HC Deb 27 April 1978 vol 948 cc1802-10

Lords Amendment: No. 1, in page 1, line 22, after "Shipbuilders" insert or any other body corporate which has its principal place of business in Great Britain and which, between 1st January 1976 and 31st December 1977, has in Great Britain—

  1. (i) completed a metal-hulled ship with a length of not less than eighty feet; or
  2. (ii) repaired, refitted or maintained such a ship in a dry-dock or graving dock in which that body corporate has had during that period an interest in possession or a licence to occupy that dry-dock or graving dock for a period of not less than one hundred and fifty days"

11.15 p.m.

The Minister of State, Department of Industry (Mr. Gerald Kaufman)

I beg to move, That this House doth disagree with the Lords in the said amendment

Mr. Speaker

With this have been grouped the following Lords Amendments:

No. 2, in page 2, line 11, at end insert— "length", in relation to a ship, has the same meaning as it has for the purposes of the Merchant Shipping (Load Lines) (Length of Ship) Regulations 1968; No. 4, in page 3, leave out line 9 and insert—

  1. "(a) in the case of a person employed by or by a relevant company of, British Shipbuilders, by British Shipbuilders; and
  2. (b) in the case of a person employed by any other relevant company, by that relevant company."
No. 6, in page 3, line 16, at beginning insert "(i)"

No. 7, in page 3, line 18 after "company" insert "of British Shipbuilders"

No. 8, in page 3, line 20, after "Shipbuilders" insert— or (ii) any other relevant company to authorise any of its officers or employees to determine on its behalf any such question which falls to be determined by it".

Mr. Kaufman

This amendment and those grouped with it are consequential on those with which you, Mr. Speaker, have advised the House to disagree. I ask the House to disagree with this and the other amendments in the group.

Mr. Norman Lamont

I should like briefly to comment on these amendments. These amendments allow the Government to set up schemes for redundancy which would apply to the private sector just as the scheme which the Government envisages applies to the public sector. As the House will recall, we raised this point at all stages of the Bill and we have attempted through the Lords to deal with some of the detailed criticisms. These included problems of the definition of a ship. This seemed to worry the Minister of State. We have tried to establish what sort of hull there should be on a ship and to draw a clear dividing line for the Minister.

One of the arguments we made was that the Bill discriminates between the public and private sectors. In the Lords debates that was openly admitted by the Government.

Lord McCluskey said: May I, with permission, just intervene to say that I have acknowledged from the start, and I repeat it now, that there is discrimination. I am merely making the point that there always has to be discrimination.—[Official Report, House of Lords, 9th March 1978; Vol. 389, c. 959.] On several occasions he admitted what the Opposition both here and in another place said—that there is discrimination between the public and private sectors.

Our case against the Bill is that this discrimination embodies an element of unfair competition. It imposes on the small remaining private sector in shipbuilding and ship repairing a burden that they will not be able to meet. They are confronted with the same factors as British Shipbuilders and which face all those involved in the international shipbuilding crisis. They involve the same jobs and the same type of people, who are represented by the same unions. The same threat of unemployment hangs over the small firms as hangs over British Shipbuilders.

We say that the Government proposals are unfair to the companies and to the men employed in them. Furthermore, the Government's position is inconsistent with their own intervention fund. The Government have made great play of the fact that the fund is not exclusively for the nationalised sector but is available to private shipbuilding companies. If there is no discrimination in the intervention fund, why is there discrimination in the availability of Government money for redundancy?

We are left wondering why there is discrimination. What is the motive for it? Has it anything to do with the, at times, bitter political struggle over exempting ship repairing from the Bill? I hope that there is no political motive for this, although I am bound to say that we have not as yet heard a logical, coherent case put forward in the debates in this House or the House of Lords why the private sector should be left out of the Bill.

It is discrimination. Ministers admit this. We wonder whether it is compatible with Articles 92 and 93 of the Treaty of Rome which specifically say that aids to industry which discriminate between companies within a sector are incompatible with the functioning of the EEC. We have raised this point on several occasions but have had no reply from the Government. I would have thought, on the basis of those articles, that this move might be incompatible with the Treaty of Rome. If we cannot have this point answered by the Minister tonight, perhaps this is something which others will have to consider raising direct with the Commission.

Other European schemes, such as that applying to the steel industry, have operated on an industry basis not on the basis of discrimination between companies. The steel redundancy scheme is available to the private sector companies in this country. Help is given from the EEC in addition to the statutory redundancy scheme which provides the legal minimum payments.

