HC Deb 20 December 1983 vol 51 cc281-91
Mr. Speaker

Statement, Mr. Norman Lamont.

Mr. Dennis Canavan (Falkirk, West)

On a point of order, Mr. Speaker. Is it not an insult to the House and a bigger insult to the workers of Scotland that the important statement that we are about to hear should be made by someone of less than Cabinet rank, especially since the closure could have repercussions throughout Scotland where already over 300,000 people are out of work and another 8,000 jobs are at risk?

Mr. Speaker

What is the point of order? The question of who speaks from the Front Bench is not a matter for me.

Mr. Canavan

I should like you, Mr. Speaker, to use your good offices to get someone of Cabinet rank to make the statement.

Mr. Speaker

That sounds like a good Christmas demo.

4.12 pm
The Minister of State, Department of Trade and Industry (Mr. Norman Lamont)

With permission, I shall make a statement about the contract between Britoil and British Shipbuilders.

In December 1981 Scott Lithgow contracted with Britoil to produce a semi-submersible drilling rig. The contract value was £88.6 million, and the contractual delivery date was April 1984. Construction began in February 1982. By March 1983, British Shipbuilders had provided for losses of £43.8 million on the rig. The then chairman, Sir Robert Atkinson, warned that performance and losses at Scott Lithgow were unacceptable.

On 31 October 1983, Britoil was sufficiently concerned about progress on the contract to issue through its agents a notice requiring Scott Lithgow to demonstrate within 30 days that the rig could be completed by February 1985. Scott Lithgow responded to Britoil by arguing that despite the undoubted delays on the contract hitherto, completion would be possible within the terms of the contract. However, on 19 December a notice of cancellation was served on behalf of Britoil on the basis that Scott Lithgow had not demonstrated that the rig could be delivered by February 1985. British Shipbuilders has responded to the cancellation notice by disputing its validity and I understand that it has now instituted legal proceedings.

While British Shipbuilders and Britoil are considering the next step in this negotiation, all work on the rig will be stopped. British Shipbuilders is instructing suppliers to suspend work on contracts relating to the rig. Up to 2,000 of the work force are involved in construction of the rig. The remainder of the work force—about 2,250 men—are employed on two other contracts: one for BP and one for the Ministry of Defence. It is British Shipbuilders' intention that these contracts will continue.

Unemployment in this area is already high and a further increase of the scale implied by the cancellation of this order would be a matter of deep concern to the Government. My right hon. Friend the Secretary of State for Scotland this morning met the Scottish TUC and told it that he would, of course, seek to do all that he can to alleviate the very real distress that would be caused in the local community. However, the offshore industry is highly competitive and customers insist upon contractors—including management and work force—delivering on quality, price and time. Regrettably, Scott Lithgow so far appears to have been unable to satisfy Britoil that it can fulfil its obligations on this contract.

Mr. Peter Shore (Bethnal Green and Stepney)

That is a totally unsatisfactory statement. Surely the Minister understands that this is not the time for the Secretary of State for Scotland to be telling the Scottish TUC that he will seek to alleviate the distress caused by closure, but that it is the time for the Minister of State and the Government to call in the parties and insist upon a solution. Why has he not done that already? Surely he has known for months that the losses have been building up. Does the Minister understand that not just 2,000 jobs, but 4,250, are at risk directly if the shipyard closes, and that another 4,000 workers are directly engaged in ancillary work and contracting? We are talking about over 8,000 jobs.

Is the Minister aware that Scott Lithgow is the lead yard designated by British Shipbuilders for offshore construction and that it is building probably the most advanced semi-submersible rig that we have yet embarked upon? It is designed to operate in the deep waters of the Atlantic and is a far more sophisticated rig than has so far been operated even in the deep waters of the North sea.

