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7 Mar 2000 : Column 156WH

Bentwood Ltd. (Chorley and Bury)

12.30 pm

Mr. Lindsay Hoyle (Chorley): I did not wish to have to speak about job losses in Chorley, but unfortunately I must because a company called Bentwood Ltd., based in Chorley and Bury, has decided to close two factories with the loss of 300 jobs. The future for those jobs over the next 90 days is worrying. The Chorley and Bury sites specialise in ladies' outerwear. One hundred and eighty-nine people work at Chorley; the remainder work at Bury. The firm's contract is with Marks and Spencer.

The workers have skilled jobs, which pay well above the minimum wage. There has been continual investment in modern machinery and other equipment since the early 1980s, when the new factory was built. The workers are highly skilled, undoubtedly because Marks and Spencer requires quality garments. Pressure has been put on the work force to ensure that quality goods are checked and supplied. That has happened without hiccup for many years.

The situation has resulted from Marks and Spencer's decision not to renew its contracts for outerwear. The arrangement ends on 21 April; Bentwood Ltd. is in the 90-day consultation period. Bentwood's press statement says that it will be restructuring the business, refocusing the product range on lingerie and underwear and away from ladies outerwear. I understand why it will not comment on Marks and Spencer--its contracts are continuing and it is part of the Stirling group, which has 3,000 workers. However, the people losing their jobs at Chorley and Bury are not being helped.

Bentwood's managing director refused to meet me, the chief executive of Chorley's local authority or the leader of the council. His decision was not sensible and did nothing for British industry. If an issue affecting people's jobs arises, companies should debate it because others may be able to help, to persuade and to pursue the matter, to the benefit of those losing their jobs, who are uppermost in my thoughts.

However, let us put that behind us. The firm must have recognised its mistakes because, out of the blue, came a meeting on Friday involving a divisional director, me and the work force's union representatives. The meeting was constructive. We should give hope--I got an assurance from the director that he would return to look at the group's activities to consider whether anything could be put into the Chorley site. In fairness to Chorley borough council, it has also played a role for many years in assisting the company--it helped to clear the site and ensured that there was an easy passage for the building of the new modern factory. It has always had good relationships with industry in the town.

We should return to my original point about Marks and Spencer and the way in which it pushes costs down. Suppliers are forced to provide goods at a lower cost; most come from abroad. Marks and Spencer used to perpetuate the myth that 95 per cent. of its goods were produced in the UK; that is no longer the case. The firm should recognise that its short-term gain is a worrying long-term loss to the British textile industry. The pound is strong and there are great pressures on the company, but 75 per cent. of the money passing through the tills comes from people who have been loyal to the business.

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We are asking the firm to replicate the loyalty of its customers by continuing to support the United Kingdom textile industry and Bentwood of Chorley in particular. Will it consider how it can help and give to Chorley and Bury any contracts that it can afford to award us? I am asking Marks and Spencer to ensure that we do not lose our work force, who have been loyal not only to Bentwood but to Marks and Spencer. I plead with it to reconsider its decisions and to look to its order books to find work to ensure that jobs continue. My worry is that once a factory has been broken up and closed, it cannot be put back together.

The time has come for clear labelling on garments, informing us of their country of origin and telling us how they have been produced. If people know that a garment has come from Morocco or wherever else around the world, they will know that it is not British. Many people believe that, because something is sold by Marks and Spencer, it must be British made. That is no longer the case, and I appeal to my hon. Friend the Minister to introduce clear labelling. Proper labelling is being introduced for food, and such labelling would inform people buying clothes of the country of origin, tell them what they are buying and at least allow them to know how they are spending their money.

I am speaking about a modern factory with modern equipment and about the 189 people who are losing their jobs in Chorley. I have appealed to the company to consider downsizing rather than complete closure if the worst comes to the worst. If a factory is downsized but a market upturn subsequently occurs, it can re-expand and growth can be put back into the operation. However, if it is completely closed, that is the end. There is no way forward and no means of putting together what is no longer there. Bentwood has a high-quality, determined work force. Whenever they have been called on, they have always served the company well. I plead with Bentwood: consider downsizing rather than complete closure at this stage.

