HC Deb 23 January 1968 vol 757 cc367-78

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

11.4 p.m.

Mr. Frank Judd (Portsmouth, West)

What I say tonight will be particularly concerned with Portsmouth, but it will be relevant to the other dockyards and their supporting communities. There are at least three topical reasons for this debate.

First, there is the significance of the Government's recent defence policy changes for the communities in the location of the dockyards still too dependent on the yards for their economic well-being. I gather that the Town Clerk of Portsmouth has already written to my hon. Friend the Under-Secretary of Defence for the Royal Navy reminding him of the long-standing commitment of the Ministry of Defence to give maximum warning of any signicant change in manpower needs. The vulnerability of Portsmouth has been brought home to us all this week by the significance of the closure of Hawker Siddeley and the human problems that involves, especially for older workers of the city. Secondly, there is the level of morale in the yard at the moment. My hon. Friend and I have received numerous letters about this. But I select this evening just briefly two examples. First, the opening sentence in a letter from a greatly respected trade unionist in Portsmouth Dockyard reads as follows: The trade union leaders in the yards are firmly of the opinion that that general morale of the men is as poor as most can remember going back over the past two or three decades. The other example which I wish to take is the first sentence in a letter from a much respected representative of a white collar union. The letter opens in much the same vein: There is much dissatisfaction amongst the technical and drawing office grades in Portsmouth Dockyard. The third topical reason for this debate, perhaps the most topical of all, is the Government's concern with economic efficiency through the country and the consequential need to set an example in their own direct sphere of influence. There are about 35,000 men employed in the dockyards and there is extensive capital equipment within them. Here, if anywhere, the Government have an opportunity to show the industrial community throughout Britain what efficient management can be.

No intelligent person in Portsmouth wants to see the dockyards continued as a form of public out relief. What we want is a well-considered forecast of future naval requirements and the preparation of well-equipped, modernised dockyard units to meet those requirements. We as a city community hope that all this can be rapidly accompanied by the release of surplus land and facilities for alternative housing, industry and commercial port development, all badly needed in the area of Portsmouth.

In the meantime, all sorts of rumours are to be heard. One such rumour is that there is one dockyard too many in Britain at the moment. A rumour of this kind is obviously demoralising. It should be cleared up at once by an early and categorical statement of exactly what the future holds in store from the Ministry of Defence. There must be the maximum possible notice for any necessary transition to alternative industrial and economic priorities within the context of regional plans such as those of the South-East Regional Planning Board.

Even allowing for modernisation and rationalisation of the yards in order realistically to meet new commitments, there will still be special problems. For example, there is the yards' garage or maintenance function as well as their straightforward job of production. Bottlenecks, with uneven distribution of the work load, are bound to occur, although I am firmly convinced that these could be modified by greater flexibility, with the co-operation of both sides, in the management of manpower. The yards will continue to need some spare capacity to meet emergencies. Clearly it would be most alarming if the yards were working flat out in normal times so that there was no slack to be utilised in time of special circumstances.

Taking this last point together with the considerable resources of engineering skill and equipment in the yards, I cannot bring myself to believe that the present entirely passive attitude to outside civil contract work can survive. A change in this respect will require policy changes on the part of the Government and a new commercial basis to tendering and pricing, rather than the present post-operation actual cost system. At present it is altogether too lackadaisical, with no one person specifically responsible for watching surplus capacity and dynamically going out to attract alternative work. Change in this sphere would help to gear the yards to maximum continuing efficiency. In contrast, at present there is increasing concern at the amount of work going out to private contractors while some yards' facilities are not fully utilised. The argument has been forcefully put to me that the civilian contractors should be free to contribute to the export and import-substitution drive without having to contribute to defence programmes which could be undertaken in the yards.

In approaching the reform of the yards, I believe that five problems are worth special attention. First, we must look at the duplication of control. There is a confusion of naval and civilian management stretching down from the most senior level to modest levels of administration. What, for example, is the precise definition of responsibility between the short-stay—I think that it is two or three years—admiral superintendent and the general manager? Has this always worked well so far? If not, why not?

