Examination of Witnesses (Questions 159-179)|
WEDNESDAY 8 MAY 2002
159. May I reconvene the Committee and apologise
profusely to our next series of guests. The session has run substantially
over time and I apologise for that. Your trade union perspective
and some of the work you have been doing in the Luton Vauxhall
Partnership is an important part of the Committee's work. Earlier
this morning we were looking at collaborations and partnerships,
new ways of working. We should really like a perspective from
the TUC about some of the strategic policy issues and whether
you think the Government is on the right track and whether it
can be improved. We are also very keen to try to capture what
can be done in terms of creating a situation where there is a
big labour market collapse, a big lay-off and redundancies and
whether the systems we have in place are adequate to tackle those
needs at the moment. Would you like to introduce the team and
say a few short words about what you think the situation is from
the TUC point of view?
(Mr Allen) I am Keith Allen. I am a regional
economic adviser at the East of England Development Agency (EEDA)
and I project-managed the training and re-skilling project at
Luton Vauxhall. Luton Vauxhall announced in December 2000 that
it was going to close this March and we had 15 months lead-in
to that process. On my right is Neville Reyner, who is Deputy
Chairman of EEDA,
but who also chaired the Luton Vauxhall Partnership. The Luton
Vauxhall Partnership is a partnership of the public and private
sector encompassing the Vauxhall Company, the trade unions, the
Employment Service, regional supply network and the local authorities.
(Mr Heselden) My name is Laurie Heselden.
I am the Regional Policy and Campaigns Officer, Southern and Eastern
Region of the TUC. I am the only TUC member here today. My region
contains the GM Vauxhall Luton plant.
(Mr Hart) I am Steve Hart. I am a senior
regional industrial organiser for the Transport and General Workers'
Union with responsibility for manufacturing. I am also the Joint
Chair of the Vauxhall negotiating committee at national level.
For my sins, I was also very much involved in issues around Dagenham,
so I have had a little experience in these matters unfortunately.
160. From a TUC point of view, the memorandum
was suggesting that the road signs the Government had put in place
since they came to power in 1997 were roughly right. Are there
any major areas where you think they are lagging behind that you
can immediately identify for us briefly?
(Mr Heselden) A broad view as regards employment strategy.
The TUC is very pleased with most of Government policy. We are
very pleased about the economy being stable, very pleased about
the increased number of jobs being created. The TUC is a big supporter
of the variety of New Deal programmes, not without some constructive
criticism. We should like to see them develop and evolve. The
two key issues we are here to talk about today are the labour
market, the employment situation which is generally quite good
and a specific problem which relates to the manufacturing industry
where 400,000 jobs have been lost in the last four years and that
job loss is projected to continue. Second, evolving Government
policy and regional partnership around how we can deal much better
with major redundancy situations when they occur in communities.
Chairman: We share that concern. Let us immediately
go to some questions in those areas.
161. I want to address some of the issues arising
out of the New Deal which you have raised. Before I do, I suppose
I should place on the record that I am a member of the Transport
and General Workers' Union, since we have a representative here.
You submitted a very interesting paper to us. Whilst welcoming
a lot of the New Deal initiatives, you do highlight some concerns
specifically about New Deal for Young People. Do you have any
further comments that you want to make about why you think so
many people who graduate through the New Deal for Young People
actually leave their jobs before three months?
(Mr Heselden) A very general point. I think it is
about quality of job opportunity. If the New Deal options are
quality options and a young person has found a quality job opportunity
or quality training opportunity then they are likely to stay.
The nature of the labour market with people going in at the bottom
of the labour market is that they pick up new skills and they
naturally move on to a better opportunity or a different opportunity,
so it is a stepping stone. That is partly what the New Deal programme
is meant to be. The guidance for giving evidence today did say
that if questions were difficult and we had something to say,
we should raise it. Richard Excel who wrote a large part of the
memorandum we have submitted to this Committee would be pleased
to give very detailed evidence if you require that, but the indication
we were given was that today was more to do with the redundancy
situation in Vauxhall. It is not that I will not answer your questions
but if you want an expert opinion, then Richard would be the person
162. It might be quite useful if you could submit
some additional information to us.
