HC Deb 28 July 1976 vol 916 cc796-804

Amendment made: No. 13, in page 7, line 9, leave out 'companies' and insert: 'bodies corporate, whether or not incorporated into the United Kingdom'.—[Mr. Huck field.]

Mr. Willey

I beg to move Amendment No. 250, in page 7, line 12, leave out subsection (3).

I gather than it will also be convenient to take with this amendment the following amendments:

Amendment No. 251, in page 7, line 25, leave out 'directions' and insert 'direction to either Corporation').

Amendment No. 252, in page 7, line 26, leave out 'shall consult the Corporation to which they are to be given' and insert:

  1. (a) shall consider all factors relating to that Corporation that appear to him to be relevant to the proposed direction, and
  2. (b) shall consult the Corporation'.
Government Amendment No. 14.

Amendment No. 253, in page 7, line 27, at end insert: '(3B) Before giving any such direction to British Shipbuilders, the Secretary of State shall have full regard to the need—

  1. (a) to co-ordinate the operation of British Shipbuilders with those of the British shiping industry;
  2. (b) to take account of any shipbuilding policy for the time being adopted by any international organisation of which the United Kingdom is a member;
  3. (c) to ensure that British Shipbuilders is able to compete in world markets on equal terms with its competitors in other countries; and
    4. 797
  4. (d) to take account of any special considerations relating to parts of the United Kingdom and in particular, but without prejudice to the generality of those considerations, relating to employment'.
and Government Amendment No. 35.

These are important amendments laying down guidelines to the Secretary of State in giving directions to British Shipbuilders. This matter was fully discussed in Committee, and I am obliged to the Department for affording me the services of parliamentary draftsmen, who have improved the wording of the amendments.

Mr. Tom King

The important point about the amendments tabled by the right hon. Member for Sunderland, North (Mr. Willey) and discussed in Committee concerns subsection (3B)(a). It is important to make clear that there is a marked distinction between "co-ordination" and "coercion". It is also important to have a sensible understanding of the operations of British Shipbuilders in its relationships with the British shipbuilding industry.

We are concerned to ensure that this provision shall not be interpreted in a reverse way, so to speak, to compel the British shipbuilding industry to be coordinated with British Shipbuilders. In Committee the right hon. Member for Sunderland, North made clear that that was not his intention, but this is a sensitive area of activity. Although we should like to see the maximum use made of British shipbuilding yards, there are difficulties and disadvantages in bringing in compulsory powers.

The other question that arises on these amendments relates to the State taking power on account of special employment considerations. Those hon. Members who represent the Southampton area, which is not a development area and does not have the same unemployment problems, would be concerned if that consideration were regarded as an overriding one in placing orders for ships. Since the provisions of (3B) could be regarded as running counter to the proposals for decentralisation, the Government should make their position clear.

Mr. Les Huckfield

I am grateful to my right hon. Friend the Member for Sunderland, North (Mr. Willey) for his comments and, indeed, for his assistance in Committee on this point.

The basic purpose of Amendments Nos. 250 to 253 is to replace subsection (2A) which was inserted into the Bill in Committee at the instance of my right hon Friend.

Although the Government opposed my right hon. Friend's amendment at the time, we now accept the verdict of the Committee that the important considerations enumerated in my right hon. Friend's subsection should be mentioned in the Bill. There is no difference of view between us on the need to ensure that our shipbuilding industry meets the needs of our shipping industry, that full account is taken of international obligations, about the need to ensure that our shipbuilders compete on equal terms with foreign rivals, about which concern has been expressed by my hon. Friends, and about the importance of shipbuilding to the regions.

However, the form in which the Bill left Committee would restrict the circumstances in which a general direction could be given. In practice, a direction might be appropriate on a matter not covered by the criteria set out in the existing version of Clause 4. Therefore, in addition to accepting my right hon. Friend's Amendment No. 250, the Government also commend the other amendments in the group so that there will be flexibility to give directions on other grounds—for example, on matters relating to national security.

10.45 p.m.

Mr. Trotter (Tynemouth)

I wonder whether the Minister can say a little about the international organisations of which the United Kingdom is a member, because the amendment says that British Shipbuilders shall take account of the policy adopted by any international organisation of which Britain is a member. Can the Minister tell us which international organisations these are, and what their policies are? If there are any such effective organisations, they have not been putting forward policies that are adequate to deal with the enormous overcapacity of this industry. I should be grateful for any help that the Minister can give about what the Government are doing on this front, because unless the problem is dealt with internationally there will be no solution to it.

