§ 5.57 a.m.
§ Dame Joan Vickers (Plymouth, Devonport)
The Mallabar Report is a long, complicated and detailed document. It is unfortunate that the Chairman of this Committee was Chairman of Harland and Wolff during 1966 to 1970, during which years the firm lost £8 millions, so he seems hardly the person to whom one would go to for advice.
The report is also out of date, and it worried me that when it was presented the Government appeared to be willing to accept its recommendations without debate. This is why I asked for one tonight. The Royal Dockyards are in a different category to all other establishments. They are like fire stations, with personnel on hand for an emergency. After all, 5 per cent. of their work is qualified as unplanned programmes. With fewer ships, the turn-round must be much quicker, so there needs to be a stand-by labour force.
What surprised me in the report was that the C.E.D. has a headquarters staff of 294 in three new departments. I should have thought that the Director of Dockyard Manpower and Productivity was not necessary, and that the work was much better done locally in the 477 dockyards themselves. What is forgotten is that each yard has a different personality. Having visited all of them, I know that their ways of working are quite different.
At present, the General Manager has no direct authority over recruiting. In paragraph 51, the report says:At present, the General Manager has no direct authority over recruiting, promotion or dismissal of non-industrial staff, except in respect of temporary clerical staff.At present, the general manager has no possibility either for recruiting industrial staff. The manager is consulted apparently on individuals posted in by the civilian management and also in regard to naval officers, although he has no influence over the selection of naval officers. It must be very difficult for him, as only he knows the day-to-day needs. It is ridiculous that the general managers' department operates in a headquarters located at Bath, in the Dockyard Department. How many staff are there now at Bath? This would appear to be the type of department that should be cut down.
Devonport is the only yard that does construction work. The last survey ship was designed and built in the yard, and this could be done again with great saving of money. For example, if the dockyard says it will build a frigate at an estimated cost of £6½ million, it must be built for that amount. It cannot ask for extra money later, as commercial firms do if costs rise. One of the main problems is that the Admiralty is never wrong, which makes local conditions very difficult. Dockyards have also to contend with the Department of the Environment—the old Ministry of Public Building and Works—which adds to their burdens and delays.
I hope that the general managers will not be forced to retire at 60, unless the C.E.D., who I gather will be 60 next year, will also have to retire. I hope that my hon. Friend will bear in mind that many of the general managers have only been doing their jobs for five years when they reach the age of 60.
The work of naval officers is not properly understood in the report. In the United States the naval dockyards are entirely run by naval officers. They are none the worse for that and turn out twice 478 the rate per civilian as United Kingdom dockyards. The report assumes that naval officers have less experience in yards than their R.C.N.C. and R.N.E.S. counterparts. In practice, this is not so. The latter tend to spend more time away on tours in other areas. Also, naval officers have man-management training, besides being technicians and fully qualified for their own departments.
If we want more efficiency we should get rid of the cloud-cuckoo-land atmosphere of Bath. This will help to eliminate the cynicism at yard level because of the continual petty interference, which I find is extremely aggravating, and the inability of Bath to deal with the root troubles quickly. Any normal private industry would be driven mad by the present régime which the dockyards have to put up with, and that is why I am so disappointed with this report, since there is no real suggestion for improvements.
One wants agreement to build rather than to repair. The Admiralty is continually trying to put new wine into old bottles. I suggest that it is cheaper and easier to go for a few modern ships. The "Ark Royal" has proved what can be done, if necessary, to refit a ship, and it was done excellently but I do not advocate that. I regard it as an expensive way of working the yards, and anyhow I would much sooner see that that is not done to the smaller ships in future.
Further, on the question of the use of the yards, one should remember the excellent work done at the time of the "Torrey Canyon" disaster, which would have been much worse if the dockyard had not taken action.
Besides the ordinary work, one has to think of the accident and emergency repair work done not only for the Fleet but for N.A.T.O. This is an obligation we have to undertake, and it comes under the heading of what I call unprogrammed work.
Unfortunately, at the present time there is a tendency to use private contractors for building or repairing R.F.As, and I hope that my hon. Friend will see that this stops. Also, too much contract work it put out, often with consequent delays, and this at a time when all the work possible is needed in the dockyard to help to counterbalance high unemployment, particularly in the South-West.