Is the superstructure of naval paraphernalia too complex and expensive for the industrial force to carry? If so, how can it be justified? Should not we, as in the yards in the United States, opt clearly for management either by service personnel or civilians? If we opt for service management must it not be by specialised, carefully trained personnel, who are not available in sufficient quantities at present?

Secondly, I come to the personnel problems of management-worker relationships. How well suited are the present trade union structure and the Whitley committees to efficient worker-management relationship? How can the latter be revitalised? Is not there a need for a separate wage structure and negotiating procedure for the dockyards alone, as distinct from other sections of the Civil Service?

Why do trade union members feel as they do feel that at present their leaders negotiate under duress? What are the causes of friction, and even, at times, resentment between the blue and white collar unions? When shall we see all the proposals of the Prices and Incomes Board implemented in this respect? What is the right system of differentials in the dockyards, as dockyards? Are not even the latest pay structures inadequate, because they result from tampering with, or adjusting, fundamentally imperfect systems?

I now come to the highly contentious subject of the dockyard incentive bonus scheme. Incentive payment schemes deserve special mention because, while they work quite well in a limited number of cases, there has been far too much evidence of real resentment, unfair times, general inefficiency in their operation and even of a refusal to work them at all. Those of us with some experience of the yards all know that the job price contract system became totally discredited, and for a different reason the dockyard incentive bonus scheme is going the same way, at least in certain sections. Can an incentive scheme, whatever its merits elsewhere in industry, ever work satisfactorily in industrial units where such a high proportion of people will never qualify for it? It is estimated that barely 50 per cent. of the labour force work it now. Should we not, as in the United States dockyards, opt for a system of sensible consolidated wage rates?

The fourth point which I wish to mention is communication. This obviously leaves much to be desired. There is too much traditional stiff formality and at present the men just do not understand the changes which take place, or what is their objective. A good example of this is the indignation at the increasing ratio of pre-work planning to actual production work. We know that in the United States this has reached a ratio of one to one, which is still far from being the case in Britain, but although the position is understood and broadly accepted in the United States, there is already bewilderment and cynicism here. Why? How does the Ministry of Defence intend to overcome it? Is not this problem related to the fifth matter which I wish to mention and which is accountability?

Is not a fundamental fault in the present administration to be found in the vast impersonal Civil Service machine of which the yards are a part? Of course, in no sense am I talking personally of anyone in that structure at the moment, but in this impersonal Civil Service machine that source of accountability can be found only away in Bath and Whitehall. If we are to get maximum efficiency, will there not have to be real devolution of responsibility to individual yards and individual sections within individual yards? Is not the key of success having real power of decision making on the spot and the involvement of all workers and management in an easily identifiable team? Do we not at least have to move towards the American pattern of a profit and loss account for each yard as a yardstick for its efficiency?

If we are to get well-informed answers to all these and other questions in the light of new defence policy, would not my hon. Friend and all his advisers and staff welcome a comprehensive independent inquiry into future demands on the yards and the best detailed method of organisation to meet those demands? I know that inquiries of this sort have been held in the past, but the present situation demands a comprehensive inquiry now.

I know that my hon. Friend is deeply concerned about problems which I have mentioned and I therefore hope that he will feel able to welcome this suggestion. The time may well have come for far-reaching reforms giving the yards a new independent structure and opportunities for industrial growth in completely new and as yet unseen civil spheres. My hon. Friend will share with me the utmost respect for the pride and skill of the dockyard workers and the heroic service of their supporting communities in two relatively recent world wars. We in the House owe it them that we think ahead for their future enabling these rich resources of men and facilities to be as relevant in the future as they have been in the past.

11.18 p.m.

The Under-Secretary of State for Defence for the Royal Nayy (Mr. Maurice Foley)

My hon. Friend the Member for Portsmouth, West (Mr. Judd) has spoken with much eloquence and knowledge of this subject which is befitting a dockyard Member of Parliament, of whom a number are present and for whose presence and interest I am grateful. In the time available I ought to try to deal with some of the matters raised and if I do not deal with them all, I shall write to my hon. Friend later. I ought first to put his comments into their essential perspective.

