HC Deb 23 February 1983 vol 37 cc994-1026 7.39 pm
Mr. Norman Lamont

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

For a three-clause Bill to have had 16 sittings in Committee must be a record. It shows the interest in and strong feelings about it. Although we have had 16 sittings, it is right for me to set out again the Government's position on what are undoubtedly extremely important issues.

The Bill has been described as a privatisation measure, but it is an enabling Bill that makes privatisation possible by two routes—outright disposal and the introduction of private capital. To open both those routes to privatisation, the Bill loosens the statutory straitjacket on British Shipbuilders. It replaces the corporation's statutory duties to engage in shipbuilding and related activities by powers. From now on, British Shipbuilders will be free to choose whether to engage in the activities that it has powers to carry out according to its commercial judgment. It will make it possible for private capital to be injected into British Shipbuilder's subsidiaries.

The way will be clear for the corporation to act jointly with other companies, if it so wishes. I emphasise "if it so wishes" because there was confusion among Opposition Members when we talked about joint ventures. It was their impression that the Government were making an announcement about the imminent creation of some joint ventures. The important provision is that the Bill unambiguously givers British Shipbuilders the statutory cover to engage in joint ventures if it wishes. That is not the only way to privatisation, but the Bill makes it clear that the joint venture route is now available.

British Shipbuilders will be free to decide its own areas of operation, but the decision on where to draw the line between the public and private sectors cannot be left to only one part of the industry. Nationalised industry chairmen and boards do not always fall over themselves to surrender part of their empire, so the Bill also gives the Government new powers to direct British Shipbuilders to cease or to restrict activities or to dispose of assets. Naturally, we hope that any disposals will take place as a result of agreement and that it will not be necessary to use those powers.

Powers to restrict an activity are also provided for the purpose of strengthening the Government's position when dealing with unfair competition. All hon. Members are aware of the many disputes that arise between the public and private sectors in the area of overlap. I have often received complaints from hon. Members on both sides of the House about the overlap between public and private enterprise. Hon. Members know of the anxieties that have been expressed by private sector ship repairers and engine builders about alleged unfair competition from British Shipbuilders.

These powers would be relevant if British Shipbuilders were to engage in unfair competition with established shipping interests. I emphasise that British Shipbuilders has no plans so to do, but there is understandable concern that, in the present depressed markets for both shipbuilding and shipping, British Shipbuilders might be tempted to enter the market to employ unsold ships. If necessary, the Government would consider using the new powers to prevent the corporation from doing so.

In Committee, Opposition Members emphasised the difficulties faced by the corporation and argued that the timing of the Bill was wrong. They argued that it was wrong to change even the statutory framework within which the industry operates. I am not persuaded by that argument. The important feature of the Bill is that it gives the corporation the opportunity to make decisions about its own establishment and activities. When the Bill is enacted, the board will have a greater opportunity to decide in which activities it wishes to be involved. It can decide whether to work in co-operation with the private sector in joint ventures. At present that is not possible, and any doubt about the matter is plainly absurd.

British Shipbuilders faces a difficult market. The world markets for merchant shipbuilding, ship repair and offshore work remain depressed. As the half year results show, British Shipbuilders will this year considerably overrun its loss target. But one bright spot is that since the introduction of the Bill British Shipbuilders has received £585 million worth of orders for new naval ships, partly to replace our Falklands losses, and another frigate will be ordered this year. The prospects in other markets remain uncertain.

It is unlikely that British Shipbuilders can secure orders for merchant ships without subsidy. The House will be glad to know that the European Commission recently agreed to our proposal that the Government should make available £20 million of intervention fund from January to July 1983. The fifth directive on shipbuilding aids, under which shipbuilding support is authorised, expired at the end of December 1982, and the Commission's previous approval covered only July to December 1982, for which the amount was also £20 million. The directive has since been extended until the end of 1984. We shall be approaching the Commission in due course about a further tranche of intervention fund to start after the expiry of the present one.

The Government recognise the difficult and uncertain position of the corporation, and after considering British Shipbuilders' corporate plan we have accordingly decided to increase the corporation's external financing limit from this year's £122 million to £160 million for 1983–84. Within that framework, the corporation will be required to have a continuing duty to make substantial and early progress towards providing an adequate return on the capital employed by the corporation and its subsidiaries.

Another point made frequently in Committee, and repeated a moment ago by the hon. Member for Thurrock (Dr. McDonald), was that the Bill would damage our defence capability. Our main defence need is for a strong and efficient naval shipbuilding capacity. I see no reason why that should be affected whether naval shipbuilding is in the private sector or in a mix of the public and private sectors. An element of privatisation could even assist warship building. Opposition Members have agreed that investment in that area has suffered because of greater than expected losses in other parts of British Shipbuilders.

Privatisation could lead to the injection of more capital, which might improve the competitiveness of the industry. That is needed because the warship yards' export performance has not been impressive recently. Some hon. Members said that it weakened our national defence because the Bill has repealed section 2 of the 1977 Act. That section required that British Shipbuilders, not the Government, should have full regard to the requirements of national defence. That is an absurd argument.

The needs of national defence cannot be determined by companies or corporations, however eminent. De Fence must be decided by the Government, and it would be ridiculous, as hon. Members came close to suggesting in Committee, to decide that the capability of our Navy and the balance between surface ships and submarines should be decided by a corporation, or that the industry should have a view of defence needs that is independent of the Government. However, hon. Members cannot seriously believe that argument. They moved behind it as a convenient way to argue that matters should remain as they are and that capacity should always be maintained regardless of need and cost.

Individual organisations must work within the framework of the Government's defence policy. As the MOD is an enormously important customer for British Shipbuilders, plainly the corporation will, without a specific provision in the legislation, pay close attention to the MOD's needs.

Another argument deployed in Committee was that the privatisation of warship building, if it happened, would weaken the merchant yards and make closures more likely. I recognise the genuine anxiety felt on that point, but I think that it is a mistaken argument. Any sense of security built on the back of warship building results is, I am afraid, misplaced. The warship building side of British Shipbuilders makes substantial profits. To some extent, those profits mask losses elsewhere and in merchant shipbuilding. With or without warship yards, merchant shipbuilding makes losses. Those losses will not go away or become any smaller because the warship yards stay within British Shipbuilders.

The corporation knows the position; Ministers know it and Labour Ministers in government knew it; and if Labour Members were in government again they would know the position, and would be bound to look at the losses on merchant shipbuilding standing alone. At all stages of the Bill, because I have wanted to lessen the anxieties expressed by Opposition Members, I have emphasised that merchant shipbuilding is at present unlikely to attract private capital I have also emphasised that the Government will, of course, continue to support merchant shipbuilding for the foreseeable future.

Our support for the industry and the merchant shipbuilding side has been substantial. The figures speak for themselves. Losses in the merchant shipbuilding division in 1981–82 were running at around £36 million. Last year losses on offshore were £14 million. Hon. Members will also be aware of the ship repair problems. Losses of £9 million were declared on ship repair last year. Many hon. Members will know from their constituencies of the action that has been taken on the Tyne. All that has meant a continuing need for Government support. British Shipbuilders has certainly had that from us—to the tune of well over £600 million since we came to office. Of course, it is never enough for Opposition Members, but it is substantial support and commitment by the Government.

Our support for the corporation has not all gone into the funding of losses. British Shipbuilders' capital expenditure has greatly increased under the Government. In 1981–82 it doubled. This year it will almost double again, and it is expected to rise further to £90 million in 1983–84. A great deal of that investment will be used to apply new technology—computer-aided design. It is in the application of new technology to a traditional industry such as this that we have the best chance of facing competition from the far east about which we have understandably and rightly heard so much.

Mr. Dixon

The Minister says that the Government's investment in British Shipbuilders will offset competition from the far east. How does that square with the fact that the seven largest Japanese shipbuilders have already earmarked £626 million for investment in plant and equipment this year? That is almost six times as much as the Government intend to invest in British Shipbuilders.

Mr. Lamont

The hon. Gentleman interrupted me. I was about to say that even this level of support will not make the problems go away. British Shipbuilders will still be left in an extremely difficult position in the market. I am not saying, and did not say, that investment on this scale solves the problems faced by British Shipbuilders. All that I was saying was that the investment has been, contrary to the allegations made by Opposition Members in Committee, increased substantially, and it is only by doing that that we can hope to be competitive. It is not the only answer to our problems, but we must have that investment if we are to become competitive.

Another example of substantial investment is that planned at Vickers. It will make a substantial difference to that company. It will also make a substantial difference, quite apart from its commercial merits, to the conditions under which the work force operates at Vickers. I thought that they were remarkably depressing and difficult when I saw them. I had great sympathy for the people who had to work in such conditions. They will be improved substantially by the investment.

The shipbuilding industry faces a deep recession, and the 2,000 redundancies announced recently were a painful but inevitable and necessary response to the market. The Government are also providing help with the cost of redundancies through the shipbuilding redundancy payments scheme which has been extended three times since we came into office.

The House will be aware that British Shipbuilders has taken the line that any extra earnings this year must be related to real productivity gains. Sir Robert Atkinson has said that he will not ask the Government for subsidies for wages. It is a realistic response to the present crisis of significantly higher losses and a deepening shipbuilding recession. Sir Robert Atkinson is also right in assuming that the Government would not be willing to find money to finance wage claims which widen the competitive gap and make it even harder for the industry to secure orders. A responsible industry must have regard to itself and its actions as well as help from the Government.

As well as facilitating privatisation and giving greater opportunities to British Shipbuilders, we have used this legislation to tidy up certain provisions and remove others that struck us as unnecessary. Some anxiety has been expressed about the repealing of section 2(8) of the 1977 Act which requires the corporation to promote industrial democracy in a strong and organic form. In repealing this provision, there is no slackening of the Government's wish to encourage the development and maintenance of good industrial relations. Good though those industrial relations have been, I do not believe that the legislative provisions had anything to do with them. They have been achieved by co-operation on both sides, and that is how they will be achieved in the future.

I appreciate some of the anxieties that have been expressed. However, I believe that the Bill holds out some opportunities for British Shipbuilders. First, it enables the promotion of joint ventures with the private sector. Secondly, it enables the introduction of private capital into parts of the corporation. It will also allow the transfer of certain activities to the private sector. I should have thought that every hon. Member would agree that the first two of those objectives were good. It is absurd that joint ventures and the injection of private capital are not allowed at the moment, or that there should be any doubt about it.

My hon. Friends and I believe that the third objective could create a shipbuilding industry that was more adaptable and competitive and therefore more able to generate viable, lasting and secure jobs. The history of nationalisation has been that it cannot preserve jobs. It can only delay and therefore probably increase job losses. We are not saying that the whole industry can, will or should be denationalised, but the Government say that Great Britain is unique in Europe in having a monolithic state corporation. France, Germany, the Netherlands, Norway and Sweden have shipbuilding industries that are either private or a mixture of public and private.

To have a conspicuously different structure could be justified only if we had a conspicuously more successful result, which we do not. For that reason, the Government believe that there is plenty of scope, even while building on what has been achieved in the past few years, for altering the balance between the private and public sectors in shipbuilding. There is an opportunity to allow a breath of private capital and enterprise into the state-owned industry. It is a modest but realistic message that we send today, and in that spirit I commend the Bill to the House.

