§ 12.47 a.m.
§ Mr. James Hill (Southampton, Test)
Mr. Deputy Speaker,Almost alone among the ports of the United Kingdom Southampton has succeeded in surviving in an almost sylvan setting.That quotation is from a local newspaper, and it is perhaps the reason why Ministers and decision-makers invariably think that in such an idyllic and prosperous setting ship repairing has the greatest chance of profitability with the least amount of unemployment. This, unfortunately, is far from the truth. In the past two years I have been trying in various ways to point out to the Department of Trade and Industry, and now to the new Department for Industrial Development, that, although Southampton is not in a development or intermediate area, its ship-repairing industry is in dire need of support.
The unemployment figures alone which are issued each month have the usual column for men, women, boys and girls and a fifth and final column for ship-repairing workers. The grand total of unemployed in Southampton on 14th August this year was 4,042–3.3 per cent. of the working population. These figures include the ship-repair workers, totalling 620. Almost 20 per cent., then, of the unemployed are connected with the ship-repairing industry. That is before the 400 employees who are kept on waiting time have been added.
Waiting time is a curious form of payment called fall-back pay in the ship-repairing industry which adds to the 222 wages bill each year both of Vosper-Thornycroft and Harland and Wolff approximately £500,000 with no associated productivity. So, to look at it logically, the numbers on waiting time should be added to the total of the unemployed in the industry as they, too, have no work during this period.
It may be of interest to the House to know that in 1965 the labour force in the two local yards was 3,500. It is now about 1,350 and it is still dropping. The projections for the first half of the next year are in the region of 1,000.
I had a letter on 24th May from the Joint Shop Stewards Committee of Vosper-Thornycroft. In it the secretary said:Since our last communication with you it has been announced that a further 200 men will be made redundant at the end of July in the ship repair firms of Vosper-Thorneycrofts and Harland and Wolff.It also has been announced that unless the situation improves there will be further redundancies at the end of the year. I would like to call upon you therefore to pursue this matter with the utmost urgency.In a speech on 22nd April, 1971, the then Under-Secretary of State for Trade and Industry said that the Shipbuilders and Repairers Council had produced a report in August, 1970, which showed that the industry had been shrinking for 10 years and to some extent put the blame on the changing world trade routes which did not bring so readily ships to our shores for repair.
In that report there were five recommendations. The first was that the industry should take steps to strengthen itself. There should be closer discussions between unions and management and there was scope for beneficial mergers.
I am happy to say that between the Confederation of Trade Unions and the South Coast Association of Employers there is a great deal of harmony, so much so that demarcation rules are entirely eliminated, on the repair side contract dates for completions have always been met, and for some years there have been no major disruptions in the yards arising from the various productivity agreements. From the talks I had with the union and management representatives only yesterday it would seem that they all favour a beneficial merger and it was felt than this could assist them over some of the 223 minor duplications of their various services.
The second recommendation in the report asked that the Government should exceed the 2 per cent. in the payment of shipbuilders' relief to the industry. This could have no bearing on the plight of the repairers unless the shipbuilders were also ship repairers, in which case they could obviously phase some of the advantage into the repairing side of their yards.
The third recommendation was that the report asked that the Government should find ways to persuade shipowners to repair their ships in this country rather than abroad. This the Government dismissed because it was felt that shipowners must be allowed the freedom to decide where it is right and proper to repair their ships.
The weakness in this argument is that, if shipowners such as P and O and the various on-off ferry companies using Southampton, continue to send their ships either to Malta or to the Scandinavian countries from whence they came, when genuine customers who require ship repairing in a hurry need these facilities there will be no ship-repairing industry to give them any service, certainly not in Southampton.
It is well known, and has caused great bitterness, that ships that use Southampton as their home ports are only too willing to go to foreign ports for their requirements, not because they receive any better service, certainly not because they receive any greater efficiency, but because these foreign shipyards are in many cases subsidised by their Governments or pay lower manual rates of pay, therefore being able to quote a much lower tender price.