I thank my hon. Friend the Minister for being present and for giving up her valuable time. I am sure that, when I plead to her, she will take on board the aspirations of the good people of Bentwood who are losing their jobs. Will you consider what the Government can do and how they can help the employers? Will you talk to other Departments to try to give an advantage to the north-west and consider, for instance, a reduction in council tax or the provision of soft loans for the company in these troubled times? If you could help to find alternative contracts--

Madam Deputy Speaker (Mrs. Gwyneth Dunwoody) : Order. I have no problem with supporting the north-west, as the hon. Gentleman knows. It is, however, the Minister whom he is addressing.

Mr. Hoyle : Absolutely, Madam Deputy Speaker. I know that you are a staunch supporter of the north-west, of its industry and of the people who are losing manufacturing jobs there.

Obviously, we must consider how the industry can be given proper support and how contracts can be found. I make an appeal throughout the United Kingdom, Europe and the world: if anybody wants finished outerwear garments, please contact Bentwood. It will

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supply quality goods at a fair price. If anybody listening has work, please talk to Bentwood and consider Chorley and Bury. Try to place work in our factories and save these jobs, and do not let this destruction occur.

I recognise that we have problems and that the strength of the pound is causing difficulties in the textile and other manufacturing industries, but I hope that the problem will balance out. Everything comes round, and when there is a market upturn and a new demand for British textile products, Britain must be able to respond. That is why I plead once again: even if all the jobs cannot be kept, please consider downsizing, which will preserve the factory's ability to compete when contracts return. In deciding to source outside the United Kingdom, Marks and Spencer has taken a retrograde step. There is pressure from its shareholders to deliver, but short-term gain is not good for long-term manufacturing in the UK. Body blows were delivered to our manufacturing sector throughout the 1980s. We do not want the new century to continue in the same way. Manufacturing is important, especially in Chorley and to the loyal workers who are on 90 days' notice. I plead with my hon. Friend the Minister to do whatever she can. I know that she will take that on board, and her help will be most welcome.

Mr. David Chaytor (Bury, North) rose--

Madam Deputy Speaker : Does the hon. Member have the Minister's permission to intervene?

The Minister for Small Business and E-Commerce (Ms Patricia Hewitt ): Yes.

12.40 pm

Mr. David Chaytor (Bury, North): I am grateful to my hon. Friend the Member for Chorley (Mr. Hoyle) for securing the debate, which gives us the opportunity to raise our constituents' concerns about the two Bentwood factories. He outlined the general situation well, and I shall concentrate on how it relates to Bury.

The Bentwood factory in Bury was established about 60 years ago and moved to its present site 15 years ago. It has a loyal and stable work force and has been a major employer in the town. I have a special interest because both factories were located within 300 yds of where I was born and brought up. However, I am here not for sentimental reasons but to represent the concerns of the 100 or so workers at the Bury factory who face redundancy in 90 days.

The background is interesting. Although we are under no illusions about what might be achieved at this stage, the problem raises important issues that involve the process of redundancy announcements and regional policy. Last year, Bentwood's parent company, Stirling, announced a significant drop in its half-year profits. As a result of that and its acquisition of a new company called Tamarind--an international outsourcing company which is based in Hong Kong--the alarm bells started to ring in the Bentwood factories and the Stirling factories in the north-west.

At the end of November, the divisional director of Bentwood addressed the work force in Bury to explain that the longstanding contract with Marks and Spencer for ladies outerwear was ending because, as my hon.

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Friend the Member for Chorley said, it was transferring its sourcing overseas, but that there was a £62 million contract for lingerie. The work force were told that another announcement would be made in two or three weeks' time, but nothing happened until 24 February when the company said that the factory would close. No reference was made to the £62 million lingerie contract. That announcement came as a bolt from the blue to my constituents who expected, with good reason, to share in the new lingerie contract, although they realised that it would involve retooling the factory and retraining to upgrade their skills.

As a result of a meeting with the divisional director and trade union representatives last Friday, I understand that Bentwood intends to recruit new workers at its factory in south Wales. If Bentwood is going to recruit 70 new workers to fulfil the new lingerie contract, would it not be simpler to retain the existing work force in Bury and invest the cost that would be incurred in recruiting new workers in retraining?

