HC Deb 29 July 1976 vol 916 cc979-1024
Mr. Trotter

I beg formally to move Amendment No. 245, in page 91, line 4, at end add— '14. The decisions of an Arbitration Tribunal, and the reasons therefore, as to the value of the compensation to be issued for any security shall if the relevant stockholders' representative agrees be made available to the stockholders' representative for any other security'. Unless this amendment is carried, decisions of the arbitration tribunal will not be available to those taking part—

Mr. Arthur Lewis

On a point of order, Mr. Deputy Speaker. I distinctly heard the hon. Gentleman say that he "formally" moved the amendment. The usual custom is that an hon. Member formally moves an amendment, and that is it. I was hoping that the hon. Gentleman would then sit down.

Mr. Deputy Speaker

I regret that I did not hear the hon. Gentleman say anything of the kind.

Mr. Trotter

I move the amendment, and I do so with complete informality.

In view of the Government's provisions for the computation of compensation, it is reasonable to assume that there will be arbitration proceedings in each of these 43 cases. It is necessary, therefore, that a pattern should be established and that it should be known to all those taking part as representatives of stockholders in the discussions before arbitration tribunals.

We know that a considerable period of time is likely to elapse before all the hearings can take place. We know that there are 43 sets of books to be examined by a firm of auditors on behalf of the Government. Therefore, it is important that we should have the speediest possible arbitration hearings when that stage is reached, to determine the amount of compensation.

It will be of great assistance to those representing stockholders if they are aware of decisions on previous hearings in other cases brought under the Act. That is the purpose of this amendment, so that if any stockholders' representative in any one case agrees, there should be made available to the stockholders of other companies the reasons given by the arbitration tribunal for its findings, to provide a pattern for use in establishing a precedent between cases.

Mr. Les Huckfield

I sympathise with the hon. Gentleman's sentiments, but his amendment will not achieve anything that cannot already be achieved, because under the existing Tribunals and Inquiries Act 1971 and under the appropriate regulations governing the procedure on tribunals, for which provision is made in paragraphs 5(1) and 10(1) of Schedule 7 and also in Clause 42(10) of this Bill, the Aircraft and Shipbuilding Industries Arbitration Tribunal will be included in Schedule 1 of the Tribunals and Inquiries Act 1971; so that not only does this Act require tribunals listed in Schedule 1 to furnish interested bodies with a statement, either written or oral, of the reasons for the decision, if requested, on or before the giving or notification of decision, to state the reasons but in addition to that, we intend to make regulations under Schedule 7 to achieve the result that the hon. Gentleman desires, in the same way as was done in the regulations governing the conduct of the Iron and Steel Arbitration Tribunal. In the light of the reasons that I have just listed, and also in the light of a letter written to the hon. Gentleman by my hon. Friend the Minister of State on 28th April, I hope that he will now be able to ask leave of the House to withdraw his amendment.

Mr. Trotter

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

8.53 p.m.

The Secretary of State for Industry (Mr. Eric G. Varley)

I beg to move, That the Bill be now read the Third time.

In doing so I should like to say although this may not be the last occasion on which we discuss this Bill in this House —because, for example, another place may want to pass a minor amendment or two with which we shall have to deal —I should like to thank my hon. Friend the Minister of State, the Under-Secretary of State and my hon. Friends the Members for Glasgow, Kelvingrove (Mr. Carmichael) and Liverpool, Walton (Mr. Helfer) for taking this Bill so far success, fully up to this Third reading stage. They and my hon. and right hon. Friends who were members of the Standing Committee must take credit for getting the Bill this far. The Minister of State and the Under-Secretary had to bear the brunt of the 58 Committee sittings and the hundreds of hours of debate, and we have all come to admire not only their hard work but their skill and, not least, their stamina. When this Bill reaches the statute book, as it will, it will be my hon. Friends who not only deserve but will get the credit. They argued successfully for the public ownership of the aircraft and shipbuilding industries during those debates throughout the consideration of the Bill.

Public ownership is urgently needed for both industries, and it has been asked for by the workers in those industries. On Second Reading, I set out the case for taking the aircraft industry into public ownership. The need to combine the resources of the two main airframe companies is widely accepted. I believe that it is accepted by the Opposition. Ten years after the Plowden Committee's report, private enterprise has failed to bring that about. A merger under public ownership will improve public account- ability in an industry that is heavily dependent on Government orders in the military field and on Government support in the civil field. Under public ownership it will be possible to take key strategic decisions on a coherent basis. This powerful case has never been challenged effectively.

The need for the British Aircraft Corporation and Hawker Siddeley Aviation to combine their strengths is illustrated by the recent discussions between aircraft manufacturers in Europe and America about collaboration on future civil aircraft projects. These discussions have made a unified approach even more urgent. The British Aircraft Corporation has its Concorde and Jaguar links with France and its MRCA-Tornado links with Germany and Italy. Hawker Siddeley has its European Airbus links with Germany and France and its Harrier and other links with McDonnell-Douglas.

Over recent months the stark reality has forced itself increasingly on the aircraft industry that the United Kingdom must speak with a single authoritative voice. We must sort out what project to back and which partners to work with, and we cannot do that while we are divided. We must combine our resources urgently.

At last the companies have begun to work together in this sector, with the Organising Committee taking the initiative and giving the lead. The Organising Committee, which is now in business, provides a talented team to lead the industry at a critical time. It includes some of the ablest men in industry, and able and experienced men from the trade union movement and outside industry. All of them are committed to making a success of the industry after vesting day and they are hard at work in preparation.

The case for nationalising the shipbuilding industry is overwhelming. Britain's shipyards have lost their formerly dominant position since the war. In 1955 our merchant ship output of 1.3 million gross registered tons was larger than that of any other country and amounted to 26 per cent. of the world total. In under 20 years after that, our share of the market in tonnage terms slipped to only 3.6 per cent.

Management and unions now accept that to survive as a world shipbuilding nation we must have a coherent shipbuilding strategy. Moreover, the problems of over-capacity in shipbuilding are now worse than they have been since the 1930s. New Orders for ships over the next five years are likely to fall far short of world capacity. In these circumstances, the case for a concerted national effort is overwhelming. In the Government's view, the public ownership proposals in the Bill offer the only satisfactory prospect of a unified national shipbuilding effort, and without a unified effort the industry will simply not survive.

In ship repairing, there is a clear need for new investment in more modern facilities, for which Government funds will be essential. Without this modernisation, employment in the industry will undoubtedly decline.

The most significant ship repairing units are those which are located on the main estuaries in Great Britain—fox example the Mersey, the Tyne, the Thames, the Bristol Channel, the Humber, Falmouth or the Lower Clyde. The Bill will bring into public ownership all the large ship-repairing companies located on the main estuaries. This will enable the corporation to produce a coherent strategy for the larger ship-repairing yards as a whole.

Nationalisation of the specialist makers of slow-speed diesel marine engines is equally necessary, because they are dependent on the rest of the shipbuilding industry. The future survival and success of these companies are completely bound up with their role as makers of 80 per cent. of all engines supplied to the merchant shipbuilders named in the Bill.

At the present difficult stage in the affairs of these industries, we must end uncertainty quickly. We have assembled a first-class team in the organising committee, which has made an outstandingly good start. We have begun a series of important tripartite discussions between Government, the Organising Committee and the trade unions in which we are looking at ways of tackling the problems of shipbuilding in a united way. But the Organising Committee cannot really get to grips with the problems confronting the industries until the Bill is on the statute book. Failure to achieve this would have serious consequences for all those involved in shipbuilding, ship repair and related activities.

One of the Bill's main themes is industrial democracy, and this is an aspect of the Bill which has been significantly extended on Report. Industrial democracy is central to the Bill in a number of ways. First, we decided to introduce the Bill partly as a result of the expressed wishes of the workers in the two industries, through their representative unions. Second, one of the social priorities of this Government is to bring about an irreversible shift in the balance of wealth and power in favour of working people. This measure is one part of the fulfilment of that priority in industry. Third, there is the plain fact that efficiency follows consent.

Industrial democracy reflects one of the most hopeful themes of the nation's present mood. It is an opportunity to enlist the commitment and enthusiasm of workers, at all levels, to the industries of which they are a vital part. Participation and consent are at the heart of our strategy for the regeneration of British industry.

It is right, therefore, that the most important changes to the Bill on Report have been made in the field of industrial democracy. The amendments, taken together, place a positive duty on the corporations to promote industrial democracy, to enter into consultations with the unions within three months of vesting on how it should be done, and to have regard to industrial democracy in drawing up their organisation and reviewing it periodically.

The Bill already contained a requirement to include in each annual report a report on progress in promoting industrial democracy. These provisions clearly establish industrial democracy as one of the main terms of reference of the corporations. The Bill lays down a framework which will keep industrial democracy to the front of the corporations' minds, but it avoids thrusting down the industries' throats a particular structure which may not be suitable and which may not be what the workers in them favour.

