§ Mr. Simon Wingfield Digby (Dorset, West)
I beg to move, Amendment No. 48, in page 7, line 20, to leave out '£20 million' and to insert '£15 million'.
We come from supersonic boom to the older, more conventional type of transport, ships, and to shipbuilding. The Clause which this Amendment seeks to amend deals exclusively with shipbuilding. My Amendment would have the effect of reducing by £5 million the amount of grant which can be given to shipbuilding enterprises. I should say at the start that it is not my purpose necessarily to cut this figure back. My purpose is to try to find out what the money is needed for.
This somewhat unusual Clause is an attempt to substitute a new Section in an Act which was passed only a year ago and to quadruple the amount of grant given for the shipbuilding industry a year ago. An amount of £32½ million was granted for loans to shipbuilding, and £5 million for grants. That £5 million is now to be qaudrupled, after only a year's thought.
With their usual foresight, of course, the Opposition suggested at the time that the sum of £5 million might not be sufficient. When we did that in Standing Committee we were severely taken to task by the Joint Under-Secretary, who was then Parliamentary Secretary to the Ministry of Technology, who said all kinds of rude things about us. I am glad that, at any rate, he has not been afraid to learn by experience. He talked in Committee on this Bill about a change of judgment. Much less convincing were the reasons he gave in Standing Committee for this very considerable change. Why is it necessary to switch over on such a large scale from loans to grants? Why is it necessary to quadruple them?
In Committee he gave four reasons for this, and in total I did not find them 536 convincing. The effect of the change made by the Clause, apart from the sum of money involved, is that grouping is no longer to be a condition of the grants. There again, I think, the hon. Gentleman might have learned something at the time of our debates on the original Bill. A former reorganisation will now be sufficient to attract the grant. Also, the time limit goes.
In justification of this change the hon. Gentleman told the Committee that it would now be necessary, he thought, to prolong the life of the Shipbuilding Industry Board till the end of 1971. Once again I cannot help recalling that we suggested in Committee originally that it might be that they thought the shipbuilding industry could achieve this work very much sooner than was likely to be the case. The main plank in his platform was Harland and Wolff. He referred to the project there of a shallow building dock but failed to specify why it was necessary to increase the sum of the grant by £15 million for that purpose and how much would go for that.
His third justification was a somewhat naïve one. He said that the international talks about doing away with subsidies in other shipbuilding countries had not borne fruit. It surprised me that in the state of the world as it is today he should think that they ever would. Certainly I agree that our judgment must have changed in the last year with the experience of grouping under the Shipbuilding Industry Board. One of the factors which has made difficulties in reorganisation has been the persistence of very high interest rates.
Another thing which has arisen, which the hon. Gentleman did not mention, was a certain shortage of capital due to writing down the value of certain existing yards and those yards were having to close. We know from published material that of the loan available under the original Act £5,500,000 has had to be advanced free of interest for one or two years to the Upper Clyde Shipbuilders, but so far as we know there has been no question of a grant to them.
Perhaps he can tell us if they are to have a grant as well as a loan. This brings me to the whole question of the circumstances in which it is necessary to give ship builders grants rather than loans. What is his philosophy here?
537 We have now reached the stage after about a year's working of the Geddes proposals and of the Shipbuilding Industry Board where it would be very useful to have some kind of progress report of what is being achieved. It is a pity that this matter has to come up at such a late hour. I hope that on another occasion the Government will be able to tell us a little more. There are certain factors which are still disquieting in the situation. For example, the closing of Furness Yard the other day after no less than £5 million had been spent on modernisation. We know of the closing of Barclay Curie's yard on the Upper Clyde and the less expected closing of Stephen's. Orders appear to be coming in well and certain other lessons can be learned already as a result of the reorganisation of the industry. I am surprised that the Government have not stressed the need for vertical co-operation between different groups—and indeed outside the groups—in such matters as design.
In particular we want to hear from the Under-Secretary how he arrived at the figure of £20 million, why it is in grants and why it cannot come out of the £32,500,000 for loans. I very much hope that he will be able to be specific about this.
