If over-capacity can be ruled out, why did Ford single out Halewood and not share the pain across all three plants? There are several possibilities. An article in The Observer on 19 January compared the difficulty and cost of making people redundant in Britain, Spain and Germany. It showed that it is easier to make people redundant in the United Kingdom because there are fewer legal hurdles and binding agreements to overcome. It is also cheaper to make people redundant in Britain, because redundancy terms are more generous in Spain and Germany, where all employees are entitled to redundancy payments, not just those who qualify under the two-year rule.

The company argues, with some justification, that the severances will be voluntary and the terms generous, but leaving aside the economic abstractions, every redundancy is a personal tragedy for a family--1,300 tragedies in this case. The pill has to be sugared, because the age profile of the Halewood work force is such that, after all the successive job losses, it is a difficult life decision for a worker to take the money knowing that he is most unlikely to have a comparable job ever again. Finally, once the redundancies have been made, the jobs will no longer be available to the local and national economy.

A further argument is that greater financial inducements have been provided by the Governments of Spain and Germany to the company to keep production there. I have no hard evidence for saying that, but I would not be at all surprised if there were evidence to support it. I simply ask the Minister to bear that in mind in his discussions with Ford.

I shall not make political points about the cost and the ease of making people redundant in Britain. Others may wish to do that. I confine my remarks to the effects of the announcement about Halewood on my constituency in Knowsley and the surrounding region.

In conclusion, the announcement that the new Escort will not be produced at Halewood is catastrophic to the economy in my constituency, and those of many of my hon. Friends who are here today. I see that my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) is now in his place.

Mr. Andrew Miller (Ellesmere Port and Neston): My hon. Friend drew attention to the effect on the local and

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regional economy. The people of Ellesmere Port where the Vauxhall Astra is made are deeply worried by the announcement. There is no glee in Ellesmere Port. My constituents recognise that it is a serious blow to the regional economy following the job losses at Gallaghers, H. H. Robertson Ltd. and Prestige. Manufacturing jobs are being lost throughout the north-west, and, whatever the product, they are creating serious crises for many thousands of families in the region.

Mr. O'Hara: Absolutely. There could not be a better demonstration of the objectivity of the case that I am presenting than the fact that car workers in a factory just across the Mersey are supporting their opposition in the market. I note that my hon. Friends the Members for St. Helens, South (Mr. Bermingham) and for Bootle (Mr. Benton) have joined the debate.

We are talking not only about 1,300 jobs but about the knock-on effects of job losses in a myriad of suppliers--great and small--of components and services to the Halewood factory. There is a further knock-on effect of such wages and salaries across the retail economy of my area, and a social cost in an area where unemployment is far higher than the national average.

There are hard financial costs as well. There is the cost to the Treasury of sustaining with benefits those who lose their jobs and the indirect and wider cost of the consequences of unemployment, and the attendant social deprivation. Such arguments are, of course, of general application when unemployment occurs, but I ask the Minister to take particular note of this incidence.

Merseyside is an unemployment black spot. It has suffered more than its fair share of job losses in the two recessions of the 1980s and 1990s. It is the only industrial region of mainland Britain that has objective 1 status. This is not a scouse whinge; our heads are not down on Merseyside. Indeed, we are energetically regenerating Merseyside. A blow such as the Ford decision, however, is a severe setback.

Moreover, Ford is the sort of flagship multinational inward investor whose investments do two things in an area such as ours. It not only gives a big boost to the local economy with its own jobs and the piggy-back jobs that it brings with it: it punches a hole through which lesser investors follow, on the principle that, if Merseyside is good enough for Ford, it is good enough for them. There is a confidence factor, and if Ford disinvests, that is damaged. We scousers have plenty of pride and confidence in ourselves, but we need others to have confidence in us, too--notably Ford.

The argument that I present to the Minister is for selective regional assistance and affirmative action for Merseyside. Some might call that special pleading, but it is an argument for the balance of trade in the automotive industry.

It is predicted that the four best sellers in the UK family car market will be the Fiesta, the Escort, the Mondeo and the new Ka. If Escort production is taken from Halewood, all those but the Fiesta will be produced abroad and imported into this country. A conservative estimate is that that will involve 360,000 units, or £2.8 billion, on the debit side of the balance of payments. The social costs,

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the regeneration of Merseyside and the balance of trade are hard financial reasons for keeping the Ford Escort and the 1,300 jobs at Halewood.

I know that the Minister is seriously interested in the issues that I have put before him: the impact of the announcement on Merseyside and the danger of the domino effect on the Halewood plant, the Merseyside economy, and other Ford plants about which I could have said much--I could have mentioned Iveco in Langley or Bridgend.

I know that there is on-going dialogue between Ford and the DTI at the highest ministerial level and through officials, and I urge the Minister to pursue those discussions with vigour and commitment. I suspect that they will touch on support for investment in the MAV. I encourage him in such discussion. We want the MAV, and if any work force can make it succeed, Halewood can. Compared with production of the Escort, however, the MAV offers Halewood only half a future. I urge the Minister to explore any and every avenue with the company that could lead to the award of the production of the new model Escort at Halewood.

I end by quoting the motto of Liverpool: Deus nobis haec otia fecit--God gave us all these leisure pursuits. It refers to the parks and gardens of Victorian Liverpool. We in Knowsley, South, we in Liverpool and on Merseyside have had enough of enforced leisure. We want jobs--specifically the 1,300 at Halewood.

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