Ford in Bridgend

Lord Fox Excerpts

Monday 10th June 2019 Lords Chamber

[Lord Griffiths of Burry Port (Lab)]

My Lords, we are grateful to the Minister for repeating what is by any standards a desultory Statement. It seemed odd from where I was sitting to hear those words coming from his mouth in particular; they seem so mealy-mouthed. After all, 1,700 people are without work and communities will be ravaged. For all the task forces, which are starting from scratch since this has all happened so suddenly, there will be a huge period of thinking and reflecting. Some of the initiatives announced in the Statement pertain to the whole of the UK, and there is little for us to rejoice about in their specific application to Wales.

This is indeed a dark day. Since the 1980s and 1990s, when traditional industries folded up—with such great consequence to Wales, as the Minister will know—it is what has been happening down the M4 corridor that in many ways has kept the economy buoyant, brought hope and replaced those traditional heavy industries that have now gone.

We must just express our deep sadness and perhaps scratch our heads a little. After all, Bridgend manufactured 620,000 engines in 2017—one every 30 seconds. The plant makes a total of five different engines to support the production of seven Ford models. These engines are exported to Germany, Spain, Russia, the USA, China, Taiwan, Vietnam, Thailand and Mexico. Bridgend also makes V6 and V8 engines for the Jaguar XJ, XF and XK. I must apologise to the House: the recent removal of cataracts from my eyes places the reading of a document at this distance in no man’s land. With glasses I cannot see it, and without glasses I cannot see it. For all that, I want simply to say that the output from Bridgend has been considerable. Undertakings were given only recently that led people to suppose and hope that there would be better days ahead. All the activities that depend on the car industry will be similarly affected.

I think we will hear from all sides of the House some bewilderment at the blanket statement that this cannot be put down to Brexit. It seems to me that the uncertainty that has been created by this long and tedious process that Members all over the House have felt to be so damaging will bring sadness of its own kind. In Securing Wales’ Future, a White Paper from the Welsh Government that appeared within a year of the referendum in collaboration with Plaid Cymru and the Labour Party in Cardiff, emphasis was placed on maintaining and preserving work opportunities and conditions, on setting ways of achieving all that and on the necessity of maintaining confidence in the jobs market.

The uncertainty has clearly had its part to play. Ford has blamed global challenges for its decision, but, as highlighted by numerous manufacturers, falling diesel sales and the impact of a potential hard Brexit are creating a perfect storm for the sector. Today’s figures, we are told, are evidence of the vast cost and upheaval Brexit uncertainty has already wrought on UK automotive manufacturing businesses and workers—not just in Bridgend, but in other places, too. Prolonged instability has done untold damage. The Secretary of State for Wales has just recently endorsed the candidature of Boris Johnson for the leadership of the Conservative Party and our eventual new Prime Minister. No clearer exponent of a hard Brexit exists than he. Consequently, faced by the increasingly likely and to be feared hard Brexit, we will not see conditions improve or create what from this side of the House we have constantly asked for—better workers’ rights, greater security in the field of work and support for communities centred on industries such as the car industry.

This is, as I began by saying, a desultory Statement about a very sad situation. We are not convinced that the Secretary of State or Her Majesty’s Government have done all that they can, and we seek reassurances from the Minister that these task forces that have been put in place and this commitment to the future will benefit Wales as much as any other part of the United Kingdom. We were sold the promise that we would lose nothing in our economy as a result of leaving Europe, that our economy would remain buoyant and that the support from Westminster to Cardiff would not see us lose a single penny. Here is the mood music created by this sad closure impending in Bridgend. We can only regret it and ask Her Majesty’s Government to rise above the conflicts among their own numbers that currently mark this moment in their history and give greater attention to the needs of workers and communities in Wales and the United Kingdom at large.

[Lord Fox (LD)]

My Lords, I draw attention to the interests in my name in the register and thank the Minister for repeating the Statement. I commend the noble Lord, Lord Griffiths, notwithstanding his optical challenges, for his very eloquent statement. I associate myself with almost everything he said; I will not attempt to repeat it, but the loss of the Ford Bridgend plant is huge. It is not just the 1,700 workers; it is the whole community—the subcontractors and the infrastructure that supports that factory. I agree with the GMB’s assessment that this is a disaster, not just for that area but for the UK car industry.

Following on from the final point of the noble Lord, Lord Griffiths, could the Minister tell us what talks Her Majesty’s Government had with Ford in the lead-up to this announcement? What help were they able to offer Ford, which in the end proved not to be enough? How far did the Government go to prevent this happening? They had fair warning. In April, Ford warned that it would reconsider its UK investments if MPs could not agree a Brexit deal that offers a smooth departure from the EU. This really points up that Brexit is absolutely a factor in this Statement, notwithstanding the point that the Secretary of State has made. It is also another dagger in the side of the industrial strategy.

