HC Deb 30 July 1959 vol 610 cc757-65

3.35 p.m.

Dr. J. Dickson Mabon (Greenock)

I am grateful to you, Mr. Speaker, and to the House for giving me the opportunity of raising the matter of the Clyde graving dock. I hope that the Economic Secretary and other hon. Members will forgive me if I retrace a little history, merely to strengthen the points I want to make at the end of my speech.

As the Economic Secretary will know, Clydeside has wanted a graving dock for a long time now. During the war hopes were roused, particularly by the Admiralty, that the Government would in some way provide the capital means whereby the dock would be constructed. As hon. Members know, the Clyde is a famous river, a great river for shipbuilding, but unlike its sister river, the Tyne, it has not had a large volume of ship repairing, and the proposed dock represents a complementary industry to shipbuilding which would give a balance of employment on the Clyde not known previously.

I still find that hon. Members who listen to Scottish debates by accident, of who come in and listen to Scottish Questions, are astonished to find that unemployment in Scotland is so high and in some parts of Clydeside is still at the astonishing figure of 8 per cent. of (he insured population. This represents m my constituency between 2,500 and 3,000 people unemployed, which is a great deal in terms of human frustration.

During the war, because of the mercantile fleet there and because of the large naval warships sailing the oceans of the world, the Admiralty thought there should be a large dry dock on the Clyde, larger than the existing largest one. Scotstoun-Elderslie No. 2 which can take vessels with a beam up to 85 ft. To that end the Admiralty began to make navigational and other technical inquiries into the possibilities of a dock.

Between 1945 and 1955 their Lordships of the Admiralty left this matter in the limbo of uncertainty. It is fair to say that the Admiralty was still considering the matter and, in fact, it was an article of defence strategy which was still on the agenda when the present Foreign Secretary was Minister of Defence. Indeed, in my own constituency in the early days of December, 1955, the right hon. and learned Gentleman made a public speech in which once again the Government tickled the palates of my constituents by suggesting that the Government might intervene in some way or other in order to help the emergence of this much wanted and much needed dock.

Early in 1956 the Clyde Graving Dock Committee, a collection of interested industrialists, threw in its hand officially, announcing in its official trade journal that it did not wish to pursue the matter any longer because it could not find any response from Government circles. I saw as many of the men concerned as possible, and by having discussions with the previous Civil Lord I proceeded to try to raise the matter in the House, culminating in an Adjournment debate, in March, 1957.

It was then for the first time that the Government came to a firm conclusion. I am not blaming them in a party sense, but only then did we have a categorical statement by a Minister of the Crown that no State money would be forthcoming for the dock, and that Clyde shipbuilders, like those elsewhere, ought to find the capital to build that dock themselves. Personally, I welcomed this blast of cold, honest air because it turned the shipbuilders back to their original thoughts about where they would find the capital. We have a number of friends on Clydeside, and, in particular, we are indebted to the present chairman of the Greenock Harbour Trust, General Sir Gordon MacMillan, who in the early days made attempts to get the industrialists to find the money themselves. They were not successful, but there are many more people in Scotland who are just as concerned about shipbuilding and ship repairing in the Clyde as are industrialists and many of us in Parliament on both sides of the House, I am glad to say. We did our best to direct the attention of the Scottish Council (Development and Industry), the Scottish Trades Union Congress and other bodies to bring pressure on the Government to reconsider their decision.

The culmination of all these efforts was in the speech by the Chancellor in April, 1958, when he made his, to us, famous announcement that he would revive Section 4 of the Distribution of Industry Act, 1945. He said that in areas of high unemployment the Government would be prepared to consider assisting the construction of dry docks in order not only to deal with unemployment but also to provide better facilities for dry docking.

After a number of premature starts, the Inchgreen Investigating Company managed to get agreement on its application to the Treasury, which I understand, it lodged in December, 1958. As the Economic Secretary knows, since then I have never failed in any single month to plague him on these matters. I am sorry if I caused him any embarrassment, because I know that these matters are in part at least confidential, but he will realise my natural concern not only as a constituent Member but as a Clydesider that this matter should not be lost sight of, certainly not through Parliamentary neglect.

When I applied for this debate there was a meeting the following day. I deduce no remarkable coincidence at all, I must compliment the Ministers concerned, the Prime Minister and others, because the ubiquitous Lobby correspondents were unable to detect that such a meeting was to take place. They did not know about it until 6 p.m. that night when a Press statement was issued from the Prime Minister's office.