479 As regards organisation, I am not discussing the R.O.F.s though I could under this heading. I am dealing only with the dockyards. Unfortunately, they do not have their own Vote as do the R.O.F.s. Dockyard expenditure is approximately £100 million a year, but the figure is clouded by the fact that it has to be split between 18 sub-heads, four Ministry of Defence Votes and 15 Vote holders to P.U.S., P.U.S.(e) or P.U.S.(a), and also now the Department of the Environment. All this causes considerable complication. Why was it not suggested in the report that the dockyards should have their own Vote, as do the Royal Ordnance Factories?
On the question of administration, it is said in paragraph 55 of the report:In many instances their terms of reference do not make the project manager accountable for the resources he is allocated nor is he held responsible for any aspects of the work other than the completion of the task by the required date. In other words, the line management responsibilities for the various dockyard functions remain undisturbed and the project managers' functions are superimposed upon the basic organisation.Then we read that there is one exception; that is,where the project manager is a deputy manager and retains line management responsibilities.That is an extremely complicated way of running things, and I hope that my hon. Friend will look into it.
It should be remembered—it does not seem to be recognised in the report—that the dockyards are building for the Royal Navy, not pleasure cruise ships. Men have to use these ships as their homes. If I wanted to know whether a ship was seaworthy or whether a submarine would behave as it should, I would much sooner have a naval officer do the tests, because he will go to sea in the ship, he will see that it is safe, and he will see also that the conditions are right for his crew.
So let the dockyards get on with the work which they have been doing for 300 years with great efficiency, let them have modern equipment and better working conditions, for in that way we shall get better results.
Paragraph 117(1) says:the Area Industrial and Non-Industrial Whitley Committee over which the Admiral Superintendent presides should have no locus 480 in relation to those staff that are employed in the General Manager's department or whose pay is negotiated by the General Manager.The whole of the Whitley Committee procedure needs revising, particularly with regard to the yards. These should have a greater responsibility for decisions. I worked in the Royal Ordnance Factories during the war and found that the Whitley Committees got bogged down with tiny details of administration, whereas they should take a much greater interest in planning.
Since Devonport is undergoing a £43 million face-lift, I presume—and perhaps my hon. Friend will confirm this—that the yard is in no danger of being closed. I would like this assurance, because it would make a tremendous difference to the whole neighbourhood and employment in the area. I do not take the criticism about there being a high level of overtime at Devonport. The Committee visited Devonport for one morning and did not meet the trade unions. Admittedly, it offered to, but the trade unions, naturally, felt that half an hour was not enough. In my opinion to state "symptoms of unhealthy situations" in the yards is not accurate. We have loyal, hardworking and highly skilled men working in the yards, and the strike record must be the envy of all commercial yards.
We believe that the Navy should act as the customer, and we have always been told that the customer is always right. The R.N. officers play a helpful rôle and they are highly skilled. I am grateful to the Minister who is to call a meeting to talk with dockyard M.P.s. I want an assurance that there will be consultations with each of the yards before decisions are taken. Many changes have taken place recently and it would be unwise and unsettling to make too many alterations and so destroy the pattern of work. There are five study groups working in the Admiralty, and a Departmental feasibility study of the validity of these recommendations is being held. There are also two management consultant exercises. I wonder why it is necessary to have this fantastic number of committees when so little seems to be coming out of them. No wonder people are anxious about their daily work.
My next topic is something not mentioned in the report. It has to do with 481 inventions. The dockyards have a good record for inventions among their employees. This encourages them to help in the working of the yard. They receive only £20 reward. I understand that the judgment methods are cumbersome. They should be quicker. I am grateful to my hon. Friend, who has been very helpful about one case. I had a letter from him yesterday. I would like to see these people being allowed to patent their inventions and get 5 per cent. of any of the royalties. This would be a great incentive for improving the efficiency of the yard.
I thank my hon. Friend for coming here to reply. He may not be able to do so in detail, but I know that we shall have a further opportunity for a meeting next week.
§ 6.10 a.m.
§ The Under-Secretary of State for Defence for the Royal Navy (Mr. Peter Kirk)
I am grateful to my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) for giving me an early opportunity to comment briefly on the report on the Government's civil industrial establishments, which was laid before the House earlier this month. She suggested that the Government wished the report to be accepted without debate. That was a little unfair. We were, indeed, under no obligation to publish the report at all. We did so, however, and, as my hon. Friend has said, I have invited, in relation to the second part of the report, which concerns me, all those hon. Members with interests in the dockyards to meet me next week to discuss the best way to implement those sections of the report which can be implemented and which parts should be implemented.
