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We must also understand that the proposed closure, as well as being a terrible blow for those who will be directly affected financially by it, will also be an economic blow to the town of Keynsham. Small business people in particular are concerned that the factory closure will have an impact on their businesses, and they fear that they may end up closing or losing much of their trade. The truth is that about a quarter of the work force live in Keynsham, so the issue goes wider than my constituency. It affects part of greater Bristol, Bath and much of north-east Somerset. Indeed, the whole west country could be described as having an involvement with the Cadburys factory at Keynsham.
The proposal is alarming for people in the area. The number of workers has gradually fallen over the years, but previous staff reductions were dealt with through voluntary redundancy or by people deciding to take early retirement. Although just fewer than half the work force are aged 50-plus and might therefore benefit considerably from the packages on offer for early retirement, it would be wrong to underestimate how big a blow the closure will be to Keynsham, north-east Somerset, Bristol, Bath and the west country as a whole.
The social impact of the proposed closure needs to be emphasised. The terrific traditions of the Quaker families who ran Cadburys and FrysI should declare an interest in that I come from a Quaker family and understand their valuesmeant that the company provided sport and leisure facilities for its work force. In fact, those facilities were not only for the work force; they were available for use by the local community and people further afield.
Indeed, Keynsham relies heavily on those facilities for sports such as cricket, hockey and football. In fairness to Cadburys, it has indicated to me that it intends to keep the Fry clubthe on-site sporting and social centreso that it can be used even if the factory is closed. That is welcome relief to those who pursue sport and leisure activities at the site, but it does not take away the pain and discomfort for those who are economically reliant on the factory.
Stephen Williams (Bristol, West) (LD): The hon. Gentleman set out in detail some of the history of the company, particularly the philanthropy of the Cadbury family in Birmingham and the Fry family in Bristol. We might see that philanthropy as an early example of what we now call corporate social responsibility. The Fry family also contributed to the founding of Bristol university.
Does the hon. Gentleman agree that the founders of the company would be turning in their gravesthe ancestors of the Cadbury family have criticised the proposed closureif they knew that the company was withdrawing from the Bristol area and from Britain, and that, ironically, it will in future import brands that are known and consumed largely in this country?
I completely agree with the hon. Gentleman. It goes further than the families: as I said, I have an interest because I come from a Quaker family and we talk about the matter a lot, because we would like to see more of those values, not less. The Bishop of Bath and Wells, I believe, has supported keeping the
factory open for the reason that the values that created the factory are being forgotten, or it at least appears that way.
I do not know whether the hon. Gentleman agrees, but there is an irony in the fact that the Quaker values of co-operation, working together and respecting one another seem to be displayed by those who oppose the closure rather than by Cadburys, although the company would doubtless deny that. I have been impressed by the communitys reaction in all its forms, not least that of Unite the Union, and amazed by how it has communicated and co-ordinated its campaign.
What has Cadburys proposed? The company is talking about complete closure in 2010 through a series of phased redundancies, although they will not begin until 2009. The company says that it needs to do that to move production to Bourneville in Birminghamwhere it will lose 200 jobs, but in which it is to invest £40 millionand to Poland. According to Cadburys, the proposals have been made in the context of aiming to reduce its global work force by about 15 per cent. That was first mentioned in summer, before the specific announcement on Somerdale in October.
The closure is wrong for two main reasons. First, Cadbury is risking short-termism with its attitude because it is looking at the wage differential, particularly in relation to its plans for production in Poland, where wages are so much lower than in the United Kingdom, although that will be of only short-term benefit. In five to 10 years, those wage differentials will have eroded.
Cadburys needs to re-check its figures and calculations and think carefully about the tradition of Somerdale, where generations of Keynsham people, and Bristolians and Bathonians, have worked and produced great profit for Cadburys over the years. Cadburys needs to revisit all that and think about whether it wants to give up a skilled and dedicated work force. That is not just something the work force says, but something they have proven since the 1930s.
Secondly, Cadburys view is short-sighted because, as the environment becomes a greater and increasingly important issue for many people as the years pass, it seems somewhat illogical to make chocolate bars in Poland, the vast majority of which will be imported to the UK, where Cadburys biggest market is.