Is it not absurd that the future of this yard and of this industry should be left to litigation started by one wholly-owned public corporation against another 48 per cent.-owned public corporation, while the chairman of British Shipbuilders has just departed for a three-week holiday in Canada? Will the Minister now recognise and accept his own responsibilities? Will he understand that he cannot—we will not let him— simply sit on his hands while a major new high technology industry in Scotland is allowed to collapse?

Mr. Lamont

The Government have, of course, kept in close contact with what is happening in relation to the contract. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) is right to say that we are discussing a very serious matter. We are talking about a commercial dispute between British Shipbuilders and Britoil. Both sides have taken decisions that they judge to be in their best commercial interests. If the Government were to intervene, either to urge Britoil and its agents to withdraw its notice or to urge British Shipbuilders to renegotiate the contract—which it does not wish to do—the commercial and financial position of one party or the other would be severely prejudiced. The ground would be cut from under both managements' feet. In such a situation Government intervention could only be counter-productive —[Interruption.] The Government must have regard, not just to the yard but to the wider interests of the taxpayer.

The taxpayer has funded huge losses at Scott Lithgow. [Interruption.] If the House will let me finish. On this contract the taxpayer has funded losses of nearly £44 million. A total of £66 million of the losses of £117 million that British Shipbuilders announced last year came from Scott Lithgow.

Since 1977, 8 per cent. of employment in British Shipbuilders has been accounted for by Scott Lithgow and no less than 38 per cent. of the accumulated losses of British Shipbuilders. We must have regard to the taxpayers' interests. I do not know whether the right hon. Gentleman is suggesting that we should put more money into Scott Lithgow. We have already put large sums into that yard. It must be right for British Shipbuilders to do what it thinks is in its commercial interests. It thinks that it is right not to renegotiate. It thinks that it could complete the contract. That is British Shipbuilders' position.

Mr. Shore

Is the Minister saying that in his judgment it is entirely a matter for the two parties concerned and that the contract is entirely commercial? Is he saying that now, or even at the end of the present legal procedure, he does not accept that he has a separate role to look after the national interest in so far as it is involved in the future of the industry? Is he saying that he will take no action at all, now or later?

Mr. Lamont

Of course there is a national interest. The national interest is not to pour good money after bad. We must have regard for the taxpayer. British Shipbuilders has stated its position, which is that it would prefer to complete this contract. It does not wish to be forced to renegotiate the contract. If that is what the right hon. Gentleman is suggesting, he is suggesting that we should encourage the company to take risks and to incur costs that it does not want to undertake. That could have a damaging effect, not only on the finances of British Shipbuilders but on other contracts on which it is at present working.

Mrs. Anna McCurley (Renfrew, West and Inverclyde)

Does the Minister appreciate the dreadful damage that will be inflicted on Inverclyde by the closure of Scott Lithgow, with the direct loss of 4,200 jobs, the loss of a possible 4,000 other jobs related to the industry, and the jobs that will go through the loss of business within the community? Will he carry out an urgent review of the procedures adopted at Scott Lithgow with a view to salvaging some of the undoubted expertise that exists at the yard? Surely the Government cannot pull the plug on an industry that has served the west of Scotland well for more than 300 years without the most thorough examination of the position. Surely the Government will not walk away from this problem.

Mr. Lamont

I understand my hon. Friend's concern. She came to see me about this matter the other day.

This matter concerns notice about the cancellation of a contract. It is not about the closure of a yard. British Shipbuilders has stated that it intends to continue the work both on the Ministry of Defence contract and on the BP contract. It is not the Government who have pulled out the plug on Scott Lithgow—[HON. MEMBERS: "It is."] It has been, I regret to say, the inefficiency, the poor performance, the late deliveries and the massive losses that have not just arisen this year but have gone on and on for many years. The men at Scott Lithgow have been warned about that over and over again, not least by the previous chairman of British Shipbuilders.

