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7.28 pm
Mr. John Whittingdale (Maldon and Chelmsford, East): I congratulate my hon. Friend the Member for Chelmsford, West (Mr. Burns) on his initiative in obtaining this debate, and I thank him for allowing me to speak briefly in it. I am also grateful to my right hon. Friend the Member for Wokingham (Mr. Redwood), the shadow Secretary of State for Trade and Industry, who has taken the time to attend the debate.
My hon. Friend has ably represented the town of Chelmsford for the past 10 years. Sadly, he has had some experience of trying to ensure that as much help as possible is given to those who have been made redundant from Marconi.
As the Member of Parliament representing Maldon for the past five years, I have obviously been aware that a number of my constituents in the Maldon district have been affected by the redundancies. As a result of boundary changes, I now represent part of Chelmsford town, so I shall work even more closely in future with my hon. Friend the Member for Chelmsford, West on behalf of the people of Chelmsford.
I do not want to add a great deal to what my hon. Friend has said about the plight of those who have been made redundant, but I reiterate that I do not expect the Government to dissuade Marconi from its course, which is a matter for the company, operating, as it does, in a highly competitive environment; of course, it has to make its own commercial judgments.
My hon. Friend and I will be anxious, however, to ensure that every possible option is considered before the last option of declaring the redundancies. We will want to be satisfied that there are no alternatives of the kind that he has described. I shall meet the trade unions later this week, and I hope that my hon. Friend and I will both have the opportunity to lead a delegation to meet representatives of the company management in the next few weeks.
I also look to the Government to ensure that every help is given to those who have been made redundant. My hon. Friend has described the help being given by the various agencies that are active in Essex, and I add my thanks to all those involved for the swift and compassionate way in which they have responded to what is clearly a serious blow to the town. In particular, I know that Essex training and enterprise council responded extremely quickly and is active in trying to provide help.
The picture is not entirely bleak. There is no doubt that new jobs are being created in Essex. A few months ago, Boulton and Paul, a company making kitchens and doors in my constituency, sadly announced that it would be closing its facility in Maldon, with the loss of about 200 jobs--that is a serious blow to Maldon--but a few weeks later I visited another company, Keltek EDMS, about 100 yards away, which was about to create a new facility in the town, with 220 new jobs, making printed circuit boards.
Inevitably, there will be change in the employment pattern, but it is not all one way. A week ago, I visited one of the most successful employers in Maldon, Industrial Control Services, which makes safety and control systems. I was told that the outlook for the company was extremely bright, that it was winning orders from throughout the world and that if it had a problem it was the shortage of skilled engineers.
The Parliamentary Under-Secretary of State for Trade and Industry (Mrs. Barbara Roche):
I have listened with great interest to the hon. Members for Chelmsford, West (Mr. Burns) and for Maldon and Chelmsford, East (Mr. Whittingdale), and I thank them for the extremely valuable points that they have made. I greatly appreciate the constructive and helpful way in which they have addressed the issue. There is no doubt
I share the hon. Members' concern about the redundancies, and I hope that the measures that I outline tonight will show that effective action is being taken to improve the employment prospects of those affected. As they pointed out, the redundancies will have a significant impact on the Chelmsford economy, not only in themselves but in the knock-on effect on the many local suppliers.
When large-scale redundancies occur, co-operation between all local partners is essential. I am grateful that tribute has been paid to the parties concerned. Chelmsford borough council convened a meeting of the key players, including Marconi Communications, at which Essex training and enterprise council offered to co-ordinate the efforts of the partnership, and it has drawn up a plan of action.
I have visited Essex TEC and I know how hard it works. It has assigned an adviser and account manager to keep in close contact with the company. I know that the hon. Member for Chelmsford, West has also met Essex TEC and that it will keep him fully briefed about the activities being undertaken.
Business Link Essex is already working with Marconi to identify suppliers whose businesses may be at risk as a result of the planned redundancies. I had the great pleasure of attending the opening of BLE a few months ago. It is offering support and advice to ensure the continued success of those businesses by developing their activities in other areas.
I totally agree with the hon. Member for Chelmsford, West about the importance of diversification. Chelmsford's great advantage is the skills base of its people. That will do a great deal to ensure that other businesses will grow and flourish.
The Employment Service, together with the Essex careers and business partnership, will provide advice on services and benefits available to those underthreat of redundancy, assisting Grosvenor Associates, outplacement consultants engaged by Marconi, in setting up a job shop on the company premises. That will not only have all the vacancies available locally but will offer guidance and assistance to those wishing to make applications for new jobs. Clearly, it will have an important role to play in the area.
