HC Deb 08 May 1975 vol 891 cc1759-86

10.10 p.m.

The Minister of State, Northern Ireland Office (Mr. Stanley Orme)

I beg to move, That the Shipbuilding Industry (Northern Ireland) Order 1975, a draft of which was laid before this House on 21st April, be approved. The draft order makes provision for further Government financial assistance to Harland and Wolff Ltd. When I made a statement in the House on 26th March about the future of the company I said that we would shortly be introducing an interim order to keep the company in funds. This is that order. Tonight we are concerned with the survival of the shipyard; that is what this order is about.

The company is the largest single industrial employer in Northern Ireland. We aim to protect the employment which it provides and the modern technology which it embodies. Last summer the yard would have gone into liquidation but for Government intervention. I draw this to the attention of Northern Ireland Members and the Opposition. In the present economic climate the loss of the jobs and the loss of the technology would be a catastrophe for Northern Ireland, indeed for the whole of the United Kingdom. For the yard to be kept open and given a chance to survive financial help must be provided now. The company will need funds by the end of May. If the order is not made tonight the yard will immediately close.

I should first explain that we envisage that this interim order will soon be subsumed into a second order, to take the company into full public ownership, which we hope to lay before the House in the near future. We must, however, be able to act in a flexible manner so that any assistance provided can be tailored to meet the company's needs. The present order is, therefore, drawn in wide terms as regards powers, duration and financial limits.

Hon. Members will note that Articles 3(1) and 4(1) enable the Department of Commerce, with the approval of the Department of Finance, Northern Ireland, to give financial support to the company in various ways. My expectation is that assistance provided under this order, before the Government own the company, will be by way of loan. However, before assistance can be provided by way of loan, it will be necessary for the company to extend its borrowing powers, and the shareholders are being invited to agree to the appropriate adjustments under the company's articles of association.

Article 3(2) enables the money provided to be used to facilitate the reorganisation or reconstruction of the company. Since the order is intended to be temporary, Article 3(3) prohibits any expenditure under it after 31st March 1977. This date has been chosen to allow a wide margin of safety.

Article 4(3) provides for the conversion of financial assistance from one form to another, should this be considered appropriate in the light of the evolving circumstances of the company. For instance, loans could be turned into equity or grants, should that be desired. This power of conversion will also extend to existing loans advanced to the company by the Department of Commerce under the Shipbuilding Industry (Loans) Act (Northern Ireland) 1966 and the Industries Development Acts (Northern Ireland) 1966 and 1971. Again, this is to provide maximum flexibility and to ensure that these loans, which were given under earlier and quite different circumstances, can, if considered appropriate, be adapted to the company's future needs.

Article 4(4) places a limit of £40 million on the total financial commitment under the draft order. The limit will, of course, include the amount of any loans under previous Northern Ireland legislation which is written off, since this would constitute a form of additional financial assistance to the company. Hon. Members will note that the limit of £40 million may be raised on not more than two occasions, and by an amount not exceeding £5 million each time.

The provision of these extra financial resources, on top of the massive support which has already been made available to Harland and Wolff from public funds, clearly imposes on both the Government and the company a duty to ensure that the money is used in the manner best calculated to restore this company, if at all possible, to commercial viability. The House will naturally expect procedures to be established for safeguarding the proper and effective use of these additional funds for the purposes for which they are intended.

Mr. Kevin McNamara (Kingston upon Hull, Central)

For the benefit of the House, can my right hon. Friend work out how much the £40 million or £50 million works out at per head of the labour force employed in the yard?

Mr. Orme

My hon. Friend is probably as good at arithmetic as I am, but I shall provide him with the figure.

Mr. J. Enoch Powell (Down, South)

The right hon. Gentleman was dealing with the successive paragraphs of Article 4. Could he kindly revert to Article 4 (6) and clear up a point? As I understand it, he explained that a writing off is a form of assistance, and, therefore, goes to the total under paragraph 4, but apparently if a loan is written off it does not count again against the total. In that case, is it not true that a much greater total than the £40 million could be injected if it were injected first as loans or grants and then by way of write-off?

Mr. Orme

This has been done in the form of a loan because we hope that if the firm becomes viable the money can be repaid to the Government and the taxpayers. The Government are firmly committed to the financial totals explicitly set out in the order. If we wanted any more money it would have to be with the permission of the House at a future date.

The Government are taking positive steps to ensure the effective monitoring of the company's affairs and control over expenditure under the order. That relates to the point the right hon. Member for Down, South (Mr. Powell) has just raised about the House seeing that the money put into the company is correctly monitored and that a Minister will be responsible to the House for its expenditure. In this regard special arrangements are being made in the Department of Commerce for this purpose. I shall be maintaining a close personal interest in the monitoring procedure.

Since making my statement to the House on 26th March, I have had discussions with the Joint Consultative Council at Harland and Wolff, and with full-time trade union officials of the Northern Ireland Confederation of Ship- building and Engineering Unions. I have made clear to them the serious situation facing the shipyard, and the Government's plans and proposals to deal with it. I have had similar discussions with senior and middle management personnel, and with shop stewards in the shipyard. The Government's discussion paper on worker participation had been circulated to them, and I am encouraged by the initial response to this paper. It is in the interest of all who work in the shipyard that an early start should be made on the introduction of worker participation at all levels in order to facilitate the implementation of the Government's proposals for the future of the company. Any delay could have serious consequences.

A key element of the arrangements now being made for the future of the company is the appointment of a new managing director, and the post has been publicly advertised by the company. It is a measure of the Government's good will in seeking to bring about industrial democracy in the shipyard that they have agreed to the participation of trade union representatives, as assessors, in the selection procedures for a new managing director.

