HC Deb 12 December 1960 vol 632 cc169-82

9.55 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

I have notified the Minister of Transport that I wish to raise tonight the problem facing the shipbuilding industry in Scotland. I wish to begin by expressing, on, I am sure, behalf of all those engaged in the shipbuilding industry there, their considerable indignation at the leak which was made from the D.S.I.R. Report and which appeared in The Times some weeks ago.

Mr. Speaker

I wonder whether the hon. Member can help me about this. Was he able to give reasonable notice to the Minister of the points which he desired to raise?

Mr. Bence

Yes, I gave notice to the Minister, at Mayfair 9494, between an hour and three quarters and two hours ago, that I would raise the problem facing the shipbuilding industry in Scotland. I gave that notice on the telephone and I was informed that the Minister would be contacted and would be here.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. John Hay)

I wonder whether I can help? It is quite true, as the hon. Member has said, that he was able to get in touch with the Ministry of Transport, saying that he would raise the issue of the shipbuilding industry in Scotland, but I have not been informed that he intended to raise the issue of the D.S.I.R. Report. On that, I have no information for him tonight.

Mr. Bence

Had I been able to continue the hon. Gentleman would have appreciated that I was not going to discuss that leak. I thought it my duty, however, to express what, I am sure, is the opinion of everyone in Scotland, and not only of those connected with the shipbuilding industry, that a great disservice has been done to the shipbuilding industry in Scotland by that report. For instance, in my own constituency—

Mr. Speaker

The trouble about this, as the hon. Member knows, for he has been here a long time, is that unless notice is given to the Minister of the points which it is desired to raise, all that happens is that there is some sort of ex parte expression of view on one side only, which does not assist the public or the House. That is the kind of difficulty which arises unless notice of the points to be raised is given.

Mr. Bence

A lot of money has been spent on development at Scottish ports during the last few years. John Brown's, I think, have two tankers which they are building, but there is only one passenger vessel on the whole of the Clyde, one passenger liner in the whole of the shipyards. John Brown's have spent £8 million on modernising its shipyard, and I think several other companies. James Lithgow, for instance, have spent between £2 million and £4 million. There has been a tremendous spate of modernising on the Clyde in the last three or four years, but the situation is such that only one passenger liner is at present being built on the Clyde. There are, I think, 19 tankers and four ore carriers on the eastern side of Scotland.

But there are no new orders at all: none whatever. Naturally, with this huge investment which has been made in the last few years, encouraged undoubtedly by the Government, with John Brown's spending £8 million—the company has converted two berths into one, so that it now has one of the most modern shipyards in Europe—our shipyards are in a position to take on extra work, provided that it is forthcoming, but for next year, 1961, I understand the order book, so far as we can see at present, shows that only one-sixth of the 1960 output will be put out. That means a tremendous drop in employment on the Clyde.

There are between 24,000 and 25,000 people employed directly in the shipbuilding industry, besides many thousands who get employment incidentally through the activities of the shipyards, so that the shipbuilding industry on the Clyde is absolutely vital to Glasgow and places like Clydebank, Dumbarton, Greenock, Part Glasgow. Those towns are absolutely dependent upon the shipbuilding industry. It is vital to that area; absolutely vital; so that that prospect for 1961 does create in Glasgow and its environs, and along the banks of the Clyde, serious fears about what the situation may be towards the end of 1961.

It being Ten o'clock, the Motion for the adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]

Mr. Bence

I thought for a moment that I was in trouble again.

A few weeks ago I asked the Minister of Transport about the difficulties of the British shipbuilding industry resulting from various practices carried out by the Governments of other maritime nations, such as Japan, Germany, France, the United States, Holland, but not Norway. They are all pursuing practices which we call subsidising. The Governments of these countries are definitely financing shipbuilding on the most favourable terms whereas the British industry has to compete and struggle without any of this assistance. The Minister replied that all he would do would be to wait and hope that these Governments would change their practices.

Does anyone believe that the Governments of the United States, Germany. France, Holland, Sweden, or Italy will drop their present financing techniques in the shipbuilding industry? If the Minister is hoping for that, he hopes in vain. They will not drop these practices. We have to face the fact that competition both in merchant shipping and in shipbuilding is now not so much between individual units as between nation and nation. Britain, and particularly Scotland, cannot afford to allow itself to be subject to waiting and hoping that what these other countries are doing will be done here.