8 pm

Dr. John Cunningham

I listened to the Minister with considerable interest, and, perhaps to his surprise, I welcome some of his remarks. However, although we may find words on which to agree, we certainly have no general agreement about the need for the Bill or its impact on the British shipbuilding industry.

It should have been no surprise to the Government, or anyone outside the House, that the Bill took such a long time in Committee. The Minister referred to it as a three-clause Bill, but it is, effectively, only two clauses as the third refers to its title. The fact that we took 16 Committee sittings to discuss the Bill is a measure of our fundamental opposition to its proposals. We regard the whole measure as an irrelevance, coming from a Government who are besotted with the idea of privatisation. They appear to be more concerned with that ideology than with industrial strategy or policies to end the massive crisis in the shipbuilding industry, which can only be heightened by the Government's proposals.

There is a deep and fundamental gulf between the Government and the Opposition about the proposals. We oppose the intention of privatisation, and also the type of legislation—an enabling Bill that takes away duties from a public corporation that were enshrined in the 1977 Act, and transfers considerable and wide-ranging powers to the Secretary of State for Industry. As we have said many times, if a Labour Government had taken upon themselves such powers, we would have attracted epithets such as totalitarian and anti-democratic. Not only are such powers becoming a feature of the Government's approach to industry; they are not even subject to decisions by Parliament. One can be no more draconian than that. We are certainly opposed to that aspect of the Bill.

The Government are especially inept in their timing to be introducing the measure when there is such a manifest crisis not only in the British industry but throughout Europe. The Japanese and the Koreans are expressing anxiety about their shipbuilding capacity. Their total dominance of the world shipbuilding scene is well known to anyone concerned with shipbuilding and associated industrial activities.

The Opposition are not alone in opposing the Bill. On Second Reading—and again in Committee—we asked Ministers whether, at any time, the management of British Shipbuilders had sought such proposals. They failed to answer. We know the answer: that the industry—neither union nor management—did not ask for or seek any aspect, any scintilla or any shred of what is included in the Bill. So there is opposition there also.

Opposition comes not only from the industrial unions and the shipyard workers, but from the Shipbuilding and Allied Industries Management Association, the Merchant Navy and Air Line Officers Association and the Engineers and Managers Association. There is concern among the marine engineering equipment manufacturers about the likely impact of the Bill. In no way can the Government say that the Bill and its intentions have been widely welcomed, or gained support as the Bill has progressed. Indeed, it is not even clear whether those organisations that were previously the owners of the shipbuilding industry welcome the Bill. I shall return to that point later.

As my hon. Friend the Member for Thurrock (Dr. McDonald) pointed out, the position in European shipbuilding is causing grave concern, and the European Parliament has expressed strong views about that. The excess world capacity was discussed at some length in the context of policies for shipbuilding in the Community. The European Parliament expressed the view that our industry and its existing capacity should be defended. There is nothing to be gained by a further rundown, which would be on top of a major reorganisation of the shipbuilding industry in Europe, which has been accompanied by a severe reduction in capacity and a severe loss of jobs. I hope that the Commission and member Governments will take note of those views. Further large cuts in capacity would be counter productive. The inevitable outcome of privatisation will be a reduction in capacity, closure of shipyards and more shipyard workers on the dole.

I said that the Government appear to be besotted with the idea of privatisation. Certainly their rather touching adherence to the argument that market forces should be allowed to determine what happens in shipbuilding has no supporters. We do not accept that market forces are operating at the moment, and we are in rather good company in saying that. The Under-Secretary of State well knows what C. y. Tung, one of the largest shippers in the world, had to say about that. He was quoted in Lloyd's List on 10 February as saying: For the first time in many years the C. Y. Tung group is not considering ordering new ships. He went on to say in a number of almost throwaway lines that the offers that were being made to shippers to buy ships from shipbuilders worldwide were astonishing in their generosity.

The idea that market forces will resolve the situation and leave us with a shipbuilding industry is unreal. If we do not intervene and support shipbuilding far more effectively than the Government have, there will be closures, rundowns and redundancies, and major industrial communities will be torn apart. A truly frightening crisis faces our shipbuilding communities at the moment, particularly on the Clyde Tyne and the Wear, where the merchant shipbuilding yards are concentrated. The fear is expressed in the efforts of the county councils, the metropolitan district authorities and other authorities responsible for those communities, both by taking action themselves and by making representations to Parliament and to the Government, to stave off the disaster that they believe is staring them in the face.

In such a situation, it is lunacy to talk about introducing private capital or selling off part of the shipbuilding industry. I cannot bring myself to believe that the Minister of State believes that, in the current worldwide crisis in shipping and shipbuilding, he will be able to persuade people to invest substantial sums of money in British shipbuilding. All the evidence, not only at home but internationally, suggests that it is highly unlikely if not impossible that he could do so.

Mr. Robert C. Brown (Newcastle upon Tyne, West)

Is it not likely that the only area in which private capital could be encouraged would be in naval shipbuilding? Would not the selling off o f naval shipbuilding, which is the only area of shipbuilding that is guaranteed to be profitable, spell doom for yards such as Swan Hunter on the Tyne?

Mr. Cunningham

I agree with my hon. Friend.

The view of the chairman of British Shipbuilders, who was appointed by the present Administration, is that the integrity of the industry should be maintained. He believes that that is the best guarantee of our maintaining a capacity and capability in shipbuilding, in the national interest. That is the view of the chairman and, I believe, of the board as a whole. It is also the view of the unions in the industry and a view that Labour Members unanimously share. The proposal to hive off, privatise or break up the corporation will spell disaster for major shipyards. The irony is that Swan Hunter on the Tyne is not only our foremost merchant shipyard but one of our most important warship building yards. It is the largest mixed shipbuilding yard in British Shipbuilders.

Despite the current crisis, the corporation is still working extremely hard worldwide to find orders and doing what it can to keep men employed, but it believes that the outlook for merchant shipbuilding is bleak and it is difficult to dissent from that conclusion. Against that background, the Government and the House must surely agree that every order is vital to keep people at work. It is therefore astonishing to learn, as we did a few days ago, that the CEGB has been a party, directly or indirectly, to the placing of an order, using British taxpayers' money, with a Korean shipyard.

A large number of questions remain unanswered. Flow did ITM of Teesside come to be involved in the first place? I believe that the competence of that organisation is questionable, as is the manner in which it claimed that BS had been invited to tender—a claim subsequently refuted by the corporation chairman. We must therefore conclude that the truth has not been told in this matter. I lay that charge not against Ministers but against ITM.

Mr. Dixon

Lloyd's List of 3 February referred to that order going to South Korea in the following terms: A spokesman for Sunderland Shipbuilders said: 'ITM did not ask us to tender. We have heard that the order for the barge is now being placed with a Korean shipyard and everyone here is extremely angry."' That is contrary to what the Secretary of State for Energy told the House a week or so ago.

Dr. Cunningham

I believe that the Minister was acting in good faith when he said that. I believe that he, like BS, has been misled.

The matter goes further. I received a communication from the managing director of a Hampshire company specialising in navigation systems and underwater instrumentation. I shall not quote the whole of his long letter, but it shows how Britain is losing business. He said: After many months of discussions and expensive preparation, my Company tendered for designing and manufacturing the highly specialised underwater acoustic navigation equipment required to guide the Trenching Machine which buries the cable laid by the vessel in question. We lost to a French Company, who are our arch-competitors world wide. My grievance is that the whole business was totally mismanaged by the Company to whom the CEGB had delegated the task of investigating and specifying the required equipment. Although guided by detailed proposals from ourselves and at least one other British Company … the gentleman in charge managed to produce the most un-professional specification I have ever seen in my life. The terminology was grossly inaccurate and obviously biased towards the French in that he described some of the equipment required usind the trade name adopted by the French Company! That is the view of the managing director of one of our marine equipment manufacturing companies on this whole sorry business. I do not quote the name of the company simply because I was unable to contact the man who wrote the letter, although I spoke to his secretary today.

I am told that it is possible that another public corporation—British Nuclear Fuels Ltd.—will place an order for a vessel with a Japanese yard. The Minister of State shakes his head. I am pleased that he does so so spontaneously, as it would be the most grotesque insult to the shipbuilding workers on Tyneside and Wearside and throughout the corporation if another public sector order went to a foreign yard, to be paid for with taxpayers' money, while thousands of our own shipyard workers face life on the dole.

I said that I might be able to welcome something that the Minister of State had said. I welcome what he said about the external financing limit of BS. I am not so sure that the Prime Minister will welcome it, or that his own right hon. and hon. Friends will be very happy about it. Nevertheless, it is a sign that the Government are beginning to face the reality that if we intend to maintain a shipbuilding industry in this country we shall have to pay for it. Whether the Government like it or not, that is the reality of the position.

Opposition Members are in no doubt that Britain should be paying whatever is appropriate to maintain a shipbuilding industry. Britain is a maritime nation. The Opposition believe, as we said when moving the new clause in Committee, that there should be a national maritime strategy. Although it is rapidly declining, Britain has a large merchant fleet which played a vital part in the Falklands campaign. Britain has the largest navy in western Europe. That is a major factor in NATO. In the debate on defence, the remarks of my hon. Friend the Member for Thurrock about the Opposition amendment must have totally escaped the Minister. We would abandon the Trident programme and invest in conventional defence forces. That is a far better guarantee for our shipbuilding industry than the Trident programme will ever be.

Britain, fortunately, is a country with a major oil province offshore. The requirements of our oil and gas fields will necessitate a capability for vessels and modules. Of course, they should be built in British shipyards. Britain still has a fishing industry. Public sector industries such as the CEGB, British Nuclear Fuels Ltd. and the British Steel Corporation use merchant vessels. In any other country in Europe there would be absolutely no doubt as to where those contracts would be placed. They would be placed in that country's yards.

My hon. Friend the Member for Jarrow (Mr. Dixon) pointed out in Committee that, of the EC countries, Britain has the worst record for building national vessels in its own yards. In Italy, France and West Germany 90 per cent. of all orders are built in their own yards. In Britain I regret to say—I speak from memory—the figure is less than 50 per cent. That is a measure of the difference in approach between our European partners and ourselves. It is nothing to do with market forces. Let us be clear about that. This issue concerns policies for maximising industrial advantage. That is the approach that we should adopt in the development of a maritime policy.

The Government seem indifferent to the future of some of our shipbuilding communities and quite willing to accept a further decline in our industries. I am told—and I shall be interested in the Government's response—that the permanent secretary at the Department of Industry was instructed to tour the country to talk to the former owners of the shipyards and to inquire whether they would be interested in either putting capital into the industry or buying back their assets. This took place at about the same time that the Government were facing a claim from the same people at the Council of Europe in Strasbourg for increased compensation following the Aircraft and Shipbuilding Industries Act 1977. There is an air of unreality about all this.