It must be recognised that very substantial and exceptional assistance has been given by the Government and that at the end of the day what is important is the effort and resolve of all who work at Harland and Wolff, on which the future of the company now depends. Clearly, nobody can guarantee the future success of the Belfast shipyard, given the present state of the shipbuilding industry as a whole, both in the United Kingdom and abroad, and the uncertainties surrounding the world market for large ships. However, this is one of the leading shipyards in the United Kingdom and abroad, with modern facilities second to none, and a long tradition of technical excellence in shipbuilding. These are very valuable assets to begin with, and it is to be hoped that they can be utilised to restore the company to prosperity.

As I said in my statement of 26th March, the future of the yard is now in the hands of those who work there. No Government could go on supporting the yard indefinitely. Unless it can obtain orders which can be completed without loss, a halt must be called. By this interim legislation we shall be giving all who work in Harland and Wolff a further chance to demonstrate that there is a long-term future for shipbuilding in Northern Ireland.

10.23 p.m.

Mr. John Biggs-Davison (Epping Forest)

This is a sombre occasion. One recalls what Ulster shipbuilding meant to the survival of the United Kingdom and to allied victory in the World War when Belfast yards turned out 140 warships and 123 merchant ships—10 per cent of the total United Kingdom output of merchant shipping in that conflict.

Today, as the Minister of State said, Harland and Wolff is superbly equipped and served by men of exceptional skill. Yet, as the Secretary of State for Northern Ireland wrote in a foreword to a brochure on industrial democracy: There is little comfort in a company which cannot pay its way and where there are losses on every ship launched. This is not the first Government to attempt to rescue Harland and Wolff. In July 1971 the then Northern Ireland Government gave a grant of just over £4 million to clear losses on fixed price contracts. Just about three years ago, in May 1972, the first Secretary of State for Northern Ireland, my right hon. Friend the Member for Penrith and the Border (Mr. Whitelaw), gave the Conservative Government's support to an extensive project designed to raise output from 120,000 to 200,000 tons a year. At that time a detailed examination was undertaken with consultants from outside. The company was plagued with industrial and other troubles. There was a collapse of the market for big tankers.

In November 1973 my right hon. Friend the Member for Cambridgeshire (Mr. Pym). the then Secretary of State, whose absence from our sittings we much regret, announced further financial support from public funds, and now this draft order comes to us following the Minister of State's statement of 26th March. It is a first bite of the cherry—or should I say the first blow of the hammer? The Opposition stand by their request for a full debate, at the right moment, on the plight of the Northern Ireland economy, in which Harland and Wolff is the largest single industrial employer. We understand that there will be another Order in Coun- cil to transfer shares from private to public hands. I wonder whether the Minister of State is able to give us some indication of when that order will come before the House.

It is not possible properly to debate the Government's policy tonight, because we have not been told enough of the basis of the Government's decision. I hope that the hon. Member for Antrim, South (Mr. Molyneaux) will succeed in catching your eye this evening, Mr. Deputy Speaker, because he asked the Secretary of State when he intended to publish the report of the Harland and Wolff project team, which the right hon. Gentleman described on 22nd July as a comprehensive review. We were told that this team was composed of career civil servants and that the report would not be published. Therefore, our knowledge is deficient. We are glad that a more important debate will follow. However, we are not able in this debate to examine fully the Government's motives and decide whether the Government made entirely the right decision.

When the Secretary of State made his earlier statement the right hon. Member for Belfast, East (Mr. Craig) expressed general appreciation of the Government's willingness to give the yard another chance. However, the right hon. Gentleman, who represents many Harland and Wolff workers, also commended the Minister of State's refusal to promise indefinite support. We have heard that again this evening.

The foreword to the pamphlet on industrial democracy said that the Government had stated that they could not go on pouring money into Harland and Wolff indefinitely. We note what the Minister of State said about the effective monitoring of expenditure, in which he would take a personal interest. We support Ministers in the clear warning they have given.

The right hon. Gentleman has also thrown down a challenge to the management and the workers whom the Government intend—I hope that they succeed in this—to make responsible partners in the enterprise.

10.28 p.m.

Mr. William Craig (Belfast, East)

All hon. Members will be conscious of the fact that before we came to this item of business we were discussing a serious Finance Bill relating to the plight of the economy of the country. We are all conscious of the fact that every item of public expenditure must be scrutinised very carefully. Whilst recognising this, we pay tribute to the Government for a readiness to save an industry which is important to Northern Ireland. But we are still a little puzzled about whether the Government are taking steps which can really help Harland and Wolff, and we are puzzled because we do not know the full extent or nature of the problem.

We are all aware of the problems facing the shipbuilding industry generally, and those of us who have close contacts with Harland and Wolff will know of the special problems there, especially those arising out of its specialisation in large crude tankers. But, having looked at all these problems, we cannot see the reason for this critical situation developing in Harland and Wolff.

The Government have come to the aid of the firm at very frequent intervals. Each time the workers and the people of Northern Ireland have hoped that it would amount to a breakthrough for the industry. Each time we have been disappointed. It is perhaps near the truth to say that the greater participation by the Government in the affairs of Harland and Wolff the greater the problems have become. I do not suggest that this has anything to do with the Government, but I am wondering whether we are beginning to read the problems aright affecting Harland and Wolff, and whether the people responsible for the financial decisions of the firm are acting in a proper and businesslike way.