Kerry McCarthy (Bristol, East) (Lab): I think that some 98 per cent. of the produce from Cadburys factory in Keynsham is consumed in the UK. I agree with my hon. Friend that it would be absolutely mad to start producing chocolate bars in Poland and incur all the food miles associated with importing them back to the UK.
Dan Norris: I thank my hon. Friend for her helpful intervention. I am not sure whether the figure is 98 per cent., but the vast bulk of the production will certainly come back to the UK. It beggars belief that that is an environmentally sound thing to do.
When I asked Cadburys about that, it said that the new plant in Poland in which it proposes to invest will be so efficient that it will offset the carbon footprint of
transporting all that chocolate to the UK. However, having said that, surely the environmental impact or benefit would be that much greater if Cadburys invested in Somerdale. I think that Cadburys somewhat undermines its own argument.
The two key concerns are the short-termism of Cadburys economic thinking plus the environmental aspects. Cadburys argues that this is all necessary because of the competitive market in which it operates and that it fears that if it does not stay competitive, like the other confectionery companies that it competes with directly, it risks being bought out by some other company from abroad.
Cadburys wants to ensure that, by having a leaner, smaller work force, it is more robust in respect of such challenges in the years ahead and that it remains a well-known, world-renowned British name. I have to hope that Cadburys calculations are right and that its thinking is right, although, for the two key reasons I have mentioned, I am not happy.
I recognise that the Government have done wonderful things with the economy. The management of the economy under the Labour Government for the past 10 years has been hugely impressiveit is the envy of the western industrialised world in respect of unemployment figuresbut we have low unemployment not because we do not have factory closures or redundancies or whatever, but because we can create more jobs than are lost. Clearly, that is a vital part of why Britain is thriving economically in the world, even with the global challenges that we face. We are in a better position to face those challenges because of the past 10 years, but nothing is omnipresent and totally consistent. I ask my right hon. Friend the Minister for Competitiveness to think about that.
Although we must consider the nations overall benefits and what gains there need to be for the economy, and one thing and another, when thinking about a factory such as Somerdale, which is so well known and so well established and which has been profitable throughout its existence, it is hard to understand why closure might be the right thing, particularly if people are directly affected, but even if they are not.
I am sure that my right hon. Friend the Minister will be thinking carefully and constantly reviewing the Governments strategy in relation to this matter, but people find the proposed closure hard to understand, particularly when there is such a long and great tradition. Chocolate making has been happening in Bristol since the mid-1700s and it is worrying to think that there could be no chocolate manufacturer in the area.
We had a foretaste of this situation some years agoin the constituency of my hon. Friend the Member for Bristol, East (Kerry McCarthy), I thinkwhen Elizabeth Shaw shut its factory. I cannot remember when that was, although I think it was more than 10 years ago. Although we had that foretaste, I do not think that anyone ever thought it would apply to Somerdale, which was considered a much bigger, much more established factory.
I want to thank various people who have been active in the campaign opposing the proposal to close the factory. Not least, I want to thank the Bristol Evening Post and its editor, Mike Norton, who has shown that
local and regional newspapers can go back to the traditional values of in-depth reporting and explanation. In particular, I also praise Julie Harding, the senior reporter on the Evening Post, whom I have known for 25 years. She has written some amazingly illustrative and insightful pieces about the proposal to close the site. It is encouraging to see the detail being put out there so that people can make their minds up and make an informed decision about what Cadburys is doing.
I want to thank Unite the Union, which has organised many events and continues to do so, and has strong views, which it makes clear. I am grateful to it. However, most of all, I thank the work forcenot just those at Somerdale, but other Cadbury workers all over the country who have attended various rallies and events to show their complete opposition to the proposed closure.
I also thank the community of Keynsham and the surrounding area, where people have collected petitions. I am conducting a survey by questionnaire, as well. Lots of people have done sterling work because they feel so passionately and strongly about this subject.
