UPPER CLYDE SHIPBUILDERS (Hansard, 5 May 1969)

§ The Minister of Technology (Mr. Anthony Wedgwood Benn)
Yes, Sir. The Upper Clyde Shipbuilders have submitted a corporate plan to the Shipbuilding Industry Board with a request for grants to cover present and expected losses and loans for capital equipment.
37 The Shipbuilding Industry Board has considered this request, and other possibilities, and has discussed the matter both with U.C.S. and myself. I cannot disclose exchanges that have taken place between the U.C.S., the S.I.B., and myself without revealing confidential commercial information.
However, I expect to make a statement on further S.I.B. support for shipbuilding on the Upper Clyde in the next few days.

§ Mr. Campbell
Does the right hon. Gentleman recognise that the seriousness of the situation, which was confirmed by the statement of U.S.C. over the weekend, requires a restoration of confidence so that orders may continue to be placed, remembering that up to 14,000 jobs are involved?
Since the Government sponsored this merger on the Upper Clyde, and since the new managing team was given three years in which to put it into effective operation, are not the Government under some obligation to give necessary help at this early stage?

§ Mr. Benn
I am very well aware indeed of the position. I must tell the hon. Gentleman, however, that I regard the statement which was made by the Chairman of Upper Clyde Shipbuilders over the weekend as completely irresponsible, because he knew very well that the case was under consideration. By making that statement he has created a great deal of confusion. It has made a realistic assessment of the position more difficult.
I appreciate that the livelihood of a large number of people is involved. The hon. Gentleman should know that substantial help has been given to Upper Clyde Shipbuilders and that I visited the yard twice during the last three months and have been in almost daily contact with all those concerned.

§ Mr. Rankin
I thank my right hon. Friend for what he has said. Would he agree that the situation, as I found it at U.C.S. over the weekend, is extremely serious and has been giving the Board a great deal of concern? Ls he also aware that the seriousness of the situation is causing much discontent among the men? Does my right hon. Friend realise that if something disastrous were to happen there, then even the regional 38 policy which the Government have prepared or are in the process of preparing for Scotland may be damaged? Will he—

§ Mr. Speaker
Order. Supplementary questions must be brief.

§ Mr. Rankin
Will my right hon. Friend give the most serious consideration to that aspect of the problem and see that sufficient aid is given to U.C.S. to help it out of these difficulties; that sufficient money, not doles from month to month, is given?

§ Mr. Benn
I assure my hon. Friend that I am very well aware of the difficulties. I must, however, reiterate what I said: that it is extremely difficult to maintain confidence in a group, which has serious inherited problems to overcome, if public statements are made such as that to which I referred. I have met members of the board of Upper Clyde Shipbuilders on eight occasions during the last three months. It is extremely difficult if public statements of this kind are made to solve these difficulties.
The House should recall that U.C.S. has received about £3 million of the £10 million grants that have been committed, that it has received £5½ million in loans out of the £14 million loans committed, and that we are doing our very best to create a viable shipbuilding operation on the Upper Clyde. I must ask the House to allow me to conduct confidential negotiations with the people concerned without the sort of Press campaign which has been waged over this case.

§ Miss Harvie Anderson
Does the right hon. Gentleman accept that in a situation in which liquidation hangs over this company this very weekend, with the jobs of 13,500 men at stake, it is essential that we have a decision from the Government? Will the right hon. Gentleman now give a precise answer and say what amount of money will be made available and the terms on which he is prepared to offer it? Is he aware that anything less than a long-term decision in this matter must cause a further lack of confidence?

§ Mr. Benn
I appreciate that the hon. Lady knows the situation very well indeed and is anxious to help. She must recognise that there is no safety net beneath any firm or industry in this country. 39 She will appreciate that there are some very formidable problems to be faced.
In March, I went to the Clyde at a time when absenteeism was running at the rate of 16 per cent., at a time when, in the four weeks before I arrived, 10,000 days had been lost through unofficial stoppages and at a time when the steel throughput was lower than the national average.
I addressed 10 meetings, including meetings at which most of the people working in the yards and the members of the board were present, and I had to tell them that there was no safety net beneath them and that the future of U.C.S. would be decided by the work that was done by management and men on the Clyde with Government help, which we have been ready to give and which we are still anxious to consider.

§ Mr. Russell Johnston
Would the right hon. Gentleman nevertheless accept that it is vitally important that the short-term commitments of the group be met and that if the unviable components of the group must be phased out, as some people suspect, it is the responsibility of the Government to launch a major retraining and re-employment programme?

§ Mr. Benn
We accept the responsibility which we have undertaken in setting up the Shipbuilding Industry Board under the Act which Parliament passed, through which we handed over responsibility to a group of industrialists and trade unionists, putting at their disposal £53½ million to carry through the reorganisation with the object to creating a viable concern. I have neither the power nor the responsibility to sidetrack the work of the Board to maintain indefinitely security for those who ultimately must themselves become viable.

