HC Deb 17 April 1972 vol 835 cc31-6

The following Questions stood upon the Order Paper:

36. Sir T. BEAMISH

To ask the Secretary of State for Trade and Industry if he is now in a position to state what precise agreements have been or will be made with the trade unions concerned as a precondition of Government support for Govan Shipbuilders Limited; which restrictive practices are to cease; whether all collective agreements on pay and conditions will be legally enforceable; what trial period is allowed during which effect must be given to any such agreements; and if he will make a statement.

50. Mr. BRUCE-GARDYNE

To ask the Secretary of State for Trade and Industry if he will make a further statement about the progress of his negotiations with the Marathon Manufacturing Company regarding the provision of financial assistance for the re-equipment of the Clydebank Yard, and outline the methods to be used to monitor the expenditure of such assistance on the purposes for which it may be granted.

54. Mr. EDWARD TAYLOR

TO ask the Secretary of State for Trade and Industry if he will now make a further statement on the position of Govan Shipbuilders Limited.

57. Mr. DOUGLAS

TO ask the Secretary of State for Trade and Industry if he will make a further statement regarding the shipbuilding industry on the Upper Clyde

58. Mr. MILLAN

TO ask the Secretary of State for Trade and Industry if he will now make a statement on the application of the Marathon Manufacturing Company for financial assistance at Clydebank.

The Minister for Industrial Development (Mr. Christopher Chataway)

With your permission, Mr. Speaker, and that of the House, I should like to answer Questions Nos. 36, 50, 54, 57 and 58.

Govan Shipbuilders Ltd. and the Confederation of Shipbuilding and Engineering Unions have reached an agreement on working practices which is now being considered by my right hon. Friend the Secretary of State for Employment.

A further £1 million is being made available to the liquidator for working capital, pending the takeover by Govan Shipbuilders Ltd.

Negotiations have been concluded also between J. & C. Harrison Ltd., Govan Shipbuilders Ltd., the U.C.S. liquidator and my Department to enable work to start on two 26,000 tons deadweight bulk carriers at the Scotstoun yard. The trade unions concerned have promised their full co-operation in the timely construction and delivery of the ships. Details of the financial commitments entered into are being published in the OFFICIAL REPORT.

I have invited Mr. Harbin of Marathon to come to London for further discussions about the possible acquisition by the company of the Clydebank Yard, and he hopes to come this week.

Following are the details:

Financial commitments and liabilities undertaken in respect of two bulk carriers for J. & C. Harrison Ltd. and Gowland Steamship Co. Ltd. and in the provision of working capital to the liquidator.

In his statement of 29th November, 1971, the Secretary of State referred to the provision of guarantees to ship owners and the liquidator and to the provision of working capital to the liquidator.

Guarantees

2. Negotiations have been concluded with J. & C. Harrison Ltd., Govan Shipbuilders Ltd., and the U.C.S. liquidator to enable work to start on two 26,000 tons deadweight bulk carriers in the Scotstoun yard.

3. The completion of both orders at the original contract prices will involve Govan Shipbuilders Ltd. in a construction loss estimated to total £2 million. It has agreed to sustain this loss within the total of up to £17 million allowed for this purpose in the Hill Samuel report (Cmnd. 4918).

4. The liquidator was prepared to adopt the two U.C.S. contracts only if he were assured that no extra cost would fall upon the U.C.S. assets. The Government have agreed, there fore, to fund the initial costs of construction in so far as these costs are not covered by payments received from J. & C. Harrison Ltd. These sums will be recovered later from Govan Shipbuilders Ltd.

5. The Government have agreed to issue an extra statutory credit guarantee to the ship owners to enable them to obtain the necessary finance and have also undertaken in the event that the ships are not delivered by certain dates, to refund all future payments made by the owners.

Working Capital

6. A further loan of £1 million will be made available to the liquidator for working capital on the same terms as those applying to the loan of £1.5 million announced to the House on 29th November, 1971.

Sir T. Beamish

Is my right hon. Friend satisfied that the promises to abandon unjustifiable restrictive practices go far enough? Further, to what extent would the provision of £35 million of taxpayers' money, largely on social rather than commercial grounds, be justified if these promises were not kept?

Mr. Chataway

As my hon. and gallant Friend knows, considerable importance has been attached by my right hon. Friend the Secretary of State to the matter to which he refers. The agreements now reached between Govan Shipbuilders Limited and the unions are, therefore, being studied by my right hon. Friend the Secretary of State for Employment to ensure that they are acceptable to the Government.

Mr. Bruce-Gardyne

With reference to the current discussions, is it not a fact that there is no precedent for assistance to a single firm under the Local Employment Acts on the scale which has been talked about? If that be so, will my right hon. Friend give particular attention to ensuring that proper procedures are followed for the monitoring of sums provided to ensure that they are used for the purposes for which they are allocated?

Mr. Chataway

Any assistance which is made available to the Marathon company will be under the general powers available to my Department, according to the criteria which would apply to any company. Under the Local Employment Acts, there is a monitoring procedure, and this will certainly be followed.

Mr. Douglas

Will my right hon. Friend give an assurance that in the discussions with the Marathon company an invitation will be extended to Mr. Dannie McGarvey, of the boilermarkers'union, who has played such an important part in inducing this firm to come to the United Kingdom?

Mr. Chataway

My right hon. Friend has made clear that he applauds the part which was played by the gentleman to whom the hon. Member refers in visiting a number of companies in Texas which were in contact with his Department.

Mr. Edward Taylor

Will my right hon. Friend take it that the news of the two new orders will be greatly welcomed on Clydeside, and that most Glasgow Members greatly appreciate in any event the splendid and energetic work which he and his colleagues have done to bring the matter at least to this stage? Is my right hon. Friend hopeful that the Marathon deal will come off?

Mr. Chataway

I am grateful to my hon. Friend for what he says. I am anxious to try to reach an agreement with the Marathon company if one is possible.

Mr. Millan

As regards the Marathon company, is the right hon. Gentleman aware that a decision was expected some weeks ago and that the delay in coming to a conclusion has given rise to some anxiety? May we be told that the discussions on which he is now entering will be the final discussions, and that we can expect a decision—a favourable decision very soon?

Mr. Chataway

The hon. Gentleman is wrong about that. The proposals have only recently been put to the Government, and Mr. Harbin has made clear that he at least considers that there has been no untoward delay.

Dame Irene Ward

I make no comment about the amount of money which is going to Clydeside, but may I have an assurance that we shall have the same treatment on Tyneside, where we have had much less restrictive practices and so forth? Further, will my right hon. Friend take it that, if the amount of money which is going to Scotland is set against the £50 million which is, apparently, all that shipbuilders in other areas are to receive, I can only conclude that we are not getting a fair proportion?

Mr. Chataway

It is too soon for me to comment in detail on my hon. Friend's question——

Dame Irene Ward

I want my hon. Friend to comment.

Mr. Chataway

—but I shall certainly take note of her view.

Mr. Small

Will the Minister remember that the whole idea on Clydeside is to keep the four yards in existence, and will he bend his mind to that full endeavour?

Mr. Chataway

I have already told the hon. Gentleman of the action which we are taking in relation to the Marathon company.