The first part of the report concerns the Royal Ordnance Factories, which are not strictly within my competence. It is being considered by the new Defence Procurement Agency, and when Mr. Rayner has completed the study he will report to my hon. Friend the Secretary of State for Defence.
Some of the points my hon. Friend raised spring from the report and some are peripheral to its main theme. I am grateful to Sir John Mallabar and his colleagues for their work. It is true that the work has been overtaken by events to some extent. Nevertheless, the principles behind it are acceptable to 482 the Government, and over the last two years we have taken a number of steps to inject a greater sense of purpose into the dockyard organisation, which was what the report had in mind.
I know that my hon. Friend is not fond of boards and inquiries but we have streamlined the organisation, both under my predecessor's direction and mine, into three new boards. The first is the Royal Dockyard Management Board under the chairmanship of the Chief Executive, with the membership of the three headquarters directors and four home general managers. It meets at frequent intervals to discuss general policy issues affecting the home dockyards. A point overlooked by my hon. Friend perhaps in her criticism of Bath is that quite a few problems are common to the four home dockyards and, indeed, to Gibraltar, and need to be considered centrally. Many of them concern vital matters of manpower and productivity. This is why the Director of Manpower and Productivity has a key post and the Board has the task of reviewing management throughout the four home dockyards and trying to ensure as great a degree of commonality as possible.
Secondly, there is the Headquarters Board, which is again under the chairmanship of the Chief Executive. The three headquarters directors are also members. This goes round the Navy yards to monitor the state of affairs in each and the progress being made with individual programmes.
Finally, there is the Royal Dockyard Policy Board, which is under my chairmanship. The terms of reference are to consider and advise on management policy for achieving the best use of the material and human resources available to the Royal Dockyards. It consists of all those members of the Admiralty Board concerned with the dockyards, plus the Chief Executive and two outside members chosen for their expertise in finance and management—Sir Henry Benson, of Cooper Brothers, and Mr. Richard O'Brien, of the Delta Metal Company.
Following this central reorganisation, which coincided with the appointment of the Chief Executive, we are progressively introducing, as the report recommended and as my hon. Friend mentioned, project managers into all the yards to handle large individual projects, particularly 483 modernisations and conversions, Good examples are H.M.S. "Ark Royal" and the conversion of H.M.S. "Hermes" to commando carrier and of H.M.S. "Matapan" to experimental trials vessel. The most dramatic example of all is the recently completed refit of H.M.S. "Resolution" at Rosyth. This was an extremely sophisticated and difficult job and it was finished on time—a fact which was much admired by the United States Navy, as I discovered when I visited the United States last month.
Paragraph 9 of the report contains certain strictures about the dockyards, referring particularly to the high levels of overtime, waiting time and low productivity. I think that these strictures are now out of date. There has, clearly, been a marked improvement in these matters, and all the indications are that the productivity agreements now operating in each dockyard have done much to remove these specific complaints.
My hon. Friend referred specifically to the authority of the general manager, particularly his authority to hire and fire non-industrials and his authority over naval officers. We have gone some way over the last few years to strengthen the authority of the general manager and to give him a clear chain of command through the chief executive and ultimately to the Chief of Fleet Support, who is the responsible Board member. I think that every general manager now knows precisely where he stands in the hierarchy, and the line of responsibility is clear and direct.
Nevertheless, we have to realise that we are not dealing with a normal commercial operation. We are dealing with something which, whether rightly or not, is part of the Civil Service, and the normal Civil Service rules apply. Therefore, it is not possible to give the general manager the same authority over non-industrials which would be enjoyed by the general manager of a totally independent company.
My hon. Friend referred also to the retirement of the general manager at the age of 60. Here, too, we are bound by the Civil Service rules. In the Civil Service the clear rule is that people retire when they reach 60, and there seems to be no good reason why we should attempt to make an exception in 484 respect of general managers. That is not to say that I do not acknowledge the contribution which they have given to the dockyards, but they themselves would recognise that if we are to attract the right calibre of person that we want in the management of the dockyards, we cannot afford to retain senior staff in excess of the normal time and so deny promotion opportunities to those below. In this we are no different from any industrial or commercial undertaking which seeks to bring its young men along.
My hon. Friend referred to the employment of naval officers in the dockyards. She specifically mentioned the United States experience. While in the United States, I managed to visit the naval yards at Longbeach and Boston and there saw the major part that naval officers play in the management of the dockyards. Indeed, the whole of the higher management of the dockyard is in the hands of naval officers, although I would not go so far as my hon. Friend did and say that nearly all management is. Further down the line individual plants are managed by civilians.
