De La Rue: Gateshead

Baroness Laing of Elderslie Excerpts

Thursday 25th June 2020 Commons Chamber

[Liz Twist (Blaydon) (Lab)]

I am glad to have secured this debate on the Government response to job losses at the De La Rue site in Gateshead. I know that you, Madam Deputy Speaker, take a particular interest in this debate, as you have a De La Rue site in your constituency of Epping Forest. I thank you for the concern you have expressed for the staff in Gateshead.

On 25 March 2018, I stood in this Chamber as a fairly new MP to ask an urgent question of the Home Office about the awarding of the contract to produce UK passports to Franco-Dutch company Gemalto rather than to De La Rue, which produced the passports at Team Valley in my constituency.

The De La Rue site, which quite literally prints money as well as producing passports, is one of the industrial jewels in the Gateshead crown. It produces high-quality, nationally important projects with great skill and in highly secure conditions. The staff are highly skilled and trained and well paid. These are quality jobs and staff are proud of the work they do. They do not just come from my constituency; they travel from a wide area around. Hon. Members from across the north-east will also have constituents who work at the site.

In 2018, despite huge public support for keeping passport production in the north-east and in the UK, despite newspaper campaigns and despite meetings with Government Ministers, the contract was eventually awarded to Gemalto. UK passport production was to be offshored, with blank books—a highly valuable commodity—being produced overseas and the personalisation being done in the UK.

Decisions were based primarily on cost in the procurement process that started in 2017. In my view, the Government should have taken a more strategic view from the start, as some other EU countries have done, believing that passport production is essentially a part of the integrity of our security system.

I do not absolve De La Rue’s senior management at the time for getting the price wrong, but my concern is for the staff who worked so hard and with such great pride to produce a secure quality passport for Great Britain. We must learn those lessons for the future when we reconsider the passport contract, but meanwhile, De La Rue employees are bearing the after-effects of that decision.

The loss of the passport contract meant the loss of 200 jobs as the contract came to an end, with a start date for the new contract of July 2019, but more job losses were to follow. In June 2019, a further 170 jobs were lost at Gateshead, from the currency production side. One of the two currency production lines printing banknotes was closed down as the company looked to reduce costs in the aftermath of the loss of their passport contract. Work was again transferred from Gateshead to the company’s other sites, including those in Gibraltar and Kenya.

To add insult to injury, chief executive Martin Sutherland stood down with a bonus worth more than 30% of his executive pay of £197,000, as staff pay was frozen, 48% of shareholders voted against De La Rue’s remuneration report in June 2019 and the future of the company looked very uncertain. Staff at the Gateshead site were facing redundancy. The Guardian wrote in November 2019:

“The farewell bonus for Sutherland, who finally departed last month, now looks like a wretched joke about a licence to print money.”

Sadly, it is not a joke for the staff who actually printed the money for De La Rue.

Each time I visited the site, I talked to staff, who are incredibly proud of the work they do and the responsibility that they carry. I talked to the union Unite about trying to save those jobs. Each time, top management told them that they would be looking to bring more work to Gateshead to replace the passport contract. None materialised.

Last week, as the company financial reports were released, news came of the proposal to end production of currency at Gateshead, with the loss of 255 jobs, leaving only 90 jobs in highly specialised functions at a site that just a few years ago had more than 600 jobs. For many staff not on shift when the stock markets opened, the news first reached them via the Chronicle website, social media, a text from friends or local TV and radio news. The staff deserve better than that.

Once again, work previously done in Gateshead will be moved to De La Rue’s other sites in the UK or overseas. There is a direct link between the decision to award the passport contract to Gemalto and the job losses across the Gateshead site. Because of the number of redundancies, there is now a consultation period of 45 days, so I will be working with Unite and echoing its call for this decision to be reversed and for work to be kept at the Gateshead site. Last week, I spoke to the current chief executive and chairman to let them know my anger at the decision and to support Unite’s call for it to be reversed. I will keep on pushing hard for that throughout the consultation period.

However, the Government have a responsibility in this too, and I am asking the Minister to help me and my colleagues to retain these skilled, high-quality jobs in the north-east. I want to know what the Government are going to do to ensure that jobs such as these are retained in the north-east. We simply cannot afford to lose them. These highly-skilled, well-paid jobs will help to stimulate our regional economy. We need sustainable jobs in the north-east. The Government say that they want to level up the north of England, so they must take practical and decisive action to keep those jobs and to secure more of them for our workers.

Behind those numbers are individuals, families and livelihoods. With the loss of those jobs comes a loss of security, of safety, of hope and of aspiration. Many will be shaken and shattered by this news, and those affected will emerge from the current pandemic even more uncertain about their futures. I join with Unite, the staff trade union, in calling for the company to reverse its plans and maintain production at its Gateshead site.

As I have already said, in 2018 and 2019 the previous management of De La Rue told staff at Gateshead that they would work to bring new work to the site and that the site was important to the company. Those promises were not delivered. Empty words mean nothing to people in my constituency, so I urge the Government to act now. They can start by ensuring that De La Rue’s site is maintained and that the contract to produce passports is returned to the UK as a matter of urgency. They can also help by taking action now to help me to keep those jobs in Gateshead. We must act with immediacy not only to protect local quality jobs, but to safeguard our local economy and strengthen our place in a rapidly changing world. The staff of De La Rue Gateshead deserve no less.

I will finish with one final irony. Today, almost one full year after the new contractor was due to take on the passport contract, some passports are still being produced by De La Rue staff on the Gateshead site in Team Valley in my constituency. That work is due to end at the end of June, just a few days from now. The remaining 80 passport staff will lose their jobs and passport production will cease on the site. I thank those staff and all the staff at the Gateshead site, and end with the hope that we will see a resurgence of the high-skilled, high-quality jobs we so need in the north-east.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I thank the hon. Lady for graciously mentioning that I share her concerns, as De La Rue is a major employer in my Epping Forest constituency.