It is at this juncture that I want to ask some questions of the Economic Secretary. He may recall his reply to me on 16th July. I asked: Is there a time limit attached to the offer from the Government? Are the promoters expected to give an answer one way or the other within a certain time? The hon. Gentleman replied: No, Sir; it is certainly not outwith D.A.T.A.C.; nor for the time being is there any time limit on it."—[OFFICIAL REPORT, 16th July, 1959; Vol. 609, c. 557.] I recognise that this is a very delicate stage in the negotiations. The consortium is at this very moment—yesterday, or some time this week or next—meeting to try to determine whether or not it can accept the Government's offer. I should like the Economic Secretary to confirm two points. First, is it true, as the Glasgow Herald has suggested, that, in fact, the broader economic considerations surrounding the dock have been agreed by the Government—that this is not a point of argument any more? Secondly, that the potential demand for a graving dock is accepted by the Government as having been established and that the dock is an economic, viable proposition? If the hon. Gentleman will confirm this we can get that out of the way and we have but one point left.

Do I take it that the meeting on 9th July was concerned with the very narrow, but very important, issue of the precise financial terms which the Government are making? It is said in the public Press and elsewhere that a Government loan at fixed interest rates has been offered. The loan is said to be £3 million and the consortium has been asked to find £¼ million or whatever is the difference between that and the actual estimated cost of the dock.

I am not suggesting that the Economic Secretary should, nor do I expect him to, confirm these figures. I want, however, to ask him these two very pertinent questions. I should like him to reflect on the Answer which I got from the Civil Lord of the Admiralty in March, 1957, and which did so much good in this matter. Then the Civil Lord gave me a very clear and forthright Answer which helped all the interests concerned to sober up from their dreams of Admiralty assistance and come back to reality. I should like the Economic Secretary to do a similar task if that is possible and if he is willing to do so.

Is this offer a once and for all offer? If the promoters refuse this offer, are the Government saying, "We have been 'very generous' "—to quote the chairman of the promoters— "in this offer; we can go no further"? I think that a firm statement about that would be helpful. If it is true that the Government are concerned about this and are prepared to argue further about this point and that point, whether a fixed rate of interest is too high or whether the actual aggregate sum is too low, and matters of that sort, I hope that the Economic Secretary will say so. I should not like to think that in the summer months when I am inert Parliamentary-wise, at any rate on the Floor of the House, there is all this dispute going on and I am unable, with my hon. Friends and with hon. Gentlemen opposite, to some of whom I am grateful for helping me in calling attention to this matter, to do anything.

Is this a once-for-all offer or are the Government considering some modification of the terms if the promoters cannot find the capital required? Is there any time limit on the offer? We are not told whether it is a once-for-all offer.

I have been concerned with this matter ever since I was returned to Parliament three and a half years ago. I should like to know whether, when I am returned to the next Parliament, I shall need to pursue the matter even more intensely or whether my constituents will be content and rejoice that at long last, after two or three decades, we have managed to secure this great economic asset on the Clyde which should develop ship repairing and make it possible to remove the incubus of unemployment which haunts my constituency and many other Clydeside towns.

3.47 p.m.

The Economic Secretary to the Treasury (Mr. F. J. Erroll)

The hon. Member for Greenock (Dr. Dickson Mabon) has a very fine record for persistence on this question. I would congratulate him not only on his persistence, but upon the extraordinarily good-tempered way in which he has, to use his own words, "plagued" us on the matter. I should like, on this genial occasion, when we are about to rise for the Summer Recess, to say that we have never had any hard feelings against the hon. Gentleman. He has done it with great courtesy and pleasantness. If I had been in his shoes as the hon. Member for Greenock, I should have pursued the matter with just the same persistence, and I should have been delighted if I had shown the pleasantness and courtesy that he has.

The hon. Member referred to the long history behind this matter. I should like to outline for a moment the Government's attitude towards dry dock construction throughout the United Kingdom so that the hon. Gentleman, and the House as a whole, can see rather better how the Greenock project fits into the overall scheme.

