HC Deb 29 February 1984 vol 55 cc245-7
9. Mr. Hirst

asked the Secretary of State for Trade and Industry if he will bring forward proposals for privatisation of the warship yards at present owned by British Shipbuilders.

Mr. Butcher

I have received a report from a merchant bank. I am now preparing detailed proposals.

Mr. Hirst

I thank my hon. Friend for his reply and hope that I can take from it that he will be presenting proposals fairly soon for the privatisation of these warship yards. [HON. MEMBERS: "Warships?"] Perhaps I am being presumptuous. Does my hon. Friend agree with me that it is important that the dead hand of State control should be removed as quickly as possible from the only remaining profitable yard within British Shipbuilders? In view of the circumstances that surrounded the acquisition of the companies when they were nationalised, does he agree that the former owners should be given first refusal on their disposal?

Mr. Butcher

We are anxious to remove the dead hand of nationalisation from the warship building yards. We believe that it is in the best interests of those yards and, indeed, of the country and taxpayers as a whole that this should happen. I fully appreciate my hon. Friend's concern for the position of Yarrow. I should like to congratulate the Yarrow yard on its full order book and its involvement in the designing of the new type 23 frigate. We would, of course, welcome a bid from Yarrow plc for this yard, but I am sure my hon. Friend would not expect me to say that it should have sole shooting rights.

Mr. Dixon

Does not the Minister realise that the flogging off of the warship yards is wholly irrelevant to the problems faced by the British shipbuilding industry? In view of the European Commission's interpretation of the recent change in the fifth directive, will the Minister provide additional aid for the shipbuilding industry—as the French Government have done—to help it through the present world crisis?

Mr. Butcher

The hon. Gentleman is right to link the volume of aid with performance. However, I am afraid that that connection has not been especially beneficial. Since nationalisation, British Shipbuilders has received £1.03 billion of taxpayers' money, and since the Government came to power it has received £935 million of public funds. Surely that record can be remedied in the interests of the taxpayer and the industry as a whole only by a vigorous programme of denationalisation.

Mr. Bill Walker

Does my hon. Friend agree that when the warship yards were in private ownership they had a good export record, but that since they were nationalised the record has not been so good and some of our overseas competitors have increased their share of the market?

Mr. Butcher

My hon. Friend makes a valuable point. The by-products of denationalisation and a return to private management will be a much more effective addressing of the international market and, perhaps, a better use of public sector contracts to address those markets.

Dr. Godman

I hope that the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) is not seeking the privatisation of Royal Navy warships.

Is the Minister's Department monitoring closely the negotiations on the acquisition of Scott Lithgow? Does he believe that those negotiations may be adversely affected by the formal cancellation by BP of its contract with Scott Lithgow for a semi-submersible rig?

Mr. Butcher

Of course we monitor closely the negotiations between Scott Lithgow, British Shipbuilders and potential purchasers. I hope that the hon. Gentleman will join me in urging the earliest decision on this matter, which would be in the interests of the work force and the yard.

Mr. Chope

Can my hon. Friend say more precisely when it is likely that the privatisation of the warship building yards will take place? Is he aware that the Vosp.tr Thornycroft work force at Southampton, which has consistently contributed to British Shipbuilders rather than drawing upon its money, is concerned about getting an early decision?

Mr. Butcher

Vosper's yard has an excellent record, not least in industrial relations and productivity. We are anxious to proceed as soon as possible, but will do so with proper consideration and prudence.

Mr. Shore

Does the Minister not understand that the basic difference between the state and plight of merchant shipbuilding yards and naval shipbuilding yards is precisely that the latter are sustained by some £2,000 million of British Government orders, whereas the other shipyards have virtually no orders, and some of those are in danger of being cancelled? Would it not be total folly to attempt to sell the one profitable area of shipbuilding during the middle of a continuing world recession, as that would be a death sentence to most of the marine shipbuilding yards?

Mr. Butcher

The merchant shipbuilding yards will survive and, I hope, thrive again only if they continue to reduce their costs and to make the best use of the skills available to them. Whether the warship building yards are privatised or not—and they will be—the question still remains whether the merchant shipbuilding yards are prepared further to increase productivity, because only by so doing can they have the best safeguards for their future.

Back to