It is not for me to advocate subsidies and I cannot advocate legislation in an Adjournment debate, but when we in the shipbuilding industry on the Clyde are running into serious difficulties it makes us think that what could be done for the cotton industry in Lancashire when it was running into difficulties could be done, or something like it, for the shipbuilding industry in Scotland. We do not need help to protect us against price competition. The Clyde can build ships as economically and efficiently as any shipyard in the world, but it cannot do it if companies abroad receive credit and favourable financing in the world's markets.

British shipbuilders, and particularly John Brown's, can build any ship up to 100,000 tons as efficiently as any yard in the world, but it cannot compete with companies which are financed by privileged conditions back by Governments. We hope that Her Majesty's Government will take some action to see that the shipbuilding industry here shall have encouragement and help, possibly by the direction of orders or the raising of standards to eliminate older ships so as to get a replacement programme going for the mercantile marine.

10.4 p.m.

Mr. William Small (Glasgow, Scotstoun)

I am indebted to my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) for drawing the Minister's attention to conditions in the shipbuilding industry on the Clyde. Representing, as I do, the neighbouring constituency of Scotstoun I am equally involved in the problems affecting shipbuilding. In the day-to-day contact that I maintain with the industry I am being informed all the time of the issue of redundancy notices.

The Blythswood Shipbuilding Company has paid off 150 men. The "Hamilton Sleigh" is the last ship launched by the Blythswood yard, which means redundancy for its labour force of 850, most of whom have to go at Christmas. I have had correspondence from Yarrow's indicating that a pay-off is pending, and Meechan's and other places in my constituency are involved in these difficulties. It is most distressing when one gets letters from one's constituents, quite apart from the shipbuilding employers. Both sides have a mutual interest. Consequently, I shall take advantage of every opportunity which becomes available to draw these matters to the attention of the Minister.

I have in my hand a copy of a British shipbuilding report containing the statement that the Minister of Transport said that the country must be grateful for the huge sums which have been earned by shipbuilders and shipping in the past. The Minister went on to say that all the help that the Government can properly give will be given. But I note that Sir Nicholas Cayzer, in reply, indicates the position in Great Britain as a whale, and I am sure that the Clyde must be affected in proportion. He says that at the end of the last century Great Britain owned half the world tonnage. Even fifty years ago we owned 40 per cent. Now the figure has fallen to some 17 per cent. When is this decline to stop? When shall we stop this drift?

There is something in particular that I fear. Most of the shipowners and shipbuilders to whom I have talked are at present looking for types of diversification in engineering in competition with other industries. I feel that the time is now ripe for some proposal in respect of nuclear propulsion for shipping in order to provide a diversification of propulsion within shipping itself so that we may maintain a forward-look in shipbuilding. If the industry looks to some other form of engineering for diversification, the decline will still go on and the rot will set in. I feel that unless progress is made in developments of this character there will be little hope of the Clyde keeping in the van of world shipbuilding.

10.8 p.m.

Lieut.-Colonel R. G. Grosvenor (Fermanagh and South Tyrone)

I am tempted to intervene in the debate because of the interesting things which hon. Gentlemen opposite from the Clyde have said about shipbuilding. The Clyde is not the only part of the British Isles where ships are made. I speak on behalf of the Province of Ulster, and particularly the City of Belfast, for there we can make ships as good as if not better than those built on the Clyde.

Hon. Gentlemen opposite and I know that there are not enough orders for ships to be built. Therefore, the new "Queen"—so far tonight no reference has been made to it specifically—must be open to perfectly good, honest tenders. In a previous intervention it was suggested that the number of unemployed in or near the yard where the ship might be built should be taken into consideration. I want to stress this aspect because the Minister of Transport went to Belfast the other day and said that the tenders would be straight tenders and that the unemployment implication would not be considered. Consequently, the intervention made earlier was a slightly unhappy one; the tenders will be straight ones, and decided on their merits. Though I confess that I am not knowledgeable about shipbuilding, I think that that is the best possible way to deal with tendering.