§ Mr. McMaster
The Joint Under-Secretary of State for Economic Affairs will remember, I am sure, the debates we had on the Shipbuilding Industry Bill. He will remember that we very strongly criticised the amount which he had set aside in the Bill to assist the shipbuilding industry. He adopted the arguments put forward by my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby). He adopted this argument almost in toto, without a word of attribution or gratitude. Nevertheless, we are glad that the Minister has now admitted that the provision in the Shipbuilding Industry Act was not sufficient to meet the requirements of our shipyards.
A great deal of the debate in Committee was concerned with the firm of Harland and Wolff, which is in my constituency. It was cited as one of the main masons for advancing £20 million to assist our shipbuilding industry. Part of the money will be used to lay down there one of the biggest building docks in Europe which will be capable of taking 538 boats of up to a million tons. It is very much bigger than anything which is planned today, even in Japan. It will be backed up with new fabrication sheds and other works, and should help to keep the yard in the forefront of world shipbuilding.
However, there are other factors which are working against the interests of the British shipbuilding industry, and I refer particularly to the short-term. Can the Joint Under-Secretary of State tell us how much of the £20 million is to be advanced to our shipyards in order to tide them over until orders come in for the large tankers and other craft which will be built in these new docks?
On the Queen's Island, in Belfast, it is feared that there may be severe redundancy between now and the building of the two Esso tankers, and the engine works is where the redundancy is likely to hit first Do the Government intend to spend any of the £20 million, for instance, in assisting Harland and Wolff to develop a new British engine which could be used to keep together the work force in Harland and Wolff until the new facilities come into being?
Another difficulty facing British yards is the very high rate of interest which has been prevalent in the last two or three years. It makes it almost impossible for British yards to compete against their German, Swedish and Japanese competitors when they have to borrow money at one or two per cent. above Bank Rate, which itself is at an all-time record high and has remained so for a very long period, in spite of many assurances to the contrary from the Government.
I should like to know why the Government have fixed on the figure of £20 million, and how the entire sum of money is to be spent. I should also like the Minister to say what decisions the Government have reached about the grouping of yards, and which groups the Government intend to survive. I feel that we have been rather stumbling in the measures that we have taken to assist our shipbuilding industry. A master plan is needed, based on the Geddes Report, indicating which of the groups they intend to survive. I include Harland and Wolffe in that, although it does not group conveniently with any of the other yards on the Clyde or Tyne.
539 What assistance is to be given to these groups and what steps are to be taken to rationalise the rest of our shipbuilding industry? I do not intend, at this late hour, to do more than ask these questions of the Minister. I hope that he will answer them, and subject to satisfactory answers, I will not seek to press this Amendment.
§ Dame Irene Ward
This Clause is rather wrapped in mystery. It suddenly appeared in the Bill, and up to date we do not appear to have had any satisfactory explanation or information on what this money is required for. I therefore join my hon. Friends in asking the Minister to give a full explanation. I want to know how the money is to be allocated as between parts of the country. I hope the Minister is not unaware of the fact that on Tyneside, in recent months, Swan Hunter and Smith's Dock, which were in the consortium which emerged after the original Shipbuilding Industry Act had been placed on the Statute Book, has had some brilliant successes.
We on the Tyne are very proud of this, and I hope that the Minister will give approbation to what we have done on the Tyne on a competitive basis. We have heard a lot about the success of Rolls-Royce and I should like to hear about the successes we have had on the Tyne. In many ways the North-East Coast has had less of the public investment for development areas than others. I cannot say what happens in Northern Ireland, but we have had less public investment than Scotland and Wales. I have watched, with great interest, the developments on the Clyde. We think it is in the national interest that shipbuilding should have as much support as possible, whether on the Tyne, the Clyde, in Northern Ireland, on Merseyside, or in other parts of the country.
