UPPER CLYDE SHIPBUILDERS

HC Deb 19 June 1969 vol 785 cc721-6

The Minister of Technology (Mr. Anthony Wedgwood Benn)

Mr. Speaker, I will, with permission, make a statement about Upper Clyde Shipbuilders.

As the House knows, the Upper Clyde Shipbuilders' Board yesterday decided to accept the offer made by the Shipbuilding Industry Board and the conditions attached to it. The S.I.B. has made it clear that it will be ready, early next year, to discuss the developing financial situation with the reconstructed board and management of U.C.S. in the light of the performance of the group following the implementation of the present plan. The renegotiation by the boilermakers of the present fall-back guarantee will be necessary immediately as part of this plan.

This decision, which I am sure was the right one, has been made possible by many factors and especially by the co-operation from the trade unions involved.

I should like to pay tribute to Sir William Swallow and the S.I.B. for the part that they played in making this possible.

I have always believed, Mr. Speaker, that this task of reorganisation could be carried through and I am sure that the House will want to join me in expressing that confidence now.

Mr. Gordon Campbell

There will be general relief that the long-drawn-out crisis is over. However, will the Minister agree that it is essential that all concerned should now concentrate on making U.C.S. a viable, highly competitive enterprise? Does he attach special importance to the proposed renegotiation of the productivity agreement with the Boilermakers' Society, and can he tell us more about that?

Mr. Benn

I referred in my statement to the boilermakers. This is a matter which the S.I.B. has provided as one of its conditions, in my judgment quite rightly. It is a matter for the management and the union involved and I think that I should leave them to it. What has emerged out of the last few months of discussion has been a readiness on the part of all those involved on the Clyde to take responsibility upon their own shoulders. This is the most important thing which has come out of it.

Mr. Small

Is my right hon. Friend aware that after the marathon crisis on the Clyde we are grateful to him for the urgency with which he attacked this question? Is he satisfied that the Government's share of the equity will be sufficient to give moderate control of the destiny of the group in the future?

Mr. Benn

The proposal by the S.I.B. was made under the Act. It involves £22 million in grants and £3 million in loans for the purposes of meeting transitional losses. This will provide a substantial, though not a majority, holding in U.C.S. It was not the object of the exercise, but it means that the S.I.B. will have the major holding in U.C.S. and I think that the House would feel that that was right in view of the sums involved.

Mr. Galbraith

While we are glad that, for the time being anyway, Upper Clyde Shipbuilders will be able to carry on, we deplore the brinkmanship with which the Minister and the Government have conducted this affair, for it has done nothing but harm to the prospects for the Upper Clyde.

Can the Minister explain the nature of the difference of £3 million between what the company considered necessary and what the Government were willing to offer?

Mr. Benn

I am sorry that the hon. Gentleman did not follow this controversy. Had he done so, he would have known that the Government never delayed for more than 48 hours on any request that came from the Clyde. The problem was a problem arising from the inheritance of the past. I do not want to say more about it now. At no stage did we delay in giving decisions on the proposals put forward.

What has been most damaging—and I hope that the hon. Gentleman will not pursue it—has been public speculation about the finances of a company the success of which, as with all companies, depends upon its being able to conduct its affairs with a reasonable degree of privacy. I hope that from now on that will be possible.

Mr. Lawson

Does my right hon. Friend appreciate that the kind of problem facing the Upper Clyde is a problem typical of large sections of British, and particularly Scottish, industry? Will he take it from me that the people of Scotland are grateful to him for his efforts to ensure that this concern gets down to the business of building ships economically?

Mr. Benn

I am grateful to my hon. Friend for what he said, but particularly for his last phrase, because the security of employment on the Clyde and maintenance of its capability depends upon people there making money out of making ships. Anybody can make ships at a loss; it is making money out of making ships which is difficult. That is what I hope the S.I.B. help, through reconstruction and in other ways, will make possible.

Miss Harvie Anderson

I welcome this new chance to save the Clyde from catastrophic disaster. Will the Minister re-emphasise that not only must the Clyde build ships economically, but it must have particular reference to delivery dates? Will he now urge all concerned to place all their interests on the hard work necessary to get delivery dates right, so that confidence to place new orders may be quickly restored?

Mr. Benn

The hon. Lady, who has taken a keen interest in this matter, is on the point. However, whether it is for me to tell Upper Clyde Shipbuilders how to run their affairs, I doubt. My object in the exercise throughout has been to get both sides to accept responsibility themselves for the solution of their own problems. Judging from what has happened over the last few weeks, I am confident, and I always have been throughout, that this task may be accomplished successfully.

Mr. Rankin

During his visits to Clydeside, did not my right hon. Friend observe that one of the chief troubles there was lack of consultation by employers with the men and lack of co-operation? Does he not agree that unless we manage to establish that on the Clyde the troubles that have faced us may again occur in the not too far distant future?