While this Bill has been proceeding through Parliament some companies have come in which were not previously within its terms. Ailsa Shipbuilding Company in Troon has now become part of British Shipbuilders. It has decided that there is a better future within the organisation. It has gone into State ownership since 1st April. What we should like to know from the Minister is whether Ailsa Shipbuilding qualifies for help under this legislation from 1st April or from the vesting date of British Shipbuilders, namely 1st July 1977.

We can draw a contrast between what is happening with Ailsa Shipbuilding and what will happen to Western Ship Repairers in Birkenhead. That company has got into extreme difficulties and has laid off 625 men. As things stand, that company will not benefit from the redundancy payments scheme, despite the fact that its difficulties have been caused by exactly the same international factors in shipbuilding as those about which the Minister never ceases to tell us in all our debates on the subject.

It may be said that it is a small company. Indeed, the Under-Secretary in our previous debate, went out of his way to say that the smaller companies would not be affected so much by the forces of the world shipping recession. That is true up to a point. But it is not a very good argument for drawing a distinction. It is not a very good demarcation line to draw in this legislation between small and large companies. Even if it were what the Government were attempting, it does not seem to be a good argument when we find companies such as Western Ship Repairers being so badly affected and in an area such as Merseyside, about whose unemployment all hon. Members are concerned. I would have thought that there would be concern that, while the men at Troon are to benefit from the Bill, those at Western Ship Repairers apparently are not to do so.

We have so far heard no convincing arguments on this point. We have tried to read between the innuendoes of Ministers' speeches to discover what is the reasoning behind the exclusion of the private sector from the legislation. But no coherent argument has been advanced. Size is sometimes advanced as one reason. It is said that the smaller companies are the companies that have been left out But a moment's examination shows that that is not so. The largest ship repairers are outside British Shipbuilders, and small ships are built within the public sector. Whatever else it does, the Bill does not draw a distinction between public companies dealing with large ships and private companies dealing with small ones.

Another argument is that to incorporate the private sector would cause delay. We do not want to do that, but I cannot take the argument seriously when the Bill is retrospective.

Then there are vague references to administrative difficulties. That is a convenient argument if one cannot make out a good case, but I wonder what those difficulties are. To administer a scheme like this, one needs to know three things—salary, length of service and birth date. All three are verifiable—two of them through the PAYE system.

Other schemes, like the EEC steel scheme, are administered by the NCB computer, the same computer which will operate this scheme, for both public and private firms. The textile redundancy scheme, administered by the Government, covers private firms. It is difficult to find administrative arguments, easy though they are to fall back on, convincing.

Nor can one say that a large number of companies would have to be covered. The trade association, which has been so helpful and clear, estimates that only 20 companies would be affected by extending the scheme to the private sector.

The amendments would simply give the Government another enabling power—to create schemes for the private sector. If there were only a few redundancies in a particular case and the Government did not think that such a scheme would be appropriate, they could so decide.

The cost argument will also be raised. But we have never had any evidence of what this legislation will cost—whether £10 million, £15 million or £60 million. There is no financial limit. The only estimate which has been given is the cost per 1,000 men—which, during the passage of the Bill, rose by 60 per cent., from £900,000 to £1,500,000. So the whole area of cost is a vast fog and our proposal could be only a minimal addition to public expenditure. It is on grounds of fairness to the companies and to those whose lives have been spent working in them that we think the Government should agree with the amendments.

11.30 p.m.

Mr. Frederick Willey (Sunderland, North)

If I understood Mr Speaker right, this debate is otiose, so I do not propose to prolong it. I am satisfied to record my attendance at this late hour. I would only add that we are worried in my area about redundancies in shipbuilding. Although we have the most successful yards in the country, some redudancies are currently being declared and we are anxious to expedite the passage of the Bill. I am delighted that the prospects of that are so good, and I hope that the Minister will do his best to see that we get the Statutory Instrument as soon as possible.

Mr. David Hunt (Wirral)

This is a regrettable Bill but—

Mr. Deputy Speaker (Sir Myer Galpern)

Order. We are dealing with a series of amendments.

Mr. Hunt

This is a regrettable Bill to which a series of amendments have been tabled but it is, unfortunately, necessary. It is important that the Bill should be fair but as my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) said, in its present form it is manifestly discriminatory.

The Minister said on Second Reading that the purpose of the Bill was not to put shipyard workers in a privileged position, but since then it has become clear that what the Bill does is to discriminate in favour of certain employees in the shipbuilding industry and that it in no way assists about 10 per cent. of those in that industry and about 25 per cent. of those in the ship repairing industry.