It is interesting--I ask my hon. Friend the Minister to confirm this if she is able to do so--that the other Bentwood factory is in the west Wales and the valleys objective 1 area. We suspect that the company is simply relocating from an area that does not have a high level of regional assistance to one with a significant level of regional assistance and European funding, particularly for retraining. Last Friday, we were told that the cost of retraining the work force in Bury was about £250,000. Last year, although there was a drop in profits for the parent company, Bentwood itself made a net profit of £4 million. It is allocating about £4.5 million for restructuring costs; in that context, a cost of £250,000 for retraining is not excessive.

My hon. Friend the Member for Chorley and I met representatives of the work force and the divisional director last Friday and asked what consideration Bentwood had given to retraining the work force and keeping production in Bury. The answer was that that had been ruled out because of the cost. We asked them whether they had discussed this with the local authority and the local training and enterprise council in regard to what assistance might be available; they had not. I suggested that they do that quickly. I understand that there will be discussions this week and that there is the possibility of a package of assistance, albeit small scale, for the company. We also asked when Bentwood would finally announce its intentions; that question is open-ended. It is encouraging that further meetings are being held with the work force, yesterday and later this week.

I have to say the work force have behaved in a most creditable fashion. They have made it clear that they are unhappy with the company's decision, and that they were disappointed with the lack of information at the early stage. They mounted a demonstration outside Marks and Spencer in Bury last Saturday, attracting 1,000 signatures protesting against Marks and Spencer's policy of outsourcing more of its goods abroad. They have also been in touch with local small businesses which largely earn their living from the work force at the factory and are worried about the knock-on effect, and a petition is circulating among them.

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Three major issues arise out of this sad process. First of all, there is the position of the British textile industry in the global market and the impact on it of lower labour costs in many countries comparable with the United Kingdom. Many think globalisation and the deregulated free market are the solutions to all our ills. However, it does not seem to be very sensible to shift textile production abroad to achieve a minor reduction in shop prices when the consequence is higher unemployment in the United Kingdom.

Secondly, there is the process of notification of the work force. We have described the imperfections in this matter and the intransigence of the managing director of Bentwood in refusing to meet my hon. Friend and me--although the company has now arranged for the divisional director to meet us. It seems to me that there are imperfections in the current system and that the loyal work force of Bentwood deserve better.

Thirdly, there is the question of regional policy. Our hon. Members in Wales have fought long and hard, as have our Government, for the designation of objective 1 status in west Wales and the valleys. There is no question but that that area is a part of the United Kingdom that is very much in need of help, and I would be the last person to deny it that assistance. Fortunately, unemployment in Bury is traditionally slightly lower than the national average. However, it seems worthy of investigation. We should know whether British companies are choosing to close factories in those parts of the United Kingdom where regional assistance is not available simply to move to areas with objective 1 status. I ask my hon. Friend the Minister to comment specifically on that point.

12.48 pm

The Minister for Small Businesses and E-Commerce (Ms Patricia Hewitt) : I congratulate my hon.Friend the Member for Chorley (Mr. Hoyle) on securing the debate. I congratulate also my hon. Friend and my hon. Friend the Member for Bury, North (Mr. Chaytor) on their sterling efforts on behalf of their constituents in seeking a meeting with the directors of Bentwood Ltd., and in seeking to find a better way forward for the company and its work force.

My constituency forms part of a city that is dominated by the textiles and footwear trade, so I am well aware of the enormous difficulties faced by the industry and of the huge anxieties that they cause employees, who are affected not only by the intense global competition in that industry but by the difficulties experienced by most high street retailers, including Marks and Spencer. As the Minister with responsibility for small businesses--I am the textiles Minister--I work closely with the industry to ensure that the Government take the steps necessary to help the industry maintain and improve its competitiveness in these difficult global conditions.

I should tell those who are affected by the decisions being made at Bentwood how very much I and the Government regret the proposed closure of Bentwood Ltd., at Chorley and Bury, and the possible loss of 300 jobs. The decisions about product lines and location must be a matter for the company's commercial judgment. It is not possible, nor would it be desirable, for Ministers and officials to try to second-guess the

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commercial decisions of Bentwood, Marks and Spencer or the thousands of other companies that operate in the United Kingdom. It is our responsibility to try to create a favourable environment in which those businesses can expand and in which employment can increase.