I have a copy of the press notice following those deliberations in Strasbourg. On page 3, it says: The respondent Government"— that is Her Majesty's Government— maintain that Article 1 of the Protocol does not, either expressly or by implication, guarantee a right to compensation in case of nationalisation of the property of a State's own nationals. The nationalisation of the relevant companies on the terms laid down in the 1977 Act was a lawful measure which the Government of the time were entitled to take"— that is the previous Labour Government— and did not involve any breach of the Convention requirement that deprivation of property be in the public interest. They"— this Conservative Government— maintain that the compensation was assessed in accordance with the compensation provisions of the 1977 Act, which provisions met the international law requirements of adequate, prompt and effective compensation even if, contrary to the Government's contention, such requirements applied to the applicants, as United Kingdom nationals. The Government have been saying, first, that there is no right to any compensation and, secondly, that the compensation paid was adequate. At the same time, the permanent secretary has been despatched to talk to these people about—

Mr. Norman Lamont

I am sure that my hon. Friend the Under-Secretary of State will say something more and at length, but I should point out that the press release that the hon. Gentleman has read out does not represent the Government's views or the views that they advanced in the case.

Dr. Cunningham

I was about to come to that point. The hon. Gentleman has made an interesting challenge about what is written in the document. The document is official, and I should be happy for the Minister to look at it in a moment. It is headed "Council of Europe press release". It is printed on official headed paper and sets out the conclusions of the deliberations in Strasbourg. If they are not the conclusions, or if the Government do not accept that they are the conclusions, they should tell the House their real position.

I think that it was in August 1980 that the previous Secretary of State for Industry, the right hon. Member for Leeds, North-East (Sir K. Joseph), said in public—in Committee, in the House, and elsewhere—that the compensation paid was unfair and inadequate. I understand that that view has recently been reitereated by Ministers. However, in the Council of Europe, the Government have apparently been telling an entirely different story in defence of their case. That demands some explanation. We maintain that the compensation paid was fair and adequate and the Government have apparently been agreeing to that in private but denying it in public.

But what of the taxpayers' interest now? The Government are trying to privatise the industry and to obtain a fair price for the taxpayers' assets and investments. They have argued in Strasbourg that there should be no change in the previous compensation terms, while at the same time saying publicly that they were inadequate. What price will the taxpayer get for British Shipbuilders against that background of confusion and—I shall withdraw my next remark if it is unparliamentary—duplicity? Some double talking is apparently going on. The outcome of all this cannot possibly help to obtain a realistic price for the taxpayer from the disposal of any assets. Once again, following Amersham International, Britoil, and Associated British Ports, there is likely to be a fiasco in the handling of public assets because of the Government's attitude to privatisation.

I reiterate our view that the Bill is an irrelevance to the position, problems and future of shipbuilding in Britain. It has increased uncertainty—no, it has increased fear in the shipbuilding communities since its introduction and throughout its consideration. It has destroyed the confidence of potential customers for vessels, particularly since it has been demonstrated that the Government cannot even ensure that in the public sector orders go to British yards.

It is enabling legislation but its provisions will be used to break up the British Shipbuilders. Let the buyers beware. Let there be no doubt in the House and outside in the industry that the next Labour Government will recreate a publicly owned shipbuilding corporation in the national interest as part of a maritime strategy for Britain.

8.30 pm
Mr. Hill

To clear up one point, I was in Strasbourg when the case was presented by the former owners of Vosper Thornycroft, Southampton, to the European Commission of Human Rights. After long deliberations, with both sides presenting their cases, the Commission said that there was a case to answer. It only went as far as that. We must not read more into it than is there. The case will go on for some time. The process in Strasbourg is not famed for speed. The Government will present their case and at the end of the day obviously will take cognisance of the finding of the Commission.

Mr. Lamont

What my hon. Friend has said is right, but he might also like to know—because it relates to what the hon. Member for Whitehaven (Dr. Cunningham) said—that the Government have not been arguing that adequate compensation has already been paid when they said that some companies were treated unfairly. What the Government are arguing before the Commission is that the compensation arrangements under the 1977 legislation did not involve a breach of the convention or international law requirements. That is the position. My hon. Friend will understand that I cannot say a great deal more about it.

Mr. Hill

Having put that on record and having been supported by the Minister, I hope that the Opposition will realise that that is one red herring that they can pull in. In the next Parliament we shall still be discussing the court case in Strasbourg.

Mr. Harry Cowans (Newcastle upon Tyne, Central)

The hon. Gentleman will do it from the Opposition Benches.

Mr. Hill

It will be discussed on both sides of the House.

The Southampton interest in the Bill is twofold. We have Vosper Thornycroft, the warship building division, and we have the very able firm of British Ship Repairers of Southampton. During the Falklands campaign British Ship Repairers did not get enough prominence for the work it did. One of its convenors pointed out to me that it was always reported that Vosper Thornycroft had done the ship repairs. To the public and sometimes to the journalists from the local newspapers the two firms did not appear to be separate. Therefore, it is right to make a public acknowledgement here of the able work that British Ship Repairers of Southampton did to keep the merchant fleet and the warship fleet in readiness, to convert ships into hospital ships, and to provide helicopter pads where necessary. It was a tremendous effort. The enabling Bill will have a direct effect on British Ship Repairers of Southampton.

Vosper Thornycroft, if British Shipbuilders considers that it is a subsidiary that can be formed, will he most attractive to private capital, to be sold off as a subsidiary company or to become a joint venture. I should like to see private capital going into Vosper Thornycroft (Woolston) Southampton because it desperately needs more orders and more modernisation. The attraction of private capital with the obligation that this will bring increased efficiency and make the yard more commercially orientated can only do good.

Joint ventures are a different animal. I should hate to think that either of the two hon. Members representing Southampton would ever push a joint venture. On the other hand, the former owners of Vosper Thornycroft (Woolston) Southampton might be interested, especially if there is the promise of some compensation following the court hearing in Strasbourg to enable them to purchase back Vosper Thornycroft Warship Builders, Southampton. The yard has an excellent record as naval warship builders. It has built for the Brazilian navy. It has been successful in winning some magnificent orders. Unfortunately, its research, development and design work for the warship division of British Shipbuilders is done almost entirely in Southampton. This represents an added cost that is not always recognised by other warship yards within British Shipbuilders.

Vosper Thornycroft's lifeblood is the occasional Ministry of Defence order. With an order for a type 22 frigate, or perhaps two, it would once again be able to build its business from a firm base. As a yard, it is interested in defence and security. It is involved in high technology and keeps up to date with progress on weaponry. Indeed, in defence and security, the yard cannot be topped. When national interest or national security is threatened, Vosper Thornycroft is the first to put its efforts and its work force at the disposal of the Government.

The hon. Member for Whitehaven (Dr. Cunningham) wondered why Italy achieved so many orders. The first report from the Select Committee on Trade and Industry on British Shipbuilders contains on page 103 complete coverage of all the subsidies that operate in Europe. I shall not weary the House with the details. It is shown, however, that Italy has a combined subsidy on merchant shipbuilding of 55 per cent. while we, in the United Kingdom, although the figures might be a little out of date, have a combined subsidy of 37 per cent. The report relates to the 1981–82 Session. It is, however, clear that the reason for Italy achieving so many home market orders for merchant shipbuilding is associated with the 55 per cent. subsidy.

As a pro-European, I sometimes think that the competition policy in the European Community is very restrictive of our traditional industries. Perhaps we did not get into Europe early enough to play our part in laying down the ground rules. We, being the high-minded people that we are in government, abide by every rule in the book, and sometimes we as a Government are criticised because we do that. However, there is no way round it.

Dr. John Cunningham

The hon. Gentleman is making a telling point. He is really saying that other European Governments do more to support their industries than his Government do.

Mr. Hill

I do not think that I would ever say anything quite as blunt as that, but it is common knowledge in the Lobbies here that some of our European partners do not always play the game according to the rules, and that sometimes they cut corners, especially in steel production and shipbuilding.

However, that is not the complaint this evening. The Opposition complain this evening that, at long last, this enabling Bill will enable the chairman of British Shipbuilders to come forward with schemes to form subsidiary companies to do what he can to make his conglomerate—because that is what it is—more efficient. I am sure that the House will respond at the end of this debate with an overwhelming vote in favour of the Bill.

8.41 pm
Mr. Willey

The Minister spoke about a deep recession. My hon. Friend the Member for Whitehaven (Dr. Cunningham) talked about a crisis. It is not only a crisis, but it is a crisis that has got far worse since we began our discussion of the Bill. We can be fraternal and say that world shipbuilding is suffering a crisis. We can be fraternal and say that Europe is suffering a crisis. We can read about what is happening in Germany, Sweden, France and Spain, but it is no comfort to us. We have to look at our present crisis, particularly in the form of redundancies.

Shipbuilding is an assembly industry, and we should realise that more than half of the costs of a ship come from outside the yard. We have to double the redundancy figures to see the true figures in areas such as the north-east coast.

We are told that we are following the policy on steel: "We are shedding workers, but we shall save the yards." We shall see. We must realise that not only has the crisis worsened since we began our discussions, but that the Bill has contributed to the worsening of the crisis.

My hon. Friend the Member for Jarrow (Mr. Dixon) and others spoke about industrial relations. There is no doubt that industrial relations have worsened as a result of the steps that are being taken in the Bill. It is equally true that this Bill has greatly aggravated the problems of merchant shipbuilding. It has jeopardised merchant shipbuilding, and that is why it has particularly affected us, and why we have four Members who represent the north-east coast on these Benches now. We have reached almost the minimum capacity that we can carry in merchant shipbuilding. We have only five yards left, of which four are in the north-east. In fact, one is a mixed yard—Swan Hunter.

One matter that I raised in Committee, and I raise it again, concerns Mr. John Parker. He was the principal person involved in merchant shipbuilding. I complained that he went to Harland and Wolff. He not only went, but it is now agreed that he went by Government request. British Shipbuilders now says that it was obliged to accede to that request. I want to know where the priorities lie. The north-east is the main area for merchant shipbuilding in Britain but that is what has happened. We see our calamities being aggravated.

The position in the north-east is extremely serious. It has been described as frightening and it is. At the moment, the problem centres upon Sunderland Shipbuilders, but again we can see what is happening. I welcome the appointment of Mr. Hubert Rice on the forthcoming retirement of Mr. Derek Kimber, but it is significant that Mr. Hubert Rice is to be chairman of Swan Hunter. One would have thought that at the moment his interest should be centred on Sunderland Shipbuilders. Tributes are paid in Sunderland to the work done by British Shipbuilders in what was Doxfords but all that is at grave risk. Shortly we shall be told that we are saving the yards, that they are being mothballed. That has already happened in Sunderland. It will be no comfort to us if we lose a yard. That is the position that we face in the north-east. It is a grave and alarming position and something must be done about it.

There are many priorities with which the Government should deal other than the Bill. There are many things that should take priority over privatisation. I was glad to hear the Minister of State mention the £90 million, which is important to investment in new equipment systems. We need to concentrate on marketing, particularly since Mr. Parker has gone. We want to improve export credit guarantees. We want—I emphasise this and it is the view of the shipowners—more generous credit terms for United Kingdom shipbuilders. That is urgently needed now. We must have some help and some British orders placed with our yards rather than see them close.