The hon. Member for Dunbartonshire East (Mr. Bence) has spoken about unfair competition all over the world through shipping lines being subsidised. What he has said is perfectly true. However, the Government are meeting that competition with a subsidy for the new "Queen" which is to be built.

Mr. Bence

It is a loan.

Lieut.-Colonel Grosvenor

It is a loan to the extent that it is a subsidy which is repayable. That is a point of view which I would ask the hon. Member to think about.

Mr. E. G. Willis (Edinburgh, East)

That is a new definition of subsidy.

Lieut.-Colonel Grosvenor

We will agree to differ on that. However, we are now entering the shipping markets of the world with a new outlook in that help is at least being given to the shipping companies to build their great ships.

I hope that we shall consider shipping throughout the British Isles and not only in Scotland, of which we have heard a good deal tonight, and that various other parts of the country, in particular that part which is so important to this House and to all of us—the Province of Northern Ireland—will not entirely be left out of the picture.

10.10 p.m.

Mr. E. G. Willis (Edinburgh, East)

I am glad that my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) has raised this very important matter. We owe him a debt of gratitude for allowing us even this short time in which to express our views.

The situation of the shipbuilding industry on the Clyde and in the rest of Scotland is of supreme importance to the Scottish economy, because one out of ten of the insured workers in Scotland depend for their livelihood on it, either directly or indirectly. Even in Edinburgh there is a very large engineering firm engaged in building auxiliaries for ships and stabilising equipment.

What happens to the shipbuilding industry in Scotland affects employment throughout the whole of the country. Scotland is not in a position in which it can afford to allow this industry to decline much further, particularly bearing in mind the large sums that have been spent on re-equipment.

A tremendous blame rests upon the Government, because this situation has been foreseen for a long time. We are told how very few ships—not one on the East Coast—are on the order books for next year. The picture is deplorable, but this was known three years ago. I remember attending, with some of my hon. Friends, a meeting in Glasgow two or three years ago. One prominent person in the industry forecast that not only would the situation be serious in 1959, but that it would be worse in 1960 and far worse still—almost catastrophic—in 1961. That situation exists today.

What have the Government done? We have to face this situation. It is a challenge to the Government which they have not met. If they fail to meet it next year then the position throughout Scotland will worsen considerably. We of all parts of Great Britain cannot allow that to happen. I have made these two points: the importance of this industry to Scotland and the fact that considerable blame rests on the Government. We want to know what the Government intend to do about it.

10.15 p.m.

Mr. James McInnes (Glasgow, Central)

I should like to associate myself with the views expressed by my hon. Friends. I am certain that I do not have to impress upon the Joint Parliamentary Secretary to the Ministry of Transport how vital an industry shipbuilding is to Britain. At one time Britain produced 80 per cent. of the world's shipping output, yet in 1955 that proportion had dropped to 20 per cent.

Shipbuilding is vital to the Clyde because, as my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) and my hon. Friend the Member for Glasgow, Scotstoun (Mr. Small) said, it employs about 10,000 people, who are, naturally, somewhat concerned about the industry and who want to know what the Government's intentions are. Are the Government still waiting for reports from various committees investigating the efficiency of the industry? When are such reports likely to be made? Do the Government agree that this is not merely a matter of competition and that there are other elements? For example, I am satisfied that there are too many old men in the industry, and it was men mostly over 60 years of age who were appointed by the industry to inquire into its future.

There is undoubtedly strong feeling about the wastefulness in British shipbuilding. It does not seem to have an appropriate organisation. We are lagging behind and we have to go to the Continent for new ideas and new techniques in this industry. Perhaps there is some justification for the often repeated assertion that disputes within the industry are due almost entirely to the failure of the management.

I will say no more, but will leave the Parliamentary Secretary time to deal with the issues which my hon. Friends have raised.

10.16 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. John Hay)

We have had a brisk and stimulating debate on the problems of shipbuilding on Clydeside, stimulating particularly to me because of the unexpectedness of the debate. I do not complain about that. One gets to expect anything from Scottish Members, and, being of Scottish ancestry myself, I am not at all surprised when things happen in the way they do.

