BAE Systems

Andrew Percy Excerpts

Thursday 24th November 2011 Commons Chamber

[Mr Davis]

It is certainly the consequence of deliberate decisions. Whether the management intended this outcome at the beginning, or whether it is sheer crass misjudgment, I will leave the House to judge. What I am trying to do is lay out the facts as starkly as I can, because it was long ago time to open up the process to public scrutiny.

That brings me to the decision today. The company is in the middle of a 90-day consultation period. From the start, the right hon. Member for Kingston upon Hull West and Hessle and I, and a number of colleagues—probably every Member of Parliament involved in the process—told the company that we would hold it to its legal responsibilities on a 90-day process. Those legal responsibilities involve being transparent and open, and looking in good faith at all proposals put to it. I repeat that: looking in good faith at all proposals put to it. Unfortunately I have to tell the House that, based on the company’s behaviour to date, it seems to me entirely possible that it has broken its legal responsibilities. It has not looked in good faith at all the options available to it, but I will leave it to my right hon. Friend—I beg his pardon, the right hon. Member for Kingston upon Hull West and Hessle; he is my friend—to say more on that later.

I certainly expect the company to demonstrate why it turned down the options that it was looking at before it made the decision. As far as I can see, it has not even done that. Secondly, I expect it to give proper consideration to the plan drawn up by its management to preserve employment at Brough in my constituency, albeit at lower levels. Again, I think that the right hon. Gentleman will touch on that point.

The work force at Hull are the best, in terms of attitude, productivity and skill, I saw in my 20 years in business before I came to the House, and BAE Systems senior management agree. The work force’s attitude is positive, their productivity is high, and the right hon. Gentleman and I have always been told that they are competitive on cost and quality. They deserve a proper chance.

If the company does a proper, open-minded review, and the figures do not add up—I accept that is possible—its responsibilities do not end there. We have been fortunate: the Civitas think-tank has invested £50,000 in looking at the Brough site to see what it can be used for, how the skills can be deployed, and what we can do without destroying the skills base. For that, I thank it warmly. The chairman of the Government’s skill retention taskforce came to see us yesterday, and it is at work, looking for alternatives. The Government acted within two weeks and put in place two enterprise zones, one on each side of the Pennines, to help us in all this, but if we cannot come up with an alternative, we will again lose a critical mass of skilled workers that will not be replaced once it is dissipated. That is the nub of the matter.

The job losses in Brough and on the other side of the Pennines are, to a large extent, a direct consequence of the company’s strategy over the years. The company’s profits come, to a very large extent, from taxpayer support.

[Andrew Percy (Brigg and Goole) (Con)]

My right hon. Friend makes a powerful point. On the legacy issue, does he agree that it is not good enough for BAE Systems to say, “We will do everything that we can to find people alternative work”? It has to make sure that that legacy remains in east Yorkshire, and that the site remains a site of employment in manufacturing for our constituents.

[Mr Davis]

My hon. Friend, who has been very active in this campaign, brings me to the nub of the issue. It is precisely because the company had, until five years ago, experience in civil aviation; precisely because it is the biggest employer of engineers in the country; and because of its knowledge, access, contacts and understanding of the markets, that it is best equipped to find an alternative use for Brough—full stop. That is what I—and others, I am sure—demand. It is not just Brough; I keep saying Brough because it is closest to my heart, but the company must find alternative employment and use for the assets and the work force across the country. That is what it is best equipped to do. Frankly, as far as I can see, so far it has not lifted a finger in that direction.

There has been a lot of criticism in recent weeks of high levels of executive pay. Recently, the statistic came out that, over 30 years, senior executives have had a 4,000% increase in pay. Despite severe criticism of senior management by investors and others over the years, the pay of BAE’s chief executive grew by 8,000% over the same period, double the national average. I am not one of those who believe that people should not be paid large sums of money, but I expect them to earn it. They could perhaps justify their salaries—the chief executive’s is £2.4 million—by doing a better job not only for shareholders, but for employees and the country.

