§ 3.58 p.m.
§ Mr. G. R. Strauss (Vauxhall)
I wish to ask the Committee to consider two items in the Supplementary Estimate which comes under this Vote. I have given the Parliamentary Secretary notice of the two points which I propose to raise—perhaps other hon. Members will want to raise other points—and I am sure that he will answer the questions which I ask and will give the Committee the information which it should have on these two points.
The first point concerns the Supplementary Estimate of £146,000 which falls to be paid because—and I quote the words of the Supplementary Estimate—An increased proportion of the cost of clearance of the Canal"—that is, the Suez Canal—has been established for United Kingdom account.This means that the country is being asked to pay a further and quite substantial sum as one of the results of the Suez folly of 1956.
Most hon. Members and most people had believed that the whole of this shameful, sordid and costly story was a thing of the past and had been relegated 225 to that part of British history about which the less said the better. But, apparently, that has not yet happened, and, in 1963, we still have to pay £146,000 for the clearance of the canal, which this country helped to block, or, rather, the blockage of which was caused by this country.
§ Mr. Strauss
It was caused by this country and others. [HON. MEMBERS: "No."] I understand that the direct reason for the Supplementary Estimate is that it arises from an arrangement with the United Nations. To start with, there was a 3 per cent. Surcharge—
§ Mr. Paul Williams (Sunderland, South)
Surely, the right hon. Gentleman must try to keep the record on this matter correct. Britain did not block the canal. Whatever some may think about the political venture itself, the facts are evident that the canal was blocked by the Egyptians.
§ Mr. Strauss
I know, Sir William, that you would not allow us to pursue this matter, because it would be out of order. If, however, I may be allowed one sentence, had it not been for the action of the British and other Governments the canal would never have been blocked. I am sure that the hon. Member agrees with this.
To start with, there was an arrangement by which all ships passing through the canal paid a surcharge on dues of 3 per cent., the money to be devoted to the unblocking of the canal. Later, I understand, the arrangement was changed and the money was paid, instead of by the owners of the ships, by the Governments whose nationals owned the ships passing through the canal; the Governments were to pay the money to the United Nations. That agreement ended in 1960, but the financial burden to be sorted out was only finalised in 1961.
I am informed that difficulties have arisen about the division of the costs arising between the various countries concerned. In many instances, the ownership of the vessels has been difficult to trace. What now has happened is that the United Nations has said that the British Government are responsible for paying certain sums of money 226 as ships belonging to nationals of this country passed through the canal and, therefore, had to be assessed for the additional 3 per cent.
It is now a long time since the canal was blocked, and the original arrangement was made in 1958. I want to ask the Parliamentary Secretary why there was no Estimate at an earlier stage showing that a certain amount was still due from the British Government to the United Nations on this account. This should have been clear at an earlier stage. Was no earlier Estimate made because either the Government had no idea that there would be any further charge, or was it because they were optimistic and hoped, on both political and financial grounds, that the last penny had been paid by this country for the consequences of their disastrous adventure in 1956? We want more information about this. It is right that the people should realise that they are still paying for the consequences of the Suez folly.
The other point which I wish to raise is the Supplementary Estimate for £250,000. This is a payment of £50,000 to each of five tenderers by way of contribution towards their costs of preparing tenders for a nuclear reactor. The Committee will remember that great interest was aroused in 1959 when the Government proceeded to invite tenders from a number of consortia for the construction of a ship of 65,000 tons with a nuclear reactor capable of developing 20,000 s.h.p. Later, having received those tenders, the Government decided not to proceed with them. There was grave disappointment in the engineering and shipping industries and it was expressed by many hon. Members, on both sides of the House.
The first question which naturally arises is whether it is really necessary to pay this compensation of £¼ million, a very substantial sum. Secondly, does it provide a precedent for the payment of compensation on future occasions to tenderers whose tenders are not accepted? Thirdly, why was not this expenditure foreseen? Did not the Government realise at the time that if they asked these firms, to produce tenders which would involve them in considerable expenditure, the firms might ask the Government to compensate them for all the work which they put in. Leading scientists and engineers devoted many 227 months of effort and ingenuity in working out a design for the ship which the Government, at that stage, apparently, considered building. Did not the Government realise that a claim would be submitted? If so, why did they not provide in their Estimates for the year a sum to cover that amount?
The Government appear to have acted in an extraordinary way. Their approach has been a fumbling and a wasteful one. When they asked for tenders for this ship they did not at that stage decide that the tenders to be submitted by the consortia must be for a vessel that was economically viable. That condition was never made.
What the Government wanted was tenders from the firms for the construction of a ship of this specification. The work of the companies was to see in what way and by what devices such a ship could be built. At the end of the day, however, the Government said that none of the ships was economically viable. They never asked the consortia to prepare tenders for a ship which was economically viable and, for reasons which they expressed only at that late stage, they rejected all the tenders.
The result has been to cause justifiable disappointment and resentment in certain sections of the shipping industry and in the nuclear reactor sector of the engineering industry. I want to know from the Government whether, at the time they invited the tenders, they expected to accept one and then to proceed with the construction of a ship, or whether at that stage they realised that they might not accept any of the tenders. In either case, did they not appreciate that the firms were being put to enormous expenditure and that a claim would he made for compensation for the time spent by the firms in preparing the tenders?
As I indicated, another consequence of this payment is that apparently a precedent has been set by the Government for paying compensation to tenderers when their tenders are not accepted if the work incurred by them is substantial. Does this mean that in future, when a tender is invited from a consortium for work such as this, or even for something entirely different, and the Government decide not to proceed with the project after the tenders 228 have been submitted, compensation will be paid to these firms? Certainly, the industry will be able to plead that the Government have set a precedent by compensating these firms very handsomely—50,000 each—for their wasted efforts.
I am bound to ask, too, whether the Government were right in asking for tenders in the first place. Did they act prematurely or possibly too late? Would it not have been better to have waited a little longer, having granted £3 million to the Atomic Energy Authority to work out a viable nuclear reactor, and then, on the information provided by the Authority, to have invited tenders at that stage, in which case the £250,000 would have been saved?
Should the Government have asked for this tendering to be done at an earlier stage? Other countries have proceeded experimentally towards the production of a nuclear-powered ship —the United States and the Soviet Union—and now Japan has decided to build a nuclear-powered survey ship.
§ Commander Courtney
Surely the right hon. Gentleman is not suggesting that the Russian and American nuclear-powered ships are economic.
§ Mr. Strauss
No. But apparently the Government did not ask the consortia to produce an economically viable ship. Presumably, they merely wanted work and research to be done with the intention of building a ship even if it was not economically viable. I question whether the timing was right. I am asking whether it might not have been Better—I do not say that it was—to have waited until the A.E.A. had done its research or to have asked for the tenders earlier, which might have produced information enabling the country to proceed faster and earlier with this development. I do not know the answers to these questions, but the timing may not have been correct. The fact that the tenders were later turned down and compensation paid in itself suggests, that the timing was wrong.
What have we got as a result of these tenders, all the work done on them and the £250,000 compensation? Have we any knowledge or information enabling us to proceed further and more quickly? For example, has this work established 229 the fact that the boiling water reactor is the only possible one for a merchant ship. That seems to be the view of mast authorities in the industry, although perhaps not all. I understand that the tenderers came to the conclusion that this type of reactor was the only possible one. If such a firm decision has been arrived at as a result of these tenders, then at least the project has been of some value.
Has the work on these tenders enabled the A.E.A. to come to the conclusion that either their I.B.R. proposal or the Belgian Vulcain type of reactor is best? If that is so, it may be some consolation. But are we sure that the same thing might not happen again, however? A new design will no doubt be worked out as a result of the final decision of the A.E.A. in September. At that stage, new tenders will he asked for the construction of a ship which will be economically viable. Again large sums will be spent on preparing those tenders. When they are submitted, is there any change that once more the Government will say, "Thank you for your work, but we are not proceeding further and will pay you compensation"?
The information we have on the development and the prospects of a nuclear-propelled ship is very meagre. This Committee and the public are very interested and should be given much more information. I hope that the Parliamentary Secretary will be able to enlighten us today. It is the lack of information and hard facts which has caused so much uneasiness in the industry and confusion in some sections of it.
It is impossible for a layman in the conflict of opinion among the experts to say who is right. My inclination is to back the views of the A.E.A., where most of our best brains in this engineering science are located. But we should have more information about what has been learned as a result of these tenders. We should be told where we now stand and what the next step will be. The public is exceedingly interested in this problem.
The future Merchant Navy may he powered by nuclear energy, and whoever is first in the field will have an enormous advantage. If we are first, it will be an enormous advantage to our flagging shipbuilding industry. That 230 industry sorely needs a boost. Let us today have some indication of what is likely to happen following these abortive tenders.
Although I have been critical of the Government for their action in this matter, we on this side of the Committee are very strongly in favour of proceeding as quickly as is technically justifiable with the development of a suitable nuclear reactor for merchant ships. We feel that the Government have been far too slow. Nor do we dispute that the industries concerned may have a good case for asking the Government to pay them compensation for the abortive work which the Government asked them to do, but it is the Government who are responsible for the policy which led to that abortive work.
Our blame is not oil the companies who put forward the claim, but on the Government, who have caused a situation which, without further explanation, appears to be wholly unjustifiable. It appears to those of us who are laymen, and it has appeared, as we know, to many responsible people in the industry, that in the past Government policy has been characterised by changing moods of optimism, pessimism and indecision. We ask the Parliamentary Secretary to justify this substantial Supplementary Estimate and to assure us, if he can, that out of the wasted resources which it represents, the Government are now in a position to pursue a more resolute policy and that they now know where they are going.
§ 4.20 p.m.
§ Commander Anthony Courtney (Harrow, East)
It was with the greatest interest that I followed the remarks of the right hon. Member for Vauxhall (Mr. Strauss), with most of which I had generally the greatest sympathy. However, I do not agree with his view that Government policy in this matter is necessarily wrong. I refer, in particular, to Subhead J.
The figure of £250,000 is a small price to pay in what amounts to a fivefold research and development programme carried out for the Government at the Government's instigation by private industry. That figure has to be compared with the enormous outlay by the Central Electricity Generating Board, for example, of about £500 million. We are considering 231 a vital national interest, which is represented by the shipbuilding industry and the possibilities of nuclear propulsion, and we must not lose our sense of proportion. Even if the right hon. Gentleman were right, and I do not think that he is, the Government would be well advised to lay out this sum of money on research and development.
Surely it is right, in the present state of the development of nuclear propulsion for merchant ships for the Government, to go outside the Atomic Energy Authority to get the best possible experience of this new form of propulsion for merchant ships. One of the results of this expenditure of £250,000 may have been that the Government have seen fit on the advice of the Authority to discard certain types of reactor, perhaps the boiling water reactor. However, as the right hon. Gentleman said, in this Committee we do not have sufficient detailed technical information to reach our own conclusions. I can only ask my hon. Friend the Parliamentary Secretary to make a remark or two about that.
The difficulty which we are up against is the interaction of State enterprise, the Atomic Energy Authority, and private industry in achieving a common result for the good of the country. Here, at once, we get into not only political but technical difficulties. The Committee will be aware that this interaction has recently brought about various happenings. I am anxious about the safeguards in the new arrangement for private industry.
For example, is it a fact that by what might be called "ganging-up" in private industry, certain sections of nuclear development in private industry are being frozen out? Allegations have reached me, as they have reached other hon. Members, that that might be the case. I hope not, and I hope that we can have some reassurance. Secondly, are we sure, in the words of a Question put down to my hon. Friend the Parliamentary Secretary for Science today, that the membership of the Padmore Committee and the working party which selected the Vulcain and I.B.R. reactors meet all the requirements and are we sure that the competence and the technical qualifications of these highly respectable gentlemen are sufficient to make the essential decision?