There is one thing on which we all agree, and that is the vital nature of shipbuilding to Scotland, a matter which has been mentioned by several hon. Members. I agree that the health and prosperity of this industry are vital, not only to Scotland but to the whole of the United Kingdom, and anything that affects shipbuilding in Scotland is bound to have its repercussions on the economy of Scotland and on that of the rest of the United Kingdom. I can best help hon. Members by giving what answers I can and have been able to obtain in the time available, but first I want to make one or two observations.

I think that it is generally accepted and recognised that the problems which are now facing British shipbuilding are not of our own making. The plain fact is that shipping throughout the world has suffered for some years now from an excess of tonnage. Going back, one can recognise that at the time of the Korean War a great amount of tonnage was built in anticipation of trouble, and much of that tonnage is still with us.

Therefore, somehow the shipbuilding industry has to compete in a world which is already over-stocked with ships. That is something which is affecting not only our own but other countries, and it is something which cannot be put right overnight. Hon. Members have asked what the Government are doing about this and why the Government have not acted before. I think that on reflection, against the background of a world situation of that kind, affecting the users of the ships which are built by shipbuilding industries throughout the world, hon. Members will agree that it is extremely difficult for the Government to come forward with some simple or quick panacea to deal with all the problems and all the difficulties. However, I hope to give a few indications of some of the practical things which we are doing to try to help.

Personally, I do not think that the prospects of the shipbuilding industry on the Clyde are very bright. I must say that frankly. But on the other hand, I do not think that they are particularly black. The situation is serious, but it is not grave. I base this upon the information that I have been able to obtain in the course of the last couple of hours.

The position of orders is a good guide to the probabilities of the future. In the early part of this year we were taking an extremely serious view of the situation, because there was no doubt that the order books were shortening and the whole situation looked grave indeed. Now I am told that the orders seem to be holding up rather better than was feared at the beginning of the year. I do not want to sound a note of false optimism, but at the same time I do not think that one needs to descend to an abyss of pessimism about it. The general situation on the Clyde is serious, but has not yet reached a point of great gravity.

Moreover, this is an industry in which the prospects can brighten very rapidly. It is an industry in which perhaps only two or three orders can make a great deal of difference if they are orders for big ships, because this industry is concerned not only with the building of hulls but with the building of propulsion machinery, the equipment of ships, furnishings, and a thousand other things. All these different trades in the industry can be affected by a few big orders. That is why I think it is important to do what we can to assist the process of diversification which the hon. Member for Glasgow, Scotstoun (Mr. Small) mentioned.

Mr. Malcolm MacPherson (Stirling and Falkirk Burghs)

Can the hon. Gentleman say something about the shipbuilding yards in my constituency on the East Coast—about which I know he has not been warned—and about the difference between the future of the big shipbuilding yards, to which the big orders go, and the smaller yards? The shipbuilding yards on the East Coast are smaller than those in other areas.

Mr. Hay

I understand that, and I am sorry that in the time available I have not been able to obtain the full information that I would naturally like to answer a debate of this importance. I will look into that point and try to write to the hon. Gentleman about it.

Our general outlook as regards the prospects of shipbuilding, not only on the Clyde but throughout the country, is this. I think that we have to face this problem in an attitude of sober realism. It would be easy for me to stand at the Box and trot out a number of bromides which might be well reported and which would give the impression that we regarded the industry in a fairly rosy light. We do not regard it in that light. This is a serious situation and we are trying to meet the problems of the shipbuilding industry in a serious fashion.

We are ready to help in every way we can, and, with respect, the hon. Member for Edinburgh, East (Mr. Willis) was too ready to blame the troubles of the industry upon the Government. There is a limit to what the Government can do. But let me mention three things that we have done to help Clydeside in particular.

Mr. Willis

rose—

Mr. Hay

Time is short and I cannot give way.

We have done three things in recent months to help Clydeside. First, there is the allied industry of ship-repairing, which is not so large a part of the industry on Clydeside as in other shipbuilding parts of the country. Here, to assist in the development of the ship repairing side of the industry, the House will know of the proposals which we have now accepted for the building of the Greenock dry dock. This is one of the projects which has been proposed for many years. It has long been wanted, and now we are going to have this enormous dock. It is a big one indeed, over 1,000 feet long, and the Government are lending about two-thirds of the total cost of about £4¼ million.