Mr. David Steel (Tweeddale, Ettrick and Lauderdale)

Is the Minister aware that he is pushing the laissez-faire philosophy of the Government to preposterous lengths in his statement? The people of the west of Scotland are entitled to look to him for a greater sense of concern about a potential unemployment rate of 40 per cent. in the Inverclyde area and about the damage that this will do to Britain's prospects in offshore technology. Is he aware that when I visited the yard a few months ago, without making excuses for the faults in the past. I was impressed by the way in which management and shop stewards were adapting to the needs of this sophisticated and complicated new technology and the change in working practices that that involves? There seemed to me to be a new determination in the yard to try to work towards a renegotiated contract. Will the Minister try to assist in that process?

Mr. Lamont

I do not see how it could be remotely described as "laissez-faire" to have funded losses by the yard of £140 million in addition to giving production subsidies of 17 million to Scott Lithgow through the intervention fund. This position has been growing for years and it can be no surprise—indeed, Opposition right hon. and hon. Members are not surprised, as they have been expecting this for some time. One would listen more to Opposition Members if they made some acknowledgement of the failures and faults of the yard in the past or even made mention of the intention to have industrial action on 6 January at British Shipbuilclers. What possible good can that do the yard?

Mr. T. H. H. Skeet (Bedfordshire, North)

Does the Minister appreciate that it is absolutely vital for the United Kingdom to maintain a capacity in rig making and that if Scott Lithgow cannot do it perhaps a consortium of other companies could do the job for it?

Mr. Lamont

If the contract is cancelled, the rig is the property of British Shipbuilders and it would then be for British Shipbuilders to decide what would happen and whether the rig could be completed in any other way.

With regard to the general offshore capability, there are, as my hon. Friend knows, other yards in the United Kingdom, including Cammell Laird and UIE in Scotland. Other yards can construct jack-up rigs and mobile rigs.

Mr. Bruce Milan (Glasgow, Govan)

Is it not outrageous that with a shipbuilding strike looming and now the threatened closure of Scott Lithgow, the highly paid chairman of British Shipbuilders should have gone off to Canada on an extended Christmas holiday? Should we not conclude from that that he has a mandate from the Government to close the yard? If that is not so, and if the Government deny that — they are expressing their concern—why do they not intervene now? This contract can be saved and the jobs can be saved. Indeed, it will be cheaper for the public purse at the end of the day if the contract is renegotiated. I warn the Minister that if the Government do not intervene, they will not be forgiver, in Scotland.

Mr. Lamont

The right hon. Gentleman says that it would be cheaper if the contract were renegotiated. I do not know how the right hon. Gentleman can be so certain and can know what further losses will be incurred with this contract if it is proceeded with. Who is the right hon. Gentleman, even with his distinguished record, to say that his judgment is right and that of British Shipbuilders is wrong?

Mr. Barry Henderson (Fife, North-East)

Will my hon. Friend take this opportunity to commend the skill and ability of the many other platform, ship and boat building yards throughout Scotland which are in the habit of delivering on time, to specification, and which are in danger of being guilty by association in this circumstance? Will he condemn the SNP and the Opposition who voted for the creation of this nationalised industry, British Shipbuilders, which took responsibility for Scotland away from Scotland? Does he agree that British Shipbuilders cannot be right in trying to shrug off responsibility for Scott Lithgow's affairs, in that it failed to provide the skill and management necessary to ensure the success of the contract? Does he not feel that, even now, it should be working hard in the negotiations to ensure that something can be salvaged of the taxpayers' money and its own credibility?

Mr. Lamont

On the last point, one acknowledges that management has an important role to play. I am not placing all the blame in one quarter but it is extremely difficult to get good management to go and work in Scott Lithgow because of the yard's reputation. I agree with what my hon. Friend says about the reputation of other companies involved in the offshore industry. They manage to have a much better record and they deliver to price and to time.