232 What I have in mind is the danger in this crisis, if one may call it such, in our nuclear propulsion affairs that we may take a wrong turning and might perhaps have our Comet I in nuclear propulsion. I say that because there is a marked difference of opinion between the Atomic Energy Authority and a section of marine engineers, revolving round the fact that in at least one of the two chosen reactors which come within the category there are certain working parts within the pressure vessel.
This is something which no marine engineer worthy of his salt could possibly accept. He could not accept having to go to sea for two years at a time, knowing that there were moving parts, in this case the circulating pump, subjected to certain unpleasant radiations which might affect them and in a position where he could not get at them to put them right if they broke down. I would like a reassurance from the Parliamentary Secretary that the working party and the Padmore Committee contain marine engineers of sufficient experience to decide in the national interest.
This £250,000 is a very small sum for this work. The working party is on the right lines. I would welcome some reassurance on the subjects I have raised and I hope that more than the derisory sum of £3 million which has been allocated to marine nuclear research will be forthcoming in the very near future.
§ 4.26 p.m.
§ Mr. E. Shinwell (Easington)
It is about a year ago that hon. Members opposite, led by our former, lamented noble Friend, Viscount Hinchingbrooke, made a strong demand that before we voted any money to the Government for any projects in contemplation there should be a thoroughgoing investigation. We met yesterday to consider the expenditure of £244 million for projects associated with the Air Ministry, but there was hardly any criticism, except from hon. Members on this side of the Committee, and they were comparatively few.
The enthusiasm of a year ago has completely and absolutely evaporated. Where are the critics now? I exempt some hon. Members opposite. The hon. Member for Sunderland, South (Mr. P. Williams) retains his faculty for criticism, and the hon. Member for Dorset, West (Mr. Wingfield Digby), who was previously 233 associated with the Admiralty, has a natural interest in the subject which we are now discussing.
We are about to vote very large sums of money related not to the whole of our transport system, but to a section of it, namely, shipping and shipbuilding. That includes the topic of the atomic energy reactor for underwater vessels. I think that it is justifiable to comment that one expected the Parliamentary Secretary at the beginning of our deliberations to acquaint hon. Members with the Government's general shipping policy.
After all, this is perhaps the only opportunity that we have of debating the Government's shipping policy. Now and again, like a bolt from the blue, we have a debate on shipping, but it is of a specific character, usually associated with the intransigence of the United States of America in maritime affairs. This is an opportunity to debate shipping policy, and the hon. and gallant Gentleman the Parliamentary Secretary remains seated and waits for questions to be asked. And, of course, after they are asked, does anyone suppose that there will be a satisfactory response? Of course not. We had an example of this only yesterday, and I have no doubt that that example will be emulated by the hon. and gallant Gentleman this afternoon.
When the hon. and gallant Gentleman was appointed to this office I was disappointed, not because of his appointment —I pay him the highest respect—but because, like other hon. Members, some on this side of the Committee, I wanted the appointment of a first-class Minister of Shipping who would be responsible for dealing with shipping and shipbuilding. The Prime Minister frustrated our efforts and presented us with the hon. and gallant Gentleman, who no doubt, has done his best, but shipping was in a shocking state before his appointment, and it is even worse now.
Yesterday, in another context, I said that if Ministers could not fufil their obligations they ought to be surcharged, or, at any rate, suffer a reduction in their salaries, and, of course, we could adopt that procedure this afternoon, though I have not the least expectation that at the end of our proceedings the hon. and gallant Gentleman will be left in the position of having to apply for National Assistance. He will receive his salary just the same.
234 Let us consider the Estimates and the Supplementary Estimate. Let us begin with the former. We are debating the expenditure of a vast sum of money, and we are entitled to ask what we are getting from it, apart from the hon. arid gallant Gentleman. Is there any improvement in the shipping position of the United Kingdom? Are we making any progress in shipbuilding development? What is the answer to those questions? The hon. and gallant Gentleman will be bound to reply that unfortunately we are making no progress.
§ The Chairman
I am reluctant to interrupt the right hon. Member, but so that no misunderstanding should develop, may I point out that it is the Supplementary Estimate that we are debating just now?
§ Mr. Shinwell
Sir William, are we to understand that we are never to be afforded an opportunity to discuss the Estimates? Are we to understand that only the Supplementary Estimate, which involves a comparatively small sum of money, can be debated, and that the vast sums which have been expended, or are about to be expended, and which relate to the hon. and gallant Gentleman's Department, are never to be debated? When are we to be afforded an opportunity to debate these matters?
These matters are of fundamental importance, and I was under the impression that, as we were debating the Estimates yesterday and not merely the Supplementary Estimate, we were entitled to debate these Estimates today. At any rate, I presume that I am entitled to ask questions about expenditure. Perhaps you will advise me on this point.
§ Mr. Shinwell
I am ready to be guided in this matter, and I am anxious that it should be on the record that we are permitted to debate expenditure of a comparatively small amount relating to the Supplementary Estimate, but that we are precluded from debating or even asking questions about the vast sums expended by the Government for which the hon. and gallant Gentleman and his right hon. Friend are responsible. I should like to put that on the record and to have the answer.
§ The Chairman
I am obliged to the right hon. Member for allowing me to try to put these things clearly. That may be put down for debate on another day. What has been put down for debate today at the moment is this Supplementary Estimate, and we are now dealing with Class IV, Vote 13, and purely that.
§ Mr. Shinwell
Very well, Sir William. If I am precluded from debating the larger sums, at any rate I can ask questions about the smaller ones.
§ Mr. Shinwell
I am glad of that response, because it seems to fit in with the status of the hon. and gallant Gentleman the Parliamentary Secretary. I say that advisedly. I do not mean any offence.
I say it with respect, but what I mean is that we are now debating a comparatively small sum relating to two or three items of very little importance, or perhaps I should say not of vital importance, in relation to the functions of the hon. and gallant Gentleman. If we are to debate this trivia in finance, it seems to be related to the status of the hon. and gallant Gentleman, and I ask him whether, as regards the services included in the Supplementary Estimate, he will present us with some indication of the Government's policy in relation to these items?
In so far as the Supplementary Estimate items are related to the Government's shipping policy, can the hon. and gallant Gentleman say whether any progress has resulted from his efforts, particularly in relation to conversations with the delegates of other maritime countries? This is a matter to which reference was made some time ago and on which we have had no information. Can the hon. and gallant Gentleman furnish any information on those items?
I now say a word or two about the matter which has been discussed by my right hon. Friend the Member for Vauxhall (Mr. Strauss) and the hon. and gallant Member for Harrow, East (Commander Courtney). I am inclined to agree with the hon. and gallant Gentleman. I am sorry to disagree with my right hon. Friend. I can understand my right hon. Friend's anxiety about spending money which is directed to private enterprise. That view is held strongly on this side of the Committee 236 unless the money is directed to definite beneficial aims.
The device to which my right hon. Friend referred is a new one. It is an experiment. No one can foretell what will result from it, but in a matter of this kind it seems well worth while the Government spending a comparatively small sum of money to induce those who are likely to engage in research, the subsequent development, and the final production of the article, to proceed with their experiments. After all, £50,000 to each of the tenderers does not seem to be a great amount of money. The only doubt that I have in my mind, and perhaps this was the doubt in my right hon. Friend's mind, is whether, at the end of the day, the results will be fruitful, and I think that the hon. and gallant Gentleman the Parliamentary Secretary must be in a position to reassure us on this point.
In the past we have suffered many disappointments in the defence sphere, and we are, in fact, discussing an aspect of defence although it has certain civil repercussions. We are discussing the possibility of the construction of merchant vessels of a nuclear design. We have suffered disappointments in connection with Skybolt, with Blue Streak, and with various ballistic missiles, and we ought to guard ourselves against suffering a disappointment in connection with this very important project. Apart from gaining some reassurance from the hon. and gallant Member, I do not feel that an expenditure of £250,000—especially when we are contemplating the expenditure of about £400 million on Polaris submarines —is a venture that we should impede. Therefore, I do not worry a great deal about it.
Nevertheless, I repeat what I said at the outset—although it is not related entirely to the Supplementary Estimate —that it seems to me that the hon. and gallant Gentleman, on behalf of the Government, should have risen in his place at the outset of our deliberations and furnished the Committee with some information. The real trouble with the Committee and with the House in connection with financial expenditure is that although Members of the Government are frequently interrogated very little information is vouchsafed. It is about time that hon. Members insisted on a thorough examination of the expenditure 237 that is being indulged in by the Government, and that the Government satisfied us that this money is being well spent.
§ 4.40 p.m.
§ Mr. Paul Williams (Sunderland, South)
I always enjoy following the right hon. Member for Easington (Mr. Shinwell), especially when he has made a speech of the kind he made today. I note a tendency of his to try to have it both ways. If my hon. and gallant Friend the Parliamentary Secretary had risen at the beginning of the debate, no doubt the right hon. Gentleman, or one of his colleagues, would have said that he was trying to cut short the debate. In this case, my hon. and gallant Friend has had the courtesy to wait to hear the views of the Committee, and the right hon. Gentleman attacked him for doing so. This is a very natural gambit, and we all enjoy it. I hope that the right hon. Gentleman will not blush too much now that I have caught him out at this trick, which he plays from time to time.
I agree with the decision of the Government to go for a commercial nuclear ship. It seems to me to have been right to delay taking a decision on what sort of propulsion machinery to use until we were in sight of producing something with a commercial application. My hesitation about this Supplementary Estimate, and about next year's Estimates, can best be expressed in the form of questions. First, how serious are the Government about getting into this business at all?
We see from the Supplementary Estimate that compensation of £250,000 is to be paid to the five tenderers, but it is reasonable to ask my hon. and gallant Friend how the knowledge and experience of these five tenderers has so far been used for the benefit of industry. Or is it the case that this knowledge and experience have been brought in and are now being reserved to the Government, or the Atomic Energy Authority, without that experience being passed round the rest of the industry?
To use a phrase that is in current usage today, it seems to me that the commercial and industrial fall-out of knowledge should be spread as widely as possible. The Atomic Energy Authority and free enterprise can both benefit from the cross-fertilisation of their ideas. I am not sure that this is happening today.
238 To put it no higher, there is a suspicion that the Authority, and those who work with it, are working inside a ring of firms—inside a tight closed shop—and that anyone who is not in the ring has a kind of second division status, and is considered to be not a worth-while firm but to be almost lower than dirt. If there is a scintilla of truth in this the nation is suffering from this freezing out of the venturesome and the risk-takers. I need mention only the recent case of Captain Atkins. It could be that he is right, and that the Atomic Energy Authority is wrong, in which case the Government are by-passing the one worth-while view. I express no technical knowledge on this matter, but it is possible that we are missing a great opportunity.
I know that if I were to elaborate on this matter I should be out of order, but I asked at the beginning of my speech how serious the Government were in their programme for a nuclear reactor. I asked that because, if we look at the Civil Estimates for next year, we see the item, "Development of Nuclear Propulsion for Merchant Ships, £10"—a couple of "fivers". We could hardly hear them crinkling together. Is this a serious venture into nuclear power, or am I misreading next year's Estimates? I hope that I am. If not, there will have to be a very large Supplementary Estimate at this time next year. As the right hon. Member for Easington rightly said, some of us will then be asking why there was not better budgeting and more accurate forecasting.
I should like to know to what degree those firms which are outside the five in the consortia are consulted about future developments. Is it true that one, or perhaps two, could put forward a commercial venture now? Many firms involved in this industry consider that they could supply a commercial power unit today. If so, and if private enterprise is not willing to take the risk, could not the Government themselves go forward with the venture, on the understanding that the tendering company would provide the instrumentation and the machinery at a fixed price and under guarantees? If this could be done, why should not the Government go ahead with something of this nature —perhaps a Fleet refuelling tanker?
