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Several hon. Members rose--

Mr. Deputy Speaker (Mr. Michael Morris): Understandably, many hon. Members wish to take part in the debate. May I therefore make an appeal for short speeches?

10.4 am

Mrs. Jane Kennedy (Liverpool, Broadgreen): I congratulate my hon. Friend the Member for Knowsley, South (Mr. O'Hara) on securing the debate. I am conscious of time, and shall not detain the House.

I am slightly disappointed that none of our Conservative colleagues who represent Merseyside has been able to be present, but I welcome the presence of the Under-Secretary of State for Education and Employment, the hon. Member for Hornchurch (Mr. Squire), who has responsibility for Merseyside.

My hon. Friend the Member for Knowsley, South described the effect of the decision on confidence on Merseyside. I do not believe that that can be overstated. The decision comes at a quite critical time for us on Merseyside. We have been living with objective 1 status for three or four years. It is a double-edged sword. It provides very much needed European aid, which is essential in the region if we are to regenerate the local economy and improve economic activity, but its downside is that it is a recognition of just how bad things have become.

We on Merseyside are making many improvements. A new city centre is emerging from the ashes of the 1970s and 1980s, when manufacturing fled the region, and hopes for the future of the region have been growing. There has been some success in the campaign to attract new jobs in my constituency, which borders with the

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constituency of the hon. Member for Mossley Hill. The Wavertree technology park is one of many examples of success in attracting new businesses and generating new jobs on Merseyside.

Just as we were hoping to come to the end of objective 1 status, Ford's decision has been a huge blow to the confidence of Merseyside people and their work in partnership with local authorities--and in many respects with the Government--in lifting the region and pulling ourselves up by our bootstraps, demonstrating the skills, ingenuity and resilience of the people, who have had to face and grapple with such economic difficulties.

Ford's decision has had a major impact on the image that people have of Merseyside. I criticise the company for the way in which it handled the decision and remained silent about the reasons why it had arrived at it. That left commentators, the press and others around Britain and in Europe to draw their own conclusions based on images--often the wrong images--of Merseyside. The way in which the decision was taken did not allow for any clear analysis. Everything was privately indicated in meetings with Members of Parliament, the unions and the Government.

It is clear that Ford has been facing serious problems. There is no question but that the Escort has been losing its position in the car market. It has made its case to Members, the Government and the unions, and explained how it has been losing money hand over fist with that product. Hon. Members understand the difficult competitive world facing car manufacturers; we appreciate that, when people buy their cars, they base their decision on different judgments than those they made in the past; we understand the problems facing volume car producers such as Ford when they are deciding what new products to bring on stream.

Mr. Andrew Hargreaves (Birmingham, Hall Green): The hon. Lady referred to Conservative Members from her region. I represent an area further south that makes motor cars. Rover and Land Rover are virtually within spitting distance of my constituency, although not in it. She does her own region proud in her defence of it.

I do not feel that the decision is so much a reflection on Merseyside itself, as the hon. Lady seemed to be saying. It is, as she is now beginning to say, more of a reflection on Ford, which has had problems in attracting buyers of certain designs of car over the past five years or so. That has been a problem for Ford Europe, and I am sure that the hon. Lady will go on to say that that problem is not reflected in some of its competitors, such as Rover and Land Rover. The decision is therefore to some degree a reflection on the company, rather than on the area or the work force of Merseyside.

Mrs. Kennedy: That is my point precisely. As my hon. Friend the Member for Knowsley, South has explained, the workers at Ford Halewood have demonstrated their capacity to grapple with the problems that the company faces and to work in partnership with it. There has been an unprecedented period of freedom from all kinds of industrial problems at the plant. The workers have demonstrated their commitment to the company, and shown that they are prepared to work with it to rise above the challenges that it is telling us about.

I believe that Ford's decision was based on reasons other than those about which it is prepared to come clean. As a country, we must face up to the fact that Ford has

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three plants in three European countries, that it has taken that decision, and that, in doing so, one factor that it has taken into account is the difference between the employment requirements in the three countries. There is a strong belief on Merseyside that we have suffered because it has been easier and cheaper for Ford to make 1,300 people redundant at Halewood than it would have been at either of the other two plants.

My hon. Friend has talked about those 1,300 jobs, and I want to talk about the consequences for the 1,300 workers. Every week at my surgeries, I see the consequences for the health of men who stop working at 50 with no prospect of further work. There are also important consequences for the job opportunities of young people on Merseyside, who hoped to find employment and develop their skills at the plant.

We are aware of the problems that Ford has faced, and of the changing car market. Why does the Department of Trade and Industry appear to have been taken so much by surprise by Ford's decision? Given the major impact that it will have on our trade deficit, why was the Department caught on the back foot? It seems to me that the German and Spanish Governments had been working more closely with the company in trying to prevent the decision from going against workers and businesses in their countries. I greatly regret that.

A view is developing on Merseyside that objective 1 funding should be used to support Ford's decision to bring new manufacturing to Merseyside, but I believe that that would be a mistake, and that other funding should be used instead. We should use DTI funding rather than European money, because clearly most of that has already been earmarked for other projects, and we are coming to the end of it.

I am conscious of the number of people who want to speak, so on that point I shall finish.

10.12 am

Mr. Robert N. Wareing (Liverpool, West Derby): I too shall be brief, because I realise that so many people want to make contributions.

In 1982 there was a similar problem, which had largely been caused by bad management-labour relations. I shall not say who was to blame, because that would be futile. I was the chair of economic development at Merseyside county council at the time, and we had four hours of discussions with Bill Hayden, who was then the chief of Ford Europe.

As a result, agreements were made within the company between the work force and the management, and the workers agreed to co-operate in the changes in productivity and works practice. This time, however, Ford has not consulted anybody. I presume that it did not even consult the Government before making its statement.

Since 1982, the labour force has carried out all its promises to improve productivity--so much so that, on 17 January, Ford News, the house magazine of the Ford company, said that Halewood workers had reached their productivity objectives under the company's total productivity maintenance scheme in record time.

What was the reward for that? It was the notices sent out to the effect that 1,300 workers are to be made redundant. What message is the Ford Motor Company sending to other workers in this country who may also

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be asked by management to agree productivity deals and changes in works practice? My hon. Friends suggest that the company chose Halewood for the cut--

Mr. George Howarth (Knowsley, North) rose--

Mr. Wareing: I shall give way in a minute.

I think that Ford chose Halewood because it believes that, unlike other Governments in Europe, the British Government are a soft touch. That comes across in all their actions in connection with Europe. They are not at the heart of Europe. Ford and other companies--a recent example is Toyota--have shown that they want to be at the heart of Europe.

Mr. Howarth: Does my hon. Friend agree that the work force at Ford are not asking for special treatment? However, there is something that the workers do expect--this is something that the Minister will have to address when he sums up.

They expect not to be put at a disadvantage compared with those in Spain or Germany simply because it is cheaper for the company to get rid of them than to get rid of workers in other parts of Europe. If that is what lies behind the decision, all the Government's claims to be friendly towards industry and employment go out of the window. If work protection in this country is so weak that it makes us vulnerable, it is time that the Government thought again about their approach to the social chapter and other such issues.

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