I will seek to highlight some of the bitterness. I had a letter from the Southampton Trades Council in which its secretary said this:Once again, we see ships going to foreign ports for repair, the latest the 'Nevasa' and the 'Uganda' to Malta. These ships use the U.K. for business, cruising from Southampton and taking children on educational trips. Not content for the last two to go to Malta, I understand Vosper-Thornycroft have supplied 100 8 ft. by 4 ft. Formica faced Marinite panels and despatched them to Malta, when again this week—12th February 224 —there are again further reductions of the docks workers.I am told that in the United States there is a levy system which the United States Government charge to their ship owners who have their repairs done outside the United States. Though this may seem harsh, I feel that it is the only way to make ship owners, who are greatly assisted by the British taxpayer, to think of the future of our British ship-repairing yards.
The ship owners will put forward, quite rightly, the opinion that this is not possible since some of their ships never come within several thousand miles of our shores, but I am sure that the Government could plan to make exemptions in these cases.
The next recommendation dealt with the rating and taxation of dry docks. I know that in Southampton this has meant a reduction in the rates on the whole of Southampton docks, so much so that I was in correspondence with the Secretary of State for the Department of the Environment when the city of Southampton pointed out that it was losing an appreciable amount of rateable value on account of the introduction of the new rating formula. One of the city councillors wrote to me at the time as follows:It has come before the Policy and Finance Committee that the Department of the Environment proposes to make an Order under the General Rate Act 1967 which will result in the reduction of the rateable value of Southampton Docks from £337,500 to £184,000, equivalent to a loss of rate income of around £109,000 per annum.Has my hon. Friend any idea whether these savings have been passed on to the users, first of the port, and secondly to the ship-repair yards which use the facilities of the dry docks. As he will well know, four years ago there were six dry docks in action in Southampton. Now there are three and there is the constant fear that one of them, Dry Dock No. 5, may close on pure economic grounds. The utilisation of these dry docks must increase and any further closures would be but one more nail in the coffin of the local ship repairers.
In a letter received from Vosper-Thornycroft in December last year, and repeated in April of this year, the company emphasised that though they realised that the number of ships using the port 225 has diminished, this was only the transitional stage in the type of ships using Southampton. When the container jetties are completed, the number of ships using the port will increase and, in their opinion, in 1973 there will be a problem in obtaining dry dock facilities. If shipping owners are to be encouraged to use the facilities of Southampton docks, it is essential to have sufficient dry docks available for the owners to carry out their annual surveys, damage and main. tainenance repairs and, in Vosper-Thornycroft's opinion, another dock will become essential, whether it be a land dry dock or a floating dry dock.
A letter which I received from my right hon. Friend the Minister of Transport Industries, dated 25th May this year, said:The British Transport Docks Board are aware of the concern expressed by ship repairers in the port for whom the loss of passenger liners represents a decline in traditional repair work. The Board's policy has, however, been to capture all the alternative business available this has been done with some success. The most notable examples have been the development of substantial new container trade at the Western Docks extension where considerable capital is being invested, and the provision of roll-on/roll-off terminals in the Eastern Docks to cater for short-sea passenger and freight trades.The type of ship-repairing for which Southampton is justly famous is the outfitting and renovation of passenger liners. This calls for a great deal of skill and also, such as in the present refit of the QE 2, a great number of men for short periods of time. This is why both Vosper-Thornycroft and Harland & Wolff are most concerned about the question of fall-back pay. They say quite readily that they are paying a substitute for unemployment pay for these men in between jobs. Surely a more equitable way would be to agree with the ship-repairing industry a percentage of the unemployment pay during this waiting time which could go some way towards easing the burden of the ship-repairing management in bringing the employees' wages up to the full fall-back rate. I am sure that any discussion on this point would meet with the greatest enthusiasm of those in this industry.
In Southampton we are well placed geographically, with a two-tidal system and a skilled work force with a high reputation. It is well known in shipping 226 circles that Southampton yards are often used for finishing off the work in ships left by other yards. The unions in Southampton have agreed with managements and shipowners to allow crew working during the period in port, a facility very few other ports have. And labour relations are excellent.
What more can they do to help themselves? With the changing pattern in the type of shipping using Southampton? The containers and bulk carriers do not need repair, due to the newness of the ships and the simplicity of the machinery. We are faced with the alternative of having either to appeal to the Government for fiscal aid or additional work or perhaps just let evolution take over and lose our ship-repairing yards for all time.
