HC Deb 04 July 1977 vol 934 cc867-9
10. Mr. Mike Thomas

asked the Secretary of State for Energy whether he will now invite the CEGB to place the order for the Drax B power station.

Mr. Benn

Discussions are continuing, but I recognise the need for an early decision.

Mr. Thomas

Is my right hon. Friend aware that procrastination is now becoming a real threat to jobs and that there are overwhelming reasons for making this decision quickly? Can he confirm that competitive tendering for this order, which would delay work on the shop floor by up to two years, would not achieve the objective which was intended—that of saving jobs in the industry? Does he not agree that that would be nonsense which the Government should not entertain?

Mr. Benn

The energy case for Drax B is not in dispute. The problem is over the restructuring, which is a matter for my right hon. Friend the Secretary of State for Industry. The question of competitive tendering is one that would have to await decision on the order itself. It is recognised that the previous Government, when Ince B was put out, did not engage in competitive tendering for similar reasons.

Mr. Mellish

Does my right hon. Friend remember that some time ago he gave an interview at a firm in my constituency, Babcock and Wilcox, which is the largest firm in London dealing with generating equipment and which involves 15,000 people? Is he aware that we were impressed with the way in which he handled that negotiation? Can he do something about the uncertainty that the decision on Drax B is creating for this and other firms because they do not know what the future holds for them?

Mr. Benn

I recall the visit to Babcock and Wilcox when I saw management and workers. I also went to see the plant at Renfrew. The problem arises not so much concerning the restructuring and the boiler-makers but on the more difficult questions involving the turbogenerator manufacturers. The Government can proceed only by trying to reach an agreement by consent between those concerned. The powers do not lie with us to impose a solution. These are matters for the Secretary of State for Industry.

Mr. Gray

May we have clarification about competitive tendering? May I remind the Secretary of State that his Under-Secretary of State gave a categoric assurance to the House that there would be competitive tendering?

Mr. Benn

The record does not show that. The hon. Member is always reminding me that the nationalised industries themselves have prime powers in this matter. A decision about competitive tendering does not in the first instance lie with the Government. The hon. Member will also recall that in similar circumstances his Government thought it right not to go for competitive tendering. That is a very important precedent which must be uppermost in our minds.

Mr. Buchan

Does my right hon. Friend accept that his visit to Renfrew was extremely welcome? Does he recall that we exposed the job figures in relation to delays in the Drax B project and that with every day that passes further redundancies are being considered? Does he accept that redundancies must be avoided at all costs? Will he bring pressure on his colleagues and say that if the restructuring does not take place he must cut the Gordian knot and put the contract where everybody expects it to go—to the North-East and to Babcock and Wilcox in Renfrew?

Mr. Benn

I appreciate what my hon. Friend has said. I remember discussing the problem with him when I was in Renfrew. I am anxious that there should not be any playing off between the management and work forces of the companies concerned. They are all caught in the serious situation of a serious dip in ordering, and jobs are threatened. The research and development technology and management in all these centres, in turbo generating and boiler manufacturing, are of the highest world standards. It is important not to allow one group to be played off against the other while these matters are dealt with.