HC Deb 05 July 1971 vol 820 cc908-12
17. Mr. Millan

asked the Secretary of State for Trade and Industry if he will now make a further statement about Upper Clyde Shipbuilders Limited.

Mr. John Davies

No, Sir. The many questions answered in the House on this subject have explained the Government's position. As soon as I am in a position to make a further statement I shall do so.

Mr. Millan

In view of the appalling unemployment figures on Clydeside, will the right hon. Gentleman take it from me that no reconstruction of Upper Clyde will be acceptable unless it preserves all existing jobs? Will he impress that upon the four advisers whom he has appointed?

Mr. Davies

I take note of what the hon. Gentleman said, but I feel sure that he will agree that, in the interests of the people employed there, the important thing is to have long-term viable and prosperous shipbuilding on Upper Clyde.

Mr. Benn

As the liquidator has money to pay wages until 5th August, will the right hon. Gentleman assure the House that there will be no redundancies declared in Upper Clyde during the long recess?

Mr. Davies

I shall have to look at the matter as soon as I have the advice of the team of experts which I have assembled to give advice on the subject and had an opportunity of talking further to the liquidator. At this stage I cannot go further than I have already gone.

24. Mr. Lawson

asked the Secretary of State for Trade and Industry why he suspended credit guarantees in respect of ships being built by Upper Clyde Ship builders Limited.

Mr. Ridley

I refer the hon. Member to my replies to the hon. Member for Glasgow, Craigton (Mr. Millan) and other hon. Members on 28th June.

Mr. Lawson

Will the hon. Gentleman say how it is that his right hon. Friend can say that he had only 48 hours' notice of the difficulties of this concern, when it is quite clear from the answers we have had that his Department have been in touch with either the director or the company since mid-October of last year?

Mr. Ridley

As I explained in answer to the last Question, we had doubts about the viability of U.C.S. in the autumn of last year. These doubts were resolved by the capital reconstruction and the injection of funds from ship owners which enabled the Government to grant credits again to U.C.S. The Government would certainly not have granted credits if they had not been confident about the viability of U.C.S. at that time.

25. Mr. Buchan

asked the Secretary of State for Trade and Industry if he will publish in the OFFICIAL REPORT a copy of the letter dated 3rd May, 1971 written to his Department by Upper Clyde Shipbuilders Limited.

Mr. John Davies

A letter sent by the company on 3rd May was published in the OFFICIAL REPORT on 28th June.—[Vol. 820, c. 9.]

Mr. Buchan

I am aware of that, but will the Secretary of State make sure that his right hon. Friend the Prime Minister is aware of it, because he did not seem to realise the facts given in it last week. Is not this letter yet another example of the squalid conspiracy initiated by his hon. Friend the Under-Secretary to butcher Upper Clyde? Did not the letter make it perfectly clear that while the company was in a favourable trading position, the cash position was acutely difficult, which the right hon. Gentleman said that he did not know until 48 hours previously?

Mr. Davies

I take it that the hon. Gentleman has either not read what I said or has not read the letter. The letter quite clearly accompanied a delayed statement on the state of the company at the end of March, which should have been in earlier. It was a delayed statement. The company declared in February its confidence in its own future. The Government accepted that, and renewed, as my hon. Friend has said, the provision of guarantees. The company only then, on 7th May, realised that it was not in possession of adequate knowledge about its financial future and commissioned a study of it. That study emerged on 7th June, when, for the first time, the company apparently realised that it was trading in deficit. It informed me of that matter 48 hours later, and 48 hours before it proposed to appoint a provisional liquidator. Those are the facts.

35. Mr. John Robertson

asked the Secretary of State for Trade and Industry how much additional public money he has now committed to keep work going at Upper Clyde Shipbuilders Limited and to provide assistance for a reconstruction of the company.

Mr. John Davies

As I said in the Answer I gave the hon. Member and others on 28th June, the best estimate of the Provisional Liquidator's total requirement from the Government until 6th August is £3 million.—[Vol. 820, c. 12.]

Mr. Robertson

Does the Secretary of State agree that the proposed reconstruction might have been carried out at less cost to the taxpayer and with less disruption to the industry if there had been an outright acquisition by the Government?

Mr. Davies

No, I do not think so. In fact, it was not even practicable because of the inadequate notice which the Government had of the liquidation. I doubt even so that it would have been a sensible solution. The right solution is the solution that the Government are pursuing, to try to bring about a viable, effective reconstruction on the Clyde. I greatly hope that this will be the outcome of these affairs.

Mr. Benn

Will the Secretary of State now give the House his estimate of the total cost falling on public funds from the redundancies expected due to the reconstruction?

Mr. Davies

No. I have said earlier that at present it is impossible to say what the employment outcome will be on the Upper Clyde, so clearly the right hon. Gentleman's question cannot be answered. However, as the right hon. Gentleman seems singularly unable to see the difference between the two, it is worth while my mentioning that to put in £3 million to procure a healthy construction is much better than putting in successions of £6 million to bolster up.

50. Mr. Rankin

asked the Secretary of State for Trade and Industry what is the number of ships presently under construction at Upper Clyde Shipbuilders Limited; those ready for launching; and the total number on the order book.

Mr. Ridley

Work is proceeding on 14 ships, of which six have been launched and are fitting out. Two more of these ships are expected to be launched by the end of July. The total order book is 31 ships.

Mr. Rankin

Does the hon. Member agree that ships under construction, ships ready for launching and ships on the order book all represent potential wealth? Will he promise that money will always be forthcoming to make that potential wealth a real thing in the community life of Scotland—and of England, too?

Mr. Ridley

Whether it is in the interests of all concerned to complete a specific contract is a matter which the liquidator is by law bound to consider, and it would be wrong for me to seek to interfere with him.

Mr. Rankin

On a point of order. Here is an issue of almost life and death—[Interruption.] Of course it is. Instead of the Minister's giving an answer that includes his responsibility he seeks to shove it on to the liquidator, over whom we have no control.

Mr. Speaker

The hon. Member knows that that is not a point of order.