We want, as I argued on Second Reading and as I have mentioned time and again—some action following the Falklands war. We want a strategic merchant fleet with defensive aids. That should be considered and decisions should be made and the work should be placed with British shipyards. We need a better system of flexible financial packages—I have had experience of that over the past few months—for Third world countries. I know all the difficulties but we must tackle the problems and improve the position. We must look seriously at the public support that is given to shipbuilding in comparison with what has been done in other countries. The Minister of State says that we are in the middle of the road, as though that is an answer, but it is not. We know Italy's policy on shipbuilding which it has followed for 30 or 40 years. I welcome the £160 million, but we must see that we get comparable public support and use it to the best advantage. As I have said scores of times now, we must deal with Korea, Taiwan and the far east. We must show that we will not put up with the present position and, if necessary, we shall take steps unilaterally. We must say that it was nonsense that last year they cut prices by 30 per cent. It is nonsense that they have been allowed to expand the shipbuilding industry at a time of world crisis.

We must pay attention to the evidence of the Trade Union Congress to the Select Committee about the conduct of nationalised industries in placing orders and get that matter cleared up. I agree that it is muddled but it seems frightful that it should ever have happened. I do not wish to be controversial. I wish to give the maximum possible support to this basic industry.

I conclude by agreeing with the hon. Member for Tynemouth (Mr. Trotter). He is not present—he is probably in Korea or Taiwan. He said on Second Reading that we should recognise that our national interest lies in the Merchant Navy, and that we need a shipbuilding capacity to enable us to maintain it. After the Falklands war, that should be readily recognised. These are two great national assets without which we cannot survive. I hope that this debate has removed the irrelevance of privatisation and has emphasised the serious position that faces British shipbuilding today.

8.51 pm
Mr. Colvin

It is a pleasure to follow the right hon. Member for Sunderland, North (Mr. Willey) whose utterances in Committee have been particularly interesting. On the whole, we have enjoyed the deliberations of the Standing Committee. Notwithstanding some of the political views that have been expressed, it has been interesting to hear at first hand from hon. Members who have had lifelong experience in the shipbuilding industry. If nothing else, we have come out of Committee a great deal more knowledgeable than we were when we went in.

I am sorry that my hon. Friend the Member for Tynemouth (Mr. Trotter) is not present this evening.

Mr. Willey

I am obliged to the hon. Gentleman for giving way. I regret to hear that illness has prevented the hon. Member for Tynemouth (Mr. Trotter) being here. We all wish him a speedy recovery.

Mr. Colvin

I am grateful to the right hon. Gentleman. He has taken the words out of my mouth. I shall not repeat them, but I endorse his thoughts.

It has been suggested by many people that this has been a long Committee stage for a Bill with only three clauses, but page for page, it has not been anything like as long as the original Aircraft and Shipbuilding Industries Act 1977, which took two years from First Reading through to Royal Assent. Page for page, we have done a faster job.

My hon. Friend the Minister of State in his opening remarks was quite right to remind the House that the Bill is only an enabling measure. There is no ideological rush to denationalise the shipbuilding industry. To sell off the whole or part of British Shipbuilders or to introduce private capital presupposes that there are buyers around or people who will be interested in investing in that industry. As the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) said, nobody in his right senses would do that at present. The hon. Gentleman is probably right because in part or in whole British Shipbuilders does not look an attractive buy.

Nevertheless, that is no reason for not passing this enabling legislation. I was glad to hear from the opening remarks of my hon. Friend the Minister of State that, in spite of the time that will elapse between now and the beginning of privatisation, Government financial support for the industry will continue. That is, indeed, welcome news.

I was interested in remarks of Opposition Members about the apparent ease with which they think the warship builders could be privatised and I should like to take up the remarks of the hon. Member for Whitehaven (Dr. Cunningham). I did not read the press statement from which he quoted but I did see a report in The Times this morning relating to the approaches that are being made by the Department of Industry to the original owners of the warship building companies with a view to perhaps sounding them out on repurchase.

According to the newspaper report, the previous owners have asked for two assurances. Perhaps the Minister will comment on them and let us have his views. The former owners, who are probably the most likely buyers of the warship builders want, first, improved compensation for their assets which were taken over by the Labour Government in 1977. I sympathise with that and endorse what the previous Secretary of State for Industry, my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said on the matter when he commented that the original compensation payments were grossly unfair. We know that as a result there are now nine separate applications before the European Commission of Human Rights. I gather that the commission has ruled that some of those applications are admissible. However, a comment on the matter from the Minister would be welcome.

The second assurance that the former owners have sought is that adequate compensation will be paid if a future Labour Government were to renationalise. The hon. Member for Whitehaven said that that was part of Labour party policy, but he was careful to exclude any remarks about compensation. Perhaps the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) will comment on that matter when he winds up as it is important and will no doubt influence potential buyers.

I doubt whether those two assurances can be given, so I also doubt whether the sale of British Shipbuilders in part or in whole, not even the warship builders, can be a foregone conclusion. Most certainly it will not proceed with haste. However, that is no reason for not passing this enabling measure.

The best analogy with this measure which illustrates the realistic attitude of the Government towards the policy of denationalisation that they are pursuing is surely the Civil Aviation Act 1980, which provided for the introduction of private capital to British Airways. There has been no rush to privatise British Airways. The enabling measure has concentrated the minds of those in the corporation, both management and employees. That has had an immediate effect on productivity. If this Bill is passed, it will have a similar beneficial effect on both management and employees in the various parts of British Shipbuilders.

Before one can sell part or whole of a company one has to be able to write a prospectus. Before one can write a prospectus, one has to be able to show a profit. Before one can make a profit, one has to be competitive. We should give credit to British Shipbuilders for the way in which it has increased productivity and competitiveness over the years. It is true that it has reduced the number of bargaining units from 168 to only two. It is true that it has cut out leapfrogging and that demarcation disputes are now a thing of the past. It is true, alas, that 25,000 jobs have gone. It is true that it now has central wage bargaining. That is good and splendid. However, it does not take legislation to bring those things about. I was interested in the remarks that were made on clause 1, when it was assumed that, by passing a law, one would make people realistic and improve industrial relations and productivity.

Mr. Cowans

Will the hon. Gentleman tell the House that all those improvements, all the good industrial relations, all the investment and all the advanced ideas happened only under nationalisation? None of them occurred under private enterprise.

Mr. Colvin

Nationalisation was coincidental with the start of a world recession. I believe that it is the feeling of realism among management and workers in British industry, rather than the ownership of the firms concerned, that has brought about the improvements to which the hon. Gentleman referred. Since the second world war we have had five men doing four men's work. In the past three or four years, the fifth man has gone. In labour terms, we are now competitive.

I shall return to my analogy with British Airways and the problems of privatisation. With British Airways, it was never thought that privatisation was possible. That is why passing an enabling measure such as this concentrates the minds of those who are involved. It hastens higher productivity and improved profits.

British Shipbuilders can survive, either in part or in whole, whether state-owned or owned by private shareholders or, perhaps, a combination of both, only if the world shipping industries are healthy. We know that there is a vast overcapacity of shipping in the world today. An enormous tonnage is laid up. We know also that the British share of world shipping is shrinking as other maritime nations emerge.

However, there are still healthy sectors that are growing. For example, offshore vessels are still in demand and being built in British shipyards. The high technology ships for which we have a high reputation are still in demand and we can win orders for them. Unfortunately, with regard to the very large crude carriers, what The Sunday Times said on 15 February is true—Korea rules the waves. However, Korea will rule the waves only for as long as it is making a profit out of building those ships. Korea will soon decide that it does not want to go on making ships any longer when it no longer makes a profit. That will happen when China starts to build ships. The competition from China will drive Korea out of business, and China is not exactly renowned for its freedom, industrial democracy, or care about profits and profitability.

We must not conclude this debate on a note of utter gloom and despondency. I welcome the Minister's statement about the increase in the intervention fund. That at least is good news. I endorse what the right hon. Member for Sunderland, North has said—the need for more help remains. To know what help we should be giving our shipbuilders and shipowners, it is vital that we find out what other countries do. At the moment, there is no proof of the financial incentives and help given by other Governments either to their shipbuilders or to their shipowners. Until we have solid facts we cannot plan the measures of support that we should be giving.

We must re-examine a scrap-and-build policy whereby we scrap two ships for every one that is built. I was glad to note a reference in Lloyd's List the other day to the international maritime industries forum which is examining a scrap-and-build policy once again. In that, there is some hope that we can get the type of help that our shipbuilders require.

The Bill fulfils a commitment by the Conservative party to reduce the role of the state where possible. It is based not on dogma, but on common sense, and if enacted it might open up new prospects for an important national industry.

9.4 pm

Mr. Ernie Ross (Dundee, West)

The Third Reading and Committee stage of the Bill demonstrate the lack of a concerted effort by the Government to come to grips with an industry in a severe crisis. The Opposition, which have a different approach to nationalised industries and to British engineering, have a responsibility to make clear those differences. Although we may welcome some of the Minister's comments we must put on record the different strategy that we would have adopted had we been in power, and that we will adopt when we are returned to power after the next election.

It is an essential objective of every trade union to defend the industry in which its members work. If there is no industry, there will be no members and no wealth to support our people. The Government are determined to de-industrialise the nation that gave birth to modern industry. Many Opposition Members have experience in shipbuild-ing and other industries. Some hon. Members are sponsored by trade unions that have promoted the idea of defending British engineering, not from chauvinism but from patriotism. Moreover, that is a vital demand of those who work in the industries, and it is in the interests of those whom we represent.

The Government have introduced the Bill for ideological reasons that are as relevant to the modern world as are leeches to modern medicine. It has nothing to do with resolving the problems of British engineering and, more important, British shipbuilding, but supports the Government's contention that on some distant, undeclared day everything will come right.

One need only read the speeches of my right hon. and hon. Friends in Committee to see that the Bill is unnecessary. It is an attempt to privatise and it cannot work. If the enabling legislation reaches the statute book, the weaker yards will be abandoned or will collapse and even larger Government subsidies will be required if they are to survive. If the specialist yards were hived off they could not meet delivery dates without the assistance that they receive from the present mix in British shipbuilding. It is a mystery how a change in ownership of a yard would enable it to compete more effectively in world markets. It would have to reduce costs dramatically, and improve delivery dates and productivity or it would need major capital investment, which is hardly likely with privatisation. It would require the co-operation of the trade union movement, which increasingly expresses concern about its role in the industry. The Government believe that the trade unions should accept low wage increases and job losses without long-term security. If the industry is handed back to those who brought it near bankruptcy, trade union co-operation is unlikely.

Furthermore, British Shipbuilders' centralisation of research and development has cut research duplication and wasteful multiple estimation in tendering. Privatisation is not in the commercial interests of British shipbuilding, the employers or the employees. An integrated industry can better survive the world shipbuilding crisis.

British Shipbuilders has the ability to build warships, Polaris submarines, computerised frigates, trawlers, pilot boats, tugs, feeder ships, coasters and fishing patrol vessels. Hiving off will only divide the work force who would be competing with one another. That would not be good for the industry.

