HC Deb 09 December 1965 vol 722 cc618-23
The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown)

With your permission, Mr. Speaker, and that of the House, I should like to make a further statement about the Fairfield Shipbuilding and Engineering Company Limited.

On 4th November, my right hon. Friend the Chancellor of the Exchequer announced to the House that the Government had agreed to guarantee an advance by the Bank of England of a sum not exceeding £1 million to enable this shipyard to continue in operation.

In view of the leading part which shipbuilding plays in the Scottish economy, the fact that the Fairfield yard is an important and recently modernised part of this industry, and that the livelihood of many thousands is involved, the Government have been consulting with a number of interested parties to ascertain whether it is possible to establish the yard on a more permanent and satisfactory basis. These consultations are still continuing with some hope of success; but the Government have not yet taken any decision. The House will, of course, be informed as soon as a decision has been reached.

Mr. Barber

I should like to put two questions to the right hon. Gentleman and to seek two assurances from him.

First, will the right hon. Gentleman tell the House what inquiries are being made into the source of the calculated and obviously detailed leak which appeared on the front page of practically every national newspaper this morning on a matter which, after all, is of great concern to the whole shipbuilding industry and which has caused the right hon. Gentleman, quite rightly, to come to the House and to make his statement today?

Secondly, he says in his statement that the Government have been consulting a number of interested parties. Will he explain why it was that, when consultation had taken place with the trade unions on Tuesday, no approach of any kind was made either to the Shipbuilding Conference or to the Shipbuilding Employers Federation for their advice on a matter of great concern to the industry? Does he realise that these two bodies heard about these proposals purely by chance and that they had to ask to be heard by two Ministers yesterday afternoon? Will the right hon. Gentleman see them himself personally?

I can put the two assurances which I should like from the First Secretary very briefly. Will he assure the House that any arrangement which is finally reached by the Government on Fairfields will have the approval of Mr. Geddes and his Committee? Secondly, will he assure us that nothing will be done to put Fairfields in a privileged position in relation to the rest of the industry?

Finally, why have the Government gone back on the statement made by the Chancellor of the Exchequer in the House on 4th November, when he indicated that a solution to the problem of Fairfields would await the findings of the Geddes Committee?

Mr. Brown

The answer to the last part of what the right hon. Gentleman has said is quite simple. This is a matter of tremendous interest to a part of this nation. It involves the livelihoods of a lot of people. It is tremendously important to the Scottish economy. When it became clear that events controlled by banks and others over whom we had no control seemed about to bring the yard to a close, the Government had to move rather more quickly than we would have done otherwise.

There is nothing new about the question of the stories in the newspapers. I have said this in the House before, and right hon. Members opposite have had the same experience. If one consults widely, then quite a lot of people are in a position to breach security. I am sorry that this has appeared in the newspapers this morning. I do not think that it has done any great harm. I can only repeat what I said once before to both sides of industry: if industry asks to be consulted, it has an obligation to preserve the security which only can be the basis of such discussion. There has been no leak from anywhere here. I fear that there has been a revelation of things which were discussed, but I do not think that it has done any very great harm.

On the question of consultation with the Shipbuilding Conference and the Shipbuilding Employers Federation, we will consult everybody who is concerned with this. Up to now our consultations have, obviously, been concerned with those who are involved in the yard. The Shipbuilding Employers Federation saw the Minister who is responsible for shipping yesterday. He has spoken to me.

But there are wider issues to be considered. My right hon. Friend the President of the Board of Trade, whose departmental responsibility this is, and I will be willing to see the Federation and discuss the matter.

However, at the moment, we are consulting those who are most concerned with the future of the yard—and that goes much wider than trade unions. Quite a number of industrialists have been consulted, and I shall be happy to explain to the right hon. Gentleman, if he wishes, the extent of our discussions.

May I now deal with the two assurances for which the right hon. Gentleman asked. First, if the future of this very important Clyde yard could have awaited the outcome of the Geddes Report, the Government would not have intervened. The point is that events have taken everybody—including the Clyde—by surprise, and it cannot await the outcome of Geddes. We must ensure that whatever we do is suitable for fitting into the outline which the Geddes Committee recommends. We have this very much in mind.

The right hon. Gentleman asked for an assurance that Fairfields would not be put in a privileged position. It is not a question of putting them in a privileged position. Perhaps the right hon. Gentleman has not got the Scottish point. The point is that the yard is about to close and many thousands of people are about to be put out of work; a very highly modernised yard is about to be wasted. If we keep it in being, that is not putting it into a privileged position. It is just making use of what is there.

