HC Deb 20 October 1966 vol 734 cc569-78

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

11.27 p.m.

Mr. Edward Milne (Blyth)

Deployment, "shake-out". job sharing, unemployment and redundancy have become often-used words in connection with the country's economic affairs during the past three or four months. This Adjournment debate deals with a shipyard in my constituency, owned by the Blyth Dry Dock and Shipbuilding Co. Ships have been built there for two centuries, at all stages, from wooden ships to the present-day vessels. The yard has moved with the times, and on occasions has been ahead of them. There were 62 ships built during the First World War and 24 during the Second World War, not counting a large number of frigates and corvettes, reflecting great credit upon the adaptability of men and management.

The first "Ark Royal was built at Blyth, but it is with the present that we are mainly concerned tonight. In the first week in August of this year, the yard was on annual holiday and the editor of the local paper, the Blyth News, on 3rd August, was telephoned and asked to go along to the yard for what was described as an item of news. A receiver had moved in that morning and taken over the running of the yard. Needless to say the town was stunned. Workers on holiday received the news from newspaper reports, and many returned from their holidays to receive the news in envelopes marked "Hong Kong."

There is not the time to describe the feeling of desolation that is experienced at a time like this. As anybody in the House will appreciate, it is a matter of great sadness to watch a great industry die. The method of announcing the closure was criminal. No other word could fit the act. Men who had given a lifetime of service to the Blyth Company, in good times and bad, were entitled to treatment better than this.

It is certainly true that the shipyard had lived on a razor edge for years. The city editor of the Newcastle Journal, writing on the state of the shipyard, talked about the fact that it had been in stormy waters financially for some time. The last statement of accounts and balance sheet filed with the Official Registrar of Companies in London makes this clear. It talks—as my hon. Friend knows—about the last audited balance sheet showing the company owning its own fleet of ships, which cost £1,662,000, but which had been written down in value to just over £532,000, and about the Chartered Bank's loan to the company, shown again in the balance sheet as not currently payable but being about £374,000, and that Lloyds Bank had lent the company about £539,000.

It would be useful at this time to look at the financial ramifications of the company owning this yard. The Blyth Dry Dock and Shipbuilding Company Limited, which has 245,000 shares, saw that 242,000 of those shares were owned by the Moller Trust Ltd., of Hong Kong. Again, there is not sufficient time in a brief Adjournment debate to go into detail, but when we list the interests of this firm; when we cite the fact that the overwhelming bulk of shares in each of its interests was owned by the Moller Trust Ltd., we realise that something needs examination by the Board of Trade.

I hope that my hon. Friend will give us some undertaking on the question of an examination of this company and its interests, because, in addition to the Blyth Dry Dock and Shipbuilding Company, we have the Lancashire Shipping Co., Ltd., Brinkburn Steamship Co. Ltd., Moller Line (U.K.) Ltd., and a host of others too numerous to mention now but details of which have been given to the Board of Trade.

So, from the date of the closure we move on to the stormy creditors' meeting in London on 13th September, chaired by Mr. Tucker, who appears in the list of all the financial interests of the Moller Trust. At this meeting it was again indicated that the Moller subsidiary interests were themselves creditors to the firm which then went into liquidation.

What surprises me is that I was able to get from my own union's research department, and also from the excellent research department of the Library of the House, details of this firm's interests, but letters which I had from the Board of Trade gave me little or no assistance. They said that a trade directory shows several companies with offices at Union House, Hong Kong, with the word "Moller" in their name.

But the lack of information from the Board of Trade becomes even more evident in a letter which I received from the Minister of State, Board of Trade, on 3rd October, which thanked me for my inquiry about the meeting of creditors of Blyth Dry Dock and Shipbuilding Co. Ltd., but added that the Board of Trade had no responsibility over voluntary liquidations.