I said in Committee, and I repeat, that the Government's determination to have privatisation has nothing to do with real interest in the industry. It has more to do with the Conservative party policy group report on the nationalised industries which was put together by the Financial Secretary to the Treasury. It was leaked in The Economist in May 1978. It has more to do with political dogma than any understanding of how British engineering works.

I am sponsored by a trade union—AUEW-TASS—which includes and represents many naval architects, engineers and designers employed in British Shipbuilders. During nationalisation I fully supported the building up of specialised teams. Privatisation puts at risk centralised control of materials, research, development and design for the corporation. British Shipbuilders has gained an advantage from the new technology that it was able to introduce following nationalisation. The advent of new technology has led to tremendous problems of adjustment—displacement of jobs, the obsolescence of many skills, the need to learn new skills and adapt to new working environments. All those problems were handled by the trade unions because they understood that it was their industry. The industry was nationalised not just for the benefit of the work force but for the country's long term benefit.

If the yards are hived off that interest is bound to receive a setback and the work force will not be encouraged to continue to work together so effectively. When one looks at British Shipbuilders' demands for quicker production, engineering and planning, leading to advanced outfitting, detailed production scheduling, material control, greater control over suppliers and subcontractors, superior shop floor organisations with improved supervision of working practices, job flexibility, communication, information, tighter control of dimensional accuracy at all stages of production leading to the virtual elimination of re-work, involvement of shop floor workers as the first line in a quality control system, how will all that be achieved by this enabling legislation? How will the co-operation of the work force, which is so essential if these aims are to be achieved, be guaranteed if the industry is hived off?

The shipbuilding unions are clear about their specific demands. The CSEU says that it wants increased Government aid in both the short and long term. It wants the introduction of a scrap and build programme and financial incentives to British owners to buy British. It is important that the House realises that there is a change of mood at all levels of the work force. That change of mood is not taking place where we believed initially that it might when job reductionssss were asked for. We thought that when job reduction were demanded, the work force would refuse to accept them. After discussion, however, it decided that it would accept a reduction in the work force. The Government would do well to be aware of the change of mood. The workers in every yard in this country are against privatisation. They have accepted wage increases below the level of inflation over the past few years in order to remain competitive. They have had to accept the closures and redundancies to improve efficiency and productivity. The workers are saying that it is "not on" to give the industry back to those who brought it to the state of bankruptcy that existed when we nationalised it. The Government had better be prepared for the reaction in these yards if any of this nationalised industry is sold.

What has been the Government's role? Despite tonight's statement of an increased subsidy, their attitude shows little recognition of the serious crisis in world shipping. They constantly lecture the House and the shipyard workers. The Bill does nothing for the morale of the industrial team, which is united against it. They are also united in their determination to ensure that this island nation maintains a shipbuilding industry capable of providing for merchant and defence needs. The Government are wholly unsympathetic to the crisis facing merchant shipping. That is not unconnected with their lack of concern about merchant shipping orders.

I draw to the Minister's attention an article in The Scotsman of 16 February, and the comments of Jim Murray, the leader of the union side of the shipbuilding negotiating committee. He said: God helps those who help themselves and, to be quite frank, at the present time with the policies being pursued by the present Government and British shipping interests, it is questionable as to whether or not we qualify for divine help. We make that: point perhaps in rather light vein, but in much more serious vein, we would illustrate the point much more forcibly—the replacement Atlantic Conveyor. The world outside must have thought that as a nation we must have gone stark staring bonkers. If Government and shipowners can act in the way that they did on that very sensitive situation then our task and our joint efforts become that much more difficult. My right hon. and hon. Friends have made it clear that we expect financial incentives from the Government. How do they intend to respond to that? We want not only financial incentives for the domestic industry, but easier credit terms and packages for the developing world, which is anxious to place orders for ships in our yards but cannot raise the finance. It needs easier credit terms.

The intentions of the Bill are criminal. Instead of recognising British Shipbuilders as a national strategic industry, instead of examining how that industry—which has achieved so much with so little help—can be stimulated and encouraged, instead of trying to help British shipbuilding through a difficult period, the Government have decided to reward their political friends by putting up for sale yet another of our national assets.

The Bill is unnecessary. It makes no industrial or economic logic. It asks the House to believe a scenario that is a nonsense. No one will buy the non-profit-making yards. If the naval yards—Yarrows, Vickers and Vosper Thorneycroft—are sold, the remainder will collapse without massive Government finance. Yet again, the Government fork out to line the pockets of the Prime Minister's friends. The Bill will fulfil an election pledge. I challenge the Government to say tonight how privatisation will help the industry. Why do neither workers nor management support it? Why is it that members of all unions, including the National Union of Seamen, want completely different alternatives to the privatisation measure?

I doubt that the House will hear the answers to those questions. That is why I shall join my right hon. and hon. Friends in voting against this unnecessary measure.

9.18 pm
Mr. R. C. Mitchell

I regret that the hon. Member for Southampton, Test (Mr. Hill) has temporarily left the Chamber. I wanted to congratulate him because at least one third of his speech was almost a word-for-word reproduction of my Second Reading speech. I congratulate him on reading it. If I have achieved something during the passage of the Bill, perhaps it is the conversion of the hon. Gentleman.

It is not my intention to make a constituency speech today as there will be other opportunities for doing that. I want to deal with the Bill as a whole. I shall advise my hon. Friends to vote against the Bill because it is completely irrelevant and does nothing whatsoever to tackle the underlying problems affecting shipbuilding today. It will not produce one more order for a merchant ship or warship. It is a piece of ideological dogma.

Both the Government and the Labour party seem obsessed with ownership. Privatisation has become a virility symbol for the Conservative party as nationalisation has been for the Labour party for many years. We are reaching the nonsensical situation in which one side nationalises and the other side privatises. Whether nationalised or privatised, the industry faces similar problems. The problems of management, getting orders, and competing against foreign shipbuilders are similar whether the industry is in public or private ownership.

I believe that the shipbuilding industry should remain in public ownership. I voted for public ownership in 1977, not necessarily taking the view of the majority of my shipyard workers who had grave doubts about it at the time. But now the morale of the workers, especially in the warship yards, is liable to be affected. Indeed, it has already been affected by the defence cuts and the fact that, because of the Government's defence policy, the workers cannot see where future orders will come from. I agree that far too much is being spent on Trident and that more should be spent on conventional weapons.

The Bill will create another uncertainty. What is to happen? Are we to be privatised? Are we to be sold off or not? The only people who are never asked for their views are the workers in the industry. Nobody ever asks the workers whether they want to be nationalised or privatised.

Dr. John Cunningham

That is not true. The workers in the yards are consulted by their trade unions. I am sorry to hear fatuous laughter from the Government Benches. The trade unions have a far better understanding of how the shipyard workers feel about these issues than the Government have.

Mr. Mitchell

That may well be true, but that would not be difficult. It does not necessarily follow that, at any moment, the official line put forward by a trade union represents the view of the majority of its members. The trade unions are consulted, but not necessarily all the people who work in the shipyards. In 1977, I asked for a poll to be taken of the shipyard workers to find out whether or not they wanted to be nationalised. That is the only real way to achieve consultation.

Mr. W. E. Garrett

On the north-east coast, trade unionists are consulted at meetings held by the various unions. The facilities are there for them to attend. They attend in large numbers and discuss the issues, and the full-time officials take away the views of those members. That is the basis on which decisions are reached.

Mr. Mitchell

I am sure that a consultation process goes on, but the hon. Gentleman knows as well as the rest of us that not all trade unionists attend branch meetings. A relatively small proportion turns up to discuss things. There is therefore a case for consulting the workers in a different way. For example, the great majority of shipyard workers in the north-east may well have favoured public ownership in 1977, but that does not mean that the same necessarily applied in Southampton or elsewhere. However, I shall not labour that point.

The other reason why the Bill is thoroughly bad is, as I said on Second Reading, that it puts still greater power in the hands of Ministers. I dread to think of that power in the hands of some official Opposition Members who would like to be Ministers. I dread to think of such power in the hands of some extremely Left-wing potential Ministers. If it were in the hands, for example, of the right hon. Member for Bristol, South-East (Mr. Benn), I hate to think what the end result might be. The Bill takes power from Parliament and gives it to the Executive. More and more enabling Bills are doing just that and more and more real power is being transferred from this place to secret Cabinet rooms.

As the right hon. Member for Sunderland, North (Mr. Willey) said, instead of playing around with irrelevant Bills like this, Ministers should be working out a proper maritime strategy in consultation with Ministers from other Departments. The Falklands crisis clearly showed the need for a strong Merchant Navy sailing under the British flag. The number of ships sailing under the British flag falls every month. It also clearly showed that the Merchant Navy is the fourth service—the fourth arm of defence. A naval operation cannot be mounted without its assistance. The Government should be considering that and deciding what kind of Merchant Navy we need and the kind of ships required. They should be consulting shipowners about how ships can be adapted. They should be doing all that instead of playing around with this Bill.

The Government should also be dealing with the problem of competition and considering how Korea manages to undercut this country so severely. I strongly oppose the CEGB placing orders in Korea, but purely from the taxpayers' point of view the cost of the ship will be considerably less than if it were built here. There is a considerable price difference, mainly because Korea is doing in shipbuilding what Japan has already done in many other industries—heavily subsidising to dominate the market. Once it has dominated the market, things may change, but that is how those countries operate. We always seem to take the Simon Pure attitude that we should not subsidise because it is not playing the game. The fact remains that all our competitors are doing just that.

I was alarmed at the speech of the hon. Member for Dundee, West (Mr. Ross), which showed all that is wrong with British industry today. The hon. Gentleman is still fighting the old class war.

Mr. Ernie Ross


Mr. Mitchell

I am glad of that confirmation. The hon. Gentleman is still fighting the old class war, but British shipbuilding and British industry generally need the recognition that management and employees are not diametrically opposed but have the same objectives. If the industry is not profitable, there will be no jobs. It is a question of working together, not of automatic opposition. Until that feeling gets through to shipbuilding as well as to everywhere else, this country will not be successful.

9.31 pm
Mr. Dixon

I wish to quote from the annual report and accounts of British Shipbuilders for the year 1981–82 when Robert Atkinson, the chairman of British Shipbuilders, summed up in a couple of sentences the position of Britain as a maritime nation. He said: Britain as an island nation is, and always has been, a strong maritime nation needing sea power, and by necessity this must continue to be the case. Shipbuilding plays a vital part in our nation's prosperity and in its protection. We have a capability that needs to be sustained and recognised as a national asset because a shipbuilding capability is not something that can be used intermittently; to be available when required. To be effective it needs continuous use, it needs continuous improvement and continuous investment in men and materials; once that capability is allowed to disperse, it will not be recoverable. Shipbuilding, like shipping, is a national strategic industry and needs a declared national maritime policy. Britain remains one of the few major maritime nations in the world where the national requirements of shipping and shipbuilding are not linked. Therefore, it seems to me reasonable that since we are required to be internationally competitive we should be able to rely on adequate Government support such as is received by all those overseas shipbuilders with whom we have to compete". Since he has been chairman, he has served under two Secretaries of State for Industry and three Under-Secretaries of State for Industry. I have more confidence in his statements that I have in the Government Front Bench, from whom we shall shortly hear.