Mr. Roy Jenkins (Glasgow, Hillhead)

Is not the Minister aware that, however much he may talk about commercial considerations and competitiveness, this stand-off attitude which he has taken today to the death of an industry and of two towns is something which would not be allowed to happen in any competitive industrialised country in the world? While no doubt there are grave faults on the part of Scott Lithgow, unless he makes an effort to bring together the two parties, he will be contributing to a large further step down the road of Britain ceasing to be an industrialised country. It would be both ironic and dangerous for Britoil, perhaps temporary in its operations, to contribute to this permanent process.

Mr. Lamont

I do not agree with the right hon. Gentleman. First, it will not be the death of an industry. Other yards are involved in the industry and the right hon. Gentleman should not assume the closure of the yard. We are talking about the cancellation of a contract.

The right hon. Gentleman used the phrase "death of an industry". Who has killed this industry? I cannot believe that in many other countries a Government could have gone on funding losses year after year as the present Government have done with Scott Lithgow.

Mr. Michael Hirst (Strathkelvin and Bearsden)

How much of Scott Lithgow's present difficulties arise from design problems and inexperience in the specialised work involved in the Britoil contract? How much is due to the weak management and the crazy restrictive trade practices of the yard and past madness such as the Financial Times crossword strike? Does my hon. Friend agree that there is an urgent need to end restrictive trade practices in all yards of British Shipbuilders and that, in the present context, a strike next month is nothing more than suicidal madness?

Finally, does my hon. Friend agree that the bad publicity for the Clyde is terribly unfortunate at a time when other efficient and productive yards such as UIE on the upper Clyde are in the market trying to get orders?

Mr. Lamont

There have been design problems with the rig, but I cannot comment on that very much, because it is one of the factors that lies behind British Shipbuilders issuing a writ and taking action. There have been many contributory factors, including management and poor industrial relations. The position was summed up by Sir Robert Atkinson when he left BS in August. When talking about Scott Lithgow, he said: It has a long history of losses, late deliveries, high absenteeism and a very bad industrial record. As my hon. Friend has said, it would be utter madness to have a strike on 6 January.

Dr. Norman A. Godman (Greenock and Port Glasgow)

Will the Minister accept that his statement will arouse only distress and anger among my constituents, some of whom, although a declining number, are taxpayers? Will he acknowledge that it is manifest to all concerned that it is in the public interest that the rig be completed at Scott Lithgow and not in a yard in south-east Asia? Will the Government enter into an involvement with both Britoil and British Shipbuilders to intervene directly in the near future with the humane objective of ensuring that the rig is built at Scott Lithgow?

Mr. Lamont

What happens to the rig will be a matter for British Shipbuilders if there is a cancellation. If the rig is its property, it will have to decide where completion takes place. I accept that great problems and great distress will be caused to the hon. Gentleman's constituents. Many of them are workers at the yard and are among those who turned down the productivity deal that was offered by BS. They turned it down and there was no criticism of them from the Opposition, who just wanted to slip in a few more million pounds as a reward.

Mr. Donald Dewar (Glasgow, Garscadden)


Mr. Albert McQuarrie (Banff and Buchan)

I was born in Greenock and I spent most of my life there. That being so, I know the yard inside out. It is a tragedy that we have to listen to such comments from my hon. Friend but, unfortunately, I must agree with him that the workers' lack of flexibility and the lack of proper management control and management agreements between the work force and the management has led to the disaster that could face the yard. I appeal to my hon. Friend to give an assurance that the rig will be completed at Scott Lithgow. Unless there is an agreement of that nature, the west of Scotland will be decimated. My hon. Friend must accept, as the hon. Member for Greenock and Port Glasgow (Dr. Godman) has said, that if the rig is built outside the United Kingdom, or the west of Scotland, it will be a major tragedy. I hope that he will give an undertaking that he will try to achieve an agreement that the rig will not leave Scott Lithgow's.

Mr. Lamont

My hon. Friend knows that I cannot give the assurance that he seeks for the reasons I have already given. I am, however, grateful to him for the first part of his supplementary question.

