---

Mr. Geoffrey Robinson (Coventry, North-West) (Lab): I join my hon. Friend the Member for Coventry, South (Mr. Cunningham) in thanking Mr. Speaker for granting the debate, and I congratulate my hon. Friend on securing it. It is a pleasure to have such a good turnout on the Labour Benches and, to some extent, even on the Conservative Benches. [Hon. Members: "What about the Liberals?"] We do not expect anything from that lot. When there is a serious matter, they are usually not to be found. From our point of view, this is a serious matter and it shows that, in proposing the closure, Ford has touched a raw nerve in the House and throughout the country. Browns Lane is the historic, original centre for Jaguar. Moreover, since Ford took over, it is a highly productive, highly efficient, high-quality assembly plant.

David Winnick (Walsall, North) (Lab): Does my hon. Friend accept that the closure will have an effect on many factories in the wider area, certainly in my constituency and throughout the black country, which
 
26 Oct 2004 : Column 1410
 
undertake contracting and subcontracting work? We view what has been happening in Coventry with grave concern.

Mr. Robinson: I am grateful to my hon. Friend for making that point. It is usually calculated that, for every job in manufacturing lost directly, another two can be counted in the supply chain and more widely in the surrounding industries. The concerns go even wider than jobs lost, and I shall come to that in a moment.

As my hon. Friend the Member for Coventry, South said, this comes down to the credibility of a major global company that operates in this country and throughout the world. But, to be fair to Ford, I want to pay two personal tributes. In the 15 years in which Ford has owned Jaguar, it has done many good things. We should put on record that when Bill Hayden moved to Jaguar, he made an inestimable contribution towards putting right what had been wrong with it for many years. He got the quality right and broke the back of the problem. Nick Scheele took over from him and was a fine chief executive. In those 15 years, Ford invested heavily in, and did a lot of good for, Jaguar. However, the results thus far have not lived up to its expectations, which is why we believe that the erroneous, sudden and inexplicable decision to go back on its previous policy has been taken.

The opening of Jaguar at Castle Bromwich happened under Ford and led to hundreds of millions of pounds of investment, and the huge investment in Halewood was due to Ford. However, it was clearly understood when those decisions were made that neither would occur at the cost of not investing in Browns Lane. Such investment could easily have been made at Browns Lane.

The situation led to the signing of a comprehensive agreement in 1998 between the trade unions—Keith White, who signed the agreement, is still the convenor at Browns Lane for the unions—and representatives of the Ford Motor Company at the highest level. Jacques Nasser, the then chief executive officer, and Nick Scheele, the chairman and chief executive of Jaguar, signed the agreement. The agreement was not circumscribed, or made conditional on circumstances or time. It was a commitment made by Ford that if the unions did what was expected of them and met targets for high productivity and quality standards, there would be no question but that the Jaguar large saloon and replacement models would go to Browns Lane, as would the sports car. The present management subsequently confirmed that clear-cut written agreement.

I know that the Minister for Energy and E-Commerce is a lawyer, as is the hon. Member for Solihull (Mr. Taylor)—they are both in the Chamber. Such people might have better knowledge of the matter than me. However, it seems to me that although the written agreement was not legally binding—we all know that the unions have never wanted to enter into such agreements for other reasons—a question of estoppel could arise due to the fact that on the basis of the representations made by the company, the unions undertook to accept onerous conditions in their working practices. I do not know whether estoppel could apply in that situation, but given the serious nature of the matter, that could and should be
 
26 Oct 2004 : Column 1411
 
considered because it might mean that the company would take the agreement more seriously than it seems to want to at present.

My hon. Friend the Member for Coventry, South was right to say that the debate is about not only Jaguar, but manufacturing, although Jaguar and Browns Lane are the main focus of my remarks. There are other large concerns in the west midlands, especially regarding Peugeot. I do not expect a response to this point today, but it is extraordinarily unclear why the application for regional selective assistance has not been agreed at the European level. We are beginning to doubt whether Peugeot is serious about pursuing that.

Brian White (Milton Keynes, North-East) (Lab): Does my hon. Friend agree that decisions made regarding Jaguar Racing in my constituency and Cosworth have a knock-on effect on the general motor industry? Innovations that come from motor sport are critical.

Mr. Robinson: I take my hon. Friend's point. The situation at Cosworth should be highlighted, so I hope that he will try to secure a similar debate to raise the matter. We would wish him well and support him in that.

I said that the 1998 agreement had been subsequently confirmed. On Tuesday 3 February, the present chairman and chief executive of Jaguar, Joe Greenwell—he is a fine and long-standing Jaguar employee—had lunch with my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth). He told my hon. Friend that it had been agreed at the head office in Detroit that Browns Lane was safe. He told him that the 1998 agreement had been confirmed and that the successor model to the large saloon and the sports car would continue to be produced at Browns Lane. Joe Greenwell took my hon. Friend out to lunch here in the Commons—

Mr. Bob Ainsworth (Coventry, North-East) (Lab): I paid for it.