For the avoidance of doubt, can the Minister update your Lordships’ House on how the Government are getting on with negotiating the smooth exit strategy that Ford and the rest of the car industry need? How many meetings have been had in Brussels since the extension of the exit date? How many times has the Prime Minister met with anybody in Brussels to bring forward a new proposal to Parliament? Indeed, when might Parliament expect a new proposal to deliver the smooth exit that business says it needs as a minimum level? The Minister may plead that this is above his pay grade—modestly, I would suggest—but this, above all issues, is front and centre in all the decisions that his department, BEIS and all the other departments in this country and Wales are dominated by. It must be dominating his waking hours. I hope he has an answer to the question: how are you getting on with the negotiations?

I thought that the situation was bad last term, but that stasis is nothing compared to what we are seeing now. The PM, as we know, has stepped down and the Government have gone into a sabbatical of self-immolation—if you want to see what setting fire to yourself looks like, just look at what Michael Gove managed over the weekend—while Britain’s advanced manufacturing is crying out for stability and direction. In the words of the SMMT’s chief executive:

“This ongoing uncertainty is corrosive, both on the operations … and on their reputation”.


That is another reason why Brexit is causing this to happen. The reason Ford pulled out is that it is losing confidence in the UK trading environment.

Of course, it is not just automotive. A recent paper from the Royal Economic Society finds that the confusion following Brexit has caused an output loss—a cut in GDP—of 1.7% to 2.5% up to the end of 2018. Today’s announcement of a drop in GDP of 0.4% in one month is a shocking reminder, but we should not be surprised. We were warned. In fact, the ERG’s favourite economist, Patrick Minford, explained some time ago that a no-deal Brexit would see manufacturers go the same way as the coal industry. That prediction is now being priced into every industrial and commercial decision made today, and it is the workers of Bridgend who are falling foul of that today.

In the FT, the Business Secretary is quoted as saying in this context that there are “grounds for optimism”. I am sure the Minister will agree with his colleague, because Ministers have to agree with Secretaries of State, so could he please answer just this one question, if none of the others. On this rainy day, what are the grounds for optimism for the workers of Ford Bridgend?

[Lord Bourne of Aberystwyth]

My Lords, first, I wish the noble Lord, Lord Griffiths, a speedy recovery from his cataract operation. It is very good to see him here at all, and he did an excellent job putting his case.

I shall try to answer the points made by the noble Lords, Lord Griffiths and Lord Fox, in the order in which they were made, if I may. First, there is a consultation here. I agree that this is serious—it is a devastating body blow, and there is no doubt of that—but we must appreciate that a consultation will be going on. Secondly, we know that the manufacture of the Dragon engine will continue until at least February next year, and the Jaguar Land Rover production still at the plant will continue until September next year. I am not making light of the issues, but it is important to get them in the proper context.

Both noble Lords touched on the task force. I think it is fair to say that the task force system was a creation of the Welsh Government. I was privileged to act as chairman of one in relation to a previous job problem—the closure of the Murco oil refinery in west Wales—and I can say with confidence that such task forces are very effective at bringing agencies together to talk about ways to mitigate problems. The first meeting of this task force will be within a week, and both Ken Skates from the Welsh Government and the Secretary of State, Alun Cairns, will be at that meeting, as will representatives of the unions. I understand that the consultation and discussions going on so far between the Secretary of State, the unions and Ken Skates have been very constructive.

It is very important that situations such as this do not become a political football. That is not to say that political points will not be made, but what is important for the people in Bridgend is that we act responsibly to seek new jobs, to find out what we can do to ensure that the highly skilled workforce there—including some excellently paid jobs in that town and the surrounding area of Ogmore and the south-west Wales valleys—is properly served by the work we do. I think that is the intention of all those involved.

On the point about Brexit, it is very important that we do not misrepresent what this is. I am not saying that there is not a discussion to be had on Brexit, and I will come to that, but it is very clear from what was said by Ford and from the context of the Statement, with significant job losses in Germany—5,000 being talked about—Spain and France, that this is not simply about Brexit, or it would just have been about jobs being lost in Britain.

That said, I accept—and noble Lords would do well to reflect on this—that Ford, Honda, Nissan and the Society of Motor Manufacturers and Traders have all called for support for a deal. Indeed, they have all called for support for the deal that has been voted down: the Prime Minister’s deal. I say to noble Lords that, yes, it is important that we get a deal, but there is a deal that these manufacturers have been urging support for which does not attract support from most Members of parties opposite. I make that point advisedly.

I accept that this is also an issue about the supply chain. That will be discussed in the context of the task force. The supply chain is also a factor with Honda. What has been offered in support for Honda’s supply chain will also be offered here. It is worth noting that the automotive sector deal, which is a significant part of the business strategy, has expended £16 million on supply chain assistance.

Noble Lords also need to see that the context of this is the move from diesel and petrol to electrification. The support we are giving to electrification—low-emission vehicles and infrastructure—is significant here. Thoughts about how we can develop that would really help the Welsh workforce, and indeed the British workforce, going forward.