I invite my right hon. Friend the Minister to come to the Somerdale factory, if he can possibly do so. Failing that, perhaps he will invite a delegation from the factory to see him. I appreciate that he is very busy, but it would be great if he could get a feel for the site by visiting it. I want him to hear from the workers and those directly affected, because they have a passion that is impressive and insight that will inform him. I should like to think that, after meeting those people directly and hearing from them, he would be minded to talk to Cadburys board about its proposals to close the site and not least work through my two key criticisms of the short-termism of this plan, as well as the environmental impact.
The closure proposal is terrible, but it would be even worse if Cadburys and the rest of the Keynsham community were to look back and say that the decision was utterly and completely wrong but was still pushed forward. That would be a tragedy of Shakespearean proportions.
We all hope and continue to fight to keep the factory open, but whatever happens the community of Keynsham is resilient and tough and will overcome the hurdles facing it. However, I hope that it will not be necessary for it to deal with the loss of an iconic brand, Frys, and the closure of a factory that has been hugely significant for the whole community for many a long year and has affected many generations.
When Cadburys comes to make its final calculations and assessment when the formal consultation finishes in the middle of next month, I hope that it concludes that there are other ways to make the competitive savings that it needs without needing to close this wonderful factory and lay off the wonderful workers at Somerdale who have been a dedicated staff for many years, produced profits for Cadburys and deserve to be treated better than to face a proposed closure.
The Minister for Competitiveness (Mr. Stephen Timms):
I congratulate my hon. Friend the Member for Wansdyke (Dan Norris) on securing the debate. His
concern about the potential loss of jobs in manufacturing will be shared by many colleagues throughout the House and it is shared by the Government. I pay tribute to him for his campaigning on this issue and for the way in which he has presented his case today and throughout the campaign.
I vividly remember the dismay in my constituency when a long-established factory from the same groupa Trebor factorywas closed 25 years ago. Today the company name is still prominently displayed on the building, but that is all that is left. I understand very well the degree of alarm that my hon. Friend has described among those who work in the factory, following the announcement in October, and I want to express sympathy for everybody affected. I well understand the strong local concern, which he has expressed, about the impact on the local economy and the local community in Keynsham and north-east Somerset, especially when chocolate making on the site remains profitable, Crunchie bars remain popular and chocolate making in the area goes back so many years.
In October, the House received a very large deputation from the Unite manufacturing lobby. My hon. Friend was among those hon. Members supporting manufacturing at that event. There is also concern about the state of UK manufacturing more generally.
Manufacturing still accounts for one seventh of our national wealth in the UK, more than half of our exports, and three quarters of our business research and development. About 3 million people work in manufacturing, and manufacturing continues to be essential to the continuing health of the British economy. Since the summer, a string of reports from the Engineering Employers Federation and others have underlined the extent to which, after some very hard times, manufacturing in Britain is doing well. For example, last year we made almost twice as many cars in Britain as we did 25 years ago and we exported more UK-made car engines than ever before.
In recent months, I have visited a number of manufacturing companies in Hull, Sussex, Wales and, last week, in Sheffield, and I have been impressed by their strong commitment to, and confidence in, competing successfully with the best in the world. It is striking that the manufacturing sector is characterised by intense commitment and pride among those who work in it. My hon. Friend drew attention to the commitment and pride in the work force at the factory in his constituency.
Food and drink is the biggest single part of the manufacturing industry. It accounts for about one sixth of the total sector. If one includes manufacturers, retailers, food service and wholesalers, it accounts for a total estimated gross value added of around £70 billion, and almost 9 per cent. of national full-time employment.
We have an increasingly globalised and competitive environment. Companies have to be allowed to decide the most profitable way in which to run their businesses in order to grow. My hon. Friend referred to the fact that some of the companys main rivals, including Nestlé in York, Terrys, and Mars in Slough have decided to relocate production to other countries. At the same time, however, I would like to underline that many companies from outside the UK have decided to set up and develop their businesses within Britain with
foreign direct investment. We are the worlds second largest recipient of foreign direct investment by overseas companies, creating many UK jobs.