239 We are discussing the question of Supplementary Estimates as a principle as well as in detail. I have my doubts about the whole method of Government accounting. It seems that Treasury control often goes too deeply into any venture. I wonder whether, on the question of nuclear propulsion for merchant navy ships, Her Majesty's Government should not appoint one person —perhaps with a Treasury aide to sit alongside him—to see the venture through as a whole, so as to be able to reduce expenditure in certain ways while stepping up research and development in other directions.
One person should have control over the whole venture. Heaven forbid that it should be the Minister; I am referring to someone who will do the whole work and not someone who will take a policy decision. I want a person who will see the venture through in detail and have control over every penny of expenditure, and not have to go back to the Treasury whenever a minor modification is made in the programme. If responsibility is placed further down the line the Government will get better value for the money they spend, and quicker decisions.
I repeat the questions that I have asked: first, is the experience gained from these five tenderers spread fairly round the whole industry; secondly, are those firms outside the consortia adequately consulted, and is their experience drawn upon and shared around as well, and, thirdly, will the Government consider my suggestion about the control of expenditure and see that people lower down the line are allowed to have this control? If they are, they will produce the results.
§ 4.48 p.m.
§ Mr. Norman Pentland (Chester-le-Street)
I hesitate to intervene, but since the question has been raised of our proposal to go forward with the project for a nuclear-powered merchant ship I feel that I ought to say a few words and follow the hon. Member for Sunderland, South (Mr. P. Williams) in asking how serious the Government are about this project, and how much money they intend to spend before it is finally in process of development. A good deal of nonsense has already been talked about this project, and about the possibilities 240 and potentialities of a nuclear-powered merchant ship.
During the past few weeks, some right hon. and hon. Members opposite have suggested that this ship was in process of being built in a certain shipyard. One would think that a ship would be built with a nuclear-powered reactor as a means of propulsion before the end of 1963, and that all the research and development on the nuclear reactor chosen had been completed. Nothing could be further from the truth.
It is well known that although we knew in the beginning that there was a political motive behind the project, we must remember that the announcement about the ship was primarily a political decision. Nothing was said about it until a debate on the economic situation and the high figure of unemployment, when an announcement was made by the Prime Minister. In other words, the shipyard workers on the Tyne, the Wear and the Clyde were led to believe, following the Prime Minister's speech, that the unemployment problem in those areas would soon be eased because they would have the opportunity to build a nuclear-powered merchant ship in the very near future. That is not true at all.
The opinion of experts on nuclear propulsion is that although it is possible to envisage a nuclear-propelled ship in the future, that will not become a fact before 1967. They refer to certain tankers and oil loaders which may be nuclear-propelled, but not a large merchant ship. I agree with my right hon. Friend the Member for Easington (Mr. Shinwell) that the Government are justified in taking a chance. If many of my hon. Friends had had their way, this project would have been examined, and evidence adduced for building a nuclear-powered merchant ship long ago.
If we could produce a nuclear reactor system comparable with other propulsion methods, we should be ahead of the world, and it would offer wide possibilities for our shipyards. My point is that it is quite wrong for the Government to raise false hopes about a project and create the impression in our shipyards, particularly in areas of high unemployment, that the chosen reactor has reached a final stage in its development, because that is not true. There is clearly a need for more facts to be known. I agree with 241 the hon. Member for Sunderland, South. A good deal more needs to be known about the Government's decision to choose the reactor system of the Atomic Energy Authority rather than the other systems which have been brought forward.
Here again, it is a question of being sure that the cost and effort put into the system is worth while and in the best interests of the nation. On 27th February, the Parliamentary Secretary to the Ministry of Transport is reported as having said that the Government had decided to develop a nuclear reactor and this had been done. Yet on the same day the scientific editor of the Financial Times wrote:All the designs"—meaning the reactors—exists merely on paper and are frequently modified. Nobody has built one".That is true, and it led me some weeks ago to ask the Parliamentary Secretary to the Ministry of Transport whether it was a fact that the chosen reactors were at the drawing board stage and that before a reactor could be built, a tremendous amount of modification would have to be done. I do not wish to say any-Thing about the controversy which has arisen in the country over this project, except that I believe that it would be in the interests of the Government to tell the nation exactly why they decided to choose the reactor system which they have chosen. That should be made known before we decide to spend large sums of money on research and the development of a reactor system.
As I said some weeks ago, I feel that the Government must have a good reason for choosing the reactor. But the country should be informed. Without revealing any of the "know-how" of the system, the Government should indicate how they reached a final decision about this reactor.
§ 4.56 p.m.
§ Mr. Simon Wingfield Digby (Dorset, West)
I agree with the hon. Member for Chester-le-Street (Mr. Pentland) that it would be a good thing if the Government and the A.E.A. made plain their answers to criticisms of these reactors. But I do not understand where the hon. Member got the idea that these ships are almost about to be built. Had he 242 followed the Parliamentary Questions and the statements made in this House on the subject, he would know that many of us have for a long time been pressing to get something decided. As long ago as December, 1961, I initiated an Adjournment debate on the matter and I wish that the hon. Gentleman had supported me on that occasion. It was the beginning of these research projects which have now got to a more advanced stage. The four types of reactors have been narrowed down to two.
§ Mr. Pentland
The hon. Gentleman will recall that I said that for a long time right hon. and hon. Members on this side of the Committee have been pressing for us to engage in research and development iii connection with a nuclear reactor system for merchant shipping. I agree that certain hon. Members opposite, including the hon. Member for Dorset, West (Mr. Wingfield Digby) have also been doing so. My point was that the impression was given that the ship would be built before the end of 1963. That was the impression with which people were left following the speech of the Prime Minister. An announcement was made as if there was a relevant project.
§ Mr. Rankin
I thought he followed that by saying that it was from this date that all this pressure arose. Surely the hon. Member would agree that long before then we had an exhibition at the office of the Board of Trade in which these reactors were on show. It was understood then that as a result of that exhibition the Government would come to the conclusion about the type of reactor to be chosen.
§ Mr. Digby
I think that the hon. Member for Glasgow, Govan (Mr. Rankin) has misunderstood me. I thought I said that I had an Adjournment debate in December, 1961, at which time a £3 million research project was announced. That was not the first shot 243 in this controversy by any means. Before that date many people had been pressing for something of the kind.
In addition to referring to Subhead J of the Estimates, I wish also to refer to Subhead I, which shows an increase of £4,000 to be paid out by the Ministry of Transport to the A.E.A. This may seem a small sum and comparatively insignificant. But I believe it is rather significant. At Question Time today I asked how much of the £3 million research project had been spent and it was disclosed that only £1¼ million had been spent in a period of nearly a year and a half.
To me, that seems to show that the Ministry of Transport is not spending enough with A.E.A. and it has been a criticism that A.E.A. has been spending far too much in other directions, on power stations, and not enough on other uses for nuclear devices, such as marine propulsion. The fact that only £4,000 extra is being provided—I do not know what that means in terms of scientists—seems to me to indicate that this project is not being manned-up as we would hope would be the case, now that two types of reactors have been settled on. I was glad to hear, again at Question Time today, that it is hoped at the end of the summer to reach a decision between these two types of reactor. I hope that a little more than £4,000 can be spent in putting extra scientists into this project to make sure that a decision is reached.
I now turn from Subhead I to Subhead J, which is the subhead that other hon. Members have discussed. Here we have an expenditure of £250,000. I suppose that in the event this would be described by the Civil Service as "nugatory expenditure", expenditure for which, on the face of it, we get nothing. These five firms are to get this money. I confess that I am not particularly keen on the expenditure of public money in this way on private firms. That is not a principle I like very much.
It may be that in the circumstances it was necessary, but I should like to hear in the reply how those five firms were selected and whether this gives them a ticket, as it were, to be in on the next tenders. Will they automatically get in on the tenders next time? Can we believe that they have learned enough 244 by tendering for this project to be of value to the nation? That causes me to wonder whether it is not something of a precedent in procedure to pay out £50,000 on unsatisfactory tenders. During the discussions on the Navy Estimates it was pointed out that Polaris submarines were to be built, two in one place and two in another, but there were three possible yards to which the contract could go. Will the same principle apply in this case in which one of the three yards is bound to be unsuccessful?
Another point is the failure of the A.E.A. to answer the criticisms of the types of reactor it has put forward. There has been some doubt in the past as to how wise some of its decisions have been about power stations. Now that we are going forward, is there not a danger that once more we may be faced with some kind of nugatory expenditure such as that which is before us in this Committee? As to the rights and wrongs of the integration idea and whether it is wise, as my hon. and gallant Friend the Member for Harrow, East (Commander Courtney) seemed to doubt, to put the pumps right inside the reactor and whether it is not possible that something would go wrong I do not know the correct answer. Evidence seems to show that in nuclear engineering very much greater precision is necessary than in ordinary engineering.
It could be that here we are on the wrong lines. It may be that instead of trying to get a completely integrated reactor the whole of which can be removed from a ship, we should be thinking on the lines of finding a method of fuelling which would last for the lifetime of the ship. The life of a merchant ship is limited, but that may be looking too far ahead. It may be that these are the lines on which we should be working.
I hope that when the Parliamentary Secretary replies he will tell us about these things. I hope he will tell us in particular about the five firms, or consortia, which are to receive £50,000 each and whether there is an implied understanding with them—and only them—that they will be allowed to come forward on the next occasion and offer their tenders.
§ 5.4 p.m.
§ Mr. Stanley R. McMaster (Belfast, East)
I should like to follow the remarks of my hon. Friends the Member for 245 Dorset, West (Mr. Wingfield Digby) and the Member for Sunderland, South (Mr. P. Williams) in speaking on Subhead J. I should like particularly to press the point about the five tenderers.
Could my hon. and gallant Friend the Parliamentary Secretary say whether the same situation will apply in respect of those tenders as applied in the case of the contracting for Polaris submarines, which also will be atomic-powered, and whether the reasoning has been followed that only to those yards with previous experience of building such submarines will it be open to tender in future for more building of a similar kind. If we are to go on applying the principle that only those in at the beginning can remain in the struggle, very many engineering interests in the country will be neglected and will miss the spread of "know-how" to which my hon. Friend the Member for Sunderland, South referred.
Like the right hon. Member for Easing-ton (Mr. Shinwell), I should have liked to hear the Parliamentary Secretary opening this discussion this afternoon in order that we might have been shown just how far this Class IV, Vote 13, went. There are many other subjects mentioned in Vote 13 besides that under Subhead J, which has been the main topic of discussion. I should like to know in respect of the first item how far the expenditure of £342,000 went to meet the expenditure in negotiations which my hon. and gallant Friend has been undertaking to help British shipping interests over the past year.
I ask my hon. and gallant Friend if in his reply he will indicate to the Committee what efforts he has been making under this head, which are covered to some extent by this expenditure, to assist British shipping interests. It is difficult to address the Committee on this subject without more knowledge of the exact limits and things which are covered. Therefore, I add my support to the criticism which has been voiced about lack of information which the Supplementary Estimate gives to the Committee.
I wish to contradict some remarks made by some hon. Friends who have tended to criticise this amount. I should like to see much greater amounts. I should like to see enough to cover additional expenditure designed to assist British shipping interests in meeting the type of competi- 246 tion which they have to face and which hon. Members have continually spoken about, at least in the past four years, practices which I should not go into today because that might well be out of order, although I am not sure. These are practices which my hon. and gallant Friend knows about, flag discrimination, flags of convenience and practices of subsidised shipbuilding. How far does this expenditure cover the Government's efforts to meet those practices?