To what do you ascribe the differences in success of the different
options available in New Deal for Young People? I do not want
to put you on the spot today, but you might want to take that
(Mr Heselden) I am sure Richard would
be very pleased to help.
163. Looking at your memorandum, why do you
think these subsidised employment options are much less popular
than expected? Is that again a question you would rather take
(Mr Heselden) Richard could give you a far better
answer than I could.
164. It is always useful having somebody in
the background you can then pass these question on to. I am sure
then that you would want to pass on to him another one. I read
your memorandum on the train coming down and I could not make
sense of the statistics in paragraph 21. Even with my rudimentary
maths they did not add up. Thirty-one per cent of participants
had left before the 26 weeks' subsidy was up. Of this group, 40
per cent resigned, 30 per cent were dismissed, 21 per cent were
made redundant and two per cent left for health reasons. That
seems to add up to 93 per cent. Then later on it says, of those
who were dismissed 60 per cent were dismissed for poor attendance,
36 per cent for insufficient quantity of work, 17 per cent for
disobedience, 11 per cent for dishonesty, 19 per cent for some
other reason. That is 143 per cent. When you write back to us,
could you just re-examine those statistics? The
other statistics you give are actually very useful.
(Mr Heselden) Thank you for those comments.
I shall pass them on.
Mrs Humble: In your memorandum you conclude
that New Deal recruits are not yet job ready. If that is correct,
what more could be done and what could be done to improve the
failure rate. You mentioned earlier that the success with the
New Deal seemed to depend upon the quality of the work which was
being offered and we must also look at whether or not the New
Deal recruits are actually job ready and what more can be done.
165. It is now quite clear to me that the constructive
way for us to proceed is to formulate some written questions.
We have some more important aspects where we think the TUC may
have some detailed comments on the technical outcomes and some
of the processes in New Deal but clearly the best thing for us
to do is to drop a note capturing some of the areas.
If you would kindly take the message back that if in due time
some of your operational experts could provide the technical background,
that would be very helpful to us.
(Mr Heselden) If you wish to invite Richard
formally to give evidence on the New Deal in open dialogue
Chairman: The honest truth is that we might
not have time to do that. If it could be done by a written exchange,
that would be extremely helpful. Can we turn straight to the matter
in hand which is about some of the specific employment initiatives
which we should be looking at in terms of our work and similar
166. I should like to start with questions to
Steve Hart who has general experience of car workers in the South
East, Dagenham as well as the Luton car plant. In your experience
what has been the effectiveness of Jobcentre Plus and the Rapid
Response Service in helping to place redundant workers from car
(Mr Hart) The first thing which has to be recognised
is that there have been many voluntary redundancies over the years
in the car industry without such things and my impressionand
this is an impressionistic pointis that many people have
left and have gone into a black hole. Many of them will have remained
redundant. They will have received redundancy packages which are
by no means the worst around. They will have lived off them for
a period and in many cases they will not have found their way
into well paid jobs for a very long time. That is part of the
problem of manufacturing decline. What you have in both Dagenham
and more to the point Luton, is that there has been a great deal
of assistance. It has transformed the atmosphere. You would have
found that both factories, Dagenham and Luton, looked more like
an educational institution towards the end with a buzz. People
feeling that in spite of this terrible blow of the closure of
the factory which they had maybe worked in 15, 20 or 30 years
or more, which is really demoralising to people and they feel
like the end has hit them, instead they begin to look beyond that
and a buzz develops and people are looking for jobs and hearing
about jobs and word passes around about some good opportunities
there, some training opportunities and so on. It is an incalculable
improvement with the various specific measures that there have
been in both Luton and Dagenham to a more optimistic way forward
in what at the best of times is going to be a very difficult situation.
There is also some detailed, specific evidence of qualifications
and job fairs with people being put in touch directly with job
opportunities and achieving jobs in many cases. There will be
a lot more after a few months who will find jobs and have results
which does not necessarily show up statistically or will not be
picked up statistically. I am sure Keith has some precise figures
that will tally with this.