The Bill is irrelevant to the needs of the British shipbuilding industry. When we talk about competition, we are talking about international competition. To quote Robert Atkinson again, this time in the November issue of Shipbuilding, he said, and I believe the hon. Member for Southampton, Test (Mr. Hill) referred to this: There's no future in boxing by the 'Queensberry Rules' if your opponents are engaged in 'all-in wrestling'". That is what happens to British shipbuilding when it competes with Korea, Japan and other far eastern nations.

The hivingoff of the warship yards from British Shipbuilders will do it harm. The merchant shipping section will, to use a pun, go down the Swannee. Britain will have no merchant shipbuilding capacity left if the warship yards are hived off. It is against the unions' advice, the advice of the chairman of British Shipbuilders and that of everyone concerned with ships and shipbuilding

The Minister spoke about introducing or inviting private capital into the shipbuilding industry. When the shipbuilding industry was in private hands it was unable to get private capital invested. There was the Paton report in 1962, the Geddes report in 1966 and the Booz Allen report in 1972. Those reports on the British shipbuilding industry talked of the lack of investment in the British shipbuilding industry. That is the reason why it was uncompetitive.

What is required is some help from the Government but the Bill helps in no way whatsoever. I agree with my hon. Friend the Member for Dundee, West (Mr. Ross), who spoke about the attitude of the workers in the shipbuilding industry. The Bill will cause confrontation. There has already been a conference. They will not accept the fragmentation of the shipbuilding industry. They will not accept the compulsory redundancies that the Bill may bring.

There was a Select Committee on Industry and Trade in the Session 1981–82, which interviewed the Confederation of Shipbuilding and Engineering Unions, British Shipbuilders, the Minister and Government officers and made recommendations. Not one of the recommendations is included in the Bill. Nothing that the Select Committee said is included in the Bill. The Bill will not help British Shipbuilders. It will only hinder it at a time when world shipping is in recession. Despite the requirements of shipbuilders and the shipping industry, the Minister has come along with a totally irrevelant Bill, which will cause only confrontation with workers in the shipbuilding industry.

9.35 pm
Mr. W. E. Garrett

The hon. Member for Bristol, North-West (Mr. Colvin), who is not in his place, referred to the previous shipbuilding Bill, which took two years to go through its parliamentary stages. I was a member of the Committee that considered the Bill and I well recall the vigour with which the Bill was debated and the acrimony generated on both sides. The then Conservative Opposition were very keen when it came to defending their corner and the private sector.

The significant factor about our 16 Committee sittings and tonight's debate on this Bill is the subdued torte of Ministers and their supporters. In Committee, there was a fair bit of humour and some knowledge was gained, because we learnt much from my hon. Friend the Member for Jarrow (Mr. Dixon) about the problems of industrial relations and working practices in the industry and about some of the characters who worked in the industry. He enlightened many a long weary hour in Committee.

However, when Ministers replied to some of the points put in Committee they were polite and very low key for their temperament—I have seen them display a bit more vigour on other occasions—and at one point I wondered whether they had lost their passion for privatisation and whether something terrific might happen. I wondered whether the Bill would collapse and whether we would all be able to go home to think about it. However, that did not happen and we are now debating the Bill's Third Reading.

I refer the Minister to something that he said early in his opening remarks. He said that the Bill had freed British Shipbuilders from a straitjacket. That is not my impression. I am under the impression that any straitjacket has been replaced by a noose, which can be pulled at any time. When it is pulled, it will kill off British Shipbuilders. Depending on how it is pulled, it will kill it quickly or by slow strangulation. My hunch is that it will be slow strangulation. Either way the Bill could be fatal for the British shipbuilding industry. The industry could fall between the two stools of private and public sector and in the end both would collapse.

I am also at a loss to understand the Minister's quiet satisfaction with the EC's fifth directive, which approved a loan of £20 million for the first six months of this year. It is not the EC's money but our money. It is the British taxpayers' money. Why should it approve money that is raised by the taxpayers and which we should spend? The hon. Member for Southampton, Test (Mr. Hill) said that he was committed to the principles of Europe. If he is still a committed supporter now, we should pity him, because it shows an extremely closed mind.

I should like to reinforce two points. First, the labour force is demoralised. If any hon. Member doubts that, he should go to the north-east coast and see what is happening there. It is no good beating about the bush. One can see all the early signs of further industrial trouble. I warn Ministers that they will bear some responsibility. When industrial trouble breaks out, I hope that they will understand and have broad enough minds to realise that they had some part to play in the troubles that will inevitably come.

Regrettably the Government will kill off the industry if they pursue the division of responsibility instead of trying to heal the nation's industrial relations wounds. They should be bringing together sectors of industry instead of separating them. If they pursue this policy, more and more British industry will be destroyed. The only way that destruction can be stopped is by society at large being prepared to think out issues. If they do, they will reject some of the privatisation policies that have been advanced during this Parliament.

I do not like to be prophetic, but if any hon. Member thinks that this is the last Bill on the shipbuilding industry with which he will be involved in his parliamentary career he will be disillusioned. Whichever party wins the next election, there will have to be further legislation to iron out the anomalies arising from the privatisation of the industry. If the Conservative party were to win the election, the Minister of State and his colleagues might again be in Committee Room 10 or 11 explaining to us why privatisation created more problems for the industry. They will say that they tried it and it was not very good, so they are going back to a public or semi-public body. The Minister may be in the same job. Perhaps he will be a grade higher. If he is, I shall be delighted to sit in the Committee and listen to him giving the explanations.

9.42 pm
Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)

I begin by paying tribute to my right hon. and hon. Friends who served on the Standing Committee. We kept the Bill in committee for 16 sittings not as a mere exercise to demonstrate the length of time such a small Bill could be kept in Committee but because we regarded the Bill as so important. Throughout the debates on Second Reading, in Committee, on Report and now on Third Reading we have been told that this is only a paving measure, as though that was a minor thing. We have been told that there is nothing to worry about. If the Bill is so minor we are entitled to ask the Minister why the Government went to all the trouble of introducing it.

It was appropriate that the final contribution from the Opposition Back Benches should have come from my hon. Friend the Member for Wallsend (Mr. Garrett) who has in his constituency the biggest shipyard in the British Isles, apart from Harland and Wolff in Northern Ireland. He and my hon. Friend the Member for Jarrow (Mr. Dixon) have that intimate knowledge of shipbuilding that ought to have made Ministers sit up and take notice.

One of the significant features of all the debates is that we have had no response from Ministers to any of our questions. Ministers have singularly failed to produce anyone who is in favour of the Bill. British Shipbuilders is not in favour of it. To comfort the hon. Member for Southampton, Itchen (Mr. Mitchell), who was antagonis-tic to the "them and us" situation, I would point out that the Engineers and Managers Association, which represents the management of the shipbuilding industry, is not in favour of the Bill. None of the trade unions involved in the industry is in favour of it. Now we learn that the Government are in such great difficulty that they are sending the permanent secretary to the Department of Industry round former private owners to see whether they are in favour of it. It has become apparent that no one is in favour of the measure.

It was the hon. Member for Bristol, North-West (Mr. Colvin) who, at about 9 o'clock, gave the game away. The hon. Gentleman said that this was the honouring of an election promise. That is what the Bill is all about. It means that the Government can take the Bill to their annual conference and wave it to the well-bedecked ladies and other delegates, claiming that it is one more election promise fulfilled. I am sure, however, that the damage done to the shipbuilding industry in the process will not go unnoticed by the delegates who will face the consequences whenever the Conservatives meet in conference again. The one defence of the Bill is that it honours an election promise.

The Bill, as the Minister says, is an enabling measure. It enables a tremendous amount of damage to be done. It is a paving measure towards privatisation. Clause 2 will devastate the traditional shipbuilding areas, not least Clydeside. I hope that the Scottish Office Minister will address himself to this matter against the background of Sir Robert Atkinson's announcement last week that there will be an additional 30,000 redundancies in the shipbuilding industry. I hope that the Minister will say how many of the redundancies he expects will take place in Scottish shipyards. The Bill will devastate the shipbuilding industries on Tyneside and Wearside.

The measure is irrelevant to the shipbuilding industry. It has already been argued that the measure will not produce a single additional shipbuilding order. That is true. It will do nothing to stabilise the maritime fleet that is in such difficulties. Much of the tonnage is laid up. The tonnage that is not laid up is engaged in slow steaming in order to save money. The Government have failed to come forward with any proposals to give additional credit or preferential treatment for those customers prepared to order vessels that are constructed in British yards.

Export credits guarantees are also important. These have not, however, been discussed. Debate has been only about the sacred policy of privatisation, the petard upon which the Conservative party has become hoisted. Before the hon. Member for Southampton comes back with his reference to my hon. Friend the Member for Dundee, West (Mr. Ross)—

Mr. Hill

On a point of order, Mr. Speaker. The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) is actually addressing the hon. Member for Southampton, lichen (Mr. Mitchell). We do not always see eye to eye.

Mr. Ewing

Actually, I was itching to find out what constituency the hon. Member for Southampton represents. I recognise now that it is Southampton, Itchen and not Southampton, Test. The people of Southampton, I am sure, if they have studied the remarks of the hon. Member for Itchen will have great difficulty in distinguishing between the two hon. Members without my adding to the confusion. I accept therefore the strictures of the hon. Member for Southampton, Test (Mr. Hill).

Before the hon. Member for Itchen comes to the reference that he made to my hon. Friend for Dundee, West I should like to say that his approach to that question was a little simplistic. We are not dealing with an industry that has been nationalised for many years. We are dealing with an industry that was in private hands until 1977. During the time that it was in private hands, as the hon. Member for Itchen knows well, labour relations were a disgrace. The whole industry was a shambles. It was almost bankrupt. That was the reason that the hon. Member for Itchen, then a Labour Member, supported the then Labour Government in taking the shipbuilding industry—I leave aside for a minute the aircraft industry—into public ownership.

The industry has been in public ownership only since 1977. Therefore we are entitled to compare its performance when it was in private hands in recent years with its performance when it was in public hands in recent years. It is not a "them and us" situation. The record proves conclusively that the industry was much more successful during its period of nationalisation. It is not a diplomatic argument. It can be proved conclusively that the industry was much more successful under public ownership than it was under private enterprise. In the halcyon days under private enterprise, when the industry made substantial profits, the great weakness was that the people making the profits were not re-investing. Major investment in the industry and its modernisation have taken place since 1977, when it was nationalised. It was all done with the co-operation of the work force which, as the hon. Member for Bristol, North-West rightly said, accepted 26,500 job losses during that period. Now the work force is threatened with this privatisation measure, which tosses to the winds all the efforts that have been made since 1977. There is a complete lack of concern on the part of the Government at the damage that will be done to the industry when this measure reaches the statute book.

The Minister of State opened his remarks by saying that the Government are attempting to attract private capital into the industry. However, he forgot to explain the change that the Government made to the Bill in Committee, whereby those who are buying part of the industry will be indemnified. They will be underwritten by the taxpayer until the contract is completed. Those who are concerned about the taxpayer are concerned about the underwriting of these orders. If any of the subsidiaries is sold off, the orders sold with that part of the industry will be underwritten by the taxpayer until the contract is completed.