Mr. Rankin

Is my right hon. Friend aware that, apart from any question as to whether or not the definite statement which appeared in the Press has done no harm, there is no doubt that that statement raised a great many hopes? Will my right hon. Friend keep that in mind, as it outlined a course of action which many of us had hoped for, indicating Government intervention and various other things on which I shall not now embark? Will my right hon. Friend recognise, also, the importance of what he said in conclusion, that this is a matter which cannot await Geddes, and will he, therefore, continue in that line of thought and action?

Mr. Brown

Whatever we do must in the end be capable of assimilation in the light of Geddes. My hon. Friend's first point was that hopes had been raised. I have hopes myself. But there cannot be any guarantee of success. All I can tell my hon. Friend is that the Government, recognising the importance of this yard and that, under private enterprise as it now exists, it would close, are doing everything they can to see that the yard can be kept going on a proper and acceptable basis.

Mr. George Y. Mackie

If this modern yard can be saved, undoubtedly this will be very welcome on the whole of the Clyde, but I think that the Minister ought to give an assurance about the management which goes in. If the newspaper stories are right, the chairman may well be very efficient indeed, but may we have an assurance that the yard will be efficient in a commercial way, as the rest of the shipbuilders on the Clyde are, naturally, concerned and, although they want to see the yard saved, they would be completely against what might well be a super-efficient, Government-subsidised shipyard? It is important that, while the Government provide the funds to save the yard and, one hopes, good management, it is ultimately operated as a commercial undertaking.

Mr. Brown

I can give the hon. Gentleman that assurance. One wants it to be a commercially viable operation. One wants not only to provide funds to keep it open but to find a way by which really efficient management can go in; and one wants to provide the background against which the trade unions can operate with an efficient management to set up the basis for a really commercially viable and successful yard. All those things are in our minds.

Mr. William Hamilton

Will my right hon. Friend take it that the Government's determination to keep this yard open will be widely welcomed among the Scottish people? Second, will he give an assurance that his mind is not closed to the idea of accepting the principle of a 50–50 partnership between private and public enterprise along the lines of the Short Bros. and Harland and Wolff scheme? May we have a firm assurance that that is one of the possibilities the Government are keeping under consideration?

Mr. Brown

My mind is certainly not closed to any of those possibilities. I cannot go into details today, but the idea of a 50–50 partnership between private enterprise and public enterprise in a yard like this seems to me to be a very interesting possibility.

Mr. Edward M. Taylor

Everyone will appreciate any genuine plan designed to help the yard, but will the right hon. Gentleman clear up one or two small points? First, is he saying that the position in Fairfields is so serious that, despite the extra £1 million of credit, the yard cannot last until February? Second, will he tell us who is conducting the negotiations from the Government side? Is it his Ministry, the Minister responsible for shipping, the Chancellor of the Exchequer, or all three?

Third, what have the Government in mind if other shipyards in Great Britain are affected by similar financial difficulties? Next, will the Government, before establishing any firm scheme, consult all other yards which are considered from time to time for Government contracts? Finally—I apologise for one more question—will he say whence the initiative for this new suggested arrangement came?

Mr. Brown

First, could Fairfields, left alone, without Government help, last until February? As the hon. Gentleman must know, the answer is "No".

Mr. Taylor

With £1 million?

Mr. Brown

It is not a question of £1 million. I am afraid that private enterprise got itself into such a mess, and the banks—when he goes home this weekend, the hon. Gentleman might find out about this—helped to get it into such a mess, that there is not the slightest chance of this yard, left alone, carrying on until February or anything like February. If we are to keep the yard open, a yard which has been modernised at great cost, the Government must come in and see how they can help. This we are doing, and I imagine that, when the hon. Gentleman gets home, he will find that all Clydesiders, the people of Glasgow and most other Scottish people are rather glad about it.

As to which Ministry is acting, the answer is that it is the Government as such. The fact that I am answering questions today indicates that, if people want to find one of us, I shall be ready to take the responsibility, but I am doing it in collaboration with all my colleagues who are involved.

Next, the hon. Gentleman asked what would happen if any other yards owned by private enterprise collapsed. That would present us with an even more serious situation and would invite us to undertake even wider considerations. At the moment, I am dealing with the one which has.

Several Hon. Members rose——

Mr. Speaker

Order. We cannot debate this in detail on a statement.