I am not complaining about that, because the present Government were not responsible for the law which made this situation possible, but I am surprised that, after a meeting of creditors of a firm which had put nearly 1,000 jobs in jeopardy in Blyth, the Board of Trade should say: We are not aware that any report of the meeting, apart from newspapers reports, has been prepared. This is the position in 1966—that a Mr. Tucker, with all those interests in Moller Trust Ltd., can chair a meeting of the creditors of that firm and then return to Hong Kong without any compulsion being imposed on him to provide the information which is urgently required to clear up this matter.

What is even more surprising is that this same gentleman, with little or no knowledge of the yard—having paid only one visit there—according to Press reports of the annual meeting, made a savage attack on the attitude of management and workers there. A statement was issued by the shop stewards' committee refuting the allegations of responsibility for the need for closure and my only regret is that the management were not equally forthright in defending their position.

The real truth is that the Blyth Yard —my hon. Friend knows this because, as Minister responsible for shipping, he paid a visit there recently—has a powerful case. A deputation met the Minister, Mr. George Darling, on 8th September——

Mr. Speaker

Order. The hon. Member knows the Parliamentary way of referring to another hon. Member. He must say the right hon. Member for Sheffield, Hillsborough (Mr. Darling).

Mr. Milne

—my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling), whom we met on 8th September. All aspects of the yard's activities were fully examined and the Department was furnished with a document prepared by Mr. Jack Rowlands, the chairman of the North-East Federation of Shipbuilding and Engineering Unions.

We are particularly concerned with the achievements of the yard in the past five or six years and its prospects for the future. During that period, vessels like the bulk carriers "Chapel River" and "Pacific Princess", of over 22,000 tons, have been built there, as have hopper barges, dredgers and pilot vessels for the Calcutta Port Commissioners and others. Colliers, coastal tankers and oil tankers for firms like William Cory, Stephenson Clark and a number of others have been built in the yard in that period.

A collier of over 7,000 tons—the "Pul-borough"—was built in the yard and is regarded by seamen as the fastest and most efficient of its kind. We in Blyth know about the shipping of coal, because, over that period, about 4 million to 6 million tons of coal have left the port each year.

On the question of the ability to build ships and the ability of the yard. I should like to strike a personal note on a point about the building of a suction dredger at the yard. When I first arrived in the constituency there was a controversy about the yard's ability to do a job of this description, and the Blyth Harbour Commissioners went outside the town to have this suction dredger built, because the experts and those not so expert said that the yard was not capable of doing it because it had never done it before. That is never a good argument against a shipyard not being able to do a job which it sets out to do.

In 1965, the Blyth Yard completed a suction dredger, the "Tideway", for the Westminster Dredging Company. It is interesting to note, when we make comparisons between the achievements of British yards and those of Continental yards, that the same type of dredger was commissioned by the same company from a firm in Rotterdam, and on all counts and in all matters of achievement the Blyth Yard was ahead of its rival. I could go into great detail about the jobs that can be done and the jobs that have been done in the Blyth yard in the period under discussion. The Geddes Committee's Report recently issued, about which there has been a great deal of discussion, stresses the need for increased shipyard trade in this country. What we are looking for is not a reduction in the capacity for shipbuilding but rather the reverse.

Another question is that of flexibility. During recent years the yard has moved into industrialised housebuilding and has prepared and erected factory structures, bridges and other erections of that type and is capable as any examination would show, of building tankers up to 40,000 tons and general cargo vessels of 35,000 tons. The question of specialists, research, advancement and other matters has been raised. The yard is adapted to meet the challenges that the shipbuilding industry faces at this time and it would be a tragedy if it were not to be allowed to assist in meeting the challenge which the Government have asked shipbuilding industry to face.

May we consider ways in which the Board of Trade could help us in this matter? We have two recent examples of financial assistance on a considerable scale given by the Northern Ireland Government to Harland and Wolff and the set-up arranged with Government consent at Fairfield's, on the Clyde. While we realise that there is no exact parallel in this matter, we know that since the closure of the yard was announced there have been firms and individuals ready to consider Blyth as a proposition for future shipbuilding if encouragement from the Government is forthcoming.

