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Burton’s Foods has been an important local employer on the Wirral for many years and we wish to do everything that we can to keep it that way. The initial meeting taking that work forward will be in
Wallasey town hall tomorrow. The Burton’s plant in Moreton is the largest private sector employer in my constituency, with more than 1,000 people on the payroll. Seasonal work can boost that number still further. The announcement ending the manufacture of biscuits on site is a terrible blow for local employment prospects. Generations of my constituents have worked at the plant. Often entire families and succeeding generations of the same families have had access to the employment opportunities that were there. Since the second world war, the biscuit factory has been one of the mainstays of economic activity in the area. Its threatened loss creates a very serious situation which, in my view, deserves urgent Government attention.
I have asked for this Adjournment debate to make two requests of the Minister. First, I wish to secure my right hon. Friend’s unequivocal support in the battle to save a manufacturing capacity at the Moreton plant, if that is at all possible. That is clearly my preferred outcome, despite the bleak prospects currently facing us. Secondly, if the company goes ahead with its plans unchanged, it will be vacating about half of a 29 hectare site currently designated for industrial use and crucial to any prospect of regenerating local employment opportunities. I wish to use this debate to emphasise to my right hon. Friend how important it will be to have Government support and engagement via the Northwest Development Agency to buy the site in order to develop new business and employment opportunities for local people in their own neighbourhood.
The site hosts two other sizable local employers, Manor Bakeries and Typhoo Tea. Burton’s has said that it is maintaining the chocolate refinery and packing work on site, which will retain 100 full-time jobs and 200 seasonal jobs. However, if biscuit manufacturing were to go, I would be concerned to ensure that the viability of the site is safeguarded as an industrial base for the area. The local authority has assured me that it would actively oppose any attempt at changing the land use, so there will be no quick or easy profit to be made from selling the land for housing development. I strongly support that approach. We cannot have new houses and new communities with no local job opportunities. However, in circumstances where Burton’s does indeed shed these jobs, we would have to rely on Government grant to invest in new industrial units and create the infrastructure required to attract new employment opportunities to our town.
Wirral has historically had a very low job density rate. Residents have traditionally travelled across the Mersey to Liverpool or down the peninsular to Chester for work. Prior to the Burton’s announcement, the job density in Wirral was 62. That means that there were only 62 jobs per 100 people of working age available on the peninsular itself. To put that figure into perspective, the average job density for the country is 83. The loss of jobs at Burton’s will make the already low figure of 62 worse still. It is therefore vital for our future economic prospects that Wirral is assisted in developing new investment opportunities to create local jobs that my constituents can get to even if they do not own a car.
Can my right hon. Friend tell me what her Dept can do to help us in the current circumstances? Will she ensure that the Northwest Development Agency pays urgent and serious attention to the issue and develops flexible and active responses to enable us to fight for the 660 threatened jobs, as well as to plan for the redevelopment of at least a part of this massive site, with the focus on creating new local employment opportunities?
Prior to the threatened loss of 660 local jobs, Wirral had worked hard with the private sector and achieved an employment rate of 71 per cent. Clearly, this will be badly impacted should the threatened job losses go ahead. The Government rightly have an aspiration to achieve an 80 per cent. employment rate throughout the country by 2012. The events of the past two weeks have made that target much harder to achieve on the Wirral.
Whatever we may be able to salvage from an extremely difficult situation, it seems clear that there could be substantial job losses to be absorbed by the communities of Moreton and Leasowe, in the short term at least. I am due to meet my hon. Friend the Minister for Employment and Welfare Reform soon to discuss the help that his Department could bring to bear should the threatened job cuts materialise. I wish to make a case publicly for a significant package of Government assistance, including financial support for retraining and enhanced support for those who could find themselves searching for alternative employment. Will my right hon. Friend explain what her Department can do to help in those circumstances?