We want a good, sound, prosperous and profitable shipbuilding industry, wherever it is based. There have been rumours in my part of the world—and I only toss this off in passing, but Ministers do not always say everything so it is not up to us to give them all the facts—that on the Tyne certain pressures have been brought to bear. We are always apprehensive about this in an industry where we are not keen on 540 Government interference and on their thinking that they know better than experienced men what should be done in the industry.
I want to know whether this money will be properly used, and whether advice will be tendered not by the Government but by those who know how to build ships.
Will any of that money be offered to help with the proper development of marine engineering? That is linked with shipbuilding, and we never managed to get real satisfaction from the Minister when were were discussing the Shipbuilding Industry Act in Committee. What is happening to marine engineering? We used to be absolutely supreme in that industry, and the gradual decline in it has been very much regretted on Tyneside. Therefore, I am very glad that my hon. Friend has put down the Amendment, and I look forward to hearing every bit of detail that the Minister can give us.
I listened to all the debate on the question of advisory committees, the experts, and heaven knows who, who were to advise the Minister on heaven knows what. But I should like to know whether this new proposal has been put forward by the shipbuilders through the Shipbuilding Industry Board. Has it asked for this increase in money, or is it an idea of the Minister with a view to having a little money to spread about, to get more fingers in the pie than he has had in the past?
I do not want a private enterprise industry which has produced the most magnificent ships and marine engines in the world to get too much mixed up with the Government, because very often the Government have a dead hand. I have noticed that on several occasions when shipbuilding has been raised Ministers have tended to say, "Look what the Government have done for the shipbuilding industry." I say, "Look what the shipbuilding industry has done for the country." It is not our fault that we have gone through very bad times.
Therefore, I shall be very grateful if the Minister will put all his cards on the table and let us know what is behind the Clause. On what he tells us will depend the decision of my hon. Friend who moved the Amendment, and others of my hon. Friends associated with it, on what they do. Let us know where we 541 are and have a real tribute to that great advantage that has emerged from Swan Hunters on the Tyne in their tendering.
When I was in the North last weekend I found that in spite of the orders we have been able to obtain there are still great anxieties on the Tyne. I should like to know that they can be allayed. I am very glad to have had this opportunity of trying to probe the mystery that the Government have suddenly caused.
§ Mr. Albert Booth (Barrow-in-Furness)
I oppose the Amendment. It seems to me that those who have moved and pressed it may, inadvertently I hope, be doing a disservice to the shipbuilding industry. The state of the industry is such that it is, without a shadow of doubt, in need of considerable grant assistance if it is to use the finest technologies and the best equipment which has been developed in some of our research stations it order to capture a wider market for this country and to play a far greater part in building up our exports.
It falls ill from the lips of any hon. Member opposite to talk about the industry stumbling along without a plan, because it was not until the advent of a Labour Government in 1964 that a proper plan for the industry was introduced.
My purpose in intervening is to make some inquiries on the point to which the Amendment is directed. I am at present much concerned about the position of Vickers (Barrow), the shipyard in my constituency, and the position of the North-West shipyards in general, as they are at present engaged in talks with a view to amalgamation and the forming of a group. Britain's nuclear submarines are being built in the shipyards of the North-West. If, as it is reasonable to suppose with the present planned defence expenditure, there is to be a curtailment of production of nuclear submarines, we have to consider now what money will be available to make possible the changing of yards from nuclear submarine production to the production of merchant ships.
The production of nuclear submarines is such a highly specialised business that it is impossible to gear a yard properly in terms of labour and capital to the 542 building of nuclear submarines and then change overnight to the building of merchant ships, be they sophisticated bulk carriers, tankers or any other sort of merchant vessel. Will my hon. Friend tell me, therefore, whether the grants envisaged here would be such as to help Vickers (Barrow), in particular, or Cammell Laird so that they could capitalise and reorganise when their nuclear submarine contracts come to an end and go into the production of advanced merchant vessels again?
In the past, Vickers (Barrow) has proved, by its production of such ships as the "British Admiral", the "Methane Princess" and the "Oriana", that it is capable of building fine merchant vessels, but the berths which produced those ships are today incapable of such production because they have been altered specifically for the production of nuclear submarines. I want an assurance that, with the aid of grants, it will be possible for Vickers (Barrow) and other yards which have been building fine naval vessels to make a major contribution to this country's exports by turning over to merchant ship production.