For those wishing to go into self-employment, a range of services will be on offer from the Business Development Advisory Service. Support is also available to any start-up businesses set up by redundant workers through the Centre for the Advancement of Manufacturing and Technology in Chelmsford. Essex county council is also offering managed work space as an additional way of supporting those start-up businesses.
In appreciation of the special needs of the redundant workers, the TEC has already waived the six-month qualifying period for access to training for work. It is primarily designed to help unemployed adults to get jobs, including self-employment, as quickly as possible, through an appropriate mix of guidance, training, approved qualifications and structured work experience. The training for work programme in Essex is one of the
most successful in the country, with nearly 60 per cent. of those undertaking it immediately moving into employment.
Those measures are designed to alleviate the immediate needs of the area, but, as the hon. Gentlemen have pointed out, Chelmsford faces considerable long-term difficulties. The town has traditionally been dependent on high-technology, defence-related industry, with Marconi Communications, Marconi Radar Systems and EEV providing most of the employment within that sector. As the hon. Gentlemen said, as a result of the peace dividend and the recession of the early 1990s, there has been a general decline in defence-related manufacturing which, regrettably, has resulted in the redundancies announced by Marconi.
The growth in the service sector has to some extent offset the decline of the manufacturing sector. Public administration provides 26,000 jobs. Both the financial services and the hotel and distribution sectors play a significant part in local employment, providing a further 20,000 jobs. Chelmsford is the main United Kingdom base for Britvic Soft Drinks Ltd. and is also the administrative headquarters of the investment managers, M and G Group.
Chelmsford has a growing reputation as an ideal place for new and expanding businesses to settle. As the hon. Member for Maldon and Chelmsford, East said, the picture is not all gloomy. It has a strategic location, close to London, Stansted airport and the ports of Tilbury, Harwich and Felixstowe, and its work force is well trained, highly qualified and adaptable, so it is clear why companies such as Royal Mail, Royal Insurance and Barclays Bank have recently chosen Chelmsford. I am sure that, given the skills and abilities of the work force, those will not be the only locations and relocations.
The hon. Member for Chelmsford, West mentioned the KONVER programme. Although the Chelmsford economy has diversified away from defence-related manufacturing, the problems of defence rundown continue. That is why Chelmsford is designated as a KONVER area. Since 1993, KONVER has enabled affected regions to respond to factory closures and deal with high job losses. KONVER funding is already being used to help train and retrain employees of firms dependent on the defence sector in the Chelmsford area. Organisations such as Essex TEC, Essex county council and Anglia polytechnic university have developed a wide range of vocational guidance and vocational training projects. The TEC alone has helped to retrain more than 400 former defence workers since the start of 1996.
More than £1 million from KONVER has been used to establish a regional centre for the advancement of manufacturing and technology, the AMT, whose activities include hands-on experience of modern machine tools, high-level training, technology transfer, prototype development and advice. As the hon. Member for Chelmsford, West knows, I visited the centre a few months ago and was tremendously impressed by its work. Much knowledge and experience, which can help both well-established and newly established firms, can be found there. The centre clearly enjoys much respect in the local business community.
I am certain that the centre will provide a vital base for re-employment of the well qualified and highly skilled local work force. It helps small and medium-sized firms
to develop new products and improve competitiveness through the introduction of new technologies and training. As the Minister responsible for small firms, I am acutely aware of the needs of small and medium-sized businesses and I am working through the network of Business Links to develop support and advice that can be accessed by all SMEs.
I agree with the hon. Member for Chelmsford, West about SMEs, which are essential to Britain's competitive edge and central to the Government's competitiveness agenda. The encouragement of high-tech SMEs is a key factor in our programme. That is why I believe that our programme is in line with the way in which local businesses in Chelmsford, especially local start-up businesses, can be helped. Chelmsford's work force clearly has the skills, know-how and dedication to make SMEs a success.
Over the past year, the AMT has saved more than 200 jobs in businesses threatened with closure and has directly supported growth in businesses providing a further 100 jobs. It has also run two meet-the-buyer events, attracting more than 100 national and international buyers and providing direct sales meetings for more than 600 local businesses.
The AMT estimates that more than £2.5 million worth of business was brought to Chelmsford in that way. Such work is essential in the climate of redundancies. Any encouragement to start-up businesses is important, in that the development of regional supply chains and networks is vital. That may be one subject which the hon. Member for Chelmsford, West could discuss further with the AMT.