We will never get anywhere in a discussion about the dockyards unless their Service r´le is recognised from the start. The dockyards exist to maintain, repair and refit ships of the Royal Navy so that the Navy can have the ships it wants at the time it wants to meet its operational commitments. The dock yards therefore give an essential service to the Navy.

They cannot be considered in isolation from the Navy. It follows from this that the dockyards cannot, except within comparatively narrow limits, cut, trim or re-arrange their programme to make the most economic use of their resources and manpower. Essentially, the dockyards exist for the naval programme, not the other way round. This is a fundamental point, and until we get it clear anything else must be based on a false premise. Hon. Members will appreciate that this puts the dockyards at a considerable planning disadvantage over commercial firms, which act independently, on the narrow basis of the most efficient use of their resources.

Dealing with other points raised, there was firstly the question of the supervision and the relationship between the Admiral Superintendent and the General Manager. The principle flows from this prior consideration as to why the dockyards exist. The Admiral Superintendent of a dockyard remains a feature even in the new functional dockyard structure and organisation. The reason for this is implicit in the nature of the dockyard.

There is a great deal more to a dockyard than just an industrial organisation. There is the whole complex of stores organisation concerned with every aspect of stores supplies to the Fleet. In addition to the ships under repair the dockyards are used as a base for operational ships, all in need of day-to-day administration. The Admiral Superintendent is the focal point of these activities and not the least of his tasks is to ensure harmonious working between the Fleet and the civilian organisation.

My hon. Friend referred to the dockyard load and the possibilities of looking for outside work. He must recognise that we try to make the best possible use of each dockyard's resources. A dockyard plan covering all the yards is worked out and regularly brought up to date. This plan is on the basis of the best and most up-to-date information available, and apportions out to each dockyard an equitable and realistic distribution of dockyard work.

Hon. Members on both sides of the House recently attended a presentation on the way a dockyard works, and the way in which the load is determined, and the factors which influence the variation of this load. Any planning reproduced is not ad infinitum, it is not immutable and may be altered.

Dr. David Owen (Plymouth, Sutton)

Would my hon. Friend agree, however, that although we accept the necessity for this plan to be changed, in Devonport Dockyard there is very considerable concern about the decision on "Ark Royal"? When are we to hear whether the refit of this ship, on which the economy of the City is dependent, will go ahead or will be cancelled.

Mr. Foley

I appreciate the concern of my hon. Friend and other hon. Members who have raised this matter. I hope that my hon. Friend will appreciate my dilemma, firstly that there is a political decision to be taken in terms of reducing commitments. The question for the Navy, and all the Services, is to determine in the light of new commitments what is required to fulfil obligations.

This is a matter which takes time to work out and cannot be done overnight. Clearly I am exercised about this and concerned over it. I have visited the dockyard at Devonport and spoken to the workers, and given them certain assurances and hope that I will be able to honour them. This is not the moment for me to state categorically what will happen. At the moment the refit continues, and this is as far as I can go.

I was talking about the commercial work being introduced into the dockyards. If one accepts that no matter how good one's planning may be there will be times when there will be peaks and troughs in terms of work load then there will be times when certain skills will be over-used and others will be under-used. In planning one's work load, one has to have regard to the basic physical facilities available in a yard, the various skills in the manpower force and their competencies. These are all taken into consideration in planning the load, but, inevitably, from time to time there will be troughs.

In considering whether or not we can cater for outside civil work, we have to bear in mind all the time our primary role. If we offer to do outside work, it must be subordinate to the work of repairing and refitting our own ships. Delivery dates cannot be guaranteed, and the yards may not have the equipment required or the capital necessary to alter existing equipment to do outside work. I do not hold out much hope that the position can be improved upon very much. All that we can do is look again at our planning procedures to see whether there is anything more that we can do in terms of forecasting.

It must be borne in mind that, from time to time, ships come in for immediate repair and refits. Others that were expected do not come in on time and can be anything up to two months late. All this produces difficulties and frustrates those concerned with work loads.

Dame Joan Vickers (Plymouth, Devon-port)

We are worried about the lack of forecasting. In Devonport Dockyard, there are at least 2,600 men who are anxious to know what is to happen. Can we have an assurance that there will be plenty of notice if it is found necessary to have redundancies?