§ Mr. Ridley
Is it still Government policy to continue to subsidise our foreign competitors in the fantastic way we are now doing by means of investment grants? We have just heard that the cost of investment grants for ships built in foreign yards in the next year or two is likely to be £65½ million. Why the British taxpayer should be asked to pay £65½ million to subsidise ships being built abroad beats me. No wonder the British shipbuilding industry is in trouble, and no wonder we have to vote money under the Bill to help it to survive against that competition.
Is it necessary to pay 25 per cent. of the cost of all ships built abroad, whether for British owners or for foreign owners? We had a debate about this on the Adjournment last night, in which I took part. It seems extraordinary that we have to vote money for subsidising the shipbuilding industry in order to make up the enormous disadvantage under which British shipbuilders are suffering as a result of our profligate expenditure of public money on foreign shipping.
I do not believe that the Shipbuilding Industry Board, Sir William Swallow, the 543 groupings and the investment schemes—all the claptrap which the Minister will tell us about—are worth twopence compared with this vast burden which the Government have put on our industry by making it compete with yards abroad with a 25 per cent. advantage from the taxpayer. The Government might start on sorting out our economic problems and curing our balance of payments problem by stopping a drain of £.65½ million across the exchanges in order to subsidise foreign shipyards building in competition with British shipyards. If they want to carry that further, they might well investigate other aspects of the investment grant system which are doing grievous harm to our industry.
This is a clear-cut example of the way in which the Government could help the balance of payments, cut Government expenditure and help the British shipbuilding industry. They could deal with all three matters at once if they were prepared to accede to my request. Our struggles with this bogus form of Government interference would end if it were not for the desire to spend this enormous sum of money on subsidising our competitors. I hope that they will answer this point.
§ Mr. James Tinn (Cleveland)
I wish to draw attention to a practical problem on Teesside which is relevant to our debate. It concerns the Furness shipyard, which is facing closure, involving the loss of the jobs of 3,000 men. It is a very efficient yard and ranks with any in the country, but it has had an unfortunate history and has accumulated considerable losses which have resulted in the present threat to its existence.
I do not ask my hon. Friend for an assurance that assistance for this shipyard will be forthcoming under the Clause, because the Ministry is very actively considering—and I am a member of the Working Party which is doing it—practical ways in which assistance can be given. This is a practical illustration of a yard which is threatened by special circumstances but the closure of which might be avoided if sufficient funds were forthcoming, ensuring a future for the yard and the people dependent on it for their living.
§ Mr. Ted Leadbitter (The Hartlepools)
Not only are the questions which have 544 been asked relevant, but it is imperative that an answer should be given to them. It is a matter of alarm that this kind of grant for helping the shipping industry puzzles 3,000 workers on Tees-side in the Furness shipyard. The yard is reputed to be the most modern in the country. It is reputed to have had more new equipment put into it in the past three or four years than any other. In spite of the information which has been conveyed to the House about the discussions which are taking place, the men in the yard have learned only today that a bridging solution has been refused both by the Ministry and the Tyneside consortia.
I impress upon the Minister that there are angry people on Tees-side and that the Government have a duty to answer, because we cannot see the sense in subsidising shipyards abroad, particularly in Germany, which is increasing its shipbuilding capacity, when there is a modern British shipyard in a modern British port waiting to be utilised. Even during this last week, Tyne concerns have been asking our workers to go there. The Government have a duty to answer these men and to respond to the taxpayers and at least to see that the grant system is used for preferential treatment for our own shipyards and not for those abroad.
§ Mr. Dell
The fate of the shipbuilding industry is intimately bound up with Government assistance. There is no question of its fate being separated from the assistance the Government are prepared to give it. The Government have to assist it. This is not a question of the dead hand of Government. The Government are helping to keep the industry alive and are doing so because they believe that it can become competitive and can bring to the country considerable advantages in export orders and in supplying our own shipowners.