I appeal to my hon. Friend, "Do not let this good ship founder for want of a ha'porth of tar and lack of consideration." We can only fail if Southampton yards have to compete against foreign yards which obtain their Governments' subsidies, and also with other yards in the United Kingdom which receive Government assistance. Surely the case for Southampton is too strong to deny. I finish by asking whether my hon. Friend is aware of the difference between an unemployed man in the Clydeside and an unemployed man in Southampton. They both face the same hardships but, once again, it is obvious that with the cost of living in the South being what it is, the Southampton man will suffer the most.
§ 1.2 a.m.
§ The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)
I listened with great interest to what my hon. Friend the Member for Southampton, Test (Mr. James Hill) said and to the persuasive case he makes about the difficulties which ship-repairing firms are encountering in Southampton. I have some familiarity with what he said, partly from my own knowledge and sources of information, and partly from having heard him and the hon. Member for Southampton, Itchen (Mr. R. C. Mitchell) speaking on the subject just before the Summer Recess.
As his last point, my hon. Friend made the contrast between unemployment in Clydeside and unemployment in Southampton. I must tell him that I have just come back from a visit to Clydeside, 227 and there is a very real difference: it is the prospect of employment. I do not think that it would be necessarily right to relate the two cases as being similar in any degree.
It is undoubtedly true that employment in ship repair in Southampton has shown a declining trend for a number of years. I would not like to be dogmatic about the extent of the decline, but it is probably true to say that in five years the labour force has fallen by about 25 per cent. If we look at ship repair as a whole, and not merely at Southampton, we see a number of reasons why demand for the industry's services should have slackened. The age of the UK merchant fleet has been falling—younger ships—and small ships are frequently replaced by a smaller number of large modern vessels which have stronger protective finishes than their predecessors had, and which are equipped to carry out many of their repairs at sea. Intervals between major surveys now tend to be longer, and the need for complex repair jobs is sometimes obviated, as indeed occurs in other industries, by replacing complete assemblies or sub-assemblies.
On top of these general factors there is of course the historical fact to which my hon. Friend drew attention of the decline of the seaborne passenger traffic which has traditionally been associated with the port of Southampton.
We must, however, view the movement in this industry against the general background at Southampton. Here we have one of the most prosperous areas of Britain, with a male unemployment rate of only 3.8 per cent., compared with 5.2 per cent. for the country as a whole. I know that my hon. Friend appreciates that we as a Department have to concern ourselves with the country as a whole and with areas where there are much greater difficulties than is happily the case in Southampton.
It is natural, inevitable and, indeed, healthy for some areas of economic activity to decline and others to take up the resources which have been released. A static situation is unthinkable, and in an area such as Southampton, with a strong demand for labour, the effects of decline in one industry are much less serious than they might be in other areas. 228 This is proved by the fact that the gradual decline in employment in ship repair has not given rise to a serious unemployment situation even in the shipbuilding and ship-repair industries as a whole in Southampton.
The number of men registered as wholly unemployed in these two industries, for example, was 870 in mid-1970 and 530 in mid-1972. The last monthly figure, I am advised, was 330, and I have been pleased to learn that unemployment in ship repair in Southampton is at present—at present, I accept—non-existent, thanks largely, of course, to the work on the QE2. Indeed, workers are coming in from other areas.
Therefore, the short-term situation is good, though I do not for a moment suggest that that is anything but the short-term situation or that there is not the problem which is concerning my hon. Friend.
Ship repair will probably always be subject to greater fluctuations of work load than are many industries. However, in the context of the situation in Southampton this is a manageable problem, which is not something one can necessarily say everywhere. This view, to my mind, is supported by the fact that the managements of both the major ship, repair firms in the area have been able to take engineering work for other concerns in and around Southampton when the marine side of their business has been slack. This shows commendable enterprise on their part, but it suggests also that in some sectors there is a shortage of skilled engineering labour. There are industries in the area, such as construction, oil refining and, of course, shipbuilding itself which can make use of the skills of ship-repair men; and the unemployment figures which I have given suggest that the great majority of those who moved away from ship repair have found alternative employment.