167. What did you feel was the quality of the
response from the public agencies in London and the Eastern region
and the South East to these major redundancies which you have
been involved in?
(Mr Hart) It has been pretty good; that would be my
168. That is co-ordination with central government.
(Mr Hart) Both Ford and Vauxhall got rapid Government
intervention, meeting with Ministers; we met Tessa Jowell very
early on in the process and she committed to get things moving
and indeed the partnership was one of the outcomes of that. Similarly
at Dagenham it was very rapid. The LDA
set up a group which was a strategic partnership to make sure
that things happened and things did happen. It is always very
difficult, even for employers like Ford and Vauxhall, never mind
the trade unions, to find their way round the alphabet soup of
initiatives which are around and try to pull it together to make
it happen. My impression is that things did pull together reasonably,
but with the big difficulty, in terms of rapid response, that
we got into a Catch-22 situation at Vauxhall. Vauxhall did not
want to issue compulsory redundancy notices, final notices. We
had agreed at European level and with the company that they were
going to do everything possible to avoid compulsory redundancies;
whether by redundancy terms, movement to a plant next door or
volunteers, they wanted to avoid any person being made compulsorily
redundant, so they did not want to issue compulsory redundancy
notices, plus there were issues of time off looking for jobs and
so on. That meant that the monies could not be triggered because
they required a redundancy notice. So Vauxhall was doing the good
thing and this was causing problems in getting a lot of the things
off the ground. That stand-off lasted for some time and it really
does seem absolutely daft that that happened. If there is one
thing you ought to have a good look at, it is whether there are
ways of short-circuiting that. A factory was closing, there was
no two ways about it, it was going to close and it had been announced.
That apparently was not good enough to trigger the money from
the Rapid Response Service.
(Mr Allen) By July of last year we had
gone through a skills audit, we had given careers advice and we
had trainers set up to provide training.
169. When you say "we" do you mean
the trade unions?
(Mr Allen) The partnership. We were all ready to go.
We built in an expectation at the works that training was going
to start and then in July we were told we could not access the
response fund because no formal redundancy notices had been issued
and the company would not issue the notices, so we had to go looking
for alternative sources of funding. We ended up looking at the
European Social Fund. That ended up with a bidding process and
we did not actually get the money out of that until October. We
had that hiatus from July to October where the workers were starting
to get edgy and all the good work we had done through the advice
and the guidance almost disappeared.
170. I shall come back to some specific questions
for the Luton Vauxhall Partnership later on but may I just go
back to Mr Hart? You mentioned some training at the different
plants and I have seen the quality of that at the Luton plant
myself. What specific measures would you say from your recent
experience have proved really effective in helping redundant employees
get back into work quickly?
(Mr Hart) One of the areas which was developed at
Luton and was a very useful measure was accreditation of prior
learning, which was not the first response. As I understand it,
since the concept of accreditation of prior learning first came
along, it has been somewhat bureaucratised and it has become extremely
complex to deliver. What you have in manufacturing, aside from
the skilled workers, is that the bulk of employees will have received
all sorts of training over the years and will have experience
that is second to none in terms of manufacturing: tin work, all
the various soft skills in very high productivity work places.
They are very skilled in manufacturing yet they have absolutely
nothing to show for it. Big companies often do not do NVQs
because they internalise the training. In some cases it is very
soft skills which have just developed over the years. Accreditation
of prior learning and improvement of that and recognition of that
would be important. Another feature that is difficult is developing
greater linkages with other manufacturing companies in particular.
There are tremendous skills there which can be used elsewhere
in manufacturing. Some areas in the South East in manufacturing
currently say they have skills shortages or shortages of good
people to come into manufacturing. So stronger links. I know the
Employment Service and others tried hard, but not always getting
the widest links into the rest of manufacturing. In some cases
it was possible to take 30 people en bloc into another
manufacturing site. On the one hand you hear they cannot get anybody
and on the other hand you know that all these people are there.
Improvements in those linkages would be important. Another point
which should be made is that we are talking Luton Vauxhall and
Ford, big lumps of people, thousands. The comparison needs to
be made as well between those and the weekly 20s and 30s who get
no access to that, although there are one or two opportunities
171. If I may say so, that is a subject very
close to my own heart, but probably also shared by colleagues.
