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Ms Margaret Moran (Luton, South): I thank my right hon. Friend for his statement. Does he agree that now is not the time for political posturing, for tearing up workers' rights, as those on the Opposition Benches seem to advocate, or for returning to the economic and employment policies that caused such devastation to businesses and the economy in Luton during their term of office? Does he understand the anger felt by the work force and the community in Luton, and the need for an urgent response from the Government?

I thank him for the package that he outlined and put in place so swiftly, and also for the responsiveness of this Government to our call for objective 2 and assisted area status funding, which will help those people who may be facing unemployment in Luton. Does he agree that, if General Motors feels that it has a right to close car plants,

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it also has a responsibility to consult workers and to ensure that it takes full responsibility for their future livelihoods and for the regeneration of the local economy?

Mr. Byers: I thank my hon. Friend for those comments. I am sure that the House has great respect for the way in which she and hon. Members with neighbouring constituencies are dealing with a difficult set of circumstances. She is right to point out that we have put in place measures to give Luton objective 2 status and ensured that our assisted area map applies to Luton, which was not the case, so that there are greater opportunities to lever new investment into the town and the surrounding area. I also understand--I referred to this in my statement--the anger that the workers must have felt about hearing their fate on a local radio news station. That is no way, at the beginning of the 21st century and in a spirit of partnership in the workplace, to treat dedicated and hard-working employees.

What we need to do is look carefully at how the European works councils and the collective redundancies directives are operating to see whether they can be improved to ensure that we do not see a repeat of yesterday's events.

Dr. Vincent Cable (Twickenham): May I add to the sympathy for the workers who have lost their jobs in these sad circumstances? There seems to be common ground between all participants in the debate about the peremptory and insensitive way in which the management have handled the matter. Has the episode in any way changed the Government's attitude towards the European directive on worker consultation, which they have hitherto resisted but which might have mitigated some of those effects?

Does the Secretary of State see a common thread in the decision of four car companies to relocate production to the core euroland economies? Does he share the judgment of Nick Reilly at Vauxhall that the persistent and substantial overvaluation of the pound against the euro, although not decisive, was certainly a factor? Does he share the view that John Monks expressed yesterday at the Trades Union Congress that continued uncertainty over British participation in the euro is influencing long-term investment decisions? As there is continued uncertainty about Rover, will the Secretary of State give a progress report--if he has one--on the company's effort to secure a long-term global strategic partner for its operations?

Mr. Byers: The information and consultation directive that is being discussed in Europe at present is flawed in a number of ways. As the House knows, the Government have concerns about the principle of subsidiarity and the fact that it is not respected in the directive in its current form. We are not convinced that the directive will work effectively in the United Kingdom. However, especially in the light of yesterday's announcement and the manner in which it was made, we accept that there is a need to look carefully at provisions that currently apply within the UK. That is why I mentioned the directives on collective redundancies and European works councils, which apply within the UK. We need to reflect on how they can be improved or, perhaps, on the need for us to come up with our own domestic arrangements. That will ensure that, in the spirit of partnership in the workplace--which, we believe, assists productivity--there is a better way of doing things.

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On the single European currency, all that I can say is that yesterday's announcement by General Motors and Vauxhall made it clear that that was not a significant factor in their decision. When an announcement is made that affects 2,000 jobs in Luton, 3,000 jobs in mainland Europe and, I understand, 5,000 jobs in north America, it is clearly not a matter that relates to the single European currency. On the situation at MG Rover, I understand that it is still on course to meet the targets that it set when it took over from BMW.

Mr. Kelvin Hopkins (Luton, North): May I thank my right hon. Friend for his statement and especially his assurances about measures to help workers who have lost their jobs to get new employment in the future? Hundreds of my constituents have been affected and are unemployed. This morning, I was outside the plant, where there were a lot of extremely angry people. Will my right hon. Friend condemn the company for the way in which the announcement was made, as it was leaked to the press before the workers and trade unions were told? Will he also condemn the decision itself, which is not justified? Two years ago, with the assistance of the Government, the trade unions, local Members of Parliament and the council, we got an agreement to keep production at Luton to bring the new car in. Only three months ago, an agreement with the trade unions was reached that was predicated on the new car. That is not going to happen now.

I have two specific questions. The first is about the strength of the pound. The company studiously avoided reference to that in its statements. That is understandable, as it negotiated a deal with the trade unions that specifically mentioned the strength of the pound. The workers accepted a lower pay rise, predicated on the possibility of the pound depreciating. When that happened, they would have a higher pay rise. Although the company did not mention the strength of the pound, Nick Reilly, the chairman of the company, mentioned it on television last night. That may be factor, and we want to know which of those voices is the correct one.

Secondly, there may be overcapacity in the car industry in the world, and even in Europe, but there is not overcapacity in Britain, because we are still net importers of car products. It is about time that we defended what remains of our car industry in Britain, because if we do not, it will all disappear, with terrible damage not just to employment and the balance of trade, but to Britain's economic future. Manufacturing matters and we should defend it.

Mr. Byers: I understand the anger felt by the work force and by those Members of Parliament who were closely involved in securing the deal two years ago, which all felt would give the Luton plant a long-term future. That was the intention of the deal and, just six months ago, Vauxhall committed itself to a significant investment in Luton, which, once again, most people thought would secure the plant's future.

Yesterday, Vauxhall said that the losses incurred in Europe in the third quarter of this year, running to $181 million, with even further losses projected in the final quarter of this year, were such that immediate steps had to be taken. As a result, it made yesterday's announcement affecting 5,000 jobs throughout Europe. It did not pray in aid the strength of the pound as a reason

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for its decision on Luton. We will have a debate on the effect on manufacturing of not being within the eurozone and of the strength of the pound in relation to the single European currency, but today's statement on Vauxhall at Luton is not the time for that debate. When it is announced that jobs are to be lost in Belgium, Germany and north America, the pound and the single European currency are clearly not factors on this occasion.

Car plants in the United Kingdom trade in Europe and, increasingly, globally. For example, Toyota in Swindon is looking to export an increasing number of its cars to north America. Therefore, the issue is not one of overcapacity in the United Kingdom. Those companies deal at a European level and are often organised at a European level, and they will look at the market in European terms and make a decision based on overcapacity in that market. That is the decision that has been taken by GM in relation to Vauxhall at Luton.

Sir David Madel (South-West Bedfordshire): This is terrible news for Luton, but equally terrible news for the adjacent towns of Houghton Regis and Dunstable. May I take it that the help that Luton will get will be applied to Houghton Regis and Dunstable as well?

Does the Secretary of State agree that, first and foremost, the news should have been given to the work force by the president of General Motors Europe, not by whoever it was who leaked it to the BBC?

The Secretary of State is aware of job losses and possible job losses in Dunstable and Houghton Regis at TRW Steering, BTR and Trico Products. We need to modernise our automotive base in south Bedfordshire. We need drastically to improve the infrastructure to make the area more attractive to new employers so that they will come and help us.

I am sure that the Secretary of State will understand if I say, after battling for 30 years in the House to help Vauxhall, that this is a terribly sad day. If only the Luton plant could have had the new Corsa, it could have been a flexi-plant, which I sincerely hope Ellesmere Port will be and so be able to help in the employment of some of those who will lose their jobs.


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