This has been closely examined by myself and others actively interested in the matter. We consider that the Local Employment Act, investment grants and the Bill which the House discussed yesterday setting up the Industrial Reorganisation Corporation are all instruments which the Government have at their disposal for assisting industry in one form or another. Needless to say, we should very much like the Government to have a close examination of the possibility of one or other of these measures being used to assist Blyth and its shipyard in playing the rôle which I have outlined.

I have in the past referred to the need for the Minister responsible for shipping to visit the North-East. On the last occasion the Minister of State, my hon. Friend the Member for Barnsley (Mr. Roy Mason), visited us he managed to purchase a cloth cap in the area, following in the footsteps of a person from the other side of the political fence who also came to have a look at the North-East with a view to solving its problems.

We have asked for definite and decisive action along the lines that have been mentioned. We feel that the evidence at the disposal of the Board of Trade and the facts I have mentioned tonight are sufficient, at this difficult period in the economic affairs of the country, for us to ask for such action. If it is not forthcoming, the next time my hon. Friend visits the North-East his garb will not be a cloth cap, but sackcloth and ashes.

11.46 p.m.

The Minister of State, Board of Trade (Mr. Roy Mason)

I enjoyed the reference by my hon. Friend the Member for Blyth (Mr. Milne) to my having purchased a cloth cap. I assure him that I felt one of those I met and that I did not pretend to be one of them, as did the previous gentleman my hon. mend mentioned.

I assure hon. Members, and my hon. Friend the Member for Blyth in particular, that the Government are not indifferent to the situation created by the closure of the shipyard in Blyth. We appreciate the worry and distress this closure has brought to those employed in the yard and to their families and the importance of ensuring that there should be alternative employment for those put out of work by the closure.

However, I cannot accept the simple proposition that the shipyard should be kept open at all costs. The company appears to have failed because, like many other firms in the industry, it had to take orders at fixed prices at a time when costs, including the cost of labour, were rising. Ships constructed have proved to be unprofitable and the yard had for some time been operating at a loss.

The experience of this yard is not unique in the industry. It was this and similar problems which led us to set up the Geddes Committee. The Report of that Committee has been accepted by the Government, by the industry and, I believe, generally, as showing the way to a viable and competitive shipbuilding industry in this country. If we consider that the Geddes remedies are broadly right for the industry as a whole, we must have them in mind when considering individual shipyards.

The Report recommended the grouping of existing shipbuilding firms into larger companies, each controlling a number of yards and each making its own specialised contribution to the group as a whole. The initiative for grouping must come from the industry itself and I know that shipbuilders on the North-East Coast are actively considering the Geddes proposals and are in touch with the Chairman-designate of the Shipbuilding Industry Board.

I have no doubt that they are considering whether there is a viable and profitable place for the Blyth shipyard within the groupings they have in mind. But it would be neither sensible nor in accordance with the Geddes proposals to seek to influence them to do so. Nor would it be in accordance with the proposals to keep a yard of this size operating as a separate unit if it had no viable future.

Nevertheless, I ask shipbuilders in the North-East to consider very carefully whether there is a place for the Blyth shipyard in their plans for the industry. I know that the Receiver would be willing to discuss any such proposal, but I must make it clear that no useful purpose would be served in Government intervention to keep the yard alive in the hope that such a place may be found at some future date.

I know that comparisons have been made in recent times, and my hon. Friend made a comparison tonight, relating to Harland and Wolff and also to Fairfield's. Harland and Wolff have been assisted by the Northern Ireland Government. Fairfield's was a different proposition. This was a major yard, it had a lot of modern plant and a good order book. This, I am sorry to say, is not true of Blyth. There is a very short order book—orders, in fact, only until January—and the yard has made a profit only once in the past five years.

I know that Blyth is a difficult area for employment. The town is largely dependent on two industries—coal mining, which is contracting, and shipbuilding. I appreciate that for this reason the closure of the shipyard was a particularly hard blow to the town. During the Summer Recess my hon. Friend accompanied a deputation of interested parties to the Board of Trade, and I can assure him that the views they expressed have been taken into account.