This is, in many ways, a most unsatisfactory scheme. We protested at many stages during the passage of the Bill through the House that insufficient information was being brought forward. As my hon. Friend said, the cost and the estimates of cost were at first extremely vague. I remember that in a moment of panache the Minister came to the Chamber, having just allowed us to receive some detailed documentation at the time that the Bill was last in this place. We looked at the information and tried to assess the cost, and it became clear that the original estimates were wholly wrong. How certain can we be now that we have the right estimates before us?

What the amendments seek to do is to look at the serious nature of the problem. The problem is not confined to particular companies involved in the shipbuilding and ship repairing spheres, but appertains to the industry as a whole. As part of the world problem shipbuilding and ship repairing are facing a serious recession, and it is wrong to pick out certain companies that are publicly owned and give them an unfair advantage.

We should not consider this matter merely from the point of the companies but should take into account the employees in the private sector of the industry. They belong to the trade unions which represent employees in the public sector. Why is it that because they are in the private sector they are to be left out of this scheme? It is manifestly unfair to do that. A number of extremely good arguments have been put forward against that being done, and I have not heard any real argument from the Government to show why these employees should be excluded from the scheme.

It was said in Committee that it was almost impossible to draft an amendment that would allow these companies to be included without causing serious anomalies. When one examines that argument one sees that it immediately falls by the wayside, because the scheme itself introduces a whole series of anomalies. That is so because within British Shipbuilders there are a number of companies that have nothing to do with shipbuilding or ship repairing. Employees who are employed in different industries will be entitled to benefits under this scheme over and above the payments available under the statutory redundancy scheme. It may be that when the Minister decides how to implement the scheme in its various ways he will try to find some formula to remove those employees from the benefits of the scheme, but as it is designed at the moment they will be entitled to those benefits.

Surely that is no greater anomaly than extending the Bill to the private sector. I can see no difficulty in doing that within the proposed definition. The matter was seriously considered in another place and, having read carefully what was said there, I can see no danger of the Government in an extension of the scheme.

It will be up to the Minister when he sets out the guidelines for implementing the scheme to lay down what sort of employees will be entitled to claim benefits. It is wrong to exclude part of the industry for what seem to be dogmatic reasons. I can see no other reason for the exclusion. There have been arguments about delay and so on, but none of the Government's arguments holds water.

If the Government are not doing this out of petty ideology or sheer dogmatism, I cannot see why they are not prepared to accept the proposed extension of the scheme to people doing the same job and facing the same recession. If the Government have any positive arguments, I should be pleased to hear them, but I see no reason for not accepting the amendments.

Mr. Kaufman

The hon. Member for Kingston upon Thames (Mr. Lamont) asked about the attitude of the European Commission to the Bill. I have discussed it on several occasions with Commissioner Vouel, the Commissioner responsible for competition, and he has never questioned the scope of the Bill.

The Opposition claim that the question of demarcation is easy and should not create problems, but the hon. Member for Kingston upon Thames admitted that the amendments in another place were tabled at the instigation of himself and his hon. Friends. Those amendments lay down a definition of 60-ft. ships, while the Opposition amendments in this House laid down a definition of 80-ft. ships. The Opposition have shown how difficult it is to lay down demarcations in this matter. The only clear demarcation is that of companies that are subsidiaries of British Shipbuilders or the Northern Ireland company.

The hon. Member for Kingston upon Thames also asked about the position of Ailsa, which has become a subsidiary of British Shipbuilders since vesting day. Employees of Ailsa will qualify under the scheme only if they have been made redundant after the company became a subsidiary of British Shipbuilders.

I am surprised that the Opposition should raise the question of Western Ship Repairers and accuse us of petty ideology and dogmatism. If it had not been for the petty ideology and dogmatism of the Opposition, Western Ship Repairers, would have been nationalised as part of British Shipbuilders on 1st July last year and all its workers would have qualified under the scheme.

Question put and agreed to.

Lords Amendment No. 2 disagreed to.

Lords Amendment No. 3 agreed to.

Lords Amendment No. 4 disagreed to.

Lords Amendment No. 5 agreed to.

Lords Amendments Nos. 6, 7 and 8 disagreed to.

Lords Amendment No. 9 agreed to.

Lords Amendments Nos. 10, 11 and 12 disagreed to.

Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their amendments to the Bill: Mr. Bates, Mr. Huck-field, Mr. Kaufman, Mr. Norman Lamont and Mr. Weatherill; Three to be the Quorum.—[Mr. Kaufman.]

To withdraw immediately.

Reasons for disagreeing to certain of the Lords amendments reported, and agreed to; to be communicated to the Lords.

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