Mr. Robinson: So my hon. Friend made his own modest contribution, which no doubt found its way into his modest declaration of expenses in the year that recently featured in the Coventry Evening Telegraph.

We did not seek the meeting. Mr. Joe Greenwell volunteered the information and came down here to tell us about it. Having seen my hon. Friend he went off to see the Secretary of State, where he said something interesting. He said, "Look. We're not doing this because we are sentimentally attached to Browns Lane. We're not doing this because we care deeply about Coventry, the employees or even the 1998 agreement. We're doing this because we showed Ford Motor Company that it is more expensive to close Browns Lane than to keep it going."

In addition to responding to the points raised by my hon. Friend the Member for Coventry, South, I should like the Minister to address the following, either now or later because this will not go away and must be answered by the Secretary of State's Department. Was a minute
 
26 Oct 2004 : Column 1412
 
taken of Jaguar's view, as proven to the head board of Ford Motor Company in Detroit, that it would cost more to close Browns Lane than to keep it open? If that is the case, what has changed? We know that sales are down and that the exchange rate is adverse, but those factors were known at the time, so they cannot explain the difference between a situation in which it costs more to close Browns Lane and the situation now in which, allegedly, out of the blue, a saving of £80 million a year has materialised. I do not think that Joe Greenwell could explain that. I know that the unions have written to the Secretary of State and we need clarification.

If it is the case that there is no strong economic reason—no cash reason—for closing Browns Lane, why is Ford Motor Company taking that action now, with all the difficulties that that involves, because it is doing that with no regard for the serious solemn undertakings it entered into with the unions? I honestly cannot believe that the Ford Motor Company will reject the concept of good faith and resile from commitments by rejecting its undertakings. I do not believe that the Ford Motor Company that I know, which has always gone out of its way to honour its word and ensure that its credibility remains intact, has said its last word on the matter.

7.32 pm

The Minister for Industry and the Regions (Jacqui Smith): I congratulate my hon. Friend the Member for Coventry, South (Mr. Cunningham) on gaining the debate. The attendance, as noted by other hon. Members, shows the significance of Jaguar for Coventry and the motor industry for the west midlands more generally.

The Government have great sympathy with the people of Coventry in the wake of Jaguar's announcement. The decision to halt trim and assembly operations at Browns Lane has been a heavy blow to the work force and their families. I acknowledge too, as my hon. Friends pointed out, that it was particularly hard to bear in view of the great efforts that the work force of Browns Lane put in over the years to improve quality and productivity at the plant.

On behalf of the Government, I reiterate our disappointment, especially in relation to the points made by my hon. Friend the Member for Coventry, North-West (Mr. Robinson), that the company has not delivered on assurances that it gave to the trade unions on Browns Lane and the three-plant strategy. I share the concern that the trade unions and local MPs have yet to be given a detailed explanation of the reasons for that decision. However, I am pleased to report that the company and trade unions have agreed to meet shortly to discuss the way ahead. I cannot supply details of the specific terms of reference and the level at which the meeting should happen, but it is an important step. As for more general points about legislation, such an initiative would be in the spirit of the new information and consultation arrangements that the Government will introduce next spring.

As my hon. Friends pointed out, my right hon. Friends the Prime Minister, the Chancellor and the Secretary of State have taken part in meetings, and I can assure them that the Prime Minister and the Chancellor have spoken forcefully and directly about the closure to Ford's senior management in the United States. My
 
26 Oct 2004 : Column 1413
 
right hon. Friend the Secretary of State has repeated those arguments to Jaguar's management in the UK as part of her ongoing dialogue with Joe Greenwell, Jaguar's chairman and chief executive, on the issue. I hope that my hon. Friends are reassured that concern and disappointment have been expressed at the highest levels of Government to Ford's senior management. My hon. Friends in the region have conducted important lobbying and made significant contributions, including in today's debate, as many of them, as we heard, have constituents who are directly affected by the news.

Action clearly had to be taken for Jaguar to address its financial difficulties and remain a sustainable part of the automotive industry in the UK. Ford's Premier Automotive Group, of which Jaguar is a part, has lost more than $521 million in the past six months alone. Many of the global auto-industry markets, including Jaguar's key markets in the USA and Europe, have experienced savage price cuts as manufacturers strive to maintain market share, and that has hit Jaguar hard. If Ford had not taken steps to improve competitiveness, the long-term viability of the Jaguar business could have been at risk by those pressures. I share my hon. Friends' concerns, however, that the actions the company will now take in consultation with its union representatives must ultimately generate the ability to make profits, without which there can be no reinvestment for the future. While I welcome the fact that Jaguar has come up with a plan that requires no compulsory job losses, and that it has not decided to close Browns Lane entirely, none the less I accept my hon. Friends' concerns. Many functions will continue at the site. Jaguar's headquarters and administrative centre will remain in Coventry, as will the company's wood veneer manufacturing operation and the Jaguar heritage centre.

---