The Chairman (Sir William AnstrutherGray)
I hope the lion. Member will not go too far in asking those questions, because it will be quite impossible for the Minister to remain in order and at the same time to give an answer to them.
§ Mr. Shinwell
On a point of order. May I direct your attention, Sir William, to some of the items in the Supplementary Estimate which surely have a bearing on general shipping policy? If you will allow me to do so, I shall read them. There are "Weather bulletins, navigational warnings and time signals", Surely those are related to shipping policy? There are "Services for seamen". Leaving out matters under Subheads I and J, we have: "Facilities for handling explosives" and, later under "Services for Shipping", "Radio aids to navigation" and the "North Atlantic Ice Patrol". Surely those are definitely related to shipping? I should have thought that those items justified the comment of the hon. Member for Belfast, East (Mr. McMaster) who asked for further information on Government shipping policy, for which I also ask.
§ The Chairman
I am grateful for the right hon. Gentleman's intervention. He has read out subjects which are specifically mentioned. They are indeed in order. I thought that the hon. Member for Belfast, East (Mr. McMaster) went further than that. Flag discrimination was one subject he mentioned, which I do not think would be in order, and I think that he was prepared to stray even further.
§ Mr. McMaster
Yes, Sir William. I accept this restriction. I am grateful for the intervention of the right hon. Member for Easington (Mr. Shinwell). I was 247 restricting myself to the main Supplementary Estimate rather than dealing with the subheads. I should like particularly to know whether the expenditure of £342,000 covers items such as the conference about which we have read recently which is taking place with European countries and is designed to meet these practices. If not, what is covered by this item? Would my hon. and gallant Friend consider increasing these Estimates to include measures which would assist our shipping to stand up to the practices to which I have referred, if he is not able to persuade the other countries involved to take other action to meet these practices?
§ 5.12 p.m.
§ Sir John Langford-Holt (Shrewsbury)
I apologise for taking up the time of the Committee on what might appear at first sight to be a very trivial matter. It is a subject which I have raised previously with my hon. and gallant Friend by means of Question and Answer. I am at a certain disadvantage in knowing whether the subject I wish to raise comes under "Governmental Shipping Services" or "Services for Shipping". On balance, I think that it comes under "Services for Shipping, Civil Defence and Related Expenditure". I have to be as vague as this, because it appears nowhere specifically either in the main Estimates or in the Supplementary Estimates.
About eighteen months ago I raised with my hon. and gallant Friend a question to which I then got a rather unsatisfactory answer. I hope that he will be able to improve upon it today. I refer to the provision by the Ministry of Transport of mooring buoys for a purpose which I believe to be for civil defence. This came to my notice up in a small part of Scotland, because I saw out at sea no less than seven mooring buoys which, as far as the local inhabitants could tell me, had never been used before. As far as I am aware, they have never been used since. I tabled a Question to my hon. and gallant Friend asking what use was made of these buoys. I asked whether he would consider their reduction. He told me that one of the buoys had been used for a period of four weeks during the last four years. I then suggested that perhaps there were grounds for reducing the number by six buoys. He then gave me a most unsatisfactory 248 answer which I hope he will recall as vividly as I do. He said that, in so far as the fact that these buoys had not been used showed that the merchant fleet was in full operation, he was very pleased with the fact.
These buoys cost £1,000 per buoy per year to maintain. They have been used for a period of four weeks in the last four years. I was told in answer to another Question that the Ministry maintains 120 or 130 additional buoys. If they are maintained at the same cost of £1,000 per buoy per year, that means that £130,000 appears either in the Estimates or in the Supplementary Estimates under "Services for Shipping, Civil Defence and Related Expenditure".
I want to know how many of these buoys are in existence controlled by the Ministry of Transport. How much use is made of them? I want to know the answers to those questions after my hon. and gallant Friend has told me what the purpose of the buoys is, because that is not at all clear to me. I know that this is outside this Supplementary Estimate, but the Admiralty maintains about 1,000 buoys. Is there any consultation, because if the Admiralty's buoys cost the same to maintain, that is another £1 million on mooring buoys alone. Is there any consultation with the Admiralty? I have no doubt that the Ministry of Aviation also has some buoys, though I shall never know why. What consultation goes on with other Departments with a view to getting some sensible answer to this? What service is provided by these buoys? To whom is the service provided and what charge is made for the service? How much longer are we going to have to pay for these buoys year after year in these Estimates and Supplementary Estimates?
§ 5.16 p.m.
§ Mr. John Wells (Maidstone)
I apologise to the right hon. Member for Vauxhall (Mr. Strauss) for not hearing the whole of his speech. Unlike some of my hon. Friends, I am glad that my hon. and gallant Friend is going to speak at the end of the debate, because this will give him an opportunity to answer the questions and points which have been put to him.
The first point of which I hope that my hon. and gallant Friend will take close note is that raised by my hon. Friend the Member for Sunderland, 249 South (Mr. P. Williams). I support my hon. Friend in emphasising the importance of more people lower down the scale of administration being empowered to take real decisions. This is a point which is worrying many of our younger technical generation, who see more and more of their valuable technical time being wasted in attending committee after committee composed of no doubt very excellent administrative civil servants who know nothing about the technical problems and therefore waste the time of the technical men.
I hope that my hon. and gallant Friend will learn something from certain Scandinavian Governments, notably the Swedish Government, who are prepared to send over to this country a small delegation of a technical man, a Treasury man, as my hon. Friend suggested, and perhaps somebody in a ministerial capacity. That committee of three listens to what a commercial firm has to offer and then makes a quick decision. This is an important advance which we could copy from Scandinavian countries.
I want to turn my attention, as other hon. Members have, to Subheads I and J in the Supplementary Estimate. I, too, am very worried that we are not spending nearly enough on nuclear research and nuclear development in all its branches. I should say straight away that I have interests in the marine engineering world, as some hon. Members know. I do not believe that I have any interest to declare to the Committee in this matter. I merely mention it lest anybody picks me up later. I deplore the expenditure of a mere £¼ million in this important sphere.
I wonder if we could have a clear explanation, when my hon. and gallant Friend replies, of the increase in Subhead H. It seems a curious fact that there will be a very substantial increase in wages, expenses, etc., of seamen left abroad.
I come to Head D. We all welcome decreases in provision. These are always welcome, but it seems to me that a decrease due to a—Reduced payment to Admiralty in consequence of delayed recruitment of technical staff "—implies some adverse criticism on somebody. What technical staff were they? Why was there this delay in recruiting them? What is being done to remedy the matter? There is the modest decrease of 250 £5,000 for the North Atlantic Ice Patrol, and I would like to know how that decrease comes about. Is it because better technical equipment is being used?
Under Subhead O we see the cost of facilities for handling explosives at Cliffe Anchorage, and it would be interesting to know what is to happen in this area. What new arrangements are being made? All these points should be explained in greater detail than can be set out in a Supplementary Estimate, and I hope that the Minister, without giving an excessively long reply, will give a clear, concise and satisfactory explanation of all these things. It is all too easy to gloss over these increases and decreases.
§ Mr. P. Williams
Would my hon. Friend say the same about Subhead M concerning the delay in the execution of the programme? There there is a decrease of £54,000. Surely my hon. Friend is aware that there can be just as inefficient and bad government resulting from overspending as there can from under-spending. Do we not want to see accuracy in spending without either over-spending or under-spending?
§ Mr. Wells
I am grateful for my hon. Friend's help. That is what I was implying in my remarks when dealing with the figures. We want to know the full story behind both the increases and the decreases.
Two hon. Members have made either direct or overt references to the case of Captain Atkins. I believe that it is quite possible for Captain Atkins to have been right. It is equally possible that he was not right but I hope that in dealing with Subhead J—" Development of nuclear propulsion in merchant ships"—my hon. and gallant Friend will say something clear and concise about Captain Atkins.
My hon. Friend the Member for Harrow, East (Commander Courtney) referred to circulating pumps, and although I do not wish to go into this matter in detail, I hope that we will have a clearer answer on this than we have had in previous years. I hope, therefore, that my hon. and gallant Friend will go through the Estimate in some detail, in a concise way— without necessarily going to great lengths—and will reply to the points we have raised.
§ 5.23 p.m.
§ Mr. R. Gresham Cooke (Twickenham)
Under Subhead J we are informed of the payment of £50,000 to each of five tenderers by way of a contribution towards their costs of preparing tenders for a nuclear reactor. As I understand it, we have accepted two types of reactor—the Vulcain and the integral boiling reactor. It would be interesting to know what contribution the tenderers mentioned in Subhead J made towards this selection. For instance, did any of the five tenderers make a contribution towards either of the two reactors selected, or did we select them from other sources? I understand that Belgium invented the first one, while the integral reactor came from somewhere else. How was the decision on the final reactor made?
A lot of criticism has been thrown at the scheme for nuclear reaction, and we have all heard about the case of Captain Atkins. As I understand it, he is a marine engineer and not a physicist or great expert in nuclear power. I suppose that the problem he wanted to bring out concerned the question of whether the steam generated by the nuclear furnace would result in radioactivity being carried throughout the ship. I dare say that that problem was settled some years ago by the physicists and that, by the use of certain gases which have a quickly dying radioactivity content, one can produce steam which can be used in engines without radioactivity being caused throughout the ship. I suppose that that was one of the first problems set when considering applying nuclear power to ships.
I would be obliged if my hon. and gallant Friend would tell us more about the five tenderers mentioned in Subhead J, the extent to which they did help us in selecting the Vulcain or the integral boiling reactor, and the amount of work done by any or all of them.
§ 5.26 p.m.
§ Dame Irene Ward (Tynemouth)
I had not intended to speak, because I never really feel that a debate on the Estimates is my subject. It is difficult for me, since I have no particular knowledge of nuclear marine propulsion, to dare to take part in a discussion of this sort.
I have followed with considerable interest the subject of the development of 252 nuclear reactors in ships for a number of years. It is interesting to find that a certain amount of money has been offered for preparing reactors for further investigation. That is extremely important and I am delighted that that has been done. However, I should like my hon. and gallant Friend to tell me whether, involved in the £50,000 to each party, any of the money will go to Belgium—and will come forward in a different set of Estimates—because it seems obvious that the Belgians must be concerned with expenditure in the preparation of reactors suitable for this purpose.
Captain Atkins happens to be a friend of mine and I regret that I could not be in the Chamber to follow the whole of the debate. It is disturbing and distressing to note that there is a controversy over whether or not we have got the right types of reactor. I was never very keen on the idea of these reactors becoming buried, so to speak, in the Atomic Energy Authority but, alas, they got buried there. That is all I can say from the impression I got when I visited Risley the other day However, even with my immature knowledge of these matters, it seemed to me that progress was being made and I am glad to report that.
I am not sufficiently competent to see the difference, from the drawings, between the type of reactor under consideration and the original reactor with which, I gather, these Estimates are concerned and which was shown at an exhibition at the Board of Trade on behalf of the Admiralty and the commercial interests working with the Admiralty at the time. However, I was pleased to learn that advances had been made.
I have always understood that this is a free country and it gives me great concern that a man of great distinction and knowledge in marine engineering—and I have gone out of my way to satisfy myself that the statements I am making are correct—and a man who has a lot of friends in this country who know his value, should have been treated by his employers in the way Captain Atkins was treated. I am not now arguing whether or not he was right to have done what he did, but when someone who would appear to have a perfect right, bearing in mind his knowledge, comes out with certain criticisms, it is regrettable that he should have been dealt with in this way.
253 It is important that we should establish in this country the principle that, when people have expert knowledge to offer, their advice should be taken in the proper spirit. I understand a part of the argument for the rejection of the other reactors by the Atomic Energy Authority—and I have no doubt that the Authority was right to have made its decision—but, at the same time, we have never been given any real details about that decision.