Yesterday evening I said that the Government were considering what they could do about the situation referred to by my hon. Friend the Member for Bristol, North-West (Mr. Thomas) in relation to staff associations when he spoke to Amendment No. 329, which sought to limit the definition of "relevant trade union" to CSEU unions.

This is a complex matter. We have given careful and sympathetic consideration to the problem, and my right hon. Friend the Secretary of State for Employment has authorised me to say that the Government agree that the general legislation relating to certification of independence is unsatisfactory and needs tightening up. The existing provisions result in certificates being granted in circumstances where there is a risk of their being used to upset stable collective bargaining arrangements and to create damaging inter-union disputes.

Accordingly, we intend to take action at the earliest opportunity in response to this unsatisfactory situation by tightening the arrangements. My right hon. Friend the Secretary of State for Employment will be consulting the main interested organisations, including the TUC and ACAS, about the form such action might properly take. I have informed the Chairmen of the two Organising Committees of the Government's intention, which affects them as well as other employers, and I shall invite them, like other employers, to take it into account in their own dealings with staff associations in their industries.

In view of the Government's intention to take action on this general basis, we did not feel it right to accept Amendment No. 329, and I am sure that my hon. Friends, in the light of what I have said, will understand why.

Mr. Heseltine

The Secretary of State is telling the House that once more the freedom of individual employees to decide how they want to be represented is to be curtailed in favour of a centralised system negotiated without any consultation by the TUC. The Secretary of State is saying that if people play the game Labour's way they can go on playing but that any other way will be legislated out of existence.

Mr. Varley

That is an exaggeration of what I said, typical of the hon. Member for Henley (Mr. Heseltine). I hope that the hon. Gentleman will study what I said. The general legislation relating to certification of independence is unsatisfactory and needs tightening up. The Government accept that and will take steps to do it in consultation with the organisations concerned.

Public ownership of these two industries is needed if we are to have a coherent strategy for them. Public ownership will bring about the necessary structural change and will improve public accountability and the quality of decisions in important areas of the United Kingdom economy.

I commend the Bill to the House.

9.6 p.m.

Mr. Heseltine

After a timetable motion, it is customary not to spend a great deal of time on the Third Reading debate, so I shall be brief in the way that the Secretary of State has been brief.

I hope that, like the Secretary of State, I can trespass on your good will, Mr. Deputy Speaker, to say a personal word of thanks to those of my colleagues who have borne such a remarkable load in opposing the Bill. It has been the longest Committee stage and the most protracted opposition to any Bill in the history of Parliament. That is an indication of our determination to use every constitutional means at our disposal to prevent the Bill reaching the statute book.

I single out particularly, conscious that it is an invidious distinction, my hon. Friend the Member for Bridgwater (Mr. King), who played a conspicuous part in Committee. While we have not agreed with a great deal of what the Minister of State and the Under-Secretary of State said in Committee, we have never disagreed with the way in which they said it, apart from one or two occasional lapses such as happen in any Committee. I utter a word of congratulation to the Secretary of State, who had the foresight and wisdom to entrust the Committee proceedings to the Minister of State and thus avoid for himself the 58 sittings.

The speech made by the Secretary of State is typical of speeches made by every Labour Minister on moving the Second Reading or Third Reading of Bills to nationalise industry after industry. Exactly the same words are to be found enshrined in the Hansard record of those occasions—the need for public accountability and a more rational planning mechanism, the need to encourage democracy in industry and so on. In reality, everyone who has taken an interest in the nationalised industrial sector of the British economy is all too well aware of the fine intentions that never work out in practice.

There is no doubt that the present problems of the nationalised industrial sector are among the most severe facing our managerial and industrial economy. We have not found a method of giving it the clear sense of purpose that is required. That is because the very generalities with which the statutes are built preclude managements from knowing those things that are expected of them. The removal of any of the constraints on free enterprise activity in commercial terms, or in financial disciplines, have meant inevitable recourse to the taxpayer on an ever-increasing scale. That has been the reality, and totally absent from it has been any progress or any sense of natural planning worthy of the name.

In industry after industry there has been a sense of drift, punctuated only by improvisation by various Governments who have usually been about to be overwhelmed by crises in the industries themselves. I accept that the price control impost of 1972 is an example of the political activity to which all Governments have been forced in one way or another, and it has undoubtedly been harmful to the nationalised industries. The conclusion that we should draw is that industry should be kept at arm's length from politicians so that such a situation is far harder to bring about.

I had not anticipated—I doubt whether anyone else in the House had—that the Secretary of State would seek to use Third Reading to make an announcement about the curtailment of staff associations. All of us who are involved in industry politically have spent much time speaking to representatives of trade unions and staff associations. There is no doubt that in the aerospace industry many thousands of workers—in some cases the majority of employees in a company—have decided voluntarily to join staff associations. They have done so as a matter of choice, and that choice has been exercised freely. Individual citizens have felt that staff associations can meet their legitimate aspirations more effectively than a trade union in the conventional sense.

Mr. Doug Hoyle (Nelson and Colne)

The hon. Gentleman has referred to staff associations and to people joining them freely. He has suggested that they are not dominated by employers. Will he explain why the rules of the British Aerospace Staff Association were drawn up by a Mr. Mitchell, who is the executive director of Hawker Siddeley? He was not only the first secretary but the first chairman. The association's head-quarters are situated at Hawker Siddeley, Kingston. Will the hon. Gentleman explain that?

Mr. Heseltine

The important matter is that there is legislation to govern the registration of staff associations. In fact, several associations have complied with the existing legislation, which is designed specifically to ensure that they are not dominated by management and that they are genuinely independent. Under that legislation, some associations have been able to satisfy those who question whether they are genuinely independent. Therefore, they have begun to establish for themselves a real presence in terms of being representative of the people in the industry. The result has been complaints by unions—for example, the union of which the hon. Member for Nelson and Colne (Mr. Hoyle) is a member and, I assume, an active recruiter—that the associations are rivalling the activities of the unions. Pressure has been brought to bear on the Government that the law should be changed to preclude the right to opt for staff associations.

That is what is happening. That is what the right hon. Gentleman has said tonight. That is capitulation of the worst sort to outside union pressure. We are not dealing with opposition to trade unionism, but it is unquestionable in the minds of my hon. Friends and myself that people should be allowed to choose the organisations that shall represent them. It is intolerable, when they opt for staff associations, that the power of the trade union establishment should be brought to bear on this weak Government to obilterate their legal rights to behave in that way. That is what the Secretary of State has done from that Dispatch Box tonight.

I should like to place on record the five reasons why my right hon. and hon. Friends and I will vote against the Bill tonight.

First, its very existence over the last three years has caused immeasurable harm to the two industries principally concerned. I have listened to the Secretary of State talk about the need to end uncertainty. It is curious why the ending of uncertainty should be entirely at his timing. The right hon. Gentleman was happy to create the uncertainty three years ago; to introduce the Bill in the last Session of Parliament and then not to proceed with it, but to allow the uncertainty to remain; to proceed with the Bill at a most leisurely pace; and, at the very end of this three-year process, to argue that there is a need to end uncertainty.

As the Labour Party has created the uncertainty, not only in these two industries but in industry after industry that it has added to its shopping list as soon as an industry comes off the top and passes into public ownership, I should have thought that "uncertainty" was hardly the word that the Secretary of State would want to use to describe his preoccupation.

The fact that uncertainty is damaging was proved beyond peradventure in the deal that was done with Marathon, because the precise need for that deal was to ensure that there was no uncertainty hanging over that company. The thing that characterised Marathon was that it was an overseas company which had the right not to come to this country. In orde to ensure that it did not exercise that right, the Labour Party in opposition, was prepared to do a deal to remove the uncertainty, in spirit, by turning this measure into a Hybrid Bill.

I believe that it is arguable and demonstrable that the uncertainty that was clear in the case of Marathon, and was therefore removed, existed with the other 43 companies, listed in the schedule, which have acted in the way that companies act when faced with uncertainty —namely, to hold back on their decisions and to cut back on their investment programmes, to the incalculable harm of the companies and industries and the employees within them. I believe that that is what has happened and that it is the total responsibility of the Labour Party.

Mr. John Evans

rose—

Mr. Heseltine

I shall be coming to the hon. Member for Newton (Mr. Evans) at the end of my second point. I shall give way to him at that point, because he happens to be enshrined in my notes.

The second reason why I recommend my right hon. and hon. Friends to oppose the Bill is that it will impose a framework on the industries least suitable to cope with the genuine problems that exist.

There is no disagreement in this House that there are genuine problems facing both industries. They are problems of rationalisation of the structure, of work load, of redundancy and of how Britain is to be competitive in two internationally oriented industries. They are all genuine problems. I think that we should serve the country and this House a great deal better if we spent time discussing how do deal with those problems rather than whether the industries would be better served by moving into the hands of the State. Whenever an industry has moved into the hands of the State, any solution to the kind of problems that I have listed has been prejudiced.