The neighbouring town of Dunstable lost more jobs than went at
Luton over a year because there were four or five employers together.
It is probably an experience shared by many colleagues. Maybe
something hits the national headlines but when there are groups
of smaller employers they do not get the assistance. Is that something
you would echo?
(Mr Hart) Absolutely. There is another area I am involved
in, the upper Lea Valley, where there is something called the
Delta Project, which was developed for a closure at Delta Metals
for 200 people four or five years ago. That is now like an itinerant
project and is called upon in the North London area when there
are redundancies, quite small ones, and they carry out very similar
purposes for small groups. In most areas there is no access to
the kind of services that we were able to produce.
172. What is your overall feeling about the
prospects for manufacturing in London and the South East specifically?
Do you see continued decline? You mentioned that 400,000 jobs
had gone in manufacturing over the last four years. Do you see
that trend continuing or are there bright spots we can look forward
(Mr Hart) It is a very mixed picture. Some firms are
announcing closures. On the other hand the Eastern Region has
more manufacturing jobs than Scotland and more manufacturing jobs
than Wales. The South East as a whole is the strongest area for
manufacturing in the United Kingdom. Something which is often
not recognised. There are large numbers of companies which are
expanding in a small way. As we come out of recession, a number
may appear to do a bit better. The big blows in the motor industry
will continue to affect us for many years to come as component
manufacturers face up to how they are going to cope with things.
It is going to be very difficult in manufacturing in the next
(Mr Reyner) I am familiar with the point you made
about Dunstable and Luton itself; Electrolux also made redundancies.
There are other large name companies as well as Vauxhall and you
see some 2,500 losses at Vauxhall but that is not the end of the
story at all, there are supply chains to those. The study we carried
out showed that a lot of those companies simply will not survive.
They are just not competitive enough. That is another key area.
It may not be appropriate right now, but I have to say that we
have to find a way to make those smaller companies more innovative
for them to survive. That will also add to a lot of the people
in companies like Vauxhall who have those skills being taken on
in the supply chain if they innovate and take on those new skills
which are required.
173. Could you just tell us about the Luton
Vauxhall Partnership, why it was established and whether it has
achieved its goals?
(Mr Allen) It was established the day after Vauxhall
announced that it was going to close in 15 months' time in March
2002. It brought together all the key agencies. It was led by
ourselves. It involved the Employment Service, the local authority,
regional supply network. We had four main aims. First was to look
at re-training and re-skilling the Vauxhall workers. Second, to
look at the effect on the supply chain and local businesses. The
third aim was to create new job opportunities to replace those
lost at Vauxhall in the supply chain. The fourth was to get external
funding to do it. We have come almost to the end of the re-training
and re-skilling. We were hoping to finish by the end of March,
but because we had this hiatus in funding from the rapid response
fund, the training will not now be completed until July. We do
not have an indication at the moment of how successful we have
been at getting people back into jobs. We have a lot of anecdotal
evidence that it is working, but we need to see the unemployment
figures. It will be interesting to see the May figure. On the
supply network, the effect at Vauxhall was the end of a period;
the supply chain had been really affected by Ford, Rover and Nissan.
The number affected at Luton was about 600. Those were not all
local companies, they were spread right across the region and
outside the region. About another 400 local jobs went with local
companies which serviced Vauxhall. We were looking at a total
redundancy situation of around about 3,000. We have done work
with the supply chain to try to make them more effective. We have
put some EEDA
funding in to encourage companies to take on a business excellence
model and improve their competitiveness. On the creation of new
jobs, we put in a bid to the Government for something like £50
million and we have been awarded the first phase of that funding
this year. We have been awarded £4 million, which has to
be matched by EEDA's own funding. That will enable us to make
a start on an innovation centre at the top end of Luton and a
technology village. The fourth area was this access to extra funding.
I have certainly had difficulty about accessing rapid response
funds. We made a bid to the European Social Fund (ESF). It was
facilitated by the Government Office. When in July they said we
could not get access to rapid response funds they told us there
was an underspend on the ESF. We bid into that and we were successful
with it, which enabled us to start the funding, but there was
not enough funding in the surplus funds to do the whole package.