I well remember that when the first reactors appeared at this exhibition, the Government and commercial interests were very concerned with getting on with development, because at that time the United States of America were then busy with the "Savannah". Suddenly, the United States went off the "Savannah", on economic grounds, so the Admiralty thought it necessary to follow suit. I do not like my country to be governed like that. I like to think that we are going ahead whether the United States of America choose to do so or not. To me, the selection of proper reactors is of paramount important because I want to see us leading the world. We are the greatest shipbuilders in the world, so I do not see why we cannot lead it in this sphere.
The Admiralty having fallen back because the United States of America had fallen back, it was decided that the Atomic Energy Authority would do the development, and the companies that had developed their reactors—and which are, I assume, to be paid out of this Estimate —were told that two reactors had been chosen. If Captain Atkins liked to criticise those reactors and to say that the reactor developed by the firm for which he was working was a better one, he is quite entitled to say so—
§ Mr. Gresham Cooke
Would my hon. Friend agree that Captain Atkins is a marine engineer—not a physicist? Would she, therefore, go so far as to say that his criticism of a nuclear reactor would have no standing?
§ Dame Irene Ward
Then perhaps he did not know that working on the reactor side there are marine engineers from Vickers, because when the reactor is 254 decided on it has to be put in a ship, and marine engineers are very concerned with the problem of linking the reactor to the ship's operations. I do not want to bite my hon. Friend's head off—I do not know whether he is a nuclear physicist, which I am not, or a marine engineer, which I am not—but I must say that if I got my lesson correctly at Risley, one needs marine engineers and nuclear physicists working together if we are to get a perfect combination when the ship with the nuclear reactor finally goes to sea.
My hon. Friend might like to discuss the question with our very distinguished marine engineers in the north of England who know the reputation of Captain Atkins. Incidentally, I may tell my hon. and gallant Friend the Parliamentary Secretary that, in a way, the people there are very glad to have a distinguished member of Her Majesty's Navy dealing with this aspect of transport, because he does know something about a ship at sea. If my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) goes to the north of England and discusses this from the point of view of the marine engineer, he will find a large number of distinguished people who are as concerned as Captain Atkins is about this problem.
I went out of my way to make inquiries. The Atomic Energy Authority people—and I had a very delightful time when I visited them—complained that Captain Atkins was the only person who had made criticism, but that is not true. He may have been the only person to have had the courage to criticise, but that does not say that he is the only person to have made criticism. If he never made criticism to the Authority, he has made many criticisms at technical conferences, and when a distinguished marine engineer, or a distinguished nuclear physicist criticises in this way, the Authority would be well advised to get in touch with him.
I know that I am a difficult person, so I often stand up for difficult persons. Captain Atkins may be a difficult man, but I like difficult men. As it is public money that is being expended, the Atomic Energy Authority would have been wise to have got in touch with Captain Atkins and let him have his say. It is quite untrue to say that the Authority did not know that he had made those criticisms. He had made 255 them at technical conferences, and I suppose that the staff of the Authority read the reports of technical conferences. I should be very surprised if they did not.
The next point—
§ Mr. J. Wells
Before my hon. Friend leaves that subject, I may tell her that I am—and I speak with some diffidence —a marine engineer. There has been a good deal of talk one way and another, but I deplore, as I did in my maiden speech, the extraordinary vagueness we all use as non-experts when criticising the experts. I would remind my hon. Friend of the very sound speech of my hon. Friend the Member for Sunderland, South (Mr. P. Williams), which really hit the nail on the head.
§ Dame Irene Ward
I was only too sorry not to have been able to hear that speech. I am sure that my bon. Friend the Member for Sunderland, South (Mr. P. Williams) said a lot of wise things, as usual, but I would remind my hon. Friend the Member for Maidstone (Mr. J. Wells) that Her Majesty's Government do not always listen to what my hon. Friend the Member for Sunderland, South says. I hope that my hon. and gallant Friend the Parliamentary Secretary has listened. The fact remains that I know a lot of marine engineers, and I know the talk that is going on now about this matter. I am not an expert, but in circles to which I would pay some attention there is great anxiety. As I mentioned in a supplementary question only today, it has been suggested that it would be a good idea if some completely independent body now looked at the development of the reactors and offered an independent view on what is being made. I believe that to be a very sound idea.
I understand that Captain Atkins wanted to go to Risley, but was not received. I suppose that the Atomic Energy Authority is a Government Department. Provided that proper security is observed, it is not for Government Departments to refuse to see people who have been, at any rate, connected with a design, whether it was the right design or not. If Captain Atkins wanted to go to Risley, it is a pity that he was not received there. Anyone intimately connected with these matters should have been received at Risley. I 256 am only sorry that he did not go, because he might have been as attracted as I was by the progress that has been made.
I am very sorry not to give an expert view, but I am not trying to do so. I speak only of what I know, and I know that very many people have great anxieties over what is happening in the Atomic Energy Authority at the moment. My only concern is that we should have a first-class reactor and that it should perform magnificently when we build a nuclear ship. I also hope that not only the nuclear ship but, in due course, the nuclear reactor will be built on the North-East Coast.
§ 5.43 p.m.
§ Mr. John Rankin (Glasgow, Govan)
I am glad to know that the hon. Lady the Member for Tynemouth (Dame Irene Ward) sits down a satisfied woman: she has said all that she wanted to say, and that is a very considerable achievement in this Committee. Very many of us sit down, or are compelled to do so, before we have said half of what we wanted to say.
This evening I want to make a very short contribution to the debate. [HON. MEMBERS: "Hear, hear."] In that effort there is nothing like having the full support of hon. and right hon. Members on both sides of the Committee. It gives me the confidence which I feel I often lack in addressing this distinguished Assembly. I want to get away from nuclear propulsion for the moment. I may return to it, if I am tempted, but I want to deal now with the item on page 101 of the Civil Estimates relating to services for shipping.
There it tells us of a number of decreases. Subhead D deals with radio aids to navigation. I think that on both sides of the Committee we shall agree that this is a most essential service in navigating a ship today. We are told, in small print:Reduced payment to Admiralty in consequence of delayed recruitment of technical staff.That is my first point—delayed recruitment.
Then we come to Sub-head F which deals with the North Atlantic Ice Patrol, which is again a most essential service. There we are informed that the cost was originally over-estimated. Then I come to the reference: "Civil Defence and 257 Related Expenditure." Sub-head L deals with the part in which I am particularly interested, Faslane Port. We are told there:Reconstruction of works and incidental expenses: Delay in execution of programme.Under Subhead M, where the delay in the execution of the programme at Faslane is again referred to, we find that there has been a decrease of £54,000. I presume that that decrease is due to the delay.
There are three items dealing with services for shipping, and all that we get from the Government in the execution of these services are a series of delays. Whether there was dithering at some time or not I do not know, but I assume that, when we have these delays, there must have been a great deal of dithering. Overestimation in a most important service is also another reason for a decrease. It seems to me that one of the distinguishing features of the Government in almost everything they handle is represented by this part of the Estimates dealing with the services for shipping. Continuing delay has been the hallmark of their treatment of this part of the Estimate and the work which the expenditure represents; and also the hallmark of the Government themselves. I could go on to enumerate other examples which are equally true but none of them can be discussed on this Estimate. Therefore, I am restricted in what I might want to say, so I return to Subhead J, which has been a matter of considerable comment during the debate—the development of nuclear propulsion in merchant ships.
§ The Temporary Chairman (Mr. Blackburn)
The hon. Gentleman has not been restricted in what he has said as much as he ought to have been. If he will turn to Erskine May, page 738, he will find there that on the Supplementary Estimates savings cannot be discussed.
§ Mr. Rankin
Mr. Blackburn I am glad of the co-operation of the Chair and with respect would point out that I had no opportunity of referring to Erskine May, because I have not a copy with me. I am glad to know that these decreases which I thought were due to delay were only savings which were imposed upon a Government which did not want to make them. However, may I, Mr. Blackburn, come back to Subhead J, 258 which deals with the development of nuclear propulsion in merchant ships?
I was much interested in one remark which the hon. Lady the Member for Tynemouth made. She referred to an exhibition, and I think that she was referring to the same exhibition to which I referred when I intervened in the speech of the hon. Member for Dorset, West (Mr. Wingfield Digby). That exhibition, as I think the hon. Lady will agree, was held a good many years ago, and it seemed to me, when the hon. Gentleman was speaking, that he said that all the pressure which was being applied with regard to nuclear propulsion in merchant ships arose from the time when he had his Adjournment debate in 1961. The hon. Gentleman disputed that with me, but I had the opportunity of referring to the words he used and I find that what I said was correct. He had forgotten in a fairly brief space of time his own words. The pressure for nuclear propulsion in ships was exerted a number of years prior to that debate in 1961.
§ Mr. Rankin
No, that is quite wrong. The Government, from the time of that exhibition in the Board of Trade offices, managed by some means or another to create in the minds of shipbuilders the impression that nuclear propulsion was something which if it was not imminent was worthy of an exhibition to find the best type of reactor. I believe that about eight firms in the United Kingdom took part in that exhibition. I attended it. Most of those with whom I spoke believed that the Government seriously intended to discover the best type of nuclear reactor for the propulsion of a merchant ship.
Questions were raised in the House after the exhibition about what decision had been reached, but time went on and nothing was done and no firm or clear lead was given by the Government on the question of their intention not merely towards the nuclear reactors which had been on exhibition but towards any other nuclear reactor that might be produced by some other body.
259 The Government were in a state of confusion. Delay was the keynote of their attitude towards the problem, the delay which has characterised so many of the other Subheads in the Estimates before us. If wrong conceptions have grown up, the Government are directly responsible for creating them. I hope that when the Parliamentary Secretary to the Ministry of Transport replies to the debate he will tell us exactly what the situation is in regard to the nuclear propulsion of merchant ships.
The hon. and gallant Gentleman must know that mention has already been made of the Q4, the mysterious vessel which was previously the Q3 which we discussed nearly two years ago and to the building of which the Government decided to give financial aid. The Q3 which we then had in mind has disappeared from practical realisation, but now there is mention of a Q4 and it has been stated, on what authority I know not, that the Q4 will be propelled by nuclear methods. This is being freely canvassed and it would be well if the hon. and gallant Gentleman could clear up tonight the position on nuclear propulsion for merchant ships generally and particularly as it affects 04. Some objections have been made by hon. Members opposite, and may even have been made on this side of the Committee for all I know, about the payment of £50,000 to the individuals who have produced nuclear reactors. I agree in principle with those hon. Members opposite who objected to this payment.
§ Mr. Loughlin
Did I understand my hon. Friend to say that £50,000 had been paid to individuals who had produced reactors? This payment has nothing to do with producing reactors.
§ Mr. Rankin
I refer to the statement:The payment of £50,000 to each of five tenderers by way of a contribution towards their costs of preparing tenders for a nuclear reactor.I am sorry. I now find that I missed a word in reading the document and I agree with my hon. Friend that this had nothing to do with producing a reactor, but it had everything to do with work involved in preparing the tenders.
Hon. Members opposite tell us that, under the system in which they believe, 260 capital must take risks. I suppose that this is one of the risks which capital takes, but there were special circumstances here. These firms were very unfairly treated by the Government. I would not look upon this payment as compensation but rather as conscience money paid by the Government to people who tendered and who were treated rather badly, as I know was the case with one firm.
I hope that I have lived up to my initial statement that I would make a short speech.[Interruption.]Well, it has been short to me. Somehow or other when I get on my feet time seems to fly. Some hon. Members opposite have not been here all the time. Some of them came in only a few minutes ago. I do not know whether my name went up on the annunciator or not, but some hon. Members walked out and some came in. These are the arrows of outrageous fortune we must put up with in this Chamber. I hope that in the short time during which I have occupied the attention or inattention of the Committee I have given the Parliamentary Secretary some points which he will think worthy of reply.
