HC Deb 11 July 1967 vol 750 cc419-23
The Minister of Technology (Mr. Anthony Wedgwood Benn)

I will, with permission, now answer Question Nos. 33, 35, 37, 38, 41 and 45.

As the House knows, Shorts has been through some difficult years. After close and detailed re-examination of its programme and prospects I have authorised the company to go ahead with the production of wings for the F28 and F228 aircraft and to enter into a contract with Rolls-Royce to supply pods for the RB203 engine. I have also decided, as the House was informed on 27th June, to support the continuation of the promising Skyvan aircraft.

These projects give Shorts a clear forward programme of aircraft work.

With regard to the future, while the Government cannot themselves undertake to maintain the company as designers and producers of large new aircraft, they will be prepared to consider, on the same criteria as apply to any other aircraft company, launching aid for promising projects. The company's immediate task now is to make a real financial success of its current programme.

This requires a thorough internal reorganisation designed to increase productivity. It will also require a financial reconstruction, the details of which will be worked out with the Board in consultation with the other shareholders, and announced later. Meanwhile, subject to Parliamentary approval, the Government will continue to provide interim finance.

I now turn to the question of the chairmanship. The present Chairman has held the post for six years and in this time has had to deal with many problems and difficulties, including the substantial loss on the Belfast project which was started before he took up office.

As I have indicated, a major reorganisation must be carried out to put the company back on to a profitable basis. This reorganisation, which has already begun, can, I believe, best be carried through under the leadership of a new chairman. Mr. Wrangham has, therefore, tendered his resignation, but he has kindly offered to continue as Chairman until his successor takes over.

With its new programme of work, and with the reorganisation of its resources, I believe that the company can look forward to continuing to play a useful part in the aircraft industry.

Mr. Maxwell-Hyslop

Is the right hon. Gentleman aware that he has not said a word in answer to Question No. 33, which he said he would answer after Question Time? Will he now be good enough to answer it?

Mr. Benn

I decided that it was right to make a change in the chairmanship of Shorts, and since it is not customary to discuss in the House advice which a Minister takes inside his Department I thought it right not to answer it specifically.

Mr. McMaster

Is the right hon. Gentleman aware of the need for further substantial aircraft construction work? Will he say how many of the present 7,000 employees he expects to be employed by this company for the next two years?

Is the right hon. Gentleman aware of the valuable work which has been done by the present Chairman, particularly in promoting sales of the Skyvan and Seacat missile? Does the right hon. Gentleman not deplore the fact that the manner of publishing this decision on the chairmanship was by way of a Chapman Pincher leak?

Mr. Benn

It was not a leak. The definition of a leak is that something inside gets outside. What appeared in the papers bore no resemblance whatsoever to what was going on inside. The report said that I had an argument with Mr. Wrangham about whether Shorts should be in the aircraft industry, and had decided to sack him. This is not the case. There was no argument with the company whatsoever about the development of Shorts within the aircraft industry, and this was not, therefore, a leak. I am glad to associate myself with what the hon. Gentleman said about Mr. Wrangham's work in the past.

I expect the productive labour force to remain at about the same level for the moment, but future employment by Shorts de lends on the company's success in making this aircraft at a competitive price and finding a place for it in the markets of the world.

Mr. Barnett

Is not the situation somewhat farcical in that the Government own 69 per cent. of the shares while the remaining 31 per cent. are worthless without the Government's financial contribution? Will it not be at least worth treating this firm in its true light, and not as a private firm, as we are pretending to do?

Mr. Benn

The history of Government participation in Shorts is a long one. We shall have an opportunity during discussions about the financial reconstruction not only to think about it ourselves, but to discuss it with the other shareholders. I shall bear in mind the point made by my hon. Friend.

Mr. Kitson

Will the right hon. Gentleman say what terms of compensation have been arranged for the Chairman?

Mr. Benn

The terms and conditions of the appointment were laid down in a letter of appointment more than six years ago, and, of course, will be fulfilled completely.

Mr. Maxwell

Will my right hon. Friend say what were the difficulties about getting the Chairman to resign his office? If these difficulties arose out of a contractual obligation between the Minister and the company, would not my right hon. Friend agree, representing as he does the majority shareholder, that arrangements should be made whereby, when a Minister asks a chairman to tender his resignation, this is obligatory, without involving either the Ministry or the company in the kind of discreditable wrangles which have gone on, caused by the Chairman of this company?

Mr. Benn

There were no difficulties at all in this sense. What happened was that a totally inaccurate story appeared in the papers. It bore no resemblance to the issues which were currently under discussion. I would like to take this opportunity of saying that in my dealings with Mr. Wrangham there have been no difficulties whatsoever about this.

Mr. Lubbock

Is the right hon. Gentleman aware that all those hon. Members who have had anything to do with Mr. Wrangham during his term of office have formed the highest impression of his dedication and enthusiasm, and the energy which he has put into getting Shorts back on to a profitable footing? Can the right hon. Gentleman say further how many new jobs will be created in Short Bros. by the work on the F28 wings and RB203 pods?

Mr. Benn

Future employment in the company will depend on the markets for the aircraft in which the pods or components or wings will be placed.

As to the first part of the question, this view about Mr. Wrangham's rôle was, of course, represented to me very fully by the Board of Shorts.

Sir A. V. Harvey

Is the right hon. Gentleman not aware that although some of us have not always agreed with the policy of Shorts as aircraft manufacturers, nevertheless, as the hon. Member for Orpington (Mr. Lubbock) said, Mr. Wrangham has done an outstanding job, against endless difficulties, in constructing the Belfast ordered by Mr. Aubrey Jones? How can the right hon. Gentleman condone the sacking of this man, or his resignation, when the entire Board of Shorts is with Mr. Wrangham?

Mr. Benn

I have given the reasons. The hon. Gentleman may not agree with them, but I have to exercise a responsibility as the representative of 69½ per cent. of the shareholders, and it seemed to me, looking at the company now, and the very substantial reorganisation which will have to be carried through, that it was right to have a new Chairman, and I stick by this.

Mr. R. Carr

May we get it clear that it was the right hon. Gentleman who asked Mr. Wrangham to resign, and not Mr. Wrangham who desired to do so?

Mr. Benn

I made it clear to Mr. Wrangham during our discussions, in exactly the same way as I have made it clear to the House, that it seemed to me that the time had come to make a change, and following this he tendered his resignation.

Mr. McMaster

On a point of order. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

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