Mr. Les Huck field

The hon. Gentleman, with his usual assiduousness in these matters, has raised a relevant point. As he knows, we had several debates in Committee upstairs about the policies of other nations and, in particular, the policies that were pursued and were to be pursued in the European Community. If there is a reference to international obligations, it refers to any international obligations that may in the future accrue under the EEC and other bodies such as OECD. That was the purpose of inserting the reference in that form.

Mr. Tebbit

I should like to raise two points with the Minister. First, under Amendment No. 253, paragraph (a) says that in future it will be necessary to have full regard to the need to co-ordinate the operations of British Shipbuilders with those of the British shipping industry. Can the Minister tell us whether we should read any significance into the way in which that is put; that is, that it is British Shipbuilders which will have to have regard to the needs of the shipping industry?

Do we interpret from that that the Government have set their face against any form of persuasion, arm-twisting, direction or anything else on the shipping industry to persuade it to buy British ships which it does not think are necessarily most suited to a shipping line's business? If we read the amendment carefully we see that it is British Shipbuilders which have to do the adjustment and the co-ordinating. If I read that correctly I am happy with it, but I hope the Minister will be able to say whether I am reading more into this paragraph than I should.

Secondly, in Amendment No. 27, which we are considering with this group, there is an addition to the end of line 27 concerning the giving of directions under subsection (2). The Secretary of State is obliged to lay a copy of any direction before the House within 28 days of giving it, unless he has notified the corporation to which it is given that he is of the opinion that it is against the national interest to lay it, or if he accepts the corporation's contention that it is against the corporation's commercial interests to lay it. I am not sure that there are precedents for that. The Minister of State is nodding. I assume that if there are precedents they would have been in the original draft.

Mr. Kaufman

The hon. Gentleman created the precedent, because it was in response to a case that he made in Committee that we tabled this amendment.

Mr. Tebbit

Indeed. That is why I put it as gently as I did. I wonder whether the Minister can say in this case how it will be ensured that even if the direction is not laid before the House because of the national interest the security of it will be maintained by the corporation. Will there be any safeguard against the corporation revealing that such a direction has been given to it if it is a direction which it does not like?

In the past day or so, we have had certain explosions from the Chairman of British Rail because he is not very fond of Government policy. If a direction were given to one of the coroprations and the Minister decided that it was against the national interest that it should be laid before this House, what sanction would the Minister or the Government have against that direction being made public by the corporation itself?

Mr. Heseltine

I hope that the Minister will amplify a little the meaning of this amendment. On reading it and reflecting upon it, my feeling is that it is an amendment which apparently is desirable to have included in legislation of this kind but which, in practice, has no meaning of any sort.

When we come to consider what the Secretary of State would have power to deal with under this amendment in reality, we realise that he does not have any power to co-ordinate the activities of British Shipbuilders with the operations of the British shipping industry because he has no power over the British shipping industry.

Mr. Kaufman

That may be a valid point. But why, then, did the hon. Gentleman vote for the amendment now in the Bill which this one seeks to replace? The amendment moved by my right hon. Friend the Member for Sunderland, North (Mr. Willey) in Committee was carried against the Government because the hon. Member for Henley (Mr. Heseltine) led his hon. Friends to support it. That requires the Secrtary of State to have full regard to the need to co-ordinate shipbuilding and shipping policies. If the hon. Gentleman is not satisfied with those words, why did he vote for them?

Mr. Willey rose—

Mr. Heseltine

No. I am not giving way to the right hon. Gentleman. Time is short. I had given way to the Minister—

Mr. Wigley

On a point of order, Mr. Speaker. Is it in order for the hon. Member for Henley (Mr. Heseltine) to question my hon. Friend about an amendment which I tabled, as my hon. Frend explained, and which was agreed to by the Committee despite the Government's opposition to it? It is now claimed—

Mr. Speaker

Order. The right hon. Gentleman knows that it is quite in order to ask a question. The answer that he gets is quite another matter.

Mr. Heseltine

The amendment in the name of the right hon. Member for Sunderland, North (Mr. Willey) which I supported was to bring about some co-ordination of the European aspects of policy, and I thought it important that that should be in the Minister's mind. But it is also important to look at this amendment. It appears innocuous enough, but, in reality—[Interruption.] If the songsters on the Government Benches below the Gangway want to get to their feet and render "The Red Flag", I shall be very happy to let them sing. That is all that they understand. However, the serious content of this debate is best pursued by discussing this amendment.