The centre will work with its current partners to interview individuals affected by the latest round of redundancies to ascertain their transferable skills and how it can help by customising training courses to suit their future needs.
The hon. Members have drawn attention to the many people who are unemployed in their constituencies as a result of a series of redundancies at defence manufacturing establishments over the past few years. Tackling unemployment is one of the new Government's key priorities, and we intend to tackle it during lifetime of this Parliament. Our first priority is the "new deal" and measures to reduce unemployment among young and long-term unemployed people. Work is already under way to put that initiative into action.
The hon. Member for Chelmsford, West also stressed the importance of defence procurement decisions to the prosperity of towns such as Chelmsford. As the Prime Minister said, the Government are committed to service. That is an attribute long possessed by our armed forces, which are admired around the globe. Our commitment is to provide them with a longer-term sense of direction and a stable basis for defence policy and planning. The current strategic defence consideration is designed to ensure that our security and defence needs are matched by appropriate capabilities, both for today and for tomorrow's challenges.
Out of that defence consideration will come a procurement policy that will provide industry with the longer-term vision that it needs if it is to realise projects of the highest quality and value for money. If British industry can supply to specification, to cost and to time in a way that represents best overall value for money, it
will ensure success at home and abroad. I am delighted that the hon. Member for Chelmsford, West had a useful meeting with my ministerial colleagues at the Ministry of Defence.
Our commitment to service and to our armed forces requires that we give them the best equipment to do the tasks that we require of them. However, we are committed to a strong UK defence industry that is a strategic part of our industrial base as well as our defence effort. The industry employs some 360,000 people across the country, wins 90 per cent. by value of our business and, last year, won £5 billion-worth of export orders. That is quite a record.
It is that strength on which we wish to build for the future. We want to maintain strong links between the user and the industrial base. We want a partnership between Government and industry to enhance our economic prospects and our national security. We want to ensure that we maximise the contribution of our defence effort to the wider economy.
I agree with the hon. Member for Chelmsford, West that it is important that regional and industrial policy implications are well understood in taking procurement decisions. That is why my Department works closely with the Ministry of Defence on issues that affect the competitiveness of the UK defence industry. My officials ensure that the industrial implications of MOD procurement decisions are taken into account. They work closely with industry to ensure that all matters are taken into full and active consideration.
The hon. Member for Chelmsford, West asked about defence diversification. We support a strong UK defence industry that is a strategic part of our industrial base as well as of our defence effort. As stated in our manifesto, we believe that some of its expertise could be diversified by extension to civilian use. Nowhere is better equipped for that than Chelmsford.
The objective would be to widen the contribution made by the UK defence industrial base to Britain's economic performance by diversifying some of its technological processes and manufacturing skills into new markets. We
should certainly ensure that the investment that we make in defence equipment research and technology is put to good use for the economy as a whole.
We are actively considering the establishment of an organisation with specific responsibilities for diversification issues. The aim will be to ensure better co-ordination between Government Departments on issues such as regional policy, training and business planning to develop a positive strategy for industrial regeneration.
As my hon. Friend the Under-Secretary of State for Defence told the House on 16 June, we will be making proposals in the autumn on how best to give effect to our objectives for defence diversification. Those proposals will include how best to harness the contribution of the Defence Evaluation and Research Agency to those objectives. I will certainly ensure that the interesting remarks of the hon. Member for Chelmsford, West are drawn to the attention of my ministerial colleagues as they formulate their policies in that area.
I hope that what I have said will reassure the hon. Gentlemen that I fully recognise the problems that the redundancies announced by Marconi will create. I welcome the initiatives that local partners are taking. The speed with which that response has been put together underlines the fact that the matter is being taken seriously.
Considerable efforts have also been made in the long-term restructuring of the Chelmsford economy away from defence-related manufacturing. That accounts for the relative prosperity of that part of Essex. Many local agencies can take credit for that. More work remains to be done, however, and we will continue to support the local partners who can best take that forward.
I fully recognise all the difficulties that the redundancies have caused for individual employees and their families. I appreciate the efforts that the local Members of Parliament have made to work constructively with the company, the trade unions and all the local partners. For our part, the Government will ensure that we do all we can to support their efforts.
Question put and agreed to.
30 Jun 1997 : Column 87Adjourned accordingly at nine minutes to Eight o'clock.
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