Mr. Willis

The Government have taken a long time to make up their mind about this.

Mr. Hay

The hon. Gentleman says that the Government have taken a long time to make up their minds, but I urge him not to criticise us for being slow but rather to rejoice that this is being done.

Secondly, there is the new treatment which the Export Credit Guarantees Department has produced for certain types of shipbuilding orders. An announcement about this was made in October, and two modifications to the normal system of export credit guarantees have been introduced.

First, if it is necessary to compete in certain foreign markets where similar treatment is given to shipbuilders, an extended period of more than five years credit can be guaranteed by the E.C.G.D. Secondly, the premiums formerly payable have been considerably lowered. This has been the result of direct Government intervention and negotiation with the industry in Scotland. These are two concrete examples.

As for the long-term problems of the industry, I should mention that a subcommittee of my right hon. Friend's Shipbuilding Advisory Committee has been at work very hard for some months on a complete examination of the problems of shipbuilding and ship-repairing. The chairman of the Sub-Committee is the Permanent Secretary of my right hon. Friend's Department—Sir James Dunnett. Since the hon. Member for Glasgow, Central (Mr. McInnes) spoke about old men in charge, I would point out that Sir James is only 46 years old, which is pretty young as Permanent Secretaries go. Furthermore, anyone who knows him—and I believe that many hon. Members know him—knows that he is extremely vigorous and forward-looking in his ideas.

We are looking for some useful advice from this Sub-Committee, but we must discover the facts first, and these the Sub-Committee will provide. On those facts it is my right hon. Friend's responsibility, in conjunction with his colleagues, to pronounce his policy, and if there is any action which we can usefully take as a result I hope that we shall get the support of the House. This examination is not confined to Clydeside, or even to Scotland; it concerns the shipbuilding industry throughout Britain.

I cannot forecast a definite date for the production of the report, but I am told that the Sub-Committee is hoping to report before very long, and I do not think that any hon. Member would grudge it a few more weeks so long as the facts which come from its deliberations are right and clear.

I hope that I have made it plain that the scope for action by the Government to give direct and concrete assistance to this industry is somewhat limited. The hon. Member for Dunbartonshire, East (Mr. Bence) suggested that we might reconsider our policy of not granting subsidies to our merchant shipping. He mentioned the fact that some foreign countries give subsidies. Nevertheless, this is something that we have set our faces against for many years. We have been fighting a battle—with some success in certain respects—against the policy of subsidisation, and it would be disastrous to all the efforts which we are making in conjunction with our friends on the Continent and in other parts of the world to get rid of this idea of subsidisation of shipping if, now, because our shipbuilding industry is in difficulties for the moment, we surrendered our policy and changed our ideas.

I cannot accept that this is something we can immediately overturn. It is true that methods of subsidisation for shipbuilding could be considered. The hon. Member gave the example of the cotton industry, which was given help by the Government and Parliament. I shall take note of that comment and mention it to my right hon. Friend, but I cannot hold out definite hopes that that course will be adopted. The hon. Member would not expect me to do so.

He also said that we might direct orders to the Clyde. That course would be resisted by hon. Members from other shipbuilding areas.

Dame Irene Ward (Tynemouth)

Hear, hear.

Mr. Hay

My hon. Friend the Member for Tynemouth (Dame Irene Ward) and my hon. and gallant Friend the Member for Fermanagh and South Tyrone (Lieut.-Colonel Grosvenor) would be the first to leap to their feet if there was any question of the Government's directing orders particularly to Clydeside. It may be that the hon. Member put that suggestion forward in a heated moment, without having fully considered the possibilities.

Finally, the hon. Member for Glasgow, Scotstoun raised the question of nuclear propulsion for ships. The House knows that we sought a number of tenders for different types of propelling machinery for a nuclear ship some months ago. No less than five tenders were received in July. They are complicated and difficult things to understand and will need a good deal of consideration. This consideration is being given to them now, and I have no doubt that my right hon. Friend will make an announcement when the moment arrives.

Broadly, we are not complacent about the problems of the industry and will do everything feasible to help it.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.