The point raised by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is surely not one for this Clause, which relates to the grants to be made under the Shipbuilding Industry Act and is not related to investment grants. He is wrong to suggest that the 25 per cent. grants which are made when British shipowners place orders abroad are differentially in favour of foreign ship builders. The same grants are available when orders are placed in British yards 545 and the problem here is the basic problem of the industry—the problem of competitiveness—which it is now at last overcoming.
If we compelled British shipowners to buy ships in British yards, independently of the ability of those yards to build competitively, we should be doing a disservice to the British fleet. It is essential that, in this situation, our shipbuilders should be competitive with foreign shipbuilders, and this is what we are gradually achieving.
§ Mr. Ridley
But as a result we are now in the position where the Japanese Government charge a 15 per cent. import duty on imported ships whereas the British Government pay a 25 per cent. subsidy on imported ships. This cannot make sense. Will the hon. Gentleman book at it again?
§ Mr. Dell
I am aware of the situation in Japan in relation to the protection given to Japanese shipbuilders, which results in practically 100 per cent.—if not actually 100 per cent.—of Japanese ships being built in Japanese yards. The main point at the moment is that there is no discrimination in the investment grant system against British yards. If they are competitive, they can get the orders. Moreover, there is the further point that British yards have depended for far too long on the British fleet for their orders.
We want to see a far greater proportion of the ships built in British yards going for export and one of the welcome aspects about the number of orders coming to our yards is that so many of them are for export.
I am sorry that some hon. Members have expressed dissatisfaction with the explanation I gave in Committee about the change in the amount of money provided under Section 3 of the Shipbuilding Industry Act. I do so because I was assured in Committee that, if my explanation were satisfactory, an Amendment which had been moved would not be pressed to a division. The Amendment was not pressed and I therefore took it that the Opposition in Committee were satisfied with my explanation. But apparently some other hon. Members opposite were not. There were new facts on which it was reasonable for the Gov 546 ernment to base a change of judgment as to the amount of money which should be supplied by means of grant. The hon. Member for Eastleigh (Mr. David Price) said this explicitly in Committee and I was grateful to him. He said:I believe that we can now see the future with rather more clarity than the Geddes Committee could, because it started its work over three years ago, and with even greater clarity than we in the House and the appropriate Standing Committee could a year ago when we were debating the Shipbuilding Industry Bill."—[OFFICIAL, REPORT, Standing Committee E, 12th March, 1968; c. 338.]I think he is right. This justifies the change in judgment which we have made as to the amount of money to be provided by grant, and it is a fortunate fact that we have this Bill which enables us to make this change.
This is one of the general arguments for the Industrial Expansion Bill, that it enables changes of judgment, made necessary by the availability of new facts in industrial situations, and in relationships between Government and industry, to be put into effect, not by passing Acts of Parliament but by introducing Statutory Orders—on a time scale which is far more appropriate to the problems between Government and industry.
§ Mr. Wingfield Digby
Does not the hon. Gentleman recall that we made this very point in Committee, that we did not think that the £5 million would be enough? He poured scorn on our idea.
§ Mr. Dell
No, the hon. Gentleman is wrong in suggesting that I poured scorn on it. On the contrary, with my usual care, I considered the arguments advanced, and I based the judgment that the Government were taking on the Report of the Geddes Committee. Now, as the hon. Member for Eastleigh assures us, there are new facts. One is the considerable rise in the demand for large tankers, which has followed the closing of the Suez Canal and which post-dated the consideration of the Shipbuilding Industry Act last year. I do not say that this trend would not have emerged in any case, but it has certainly been speeded up considerably by the closing of the Suez Canal.
The changes that we are making are of three main types. We are making it 547 possible to give grants, not just to shipbuilding groups as was the case under the original Act, but also to "non-groups." We are making it possible to give grants in cases other than of transitional losses; and we are increasing the sum of money involved.