I have in mind some of the recent heavy items of expenditure arising out of the cancellation of contracts. A typical example is the Island Fruit contract. With Government approval, the company spent a very large sum of money to secure the cancellation of those contracts. But it is very difficult to assess whether that was prudent expenditure because, at that time, it seems that the fruit carriers had just as much of a vested interest in achieving the cancellation of the contracts as Harland and Wolff. Certainly Maritime Fruit Carriers, the parent company, was in considerable difficulties. In November 1974 the value of its shareholding had fallen from $29 to 7½ cents and, apart from having an enormous debt, it had the value of these very large contracts hanging round its neck.

As we look at the state of Harland and Wolff, we are entitled to know whether the amount expended in securing the cancellation of those contracts was a fair and reasonable price to pay.

Mr. Orme

It is worth noting that every order that Harland and Wolff has, until they are completed in 1978, is a loss order. This is what this £40 million is about. The cancellation of the Maritime Fruit order was done by the Government, in conjunction with the company, as it was the most economic cancellation since it was one of the orders which were most damaging to any financial considerations, and orders which remained for some of the large oil companies were not as damaging as the Maritime Fruit one.

Mr. Craig

We appreciate that assurance from the right hon. Gentleman. But it is this sort of information that we need to have. Much more could be given to us to help us in our assessment of the problem.

It seems that the basic root of the problem is the fixed-price contracts which hang round the company's neck. I am not in a position to say whether it was reasonable or prudent of Harland and Wolff to enter into these fixed-price contracts—

Mr. John Evans (Newton)

I am alarmed at some of the aspects of this order, but will not the right hon. Gentleman accept that if the company had not accepted the fixed-price contracts there would have been no work in Harland and Wolff? Socially, therefore, it was better to accept fixed-price contracts than have no orders at all.

Mr. Craig

That is an argument which I am reluctant to accept. I am aware of the social needs and of the problems arising out of the availability of employment in Harland and Wolff. But, in my opinion, there are many other ways in which we could find a solution to the problems.

Mr. McNamara

I think that on fixed price contracts the right hon. Gentleman is hitting the nail very much on the head. Is it not a question of the circumstances which led the company to decide on fixed price contracts in relation to other companies throughout the world or whether there were other reasons for a price being fixed of which we are not aware?

Mr. Craig

That is exactly the point. We would find it helpful if the Government would make this information available to us.

We recognise that the market is changing and that the structure of the shipbuilding industry must change. We see a need for improvement in the management of Harland and Wolff. However, we do not have much more information on this aspect than we have on the financial aspect. We appreciate that the Government's hands may be tied until they get a new managing director, but I am not reassured by the fact that the money has been made available and that there are schemes for the restructuring of the management and for the involvement of worker participation. Worker participation may in itself be a fine thing. But will it do anything to help the restructuring of the industry?

Like the car industry, from time to time we hear that there is a serious problem of overmanning. No one has told us whether this is a fact in Harland and Wolff. Many people in Belfast—indeed, some of the workers—have said that there is serious overmanning. I remember this argument being strongly canvassed in 1972 and 1973. Indeed, a team which was sent out from Belfast to a Swedish shipbuilding yard came back and reported that that Swedish yard, with half the labour force, had twice the output of Harland and Wolff. But from that time on there does not seem to have been any real change in the structure and organisation of Harland and Wolff.

It would be helpful if we could have an expert assessment of the labour requirement of Harland and Wolff. We understand that the Government's review body was a Civil Service examination of the state of the yard and of the Government's responsibilities in that respect. But is that enough? Would the Minister find it helpful to have a broader examination of the structure and problems of Harland and Wolff?

I have not made up my mind about the merits of worker participation. but in an industry of this kind it might be the way to tackle some of the stumbling blocks to modernisation. This industry has a multiplicity of trade unions. That fact arises from history. It is not easy to rationalise the trade union structure in that respect. However, some formula must be found for the unions to work with management to deal with the many problems of demarcation which arise out of this multiplicity.

The workers have a real opportunity now in the proposals before them to tackle many of the problems that have defied management in recent years. I hope that they will go into the challenge realising that it is just as much the function of trade unions to see that jobs are maintained as to maintain effective wage levels.

There is a great challenge before us in Harland and Wolff. I thank the Government for giving us an opportunity to tackle this problem, but I still stand by the doubts that I expressed earlier. For Members from Northern Ireland, Harland and Wolff is not just an industry that is in trouble. The company is very important to the economy of the Province. Its importance gives rise to certain considerations. Since the end of the 1960s development of the Northern Ireland economy has come to a standstill. This is one of the tragedies of our situation. The long period of industrial growth is at an end, and with the constitutional instability and lawlessness which exists it is difficult to forecast when there will be an improvement through the injection of new industry. It is, therefore, important to defend our existing sources of employment in every way we can.

As the Minister stated, Harland and Wolff is our largest single employer. I should like to think that every effort will be made to maintain that level of employment, but perhaps that cannot be done simply, or perhaps it cannot even be done. It should, however, be possible to introduce some worthwhile diversification. On a previous occasion when we were concerned about the labour target of the company an examination was put in hand of system building of housing. Here perhaps I can kill two birds with one stone. One of Belfast's most urgent problems is housing. The housing programme has fallen a long way behind the needs, and the existing stock is not being properly maintained.

I doubt whether many hon. Members appreciate just what is the price of six years of disturbance in terms of the effect on the living environment in our city. I ask the Government to consider once again whether Harland and Wolff could play a useful part in the system building of houses for the city and for the Province generally. This is the sort of exercise which can and must be mounted as a matter of urgency. One can speculate on many other types of diversification, but this would be a particularly suitable one.

