HC Deb 27 July 1976 vol 916 cc390-7

'In carrying out their functions British Shipbuilders shall have full regard to the need to consult with, and wherever possible co-ordinate their activities with those of, any body corporate in Northern Ireland whose equity share capital is held by or on behalf of the Crown and being a body corporate which is engaged in one or more of the activities specified in section 2(2) above'.—[Mr. Merlyn Rees.]

Brought up, and read the First time.

The Secretary of State for Northern Ireland (Mr. Merlyn Rees)

I beg to move, That the clause be read a Second time.

Mr. Speaker

With this we may take the following amendments:

No. 248, in Clause 1, in page 2, line 3, at end insert 'and in the case of the British Shipbuilders Corporation one of those appointed shall be an executive director of Harland and Wolff'. No. 243, in Schedule 2, in page 75, line 7, at end insert 'Harland and Wolff Ltd.'.

No. 244, in page 76, line 6, leave out 'Great Britain' and insert 'United Kingdom'.

Mr. Rees

Before speaking directly to the new clause I believe it is important, and in keeping with the wishes of Ulster Members, that I should put before the House the facts on Harland and Wolff. They are the background to my views on the new clause, and I believe it is vital that these views are on the record.

When I took office in March 1974 I began a personal investigation into the position of Harland and Wolff. In addition to the particular problems of the company, I was concerned to find out what its relationship was with the then devolved Administration. I was and am still concerned to evaluate what public ownership meant in the sense in which it operated, the role of Government directors, the role of civil servants and how financial accountability is ensured.

10.45 p.m.

Above all, I was not unaware that Harland and Wolff had received large sums of Government aid. Indeed, in July 1974 the House was told that since 1966 the company had received £68 million in standard and selective assistance. It may have been a joint stock limited liability company working to the precepts of the Companies Acts and to the philosophy of private enterprise, but the plain fact was that it had been kept in being by the Government through grants and loans from the Shipbuilding Board and the Department of Commerce. This was done by a Unionist Government at Stormont and a Conservative Government at Westminster. This was not in any sense Socialism but an ad hoc corporatism that was not, I found, guided by any clarity of mind in any shape or form.

In December 1973 I had put down a Question to the then Secretary of State and was informed that the Government would provide guaranteed facilities for up to £10 million as needed to the end of 1976. I found that the Northern Ireland Department of Commerce held £4 million of the company's equity—about 47 per cent.

In March 1974, on my second day in Northern Ireland, I was informed that the £10 million was already out of date and that substantial further sums would be required. This was in three months. Round about 1967, the yard had geared itself for the building of large tankers to tap the market, but by 1974 the facts of life had changed.

Revised figures were received by July 1974, and my right hon. Friend the then Minister of State made it clear to the House that, if the company were to continue trading, further Government financial support was required urgently. Prior to that date I was dealing with decisions of a Conservative Government. They did not treat the firm as if it were a firm that ought to stand on its own feet.

To provide further finance and to bring about changes that we thought necessary, we decided to increase the Government holding in order to give the Government a substantial majority in an expanded equity. I make it clear that this was this Government's first decision.

We also decided on a comprehensive review of the management structure and resources of Harland and Wolff; a full examination of the order book; a temporary moratorium on any new shipbuilding orders; strenuous action to reduce overheads; and training arrangements capable of securing any necessary increase in the labour force in a manner compatible with the manpower needs of the rest of industry in Northern Ireland.

We made it clear to the House in July 1974 that the steps taken were a rescue operation. Without it, the yard would have shut down. This operation was for Northern Ireland, where the yard is significant, and some of the money was found from offsetting savings in public expenditure in the Province. It was made clear from the beginning that it was not an open-ended Government subvention.

Eight months later, in March 1975, my right hon. Friend told the House that the review of the situation in Harland and Wolff was completed. The Government had been in office one year. It needed that length of time to establish the precise position.

The only point I want to make—hon. Members can read the records of the time—is that the accounts for 1973, published in November 1974, had shown a £38 million provision for estimated prospective losses on contracts entered into prior to 31st December 1973. By March 1975—by which time the detailed financial review for which I had called was complete—it was clear that this figure had to be increased by over £22 million to about £60 million.

Mr. Ian Lloyd

Will the Secretary of State say what proportion of the total Government subvention to Harland and Wolff has gone down the drain of operating losses and what proportion has gone to new capital investment?

Mr. Rees

The £60 million that we then provided to the end of 1978 was to cover prospective losses. Every ship being made is made at a loss. The £60 million is to cover losses in Harland and Wolff. This is what we were doing at that time, and it was because of this that we took the yard into public ownership. The yard was taken into public ownership, and the point I make is that it was without any opposition at all from any part of this House.

The House may vote against the public ownership of shipbuilding in Great Britain, but—[Interruption.] Hon. Members may not want a political speech but they will get one. I notice that there are those who vote against public ownership in Great Britain but are ready to vote for public ownership in Northern Ireland. The Ulster Members of Parliament vote against public ownership in Great Britain but they vote for public ownership in Northern Ireland.

This yard is publicly owned. If it were not for public ownership the yard would have shut down two years ago. In my strong view, we are monitoring this firm, and the trade unions are cooperating magnificently in the situation. My right hon. Friend who was Minister of State did a great deal to get worker directors. But the plain fact is that the market for the products—big ships—has gone. There are problems in Har- land and Wolff. The Government have done a great deal to keep Harland and Wolff going. It is already publicly owned. In my strong view it should not be part of the Great Britain nationalised shipbuilding industry which is to be set up.