I shall not digress into commenting on our overall economic policy, or the real success that we are having. Instead, I shall say a little more about the work that we are undertaking with the textiles industry, and about some of the difficulties that my hon. Friends referred to. The Government have set up a textiles and clothing strategy group, which, for the first time, brings together employers, employer associations, trade unions, the Government and certain other key people, including some of the academics who are at the leading edge of research in new processes in the textiles sector. That group has been working extremely hard during the past year, and it has produced an excellent draft report. I am sure that my hon. Friends will have had the chance to read it, and I commend it to them and their constituents.

The draft report is now out for consultation. The Government will make decisions on those recommendations once we have the final report. However, my right hon. Friend the Secretary of State and I recently met the strategy group to discuss its conclusions. A fortnight ago, I met the general secretary of the main trade union, the National Union of Knitwear, Footwear and Apparel Trades to discuss the work that that group has undertaken. The General, Municipal, Boilermakers and Allied Trades Union and the Transport and General Workers Union are members of that group. Even in advance of that, however, my Department and the Department of Trade and Industry are supporting 25 projects, all of which are designed to strengthen our textile and clothing industry. For instance, they include helping companies, many of them small, to open new export markets, with the backing of British Trade International and using the new medium of the internet. Although the relative strengths of sterling and the euro make exporting to other European countries difficult, that is not the case with the USA, because the exchange rate between sterling and the dollar has been stable for the past four years, or with Japan--or with the far east in general, with which the exchange rate has also been quite stable; indeed, at one point, the yen was falling against the pound.

By taking steps to open up export markets and strengthen the capacity of firms in the sector to market at home as well as abroad, by investing in the skills base and by helping firms, where appropriate, to move into the new, fast-growing area of technical textiles, where the United Kingdom has a world-leading position, we can ensure that, in the future, the industry as a whole is at least as healthy and successful as it has been in the past.

My hon. Friend the Member for Chorley raised the issue of labelling. Under the European Union's single market rules, it is not possible to have a compulsory country of origin labelling scheme. Marks and Spencer labels its clothing according to country of origin, as part

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of the company's ethical trading system, and its customers know the origin of the goods that they are buying. It is perfectly possible for the industry to promote a voluntary labelling scheme, and there are signs that specialist labelling schemes, such as that for Scottish cashmere, which is increasingly marketed as a generic brand under which individual suppliers can go to market, are very successful. Such schemes are best taken forward through the strategies group and the industry associations and at a regional level. The regional development agencies put in place by the Government represent the best way to ensure that, at a regional level--it is a regionally based industry--we can build more effective clusters and supply chains using our existing strengths, and build further on those strengths to keep up with what is happening in other parts of the European Union and the world.

I return to the subject of the employees of Bentwood. The 90-day consultation period required by law has, of course, been triggered by the company's announcement of the proposed redundancies. In accordance with the law, the Secretary of State has been notified about that decision. That allows local partners to put in place an appropriate support package for any employee who is made redundant after the consultation period and after the company has taken its final decisions.

The training and enterprise council for Lancashire area west--Lawtec--is already working with Chorley district council and the Employment Service on a package of support for any staff made redundant. A similar process is under way in Bury. I have made specific inquiries about the success rates of similar support packages. It is not always easy to track individuals through the process and gather accurate information. The measures taken in Bury and by Lawtec for individuals affected by large-scale redundancies in the last two or three years have shown success rates of between 70 and over 90 per cent. In the case of Littlewoods, the interventions in Bolton and Bury last year resulted in about two thirds of the employees finding employment, so far as can be tracked. Those facing redundancy should not feel that there is no support and no hope. When redundancies happen--and they are always regrettable--one of the most important things that Government and regional partners and agencies can do is to get effective support in place for employees.

I welcome the fact that both my hon. Friends have referred not only to the meetings that they have had with the company, but to the meetings with the work force now taking place. The employees' representatives must get enough information from Bentwood to take part in the process of consultation that has now begun. The company is under a statutory duty to disclose information about its plans in writing and make it available to the trade union. In doing so, the employer must disclose to the employees and their unions the reasons for the proposal, the number of employees--

Madam Deputy Speaker : Order.

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