Mr. Foley

I will come to that point in a moment. I want to pick up one or two other points first.

My hon. Friend has referred to experience in the United States, but I would urge him to be a little cautious, because. if he takes it too far, he will find that there is a system in the United States not merely of profit and loss but of hire and fire in labour relationships. He must be highly selective in the parts of the system which he wants to see introduced into ours.

As for Report No. 18 of the National Board for Prices and Incomes, that was clearly introduced last July. A number of matters stem from it, particularly the grouping of industrial workers, the proposals for non-industrialisation, questions of incentive schemes, and so on. On some of them, one can move quickly. Others of them are rather longer term. There is an increasing interest on the part of the unions in their National Whitley Council, which I happen to chair, in their desire to move more quickly in this sphere of activity.

Mention was made of bonus schemes, and this is a matter about which I am very anxious. The Dockyard Incentive Bonus Scheme was introduced at the beginning of 1966. There is still time to amend, revise and improve it, and I hope that that will happen.

Finally, I turn to the effect of the defence cuts upon the dockyards. The Prime Minister announced on 16th January that there would be defence cuts and, in particular, a reduction in the United Kingdom bases. The previous forecast reduction of 80,000 civilians, which included 30,000 in the United Kingdom, will now be achieved significantly earlier than the mid-1970s. Obviously some part of this cut will fall on the dockyards and other naval establishments in this country. We are at present engaged in a study to define exactly what the effects will be. This will take some months to work out, since it is a complicated and serious matter. I cannot at present give any further details, except to say that I recognise fully the importance of coming to a decision as quickly as possible, evaluating it in the light of prevailing economic and social circumstances, and making sure that there is the maximum consultation with unions, both nationally and locally, before schemes are implemented.

I want to join with my hon. Friend in paying tribute to those who work in the dockyards. There are many officers and ratings all round the world who would want to pay tribute, too, to the work done in the dockyards on their ships. It is the skill and expertise of the people in the dockyards which make it possible for the Navy to do its job and fulfil the commitments laid upon it.

11.31 p.m.

Dame Joan Vickers (Plymouth, Devonport)

Although the hon. Gentleman has answered many of the points raised by the hon. Member for Portsmouth, West (Mr. Judd), so far as I am concerned, it has been a very unsatisfactory debate.

He kindly asked us to come to a meeting—I could not come in the morning, but I came in the afternoon—and he gave us all these points then. What we are worried about is the future.

On 29th December, I sent the Minister a telegram. As I thought that the Government were in economic difficulties, I sent it reply-paid to ensure getting an answer, but still no decision has been made. He has not confirmed or denied that the "Ark Royal" and now the "Eagle" are to be refitted.

When we had the debate on the 27th November, I remember that the hon. Member for Portsmouth, West was worried because of the scrapping of H.M.S. "Victorious", but he was told that that would create a certain amount of work in the actual dismantling of it.

I have a letter from the right hon. Gentleman of 4th December definitely stating—the hon. Gentleman frightened me a bit this evening when he said he hoped to be able to keep his word— that there would be a full order book for five years. We are expecting the Government to keep their word. It may not be possible for them to carry on with the carrier, but what we say is that there are 240 ships in the Royal Navy and we want to see that we have sufficient to keep the present labour force occupied. If the present labour force cannot be fully occupied, he must let us know in plenty of time what the run down is to be and over what period of time so that we can press for industry to come particularly to Portsmouth.

The South-West Regional Council has been suggesting that this must become a development area. If the hon. Gentleman can give us some categorical details soon—we have already waited long enough—we could perhaps get this status granted and we could press ahead. Plymouth does not want spoonfeeding. We want action so that we know where we stand.

I would plead with the hon. Gentleman, who is a sympathetic man—and I know the difficult position he is in— to discuss this with the Minister of Defence and see that we are not kept waiting any longer.

The Government are playing with men's lives. It makes a lot of difference to the city. We have had a dockyard in Plymouth for 300 years and the city has good or bad——

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-six minutes to Twelve o'clock.