Finally, my constituents who work in the Moreton factory have felt vulnerable ever since the business was involved in a succession of private equity buy-outs. The latest of those was completed only in January this year, when Duke Street Capital acquired the assets from Hicks, Muse, Tate and Furst. As Burton’s Foods was so recently acquired, it has to be assumed that the information that led to the closure decision was being shared with the new owners at the time of the sale. However, it was not being shared with the work force, who had delivered in good faith the £12 million cost reduction package, or with the public sector partners, who have done so much to support the business in the past. That cannot be an acceptable state of affairs, and I ask my right hon. Friend to think about what might be done to ensure that appropriate disclosure of such information is required of companies in such circumstances in the future.
We will leave no stone unturned and no alternative unexplored in our attempt to save biscuit manufacturing at the Moreton site. If we are to stand a chance of success, we will need the Government’s engagement and support. I hope that my right hon. Friend can promise me that in her reply tonight.
10.21 pm
The Minister for Industry and the Regions (Margaret Hodge):
May I start by congratulating my hon. Friend the Member for Wallasey (Angela Eagle) on securing this debate so promptly? I completely understand the enormous worry and distress that has been caused to her constituents by the announcement, made some 10 days ago, that Burton’s wants to reduce production
at its Moreton site. It is devastating to be told that one will not have a job in any circumstances, but given the particular challenges that my hon. Friend faces in her constituency, the announcement is especially difficult.
I understand and recognise the need to ensure that my hon. Friend’s constituents enjoy the same job opportunities as others elsewhere in the country. That will enable them to move from a dependency on benefits, which so many of her constituents have, to independence in work. My hon. Friend represents a community in which 75 per cent. of her constituents in the local authority area live in the 10 per cent. most deprived areas in the country under the super output area definition. She is right to point out that the job density—I have a figure of 63 jobs per 100 adults; she quoted a figure of 62 jobs per 100 adults—is among the lowest within local authority districts in the north-west region, which itself faces particular problems. She is also right to point out that many people who live in Wirral work outside the borough. I hope that she agrees that one of our tasks is to ensure access to jobs within the wider geographic area, which is an important ambition.
At the end of the day, the company will have to take its own decision in its own interests. The Government cannot intervene in that decision-making process. With changing markets, particularly in that area, and increasing globalisation, companies such as Burton’s are facing tough competitive pressures. However, we can do a number of things. We can manage the economy in a way that ensures that we provide the best conditions in which business can prosper and grow, and our record on that in the past 10 years has been second to none. We have provided consistent macro-economic stability and growth in every quarter in the past 58 quarters.
Manufacturing is often talked down. We hear a lot of stories about manufacturing jobs going, but manufacturing remains a key point of our economy, accounting for 14 per cent. of GDP, 50 per cent. of exports, three quarters of the research and development carried out by the private sector and almost 3 million good-quality jobs. We work very hard both within the Department of Trade and Industry and elsewhere in government to ensure that manufacturing is not only surviving, but thriving.
There are many success stories. In the automotive industry, we are now producing almost as many vehicles as we were at the height of the automotive sector in the 1970s. The aerospace industry has a turnover of £29 billion and the pharmaceutical industry, which is important in my hon. Friend’s region, has invested £3.2 billion in research and development and produces 18 per cent. of the world’s top 100 prescription medicines.
The Government are investing in my hon. Friend’s area. She has the benefit of the investment in the Mersey waterfront regional park, which is a key project in the region. Wallasey forms of part of that plan to create an international waterfront regional park from approximately 135 km of Merseyside sub-regional coastline. The Government are also giving support to businesses in Wallasey. Let me give some examples. We are helping Insulation Product Services Ltd to relocate and invest in plant and machinery. We are helping Organica (UK) Ltd to expand its production facility. We have provided support for R L Plastics Ltd in its
expansion. We gave Northern Case Supplies Ltd help towards the purchase of new machinery. We are already investing in my hon. Friend’s region and constituency to try to help the manufacturing sector to flourish. Despite the positive national context and that investment locally, I completely understand the very real problems faced by the 660 workers at Burton’s Foods when they heard that announcement 10 days ago.
