Speaking during an adjournment debate in the House of Commons last night, Eagle (pictured, right) said closing the site could cause a ‘domino’ effect in the region.
She added: “Any potential closure of the site would have ramifications beyond the workers and their families who work at Burton’s Foods. Two other companies, Manor Bakeries and Typhoo Tea, share the site with Burton’s.
“These factories between them employ 620 more people. Executives at Typhoo Tea have highlighted how any potential closure of the Burton’s factory could cause them at least £1.5m in extra costs as they have shared agreements on electricity, gas, drainage and stock rooms.
“It is crucial to avoid a domino effect on the site, and I wish to know what the government could offer in the way of support to prevent that from happening in the event of a closure going ahead.”
Prisk: What can the government do??
Minister of State, Department for Business, Innovation and Skills Mark Prisk said he would look into the issue to “establish the specific facts and itemised numbers on that”, but stressed that if Burton’s felt Moreton was not viable, it was not clear what the government could do to change that.
He added: “When we look at the past problems of the Moreton plant, which has received £3m in direct grant assistance from the public sector, we must recognise that if the business itself says that it cannot make the plant viable, there is a challenge as to what the government can then do to change that.”
Disastrous decision
Eagle called the debate in response to Burton’s proposals to close the Moreton site, transfer biscuit production to factories in Edinburgh and Llantarnum and outsource chocolate refining – also conducted at Moreton - to a third party.
She added: “The work force, their representatives and I are determined to use that period in the most constructive way that we can to try to persuade Burton’s Foods to change its mind about this disastrous decision.”
Eagle, who argues that Burton’s failed to honour a memorandum of understanding (MOU) signed by the company and its workforce in 2007 to avoid significant restructuring before May 2012, also challenged Burton’s figures.
“There are good grounds for believing that the production costs at the Moreton site have been overestimated, whereas the closure costs have been underestimated. There is much in the company’s figures to contest.”
Increased productivity
Meanwhile, the staff at Moreton had delivered their side of the deal in the MOU, she said. “They have increased their productivity still further, despite having had pay freezes in four of the past 10 years and very modest increases in the other years.
“They have delivered £12.7m worth of cost reduction to the business and have agreed major changes in working practices to achieve that transformation.”
However, Burton’s claims that the site had been loss-making for two years, citing “overcapacity issues” for its decision.