Mr. Gordon Wilson (Dundee, East)

Does the Minister realise that the history of Scott Lithgow was such that it was regarded by many in the 1960s and up to the 1970s as the jewel in the crown of Scottish shipbuilding? By and large, the yard has the same work force. The yard accepted the order but does he recognise that the yard has found it difficult to cope with the building of this advanced rig with inadequate training arrangements, with design problems and with long-distance interference from New Orleans and Newcastle? Rather than passing by on the other side and leaving the yard to die because, if one believes the remarks of the chairman of BS, it has no future, will he urge the Government to take steps to fulfil his social and economic responsibilities for the west of Scotland by ensuring that work continues in the yard and that something is done instead of leaving the yard to rot away?

Mr. Lamont

This is not a case of passing by on the other side of the road. We have all the time been kept fully informed. We have discussed the matter with the chairman of BS and I think that he has taken the right course of action by — [HON. MEMBERS: "He has gone to Canada."]

The hon. Gentleman referred to Scott Lithgow as the jewel in the crown of British Shipbuilders. It may have been a very successful yard in the past but one cannot continue to rely on the reputation of the past. The yard's performance recently has been a bad one. Other rigs have been delivered late and have been over-priced. The BP rig is already 11 months late and a £30 million provision has had to be made for that rig as well.

Mr. Robin Maxwell-Hyslop (Tiverton)

Will my hon. Friend remind the Opposition, who are castigating the new chairman of British Shipbuilders, that the newly appointed chairman, Mr. Day, is the same man whom the Labour Government appointed when they nationalised the industry? Does the unhappy history of the firm bring home the reality that a firm can destroy itself even under nationalisation? It must not be allowed to bring down with it the viable members of British Shipbuilders, which is what will happen if the Government take the Opposition's advice.

Mr. Lamont

My hon. Friend has made two extremely good points. Mr. Day was appointed by the previous Labour Government but now that they are in opposition they are extremely critical of him. They took a different view of Mr. Day when they were in government. As my hon. Friend has said, a nationalised industry can destroy itself. Nationalisation does not insulate an industry from the disciplines of the market. It should not be a reason for pouring more and more money into a company in a vain attempt to save jobs, which will then lead to subsidised inefficiency.

Mr. James Hamilton (Motherwell, North)

Will the Minister throw away his political spectacles and take a realistic view of the impending crisis? Will he stop apportioning blame between employers and employees and take note of the letter of the hierarchy of the Roman Catholic church in Scotland, which stated clearly the social consequences in Glasgow and Scotland generally if the yard were to close? If he does not do so, the people of Scotland will never forgive him.

Mr. Lamont

I am well aware of the social consequences that may stem from the cancellation of the contract. I have noted what church leaders, including those of the Roman Catholic church, have said. However, I disagree with them. I am not sure what special qualifications the leaders of the Roman Catholic church have for making such a judgment.

Mr. Hal Miller (Bromsgrove)

Will my hon. Friend agree that nothing but damage would be caused if the Government were to intervene in the attempt of management to regain control and financial discipline at the yard? Is he aware that the example of the motor industry shows that if the yard and the industry are to be brought back from the brink of self-destruction, those in the industry must learn to make use of their facilities to deliver products that are competitive in price, quality and delivery dates, and learn also that the way to higher earnings and secure employment, which everybody seeks, is through the productivity deal that is already on offer?

Mr. Lamont

My hon. Friend is quite right. By agreeing to the productivity deal, the workers in British Shipbuilders, and Scott Lithgow particularly, will have the opportunity to earn more money. My hon. Friend is right also to say that if the Government intervened in the way that Opposition Members have suggested, we would do nothing except undermine the management of BS. I agree with my hon. Friend when he compares shipbuilding with the motor industry. When one compares the progress that the motor industry has made in recent years with the lack of progress that has been made by the shipbuilding industry, there seems to be no awareness of the changes that are taking place in Britain and those that are necessary if the industry is to survive.