§ 5.57 p.m.
§ Mr. Percy Collick (Birkenhead)
I am sorry that the Parliamentary Secretary has not yet chosen to speak in the debate, because had he done so it might have been unnecessary for me to intervene. I rise to make a short point, which is to voice the feeling of protest in our shipyards against the Government's delay in this whole matter of following up as closely as they might have done the question of nuclear propulsion for merchant shipping. My own view is that the Government have as sorry a record in this respect as in almost any other. Those who are concerned with our shipyards feel that if the Government had applied their mind more vigorously to the problem we should not be voting at this late hour a sum of £250,000 to make a payment of £50,000 each to five firms for preparing tenders.
I hope that the Parliamentary Secretary will deal with the matter and will let shipyard interests and shipyard workers know why the Government have been so shockingly slow. This is a matter which gives rise to great concern. I hope that when we have a reply we shall be 261 told something about the prospects of these tenders, when they are likely to be forthcoming, what is the possible programme of development, and when we shall get somewhere in this important work of applying nuclear propulsion to merchant ships.
It is a pity that this country's Merchant Navy, which had such a marvellous record in its early days, should be so sadly neglected by the Government. In view of the balance of payments problems, the country's economy, and so on, I cannot understand why the Government should have been so utterly indifferent to the interests of British shipbuilders and of the whole shipping industry. They have a shocking record, and I hope that the Parliamentary Secretary will tell us much more than we have been told about the application of nuclear propulsion to merchant ships.
§ 6.0 p.m.
§ Mr Stan Awbery (Bristol, Central)
There has been a long and unnecessary delay in developing nuclear propulsion for merchant ships. My hon. Friend the Member for Glasgow, Govan (Mr. Rankin) mentioned the display a few years ago at the Ministry of Transport. I attended that display and saw the models exhibited there, and my impression was that it would not be long before we had nuclear-propelled vessels at sea. Perhaps the Parliamentary Secretary will give us the reason for the long delay in this matter.
In December, 1959, over three years ago, the Government stated that they would shortly invite tenders for the construction of nuclear-powered merchant ships and would decide where the orders should be placed. Apparently, they were to choose between two types of nuclear reactor for propelling vessels of 65,000 tons. That promise was made in December, 1959, and nothing has been done about it until we find in the Supplementary Estimate today that £50,000 is to be given to five construction firms for the purpose of testing out reactors.
§ Mr. Awbery
All right—for preparing the tenders for the propulsion of nuclear-powered vessels.
In January, 1960, the Minister of Transport said that invitations to tender 262 would be sent out to five firms. Nothing has been done until we have the Supplementary Estimate before us today,
In May, 1962, the Minister of Transport stated in this Chamber that a shipping advisory panel consisting of 17 members would be set up to advise the Minister about shipping. I should like to know whether this Committee has been set up, and, if so, whether it has met and whether recommendations have been made concerning the five firms which should be selected for the building of nuclear-powered ships. Perhaps the Parliamentary Secretary can answer that question this evening.
Not only are we behind on nuclear-powered ships. We are behind in every shipping sense. Last year we lost our position as the major country in the world for the construction of ships. Japan has taken our place and we are now second. In November last year the Minister was asked whether any decision concerning nuclear reactors for marine propulsion had been made. He said that research was going on and that he hoped to report shortly. A few days later, the Ministry was asked whether it would give the date on which work would start on nuclear-propelled ships. The answer of the Parliamentary Secretary was that nothing was to be done in November.
On 30th November the Minister was asked when he expected to have nuclear commercial ships at sea. The answer was that he could not say and that it depended on the progress made in research.
§ Commander Courtney
I entirely agree with the hon. Gentleman on many of the points which he is raising, but he and his hon. Friends are a little late in the day. All the Questions which he is quoting came from Members on this side—[HON. MEMBERS: "No."]—I beg hon. Members' pardon; the majority came from this side. It is only eight months since a very strong Motion was put on the Order Paper which had no party political bias in it. My recollection is that not one right hon. or hon. Member opposite even read it, much less signed it.
§ Mr. Strauss
Constant Questions and pressures have come from my hon. Friends and myself on this subject over many years.
§ Mr. Rankin
Even before the hon. and gallant Member for Harrow, East (Commander Courtney) became a Member.
§ Mr. Awbery
I do not wish to take from hon. Members opposite any credit which they may claim for complaining about the delay of three and a half years in dealing with marine nuclear propulsion. Hon. Members opposite and we on this side have been probing the Minister because of the delay which has taken place. We are concerned about the delay in bringing nuclear-propelled vessels into operation. There are nuclear-propelled vessels already at sea. The United States and the U.S.S.R. have such ships. I cannot understand why the major maritime country in the world should be left behind.
§ Mr. E. G. Willis (Edinburgh, East)
My hon. Friend is being far too lenient with the Government in suggesting that there has been a delay of three and a half years. This matter was raised long before the last General Election. There was an exhibition in Whitehall and the Galbraith Committee was appointed in order to determine which of the six reactors which were exhibited there was the best. My hon. Friend is letting the Government off too lightly.
§ Mr. Awbery
I do not wish to rub it in. I am anxious to give the Government credit for anything that they have done, but promises were given three years ago by the Minister of Transport and the Prime Minister that something would be done about developing nuclear-propelled vessels. That is why I ask the Parliamentary Secretary to give us the reason for the delay. Perhaps he can go back further and show that the delay has been longer than three and a half years.
§ 6.9 p.m.
The Parliamentary Secretary to the Ministry of Transport (Vice-Admiral John Hughes Hallett)
At one stage during the debate, a long time ago now, the right hon. Member for Easington (Mr. Shinwell) deplored the fact that I had not opened it with a general statement on shipping policy and regretted that we were debating only the Supplementary Estimate and not the vast sums concerned in the main Estimate. We are considering an additional sum of £342,000 in the Supplementary Estimate. Had we been debat- 264 ing the main Estimate, the sum would have been £1 million. We are here concerned with a very small Vote, and would find it impossible—and I am sure that you would also, Mr. Blackburn—to relate anything in this Vote to general shipping policy. The right hon. Gentleman was later aided and abetted by my hon. Friend the Member for Belfast, East (Mr. McMaster) in the same enterprise.
Nothing in the Supplementary Estimate we are discussing entitles me to go into general questions of shipping policy and still less to discuss the Cunard Company's policy on the "Queen" liners.
§ Mr. Rankin
I did not ask the Parliamentary Secretary to go into the question of the "Queens". I asked him to clear up the problem of nuclear propulsion in the 04.
§ Vice-Admiral Hughes Hallett
The answer is "No". I could not do that, because there is nothing in the Supplementary Estimates which even indirectly relates to that matter.
My hon. Friend the Member for Tyne-mouth (Dame Irene Ward), who intervened later in the debate but has had to leave with others of my hon. Friends to attend a committee, surprised hon. Members by telling us that she seldom dared to enter debates of this nature, but I had not noticed this before. I should like to clear up one point put by my hon. Friend. None of the expenditure in these Supplementary Estimates has anything whatever to do with the two reactors on which research and development is being concentrated; that is to say, it has nothing to do with the Vulcain or I.B.R. reactors. Neither has it anything to do with Captain Atkins.
The one point, however, on which I was in complete agreement with my hon. Friend was that we share with her, as, I am sure, does the whole Committee, the desire that this country should lead the world in this sphere.
§ Vice-Admiral Hughes Hallett
The right hon. Member for Vauxhall (Mr. Strauss), who opened the debate, courteously let me know the two points which he intended to raise. One was the Suez Canal clearance and the other is the question, which has dominated most of 265 the debate, of the compensation which is being paid to the tendering firms for the nuclear installations. If it is for the convenience of the Committee, I should like to deal, first, with the Suez question, then with the various points on other Subheads which were touched upon by hon. Members on both sides and to end up with the question of the nuclear tenderers.
The arrangements concerning the Suez Canal are much more complicated than the right hon. Member for Vauxhall indicated. When I came to study the matter, I was reminded at once of the story that we were told on Friday by the hon. Member for Leeds, West (Mr. C. Pannell) when he reminded us that Mr. Joseph Chamberlain spoke for five hours in the Plimsoll debate. I will endeavour to get my explanation of the Suez Canal expenditure within a shorter compass of time. It is, however, an extremely complicated question.
The Committee will remember that the Canal was blocked and clearance was begun at the turn of the year in 1956–57 by an Anglo-French task force. Shortly afterwards, at the request of the United Nations, the work was taken over by that organisation. The Anglo-French force withdrew and after some delay, the work was started under the auspices of the United Nations.
The total cost of the salvage operation came to just over £3 million. It was decided to pay for this by a levy on the ships using the Canal. For administrative convenience, the levy was expressed as a percentage of the Canal dues and was payable by the person paying the dues although in practice, from the very beginning, the liability was accepted by the Governments.
That liability of Governments did not, however, follow the flag of the ship. It depended upon the nationality of the company responsible for paying the Canal dues. The responsibility of Her Majesty's Government therefore extended not only to United Kingdom ships working on the business of United Kingdom companies, but also to foreign ships time-chartered to United Kingdom companies. Conversely, United Kingdom ships which were time-chartered to foreign companies were not the liability of Her Majesty's Government.
266 The machinery for the payment was as follows. The 3 per cent. surcharge was paid by the shipowner or charterer direct to the Banque Belge, which acted as collecting agent for the United Nations. The shipowners or the charterers were then reimbursed by Her Majesty's Government. I might say in passing that two senior officials of the Ministry of Transport visited Brussels to inspect the operation of the scheme and to assure themselves that it was being fairly administered. They were received with every courtesy and they left fully satisfied.
The collection of the surcharge has been delayed for two reasons. First, the Banque Belge has had difficulty—in some cases great difficulty—in attributing liability in the case of a number of ships, particularly those under flags of convenience. Secondly, certain Governments, notably those of the United States and Japan, paid the surcharge direct to the Banque Beige and the process of establishing afterwards for what transits they were liable has taken time.
Since the United Kingdom shipowners and charterers were paying the surcharge at the time of transit, we felt some fear that by the time the United Nations had collected the full amount, a number of claims would still be outstanding against countries whose ships were not paying cash, with the result that Her Majesty's Government would have borne more than their fair share.
Therefore, for transits made after 6th August, 1960, the United Kingdom changed over to the system whereby the surcharge is paid direct by the Government to the United Nations for those transits for which we accept liability. It is now known that the full cost will have been recovered on transits made up to 15th March, 1961. Indeed, the closing date may well be earlier, depending upon the success of the United Nations in allocating responsibility for 4,000 transits for which liability is still in doubt. The total sum so far paid by the United Kingdom is £1,200,000. We have also accepted liability for transits the surcharge on which amounts to £180,000. That sum, for which the Supplementary Estimate is needed, falls to be paid within a few days.
It is possible that our final liability after all the cases at present under investigation 267 have been settled may amount to £1,450,000, so that we estimate that in that event, about £70,000 will remain to be paid over and above the £180,000 which I have mentioned. If I may go out of order for a moment to call the Committee's attention to the fact, a token sum of £1,000 has been allowed for this purpose in the Estimates for the coming year. At the time the Estimates were prepared, it had been hoped that the whole account would have been cleared up this year. To the extent that the United Nations can allocate liability for doubtful cases, however, the remaining sum to be paid may well be reduced.