But things are not as black as this might suggest. The great shipbuilding concentration on the Tyne is not too far away, and skilled shipbuilding labour is scarce there. Alternative employment should be available on the Tyne for many of the Blyth shipbuilding workers. Indeed, of the 470 employees of the Blyth shipyard who have so far been declared redundant, over 80 per cent. have already found alternative employment, and many of them on the Tyne. One of the fundamental conclusions of the Geddes Report is that the reorganisation of the shipbuilding industry must be accompanied by a redeployment of the resources of the industry, and this applies in particular to those resources which are scarce, including skilled labour. The Report did not exclude the possibility that in the course of such redeployment some yards would have to close. If, as I believe, many, if not most, of the shipbuilding workers from the Blyth yard will be able to find employment in yards on the Tyne, it may, in fact, serve to strengthen the shipbuilding industry on the North-East Coast and, in the long run, provide better prospects than can be provided by a shipyard at Blyth perpetually struggling to survive.

Moreover, the Government are playing an active part in creating new employment opportunities in the longer term. Under their distribution of industry policy, the Board of Trade is endeavouring to bring greater employment prospects to the Blyth area itself. The development of Cramlington New Town, which is not far from Blyth, is helping to diversify the industrial structure of the area. An advance factory of 25,000 square feet for Blyth was announced in May, and it is hoped that this will be complete in July next year. We hope to acquire more land at Blyth for further industrial development. Other advance factories are under construction in the nearby district of Ashington.

During the last six months, and under Board of Trade encouragement, 10 visits to the area have been made by industrialists looking for sites, and the area has been suggested in preliminary correspondence on 17 other occasions. Regional officers will now bring to the attention of suitable interested parties alternative proposals for the Blyth shipyard and site. No doubt the receiver-manager is working along similar lines, but I am sorry I cannot say at the moment whether he is, in fact, succeeding.

I have dealt with the employment situation in Blyth and the possibility of keeping the Blyth yard in existence as a shipyard. There is one other aspect of this matter that I would like to mention. I was disturbed, as I am sure many others were disturbed, by the abrupt way in which the closure of the yard was announced without any prior warning to or consultation with either the Government Departments concerned or with the unions representing the employees at the yard. I recognise that there are legal and other difficulties facing a company in a difficult financial situation, but I am sure that the disturbance and upset which has resulted from this action would have been considerably reduced if it had been handled in a different manner.

I particularly regret that this action came at a time when shipbuilding employers and unions have been endeavouring with great success to develop that mutual trust and confidence which has been so lacking in the industry in the past, and which I felt the Geddes Committee also considered to be essential to a successful reorganisation of the industry in the future. I know that the shipbuilding employers also regret the manner in which the closure of the yard was announced.

This particular case has already been discussed between shipbuilding employers and unions. I am glad to be able to say that both sides have agreed to discuss the subject in more general terms at the next meeting of the Joint Industrial Council which has just been formed in the shipbuilding industry. The Confederation of Shipbuilding and Engineering Unions, represented by Dan McGarvey, the chairman of the Shipbuilding Committee, and George Barratt, the general secretary, met me on this matter and suggested that this was a matter for consultation and I agreed. I suggest that this is the best way to proceed, by encouraging the industry itself to evolve processes of consultation which will be both realistic and helpful to all concerned should similar difficulties occur elsewhere.

Finally, I praise the efforts of my hon. Friend who has shown such keen awareness of his constituents' concern whilst working through the Recess, accompanying a deputation to the Board of Trade and receiving and introducing shop stewards from the yard to me today, and who has also taken the first opportunity in Parliament to see that his constituency grievances have been aired. I shall certainly take notice of the concern expressed and hope that the receiver manager and our Board of Trade regional officers may have some success in finding an alternative use for the Blyth site

Question put and agreed to.

Adjourned accordingly at jour minutes to Twelve o'clock.