Mr. Hugh Brown (Glasgow, Provan)

Does the Minister accept that the whole of Scotland will be shocked by the content and tone of his performance? Does he realise that it is appalling to have a public display of disagreement leading to legal proceedings between two bodies which are virtually publicly owned? Will he accept that the suspicion in my mind is that we are seeing another example of ideological bigotry and that the Government are getting some satisfaction from destroying the little reputation that shipbuilding on the Clyde has left?

Mr. Lamont

The hon. Gentleman calls it a public display of disagreement. The two companies involved had separate commercial interests, and there is a conflict between them.

Mr. Milian

What about the public interest?

Mr. Gerald Malone (Aberdeen, South)

Is it not significant that when Scott Lithgow was a jewel in the crown of British Shipbuilding, it was under private management? The Labour party nationalised Scott Lithgow, and the Scottish National party connived at the nationalisation. That was the first step in bringing the yard to its present predicament.

Mr. Lamont

I agree with my hon. Friend's observation, and not only in relation to Scott Lithgow. I can think of no part of British Shipbuilders that is better off today as a result of nationalisation.

Mr. George Robertson (Hamilton)

The Minister should look back to the early 1970s and to the last occasion on which a Conservative Government conspired to butcher shipyards — the yards on the upper Clyde. If that disastrous decision had been implemented, there would be no shipbuilding in Govan and no yard in Clydebank for the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) to prattle on about today.

Mr. Hirst

It would be under private management.

Mr. Robertson

Closing a shipyard is not just closing a business—it is butchering a whole community.

Mr. Lamont

The hon. Gentleman talks about butchering a business—

Mr. Robertson


Mr. Lamont

Can we be said to be butchering a business into which we have put £140 million by subsidising losses and £17 million as production subsidies to help the business to obtain orders? The hon. Gentleman's uncharacteristic outburst might have been unpersuasive if he had made even a passing reference to the responsibility of those who work in the yard for what has happened.

Mr. Tam Dalyell (Linlithgow)

The Minister has asserted that no other country has put so much money into shipyards. Has he no idea what the city of Hamburg and the federal Government have put into Blohm and Voss in terms of deutschmarks? Are we to believe that the shipyards at Bremerhaven, which looked after the boilers of the QE2 most recently, are so wonderfully efficient? Above all, can the hon. Gentleman imagine what would happen to a junior Minister in the Bundestag who talked down his own industry in such an insulting way?

Mr. Lamont

The hon. Gentleman accuses me of talking down the industry.

Mr. Robert N. Wareing (Liverpool, West Derby)

That is right.

Mr. Lamont

When the Opposition adopt an attitude that is wholly unrealistic and has no reference whatsoever to the shortcomings of that industry, and when in consequence I have to explain why the management of British Shipbuilders has taken a certain view, I am forced publicly to single out some of the unpleasant things that have happened in the industry.

The hon. Gentleman said that I had said that no other country puts so much money into shipyards. What I said was that no other Government would put money into shipyards making losses on such a scale. The Government cannot be accused of having failed to put money into Scott Lithgow.

Mr. Gavin Strang (Edinburgh, East)

Will the Minister reconsider and withdraw his slur on Scottish church leaders and on the Catholic hierarchy in particular? Does not the Minister recognise that they have an interest in the future of thousands of families in west central Scotland? Is it not a scandal that the Government appear to be abdicating responsibility for those families to the outcome of a commercial dispute between British Shipbuilders and Britoil?

Mr. James Hamilton


Mr. Lamont

I cast no slur whatsoever on the churchmen. I recognise their concern. I merely questioned their competence to give a judgment on a difficult commercial issue.