More money is here being made available from the public purse, and none of us will quibble with that provided we are satisfied that it will bring a real improvement and that it is an all-out effort to put the concern on a viable basis. We have already heard talk this evening of taking more bites at the cherry. Every worker in the company is becoming increasingly demoralised at the recurring crisis. We would like to think that this will be the last effort that is needed to rescue Harland and Wolff, that it will be the successful one. I hope that we shall not need to take another bite at the cherry next year.

I hope that the Minister will give us a great deal more information. This is not because we want to criticise. We want to be able to help the Minister and the people in Harland and Wolff to turn this into a profitable, worthwhile concern.

10.45 p.m.

Mr. Kevin McNamara (Kingston upon Hull, Central)

May I echo the words of the right hon. Member for Belfast, East (Mr. Craig) in that we do want to see that the money invested in this world-famous company ensures that the company turns the corner? Nothing would be more demoralising for the men to know that, whatever efforts they make, those efforts are not sufficient and they have to ask for more help. In that situation there comes about an attitude when the men think "What the heck? The management say it does not matter. The Government are there with an ever-ready bounty." It does not help when anyone has this attitude.

Mr. Mike Thomas (Newcastle-upon-Tyne, East)

Can my hon. Friend imagine how this looks to those working in a shipyard that badly needs re-equipping, which could perhaps do with £10 million in a constituency like mine? Will he reflect a little on the difficulty that the people in my constituency have, much as they have good will for the people of Northern Ireland, when they see this sort of order before the House time and again? The right hon. Member for Belfast, East (Mr. Craig) talks of bites at the cherry. Is he aware that ultimately this will be a very wizened and slim cherry and that my constituents will not permit the cherry to be bitten any further?

Mr. McNamara

I am grateful to my hon. Friend, because he has uttered the next two or three paragraphs of my speech. When we consider that there are 10,000 men working in the yard the figure of £40 million works out at an extra £4,000 per head going into the yard, or if we have the £10 million to which we are entitled, that works out at any extra £5,000 per head. I see the Minister of State agreeing with me. That is a considerable sum of money, and it does not take into account what the men are able to earn to offset the loss being made.

If we are prepared to make this expenditure without any protest by the Opposition we may ask what will be their reaction to our proposals to nationalise the shipbuilding and aircraft industries in view of their negative reaction to the Industry Bill. That is perhaps regarded as an English political point, so I will not pursue it.

There are other matters, touched upon by the right hon. Member for Belfast, East, about which we are entitled to ask. We do not know the full financial history of the yard. We do not know where the investment went wrong. We have heard about fixed-price contracts. Why were they fixed-price contracts? Was that the competitive situation in the world at large at that time or did it have something to do with contracts of individuals? Were there bonuses to be paid to the managing director if he could get ships out at fixed prices?

It is terribly wrong that a lot of the criticism should be levelled at the men working in the yard, who, whatever else we think of them, are working men. Their conditions of work and remuneration, no matter what sort of price freeze we had under the previous Government, may well have been tied to a contract made with a foreign company for the services of the managing director. This is why we say that it is no good the Government hiding behind the sort of answers given to me to the effect that: Harland and Wolff … is a joint stock limited liability company in which the Northern Ireland Department of Commerce holds 47 per cent. of the ordinary stock and 36 per cent. of the total stock."—[Official Report,24th April 1975; Vol. 890, c. 392.] The Government cannot then say "Because we have not got 51 per cent. in each case we are not answerable to this House, to the people of Northern Ireland or to the workers in the yard, for the conditions under which the men are being employed".

We know that there was a very long destructive strike in the yard. What we do not know is the degree to which it was attached to the previous administration's pay freeze and pay policy, and the degree to which it was tied to the contract of the managing director.

We are entitled to know what went wrong when the whiz-kid from Scandinavia arrived at the yard, when he had everything given to him—money; the right to appoint management; the right, through his company, to employ management. That has never been denied. Did he get a kick-back from that?

In this situation we are being asked again to make this money available when we do not know where the other public money went. This is just not good enough.

Rev. Ian Paisley (Antrim, North)

Does the hon. Gentleman agree, too, that the managing director was not tied to giving his full time to this particular problem but was there for probably two days a week?

Mr. McNamara

That is even better. It is another bit about which I did not know. Now we have the house, the profit on fixed-price contracts—if they got any —his escalating remuneration, the fact that payment for his services went to the Swiss company, and the fact that the Swiss company employed others whom he employed in the yard, and perhaps other contracts involved in the yard were paid for foreign services. I see all the hon. Members who represent Ulster constituencies nodding in agreement with me.

This is where the Government must come clean. I am not blaming my right hon. Friend the Minister of State. I know that this was not his responsibility. However, we can say that it was the responsibility of the Conservative Party and the gentlemen who were then at the Shipbuilding Industry Board, who must have known of and approved this sort of money going across the exchanges. I realise that. But if we are to have the full story of the yard and know where we are to go from here, we must know where we come from so that we can see from where the degree of effort must come—from the men in the yard, the management or the designers.

There are other questions involved in this decision by my right hon. Friend. I think it is terribly important that we should give money to this company in this way. I find nothing ideologically wrong with his approach. If one worked it on the basis of 10,000 workers and each one entitled to some sort of unemployment or supplementary benefit at £20 a week if they are to be put on the scrap heap, that would amount to £200,000 a week—£10 million a year, or more. So we must know the social cost-benefit analysis, and all the other sorts of jargon, in this decision, when one is reaching it. We must understand what its effect would be, apart from one obvious effect of a great deal of unemployment.