I do not want to go over all the arguments that I presented in Committee in considerable detail to explain all these changes. I want to devote most of my time now to answering specific questions that I have been asked. However, perhaps I may make these points in brief. The main "non-group" with which we are concerned is Harland and Wolff because of the demand which is emerging for large tankers—not just the Esso tankers although we are glad that firm got the order for them, and we are equally glad that Swan Hunter got an order—but for future large tankers. This will enable us to assist by grants in the provision of a shipbuilding dock in the Musgrave Channel.
It is important that the industry should understand that the fact that we are now allowing grants to be made available to "non-groups"—to single firms like Harland and Wolff, although I agree that it is a very big single firm—does not mean that the Shipbuilding Industry Board intends to let up in any way the pressure which it is exerting to establish groupings throughout the shipbuilding industry. This pressure will be maintained.
I was asked what groups we thought would survive. All the groups which the Shipbuilding Industry Board is helping to bring into existence will we hope survive. We hope there will be a further group on the Wear. We hope that the present stage of grouping will be only a first stage and that there will be further groupings. We would like to see one group on the Clyde and probably one group in the North-East. We would also like to see the emergence of a North West group. It would be wrong to imagine that Harland and Wolff would not derive considerable advantages from joining a North-West group.
§ Dame Irene Ward
Concerning the dock to which the hon. Gentleman referred for Harland and Wolff, may I ask whether we should be able to get a grant from this source for the new dock 548 which we want to build on the Tyne so that we can take the big tankers? We are in great difficulty as regards the Tyne and I should like to know whether we can have some of this grant, because the Tyne Improvement Commission says that it cannot go any further until it knows what our future is to be.
§ Mr. Dell
It is a matter for the Swan Hunter and Tyne Group to make an application. The hon. Lady asked me about the position of the Tyne Group in relation to the Clause. She complained that insufficient assistance had been given to that group as a result of the passage of the Shipbuilding Industry Act. That is quite incorrect.
It is open to the Swan Hunter and Tyne Group—as it is to other groups—to make applications, for example, for grants to assist the building of docks, or for loans. Whatever they think is appropriate, can be applied for, and would be considered by the Shipbuilding Industry Board.
§ Dame Irene Ward
The hon. Gentleman has got me wrong. I did not say that. I said that public investment, which means public investment in total from the Government, to the North-East Coast has been less than it has been to Scotland and Wales. This is public investment in total. That is why I am anxious to know whether we are able to have this additional money for our dock, because we have got less than anybody else in total—not through the Shipbuilding Industry Board at all.
§ Mr. Dell
That is a much wider question. I am sure that Mr. Deputy Speaker would rule me out of order if I went into it. On the specifically shipbuilding point, it is entirely open to the Swan Hunter and Tyne Group to make applications for assistance under the Act to the Shipbuilding Industry Board, and the applications would be considered in the ordinary way.
§ Mr. Booth
Since my hon. Friend has remarked on the advantage which he sees in Harland and Wolff becoming a member of a North-West group, and since Vickers, Barrow, is similar in terms of geographic isolation, would he give his view on the advantage of Vickers, Barrow, also becoming a member of the North-West group?
§ Mr. Dell
That is a matter which the Shipbuilding Industry Board would have to consider. My hon. Friend asked me specifically whether grants could be made available to the Vickers yard at Barrow—or, indeed, to Cammell Laird, in my constituency—to assist in any reorganisation which is required to make it able to supply merchant ships (at the moment the yard is concentrating on naval production). The answer is, of course "Yes". It is possible under the Clause—especially as rewritten because it is not new tied to grouping—for an application to be made. Nevertheless, I must re-emphasise my earlier point that the Shipbuilding Industry Board will keep up the pressure which it has already exerted to achieve groupings in the shipbuilding industry so that the industry can become more competitive and viable.
The second change between the original Clause and the Clause as we now have it is that it now enables grants to be made in cases other than transitional losses. The original concept was that there would be certain facilities, in yards which would be grouped, which would remain useful when the grouping had been carried through, but which might not be capable of being used during the process of grouping. This situation was described in the Geddes Report as "transitional losses", and grants were to be made to assist yards in the course of grouping to meet those transitional losses.