There is a curious and sad relationship here to the fact that only a fortnight ago the Secretary of State for Industry told the House, once again, that he was delaying the investment programme for the steel industry. That was not for the first time, because only a few months ago the right hon. Gentleman announced a similar delay. The Labour Party, again in opposition, announced a total review because it was electorally convenient, and that had an obvious effect on the investment programme.

The consequence is that the British Steel Corporation is now sadly behind. It is nothing like competitive by international standards. When the economy turns up—if it ever does under this Government—we shall find that we are short of the steel that we require at the prices at which it can be bought internationally. That will be the fault of the Labour Party which created the uncertainty. It now intends to do it to two more industries. In the process of doing it, it is building up an expectation among the workers in those industries that simply by moving from the private to the public sector there will be a sort of cosy option. [HON. MEMBERS: "No."] Oh, yes.

Let us now come to the hon. Member for Newton, who this afternoon was saying, not for the first time, that once we have public ownership we will be able to share the orders. He implied that there would be a greater spread of opportunity as though some divine oracle from Whitehall will allocate the international customers' orders regardless of whether they want to come. It will be a question of where the votes lie and where unemployment is heaviest. It will have nothing to do with where the yards are most efficient, where costs are lowest and productivity is greatest. The hon. Member for Newton and his Friends below the Gangway will say "It is my turn next. I do not care about the viability of those industries as long as I get work at any price, with taxpayers' support, in my constituency."

Mr. John Evans

The hon. Member badly quoted me. If the day ever dawns when we build a ship in the Newton constituency it will be the most peculiar ship anyone has ever seen because Newton happens to be 25 miles from the sea. [An HON. MEMBER: "It will be a hybrid ship."] It certainly will be a hybrid ship.

The hon. Gentleman alleged that the Government's proposals were, in effect, holding back the forward plans of the industry. Can he give one firm example of where any plans, proposals or suggestions in the shipbuilding and ship repair industry have been held back since the Government introduced their original proposals? Will he also take on board that the major problem in the British shipbuilding and ship repair industry since the war has been an almost complete lack of investment in it?

Mr. Heseltine

I hope I am not misrepresenting the hon. Gentleman by suggesting that he was involved in the shipbuilding industry. I listened to him yesterday explaining that he worked for seven companies in two years, and I assumed that he also lived among the people with whom he worked. I did not realise that he left the areas of shipbuilding behind him in the course of those years.

I have no wish to run away from the hon. Gentleman's question, but how does he honestly expect 43 companies, which are now trying to face up to getting from the Government a reasonable price for the assets which are being expropriated, to lay on the line the decision which they are or are not taking? If he cannot read from the precedent of Marathon—which would not have invested a penny piece if it had not been exempted from nationalisation—the effect that it might have had on the rest of the industries, he has not begun to understand.

Why was it that the former Prime Minister constantly said that there must be a clear divide between the public and private sectors? Was it not because he wanted to ensure that the private sector could invest with confidence? That was what it was all about. I realise that Labour Members do not believe in the argument about encouraging success. I realise that that is the fundamental dilemma which divides the Labour Party. Do not Labour Members understand that this will lead to a totally Marxist-dominated State in which every decision is taken by the State and every resource is allocated by the State, so that we get investment where the politicians want it? The only alternative that the Government can pursue is profits and a return on investment. That is the only alternative within which a private sector economy can work.

The Secretary of State for Industry told us that what he is actually after is to get a single rationalised organisation within the aerospace industry as though this is something new. I have told him, and it is publicly known, that in 1973 agreement in principle had already been reached by the two major airframe manufacturers in this country to bring about precisely the rationalisation which today the right hon. Gentleman says he is still after. It was a voluntary agreement at no cost at all to the taxpayer, because they were prepared to discuss how the companies could be restructured within the private sector. What has happened, therefore, is that because it did not suit the dogma of the Labour Party the rationalisation has been delayed for three years. Secondly, it is being achieved at a cost of hundreds of millions of pounds in taxpayers money to do what could have been done two or three years ago on a voluntary basis.

Mr. John Evans

I am Chairman of the Regional Policy and Transport Committee of the European Assembly. We have just had a document placed before us, produced by the EEC Commission, on a proposal for the aeronautical sector of the Community. Will the hon. Gentleman read that document, which makes clear that the aeronautical industry in Europe has been an almost complete disaster since the end of the war? The Commission's proposal is that the whole industry within the nine member countries be taken over by the Commission. That is hardly a success story.

Mr. Heseltine

I am delighted to hear that on the Labour Benches there is a flicker of interest in the European movement. Curiously enough, in 1973 I not only succeeded in obtaining agreement in principle to the idea of rationalisation but started the first intergovernmental discussions on how we could achieve a European policy for the European aircraft industry. When the Labour Party came to power, it slammed the door on those discussions because they did not suit its referendum posture. There has been delay not only in rationalisation but in European terms while the Government have reluctantly come to the conclusion that an Organising Committee chosen from people outside the industry should take over the responsibility from people who have spent their life in the industry.

When we hear from Labour Members about the Europeanisation of the industry, I remind them that the Minister of State is now pleading with the French to allow Hawker Siddeley back into the Airbus project that the Labour Government cancelled in the late 1960s because the Airbus did not meet the European problems of the Labour movement at the time. There is now another total turnabout by the Government on the policy they created in the late 1960s. I welcome the new faith that the hon. Member for Newton shows in the European movement. It is a tragedy that it took Labour Members years to get round to it.

The third reason why we shall oppose the Bill is that it has been sold in both industries as a means of creating or preserving jobs. One understands the argument. The impression is given by Labour Members at constituency level that once the taxpayer owns the industry there will be a fund of taxpayers' resources to maintain people in it, regardless of the industry's work flow. That is the impression given in the steel review. It is the impression that Labour Members give in every speech they make about the problem.

That creates a wholly illusory atmosphere about the real industrial dilemma which we face. We must find a way to sell products that people will buy at a price they will pay. The longer we go on suggesting that public ownership is a way to achieve that, the longer we shall be simply building up expectations which have never been fulfilled and which the Government now do not even have the money to fulfil.

Mrs. Helene Hayman (Welwyn and Hatfield)

Will the hon. Gentleman accept from me that aircraft workers in my constituency are not that stupid and are fully aware that they must make planes that people will buy if they are to keep their jobs? They are equally aware that under private enterprise they do not have a chance of continuing in employment as civil airframe workers, and that it is only with Government funding—if and when they get it—that they will have that chance.

Mr. Heseltine

As I negotiated with Hawker Siddeley the HS146, the first civil project to be negotiated in this country for 10 years, despite the fact that for most of that period a Labour Government were in power, I am not prepared to take that from the hon. Lady. Government procurement is involved in all the high-technology industries across the world. That will always be the case. The question we must ask ourselves is why, alone among the free world countries, we believe that industrial strength can be developed by public ownership, even where there is Government procurement behind it, which no other advanced country of our sort has chosen as a means of conducting its industrial economy.

That leads to the conclusion which constantly recurs in the debate—and the only reason why one comes to that conclusion is that there is a group of people in the Labour Party who are interested only in political solutions. They are not interested in industrial solutions. Every time they examine an industrial situation, they come up with the identical solution—that the problems can be solved only by nationalisation. But in practice, as the people of this country understand more and more clearly, nationalisation has not only failed to solve those problems but has usually aggravated them.

My final reason for opposing the Bill is that we are spending £300 million to compensate shareholders to persuade them to leave an industry which the vast majority of them have no wish to leave. We are putting up public money to satisfy the appetite of the Labour Party for nationalisation. As a result, we are keeping interest rates in Britain higher than they are in competing economies and, therefore, we are destroying investment throughout the private sector and consequently destroying the very jobs that the Government claim to have so much at heart.

As long as public expenditure policies remain as they are, we shall have levels of unemployment that are too high. It is a hollow mockery for the Government to talk of a clear divide between the public and private sectors. By that they mean that one can have a resting point policy while we digest a little more of the private sector. The moment that we have digested those bits that are the subject of current legislation, we shall move on with hungry progress to take over other industries such as banks, insurance companies, pharmaceuticals, the construction industries and the various industries associated with agricultural machinery and equipment which have been listed by the Government for acquisition. There is no such thing as a clear divide. The only issue is how fast one moves down the appalling road which the Government have decided to take.

We shall vote against the Bill tonight and we shall continue to resist nationalisation with all our constitutional might. If the Bill reaches the statute book, hon. Members should have no doubt that when we come to power we shall return these industries to the private sector as fast as possible.

9.33 p.m.

Mr. Stan Thorne (Preston, South)

This measure was contained in the Labour Party manifestos of 1974 and it can therefore be said that the Government are carrying through a policy that was a commitment to the electorate. In view of that, hon. Members on the Government side can only welcome the opportunities that are provided by the measure.

I attended about 50 sittings of the Committee on the Bill. As is their wont, Opposition Members represented their class interest as effectively as they could, Their role as representatives of big business has been to keep these industries in private hands for private profit. At no time have they been interested in the social aspects of public ownership. They have made references to the work force, but those references were invariably based on their usual approach to labour as a commodity that is bought, used and set on one side when no longer required at the will of the owners, or managers acting on behalf of the owners.