We had to bid for a second time to ESF in October and we did not
get the results of that until December. That is why we have this
delay. The message we want to bring to you is that needs a more
flexible funding situation. A company has declared a closure.
Do we really need them to issue redundancy notices to start to
have the funding advanced?
174. We have got that point. You mentioned 3,000
jobs going in total with suppliers.
(Mr Allen) Yes.
175. Can you actually give us any figures on
what number of those workers have managed to find other jobs or
is it too soon to do that?
(Mr Allen) It is too soon. We have trained about 1,400.
We set out with the intention of giving everybody who was declared
redundant or under threat of redundancy, the opportunity to train
for a NVQ, to train in basic skills, to have IT training and to
write a CV. Fourteen hundred came forward.
176. The other 1,600 have gone off.
(Mr Allen) Six hundred. We could only do it for Vauxhall's.
We could not do it for the supply chain or local businesses. There
were about 600 people; some would retire, some would already be
lined up with jobs, some would go elsewhere.
(Mr Hart) A significant number also went to IBC which
is the van plant next door.
177. What part of this success you have told
us about would you put down to the role of Jobcentre Plus?
(Mr Allen) It was the Employment Service at the time
and they led our training and re-skilling group. We worked closely
with them. We had an office at the plant. The Employment Service
set up a Jobcentre and an employees' help centre. Once we had
the funding through, we set up an EEDA project office. They worked
together. We were giving advice and guidance, arranging training
courses, providing benefits advice. We tried to provide an holistic
approach all over the plant. I think it worked.
178. Are there any other improvements that you
would like to see in the support given to redundant workers knowing
what you know now? You mentioned about releasing the funding.
We have taken that point on board, but as far as this support
facility to redundant workers is concerned, is there anything
extra that you would like to see being offered to them?
(Mr Allen) We started from scratch. The people involved
had never dealt with a really large-scale redundancy. We have
built up a lot of knowledge and expertise. What we should like
to do for future redundancies is to retain that. When we get a
redundancy, whoever is going to deal with that can build on our
(Mr Hart) When we talk about these closures, one of
our main arguments was that it is quite cheap and easy to sack
in this country versus the continent. One of the key aspects in
Germany and France in a big redundancy that makes it more difficult
is the necessity to develop a social plan that deals with the
redundancies. At both Ford and Vauxhalland I understand
it is similar at Roverin the motor industry we have cobbled
together between Government, trade unions and the industry a kind
of a social plan, the beginnings of a social plan, but it seems
to me that it would be appropriate for companies of a certain
size to have an obligation when they deal with redundancy to have
a plan that covers exactly what is being done and maybe some more
at the outset. More than that, one of the big problems that workers
and unions, everybody, faces is what the menu is at the beginning.
You hear of the closure. Once the closure becomes definite we
oppose it and try to prevent itI have gone through all
the very good arguments about Luton being more productive than
anywhere else and so on. When that argument is lost, the workers
involved need to know the menu, what is there, what the possibilities
are, rather than it gradually emerging. It did and that is not
a criticism of Jobcentre Plus or the LSC
or any other agency, but they all have to get their act together.
It seems to me that a menu early on, prior to these decisions,
would be appropriate for workers to understand. It seems right
for people who have worked for 20 or 30 years for a company that
the company has that kind of responsibility to do the groundwork
first so that there is life after closure.
179. I take that point, though there are possibly
difficulties with commercial confidentiality.
(Mr Hart) Yes.
62 East of England Development Agency. Back
Please refer to the supplementary memorandum (ES 09A) submitted
by the Trades Union Congress, Ev 98. Back
Please refer to the supplementary memorandum (ES 09A) submitted
by the Trades Union Congress, Ev 98. Back
Please refer to the supplementary memorandum (ES 09A) submitted
by the Trades Union Congress, Ev 98. Back
London Development Agency. Back
National Voluntary Qualifications. Back
East of England Development Agency. Back
Learning and Skills Council. Back