As part of its restructuring, Cadbury Trebor Bassett announced the proposed closure at the beginning of October. The restructuring proposals within UK chocolate manufacturing are intended to achieve greater supply chain efficiencies. It is welcome that the company is committed to investing in UK manufacturing. My hon. Friend cited the example of Bourneville. The company, led by Unite, is currently talking to employee representatives. It is committed to consulting fully on its proposals and has provided the full business case for the proposal and all the relevant details requested by the consultative representatives. I know that the group has met on five occasions, with a further three meetings planned before the end of the consultation. We are about halfway through now. There has been contact with others locally, including the local authority.
I agree that it is important that the company reflects carefully on its decision. It must look at all the factors that my hon. Friend highlighted before it finalises its conclusion, including transport costs, the likely future carbon costsincreasingly the cost of carbon is factored into commercial costs, which was underlined by my hon. Friend the Member for Bristol, East (Kerry McCarthy)and the fact that the vast majority of production will be consumed in the UK. There is still a strong attachment to UK-made products in the UK market.
My hon. Friend the Member for Wansdyke asked me to visit the factory. I will check my diary in response to that invitation. It will be difficult to make that visit before the end of the consultation period, but I will gladly meet a deputation from the factory in Westminster if he can arrange that. Also, I will discuss any concerns that arise with the company.
Cadbury Trebor Bassett describe investing in the community as a business imperative. In the event of the closure going ahead, I welcome its commitment to providing resources to help employees find new jobs, to retraining those who wish to learn new skills, to providing independent financial advice and to supporting the maintenance of the Fry Club in Keynsham.
If the closure goes ahead, my Department, through the Government office for the south-west, will work closely with the local authority and other regional and local agencies to ensure that there is a co-ordinated local response to assist those who are faced with redundancy to find new jobs and to secure redevelopment of the site to bring in new employment. We would establish a taskforce, and the efforts of Jobcentre Plus would be very important in helping Cadbury employees find alternative work and to consider options for retraining. The taskforce would include representatives of a number of Departments or
agencies, including Jobcentre Plus, the Learning and Skills Development Agency, the South West of England Regional Development Agency, the local business link, the Government office for the south west and the local authority.
The taskforce would work closely with the rapid response service of Jobcentre Plus, which helps people to identify transferable skills and training needs, to obtain training and certification that is linked to the local labour market and to overcome barriers to taking up specific job offers. I know that the district employment engagement manager has already been in touch with the company. There has already been a meeting with the local Jobcentre manager to discuss how Jobcentre Plus might help if the decision to proceed with the closure is made. The South West of England Regional Development Agency will also be very active on potential future development and future investment in the surrounding area. As my hon. Friend said, the context is a very successful economy in and around Bristol with a lot of inward investment, including a £500 million retail development in central Bristol, which I gather is due to open next year, creating up to 4,000 new jobs at big retail developments in Bath. The overall economy of the Bath and Bristol area is one of the strongest outside London.
On 22 November, my right hon. Friend the Secretary of State announced that we will review the Governments current manufacturing strategy and establish a new ministerial advisory group on manufacturing to help us with that review. I can confirm that the food and drinks sector, which is a very important part of the overall manufacturing sector in the UK economy, will be represented.
Stephen Williams: The Minister mentioned the food and drinks industry in the UK. There are really only four world-class manufacturers of confectionery. He mentioned Mars and Nestlé. There are also Kraft Jacobs Suchard, for which I was briefly the UK tax manager, and Cadburys. Cadburys is the only brand that is still British owned and predominantly British produced. Obviously, one could not prejudice a future inquiry, but the hon. Member for Wansdyke (Dan Norris) mentioned competitiveness and fear of takeover. I would be very surprised if the Competition Commission would allow Cadbury to be taken over by a foreign competitor that is owned abroad.
Mr. Timms: My understanding is that the company has every intention of continuing to thrive and succeed. Indeed, after recent changes, it is the worlds leading confectionery manufacturer. Our intention, not least through the work of the review of our manufacturing strategy, is to ensure that we continue to have a very successful manufacturing industry in the UK. Prospects are looking up for the sector. I want that to be the case in the food and drink part as well
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