Because of that approach, Opposition Members found it impossible to accept the concept of industrial democracy. The Opposition do not wish to accept the concept that the right of management to manage should be challenged. The proposals for industrial democracy rightly challenge that concept. If the workers in an industry that is being taken into public ownership are to respond to a variety of challenges, their loyalty will be harnessed only if they become involved in the decision making in publicly-owned industry. Anything short of that means that we shall attempt to do what private enterprise has woefully failed to do over the years, namely, to call for loyalty and then to proceed to exploit those workers.

The hon. and learned Member for South Fylde (Mr. Gardner) referred yesterday to the talks he had had with shop stewards at Warton. When the Committee stage of this Bill began, I set up a series of meetings, with shop stewards at the BAC works at Warton, during which consultations took place over the amendments that were felt to be necessary to clarify industrial democracy and a host of other problems. On some occasions the shop stewards came to the House and meetings took place here; on other occasions we met the representatives on their home ground. At no time was any opposition to the Government's plans put forward by those shop stewards.

In those meetings the subject of job security was rightly raised on many occasions. The question of involvement in decision making was also canvassed. Despite the efforts of the Opposition to delay the Bill's passage, the Government in the last few days have taken steps to ensure the industrial progress in this sphere that is required by workers.

I was appalled to hear the hon. Member for Henley (Mr. Heseltine) say that the compensation paid to the owners of the aircraft and shipbuilding industries was inadequate, in view of the sacrifices made by those owners.

Mr. Heseltine

rose—

Mr. Thorne

I shall not give way to the hon. Gentleman. He was allowed to make his speech and I hope that I shall be allowed to make mine. It is on this question of compensation that I am being interrupted. In the Standing Committee and again on the Floor of the House today, the Minister of State gave us some extremely interesting figures about public money ploughed into the aircraft and shipbuilding industries in recent years.

Some of us believe that when public money has been given to companies in the sort of situation that has obtained in recent years, when the question of paying compensation arises the contribution already made from public funds should be taken into account. Unfortunately, the Government have not proceeded along that path, but I would not wish to suggest in any way that we should not vote for the Third Reading because of that.

Clearly, it is my intention—and it is the desire of the aircraft workers in my constituency—to support the Third Reading, and I do it wholeheartedly.

The problem of compensation has been raised in a perfectly bare-faced way by the Opposition, as if in some way the shareholders were being sold short, when in my view it is the public generally who have contributed to these industries and have been sold short.

I am glad that we have now reached the Third Reading of the Bill. I hope that in a very short time we shall be welcoming vesting day, in order that we may build two industries in the interests of the British people.

9.42 p.m.

Mr. Kenneth Warren (Hastings)

This is a sad night for a proud industry, the British aircraft industry. The Minister of State must know in his heart that it is, and so should the Minister who opened the debate.

Those hon. Members who speak about the benefits that will accrue to this industry are simply not in touch with what the industry is like on the shop floor, in design offices or in the laboratories. They do not know the contribution that the industry has made to the wealth of this country, or the contribution it has made to the defence of this country. We hear only about the handouts given to the industry, when without that industry we should not be properly defended or employed today. The wealth of this country would be less by £500 million each year in exports.

Tonight we have listened to the Minister saying that he is frightened of the designers and the laboratory technicians who have formed themselves into staff associations to protect their own jobs. This shows the way in which the Labour Government have become frightened of the people of this country. The Government ought to be ashamed of what they are trying to force through the House tonight by the guillotine. Fewer than one in five of the people in this country want more nationalisation. We shall have a steamroller going through the Lobbies in the cause of Socialism. I wish the Minister of State were present while I read out what he said at the second of the 58 sessions we had in Committee. He said he wanted it to go forth from the Standing Committee that we are nationalising these two industries in order to further Socialism in this country."—[Official Report, Standing Committee D, 16th December 1975; c. 98.] He said nothing about jobs or wealth, or the wellbeing of the people of this country; he spoke only about Socialism.

In 1904, on what George Bernard Shaw described as a wet Saturday afternoon in the football season, Clause 4 of the Labour Party constitution was devised—the nationalisation of the means of production, distribution and exchange. Seventy-two years later we are still bogged down with the stupidity of Socialism. It cannot move without nationalising. It does not care about people, let alone the workers in an industry that it is about to nationalise.

We have been told over and over again that nationalisation will save jobs. Labour Members know that nationalisation never saves jobs. The whole history of the nationalisation of coal, steel, the Post Office and the railways has been one of lost jobs.

The aircraft industry workers, if they do not know it already, ought to be told tonight that they will lose jobs. Whole factories will be closed. For two years the Government have done nothing to protect the interests of the aircraft industry. They have also failed to carry out their duty under the Civil Aviation Act 1949, under which it was the Minister's task to encourage measures for the development of civil aviation, and for the design, development and production of civil aircraft. That duty is abolished under this Bill. There is a limitation on the amount of money that the workers may expect to receive as help from a Government whom they are supposed to support. The Minister must know that the workers do not support the Government. I wish that the hon. Member for Preston, South (Mr. Thorne) were still in the Chamber. He knows the result of the shop floor ballot at Warton. The workers said that they did not want nationalisation.

Let us consider the question of industrial democracy. It is a load of twaddle, although that may be an unparliamentary word. "Industrial democracy" is a meaningless phrase. It takes away people's right to be heard. As a result of the setting up of a panoply of bureaucracy inside the proposed corporations, the workers will not be heard. They are never heard in any nationalised industry. Nor are the customers allowed to be heard. We do not believe that this nationalisation will be different, although the Minister of State told us when he introduced the Bill that this nationalisation would be different.

Under the Bill the sum of £250 million will be allowed for new projects. That sum is enough for one new project these days. The Minister did not have to wait two years to bring the Bill forward; he could have done the work that was required before.

The hon. Member for Welwyn and Hatfield (Mrs. Hayman) knows how much the workers on the shop floor at Hatfield need help. The Minister could have provided that help under the 1949 Act. What will happen? This Bill limits the amount of assistance that a Socialist Government will be able to give to the workers. What will be the result? Jobs will be lost. That will be the effect of this measure on the people who create enormous wealth. They do not wish to make vacuum cleaners, they want to work in the aircraft industry, where they know that their skills are wanted. The Government should lead this aircraft industry with vigour. We should be standing up against the French and the Germans. The Minister of State should not be obliged to go to France to talk about European or French projects.

This leads us to the question: which factories will close? Within two or three years the words "Brough", "Chadderton", "Woodford", "Hurn", "Weybridge" and "Fitton" will be heard in the House, when we discuss the question of those workers going to the wall. The guilty men of the Government will have driven them there, as a result of the failure of the Government in the past two years. The Minister of State may look round but he will not find many Government supporters present. It is amazing how many Government supporters failed to speak in Committee on behalf of the workers, or have failed to support the Minister tonight. One Government supporter never spoke in Committee. That is not the way in which to look after the interests of workers.

I ask the Minister and his cohort on the Front Bench why they do not have the guts to tell the truth. They have got this industry into trouble. They have told the workers that nationalisation will get them out of it. They know that that is not so. Why have the Government not got the guts to tell these chaps that they will be in the dole queues faster than they ever believed?

The hon. Member for Welwyn and Hatfield knows that there are 19 Tridents left on the Hatfield order book. The Hawker Siddeley 146 cannot be made at Hatfield, nor may the BAC X11 be made at Weybridge. When nationalisation takes place, the workers' jobs in factories will be weighed in the balance. That is the way in which the Government will treat those who voted for them. We hear that the workers voted for the Government. It is scandalous that the workers should be used as the tools of Socialism.

I come to the question that seems to rile Socialist Members; it is the magic word "money". The compensation is poor. After 30 per cent. capital gains tax, £70 will be left from every £100 paid in compensation. There will be a further 30 per cent. reduction. The investors will receive £49 for every £100 paid in compensation. In today's money, that will be worth only £25 compared with the 1973–74 valuation. Those who invested in those industries will receive £1 for every £4 they saved and invested. That may sound satisfactory to Socialist Members who do not care about people's savings. I am worried about where the money will come from with which to nationalise the industry.

We have never heard from the Minister—because he dare not tell us—how much this will cost. I doubt whether he is going to get the money. This is the worst and crudest cut of all. It has been estimated that £400 million will be needed to buy these industries, and the Minister knows that we shall need about the same amount of working capital to keep them going. About £800 million must be found.

Last week, Socialist Members trooped through the Lobbies to support cuts of £1.000 million in borrowed money in order that they should be able to afford the nationalisation of the British aerospace and shipbuilding industries. They made the choice; they decided that they wanted nationalisation in preference to schools, roads, hospitals and better pensions. That sword hangs over them, and the next election will find it dropping hard upon the heads of many hon. Members on the Government Benches who believe that Socialism will save their seats. It will not.

The whole story has been one of robbery with violence. We have had the robbery of people's savings and, I regret to say, as one who served his apprenticeship on the shop floor, the robbery of the livelihoods and futures of many good men and women with whom I was proud to work.