--- Later in debate ---

[Andrew Percy (Brigg and Goole) (Con)]

It is a pleasure to follow my near neighbour and fellow east Yorkshire MP, the hon. Member for Kingston upon Hull East (Karl Turner). I also pay tribute to my right hon. Friend the Member for Haltemprice and Howden (Mr Davis) and the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) for securing this important debate.

I cannot add much to the arguments about Brough so I shall talk about the impact on the local economy. First, though, I shall respond to one or two of the points made by other Members, starting with my hon. Friend the Member for Wyre and Preston North (Mr Wallace). It is a little unfair to suggest that we think that everything should be bought here in the United Kingdom or that there is some sort of magic bullet. We recognise the requirement for partnership, to which my right hon. Friend the Member for Haltemprice and Howden referred. We are asking, “Are we getting what we can out of these contracts, or is the country too subservient in this sector?”

I am delighted that the debate has not turned party political or into a Lancashire versus Yorkshire argument, which is important to me as a Percy: the Percys fought on the Lancastrian side despite being a Yorkshire family. [Interruption.] Actually, we changed sides halfway through because we like to be on the winning side.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. May we return to BAE?

[Andrew Percy]

The point is that this has not been a political debate.

I want to discuss the impact on east Yorkshire and my constituents in north Lincolnshire, a number of whom work at BAE Systems. It was brought home to me on the day of the announcement when my secretary, whose husband works at BAE, contacted me distraught about what was happening. Practically everyone who lives in east Yorkshire knows somebody who works at, or is connected to, the factory. As my colleague and near neighbour, the hon. Member for Kingston upon Hull East will attest—we were two boys at Hull comprehensives—when we went to school in the ’80s and ’90s if someone wanted an apprenticeship, they got one either at BAE Systems or at Saltend with BP. The vast majority of my compatriots and friends at school did not go to university but, like their parents, worked—and continue to work—at BAE Systems.

As Members have said on both sides, the company is rooted in east Yorkshire, and the impact of its leaving will be indescribable not just on the work force but because of the work it does in local schools and through pairing with universities and colleges. As the hon. Member for Kingston upon Hull North (Diana Johnson) said, the Humber economy is in a pretty poor state, and has been for a long time. Over the past 10 years, we have lost private sector jobs along the Humber at a time when the rest of the country was growing private sector jobs. We are in a bad state, and the consequences of losing these 800 jobs will be indescribable.

The Minister used the word “disingenuous”. That is what we all feel about BAE Systems’ actions. As the hon. Member for Kingston upon Hull East said, when we met BAE Systems in July—the unions and everyone who has spoken have attested to this—we were told that although things were tough, the company was expecting Hawk contracts and that the most recent round of redundancies had secured the site and the business for the future. We expected those contracts to be landed and those jobs to be secured.

[Alan Johnson]

Does the hon. Gentleman recall that the specific criterion on which BAE let staff go in the last round of redundancies to which we agreed was that it would retain those with the capability to build Hawk? That was as recently as this summer. Would it not be strange for BAE not to be aware at that time of the decision it announced in September?

[Andrew Percy]

Absolutely. None of us can explain how in just six weeks the whole world was turned on its head. We have sat through BAE presentations and been shown projections going years into the future—although oddly the line always ends about 2016 and we never get to see the line beyond. Despite these predictions, however, in six weeks the world was turned on its head. Members and people watching can read into that what they wish.

We have talked about the legacy issues. It is unacceptable for BAE to think that its role is simply to secure work for the Brough workers elsewhere in the country. Constituents of mine who work at BAE Systems, including the former mayor of Goole, do not want to leave the local area or uproot themselves from their families; they want to stay working in east Yorkshire. After all, along with north Lincolnshire, it is the best part of the country to live in—so why would they wish to leave? They want to remain on that site.

I say to BAE—I hope that the Minister will listen to this message and take it forward—that it has a duty to do everything in its power, even if it hits it in the pocket, to ensure that manufacturing remains on that site, if not through the production of Hawk and other aircraft, through securing other companies and third parties on the site. It cannot walk away from Brough. It cannot say, “Well, we’ve done everything we want to do. We’ll help to find them jobs.” It has a duty to secure that site, and we, as local Members of Parliament—and, I hope, with the support of the Government—will do everything that we can to ensure just that.