But is the tale of the yard quite as piteous as has been made out? What is the record of the marine engine division? How has that proceeded? What are the prospects for the future if the large-scale tanker or bulk carrier or fruit carrier is going out? What other ideas are being considered for the specialised ship where the men's skills can be used? What is the effect of looking at the steel throughput of the yard? Have we got the right technology in the right place? Goliaths look remarkable on the landscape, but to what extent should money be invested in this sort of situation? Those are the questions to which we want answers from my right hon. Friend.

Under the order, my right hon. Friend has power to remove directors. I hope that the new director will not have to be removed in quite so peremptory a manner as the former managing director—although I do not quarrel with the justification for that removal. I also notice that power is given to write off debts. How much of the money will be used to write off past and expected debts? How much money will go for those purposes and how much for positive reinvestment in the yard? If the money is used to write off debts and not for reinvestment, again the money will be lost and the Minister will be back again asking for further sums. If it is not too impertinent, and if it does not tread too much on the issues covered by solicitors' letters, I venture to ask what debts are outstanding and how much is being claimed as debts.

The people who work in the yards, and the taxpayers, have a right to know whether their company has been milked at their expense and at the expense of the people of Northern Ireland. They are entitled to know what went wrong with their hopes and ambitions. It matters to them, and it matters to us on this island because we are entitled to ask what we are getting in return for the money we have spent. What is in it for our people? Would it be worth while just to give the workers £4,000 or £5,000 a head and say "Goodbye"? Is it worth while to say that there are vacancies in Belfast for skilled engineers and craftsmen and perhaps it would be better if these men left the yard and went there?

We on the Government side believe that there is a future for Harland and Wolff. We think that it deserves the confidence which my right hon. Friend places in the yard with his imaginative scheme for worker participation and the right of workers to be considered when managing directors are being employed. At least they could not make a worse decision than did the former Northern Ireland Government. If all this is to be done, we are entitled to know the truth.

10.58 p.m.

Mr. Robert J. Bradford (Belfast, South)

Having listened to the comprehensive and detailed speech made by my right hon. Friend the Member for Belfast, East (Mr. Craig) and the ruthlessly analytical speech made by the hon. Member for Kingston upon Hull, Central (Mr. McNamara), I feel that there is not much more to contribute to the debate. Nevertheless, my contribution will be made, though it will be brief.

Many of my countrymen are convinced that it is impossible to conceive of Northern Ireland's future without linking it directly with the continuance of Harland and Wolff as a productive and viable industry. It goes without saying that it must be productive and become viable. It comes as no surprise to discover that the United Kingdom shipbuilding industry lies fifth in the world league. That is a sad commentary on the past decades of that industry. We have to be realistic and face facts, and hon. Members who have spoken tonight have helped us to do that.

I wish to emphasise two points which have been made. First, whether we like it or not, Harland and Wolff will be faced with the need to diversify. My right hon. Friend has stated that one of the best ways in which we can rechannel the ability of a number of highly skilled men in the yard would be by using the building industry. Quite a number of people in my constituency are involved at managerial level and ownership level in the building industry. They find it almost impossible at present to acquire the number of skilled workmen they need. We realise that in Harland and Wolff there are categories of skilled workmen who could not be easily rechannelled but that does not apply to joiners, fritters, welders and so on.

We would ask the Government, if the time comes to rechannel some of the yard's work force, to make it as easy as possible by making available as much information as they can to such industries as building and to Harland and Wolff.

That brings me to my second point, which my right hon. Friend has stated very ably—that we need to know all the facts. It must be the truth, the whole truth and nothing but the truth. I know the work force in Harland and Wolff well enough to be able to say, with confidence, that, given the facts, they are men enough to face the truth.

We have to help. The Government have to help. I make that my plea tonight.

11.3 p.m.

Mr. W. E. Garrett (Wallsend)

One of my hon. Friends went close to saying that the point of no return had been reached with Harland and Wolff. I am courageous enough to say tonight that on the evidence made available the time has come to call a halt to the general spending of money within the shipbuilding industry, particularly at Harland and Wolff. The money proposed to be spent at Harland and Wolff is a misuse of the nation's resources. Such money, if used in other sections of the shipbuilding industry within the United Kingdom, would give a much better return on the capital employed and would help to create a much greater prosperity for the whole country.

I represent Wallsend. Swan Hunter have 25,000 employees and their headquarters is in my constituency. The company declared a profit of £15 million last week, a profit which they obtained by the efforts of the workers within the group and a proper use of capital. They have not had to depend to any great degree on Government aid. If Harland and Wolff have to succeed, clearly there has to be a decision "enough is enough. We are stopping".

The right hon. Member for Belfast, East (Mr. Craig) should apply his mind to the problems of Harland and Wolff. He indicated that he knows nothing about the ordinary system for big shipbuilders. Had he known, he would have known the history of the Maritime Fruit Corporation and of some devious tactics, employed not only with Harland and Wolff but with other companies. The Minister of State is a sponsored member of the AEU. I am, and so is my hon. Friend the Member for Newton (Mr. Evans). We have studied the shipbuilding industry all our lives. We know the problems of Maritime Fruit. If the hon. Member for Belfast, South (Mr. Bradford) wants to read it he will find it on the record.

The shipbuilding workers in the United Kingdom have just about had enough. They say quite categorically that if they were given this sum and given the opportunity to use it, the benefits to the United Kingdom taxpayers would be immeasurable I am not preaching to the people of Harland and Wolff but I am asking them to bear in mind that the mood of the British taxpayer is such that they will never have this chance again.

11.6 p.m.