9.52 p.m.

Mr. Arthur Palmer (Bristol, North-East)

I hope that the hon. Member for Hastings (Mr. Warren) will forgive me if I do not follow his observations except to put him right on one point: we have not yet trooped through the Lobby—for or against—on the Government's economies. That comes on Monday.

I wish instead to concentrate on the speech of the hon. Member for Henley (Mr. Heseltine), who was his usual emotional and exaggerated self. His inability to control himself in the House is now well established. The hon. Gentleman tends, as did Hitler and as does the editor of The Times, to use the expression "Marxism" as a term of abuse. If he thinks that this is a Marxist Bill or Bolshevism run mad, he cannot be living in the real world. I am a democratic Socialist and I regard this measure as a necessary extra instalment of public ownership within the context of a mixed economy.

The Conservative Party has been converted to support of a mixed economy. In that case it means that when a Labour Government are in power the mixture will be thickened with a little more public ownership, which will be restrained when the Conservatives are in power. If the Conservatives truly believe in a mixed economy, its present objection to a Labour Government extending public ownership is going beyond the bounds of political reality. What do they expect?

I wish to refer to the aircraft industry. The nationalisation of this industry is almost inevitable. Vast sums of public money are needed to support advanced technologies. It is increasingly difficult to get the money from private sources. Other reasons for nationalisation include the dependence of the industry on State orders and the need for further structural rationalisation—which is not denied by the Opposition. The engine side of the industry has already collapsed into nationalisation. Another reason, which I hope will not shock Opposition Members, is the superior strength and wishes of the trade union movement, as against the management side, in the industry. For a very long time the relative strength was the other way round.

Conservative Members must understand that the historical balance of power has shifted. They must take that into account. At heart they know this. They understand that, in the end, this kind of legislation is inevitable. If a Conservative Government come to power in the near or distant future, I doubt whether they will denationalise the industry, despite what the hon. Member for Henley said. If they attempt it, they will not then have the support of the management in the industry. They had years in which they could have denationalised the other industries which had come into public ownership. They have had to accept that, once made, a change of this depth continues.

The hon. Member said that Labour Members had sold this legislation to the workers by promising jobs where there was no economic basis for them. That is not true. Together with my colleagues from Bristol, I often visit BAC and we discuss in a realistic way at all times the employment situation. Of course, the change of ownership in itself will not create jobs. The creation of jobs depends on market opportunities, on skilled management and on the support of the workers in improving efficiency.

Once this measure goes on to the statute book and the Organising Committee takes over, it will be necessary to climb down from the heights to the plain. As a superannuated revolutionary once said, "I discovered after the revolution that I still had to do the washing up". This is the case in the aircraft industry. It is not that we do not have a very good aircraft industry—it is excellent—but there are world-wide difficulties in finding markets which the workers well understand.

I was glad to hear my right hon. Friend refer to the importance of the MRCA. I hope that there will be no question, whatever may be said in some sections of my party, of cancelling that necessary project for the defence of the country. But, apart from the fairly busy military side, on the civil side there are not many good prospects at present of any new wholly British aeroplane, leaving the Concorde out of account. I believe that to be a fact. We may get a greater share in the Airbus, the joint European project. I hope that we shall, and that we shall press that very hard with the French and the Germans.

The employment situation in the aircraft industry is undoubtedly worrying to all those who are concerned with its future. I say that without any criticism of the present management. At BAC, I know most of them very well. But the threat of nationalisation cannot be blamed for the present problems of the aircraft industry. Those difficulties have arisen under the present ownership. The hope is that the new people coming in—what might be described as a new management wave—will give a leadership that will be different and be better able to cope with difficulties.

Mr. Victor Goodhew (St. Albans)

Will the hon. Gentleman give way?

Mr. Palmer

No, I shall not give way to the hon. Gentleman. I am pressed for time, and I am coming to the end of my remarks in any event.

We have to change things for the better, not simply as a management and sales effort, important though that is, but as a joint effort by all those who work in the enterprise, on the basis of employee participation and full trade union opportunities. The hon. Member for Henley referred in a disparaging way in this connection to the TUC. Does he not understand that in this country TUC affiliation is the hallmark of genuine trade unionism? [HON. MEMBERS: "No."] It certainly is, and within the TUC, as my hon. Friends know, there are plenty of unions affiliated to the TUC which are available in the aircraft industry to organise management employees to the very highest level. There is no reason at all for managers at any level to go outside TUC-affiliated unions, and these are by definition all genuine unions.

This industry has had a very great past it has a good present and I believe that we can hope for an excellent future for it. I hope that the Organising Committee in dealing with rationalisation will make haste slowly, because a tremendous amount of damage can be done in the first few years through rationalisation being too swift. But I wish this industry well, as I know my constituents do. The House should give the Bill its Third Reading.

10.0 p.m.

Mr. Richard Wainwright (Colne Valley)

This Bill is very largely a measure of industrial archaeology for the preservation of manufacturing monuments. If it eventually becomes law, after an initial and very painful period of slimming down—an ordeal the Government have yet to face, if they are still the Government when the Bill is enacted —these two great industries, to the country's great loss, will join Stonehenge, York Minster, Fountain Abbey and Barnsley Town Hall as sacred objects which must be shored up and patched up for ever, regardless of their inutility. This disaster is compounded by the extraordinary difficulty that the Government have found in obtaining curators for these potential monuments. After a tremendously long seach some very anomalous characters have been produced.

The origin of this unfortunate essay in expensive conservation, like so many national disasters, lies in the period of the last Conservative Administration, when the two industries made themselves enormously vulnerable. Not all the units, but many, in both industries, made themselves vulnerable to the perfectly understandable charge that millions of pounds of taxpayers' money should not be sunk in industries of this kind without a large measure of public control. If only the Conservative "gravy train" had not been so lengthy and well stocked, and had not trundled around all the aviation and shipbuilding areas in a desperate search for votes, those industries would not have been so vulnerable to the attack of the nationalisers.

The result will be that for years to come, unless some extraordinary freak result arises under present electoral system, or there is a change in it, capital will be locked up in these industries far in excess of what they should be using—and, far more serious human lives, human skill, diligence and industry, will be locked up likewise. This is the great disaster of nationalisation—that it concentrates national resources in the wrong places, ill-adapted to Britain's modern industrial rôle.

The Bill should not leave this place without some other minor comments. In the first place, it should have been in the form of at least two quite separate Bills. The troubles in Standing Committee and the extraordinarily tedious length of the proceedings were due almost entirely to the intolerable confusion caused by the fact that we were leaping from an industry that is rather ancient in its modes and is situated in certain areas of the country to an industry that is highly technological and modern, concentrated in quite different areas of the country.

We in the Liberal Party believe that Bills to nationalise manufacturing industries should all be treated as hybrid Bills from the start, so that petitioners can be heard and the legislation can be considered properly.

The worst charge that we can level against the Bill is that it applies to manufacturing industries of great sophistication, which are largely dependent on export orders, the same old dreary type of nationalised structure used for public service industries that exploit the consumer with their monopoly powers. One cannot treat foreign customers with the same overriding contempt as that with which the Post Office and the Gas Board treat their customers when they want to make a profit in order to please their political masters.

There are many follies that currently contribute to our enormously swollen foreign borrowing requirements. This Bill is one of the greatest follies of all.

10.3 p.m.

Mr. Gordon Wilson (Dundee East)

Many of us in the Scottish National Party have very severe doubts about whether the Bill will protect jobs. The OECD forecast is that the capacity for shipbuilding in Western industrial countries should be reduced by about 30 per cent., and the Government are entering tripartite talks in order to get a policy in which the shipbuilding industry will be slimmed down. Therefore, it is clear why we have doubts about this matter.

The Bill seeks to deal with the shipbuilding and aircraft industries in Scotland as well as in other parts of the United Kingdom. It would be very strange indeed if this House were to allow any of these vital industries to be taken over by other countries and taken outside the control of those who live in the United Kingdom, yet that is what the Government are proposing in relation to these industries in Scotland. In the Bill there is no form of Scottish control at all. At best we have the sop of decentralisation and the recognition that there should be some Scottish interest in the organisation. It will be very difficult indeed for the Government to marry these decentralisation proposals of giving power to the yards with a Scottish structure in British Shipbuilders.

The overall effect of the Bill will be to establish British Shipbuilders with its headquarters organisation in Merseyside. The right hon. Member for Sunderland North (Mr. Willey) believes that the headquarters will be on Merseyside. I do not know whether that is true, but certainly they will not be in Scotland.

Once again we will have the removal of vital Scottish industries outside Scottish control. It makes a mockery of the Government's proposals for devolution. How can they have devolution in terms of a Scottish Assembly when they take political control outside the country? The Government have missed the opportunity to bring in any effective form of Scottish control.

