HC Deb 05 April 1967 vol 744 cc252-6
The Minister of Technology (Mr. Anthony Wedgwood Benn)

With permission, Mr. Speaker, I should like to make a statement about the future of the Firth of Clyde Dry Dock Company Limited which has today applied for the appointment of a liquidator.

With the reorganisation of the Clyde shipyards, now under active discussion with the Shipbuilding Industry Board, it is hoped that an offer for the dock will be forthcoming from a new grouping and it is also possible, under certain circumstances, that a Clyde shipbuilding group making an offer might qualify for a grant or loan from the Shipbuilding Industry Board. Other offers may also be made.

It will be the duty of the liquidator to dispose of this very substantial asset to the best advantage, and the Government, as largest creditor, will have a similar interest.

The Government have, therefore, decided that it would be right for me, should this prove necessary, to support the liquidator with sufficient funds on appropriate terms to maintain the dock and its ancillary facilities intact and in full working order for a reasonable time to allow offers to be submitted. This is designed to ensure that when an offer is accepted there will be the minimum delay in resuming operations.

I have informed the chairman of the company, and the Confederation of Shipbuilding and Engineering Unions of the Government's decision and of our view that this was the best way of safeguarding the long term future of this valuable facility, and accordingly of those whose employment must ultimately depend on it.

Mr. Noble

Does the right hon. Gentleman appreciate that this is a very considerable shock for an area which already has a high unemployment ratio? Could he give the House any idea of the reasons for this sudden collapse of this modern dry dock? Could he tell us a little more of what he has in mind when he says that further offers may be made?

Finally, could the right hon. Gentleman confirm, what I think he intends in his statement, that his help, which, I am sure, will be necessary, is to be confined just for a reasonable time while other offers are made available?

Mr. Benn

Yes. I share the right hon. Gentleman's disappointment that this project has not succeeded financially. The reasons for it are rather complex. It may well be that it was under-capitalised; and in any case, a dock of this kind had little prospect of success alone. The other offers which may come in will, in part, depend on the extent to which the Clyde shipbuilders themselves regroup to put themselves in a position to make an offer. The help that the Government are now offering to give is to allow those other offers to mature, and to see that the dock is maintained in good working condition so that it can resume operations quickly.

Mr. Manuel

Is my right hon. Friend aware that Scottish Members will be deeply grateful for the action which he intends taking to keep this dock in full working order? Is he further aware that the proposed merger of shipbuilding firms on the Clyde seems to some of us to offer the best possibility of this dock continuing successfully? Would he lend his good offices in every way possible to make certain that this proposed consortium gets every encouragement so that this dock, whose loss to this area simply cannot be allowed, can be kept in being?

Mr. Benn

I am grateful to my hon. Friend for the first point that he made. As far as offers from the Clyde are concerned, this does depend on the readiness of the Clyde shipbuilders to regroup and to put in an offer. The services of the Shibbuilding Industry Board are, of course, available and any help we can give with the Board we will, of course, give.

Mr. Edward M. Taylor

Is the Minister aware that several shipbuilding firms, major employers in the district have a financial stake here? Can he give us an assurance. that the financial stability of those firms is not affected and that if this is brought into one of the new mergers it will not move in with a large financial burden on it?

Mr. Benn

I did not hear the latter part of that question.

Mr. Taylor

Can the right hon. Gentleman give an assurance that this will not move into a merger with a burden on it because of this loss?

Mr. Benn

The loss will be written off under the liquidation procedure. As far as the liabilities of Clyde shipbuilders themselves are concerned, the losses, if any, will depend on the new grouping and merger we hope to see under the new Board. For this, substantial sums of Government money will be made available if the House passes the necessary legislation.

Dr. Miller

Is my right hon. Friend aware that this is another indication of the difficulties and failures of private enterprise particularly in this field, and that when public money is put into concerns of this kind it should, in future, be accompanied by more control by the Government?

Mr. Benn

It is, of course, true that the points made by my hon. Friend about the nature of the investment may have some bearing on the management aspects, but, at the same time, it is widely agreed now that units of this kind can really succeed only when they are part of a wider grouping. I think that this is where we must look for the solution of the problem of the dock.

Mr. Steele

My right hon. Friend has repeated on a number of occasions that the future of this dock really depends on having a wider grouping. As I understand the position, what he is intending to do at the moment is really just a holding operation till something can be done. What has he in mind to effect this larger grouping? Does he think that he can succeed?

Mr. Benn

It is true that the assistance I have announced today is intended as a holding operation. The long-term success of which depends on the offers coming from the Clyde shipyards, and in this connection, of course, the Shipbuilding Industry Board is in a position to help. I have little doubt of the long-term value of this facility, which is, in fact, a very large dock indeed. It has within it a very large tanker-washing capacity which will be of growing importance as the number of large tankers in the world increases.

Dame Irene Ward

In view of the right hon. Gentleman's statement, may I ask for an assurance that if shipbuilders and people from other rivers come forward with some proposals for additional money to be provided through the Shipbuilding Industry Bill the right hon. Gentleman will be sympathetic? His suggestion opens up to me all sorts of ideas, to which I am looking forward.

Mr. Benn

I did not realise I was putting ideas into the hon. Lady's mind, but this does not alter the arrangements under the Shipbuilding Industry Bill which, as she knows, are confined to help for shipbuilding. This particular proposal is designed to allow offers to come in from the Clyde or elsewhere.

Mr. Bence

In reviewing the situation of the dock when the liquidator is appointed, and in view of the proposed development at Greenock for a container terminal port, which, with the increasing size of ships, and if properly managed and administered, will perhaps in the next decade give us one of the most valuable assets on the Clyde, will my right hon. Friend give an assurance that in no circumstances will he allow the liquidator to sell it off bit by bit?

Mr. Benn

The purpose of the help I am prepared to give the liquidator is to see that he does not sell off cranes and other individual items in the dock, and that he is in a position to hold it so that the offers can come. This will enable Clyde shipyards to put in their offer when the regrouping with the Board is arranged.

As to the long-term future, I have no doubt of the value of the facility, and that is why I have taken this action today.

Mr. Rankin

While accepting my right hon. Friend's insistence that this is a holding operation, may I ask whether we can also infer from what he has generally said that further Government intervention, if necessary, will not be ruled out?

Mr. Benn

Well, on Government intervention on a longer-term basis, other issues are raised. The Board of Trade has a substantial investment in this dock, and I thought it wrong, by the means open to me, to do things, in terms of investing in this dock as a self-contined unit, which the Board of Trade, as investor, thought not right. What I am sure of is that by means of this holding operation we can give this dock a real opportunity of fitting into the pattern of developments on the Clyde which will be of permanent value in that area.