In reality, the only significance that the amendment has in practice is the impact that it will have on people with ships who are considering whether to stay on or to leave the British Register. That is the only impact that we should be considering.

In order that there should be no false doubts, it would help if the Minister could make it clear that the Government recognise how limited are the powers that they could claim to have over the shipping industry, that they have no wish to extend those powers, and that anyone joining the British Register will not be co-ordinated with the British shipbuilding industry, but will be free to pursue the commercial interests of his company operating on the British Shipping Register without pressures being brought which he might consider to be against his commercial interests. If that assurance is not given, the only consequence will be a flight from the British Register or a reluctance to join it, and that will be harmful to the overall national interest. As that is the only practical effect of the amendment it would be helpful if the Minister could clarify it.

Mr. Willey

I say once again that this was a matter that was very fully discussed in Standing Committee. It had the general support of the Committee.

With regard to the point about co-ordination, the amendment does not say a word about coercing anybody.

I suspect that the Opposition are afraid to reach the next amendment, because it is an Opposition Front Bench one and they will be exposed because they have not sufficient Members here to support them. Therefore, we are having an interesting discussion on my present amendment.

"Co-ordination" means "to coordinate". We can deal only with British shipbuilders because the Secretary of State has powers to deal only with British shipbuilders. But coordination is mutual. One can facilitate it only if there is co-ordination between two parties. There is the explanation of the first leg of the amendment.

Employment, is, from my point of view, a much more important issue. I have lived in and represented a shipbuilding area for a long time. We were a distressed area, a development area, and now an assisted area. I believe that any real regional policy must be centred on the basic industries of the region. I think that if we had had any full and proper development area policy over the past years it would have been centred on shipbuilding, and if we had concentrated on that we might have taken a far bigger share of the world market that existed then. Instead, we built factories for light industry and so on. The basic industry where basic capital investment was needed in my constituency was shipbuilding. That is why I am very anxious to make it quite clear that in giving directions to British Shipbuilders this should be a factor to be taken into account. If only the investment put into new factories in my constituency had been put into the basic industry of shipbuilding we would have had a far larger share of the world market.

I think this must satisfy the purposes of the hon. Gentleman in having an interesting discussion on this amendment. The Secretary of State indicated in one of our recent debates that he regards the clause as a very important part of the present Bill, and I think it is, too. The Bill is considerably strengthened by this provision. I do not know whether the hon. Gentleman wants to take up a few more seconds or whether he wants me to take them up.

Mr. Anthony Nelson (Chichester)

I wonder whether the right hon. Gentleman would care to refer to the example of Greenwell's in his constituency, where some 400 workers have been made unemployed. It is a State-controlled firm and seems to exemplify all the worst possible aspects of State ownership.

Mr Willey

I am fighting very hard for the people who lost their jobs in Green-well's. What we do not like are people who know nothing about it, such us the hon. Gentleman, trying to make political capital. We do not want it and it does not help us. If the hon. Gentleman can do anything to help, let him help.

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

Question agreed to.

Mr. SPEAKER then proceeded, pursuant to the Orders [20th July and yesterday], to put forthwith the Questions on amendments, moved by a Member of the Government, of which notice had been given.

Amendments made: No. 251, in page 7, line 25, leave out 'directions' and insert 'direction to either Corporation'.

No. 252, in page 7, line 26, leave out 'shall consult the Corporation to which they are to be given' and insert—

  1. '(a) shall consider all factors relating to that Corporation that appear to him to be relevant to the proposed direction, and
  2. (b) shall consult the Corporation'

No. 253, in page 7, line 27, at end insert— '(3B) Before giving any such direction to British Shipbuilders, the Secretary of State shall have full regard to the need—

  1. (a) to co-ordinate the operations of British Shipbuilders with those of the British shipping industry;
  2. (b) to take account of any shipbuilding policy for the time being adopted by any international organisation of which the United Kingdom is a member;
  3. (c) to ensure that British Shipbuilders is able to compete in world markets on equal terms with its competitors in other countries; and
  4. (d) to take account of any special considerations relating to parts of the United Kingdom and in particular, but without prejudice to the generality of those considerations, relating to employment'.

No. 14, in page 7, line 27, at end add— '(4A) When the Secretary of State gives a direction under subsection (2) above, he shall lay a copy of it before each Housc of Parliament within 28 days of giving it, unless he has notified the Corporation to which it is given that he is of opinion that it is against the national interest to lay it or that he accepts the Corporation's contention that it is against the Corporation's commercial interests to lay it'.—[Mr. Kaufman.]

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