What about the Government's policies for shipbuilding? I made it clear on Second Reading that the United Kingdom has had no real effective policy for shipbuilding for the last 15 years. Only last week the Chancellor of the Exchequer announced that he would reduce the regional employment premium, and that will affect male jobs in the shipbuilding areas. He also intends to increase national insurance contributions. That, too, will have an effect on the shipbuilding areas, because most of the jobs in the companies are for men and this will be an extra burden which will have to be carried whether the Bill succeeds tonight or not.

Judging from what has been said by Sir Anthony Griffin and Mr. Graham Day, it seems that the individual units in the industry will be judged on their merits. The development areas have benefited from the regional employment premium, and they in particular will lose. An additional load will have been placed on employment in these areas which did not exist before. The Bill is supposed to retain shipbuilding jobs, but the Government are placing additional difficulties on the cash flow of these industries.

I cannot see why the Secretary of State has allowed this to happen. He must go back to the Chancellor and explain that if this additional burden is to be placed on male jobs there will be a loss of employment for men. In the areas that I represent, as in Strathclyde, and in the North-East and the North-West of England, one of the prime needs is for more male jobs. The Government must make up their minds what they want to do.

We have the promise of rationalisation, but to Scottish hearts and Scottish minds rationalisation means redundancy. Already trade union shop stewards have been in touch with us in the SNP seeking our support to protect Scottish jobs, even under the nationalisation structure which the Government have in mind. They are also trying to get Labour Party support, but that is difficult to obtain when it comes to supporting jobs in the face of Government policy.

The Government have failed to take up their opportunity to provide for effective Scottish control. Once again they are proceeding with a nationalisation measure which will take opportunity and decision-making power away from Scotland. They will be placing the shipbuilding industry under the overall control of British Shipbuilders, which will be based on Merseyside, Teesside, Wear-side or some such place. That is unacceptable to the people of Scotland.

10.13 p.m.

Mr. Frederick Willey (Sunderland, North)

The hon. Member for Dundee, East (Mr. Wilson) is mistaken if he thinks I believe that the headquarters of British Shipbuilders will be on Merseyside. I believe they will be on the North-East Coast.

We spent a long time in Standing Committee, but for once I think that it was time profitably spent. The Bill contains three entirely new features. It provides for industrial democracy, and that it not unimportant. Secondly, it provides for decentralisation. In the February 1974 General Election I told the men in the yards at Sunderland that we would have centralised bureaucratic nationalisation over my dead body, and I am obliged to my right hon. Friend the Secretary of State for affording me the opportunity to remain alive. The Bill contains decentralisation based upon something which I also argued in Standing Committee—profit centres. That is another important change in our approach to nationalisation.

Thirdly, we have moved some way from the Morrisonian concept of nationalisation. We have brought in the concepts that we were discussing last night. The hon. Member for Dundee, East referred to unemployment and regional policy, and these are dealt with by the Bill. My right hon. Friend mentioned the certificate of independence. This is important to those who have made representations to me. Legislation on industrial democracy is expected. If agreement is reached before the Bill passes through all its stages in another place, I hope that provision will be made in it for these two industries.

Reference has been made to management under nationalisation. Sunderland Shipbuilders are nationalised. The yard was profitable, but Court Line got into difficulty and it was nationalised. There is the same management now as there was before. It is showing enterprise and fighting for orders.

The largest capital investment has been in Austin and Pickersgill—£35 million. That investment was after the election of the Labour Government. The firm applied for help to the previous Conservative Government but it received aid from the Labour Government. All this has been done under the shadow of nationalisation. It has made no difference. That was mixed investment. The money could be raised only if the Government put in £9½ million. During the negotiations, Austin and Pickers-gill offered the Government 25 per cent. of its equity with no condition about nationalisation, but the Government provided the loan without taking 25 per cent. of the equity.

The returns have just come in and they show that, in terms of compensated tons, new orders taken in United Kingdom yards during the first six months of 1976 were three times as much as for the whole of 1975—more than four times as much in terms of gross registered tons. That shows that the threat of nationalisation has not prejudiced the yards. It is untrue to say that the threat of nationalisation prevented orders being placed.

How does the shipbuilding industry fare? During the time we have been debating in Committee, the nationalised and private enterprise parts of the industry have been working hard and have had some return. My right hon. Friend the Secretary of State remembered the days when British shipbuilding yards produced one-quarter of world output. I have spoken in the House at a time when British shipbuilding accounted for more than half of world output.

Japan is cutting back its projected capacity by 20 per cent. Everyone in the industry knows that the present degree of nationalisation means that the whole industry must be nationalised.

Mr. Nicholas Winterton (Macclesfield)

Why?

Mr. Willey

The hon. Gentleman has not read the Booz-Allen Report. I have read it and I have repeatedly referred to it. It was pointed out in that report—this projection was made several years ago—that next year one of our eight yards would be closed. That was realised by Austin and Pickersgill. If an industry is largely publicly controlled, that will very much affect the way in which it is treated. The private yard knows that in that situation it cannot survive, however profitable it may appear to be.

The shipbuilders I have spoken to are disturbed by the protracted discussions in the House. They are anxious to have the matter settled in the interests of the industry. We should not be too doctrinaire. We must face realistically the difficulties that confront the industry—for example, Sunderland Shipbuilders Ltd., Govan Shipbuilders Ltd., Harland and Wolff and Cammell Laird Shipbuilders Ltd. We must realise that the industry is facing the most intense competition that has existed since the war. It is necessary to have a national structure within which to deal with it, and that is what we are providing today.

I hope that the Bill will afford the industry the opportunity that it needs so that we need not talk about its being a national monument. The speech which included that phrase should be circulated to the Sunderland Liberal Party. It is interesting that there are Members in the House who talk about one of our basic industries being a national monument. It is a disgrace to say such things. There is a great ability in the industry. There are those within it who have fought very hard for it. There are workers within it who have worked hard and who are second to none in many skills. It is their livelihoods for which we are fighting. By agreeing to a Third Reading, we shall at any rate be giving them a chance.

10.23 p.m.

Mr. George Younger (Ayr)

There is little left to say at the end of the Bill's prolonged passage. I suppose the best thing that can be said is that at least and at last we know the worst—namely, that these great industries are being taken into nationalisation. They are to be brought under one impersonal and remote form of management. They are to be brought within a system which has not worked for any other industry and which shows no signs of working for these industries.

To do the Secretary of State credit, I did not think that he had his heart in the words that he read when making his speech this evening. It was a load of nonsense that bore no relationship to the real facts.

What will face these industries? The shipbuilding and aircraft industries have in them successful and unsuccessful companies. The successful ones make millions of pounds for our exports and balance of payments while the unsuccessful ones offer many people employment. They will not all be brought under the same heading. There is no prospect of seeing any improvement in management. It is a tragedy that the only thing that can possibly result for those who now work in these industries is a struggle to outwit the worst effects of nationalisation.

I shall mention one of the smallest companies that is to be nationalised, because it is in my constituency—namely, Scottish Aviation Ltd. at Prestwick. It is a firm which, for the aviation industry, has a long history. For over 50 years it has been one of the pioneer companies in British aviation. It has had its good times and its bad times. It is worth remembering that the 10 years which ended in 1974 were the most successful years in the company's history. It is a small company that will form a very small part of a monster of a nationalised industry. It will take all the skill, devotion and courage of those who work: in it, manage it and represent it to ensure that it is not swallowed up and completely obliterated. I warn the Minister that I shall continue to fight hard for the company under nationalisation, regrettable though nationalisation may be. The company must continue and it must be protected.

The hon. Member for Dundee, East (Mr. Wilson) has a nerve to come here and say what he did tonight, because some weeks ago the Scottish National Party had the opportunity to demonstrate positively that it was on the side of those who were against nationalising these industries. The SNP ran away from that opportunity in the most ignominious way. It was not by accident. It was because the Government realised that they would be in difficulty in that vote. What did they do? They brought in the frighteners, the heavy mob. Trade union representatives in Scotland went to see the hon. Gentleman and his hon. Friends—they demanded to see them—and they put the screws on. But they did not need to do very much. They simply needed an interview, and the hon. Gentleman went back to his parliamentary colleagues to railroad them into deserting the Opposition on that vital night.

Mr. Gordon Wilson

rose—

Mr. Younger

On that vital night SNP Members gave the Government time to win the two by-elections that were pending. It is no use having the support of the SNP now. It will be welcome if it comes, but it is no longer of any use. The hon. Member for Dundee, East must know that he let down thousands of people who were looking to the nationalists to help us to defeat the Bill. The hon. Gentleman has let down those people, and they will not forget it.

Mr. Gordon Wilson

I have been rather amused, because the hon. Gentleman said that if the Scottish National Party and Plaid Cymru had voted with the Opposition that evening the Opposition would have won and the Government would have been defeated. In fact, as he knows, for the second time running a Conservative Member was absent from the vote. I am suspicious that, whenever it comes to a major vote in which the Government might be defeated, there is always a Conservative Member absent. Does the hon. Gentleman realise that at the meeting we were asked to give our support for the protection of the jobs of the workers if nationalisation went ahead?

Mr. Speaker

Order. The hon. Gentleman has had his go, and I am hoping to call one more Member before the winding-up speeches.

