HC Deb 27 November 1984 vol 68 cc832-78
Mr. Speaker

I have selected the amendment in the name of the Prime Minister.

During the previous debate, no fewer than 17 speakers were called, including those from the Front Benches. If we can do as well in this debate, I am sure that hon. Members will be pleased.

7.12 pm
Mr. John Smith (Monklands, East)

I beg to move, That this House deplores the deepening crisis in the British shipbuilding industry and the massive redundancies, already announced and in prospect; and demands urgent action by the Government to maintain this vital industry. When the redundancies of 2,100 at Swan Hunter and 790 at Vosper Thornycroft were announced last week, the alarm felt by the Opposition at both the consequences and implications of even more job losses in British Shipbuilders was such that we rapidly initiated this debate in Opposition time. In the first instance, our concern is for the communities in both parts of Britain that have had to face yet another major addition to the relentlessly increasing total of the unemployed. I also fear that these redundancies are a further addition to the army of highly skilled unemployed. Many of those who will be thrown on the dole by these redundancies are, like so many of their predecessors, highly skilled workers whose talents we need to harness, not reject.

In a recent study on the east end of Newcastle upon Tyne, where, as the House knows, there is a heavy concentration of shipbuilding, the city council discovered that skilled workers account for 49 per cent, of the male unemployment total in that area. The effect of these redundancies will go far wider. For every person employed in shipbuilding, there are at least three in ancillary industries and services who depend on the industry.

We deplore these redundancies and their effects, but we also fear them as a sign of the deepening crisis that is affecting the whole of our shipbuilding industry, and we fear that more redundancies are likely to follow in the other shipbuilding areas unless there is an urgent change of policy by the Government. I hope that the Government will not seek to suggest that our fears and those of the shipbuilding communities of Tyneside, Wearside, Merseyside, Clydeside and elsewhere are unfounded.

It is widely, and correctly, believed that there is a level below which it is not possible to maintain a viable shipbuilding industry, and that we are perilously close to that level, if we have not already gone below it. If the Government do not believe us or those in the shipbuilding areas, I hope that they will not disregard the views of Sir Robert Atkinson, whom they appointed as chairman of British Shipbuilders. In an interview reported fully in the Sunderland Echo, on 23 July this year, he said that it was his belief that the industry had reached a critical point beyond which it could not survive. He went on to say— and this was in July, long before the present redundancies were announced—that any further contraction or closure would mean that the industry was no longer able to offer the range of facilities that it required for viability. The article reported him as saying: 'The industry has reached the bare minimum needed now'. He believes the Government must be called upon to intervene to save the industry. 'I am a non-party man and a non-political man. All I care about is preserving a strong shipbuilding and engineering industry in Britain … and it breaks my heart to look at what has been done to shipbuilding in the past 18 months,' he said. It is his great fear that the intention is to close yards one by one. He said he was a great admirer of Mrs. Thatcher, but it's his belief that the Prime Minister has been badly advised 'by people who do not understand shipbuilding and its importance for the future.' There may be some sitting on the Treasury Bench whom he had in mind. For the Government's appointed chairman to speak in those terms about the industry that he supervised is an indictment of the Government's stewardship of the shipbuilding industry.

The Government's defence today, as we see from their amendment, is that, despite the closures, the rundowns, the redundancies and other signs of retreat, they have done well by the industry because they have provided over £1,000 million … to British Shipbuilders since 1979".

On some occasions the Government are less careful about the words. "Provide" often becomes "subsidy", although the Government know well that it is simply not true that there has been a subsidy of any such amount.

Let me once again refer to the views of the ex-chairman, Sir Robert Atkinson, on money provided to BS. He took the figure as £800 million but he may have been referring to the period up until he demitted office. The article said: He"— Sir Robert Atkinson— said much has been made of the £800-million Government aid to shipbuilding from nationalisation to the time he left the BS Chair. But he said this was a 'half truth'— because the industry was so under-capitalised, one half of that £800-million was in fact used as working capital and in capital expenditure, not in direct subsidies. The article went on: The industry had to compete with the Far East where shipbuilding was subsidised to such a degree that ships were being built for the cost of materials or less. 'Even if our men worked for nothing and we paid no rent or rates or overheads, we could not match them," he said. But he warned that if the Far East succeeded in destroying our shipbuilding industry then their own ships would no longer be so cheap. I want to refer to one further point in that interview with Sir Robert Atkinson. He says some things that Labour Members would not wholly approve of or agree with, but it is important that the House knows what he said. The article said: He said it was true that in the past the industry had had a 'strike happy' reputation and the first question asked abroad was whether delivery times would be met. But he said: 'The unions may be to blame for a lot in the past, but in my time they accepted a pay freeze and massive redundancies just to keep their industry ticking over. Their reward for that has been closure and threat of closure.' That is a striking thing for the former chairman of an industry to say. The article went on: He pointed out also that in comparing productivity rates with Europe, what was often forgotten was that the wage rates were twice as high on the Continent. He said that during his Chairmanship—40-million worth of computerised equipment had been brought in with the co-operation of the workforce, and orders had been won from abroad—including the first orders from Norway in 25 years—through aggressive marketing. But what was happening now was that owners had lost confidence in the British shipbuilding industry because they sensed a 'lack of dedication and commitment' to it on the part of the Government.