The idea now is that grants should be available to yards in other cases as well to assist those parts of the shipbuilding industry which have a longterm future and can become competitive to survive in what is for the moment—temporarily, we hope—a weak financial position. It is important that they survive because of the great advantage which successful and competitive shipbuilding yards have in helping our balance of payments.
§ Mr. Dell
Perhaps my hon. Friend will wait until I deal with the Furness yard. My hon. Friend the Member for Cleveland (Mr. Tinn) asked specific questions about the Furness yard, and it might be as well to deal with this matter as a whole.
550 I explained in Committee why it has become necessary to increase the £5 million to £20 million. I have now been asked by the hon. Member for Dorset, West (Mr. Wingfield Digby) how much of this additional grant money will go to help the reorganisation of Harland and Wolff to equip it to build large tankers. I cannot yet give that figure. It is still under discussion, but this information will be available in the annual publications of the Shipbuilding Industry Board.
The hon. Gentleman also accused me of naivety in ever believing that the international discussions of subsidies would ever achieve success. We had interesting discussions on this subject last year. That accusation was a little unfortunate. We all had our doubts about it, but it is important when entering these negotiations to have some hope that something will be achieved. Nevertheless, it is reasonable for the Government to have a fall-back position. We would have to consider the situation of our shipbuilding industry if it proved impossible to eliminate the sort of practices which the hon. Member for Cirencester and Tewkesbury mentioned—the subsidisation of other shipbuilding industries and their protection by their own governments. If it proves impossible to eliminate these practices, naturally the Government will have to consider the implications for our own shipbuilding industry.
The hon. Member for Dorset, West asked why there should be this sum of £20 million for grants and why what was required could not be done under the provisions of Section 4 of the original Act and the £32½ million for loans. We have to consider what is appropriate for loans and what for grants. If all the groups which we anticipate come into existence, the whole of the £32½ million will be absorbed. Our objectives under these provisions require assistance by way of grant, not loan.
I was asked whether any grants would be made available to the Upper Clyde Shipbuilding Group, which has recently come into existence. I cannot answer that at this time, for the simple reason that no submission has been made by the U.C.S.G. for such grant. If such a submission is made, it will, of course, be considered by the Shipbuilding Industry Board. I have to give the same answer 551 about marine engines, and marine engines at Harland and Wolff about which the hon. Member' for Belfast, East (Mr. McMaster) asked. If applications are made, they will be considered. The Shipbuilding Industry Board is considering the whole situation of the marine engine industry in this country.
I was asked by my hon. Friends the Member for Cleveland and the Member for The Hartlepools (Mr. Leadbitter) about the closure of the Furness yard. They will know that a working party has been set up under my hon. Friend the Joint Parliamentary Secretary to the Ministry of Technology and that the trade unions and others are participating. It is currently engaged on making an economic appraisal of the possible future of the yard and in due course it will submit a report. It is essential that the yard should have a possible economically successful future if it is to be given assistance under the Bill.
I was asked whether the additional grants to be made available under the amended Clause had been decided in consultation with the Shipbuilding Industry Board. The answer is that the Board has been fully consulted in this matter and we have its approval.
I think that we are now in a rather happier state with the shipbuilding industry than we were a year ago when we were considering the Bill. Recently there have been encouraging signs that the combination of greater efficiency resulting from grouping, and greater competitiveness resulting from devaluation, have brought more and more orders, including export orders, to the industry. This trend is very welcome, and I think it justifies the attention given to, and the planning done for this industry by the Government in the Shipbuilding Industry Act of last year. It is a trend which will be continued if the House accepts this amended Clause.
§ Mr. Wingfield Digby
I thank the hon. Gentleman for that reply, and I applaud some of the purposes which he has outlined for these grants, such as the project for Harland and Wolff. There is, how-over, some lingering doubt in my mind about whether he will use these grants as a kind of carrot to bring about unneces 552 sary mergers, or the unnecessary closure of specialised yards, but in view of the assurances that he has given me, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.