Mr. Younger

It is no use the hon. Gentleman hiding behind a technicality. The fact is that he let down the people who were looking to the SNP to help to defeat the Bill. Therefore, the hon. Gentleman cannot get out of it that way.

The Bill will do nothing but harm to many people who work in highly successful industries. I wish that the Government would have the sense to recognise that fact and, even now, realise that the Bill can do nothing to help them.

10.28 p.m.

Mr. R. C. Mitchell (Southampton, Itchen)

I hope that the House will forgive me if I do not join in the argument between the official Tories and the tartan Tories. We had an interesting speech by the hon. Member for Henley (Mr. Heseltine), but it was a speech that we had heard at least 10 times before. I suggest that it was as daft on its tenth rendering as on its first.

The Conservative Party, now joined by the Liberal Party, has adopted scare tactics to pretend that public ownership of the shipbuilding industry will lead to unemployment. However, the whole House knows that the opposite is the truth. If the Bill had not been introduced, there would have been widespread bankruptcies among shipbuilding companies with consequent widespread unemployment among workers in the industry.

When I first read the Bill, there were a number of matters about which I was not happy. However, it has been greatly improved both in Committee and on Report. All the credit must go to my right hon. Friend the Secretary of State for Industry and his junior Ministers.

I particularly welcome the amendments dealing with industrial democracy and decentralisation. I am also pleased with the assurances that have been given by Government Front Bench spokesmen and the Organising Committee, which is doing a very good job, that the units inside British Shipbuilders will have a great deal of local autonomy and that not all the decisions will be referred to headquarters.

I should like to make one critical comment. I hope that the Organising Committee will be allowed to choose the site for its headquarters wherever it thinks best for commercial reasons and that the Government will not be bound by any rash statement made by former Ministers.

I welcome the fact that the warship-building section of the shipbuilding industry is to remain in the Bill. There was an attempt earlier to take it out. What an absurd situation we should have had if the warship section had been taken out of the Bill and had remained outside public ownership.

I am one of those who believe very much that the three specialist warship yards of Yarrow, Vickers and Vosper Thornycroft are getting orders from the Ministry of Defence because they are the most efficient warship construction yards. What would have been the position had they been left out of the Bill? I think there would have been every temptation for the Ministry of Defence in future years to place its naval shipbuilding orders with the yards that are in public ownership rather than those outside it.

Mr. Bryan Gould (Southampton, Test)

I am sure my hon. Friend is aware that when he and I accompany the Minister of State on a visit to Vosper Thornycroft tomorrow one of the main issues the Company will wish to discuss with the Minister is the urgent need to get a contract for a Type 42 frigate. Would my hon. Friend venture an opinion as to whether the firm's chances of obtaining such a contract, either now or in the future, would be improved or worsened if it remained outside the British Shipbuilders Corporation?

Mr. Mitchell

In my opinion, its chances will be very much improved by being inside British Shipbuilders. As my hon. Friend well knows, he and I have continually pressed the Ministry of Defence to place defence orders at Vosper Thornycroft because it is one of the there most efficient shipbuilding yards in the country. If the rest of the industry was nationalised and that company remained outside, there would be a very great danger indeed that it would suffer and there would be a loss of jobs in those three specialist yards. The men in Yarrow, the men in Vickers and those in Vosper Thornycroft know that very well.

Mr. Viggers

rose—

Mr. Mitchell

I will not give way to the hon. Gentleman. There is a shortage of time and other hon. Members want to speak. The hon. Gentleman made a speech earlier.

Because of the decline in world shipbuilding orders, the British shipbuilding industry faces a difficult time in the next few years. No one pretends that the path will be easy. I believe, however, that the Bill provides the best chance of survival for the British shipbuilding industry. Let us have no further delay.

The tactics of the Opposition in delaying the Bill have created uncertainty and caused all sorts of trouble. The hon. Member for Glasgow, Cathcart (Mr. Taylor) should read a speech made by the chairman of the organisation that the hon. Gentleman represents in this House. The chairman said that the worst thing we could possibly have was continuing uncertainty, and he said that we should reach a decision one way of the other. The quicker the Bill gets on to the statute book, the better it will be for the British shipbuilding industry.

10.34 p.m.

Mr. John Cope (Gloucestershire, South)

The Bill is a tragic one. It is also a bad Bill. We Conservatives have been criticised during the debates, yesterday and before, for speaking too much about compensation, arbitration, safeguarding and so on. But more than half the clauses in the Bill are about these matters. More than half the clauses in the Bill are about the act of nationalisation. Very little of the Bill is about the future of these two industries, and that is what matters to the country and to those who work in them.

When we looked at the details of the Bill in Committee, we saw that the provisions for accounts and audits, in which I take a special interest because of my professional expertise, are very sketchy indeed. They are much more flimsy than those provided for private companies in the various Companies Acts over the years. Similarly, the provisions about industrial democracy are extremely vague and are only a little less vague as a result of the amendments which have been made on Report.

It has been said that private industry has failed to introduce industrial democracy. But what about the nationalised industries? They, too, have failed to introduce industrial democracy—whatever that means—in the way that Labour Members want. If hon. Members on the Government side have brilliant ideas about introducing great new schemes into nationalised industries, let them put them into practice in the existing nationalised industries first instead of taking new industries into public ownership in order to experiment on them.

I return to the main point, that the Bill is not about the future of the industries. In spite of the debates, we still do not know what the Government will do with them. We have been able to pick up a few scraps of information here and there. A little piece of the jigsaw puzzle began to be filled in on Monday by the Minister of State, when our local paper reported him at Yeovilton as once again holding out the idea that nationalisation was good for jobs and saying: If we get more Concorde orders, then fine for Filton. If we don't, there is a possibility we will have to look at other projects when the industry is nationalised. He tries all the time to imply that jobs are safe only if—or "when", as he puts it—the industry is nationalised. It is grossly misleading to my constituents and others involved.

The hon. Gentleman added that he hoped more work would come to Filton from the building of the MRCA. I hope that it does, as a result of orders for the Tornado which this Government and the Governments of other countries are to place. But I also hope that the Members representing Preston are satisfied that work should be transferred from there to Filton, and that my neighbour, the hon. Member for Bristol, North-West (Mr. Thomas), is happy that even more of the jobs of his constituents and mine should depend on the defence budget. Many of them in Rolls-Royce in my constituency already depend on the MRCA, and they will depend on it in the future. Maybe more workers at Filton will depend on it.

We also picked up another piece of the jigsaw puzzle on the shipbuilding side, not from the Department of Industry but from the Secretary of State for Employment, who said in his constituency of Barrow-in-Furness that three yards were to have priority. One was the Vickers yard at Barrow. I do not know whether the hon. Member for Southampton, Itchen (Mr. Mitchell) has taken that on board. He obviously hopes that his is another of the yards. We have not been told which are the other two yards. We have been told nothing else about the future of these two industries, in spite of the long debates on this ghastly Bill.

10.38 p.m.

Mr. Tom King

As we come to what will be, one way or the other, the final stage of the Bill in this House, I thank my hon. Friend the Member for Henley (Mr. Heseltine) for his kind words, which I reciprocate. I commend him for his drive and energy in leading the opposition to the Bill. I also particularly thank my hon. Friend the Member for Southgate (Mr. Berry) for the most energetic way in which he whipped us into order on a number of occasions, and I thank all my hon. Friends who supported us in the protracted consideration of this long Bill, which, as my hon. Friend the Member for Henley said, we have fought by every constitutional means open to us.

I wish that I could say that the Government had opposed us in the same spirit and in the same way. The Committee stage and further consideration of the Bill will go down in parliamentary history as the longest ever. I hope that it will never be surpassed in the deviousness and sordid behind-the-scenes manoeuvres that have marked the succeeding stages of the Bill. These have gone on so long that many hon. Members may have forgotten some of the events leading to the Government's saving the Bill only by a broken pair on one occasion. They have dealt behind the scenes with certain other parties, and those parties probably now bitterly regret this. They must now realise how they have been hoodwinked at every stage.

I agreed with the hon. Member for Colne Valley (Mr. Wainwright) when he said that the Government were largely to blame for many of the problems. By any standards, the provisions of this measure should have been contained in two Bills. Having only one Bill led to difficulties at Second Reading and in Committee when we had to dodge from one industry to another. Many of the problems would have been avoided if the Government had recognised at the start that the Bill was hybrid. It must grieve the Secretary of State that we would have progressed faster if more thought had been given at the beginning to the way in which the measure was tackled.

I approach Third Reading and the end of our opposition—and we have fought as hard as we could—not in a spirit of anger but with a deep sadness. I sincerely believe that it will not help British industry. If I believed that it would help British industrial performance, if I believed that employment would be more secure or that it would help exports, I would consider the measure seriously. British industry faces many problems and handicaps, and I believe that Clause 4 is one of the albatrosses which Britain sadly has to carry, to its cost. It is a relic of a previous industrial policy which is totally discredited, which the Government do not have the courage finally to repudiate and which still has to make its turgid and damaging progress.