§ Mr. Bence
Notwithstanding the inherited difficulties of U.C.S., and since the company has a very large order book—an order book of a size which I doubt any other company in this country could produce profitably—will my right hon. Friend see that the resources of the Clyde, whether by U.C.S. or others, are used to comply with that order book and fulfil the obligations to its customers which U.C.S. has undertaken?

§ Mr. Benn
I recognise this, but only the profitable discharge of orders will guarantee security of employment for the people working on Upper Clyde. In view of the problems of absenteeism, unofficial stoppages and totally irresponsible statements of the kind made over the weekend, it is extremely difficult for those of us who are devoting a great deal of effort to seeing that U.C.S. succeeds, to achieve our task. However, I remain confident that that can be done.

§ Sir C. Osborne
Would the right hon. Gentleman consider issuing a statement to explain why this enterprise has proved so unprofitable and why these losses have arisen? Will he also issue a statement, in clear terms, to explain to the management and men that there is a limit to which the State can go in subsidising them indefinitely?

§ Mr. Benn
I have explained that I went to the Clyde and addressed 10 meetings there to point out to the men on the spot as well as to the board the position concerning their desire for long-term support. We should not forget that their inheritance—this had better be clearly stated—includes an inheritance of bad management. This is one of the problems, though not the only one, which the Clyde must face.

§ Mr. William Hamilton
Is my right hon. Friend aware that hon. Members opposite argue that Upper Clyde Shipbuilders should be given or lent £12 million of public money over the next three years, and that that suggestion comes oddly from an Opposition who ask for decreased public expenditure? But will my right hon. Friend give an assurance that if public money is put into Upper Clyde Shipbuilders, there will be a good degree of public accountability and a guarantee of a return to the State?

Mr. Bean
As to the Government's interest, we are departmentally shareholders in the Upper Clyde operation, through the Fairfield operation.
As to the view of the Opposition, the right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) pledged in his television broadcast on the Budget that he would repeal the Industrial Expansion Act, without which Upper Clyde would not have been able to operate.

§ Sir G. Nabarro
Is it not a fact that the Clyde builds naval vessels? Would it not be wise, in the predicament in which the Government find themselves, to go out to attract rewarding new business, including the business available today for three modern frigates for Greece?

§ Mr. Benn
The question of the export of products raises another matter. I would be very surprised if the hon. Gentleman was really advocating that the various restrictions on the export of arms, including the arrangements made between ourselves and our allies, should be totally abandoned to meet the problem which currently confronts us.

§ Mr. Shinwell
My right hon. Friend has been engaged in confidential discussions with U.C.S. Will he agree that in view of the large sums that have been mentioned, ranging from £9 million to £15 million, it is desirable that before any further sums are handed over to U.C.S. the House should have an opportunity to discuss the organisation of that concern and, in particular, not only the question of absenteeism, which we deplore, but the need for expert management?

§ Mr. Benn
I recognise what my right hon. Friend has in mind, but it will be very difficult—indeed wrong—to ask the House to look in detail at the management problems of any of the firms with which we deal. That would be asking too much—[HON. MEMBERS: "Why?"] I mean in the sort of detail that some hon. Members might like.
But may I take the opportunity given to me by my right hon. Friend's intervention to repudiate entirely—and he will share this view—the suggestion that there has been any pressure put on me or representations made to me from hon. Members representing North-East or other shipbuilding areas not to help Upper Clyde. That is totally untrue.

§ Mr. David Price
To assist the House, would the right hon. Gentleman have placed in the Library the corporate plan, which I understand was prepared by Upper Clyde and sent to the S.I.B. and the Minister, so that the House can the better evaluate the proposal put forward by the board of Upper Clyde Shipbuilders? As to the board's proposals 42 for long-term viability, I think that the right hon. Gentleman will agree that we cannot argue in the particular which is necessary in this case without seeing the proposal put by the board of Upper Clyde Shipbuilders.

§ Mr. Benn
I will consider that suggestion. Some information was published yesterday. No one will know better than the hon. Gentleman the difficulty, when Government are deeply involved with industry, of revealing public matters which involve the commercial viability of a company, whether in shipbuilding, aircraft, or defence. Subject to that, I will see how much information can be made available.
The point at issue is that the corporate plan, with previous support, would require Upper Clyde pre-empting more than 50 per cent. of the grants made available by this House for the whole of the United Kingdom shipbuilding industry—that is, before the Wear or the Lower Clyde have qualified for any grant at all.

§ Mr. Speaker
Order. Statement. The Secretary of State for Social Services.

§ Miss Harvie Anderson
On a point of Order, Mr. Speaker.

§ Mr. Speaker
Not now—later.