Mr. Michael Fallon (Darlington)

I am grateful to the right hon. and learned Gentleman for giving way so early in Sir Robert's speech. Would he not have been more up to date to quote the present chairman of BS who, in Shipbuilding News for September 1984, was quoted as saying: I believe that had we taken some very difficult decisions; in 1977–78 a more competitive industry would have been preserved than that which we have today. Had the right hon. and learned Gentleman's Government taken the decisions that were necessary then, would we not have had a much better industry today?

Mr. Smith

I regret having given way to the hon. Gentleman, who cannot rise to the level of seriousness that the debate demands. Such facile attempts at witticism are not suitable to the debate. The point is that the ex-chairman, appointed by a Conservative Government, has condemned not only what has happened in the industry but has expressed a complete lack of faith in any commitment by the Government to the industry's future.

I quoted Sir Robert Atkinson at some length because it is important that the House and the nation should realise that the crisis in the shipbuilding industry is crucial, is happening now, and is thought to be happening now by those who know and care about the industry, and it is now that urgent action is required.

The first thing that the Government can and should do is to end the nonsense of privatising the warship building yards. There is no doubt that they are and will be the most profitable section of the industry. What possible sense is there in a strategy for a beleaguered industry which involves disposing of the profit-earning part and leaving the more difficult merchant shipbuilding sector unsupported and alone in the midst of the worst shipbuilding recession that we have ever seen?

There is, as was made clear by the present chairman in evidence to the Select Committee—I hope that the hon. Gentleman will accept that what the chairman said is valid—no commercial reason for privatisation of the warship yards. The proposal did not come from BS. It came from the Government and it is they alone who must bear the responsibility for their folly.

It makes us ask the Minister—and ask very directly— whether the Government have any commitment to merchant shipbuilding in Britain. If it continues to decline, will the Government stand by and let it disappear? We know that the money raised by the sale of the warship yards will not go back to the industry; it will go to the Treasury where it will be lost among the billions of pounds spent on maintaining on minimum standards our army of unemployed. The irony will be—in this crazy world of Tory monetarist economics—that the proceeds from the sale of public assets may be used to pay for the unemployment caused by the Government's failure to support the same industry.

I do not imagine that there is one Minister who, if he were in charge of his own business and wished to stay in it, would sell the most profitable parts. Why then should they handle the nation's assets, of which they are only temporary stewards, with less care than they would bestow upon their own concerns?

Mr. Gerald Malone (Aberdeen, South)


Mr. Smith

I have given way already. This is a short debate and I must try to allow as many hon. Members as possible to take part.

Privatisation could be halted now and if it were it would be a sign that the fight to preserve and to maintain the British shipbuilding industry had started in earnest. Let there be no doubt that this maritime nation needs a shipbuilding industry. We live by trade and our Navy is crucial to our defences. If we depend on others to build our ships, we shall not be able to guarantee the security of supply which is crucial to our national survival.

Under this Government we have seen the steepest decline in our shipping industry in almost its entire history. Both those trends— the declines in shipping and in shipbuilding—need to be halted by the adoption of a maritime strategy for the nation based on the maintenance and prosperity of our shipping and shipbuilding industries. It is the Government's task to bring the industries together, as other countries do. It was the order of 125 ships by the Sanko Shipping Company in Japan which rescued the Japanese shipbuilding industry and maintained its prosperity. The British Government should put on their agenda as an item of maximum importance the devising of new means— by tax concessions or more direct Government assistance— as other Governments do, to maximise the orders for British ships in British shipyards. I am less concerned about the precise means adopted— although I deplore recent changes which go in the opposite direction—than with the establishment of this maritime strategy as a national objective. It is the will above all which is lacking and which must be found.

The Government must also resolve to halt redundancies in the shipbuilding industry. If it is true—I believe that it is—that the industry is now at a minimum level, or even below it, the line has to be drawn and it has to be held. Otherwise, we shall see a remorseless decline as yard after yard in the merchant sector declines and closes. If that means, as inevitably it does, that Government support for the industry has to increase, that must be accepted as the necessary price for maintaining a crucial industry.

Instead of allowing it to be believed that the Government have little commitment to BS after the privatisation of the warship yards, an absolute determination to maintain the industry must be acted upon. Of course, BS, in this fiercely competitive world, must be as efficient as possible and it needs the support of everyone in the industry. If the Government signalled their commitment, there would be no difficulty in creating an atmosphere of total commitment by everyone within it to its success.