The Government's solution is the least suitable to the genuine problems that these industries face. They are supremely international companies. The aircraft and shipbuilding industries cannot hope to survive unless they can attract a substantial amount of overseas business. They are not domestic service industries. They do not have a monopoly in their markets. They will live or die by service, quality and competitiveness. In that situation, does anyone seriously believe that putting them under the bureaucracy of national State ownership will solve any of their problems?

Yesterday I spoke of decentralisation and I challenged the Government to explain what is likely to happen to the marketing functions of these industries. I asked whether they were likely to remain separate. I asked what would happen to wage negotiations and whether they would be negotiated in the individual companies or at national level. I asked what would happen to the purchasing functions and pricing policies.

Inevitably, centralisation will occur. The right hon. Member for Sunderland, North (Mr. Willey) has said "Centralisation over my dead body." A former leader of his party used the same expression about grammar schools, and we have seen what has happened to them. I would not sell a life insurance policy to the right hon. Gentleman because of the speed with which I expect centralisation to happen. The Scottish nationalists and others have been grievously misled over the idea that there will be a separate Scottish Shipbuilders Corporation. Centralisation will undoubtedly come to pass.

There are many pious hopes in this regard. Indeed, the hon. Member for Southampton, Itchen (Mr. Mitchell) said how splendid and how much improved the Bill was. But when the amendments are examined, it can be seen that they do not amount to a row of beans. All that the corporations have to say, within the proper discharge of their functions, is "We are reporting to you within three months as required under the legislation, and we discover that we cannot decentralise this, that or the other function." In other words, the protection in the Bill will be destroyed at a stroke. So much for local determination. There will obviously be a move towards centralisation.

Furthermore, political considerations will come into play. It will be said "Where is the unemployment, where are the Labour marginal seats? Therefore, we consider that the orders will have to go to this or that yard". When a foreign customer is sent to a yard which he does not like and which falls down on the job, that will be the last time we see him.

It has been said by Labour Members "If the Bill does not go through, there will he unemployment in the yards ". Announcements have already been made in the House that 20,000 men will be affected by the present defence cuts. Indeed, it is estimated that in the next 10 years 11,000 of them, or more than half, will lose their jobs. So much for the protection of employment offered under nationalisation. Yet at the same time the Tribune Group advocates the cancellation of the MRCA Tornado. The Secretary of State for Defence has already made clear that such a step would mean the loss of 25,000 jobs in the industry and the virtual destruction of the British airframe industry.

Finally, there is the claim that these proposals will give protection to the industry and those who are employed in it.

While all this argument has been taking place, crucial time has been lost in terms of providing orders for shipyards. Equally, a great deal of time has been lost in negotiating with our European partners possible collaborative airspace projects. Perhaps if we had taken advantage of the two years that have been lost we would now have had a share of new projects. Now, however, those projects could be lost for ever.

On the horizon is the prospect that the Government will try to bring in similar proposals for the banks and the insurance companies. If the worst were to happen in that respect—and my colleagues and I are determined to prevent that happening—we might well face the situation in two years' time that we are accused of delaying tactics that will damage the future of the banks and the insurance companies.

Against that background, and in the knowledge that the Bill will do nothing for these industries but damage and endanger employment, we shall oppose it with all our vigour.

11.48 p.m.

Mr. Kaufman

Every right hon. and hon. Member knows that this House is about to make a momentous decision. Every vote cast in favour of the Third Reading of the Bill will be a vote to give hope and opportunity to the British aircraft industry and the British shipbuilding and ship repairing industries. [HON. MEMBERS: "No."] Every vote cast against the Bill—[Interruption.]

Mr. Speaker

Order. The hon. Member for Henley (Mr. Heseltine) was heard in an atmosphere of reasonable order. I hope that that situation will be allowed to continue.

Mr. Kaufman

Every vote cast against the Bill will be a vote in favour of the destruction of the civil airframe industry. Every vote cast against the Bill will be a vote in favour of the destruction of the merchant shipbuilding industry in this country.

The result of the lack of initiative of the aircraft industry under private ownership is that not a single new significant project has been launched by it during the whole of this decade. The only new project has been the SD330, launched by the nationalised Short Brothers in Northern Ireland, whose Unionist Members plan tonight to vote to deny the benefits of public ownership to the rest of the United Kingdom. [Interruption.] The Government have more confidence in the aircraft industry than its private owners, and I have evidence of this for the House.

Mr. Robert J. Bradford (Belfast, South)

rose—

Mr. Kaufman

Earlier this year the Civil Aircraft Division of the British Aircraft Corporation requested an extension of the Government's underwriting of the BAC111 production line which was announced to Parliament in June 1975. This request was subsequently supported by the Organising Committee for British Aerospace.

My right hon. Friend the Secretary of State has now agreed, subject to negotiation of satisfactory contractual arrangements, that the potential liability falling to the Government can be increased by a maximum of £3 million at July 1976 economic conditions. If these arrangements can be negotiated, this will mean that BAC will now be able to go ahead on the production of a further five BAC111 aircraft and this should be able to retain in its work force a considerable number of people at Hurn and Weybridge—both, of course, in the area of Labour marginal seats—who otherwise would have been forced to find other work.

In accordance with the underwriting agreement, profits from further sales will be applied towards reducing the liability incurred by the Government and actual payment by the Government would be made only if an overall loss remained when BAC111 production finally ceased. Under the agreement—

Sir Derek Walker-Smith (Hertfordshire, East)

On a point of order, Mr. Speaker. I am reluctant to intervene in the Minister's speech, but, although it is the practice of the House that a certain latitude is given to Ministers as to the prohibition on the reading of speeches, is not that latitude conditioned by their giving some semblance at least of understanding the text which they are reading?

Mr. Kaufman

I am making an announcement of vital importance[Interruption.]—to thousands of people.

Mr. Speaker

Order. The debate has not long to go—[Interruption.] Order. [Interruption.] Order. The Minister has the right to be heard as well. Mr. Kaufman.

Mr. Kaufman

Under the agreement, all the finance required for the continuation of production is being provided by the British Aircraft Corporation.

Also, during the same period Hawker Siddeley Aviation Ltd. proposed a six-month programme of additional design work, research and development and structural testing relating to the HS146 aircraft project. Subsequently this was examined in detail with the company.

I can now announce that in order to continue to meet the Government's decision of December 1974—

Mr. Patrick Cormack (Staffordshire, South-West)

Further to that point of order, Mr. Speaker. Surely this is not a case of the Minister refreshing his mind from copious notes. This is a third-rate diatribe being read to us.

Mr. Speaker

Order. The hon. Gentleman knows that that was not a point of order.

Mr. Kaufman

This announcement is of vital importance to thousands of aircraft workers.

Mr. Kenneth Lewis (Rutland and Stamford)

On a point of order, Mr. Speaker. The House is waiting to hear the Minister wind up the Third Reading of this important Bill. He said that he was making an announcement, which is completely unrelated to the Bill.

Mr. Speaker

The content of the Minister's speech is his responsibility. But he should be heard.

Mr. Kaufman

To meet the Government's decision of December 1974 to keep open the possibility of launching that aircraft, my right hon. Friend the Secretary of State has agreed in principle to the company undertaking the proposed programme. The Di million required to fund this work will be the responsibility of British Aerospace on vesting day and will therefore be met from within the funds of the new corporation relevant to the Bill. The Organising Committee of British Aerospace has endorsed the Hawker Siddeley Aviation proposal. I am now writing to the company setting out the terms of the Government's approval, which will be reported to the House when the necessary contractural agreements are concluded.

If the arrangements go ahead, Hawker Siddeley Aviation will not have to announce a substantial number of redundancies which otherwise would have been necessary in the immediate future at Hatfield. I pay tribute to my hon. Friend the Member for Welwyn and Hatfield (Mrs. Hayman) for her pressure on the Government for all this.

Mr. Fairbairn

On a point of order, Mr. Speaker. I have heard some humbug tonight. Will you rule whether humbug is an offence?

Mr. Kaufman

These industries have much to contribute. During the eight months in which the House has been considering the Bill. I have had the opportunity of visiting 20 shipyards, ship repair yards and aircraft factories, from Prestwick in the north to Brough in the east, to Hum in the south and to Filton in the west. I have seen great ships and aircraft being constructed. I am dazzled and humbled by the expertise of the workers in those industries. Only public ownership can rectify the worst and make the most fruitful use of the best.

Mr. John Biggs-Davison (Epping Forest)

On a point of order, Mr. Speaker. Is it not a provision of the orders of the House that a speech on Third Reading must be confined to what is in the Bill?

Mr. Speaker

Order. I have heard nothing out of order yet.

Mr. Kaufman

The workers in these industries have earned their chance. The Bill will give them their chance, and I urge the House to support it tonight.

Question put, That the Bill be now read the third time:—

The House divided: Ayes 311, Noes 308.

[For Division List No. 304 see col. 1061]

Question accordingly agreed to.

Bill read the Third time and passed.