Rev. Ian Paisley (Antrim, North)

We are dealing with the hard realities of the shipbuilding industry in Northern Ireland. I can quite appreciate the remarks of the hon. Member for Wallsend (Mr. Garrett). However the Harland and Wolff workers are entitled to know—they were not participating in these matters under the last management—what went wrong following the vast injection of finance into Harland and Wolff. I believe that much of the responsibility lies with management. The difficulties that have been spoken of as regards employees and employers can be overcome by worker participation in Harland and Wolff. I believe that that is the only way to accomplish what we intend.

It would be wrong for us to castigate the workers in Harland and Wolff and then to lead them to believe that there is a vast amount of money available to them at any time. The realities must be presented to the shipyard and to the people of Northern Ireland. Something must be done, and this is a golden opportunity for them to get Harland and Wolff into a state of viability. Although I can well understand hon. Members on both sides of the House worrying about their own constituencies, we must remember that to Belfast the Harland and Wolff shipyard is not simply a shipbuilding industry in isolation. In fact, many other small industries are tied into the shipbuilding industry. The prosperity of the whole of the work force at one end of the great city of Belfast depends entirely upon the shipbuilding industry.

We in Northern Ireland appreciate what the Government propose to do. We appreciate the efforts that are being made. However, we feel that it would be better for us all to be satisfied that there has been a full investigation, examination and laying bare of the facts concerning the previous management. Is the Minister satisfied that he has laid bare the whole matter? Has he come to the root cause why, given the previous injection of finance, the industry went further down instead of looking up? Was the industry directed in the wrong way by the previous management? Has money been spent in the wrong way? These are matters that are perturbing not only the workers but all the people of Northern Ireland.

It has been said by the hon. Member for Wallsend that the British taxpayers are tired of these problems, but if we do not get to the root cause of the trouble even this injection of money will not make the shipyard viable. Then we shall say "We had worker participation, this that and the other, and it did not remedy the situation."

Is the Minister satisfied that he has gone right down to the root cause of this cancer? Has he put the surgeon's knife to it? Can he say that, as far as in him lies the power, he believes that he can conquer something that has bedevilled Harland and Wolff, despite the vast sums given to it to try to remove the terrible burden that seemed to oppress it continually?

We are here tonight because we are interested in the employment of people in Northern Ireland. We are interested in what will happen to the Belfast shipyard. I do not believe that it is wrong for the Government to intervene and try to make the industry viable. The Government have a responsibility for the employment of people in the nation. Any Government who fail to face up to that responsibility are failing in a vital area. No Government can isolate themselves and say that employment has nothing to do with them. I believe that the employment of people has everything to do with the Government of the country. I feel that from the depth of my heart.

I live in East Belfast, and I have worked most of my working life there. I know how much East Belfast people depend on the shipyard. It is part of their whole upbringing and life.

I wish the Government well in what they are doing. I trust that they will be successful, but I hope that the Minister has examined the matter, and that he knows that he has got to the root cause of what happened previously, when vast amounts of public money were put into the industry and did not salvage it or bring it to viability. I trust that that will not be repeated.

The fact that the Ulster Unionists are here in strength tonight shows the House that we are interested. Sometimes in Ulster debates on most controversial problems we have had a full turn-out of hon. Members. On our benches tonight we have almost a 100 per cent. turn-out, because we are interested. Some of us were in another place today, but we felt that it was our duty to be here tonight to show that we are definitely interested in the future of the shipbuilding industry in Northern Ireland.

11.13 p.m.

Mr. John Evans (Newton)

I had better declare one interest at the beginning. Although my constituency is Newton, and I now have to travel many miles to see the sea, all my life I have worked in the shipbuilding and repair industry, mostly on the North-East coast, on the Tyne, Wear and Tees. I served my apprenticeship in the constituency of my hon. Friend the Member for Wallsend (Mr. Garrett), and most of my time in the Hawthorn, Leslie shipyard at Hebburn. Therefore, I know something about the industry from the workers' point of view.

I recognise that whatever has gone wrong in the Belfast shipyards over the past few years has not been the fault of the workers. I accept that the workers in the Belfast yards are as capable of building fine ships as the shipyard workers of the Tyne, Mersey and Clyde-side, and that the intrinsic, basic problems in those yards are all similar. Generally speaking, the root cause of the problems of the shipbuilding industry over the past 40 years has been rotten, foul, vile management.

My right hon. Friend the Secretary of State for Industry writes and talks of worker participation. If ever an industry needed some form of worker participation, it is this industry. I hope that when he selects his management team my right hon. Friend the Minister of State will recognise that worker participation does not mean a monthly meeting where the management calls the shop stewards together and tells them what they must do for the next four weeks. We have had that in the past, as my right hon. Friend will be aware. If it is to mean anything, worker participation must mean what it says. It must mean that the workers have the right to participate in every level of management. If the workers had been running the Belfast shipyards they could not have made as big a mess of the job as have the highly-paid executives from foreign countries.

I believe that we should be provided with as much information as possible as to what has happened in the past few years. This matter is not only of interest to Northern Ireland or to Members of Parliament. Every individual working in the shipbuilding and ship-repairing industry has a right to know what happened to the many millions of pounds which were poured into Belfast.

It is intended to nationalise the shipbuilding and ship-repairing industry. Many millions of pounds will be required for the modernisation of that industry to 1980 standards. However, between 1945 and 1951 virtually the only country which could build the ships which were required by the nations of the world was Britain. Harland and Wolff was among the firms which built those ships. In those days massive profits were made by the industry, not one penny of which was put back into the industry. In those days people came to this country and begged the British to build ships. Those requests were often refused as our order books were full. Not one penny of the profits made then was spent on improving the training or berthing facilities, or increasing the productivity of the yards.