The hon. Gentleman referred to the Chancellor's speech in the 1958 Budget. I should like to quote from that speech. My right hon. Friend said: There is a grave risk of a shortage of dry-dock accommodation … for the larger tankers and other vessels which will be coming forward in increasing numbers in the next decade. …"—[OFFICIAL REPORT, 15th April, 1958; Vol. 586, c. 58.] The Government believe that private enterprise can be relied on to undertake the needed expansion of capacity, and, in fact, private enterprise schemes are already going ahead at several places, such as at Falmouth, on Merseyside and on the Tyne. These schemes should lead over the next few years to a valuable increase in dry dock accommodation.

The Government also appreciate that it would be unfortunate if sound projects were to be held up or abandoned because of the inability of the promoters to raise all the capital they require to put the work in hand now. It was for this reason that my right hon. Friend in his Budget speech decided to announce that assistance for dry docks might be forthcoming from the Treasury under Section 4 of the Distribution of Industry Act, 1945. The use of these powers has the added advantage of helping to relieve substantial unemployment in various places where dry docks have been projected. I am as sorry as the hon. Gentleman that unemployment has been so persistent in Greenock and has stayed at such a high level.

With Treasury assistance under Section 4 a dry dock has been completed at Swansea and work is proceeding on another at Jarrow. The Greenock graving dock is another private enterprise candidate for assistance under these powers.

I share the wish of the hon. Gentleman that the question of assistance for Greenock dock could have been settled before the House adjourned. I feel sorry for him being, as he says, "Parliamentary inert" and having to remain in his constituency unable to give his constituents definite information. I wish that on this occasion I could tell him more than I am sorry to say I will be able to. We realise that this project is one of great economic significance not only to the hon. Gentleman's constituency and Clyde-side, but to the country as a whole.

Although hon. Members are aware of it, I must remind the House that applications for assistance are made in confidence. Although there has been a good deal of reference in the Press and elsewhere to the fact that an application has been made in respect of the graving dock, I am still precluded from explaining the course of events since the detailed application was made to the Development Areas Treasury Advisory Committee in the last days of 1958. I can, however, assure the hon. Gentleman that progress has been made, culminating in the offer of a substantial measure of Government assistance to the promoters of the scheme by my right hon. Friend the Prime Minister on 9th July.

I am glad that we were able to keep the meeting secret, and that not even the hon. Gentleman, who is very good at ferreting out information on these matters, was able to learn of the existence of this meeting until the Prime Minister's staff made it known to the Press. I assure the hon. Gentleman that the Government's offer is being urgently considered by the promoters of the scheme and by the other interests concerned.

A scheme of this size, involving a substantial outlay of the taxpayers' money, needs the most careful study and consideration. Neither the promoters, who, after all, will be risking their money, nor the taxpayers, want a scheme which turns out to be financially or commercially unsound. It is in everybody's interest that all efforts should be made to ensure that the scheme is well founded, will prosper, and provide a lasting source of employment in the locality.

These matters are not only carefully taken into account, but must be studied with care. For this reason we are most grateful to the members of the Advisory Committee who, month in and month out, give a great deal of their time to study schemes for D.A.T.A.C. assistance. Although this is a bigger scheme than most, the members of the Committee are well qualified to judge the economic and other merits of it.

I mention this because the hon. Gentleman referred to two questions which I think he said appeared in the Glasgow Herald, namely, the broad economic considerations and whether it is a viable proposition. These are both matters which must be studied by the Committee and taken into account.

The hon. Gentleman asked whether this was a once for all offer. He also reminded me of the reply that I gave to one of his supplementary questions about a time limit. I said then that for the time being there was no time limit. We have every confidence that the promoters will study the offer that has been made with urgency, and we feel that until they have made known to us their views on the offer it would be premature to make any further comment on the duration of the offer and what might have to happen if the promoters were unable to come forward with any proposals. The proposal as it stands is a promising one, and it would be foolish, as well as premature, to start considering any possibilities other than the possibility of ultimate success.

We must allow the promoters proper time to consider the offer, and that is why no time limit has been placed upon it. We are not out of touch with the promoters, and if they require or request further discussion before arriving at a decision the Government will be most willing to receive them again.

I am sorry that I cannot be more forthcoming to the hon. Member this afternoon, but I feel that the course of the negotiations would only be impeded if I were to give any indication of the way in which they have proceeded. It will be much more satisfactory for all concerned if I maintain the confidentiality of the negotiations which has been maintained so far. In these circumstances I cannot add anything further to this short debate, and I hope that the reply that I have given will not be too unsatisfactory to the hon. Member.