It should be mentioned also that there is a Government retraining centre in Southampton, which is being enlarged—again, something which not every area enjoys. It offers a wider range of opportunities to acquire new skills for those who participate. I must draw my hon. Friend's attention also to the wider training opportunities scheme, announced fairly recently—in July, I think—by my 229 hon. Friend the Minister of State at the Department of Employment. This scheme makes it possible for adult workers to receive awards for training within industry and at commercial and technical colleges.
I wish to make clear that I, for one, do not believe that the ship-repair industry in Southampton is moving inexorably towards extinction. Nor, I am sure, do the major firms there. It may be that the number of men who can be permanently engaged in the industry will be rather lower than at present. But, as I said, this need not be viewed as a tragedy. Southampton will continue to be an important port for passenger and passenger cargo liners. It is only starting its life as a container port but is doing so very impressively.
I looked a few weeks ago at the work which is going on at Southampton as a container port. A great deal of capital investment has gone into the provision of facilities for container vessels in an attempt to diversify the trading pattern of Southampton. The future will bring opportunities to which both sides of industry will be able to adapt themselves. The experienced firms which operate in Southampton have close contact both with their main customers and with the British Transport Docks Board, and it is in the interest of all these that Southampton should offer reliable and competitive ship-repair facilities.
My hon. Friend's comments about the docks relate, as he appreciates, to the responsibility of my right hon. Friend the Secretary of State for the Environment. However, my hon. Friend can rest assured that I will call attention to everything he said in that respect.
My hon. Friend referred to stand-by agreements which, as he recognises, are basically matters for negotiation between management and unions. However, it must be for management to judge what size of permanent work force it is justified in retaining in the light of the orders likely to be received. Making public money available to help meet the cost of stand-by agreement would encourage companies to keep more workers on their books than they might otherwise do. It would be difficult to justify Government assistance in that connection for the ship-repairing industry and not for 230 a whole range of other industries which might find themselves in a similar situation. That would not be a productive use of public funds.
My hon. Friend made reference to the American system of a levy imposed upon shipping owners and shipping companies who use foreign ports. I am prepared to study that but I must draw attention to the fact that the circumstances in America are entirely different. We have a much larger merchant shipping fleet than America and as a nation our economy is much more dependent upon it. It must be in the interests of the nation and the shipping industry as a whole that it is able to be as competitive as possible and should not have restraints imposed upon it in a highly competitive world market.
§ Mr. R. C. Mitchell (Southampton, Itchen)
Is there no way in which the Government can persuade the ship owners wherever possible to have their ships both built and repaired in British yards?
§ Mr. Grant
It must be in the interests of the shipping industry and the nation that they can compete with the rest of the world. They can do that only if they can have their ships repaired in the most economic fashion. I am sure that is a matter of which the ship-repairing industry will take note. At the end of the day it is for the industry to be as efficient and competitive in world terms as anybody else.
If hon. Members have any examples of specific unfair competition by reason of subsidising the prices of foreign ship repairers, then we shall gladly look at them, but I should like to have any evidence which they can give in that respect. Subject to that consideration, I do not believe that it would be right to impose a burden on the shipping industry, which has to face certain difficulties.
It may be that I have not covered all the points in the short time which I have had available to me. I do not take such a pessimistic view of the ship-repairing industry in the long term. I believe that it can and will adapt itself to new and changing circumstances. I understand the anxieties of those who work in the industry. I understand the anxiety of a man working in the south as much as I 231 do that of a man working on Clydeside or elsewhere. However, I believe that the circumstances do not justify the same degree of Government support and intervention as do other parts of the country. It is however, something which the Government must consider if they are to have a proper regional policy. Nevertheless, having said that, I assure my hon. Friend and the hon. Gentleman that I and my officials will keep in the closest possible touch with the situation at Southampton and with the consequences of change as it may befall the industry. I am only too happy to pursue this discussion with them, if they so wish, and to go into the matter in much greater detail. I am grateful to them for the interest they have shown in what is a very important matter to their con- 232 stituents. I ask them to accept that the Government are sympathetic and do understand the problems, but I ask them to realise that it is our task to hold the ring, as it were, not only between the ship-repairing concerns in various parts of the country but also between various other industries which might well, in changed circumstances, seek to obtain the same sort of assistance as that for which my hon. Friend has been pressing. With this—
§ The Question having been proposed after Ten o'clock on Tuesday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at sixteen minutes past One o'clock.