I congratulate my hon. Friend on the swift action that she took to convene the partners here within five days of the announcement. As she knows, tomorrow there is a meeting between Wirral borough council, the Northwest Regional Development Agency and Burton’s Foods, and I hope that there will be a positive discussion. Certainly, we have put in our commitment to look at alternatives to these job losses. The regional development agency will look to lead on exploring the business opportunities, considering scenario planning and examining all the options with the company. It will also co-ordinate actions that emerge from any of tomorrow’s discussions.
If I am honest, I am relieved that, following representations that I received from my hon. Friend, we included the site of the Burton’s Food factory in the amended assisted area status map. That means that it will be covered as regards investment and assistance that can be given by Government.
Angela Eagle: That is the nub of the issue that faces us if we have to look to develop new infrastructure and local job opportunities on that very large site. Now that the Moreton site has assisted area status, what kind of assistance could we expect if the worst were to happen and we were unable to save biscuit manufacture there?
Margaret Hodge: I do not want to be too prescriptive because I do not want to close down options. However, the advice that I have received, which is high-level advice at this point and would need to be specific to the circumstances, is that we could consider a so-called rescue aid package under section 7 of the Industrial Development Act 1982. However, that is an exceptional form of assistance, and I do not want unduly to raise my hon. Friend’s expectations or those of her constituents. Certain conditions have to be satisfied. Aid must consist of loan guarantees or loans bearing normal commercial interest rates. The amount must be restricted to the amount needed to keep the firm in business. It must be temporary assistance that is repaid within six months—the maximum time available for a recovery plan. It must be justified on the grounds of social difficulties and must have no adverse effects on the industrial situation in other member states. The package is probably quite restricted in relation to Burton’s. If the worst happens and Burton’s decides to go ahead with the closure of its facility, there might well be greater opportunities, interestingly enough, in seeking how to use assisted area status to help further.
As well as tomorrow’s meeting, there is a meeting on Friday this week, which will be attended by Jobcentre Plus, the Learning and Skills Council, Wirral council and the regional development agency. That is a preliminary meeting to determine what funding is available to help affected employees if an adverse decision is taken and no solution can be found at the
Wednesday meeting. As my hon. Friend knows, both the local authority and the NWRDA intend to preserve the site of Burton’s Foods for business use only. As discussions are only at an early stage, there are no concrete plans for that site as yet.
My hon. Friend asked a number of questions and sought a number of assurances. I can assure her that we will, through the RDA, work to do whatever we can to save the manufacturing capacity at Moreton. If we fail in the first instance with Burton’s, we will explore all avenues to ensure that the whole of the 29 hectares site is maintained for industry and that local employment opportunities are open to my hon. Friend’s constituents. We will work across Government, as my hon. Friend asked, to support any individuals affected by the reduction in production capacity. I am pleased that she is meeting the Minister for Employment and Welfare Reform, who will take her through the details of the cross-Government plans that we put in place in circumstances such as these.
I hear my hon. Friend’s concerns about the transparency and accountability of private equity-backed firms. I know that the private equity sector itself is very conscious of these concerns, and I am pleased to tell her that Sir David Walker is heading an independent working party at the moment, which is seeking to develop a voluntary code of practice to enhance both accountability and transparency. The conclusions of the working party will be published in the autumn, and we already have in the Companies Act 2006 a good model for Sir David Walker to follow. The reporting conditions in the Act will, I hope, provide an appropriate model that will find favour with the private equity-backed firms.
Finally, I can assure my hon. Friend that she will have the Government engagement and support that she wants and needs to work in the very best interests of her constituents in these difficult circumstances. Once again, I congratulate her on her commitment and her effective efforts on their behalf.
Adjourned accordingly at twenty-seven minutes to Eleven o’clock.
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