HC Deb 10 April 1968 vol 762 cc1369-73

3.30 p.m.

The Secretary of State for Commonwealth Affairs (Mr. George Thomson)

In the statement, which my right hon. Friend the Member for Cardiff, West (Mr. George Thomas) made to the House on 3rd April in his capacity as Minister of State for Commonwealth Affairs, he undertook to give the House details of the additional financial help which we shall make available to the Malta Government as a result of the recent talks which my noble Friend, the Paymaster General, held with the Prime Minister of Malta about the Malta Dockyard.

The Malta Parliament in the early hours of this morning unanimously passed legislation bringing the Malta Dockyard into public ownership and thus ensured its continued operation. It is the intention of the Malta Government to develop and diversify the dockyard and to make it more competitive.

Under this legislation the Malta Government have acquired the shares of Bailey (Malta) Ltd. against payment of such compensation as may be determined by the Maltese courts, in accordance with Section 33 of the Malta Constitution. Provision is made by the legislation for the transfer 10 a newly established corporation of the assets of Bailey (Malta) Ltd. necessary for the running of the dockyard and certain of its liabilities. The legis lation also provides for the winding up of Bailey (Malta) Ltd. The price for the assets so transferred, to be paid to the liquidator, will be established by the Maltese courts.

The responsibility for the Malta Dockyard now rests wholly with the Government of Malta. I am glad to say that we are able to make an important contribution towards meeting the cost to the Malta Government of putting their plans into effect. First, we intend to pay over to the Malta Government a sum not exceeding an amount equivalent to our receipts as creditors in the winding up of Bailey (Malta) Ltd. in respect of our loans to the dockyard.

Secondly, in recognition of the importance of the future prosperity of the dockyard, we are allocating for the dockyard £3 million of the £51 million made available to the Malta Government under the financial agreement of September, 1964. The Malta Government will be able, if this should prove necessary, to draw on this £3 million for purposes related to the transfer of the dockyard to Malta, the balance being devoted to the development and diversification of the dockyard. At the end of the 10 year period covered by the financial agreement, an additional £3 million of aid will be provided for development projects. This money will be disbursed by 31st March, 1976. In addition, we intend to provide a feasibility study of the development and diversification of the dockyard. The two Governments are already in contact over this, and we hope that arrangements for the study can be completed soon.

The result that we have achieved is that the Malta Government have been able to acquire the dockyard undertaking and are in a position to develop it for the benefit of Malta. I would like to add my gratitude and congratulations to my right hon. Friend the Paymaster-General for bringing to such a successful conclusion a problem that has for so long created such difficulty to the Governments both of Malta and of the United Kingdom.

Mr. Maudling

The right hon. Gentleman has made a complicated statement and he will realise that we will want to study it in detail. Apart from that, I am sure that my hon. Friends will be delighted to know that some agreement has been reached; and we wish the people of Malta well.

Mr. Thomson

I am grateful to the right hon. Gentleman. I am sorry that it is a complicated and long statement, but I thought that the House would like to have the details so that they could be studied.

Dr. John Dunwoody

Will my right hon. Friend assure the House that the problems of the British ship-repairing industry have been taken into consideration in reaching this agreement? Will he go further and give an assurance that this agreement will not damage employment prospects in those parts of our development areas which are particularly dependent on ship repairing?

Mr. Thomson

Questions on this aspect should be addressed to the Minister of Technology or the President of the Board of Trade. It is, of course, impossible to predict in precise terms the effect that this agreement may have on the arrangements for ship repairing in this country. However, I can tell my hon. Friend that the arrangements which I have announced will have no effect on our main naval repair programme.

Mr. Gower

Does the Secretary of State appreciate that the action of the Malta Government in some respects anticipates the decision of a court affecting Bailey Ltd. which are closely identified with the South Wales ports? Did he offer help to the Malta Government without making some effort to protect Bailey (Malta) Ltd. from this action?

Mr. Thomson

I am afraid that I cannot accept the assumptions lying behind the hon. Gentleman's question. Litigation is in existence between Her Majesty's Government and Bailey and, in these circumstances, the matter is sub judice and it would be improper for me to comment on it.

Mr. Edelman

What reason does my right hon. Friend have for optimism about the viability of the dockyard which, until recently, was almost totally lacking in orders? Will he further define what he means by "diversification" in this connection?

Mr. Thomson

The dockyard has been particularly affected by the closure of the Suez Canal. It is in this respect that the word "diversification" which I used is, as my hon. Friend no doubt suspected, of importance. What is suggested is that studies might be made to find out whether the dockyard undertaking, which has some good equipment attached to it, might be diversified or could provide employment in work other than ship repairing.

Mr. Dodds-Parker

Can the right hon. Gentleman say what the total cost to the British taxpayer has been since this episode started with the Admiralty giving up the dockyard?

Mr. Thomson

Not without notice. The main obligations were incurred by our predecessors. What we are now offering to help this new undertaking to develop properly is £3 million of additional aid after the end of the currency of the present agreement in 1974.

Mr. Dalyell

In view of the British financial liability, do Her Majesty's Government have a representative on the newly formed corporation?

Mr. Thomson

No, Sir. As I indicated, the arrangements which have now been made mean that the ownership and control of the dockyard will be entirely in the hands of the Government of Malta.

Sir Ian Orr-Ewing

During the conversations, did the Secretary of State get some assurance from the Malta Government that this dockyard is likely to be operating in future on more efficient lines, and that no guarantee could possibly be given that all the people who have been employed there for some time will always remain in their present jobs? Is he aware that unless this point has been brought home to the people who work in the dockyard, there will be no hope of it becoming a viable proposition?

Mr. Thomson

I very much note the points made by the hon. Gentleman. However, these matters are now the responsibility of the Government of Malta who, from now on, own and run the dockyard.

Mr. John Page

Can the right hon. Gentleman say what is the position of Swan Hunter in connection with the operations of the dockyard? Is he aware that people in Malta and Britain will be delighted at the successful outcome which has been achieved and which should mean a happy future for Malta from the dockyard point of view?

Mr. Thomson

I am obliged for the hon. Gentleman's final words. The new arrangements are, of course, the result of legislation passed by the Parliament of Malta and are not matters on which I should comment in detail. The legislation sets up a Malta drydocks corporation. That will have a chairman and between four and eight members, all of whom will be appointed by the Prime Minister of Malta. It will be their obligation to decide how, and under what management arrangements, the dockyard is to be run.