It is obvious that if the problem of the British shipbuilding industry is to be solved there must be worker participation. Most ship-repairing workers will find no other form of employment in their areas. Their jobs and lives are in those areas. Their children's welfare depends upon the nature and prosperity of the industry. They have an interest ensuring that their industry is profitable, viable and modern, and that jobs are provided for themselves and their children. Another problem is the declining numbers employed and the reduction in the number of vacancies in the shipbuilding and ship-repairing areas.

Comments have been made about fixed price contracts. It was not only Harland and Wolff which lost money on those contracts. I agree that we need a full investigation into why Harland and Wolff entered into more fixed price contracts than anyone else. However, Swan Hunter also lost a great deal of money on fixed price contracts for tankers.

I am concerned about the future of big tankers. I hope that too much money has not been spent in tying up the Belfast shipyards to the super tankers. The Minister shakes his head. There is more tanker tonnage laid up in the world now than for many years past. The world environmental lobby is concerned about the prospects of larger tankers coming into their areas. The lessening world demand for oil may well mean that in ten years time the big tankers will be the dinosaurs of this era.

I wish to deal with the rôle to be played by Harland and Wolff in the British nationalised shipbuilding industry. Nothing has been said about that. Harland and Wolff is not mentioned in the list of companies contained in the shipbuilding legislation. I hope that it is not the Government's intention that Harland and Wolff should be kept separate and, like a baby, have special milk fed to it every few years.

If we are to take shipbuilding into public ownership, as I expect that we shall take this industry into public ownership this Session, Harland and Wolff must be included. Only on the basis of a national, United Kingdom industry can we ensure that there is proper planning and proper dispersal of resources throughout the industry. Only then shall we be able to make proper decisions as to which areas should build more ships, and which shipyards should build which ships, which areas or yards should build large tankers, fruit carriers, or other specialised ships.

I am concerned because the Harland and Wolff shipyard is not mentioned in the nationalisation Bill. I expect it to be included in the Bill. I assure my right hon. Friends that many of us on this side and, I hope, hon. Members opposite, would be very concerned if it were to be left on one side. More money has been poured into Harland and Wolff over the past decade than into the rest of the British shipbuilding and ship repairing industry. We all accept that that cannot go on.

We all accept that, particularly if Britain leaves the Common Market, we shall need our shipbuilding and shipping capacity if we are to trade with the rest of the world. I fervently believe that Belfast has a very large part to play in the country's future shipbuilding programme. It must be within the confines of a nationalised British shipbuilding industry. I hope that my hon. Friend the Minister of State will answer that point at least.

11.22 p.m.

Mr. Orme

There will be a further order coming before the House dealing with the public ownership of Harland and Wolff. I may then be able to reply to the points raised by my hon. Friend the Member for Newton (Mr. Evans).

We hope that the second order will be ready in two or three months' time. It is now in draft form. It will be presented in the same manner as this order has been presented.

We have had it put to us many times that Northern Ireland Members would like a debate on the Northern Ireland economy as a whole, which would include Harland and Wolff. We have offered a debate in the newly constituted Northern Ireland Committee. My right hon. Friend the Secretary of State has recently been in correspondence with the learned Member for Antrim, South (Mr. Molyneaux) on this question. Everybody understands the pressure of time on the Floor of the House. If we were to debate Northern Ireland—which is a region of the United Kingdom—on the Floor of the House, we should get pressure from other regions such as Yorkshire and Lancashire which are much larger than Northern Ireland. We would welcome a full-scale debate on the Northern Ireland economy including Harland and Wolff.

Mr. Powell

Does the hon. Gentleman not think that this would be a suitable subject for half a Supply Day if the official Opposition share the Government's point of view?

Mr. Orme

I welcome what the right hon. Gentleman has said, and I hope that the official Opposition have heard his remarks. It is not within my gift, but that is an interesting suggestion.

Mr. John Farr (Harborough)

May I ask the right hon. Gentleman to ensure that before such a debate takes place both sides of the House have much more information than has been available to them for this debate? Will he consider seriously the possibility of publishing a consultative document detailing the past history, regardless of whose fault it was, including the finances of the company and its financial structure as a whole?

Mr. Orme

I shall come to that, because I have been asked for more information and I want to be frank about this matter. The Government have nothing to hide in this regard. There are problems, as those who have been Ministers in other administrations know, in dealing with these matters. We are still dealing with a joint stock liability company. The annual report will be printed very shortly giving a great deal of the information for which I have been asked. The Government are trying to change the situation against the background of being a minority shareholder.

The last thing that I want to do is to conceal information. I have taken note of the points that have been made, even though they go beyond the level of information that comes out in the annual report of a joint stock liability company. I have provided a great deal of information in previous statements that I have made in the House. The Government do not have a closed mind on this matter, and I am prepared to consider the representations that have been made. If I can provide more information to the House I shall have no objection to doing so under the terms within which the Government have to operate.

Mr. Carol Mather (Esher)

I am sure the right hon. Gentleman will agree that hon. Members have been put in considerable difficulty tonight because of the lack of information. This complaint has been made from both sides of the House. The right hon. Gentleman says that the departmental report has been compiled and is in the Government's hands. Could not that be the basis of a White Paper to be published before the next order is debated?