Mr. Dick Douglas (Dunfermline, West)

The Minister asserts that my right hon. Friend the Member for Glasgow, Govan (Mr. Milian) had not weighed up the cost benefits of going on rather than stopping or frustrating the contract. Has his Department undertaken a detailed cost benefit analysis of frustrating the contract within weeks, or of going on? If the Minister has the figures, he has a public responsibility to give them to the House, because of the cost to the community on the lower Clyde. There is an order in a yard. The Government have a responsibility, in the public interest, to save that order. It is vital that they should do so. I do not dismiss the difficulties and frustrations suffered by management in the past. I am well acquainted with those problems, both directly and indirectly. However, in the nation's interest, it is better to complete the contract. If the Minister has seen a detailed economic and financial analysis which contradicts that conclusion, he has a responsibility to put it to the House. If he has not, he must lend his weight and his assistance to the completion of the contract.

Mr. Lamont

British Shipbuilders would prefer to complete the contract. The hon. Gentleman has asked me about the alternative costs of cancellation or of the third option, renegotiation. It is difficult to quantify the costs of renegotiation, because so many uncertainties are involved. If the order was cancelled, Scott Lithgow would have to repay all the money that it has so far received—£40 million plus interest. The contract also provides for damages of up to £7 million, but the extent of those damages might be subject to litigation. That is the commercial position of British Shipbuilders.

Mr. Dennis Canavan (Falkirk, West)

The entire Scottish community is demanding Government intervention. The demand is coming from trade union leaders, from politicians of various parties and from church leaders such as Cardinal Gray who — despite what this incompetent Minister has said—seems to have a better sense of priorities in public expenditure than the Government. The cardinal has pointed out, in a message to the Prime Minister today, that the cost of renegotiating the contract would be a mere drop in the ocean compared with the Government's expenditure on nuclear armaments.

Mr. Lamont

How can the hon. Gentleman know that the cost of renegotiating the contract would be so small?

Mr. Canavan

Cancel Trident.

Mr. Lamont

It is not the view of British Shipbuilders that, within its budget, that would be the right course of action.

The hon. Gentleman says that the entire Scottish community was demanding that the contract should be saved. We have heard some different voices from this side of the House from those who have recognised—

Mr. Canavan

What about the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley)?

Mr. Lamont

—who have recognised that the poor record at Scott Lithgow has caused this situation.

Mr. Dewar

The Minister's statement was disgraceful. It lacked humility and humanity, and offered thousands of workers no hope and no future beyond the dole queue. Am I right in assuming that the Minister intends to do nothing but see the jobs lost in a welter of litigation, and that the only action that has been promised is that the Secretary of State for Scotland will continue to stand on the sidelines, threaping ineffectively about his concern?

The Minister has given the impression that he positively supports the cancellation of the order. It is most distressing to hear any Minister address the House in such a fashion. Is it not ironic that the Minister should talk about UIE possibly helping to pick up the pieces, when UIE was saved by the kind of state intervention that the Minister refuses to countenance? It is only in existence today, to be praised by Government Back Benchers, because of a Government initiative in the past.

Given the social consequences and the cost to Scotland, will the Minister realise that the public interest is involved and that he should get the parties together and try to save the jobs by saving the contract? Anything less will be seen by Scotland as a betrayal by the Government and by the Secretary of State for Scotland.

Mr. Lamont

I have certainly not said that I support the cancellation. I said that this is a commercial dispute between British Shipbuilders and Britoil, and that both companies should exercise their commercial judgment. Of course the public interest is involved, but so is the interest of the taxpayer. Massive sums of money have been poured into British Shipbuilders and Scott Lithgow.

The hon. Gentleman referred to UIE and the money put into it in the past. The money poured into that was on nothing like the scale of the £140 million that is being poured into Scott Lithgow. I am waiting for the hon. Gentleman and his right hon. Friends on the Front Bench to tell us when they will urge Scott Lithgow's work force to accept the productivity deal on offer to them.

Mr. Canavan