Mr. Benn

The problem of communications in industry is not confined to Upper Clyde Shipbuilders. Communications between management and shop stewards throughout large parts of industry are nothing like good enough. One of the things that has emerged from this crisis has been the readiness of the union to accept responsibility and to institutionalise that responsibility by machinery that will guarantee much better communications in future.

Mr. Edward M. Taylor

Is the right hon. Gentleman aware that there is great relief on Clydeside that this catastrophe has been averted and appreciation of the time and attention which he has given to this great problem? However, as a further contribution to the restoring of confidence quickly, will he say that the facilities of the S.I.B. and E.C.G.D. for taking on new orders will be available to the group?

Mr. Benn

I am grateful to the hon. Gentleman for what he said and also for coming to talk to me and putting his own experience at my disposal when I was there 10 days ago.

The statement by the S.I.B. goes as far as would be reasonable in the circumstances and says that the Board would be ready to discuss early next year, if necessary, with the reconstructed board and management the developing financial situation. I think that that is all I need say about that.

Export credits are handled separately, but to the best of my knowledge they have not posed any special problems, other than those which have been raised by the shipbuilding industry, against the rest of which the Clyde is competing. We must not put one group in an advantageous position relative to the others, although the nature of the problems inherited may differ from place to place.

Mr. Hugh D. Brown

Does my right hon. Friend agree that the outstanding impression in the negotiations has been of the co-operation from the trade unions in spite of what everybody knows to have been a completely inefficient management? Is he aware that there will be strong support—and we should not be mealy mouthed about this—for the Government action and the S.I.B. intervention in changes in the board?

Mr. Benn

This is all agreed as part of the settlement announced yesterday. I need not go into the details, because this will be discussed during the next few days between the two sides involved. However, I should like to pay tribute to the trade union leaders themselves in Upper Clyde Shipbuilders who accepted responsibility, on behalf of their own members and later with the support of their own members, for some very detailed decisions to maintain the viability of the group.

Mrs. Ewing

As one of the main difficulties has been the adequacy of the working capital of U.C.S., may we take the Minister's statement to mean that he is satisfied that it will be sufficient and that U.C.S. has changed its mind about the adequacy? For example, does it now think that £5 million will be sufficient for it to be able to alter its purchasing method of steel, which was one of the bones of contention?

Mr. Benn

The hon. Lady knows that there has been a difference of judgment on this matter over a long period. I do not want to add any gloss to what has been said by the board of U.C.S. in its statement yesterday in accepting the conditions. However, the feeling that there was a gap to which could be attached an actual figure did more to destroy the confidence of customers and suppliers than any other single factor. Therefore, if I am reluctant to go into the alternative judgments about what would or would not have been sufficient, it is because I hope that, whatever else we do, we shall not repeat that experience in respect of this or any other company.

Mr. Barnett

I am conscious of the social responsibility which my right hon. Friend has fulfilled. However, does he not feel, in view of what he has said about the commercial aspects of this sort of transaction, that he owes it to the House to give some facts and figures to explain why he believes this to be a viable proposition when no commercial organisation has felt able to lend even a marginal amount of money? After all, it is the taxpayer who is providing the funds. Will not my right hon. Friend therefore consider presenting the House with facts and figures to justify in commercial terms the provision of these sums?

Mr. Benn

If my hon. Friend had applied that argument it would have led him to vote against the Shipbuilding Industry Bill which we introduced, after the Geddes Report, to provide help for the reconstruction of the shipbuilding industry and to meet transitional losses. It is a matter of judgment by the S.I.B. board what to recommend and the House decided that this should be left to the judgment of Sir William Swallow and his colleagues. I am responsible for assenting and agreeing to their recommendations and I am accountable to the House for that.

However, if my hon. Friend thinks that that means that the private affairs of private companies with whom the Government have relations should be published in detail, I think that he is going too far. I believe that discussion of the annual report of the S.I.B., which I have to present and defend, will provide far more Parliamentary accountability than has been provided by previous Governments for support of private industry.

Mr. David Price

Will the right hon. Gentleman consider publishing a White Paper giving at least that amount of information which, under the Companies Act, a public company would have to give when reconstructing its capital? I appreciate what he said about privacy, but would he not consider giving rather more information to the House than has so far been made available to us?

Mr. Benn

I will consider anything that the hon. Gentleman says, because he has been concerned with this matter from the time when the legislation was in Committee. But we agreed then that the report of the S.I.B. should be as full as possible. I am open to Questions. I understand that I am to be invited to give evidence to a Select Committee of the House which is interested in this matter. I hope that the hon. Gentleman will not push me into what would be damaging and which would lead any Government doing business of any kind with industry into being obliged to hold discussions in such a way that it would be impossible for the firm concerned to maintain normal business practices. That is why I am not able to go beyond what I have already said about a White Paper.