The Minister need not bother to point to his watch. We are talking about 30,000 lives which are at stake. It is not a trivial matter. We are talking about the families and the lives of 30,000 people in the shipbuilding industry. We shall not cover that subject in a few brief minutes.

Not only are the orders to be underwritten by the taxpayer, but any contract that is made in the period between now and the Bill reaching the statute book, and then sold to private enterprise, will also be underwritten, under clause 2. Whatever the Government say, the Bill is a shining example of bungling incompetence in its drafting, its implications, and everthing that it does to the shipbuilding industry.

I shall not detain the House, but I do not want to avoid the question that was put by the hon. Member for Bristol, North-West about compensation. Before facing that question head on, I want to say to the Under-Secretary who is to reply that he is under an obligation on behalf of the Government to clear up the matter that is before the European Commission of Human Rights. The Minister of State has not cleared up the matter. The Government take the view that under the compensation provisions of the 1977 Act the then Labour Government acted correctly. That is accurate as far as it goes, and that is what the Minister of State said, but page 3 of the document, to which my hon. Friend the Member for Whitehaven (Dr. Cunningham) referred, says that the Government consider that the compensation was adequate. If the hon. Member for Bristol, North-West, is correct in saying that those companies that are thinking of buying back part of this industry want additional compensation for the assets that were nationalised in 1977, the Minister has an obligation to say whether the Government are prepared to meet that demand. That is not an unimportant matter and it must be answered by the Minister when he replies to the debate.

The Labour party's position is clear. We have made it clear before and make it clear again tonight. No one, but no one, will make any profit from buying these assets. The Labour party has never confiscated anything but we are making it clear that anybody who buys any assets from British Shipbuilders will have those assets reacquired by a future Labour Government and will not make any profit from them.

In conclusion, the Bill, as has been said so often, is an irrelevant measure. I invite all right hon. and hon. Members to join us in the Lobby in voting against the Bill on Third Reading tonight.

9.55 pm
Mr. Alexander Fletcher

The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) has shown his usual courtesy towards the House by ignoring the agreement on the wind-up speeches. It is not the first time that he has done that and no doubt he will try to do it again.

There has been the tiniest chorus—

Mr. Harry Ewing


Mr. Speaker

Order. The House is anxious to come to a decision after hearing the Minister.

Mr. Ewing

On a point of order, Mr. Speaker. I would not have raised a point of order had my integrity not been impugned by the Minister. The Whips will confirm that the agreement was for each Front Bench speaker to speak for 15 minutes and I stuck strictly to that. It would be in order for the Minister now to apologise.

Mr. Fletcher

That is a rather shocking statement from the hon. Gentleman.

It would be wrong to say that there has been a chorus of protest about the Bill from Labour Members. [Interruption.] Muttering that I am a liar does not make me one. It would be wrong to suggest that there has been a chorus of protest from Labour Members because there have not been enough present to make a chorus. However, the word "irrelevant" which has echoed around the rather empty Labour Benches this evening is nothing less than a misunderstanding of the Bill or of the state of the British shipbuilding industry today. If there is one thing that the industry needs it is the opportunity to be flexible, to obtain the resources of the private sector and the opportunity for joint ventures and the other prospects that will open up to British Shipbuilders as a result of the Bill.

In opening the Third Reading debate my hon. Friend the Minister of State said that the industry was in a straightjacket. It is indeed in a legislative straightjacket which prevents the industry from having the same flexibility and business arrangements that other parts of British industry are able to undertake and participate in. That is the main reason for the Bill. If one takes a serious view of the industry today, one must agree that it needs that flexibility in order to survive. It is in a fight for survival in a world market that is experiencing one of the worst recessions in 50 years.

I regret that I do not have time to answer all the points that have been raised—[Interruption.] I understand that there is time now. One point that was raised by my hon. Friend the Member for Bristol, North-West (Mr. Colvin) related to nationalisation compensation. The European Commission of Human Rights has found that seven of the applications presented to it are procedurally in order, but that implies no view as to their merits, which are now under consideration.

There should be no doubt about the Government's case. Our argument is simply that the compensation arrangements under the 1977 Act did not involve a breach of the convention or the international law requirements. The Government are arguing no more than that the legislation did not breach the convention requirement concerning the public interest. That is not to say that the legislation cannot be criticised on wider grounds. That is the case that the Government are making clear to the commission. That is the position, whatever context may have been included in some press reports or whatever shine may have been put on it by the Opposition—

It being Ten o'clock, the debate stood adjourned.

Ordered, That, at this day's sitting, the British Shipbuilders Bill may be proceeded with, though opposed, until any hour.—[Mr. Lang.]

Question again proposed, That the Bill be now read the Third time.

Mr. Fletcher

The Bill should be seen in the context of the industry as a whole. Over the past three years the industry has passed through a period of restructuring and reorganisation which, as many hon. Members have rightly said, has been a traumatic experience. The chairman and the work force in the industry have done a great deal, but, despite the claims of Opposition Members, including the hon. Member for Stirling, Falkirk and Grangemouth, the industry has still not reached the productivity levels that existed before nationalisation. This is a matter of regret to everyone involved. No doubt it is related to the state of the market, but it is nevertheless a fact, despite the investment which has taken place at a higher rate in recent years than previously.

The Government have given the industry a great deal of support—£600 million since we came to office. It is now facing a serious world recession and the prospects for all the merchant yards—the hon. Member for Dundee, West (Mr. Ross) mentioned the yards on the Clyde—are gloomy. The chairman recently announced redundancies.

The problems facing the industry underline the fact that it will have a much better chance of survival if it is not kept in a straitjacket in the public sector. If it is able to use the resources of the private sector and if it is able to be more flexible, it has a better chance of surviving the present difficulties. That would bring the industry alongside the shipbuilding industries of most of our European competitors. We are the only country in western Europe which has a wholly nationalised shipbuilding industry. Neither we nor the industry benefits from that.

There is a need to develop the industry's strength. The attraction of the Bill is to enable it to attract private investment. Obviously the warship building side will attract the greatest interest. These businesses should not be starved of capital or investment because of losses elsewhere in the industry. In the past, capital investment has suffered because of demands for cash to meet deficits elsewhere. The fact remains that a large part of the corporation will remain within the public sector. That was said clearly by my hon. Friend the Minister of State on Second Reading. The Government will continue to support merchant shipbuilding in this country.

The corporate plan has been considered and, in view of market difficulties, the external financing limit has been increased from £122 million in 1982–83 to £160 million in 1983–84. The corporation has a continuing duty to make progress towards providing an adequate return on the capital employed in the industry.

The shipbuilding industry has a difficult time ahead and management and work force will need to work together to gain orders. The Government will continue to support the industry's efforts and the Government will use the Bill, as and when opportunities arise, to bring in private sector partners to the industry covering all of its activities. The need for that is perfectly obvious to everyone in the country and in the House who is concerned about the future and the prospects of the shipbuilding industry. We are merely putting the industry on the same footing as its European competitors. That is one of the reasons for bringing the legislation before the House. It is a very important reason. Accordingly, I commend the Bill to my hon. Friends.

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

The House divided: Ayes 285, Noes 213.