Mr. Orme

It has taken a great deal of time to analyse the financial situation. The interval between ordering a tanker and completing its building is about three years, and during that period there can be great fluctuations in world monetary movements, inflation and orders. Shipyards all round the world will bear that out. Those who place tanker orders in the current market situation hold the whip hand and they can make things very difficult.

I do not think there is any shipyard in the world, from Japan to Belfast, which is making a profit or which does not have some form of Government assistance. I am not saying that that is within the terms of what we are debating, and I am not trying to gloss over the situation, but we are faced with those facts.

The project team was put in to consider purely financial matters. The Government have given the House the financial realities of the situation. That is the reason for this order. The civil servants in the project team have made a confidential report to the Government. I can say without any fear of contradiction that the Government do not have any information, however controversial, which they are not prepared to give to the House and the country. We are not hiding anything, and, after the further representations tonight, I shall certainly look again to see whether we might even compile out of the annual report a sort of catalogue of the problems and the financial considerations as they at present apply.

Mr. McNamara

rose—

Mr. Orme

I am just coming to a point which my hon. Friend raised, if he will allow me to continue. My hon. Friend made a lot of criticism of the previous management—he is entitled to do that in the House, and we make no objection, of course—and he has been seeking information through Questions in the normal parliamentary way. Again I have to say that the Government are restricted at present because this is a joint stock company though I understand the feeling behind some of the criticisms. I acknowledge that mistakes have been made, mistakes which we inherited. When the present Government came in, one of the first problems facing us was the crisis in the shipyard. Indeed, I think that it was no secret that the previous Government would themselves have had to move extremely quickly, as we did.

As for laying blame on previous administrations or previous managements, I am sure that my hon. Friend does not want to give the impression that we can resolve our problems through criticism of past actions and decisions. A great effort is needed in the shipyard now to produce the goods. Productivity has risen. I am very pleased about that, but it is still far too low.

We are trying to restructure the management in such a way that it will meet the need for industrial democracy and worker participation. If there is one industry—I have in mind here the histori- cal reasons which my hon. Friend mentioned—which depends more than any other on worker-management relationships and improved industrial relations, it is the shipbuilding industry—not only in Belfast but probably throughout the United Kingdom.

Therefore, leadership, example and ability to motivate are probably more important in this industry than they are in any other. A new type of management structure is being developed. We have brought the trade unions into the actual selection, into participation in the appointment of the new managing director. We have asked the stewards to consider and report to us whether they are prepared to take up the opportunity to go on the advisory board. That is for them to discuss, but we want participation at all levels in the company, and we want to eradicate some of the conditions of the past. We can do that only with the cooperation of the people in the yard itself. It is on that basis, therefore, that we must look forward.

Hon. Members on both sides have referred to the central issue of diversification of products. The Government have gone into this, but we are faced with the problem of the nature of the yard itself, dominated by the Goliath cranes which are a symbol of Belfast if not of Northern Ireland, too. The yard is constructed to build tankers of 300,000 tons-plus—huge metal boxes fitted with marine engines. In passing, I assure my hon. Friend that the performance of the marine engine shop is excellent. It is exporting engines to Sweden and Japan.

The yard builds these huge tankers, with superstructure and engine, and the work force embraces the steel workers and the throughput workers, whose work is then matched by the finishing trades. If the size of the ships were to be reduced even to half, there would be a major employment problem in the yard.

Hon. Members legitimately raised the question of houses. We have looked at it. We have discussed the problem of oil derricks and the problem of bridge building. We have discussed all these problems. I have said to the management and to the workpeople that if they want to look at these questions of diversification, we have no objection. I have suggested that the joint consultative committee should hire consultants and examine this issue so that it would know what the problems are. At the end of the day, however, we are left with the fact that it is a shipbuilding firm.

Mr. John Evans

A rosy picture is painted of diversification. Does my right hon. Friend appreciate—I will give him the details if he does not have them—that in the mid-1960s during the height of the housing boom the firm for which I worked—Hawthorn, Leslie—went into house building, lost £2½ million in two years and almost went bankrupt?

Mr. Orme

I thank my hon. Friend for that intervention. It emphasises the difficulties that this sort of problem brings. I hope that all this will be examined.

My hon. Friend the Member for Wallsend (Mr. Garrett) and others have raised the question of concern about Government expenditure in other parts of the United Kingdom. We understand that pressure, quite rightly, from different parts of the House. People want to see the money well spent. I have wrestled with this problem for about 14 months. I believe that this shipyard can be made viable. I believe that we can experiment in this yard in a way which will be a credit to the British shipbuilding industry. I believe that in that shipyard we can achieve production and a viability that can put the yard on its feet and be of benefit to Northern Ireland.

I have said to the House on a number of occasions that the economic base in Northern Ireland is far too narrow. If this shipyard were to be taken out of Northern Ireland, the unemployment rate would immediately soar to nearly 10 per cent., apart from the loss of skill. It should not be thought that there are jobs in East and North Belfast that the shipyard workers could easily pick up, because there is a lack of vacancies in many of the firms which had vacancies six months ago.

I make no complaint that the debate has gone much wider than the order and has ranged over the whole shipbuilding industry. We shall be returning to this issue when the order comes before us. We all have a responsibility, not least the Government and not least Members from Northern Ireland, to assist in every way we can in getting the reality of the situation over to people in Northern Ireland and assisting in giving the con- fidence that can make the company viable.

It is on that basis that I hope the House will accept the order tonight and will also accept that we are quite willing to debate this issue in the near future. We certainly take note of the points which have been raised tonight.

Question put and agreed to.

Resolved, That the Shipbuilding Industry (Northern Ireland) Order 1975, a draft of which was laid before this House on 21st April, be approved.