HC Deb 29 June 1983 vol 44 cc561-3
3. Dr. Godman

asked the Secretary of State for Trade and Industry if he will make a statement concerning the future of British Shipbuilders.

23. Mr. Robert C. Brown

asked the Secretary of State for Trade and Industry what plans he has for supporting the British shipbuilding industry.

Mr. Norman Lamont

The chairman of British Shipbuilders has asked the Government for special emergency help to enable the corporation to gain orders in the recession. The Government are considering this request in the context of a corporate plan recently submitted by the corporation. In the meantime, the Government will give careful consideration to specific requests for help on a case-by-case basis, within the framework of the international rules.

Dr. Godman

The chairman of British Shipbuilders has asked the Government for special emergency help to enable the corporation to gain orders during the recession —[HON. MEMBERS: "Question."] I am about to ask a question. Is the Minister aware that there is a delegation of councillors from Greenock and Port Glasgow, together with shop stewards from Scott Lithgow, Kincaids and Fergusons here today to express their deep concern at the continuing decline of shipbuilding on the lower Clyde? Would it not be socially and politically irresponsible to allow that sad decline to continue?

Mr. Lamont

We all view with considerable concern the problems that our shipbuilding industry faces. The Government have massively supported our shipbuilding industry. In their last term of office they put no less than £700 million into British Shipbuilders. We have supported the industry. It is up to the industry to become more competitive. I have to say to the hon. Gentleman that the losses that are likely to be reported by British Shipbuilders this year will be up considerably. That is not due just to shortage of demand or the market. It is due also to the performance of British Shipbuilders. There is room for improvement.

Mr. Brown

Does the Minister agree that the continuance of the British shipbuilding industry is dependent upon the provision of finance by the state, as is the case with all of our shipbuilding competitors? Is he also aware that the Government's attitudes run contrary to those of our shipbuilding competitors? Will he consider for this country an all-embracing maritime policy, backed at the highest level?

Mr. Lamont

No. I do not agree with the hon. Gentleman. It is true that shipbuilding worldwide is supported by the respective Governments. The Government have massively supported shipbuilding. The £700 million that has been provided is envied by many other industries in our economy. It is not just a question of the Government helping British Shipbuilders. The corporation has to work hard to be more competitive and to get ships delivered on time and to price.

Sir David Price

Is my hon. Friend aware that, because of lower freight rates throughout the world, it is unrealistic to expect any increase in orders from the Merchant Navy? Consequently, have not the Royal Navy and the Royal Fleet Auxiliary a key role to play in sustaining British Shipbuilders during this difficult period?

Mr. Lamont

My hon. Friend correctly points to overcapacity and low freight rates in the world. On the merchant shipbuilding side, we have been fortunate in the last few weeks and months in securing some extra orders. The Mexican order for Sunderland Shipbuilders will provide 2,400 man-years of work. The Ethiopian order for Austin and Pickersgill will provide 640 man-years of work. There is a shortage of work for many of our yards. They will have to be competitive and keen to get orders. My hon. Friend talks of naval orders. He will recall that just before the election the Government announced their intention to place orders for a further £600 million worth of ships, including two additional frigates. That will be of considerable benefit to British Shipbuilders.

Dr. David Clark

Since, largely due to increased productivity, the ship repairing yards on the Tyne are currently making a profit, will the Minister give the House an assurance that those yards will not be privatised?

Mr. Lamont

I shall not give that assurance. It is questionable whether British Shipbuilders ought to be in ship repairing. Those jobs could be secured, and the people have just as good an outlook, if those yards were in private hands.

Mr. Hill

Does my hon. Friend agree that it is not just a question of helping British Shipbuilders or British ship repairers? Does he agree that the decline in the British merchant fleet is especially distressing for him, as he is responsible for this aspect of Government affairs? Does he agree also that we ought to have a full day's debate on shipping and ports policy, because at present we have a ragbag of policies? Is he aware that I have asked the Leader of the House for such a debate?

Mr. Lamont

As my hon. Friend knows, shipping and ports policy are matters for the Department of Transport. He is right to say that the decline of the British fleet is a matter of great concern. It has profound implications for British shipbuilding. That is why we reject the argument put forward by the Labour party that we should compel British shipowners to place their orders in this country, regardless of cost and of their own wishes. British shipping is as important an economic interest to this country as shipbuilding.

Mr. Orme

Is it not a fact that our main competitors see that their orders are placed in their own shipyards, to the disadvantage of British Shipbuilders? Is it not also the case that the crisis has now reached such proportions that the Government must take action? When is the meeting to take place with Sir Robert Atkinson, the chairman of British Shipbuilders? When does the Minister intend to make a statement to the House? I asked for such a statement last Friday, because, along with others of my hon. Friends, I believe that an early debate is essential.

Mr. Lamont

I met Sir Robert Atkinson this morning and we discussed British Shipbuilders' proposals to deal with the current situation. The Government's view is that it is important that we respond to the present crisis not just by short-term action but in terms of the corporate plan and an overall view of the business. Too often we have responded to problems in British Shipbuilders by short-term measures. As I said to the hon. Gentleman earlier, the Government are prepared to give British Shipbuilders help on a case-by-case basis to overcome the shortage of orders, but we also wish to discuss with the corporation the future of the business as a whole. As the right hon. Gentleman knows, the new chairman, who starts as deputy chairman at the beginning of July, will be formulating plans for the future, and we shall be discussing those with him as well.