The right hon. Member for Vauxhall asked why the need for this Supplementary Estimate could not have been foreseen. There are three reasons. First, until a number of doubtful cases had been cleared and settlement had been reached between the United Nations and the countries whose Governments paid direct, it was impossible to say what our liability would be. Again, it was not known in advance what proportion of ships using the Canal were employed by United Kingdom interests as opposed to ships under the United Kingdom flag. In the event, it has turned out to be rather more than was first expected, mainly because of the number of tankers, of ever-increasing size, that were and have been chartered by British oil companies. Thirdly, the United Nations has at no time made an interim report on how the scheme was going forward.
When my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), when Foreign Secretary, announced the commencement of the scheme in the House of Commons on 1st August, 1958, he said that our cooperation in the scheme as a whole was dependent upon the co-operation of other countries. The United Nations estimates that if the scheme is terminated for transits up to 15th March, 1961, the surcharge that has actually been collected will be at least 82 per cent. of the total theoretically collectable if all the ships were paid for. That being so, we think that the proviso entered by my right hon. and learned Friend in 1958 has been met. I hope that with this explanation the Committee will be satisfied. I apologise for 268 the complicated explanation that it has involved.
My hon. Friend the Member for Maidstone (Mr. J. Wells) and the hon. Member for Glasgow, Govan (Mr. Rankin) ran almost the whole course of Supplementary Estimates. I shall mention briefly some of the Subheads they referred to, but as you, Mr. Blackburn, rightly pointed out, we are debarred by the rule that smaller sums and savings should not be debated.
The first one mentioned by my hon. Friend the Member for Maidstone was the question of the navigational warnings and weather bulletins, for which an additional sum of £29,000 is required. The costs of this service were included under this Subhead for many years. It was provided by the Post Office as our agent and has now been discontinued. The apparatus used for this service was of very litle value for any other purpose, however, and accordingly the Ministry was required to compensate the Post Office for the capital expenditure which would otherwise have been recovered through the annual charges. This compensation accounts for the great bulk of the Supplementary Estimate.
I have received a number of letters on this which may interest hon. Members, and I should like to say something about why we decided to discontinue the service. It was started in 1924, and in 1929 no less than 10,618 requests were made for bearings. But by 1960 this number had dropped to 227. The reason for this great fall is the fact that ships rely more and more upon radar and less and less upon a system of navigation fixings which was really becoming out of date. The sub-committee which advises us on this pointed out that we must either conclude the existing system, since it has out-lived its usefulness, or establish a new D.F. system with new equipment. We did not consider the expense of that to be justified.
Under Subhead H, I was asked why the cost of repatriating seamen left abroad has risen. One reason is the larger number who had to be repatriated last year, which was largely due to the fact that the whole crew of one ship—though not a very large crew—had to be repatriated from the Red Sea. 269 That accounted for about £3,000. Since the original estimates were made, boarding., and medical charges abroad have increased substantially, accounting for about £5,000. But nearly all this greater expenditure will he recovered in future years from the beneficiaries.
There were one or two other rather complicated items. The Committee may be surprised to learn that the decision of my right hon. Friend the Chancellor of the Exchequer to lower the qualifying age for post-war credits involved a charge of about £5,000 on this Vote. The reason is that the Ministry of Transport is responsible for paying these credits to those seamen who were prisoners of war. The Inland Revenue does not do this because originally, in 1940–45, the then Ministry of War Transport collected the money itself instead of paying it to the Inland Revenue.
There is also a new kind of identity card to meet the requirements of the I.L.O., and this is costing £3,000 which, however, will eventually be recovered from the shipowners. Those are the principal reasons for the increases under Subhead H.
Under Subhead O, a certain amount was said about the additional £50,000 requited for the handling of explosives. Until the winter of 1952–53, the heavy traffic in Government explosives through London was handled at an anchorage at Holehaven, but at the beginning of 1953 the Home Office advised the Port of London Authority that, because of the rapid growth of oil installations on adjacent land, this anchorage was unsuitable from the point of view of safety. There was an alternative anchorage—the Chapman Light Anchorage—which was more favourable, but it could not be used throughout the winter because it was too exposed to the weather.
On the advice of the standing explosives committee, which deals with this in conjunction with the Ministry, it was decided as an urgent measure to use Cliffe Anchorage and provide the necessary facilities there, since it was an isolated place. We then entered into an agreement with the Port of London Authority whereby it provided facilities at a cost of £55,000 and the Ministry agreed to meet deficiencies arising from the operation of the installations, 270 together with the amortisation of the capital cost. The agreement was intended to last for 25 years starting in May, 1954.
However, in 1962, an oil company stated that it wished to develop an oil terminal near Cliffe Anchorage. It was decided that this would mean that the explosives ships arid the tankers would be too close together. The oil terminal is expected to bring in considerable revenue, and, what is more, there is a danger that if the oil company cannot develop the terminal there it will do so on the Continent. In these circumstances, the Ministry, on the advice of the working party, thought that we should not be justified in losing the oil terminal development in order to retain Cliffe Anchorage at a continuing and increasing cost to the State due to the decline in the traffic of Government explosives.
For that reason it was decided to terminate the use of Cliffe Anchorage. Agreement has been reached with the Port of London Authority for the payment by the Ministry of about £31,000 in full settlement of the remaining capital liability, together with the deficiencies that existed on 30th September, which amounted to just over £17,800. The total comes to £48,859.
I think that I have now come to the end—
§ Vice-Admiral Hughes Hallett
I have not come to the end of my speech. I was about to say that I have dealt with the questions raised on the minor and subsidiary increases and would now like to turn to the question of nuclear ships.
§ Mr. Shinwell
I understand that during my absence some of my hon. Friends wish to raise some of the items under Subheads B, F, L and M and I understand also that it was ruled that we could not debate reductions. That may well be the case, but the hon. and gallant Gentleman may have noticed that, in Subhead A, leaving out the figures and not discussing the reductions, it is stated that the cost was originally over-estimated.
We are entitled, without discussing the cost, to ask why the cost was originally over-estimated. Item L contains a reference to delay in the execution of the programme. I am not discussing the 271 figure, for I am well aware that we cannot debate decreases, but I want to know why there was delay in the execution of the programme. These items are worth explanation.
§ The Temporary Chairman
The right hon. Member for Easington (Mr. Shin-well) was not present when I read the appropriate passage from Erskine May. It would not be in order for the Minister to reply to those questions.
§ Mr. Shinwell
I contest that. I should like to have the whole of the Ruling before I accept that. I understand that we cannot debate the actual figures and that if there has been a reduction, that is not a matter for debate. But we are entitled to ask why the original cost was over-estimated, because that is a blunder by the Ministry. I am not concerned with the figure now, but we are entitled to question the Minister about his failure to estimate accurately. That is all.
§ The Temporary Chairman
That can be done on the Reports of the Estimates Committee, but not on Supplementary Estimates. My position is that I have to carry out the rules of the House, and under the rules the Minister would be out of order if he attempted to answer those questions.
§ Mr. Rankin
Further to that point of order. You chided me, Mr. Blackburn—I admit rather gently—about my remarks when I was interpreting some of these decreases as postponed payments. It would be very alarming indeed if the amount of the original expenditure set aside for Faslane had to be decreased.
§ Vice-Admiral Hughes Hallett
I am bound by your Ruling, Mr. Blackburn, or nothing would give me greater pleasure than to explain the Government's excellent reasons for these changes.
§ Mr. Loughlin
The Parliamentary Secretary gave us some explanation why the Government were involved in £30,000 compensation, plus other items, as a result of terminating an agreement about Cliffe Anchorage. The hon. and gallant Gentleman gave us a brief explanation about some oil company coming in at some point. I was not clear about it. Can he tell us more? Are we paying Government money to an oil 272 company and is there some alleged advantage in having the oil company use this place instead of going to the Continent? Did the oil company tell the Government that it would go to the Continent if the Government did not agree to this proposal?
§ Vice-Admiral Hughes Hallett
Within the limits of the Supplementary Estimate, I cannot carry this very far. I am sure that the hon. Member is aware that this is not the first occasion on which changes in ports, particularly connected with handling explosives, have been made in order to allow other major and important developments connected with refineries and oil terminals to be installed. It would be very wrong of the Government to block developments which usually bring considerable local employment with them, as well as considerable revenue to the country, merely because at the time the Government had an arrangement whereby their own explosives were handled in the area.
§ Vice-Admiral Hughes Hallett
That remains to he seen. That is a question which the hon. Member must put in due course to the Minister of Power. If he had listened to my statement, he would have heard that the application was made only during 1962. It is not without precedent and we naturally balance the convenience of the Government in handling explosives and the advantages to the locality in extra work and revenue and so forth.
I turn now to the nuclear questions and begin by saying something about Subhead I, a subject which was raised by my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby). The additional requirement of £4,000 has nothing to do with the items in Subhead J, and nothing to do with the development of future reactors for British marine vessels.
The position is that the Atomic Energy Authority is responsible for the safety of all land-based reactors. It also has to satisfy itself as to the safety of reactors in ships which may visit major British ports. In this work it acts as the agent of the Ministry of Transport. The present studies for which this money is required are concerned with the American ship 273 "Savannah" and are being carried out in co-operation with the responsible American authorities.
The need for the Supplementary Estimate arose because expenditure fell due rather later than had been expected. Provision had been made in a transfer between subheads in the Estimates for last year, but they were under-spent by £4,500, or so, and that had to be carried forward as a Supplementary Estimate to the Estimates for the current year. This work is by no means wasted, and I know that, as a result of the work of the Authority, a number of suggestions have been made and have been adopted by the American authorities.
I turn now to Subhead J, the compensation being paid to the tenderers, the main subject of today's debate. The right hon. Member for Vauxhall and others have asked questions which I shall do my best to answer. I was particularly grateful to the right hon. Gentleman and to my hon. Friend the Member for Dorset, West for specifically asking whether this compensation could be taken as a precedent. I am glad to take the opportunity of saying at once that, for reasons which will come out as I develop the case, it is in no way a precedent. The circumstances were very unusual and we would not like this case to be thought to be a precedent.
If I understood him correctly, the hon. Member for Chester-le-Street (Mr. Pentland) said that the Government spokesman had given the shipping industry the impression that nuclear merchant ships would be working in 1963. I can assure him that that is not so.
§ Mr. Pentland
What I was trying to convey was that that was the impression in the industry following the Prime Minister's announcement during the debate on the economic position and high unemployment, when he brought out of the blue the idea of a nuclear-propelled merchant ship, whose construction was to ease unemployment in areas such as the North-East and Scotland and Merseyside.
§ Vice-Admiral Hughes Hallett
I do not think that that construction can be placed on my right hon. Friend's words.
I will do my best to answer the questions about the past. I am somewhat inhibited from speaking about the future because that would certainly get me out of order. Perhaps I can say in pass- 274 ing, however, that a great research and development programme is as difficult to follow as the career of a successful politician. There is one respect in which they differ. Whereas the career of a politician depends upon a great deal of publicity, great research and development programmes are difficult to conduct with a loud running public commentary. That is particularly true where an element of commercial secrecy is involved as well, but I can at least assure the hon. Member for Chester-le-Street and my hon. Friend the Member for Dorset, West that we are taking this seriously; we are in deadly earnest over it.
The hon. Member for Birkenhead (Mr. Collick) and the hon. Member for Bristol, Central (Mr. Awbery) said that there had been great delays, and that this was proved by the Supplementary Estimate today. I entirely deny that. The speed of advance has been as fast as possible, but it is governed by matters which do not fall within the realm of Government control. It is governed largely by the progress of scientific knowledge and thought.
Perhaps I could remind the Committee of the background to this item in the Supplementary Estimate. It was in 1957 that the Nuclear Marine Committee was first set up under the chairmanship of the Civil Lord of the Admiralty, commonly called the Galbraith Committee. It was at the end of 1959 that, on account of advice from that Committee, the Government decided, without any commitment to build a ship, that tenders should be invited from selected British firms for a boiling water reactor, and an organic liquid moderated reactor, complete with a propulsion unit suitable for installation in a 65,000 ton deadweight tanker. Accordingly, it was in February, 1960, that my right hon. Friend the Minister of Transport, who had by that time assumed responsibility for the sponsorship of the shipbuilding industry, invited tenders from these five firms.