It is right that we should accept New Clause 12. It is right that we should co-operate. But Harland and Wolff must be ready to be run by a future devolved Administration, as are rail electricity and the other nationalised industries in Northern Ireland.

I am glad that the Government took Harland and Wolff into public ownership. That was right for Great Britain. We had the support of the House on Northern Ireland. I am only sorry that we did not have it for Great Britain. I believe it right to co-operate, but I do not believe it right that Harland and Wolff should be part of the Great Britain nationalised shipbuilding unit.

Mr. William Craig (Belfast, East)

I think that my hon. Friends from Ulster will appreciate the message from the Secretary of State for Northern Ireland. However, he has not reassured us as to the meaning of New Clause 12. The words "consult" and "co-ordinate" may mean a lot or a little. I am not sure that a public monopoly, or indeed a private monopoly, is ever desirable. But if there is to be a publicly-owned monopoly, there is a duty on us all to see that its resources, coming from public funds, are properly used.

The Secretary of State reminded us that Harland and Wolff was a publicly-owned company. It would seem fairly reasonable to argue that there should be areas of common ground, especially in such matters as research. It is important that we do not duplicate the activities either in Belfast or wherever the headquarters of British Shipbuilders will be located. We should have liked to hear that kind of assurance from the Government this evening.

The Secretary of State will know from his own experience that the decision not to include Harland and Wolff in British Shipbuilders has given rise to cause for concern in some quarters. That is virtually abondoning Harland and Wolff to the mercy of the tide of the future.

I support the Government, but I want to hear from them in specific terms that there will be effective co-ordination and co-operation between the publicly-owned organisations in Great Britain and the publicly-owned company in Northern Ireland. I should have liked the Secretary of State to spell out in clear terms and to give the workers and management in Northern Ireland some assurance there will be effective liaison on important matters such as research into world markets and the types of ship needed. I think that that may be best achieved by ensuring that at least one of the directors of British Shipbuilders will be a director of Harland and Wolff. I was glad to be supported by some hon. Members in an amendment to that effect. That would illustrate beyond doubt that there would be some meaning in the words "liaison" and "co-ordination." I hope that before the debate closes we shall be given more precise assurances about the meaning of "consultation" and "co-ordination".

Mr. Michael McNair-Wilson

I am disappointed by what the Secretary of State said. Admittedly, he is up against the problem of time, but he must be aware that Admiral Sir Anthony Griffin, the Chairman-designate of British Shipbuilders, said that he was creating a national policy for the industry. If the word "national" is used, it must inevitably include Northern Ireland. Therefore, in that policy Northern Ireland and its great shipyard must play a part.

The Secretary of State spoke of Harland and Wolff as if it were a bottomless pit. He knows that the world is suffering from a 60 per cent. overproduction of tankers and that the pundits in the shipbuilding world believe that by 1980 that situation may to some extent right itself. The simple question is whether Harland and Wolff is to be allowed to survive until it has a chance to prove that all the money that has been invested in the new equipment to make it the best tanker yard in the United Kingdom, the British Isles and perhaps Western Europe has not been wasted. Is it to be allowed to survive and to turn out the ships for which it has been so amply re-equipped, or is an arbitrary decision to be made? On 2nd August 1975 the Minister of State said that it was the last chance for the company.

The amendment in my name and those of the right hon. Member for Belfast, East (Mr. Craig) and the hon. Member for Belfast, South (Mr. Bradford) suggest that a director of Harland and Wolff should be a member of the Board of British Shipbuilders. That view is shared by the Chairman of Harland and Wolff. I have here a letter from him in which he says: My personal view is that representation on the board of British Shipbuilders of a director of Harland and Wolff would be beneficial to this company. More than the airy promises in the clause is required to give Harland and Wolff a feeling that it is in community with British Shipbuilders and not being treated to some extent in isolation. I hope that the Secretary of State will say something to give confidence to Northern Ireland.

Mr. Gerard Fitt (Belfast, West)

I have listened to the Secretary of State putting the Government's viewpoint on Harland and Wolff. My view appears to be opposed to the majority viewpoint of the trade union movement in Northern Ireland on the bringing of Harland and Wolff into the ambit of the nationalisation programme.

I live in Northern Ireland and I know many of the workers in the Belfast shipyard, some of whom do not support my political views, but I still cling tenaciously to the belief that the Northern Ireland people, recognising the linchpin of the industrial programme, wish to have Northern Ireland people looking after the affairs of the Belfast shipyard.

The shipyard has received from the Westminster Parliament over several years financial assistance amounting to £137 million. I do not believe that any British Government, Conservative or Labour—particularly Conservative—would look with sympathy at the shipyard's problems, but perhaps next month or the month after there will be a devolved Government in Northern Ireland representing all political viewpoints. It is those people who will know the problems which are upsetting the Belfast shipyard.

Mr. Tom King

On a point of order—

Mr. Speaker

I will take the point of order afterwards. The Resolution of the House obliges me to put the Question now.

It being Eleven o'clock, Mr. SPEAKER proceeded, pursuant to Orders [20th July and this day], to put forthwith the Question already proposed from the Chair.

Question agreed to.

Mr. SPEAKER then proceeded to put the Questions necessary for the disposal of the Business to be concluded at Eleven o'clock.

Clause added to the Bill.

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