Division No.79] [10.4 pm
Aitken, Jonathan Eggar, Tim
Alexander, Richard Elliott, Sir William
Alison, Rt Hon Michael Emery, Sir Peter
Amery, Rt Hon Julian Eyre, Reginald
Ancram, Michael Fairbairn, Nicholas
Arnold, Tom Fairgrieve, Sir Russell
Aspinwall, Jack Faith, Mrs Sheila
Atkins, Rt Hon H. (S'thorne) Farr, John
Atkins, Robert (Preston N) Fell, Sir Anthony
Atkinson, David (B'm'th,E) Finsberg, Geoffrey
Baker, Nicholas (N Dorset) Fisher, Sir Nigel
Banks, Robert Fletcher, A. (Ed'nb'gh N)
Beaumont-Dark, Anthony Fletcher-Cooke, Sir Charles
Bendall, Vivian Fookes, Miss Janet
Bennett, Sir Frederic (T'bay) Forman, Nigel
Benyon, Thomas (A'don) Fowler, Rt Hon Norman
Benyon, W. (Buckingham) Fox, Marcus
Berry, Hon Anthony Fraser, Rt Hon Sir Hugh
Best, Keith Fraser, Peter (South Angus)
Bevan, David Gilroy Fry, Peter
Biffen, Rt Hon John Gardiner, George (Reigate)
Biggs-Davison, Sir John Gardner, Sir Edward
Blackburn, John Garel-Jones, Tristan
Blaker, Peter Gilmour, Rt Hon Sir Ian
Body, Richard Goodhart, Sir Philip
Bonsor, Sir Nicholas Goodlad, Alastair
Bottomley, Peter (W'wich W) Gorst, John
Bowden, Andrew Gow, Ian
Boyson, Dr Rhodes Gower, Sir Raymond
Braine, Sir Bernard Grant, Sir Anthony
Bright, Graham Gray, Rt Hon Hamish
Brinton, Tim Greenway, Harry
Brittan, Rt. Hon. Leon Griffiths, E.(B'y St. Edm'ds)
Brooke, Hon Peter Griffiths, Peter (Portsm'th N)
Brotherton, Michael Grist, Ian
Brown, Michael (Brigg & Sc'n) Grylls, Michael
Browne, John (Winchester) Gummer, John Selwyn
Bruce-Gardyne, John Hamilton, Hon A.
Bryan, Sir Paul Hamilton, Michael (Salisbury)
Buchanan-Smith, Rt. Hon. A. Hannam, John
Buck, Antony Haselhurst, Alan
Budgen, Nick Hawkins, Sir Paul
Burden, Sir Frederick Hawksley, Warren
Butcher, John Hayhoe, Barney
Carlisle, John (Luton West) Heddle, John
Carlisle, Kenneth (Lincoln) Henderson, Barry
Carlisle, Rt Hon M. (R'c'n) Hicks, Robert
Chalker, Mrs. Lynda Higgins, Rt Hon Terence L.
Chapman, Sydney Hill, James
Churchill, W. S. Hogg, Hon Douglas (Gr'th'm)
Clark, Hon A. (Plym'th, S'n) Holland, Philip (Carlton)
Clark, Sir W. (Croydon S) Hooson, Tom
Clarke, Kenneth (Rushcliffe) Hordern, Peter
Cockeram, Eric Howe, Rt Hon Sir Geoffrey
Colvin, Michael Howell, Rt Hon D. (G'ldf'd)
Cope, John Howell, Ralph (N Norfolk)
Corrie, John Hunt, David (Wirral)
Costain, Sir Albert Hunt, John (Ravensbourne)
Cranborne, Viscount Hurd, Rt Hon Douglas
Critchley, Julian Irvine, Rt Hon Bryant Godman
Crouch, David Irving, Charles (Cheltenham)
Dickens, Geoffrey Jenkin, Rt Hon Patrick
Dorrell, Stephen Jessel, Toby
Douglas-Hamilton, Lord J. Jopling, Rt Hon Michael
Dover, Denshore Joseph, Rt Hon Sir Keith
Dunn, Robert (Dartford) Kaberry, Sir Donald
Durant, Tony Kershaw, Sir Anthony
Dykes, Hugh King, Rt Hon Tom
Eden, Rt Hon Sir John Kitson, Sir Timothy
Edwards, Rt Hon N. (P'broke) Knight, Mrs Jill
Knox, David Ridley, Hon Nicholas
Lamont, Norman Ridsdale, Sir Julian
Lang, Ian Rippon, Rt Hon Geoffrey
Langford-Holt, Sir John Roberts, Wyn (Conway)
Latham, Michael Rossi, Hugh
Lawrence, Ivan Rost, Peter
Lawson, Rt Hon Nigel Royle, Sir Anthony
Lee, John Sainsbury, Hon Timothy
Le Marchant, Spencer St. John-Stevas, Rt Hon N.
Lennox-Boyd, Hon Mark Shaw, Giles (Pudsey)
Lester, Jim (Beeston) Shaw, Sir Michael (Scarb')
Lewis, Sir Kenneth (Rutland) Shelton, William (Streatham)
Lloyd, Ian (Havant & W'loo) Shepherd, Colin (Hereford)
Lloyd, Peter (Fareham) Shepherd, Richard
Loveridge, John Silvester, Fred
Lyell, Nicholas Sims, Roger
McCrindle, Robert Skeet, T. H. H.
MacKay, John (Argyll) Smith, Tim (Beaconsfield)
Macmillan, Rt Hon M. Speed, Keith
McNair-Wilson, M. (N'bury) Speller, Tony
McNair-Wilson, P. (New F'st) Spence, John
McQuarrie, Albert Spicer, Jim (West Dorset)
Major, John Spicer, Michael (S Worcs)
Marland, Paul Sproat, Iain
Marshall, Michael (Arundel) Squire, Robin
Marten, Rt Hon Neil Stainton, Keith
Mates, Michael Stanbrook, Ivor
Maude, Rt Hon Sir Angus Stanley, John
Mawby, Ray Steen, Anthony
Mawhinney, Dr Brian Stevens, Martin
Maxwell-Hyslop, Robin Stewart, A. (E Renfrewshire)
Mayhew, Patrick Stewart, Ian (Hitchin)
Mellor, David Stokes, John
Meyer, Sir Anthony Stradling Thomas, J.
Miller, Hal (B'grove) Taylor, Teddy (S'end E)
Mills, Iain (Meriden) Tebbit, Rt Hon Norman
Mills, Sir Peter (West Devon) Temple-Morris, Peter
Miscampbell, Norman Thatcher, Rt Hon Mrs M.
Mitchell, David (Basingstoke) Thompson, Donald
Moate, Roger Thorne, Neil (llford South)
Monro, Sir Hector Thornton, Malcolm
Montgomery, Fergus Townend, John (Bridlington)
Moore, John Townsend, Cyril D, (B'heath)
Morgan, Geraint Trippier, David
Morris, M. (N'hampton S) van Straubenzee, Sir W.
Morrison, Hon C. (Devizes) Vaughan, Dr Gerard
Mudd, David Viggers, Peter
Murphy, Christopher Waddington, David
Myles, David Wakeham, John
Neale, Gerrard Waldegrave, Hon William
Needham, Richard Walker, B. (Perth)
Nelson, Anthony Walker-Smith, Rt Hon Sir D.
Neubert, Michael Wall, Sir Patrick
Newton, Tony Waller, Gary
Nott, Rt Hon Sir John Walters, Dennis
Onslow, Cranley Ward, John
Osborn, John Warren, Kenneth
Page, Richard (SW Herts) Watson, John
Parkinson, Rt Hon Cecil Wells, Bowen
Parris, Matthew Wells, John (Maidstone)
Patten, Christopher (Bath) Wheeler, John
Pawsey, James Whitelaw, Rt Hon William
Percival, Sir Ian Whitney, Raymond
Peyton, Rt Hon John Wickenden, Keith
Pink, R. Bonner Wiggin, Jerry
Pollock, Alexander Wilkinson, John
Porter, Barry Williams, D. (Montgomery)
Prentice, Rt Hon Reg Winterton, Nicholas
Price, Sir David (Eastleigh) Wolfson, Mark
Proctor, K. Harvey Young, Sir George (Acton)
Pym, Rt Hon Francis
Rathbone, Tim Tellers for the Ayes:
Rees-Davies, W. R. Mr. Carol Mather and
Renton, Tim Mr. Robert Boscawen.
Rhodes James, Robert
Abse, Leo Alton, David
Adams, Allen Anderson, Donald
Allaun, Frank Archer, Rt Hon Peter
Ashley, Rt Hon Jack Forrester, John
Atkinson, N. (H'gey,) Foster, Derek
Barnett, Guy (Greenwich) Foulkes, George
Barnett, Rt Hon Joel (H'wd) Fraser, J. (Lamb'th, N'w'd)
Beith, A. J. Freeson, Rt Hon Reginald
Benn, Rt Hon Tony Garrett, John (Norwich S)
Bennett, Andrew (St'kp't N) Garrett, W. E. (Wallsend)
Bidwell, Sydney George, Bruce
Booth, Rt Hon Albert Gilbert, Rt Hon Dr John
Boothroyd, Miss Betty Golding, John
Bottomley, Rt Hon A. (M'b'ro) Gourlay, Harry
Bray, Dr Jeremy Graham, Ted
Brocklebank-Fowler, C. Hamilton, James (Bothwell)
Brown, Hugh D. (Provan) Hamilton, W. W. (C'tral Fife)
Brown, R. C. (N' castle W) Hardy, Peter
Brown, Ronald W. (H'ckn'y S) Harrison, Rt Hon Walter
Brown, Ron (E'burgh, Leith) Hart, Rt Hon Dame Judith
Campbell, Ian Hattersley, Rt Hon Roy
Campbell-Savours, Dale Haynes, Frank
Canavan, Dennis Heffer, Eric S.
Cant, R. B. Hogg, N. (E Dunb't'nshire)
Carmichael, Neil Holland, S. (L'b'th, Vauxh'll)
Carter-Jones, Lewis Homewood, William
Cartwright, John Hooley, Frank
Clark, Dr David (S Shields) Hoyle, Douglas
Clarke, Thomas (C'b'dge, A'rie) Hughes, Mark (Durham)
Cocks, Rt Hon M. (B'stol S) Hughes, Robert (Aberdeen N)
Cohen, Stanley Janner, Hon Greville
Coleman, Donald Jay, Rt Hon Douglas
Concannon, Rt Hon J. D. Jenkins, Rt Hon Roy (Hillh'd)
Conlan, Bernard John, Brynmor
Cook, Robin F. Johnson, James (Hull West)
Cowans, Harry Jones, Barry (East Flint)
Cox, T. (W'dsw'th, Toot'g) Jones, Dan (Burnley)
Craigen, J. M. (G'gow, M'hill) Kaufman, Rt Hon Gerald
Crowther, Stan Lambie, David
Cryer, Bob Leadbitter, Ted
Cunliffe, Lawrence Leighton, Ronald
Cunningham, Dr J. (W'h'n) Lestor, Miss Joan
Dalyell, Tam Lewis, Ron (Carlisle)
Davidson, Arthur Litherland, Robert
Davies, Rt Hon Denzil (L''lli) Lofthouse, Geoffrey
Davis, Clinton (Hackney C) Lyon, Alexander (York)
Davis, Terry (B'ham, Stechf'd) Lyons, Edward (Bradf'd W)
Deakins, Eric Mabon, Rt Hon Dr J. Dickson
Dean, Joseph (Leeds West) McCartney, Hugh
Dewar, Donald McDonald, Dr Oonagh
Dixon, Donald McElhone, Mrs Helen
Dobson, Frank McGuire, Michael (Ince)
Dormand, Jack McKelvey, William
Douglas, Dick MacKenzie, Rt Hon Gregor
Dubs, Alfred Maclennan, Robert
Duffy, A. E. P. McNally, Thomas
Dunwoody, Hon Mrs G. McNamara, Kevin
Eadie, Alex McTaggart, Robert
Eastham, Ken Marks, Kenneth
Edwards, R. (W'hampt'n S E) Marshall, D (G'gow S'ton)
Ellis, R. (NE D'bysh're) Marshall, Dr Edmund (Goole)
Ellis, Tom (Wrexham) Marshall, Jim (Leicester S)
English, Michael Marshall, M (G'gow S'burn)
Ennals, Rt Hon David Mason, Rt Hon Roy
Evans, loan (Aberdare) Maxton, John
Ewing, Harry Meacher, Michael
Faulds, Andrew Mikardo, Ian
Fitch, Alan Millan, Rt Hon Bruce
Miller, Dr M. S. (E Kilbride) Smith, Cyril (Rochdale)
Mitchell, Austin (Grimsby) Smith, Rt Hon J. (N Lanark)
Mitchell, R. C. (Soton Itchen) Spearing, Nigel
Morris, Rt Hon A. (W'shawe) Spellar, John Francis (B'ham)
Morris, Rt Hon C. (O'shaw) Spriggs, Leslie
Newens, Stanley Stallard, A. W.
Oakes, Rt Hon Gordon Stewart, Rt Hon D. (W Isles)
O'Halloran, Michael Stoddart, David
O'Neill, Martin Stott, Roger
Orme, Rt Hon Stanley Strang, Gavin
Palmer, Arthur Straw, Jack
Park, George Summerskill, Hon Dr Shirley
Parker, John Taylor, Mrs Ann (Bolton W)
Parry, Robert Thomas, Mike (Newcastle E)
Pavitt, Laurie Thomas, Dr R. (Carmarthen)
Penhaligon, David Thorne, Stan (Preston South)
Pitt, William Henry Tinn, James
Powell, Raymond (Ogmore) Torney, Tom
Radice, Giles Varley, Rt Hon Eric G.
Rees, Rt Hon M (Leeds S) Wainwright, E. (Dearne V)
Richardson, Jo Walker, Rt Hon H. (D'caster)
Roberts, Allan (Bootle) Wardell, Gareth
Roberts, Ernest (Hackney N) Watkins, David
Roberts, Gwilym (Cannock) Welsh, Michael
Robertson, George White, Frank R.
Robinson, G. (Coventry NW) Whitlock, William
Rooker, J. W. Willey, Rt Hon Frederick
Roper, John Williams, Rt Hon A. (S'sea W)
Ross, Ernest (Dundee West) Wilson, Gordon (Dundee E)
Ross, Stephen (Isle of Wight) Wilson, Rt Hon Sir H. (H'ton)
Ryman, John Wilson, William (C'try SE)
Sandelson, Neville Winnick, David
Sever, John Woodall, Alec
Sheerman, Barry Woolmer, Kenneth
Sheldon, Rt Hon R. Wrigglesworth, Ian
Shore, Rt Hon Peter Wright, Sheila
Short, Mrs Renée
Silkin, Rt Hon J. (Deptford) Tellers for the Noes:
Silkin, Rt Hon S. C. (Dulwich) Mr. Allen McKay and
Silverman, Julius Mr. George Morton.
Skinner, Dennis

Question accordingly agreed to.

Bill read the Third time and passed.