The right hon. Member for Vauxhall asked why no condition had been put in the tenders that they should tender only for something that was economically viable. I think that that would have been an impossible condition. To begin with, a considerable amount of expert assessment of the tenders was required before they could be judged, and I do 275 not think that the firms of shipbuilders, marine engineers, and nuclear experts, were the people who were in the best position to judge this question, because this brought one into the realm of ship owning and the operation of ships.
§ Mr. Strauss
I did not ask why no condition had been made that the ship should be economically viable, but why there was no understanding or suggestion made during the discussion which preceded tendering that the purpose of the Admiralty was not to get ships which were economically viable, or that it was at that stage primarily interested in the viability of nuclear-powered ships.
§ Vice-Admiral Hughes Hallett
I do not know why the right hon. Gentleman should assume that there was no such understanding. After all, these tenders did not go out until after the Galbraith Committee had been in being for a long time. There had been endless discussions, and I am sure they were aware that the object was to produce an economic and cheap form of propulsion, and if the right hon. Gentleman casts his mind back he will recall that many people at that time said that this could be done.
Perhaps I could answer one question which was put to me by a number of my hon. Friends. The five tendering groups were chosen because they were the only five firms which were putting forward the two types of reactor which at that time were required. These were the types which we thought most promising at that time. I assure the Committee that the payment of compensation to these firms in no way gives them any privilege regarding future contracts.
§ Mr. Rankin
The hon. and gallant Gentleman is missing out one phase, the exhibition which was held at the offices of the Board of Trade. How did the firms come into that? That was before 1960.
§ Vice-Admiral Hughes Hallett
Some of the firms which were invited to tender were the firms which exhibited at that exhibition. That is the connection. There was an exhibition so that people interested could look at it. I am sure that the hon. Gentleman went to it. I did. The hon. Member for Bristol, Central said he was given the impression 276 then that the whole thing could come forward at once. I do not know who gave him the impression, but there were many salesmen present at that exhibition.
An examination of these tenders, which was carried out by an expert subcommittee of the main committee, showed that neither of these two systems was capable of being developed as an economically attractive proposition. It would have been feasible technically to have built a ship with either of the reactor systems, but she would not have been economical in comparison with a conventional ship. In these circumstances my right hon. Friend the Minister of Transport announced in November, 1961, that the Government had decided not to accept any of the tenders but to authorise a vigorous programme of research into a reactor system which was economically attractive.
As a result of this announcement, each of the five tendering firms approached the Ministry asking for compensation for their costs incurred in the preparation of the tenders. The claims they put in were based on itemised and certificated statements of account prepared by their own firms of accountants, and in each case the basis of the claim was that they had tendered in good faith in the expectation that an order would be placed. They accepted that the Ministry was under no legal obligation in the matter. In the special circumstances of the case—and I shall go into this more fully later —authority was given for a sum of £250,000 to be paid by way of compensation. It was further decided that the simplest and fairest way of allocating this money between the firms was to pay an equal sum of £50,000 to each firm.
§ Mr. Pentland
With regard to the point about whether the new reactor systems would be economical or otherwise, is it not a fact that it still has to be proved that the reactor system which has been chosen will in the end prove to be an economic proposition?
§ Vice-Admiral Hughes Hallett
That may or may not be so, but, with respect to the hon. Gentleman, it is nothing to do with this point on the Supplementary Estimate. We are dealing with something that happened quite a long time ago. The offers were made to the firms and they were conditional, among other things, on the Government retaining the 277 right to have free use of the tender designs. All five firms accepted the offer, and a payment of £50,000 was made to each firm between August and December last.
I should like to go in more detail into the reasons why the Government decided to compensate these firms. They claimed that it was reasonable on their part to assume, when the tenders were invited, that it was Government policy to proceed with the building of the first nuclear merchant ship, and it was not necessary to call for tenders just to demonstrate that that ship would not be economical. We do not accept that entirely, because it was made clear that there was no commitment to follow up these invitations by an order.
They then said that in any case the unusual scope and magnitude of the work and the cost involved in the preparation of the tenders in relation to the value of any possible contract were out of proportion to those normally encountered in this field. We accept that. They pointed out that there was no prospect of a continuing programme of construction which would enable them to recover their costs in due course. That is rather arguable.
They also pointed out with some truth that firms had already gone to considerable trouble in respect of previous studies, before the Galbraith Committee, for which they had not been paid. That had never been suggested, and they argued that what they were being asked to do was much more akin to a design study which would normally be paid for than an invitation to tender, and that again is true.
The Government did not necessarily accept the foregoing arguments in their entirety, particularly in view of the fact that a Press statement had been issued on 18th December, 1959, about six weeks before the tenders were invited, stating that when the tenders had been received the Government would decide whether an order should be placed, and so on. It was, however, accepted that these claims had some force. The tenders, moreover, had served the Government's purpose in providing sufficiently firm information on costs and technical problems, including safety and the development potential, to make a realistic decision based on the merits or otherwise of proceeding at once with the building of a nuclear ship.
278 It was therefore accepted that in the unusual circumstances the Government had at any rate a moral obligation to contribute to the firms costs in tendering. But we underline again that these circumstances were unusual, and we take the view that they form no precedent for similar cases that may arise in the future. Although the firms had not been told this, it had been recognised from the beginning—and it had been explained to the Treasury, which accepted it—that in the rather unusual circumstances, and in the light of the instructions given to the firms, the question of compensation would have to be considered in due course if no orders were placed.
§ Mr. Loughlin
We are entitled to as much information as possible on this matter, especially with regard to the weird departure from private enterprise that the hon. and gallant Member mentioned, in which the Government considered that the possibility of compensation had to be faced. This was before they invited the tenders. Does not that imply that the Government had no intention whatever of placing an order, irrespective of the tenders?
§ Vice-Admiral Hughes Hallett
It implies nothing of the kind. It implies that there were some uncertainties in the matter, and some grave doubts whether any tender would prove sufficiently attractive to justify going forward with the vessel. The only alternative would have been to place development contracts, and that would have been a much more costly process at the end of the day.
Many hon. Members have asked whether any use has been made of the designs obtained under this scheme, and whether they have any bearing on the future work that remains to be done. That is not an easy question to answer. It is like asking a middle-aged man bow much use the algebra and Latin that he learnt at school have been to him in the course of his life. All that I can say is that the exercise enabled everyone concerned to obtain a very much better general appreciation of the problems that would be involved, especially with regard to safety, economics and detailed design. It cannot truthfully be said that this contributed directly, in a technical way, to the present design of reactors. On the other hand, it is fair to point out that as we get on to a more detailed stage there 279 may be little facets and features of the designs then tendered which will be of use to the people engaged on the present project.
One hon. Member asked whether it would not have been much better to give the Atomic Energy Authority a research grant in 1959 –60. That is a hypothetical question. The Authority was already undertaking marine research at the time. I invite hon. Members to look at the report which was roughly contemporary with the events leading to this Supplementary Estimate. If they do they will see that the Authority was continuing studies on these systems of reactors—the boiling water system and the steam-cooled heavy water system—for ships. These two processes were going forward together.
I hope that I have answered the points that have been raised. I have done my best to do so, and with that explanation I hope that the Committee will agree to the Supplementary Estimate.
§ 6.55 p.m.
§ Mr. Charles Loughlin (Gloucestershire, West)
I shall not speak for very long. I am sorry that the Minister did not make his explanation before the debate began, because throughout it there was something unreal, in that Members were making references to items although they were not able fully to grasp the precise implications of them. I want to make only one brief reference to the question of tendering, which formed the greater part of the hon. and gallant Member's speech.
As I see it, the Government invited these five firms, or consortia of firms, to tender for nuclear reactors. It was made clear to the firms that it did not necessarily follow that an order would be placed, but the firms tendered on the basis of an expectation that, in the event, an order would be placed; in other words, as far as I can see on the basis of the Minister's explanation, this was a normal business transaction in which the tendering firms expected to secure some ultimate advantage. In the end, however, the Government did not consider that it was possible to go ahead.
If any virtue at all is going to be claimed for the initiative of private enterprise—and surely that is the whole point 280 about private enterprise—if tenders are submitted and they are unsuccessful the firms concerned are not entitled to compensation, because they are operating on the basis of securing private profit. On that basis, any expense incurred in the preparation of a tender is a normal business risk.
It is no good the Minister's saying that this cannot be construed as a precedent. Of course it can, and it will. It means that in future, even though the Government give a clear indication to the firms concerned that they will not necessarily place an order, if they ask for tenders of any kind and the preparation of those tenders involves the firms concerned in any expenditure at all, if orders are not placed unsuccessful firms will be able to quote this instance and put forward a case to the Minister. The Minister has referred to the case put forward by the five tendering firms, part of which the Government agreed with and part of which they disagreed with. Of course firms will submit this kind of case against the Government in future.
The Minister says that no direct benefit has accrued as a result of these tenders, although in the ultimate they may get an idea or two. In those circumstances the Government cannot justify the payment of £250,000 of public money to people who entered into the fray on the basis of securing private profit but who, unfortunately, were not given the opportunity to make that profit. The Government are adopting a new principle here. It is no good hon. Members opposite talking about private enterprise and social ownership in future, because this is a racket. If this is the principle upon which private enterprise is to operate, this is a racket, and the hon. and gallant Gentleman is a party to it. Not only is he instituting a racket, he is making a rod for his own back. The hon. and gallant Gentleman smiles, but I will give way if he cares to rise to his feet and tell me that this is not a racket.
§ Vice-Admiral Hughes Hallett
I was smiling, Mr. Blackburn, at the thought that if the hon. Gentleman calls this a racket, what would he call the decision of his own Government in 1946 to place public contracts for guided missiles which cost the country £40 million before we had finished?
§ The Temporary Chairman
The hon. Member for Gloucestershire, West (Mr. Loughlin) must not answer that.
§ Mr. Loughlin
No, Mr. Blackburn, and it may be to the advantage of the hon. and gallant Gentleman that I am not allowed to answer it. I was expecting him to come out with a reference to the groundnut scheme when I would have reminded him that every groundnut now has a Blue Streak"—
§ Mr. Loughlin
I am making a passing reference, Mr. Blackburn, and I understood that in this Committee one could make a passing reference to anything.
The hon. Gentleman has to recognise that he is creating a precedent. He may stand up and say that he is not until he is blue in the face. But it will be used against him, and against future Governments, and it ought to be opposed.
§ Vice-Admiral Hughes Hallett
I have spoken too long already, but I should like to say a word in reply to the hon. Member for Gloucestershire, West (Mr. Loughlin). My understanding is that during the Committee stage of the Supplementary Estimates it is usual for a Minister to wait to hear the views of the Committee before replying to them.
On the main question, it is a matter of opinion. I gave the reasons why we thought that compensation was justifiable in this case and why we do not consider that it creates a precedent, as the conditions were unusual. The line adopted by the hon. Gentleman is perfectly possible as a theoretical line. But I think it a very hard and rigid one, and were it followed consistently those responsible at the time would have been forced into a very much more expensive alternative course of action which would have meant the placing of formal design contracts. In this way we have secured a good deal of information more cheaply than it could have been obtained in any other way open to the Government.
§ Question put and agreed to.
That a Supplementary sum, not exceeding £342,000, he granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day
of March 1963, for miscellaneous services connected with shipping, seamen, inland transport and ports, including the repair of damage by flood and tempest and certain special and other services.