There is a suggestion in the report that the quota system for naval officers in some way prevented flexibility. I do not think that that is true. There is certainly no prejudice against the employment of naval officers in dockyards, and the quota system is for planning purposes only. The chief executive is fully consulted about every naval appointment before it takes place in the same way as he is about all civilian appointments.
The report suggests making certain posts open to naval officers and civilians to which appointment should be made on merit. This would give rise to a number of practical difficulties in career planning, and the way in which we handle the matter at the moment is probably better.
Another matter has been worrying my hon. Friend and a number of other hon. Members who are connected with the dockyards. It is the suggestion in the report that, where possible, there should be greater competition with outside yards and, secondly, that we should consider whether there is likely to be scope for closing a dockyard. My hon. Friend herself mentioned the work put out to contract and particularly the Royal 485 Fleet Auxiliary ships. We avoid putting work out to contract as much as we can. Experience has shown that the scope for placing warship work with commercial shipyards is subject to serious limitations. In particular, commercial yards do not have the facilities necessary to handle a modern sophisticated weapons system. The dockyards, on the other hand, are equipped to handle, with certain major exceptions, all work arising from refits. Since it would be uneconomic to duplicate expensive facilities, Ministry of Defence policy is to resort to contract refits only in those cases where the work cannot be physically handled in the Royal Dockyards either because of a temporary overload in certain trades or because specialist plant and equipment does not exist. The recent decision—the first for a long time—to place the refit of H.M.S. "Otter" to contract is an example of the former. It is the first warship to be refitted by contract for many years, and we have no plans to put any other warship out to contract.
As to the second point concerning the possible closure of a dockyard, while no one can be expected to forecast the future for decades ahead, I assure my hon. Friend that we have no plans to close any of the home dockyards. If it were the case that the dockyards were not fully loaded, no one could quarrel with the general proposition in the report that it would be more cost-effective to close down one yard and utilise the remaining three to the full rather than retain four under-used yards; but that is not the case. This situation is purely hypothetical.
As far as we can foresee, the dockyards will have a more than adequate workload in the future. In addition to their normal task of repairing warships, there is scope for the refitting of Royal Fleet auxiliaries when capacity is available. When the capacity is not available, they must be refitted by commercial yards. We also intend to continue to build certain small craft in the dockyards. As my hon. Friend knows very well, we retain the option to build larger vessels at Devonport.
Whatever scale of dockyard operations might be dictated by current needs of the Fleet, we are determined that the dockyards shall continue to improve their 486 efficiency as industrial units. There is evidence that the local productivity agreements, which exist, I am happy to say, in each dockyard, are leading to improvements in date-keeping and containment of costs, and we are anxious to continue this trend in an atmosphere of good industrial relations.
As part of this process, a special meeting of the Shipbuilding Trades Joint Council is to be held on 18th August to consider with the trade unions ways and means of tackling present difficulties, particularly at Devonport, in the balance of manpower, capacity and workload in a manner that will continue to reap the benefits of both management and men of the productivity agreements. The discussion will include such matters as the size of the apprentice entry, retirement policy and the need for an element of retraining if redundancy is to be avoided. I attach great importance to the meeting and hope that it will be a considerable success.
My hon. Friend mentioned also the reference in the report to the Whitley Council. I think that the Committee took a rather oversimplified view of the present Whitley structure. So far as the general manager's organisation is concerned, the present Whitley consultative facilities are satisfactory. In matters of local negotiation, the general manager has independent and full control through the separate joint productivity negotiating committees whose existence is authorised by the Shipbuilding Trades Joint Council. I do not consider, therefore, that it is quite as simple as the Committee appeared to think to set up a Whitley Council for the general manager's organisation at the moment. The way we are doing it, although it may appear to be clumsy, works a good deal better.
My hon. Friend referred to awards and asked whether I thought that £20 was adequate. Probably in many cases it is not adequate, but these matters are dictated as general policy over the whole Government field. I certainly take the point made by my hon. Friend and I will look into it. As she will recognise, I could not this morning promise her any improvement in this regard.
I am extremely grateful to my hon. Friend for raising this matter. I think that the report has been worth while, even if we are unable to endorse all its recommendations, and I believe that we are 487 now moving towards a sensible system within the Royal Dockyards which will be of great service to the fleet and to the country as a whole.