A useful example of that new-found commitment would be to reverse the foolish decision to close the engine factory at British Shipbuilders' engineering works— I refer to the BS(ETS) project—and thereby to end the project to build a new slow-speed diesel engine. British industry depends crucially, in all its areas, on new product development. It is tragic to see a project of such potential, in which only recently substantial investment was made, being closed. I fear that that is yet another example of Britain's industrial retreat. We should not be abandoning such an area of economic activity. As the Institute of Marine Engineers recently proposed, the engine project should be made part of a larger project for a total machinery propulsion system that would greatly upgrade marine engineering capability in the United Kingdom.

However, I fear that the Government do not seem to be disposed towards seeking new ways forward for our shipbuilding and marine engineering industries. Above all, what is lacking about the Government's policies, their attitudes and their statements and about all their actions towards the shipbuilding industry is, as Sir Robert Atkinson so convincingly demonstrated, a commitment to the industry's success. But inside and outside the industry it is widely believed that the Government are simply indifferent about whether the merchant yards will survive. It is a serious charge, but I have to say that evidence is accumulating in favour of that view.

For this state of affairs, the Government deserve to be roundly condemned by all who care not only for the industry but for the national interest. We shall express our condemnation by voting for the motion in the Lobby.

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

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'recognises the efforts being made by the British shipbuilding industry to overcome its present difficulties; notes that the Government has provided over £1,000 million of taxpayers' money to British Shipbuilders since 1979; recognises that only by becoming more competitive can the British shipbuilding industry have a secure future; welcomes the efforts of the industry's management to achieve that objective; and endorses the Government's decision to return British Shipbuilders' warship building interests to the private sector as soon as possible.'. I welcome the debate as an opportunity to set the record straight. After the speech of the right hon. and learned Member for Monklands, East (Mr. Smith), it certainly needs quite a bit of unbending.

I agree that there is cause for concern about the merchant order book. The right hon. and learned Gentleman spoke of the worst ever recession in shipbuilding. Of course, there must be concern about the international trading conditions that we face, and I agree that that concern is heightened by the inevitable redundancies at Swan Hunter and Vosper Thornycroft. But to listen to the right hon. and learned Gentleman, one would think that the whole world was queuing up to buy British ships and that it was only the obstinacy of a British Government that was stopping those orders. But nothing could be further from the truth. World demand for ships is deeply depressed. Even the Japanese are feeling the draught. The Ministry of Transport in Tokyo was reported the other day as having said that new building orders that were received between April and September amounted to only 3.9 million tonnes, which was 47 per cent, down on a year earlier.

The figures for our other competitors in Europe, including Italy and France, were also substantially down over the same period. But the latest figures in Lloyds Register show that in the 12 months to June 1984 the tonnage ordered in UK yards was up 8 per cent, over the same period. Despite the right hon. and learned Gentleman's arrival on the Opposition Front Bench to look after trade and industry for the Labour party, that party seems to get its needle stuck in the same groove. Again and again it suggests that the Government are doing nothing to support the industry. The Labour party repeats itself, so I need not be too abashed about repeating myself. The Labour party continues to peddle the myth that the Government have done nothing for the industry.

The right hon. and learned Member for Monklands, East quoted some of the figures of support under this Government. He referred to £1 billion since 1979 as being designed to compensate for the under-capitalisation of British Shipbuilders. But unfortunately the truth is that a large part of that £1,170 million since 1979 has gone to pay for losses in British Shipbuilders. In the past two years it has lost £117 million and £161 million. Not all of that Government money has been to compensate for under-capitalisation. A large part of it has also gone for investment. This year, there will be support to the tune of about £217 million. Of that, £100 million is for investment for the long term.

The scale of losses seen in the recent past cannot be tolerated and would not be tolerated by—if it is possible to imagine such a thing—a Labour Government. I do not think that they would put up with it. British Shipbuilders must take steps—as it is doing—to stem the losses and to improve its performance. The half-year results will be available next month. I am confident that those for 1984–85 will be substantially better than those for the past two years. But unfortunately that does not reflect any dramatic upturn or improvement in the merchant shipbuilding business. It reflects the ending of huge losses on offshore work. Alas, British Shipbuilders has some way to go before regaining its competitiveness.

In such debates I am always accused of knocking the labour force or the performance of British Shipbuilders. But I acknowledge that British Shipbuilders is beginning to see marked improvements in throughput per man, in accordance with the corporate plan. The successful conclusion of the phase V pay agreement has opened up substantial changes in work practices. We are heartened by the return to work at Cammell Laird of the huge majority of the work force in the face of illegal and disruptive action by a small group of militants. I congratulate the back-to-work committee on its courage and on the lead that it has given. The dropping of the overtime ban by Swan Hunter and the attempts there to get the Atlantic Conveyor back on schedule have been equally welcome. But when there is concern in several yards— as the right hon. and learned Gentleman said— about new orders and the possibility of running out of work, it represents all the more encouraging evidence of the work force changing its attitude and being prepared to deliver ships on time in accordance with specifications.

Such a performance will give potential customers confidence in the yards. It is only if customers are confident about the performance, delivery and price that they will be persuaded to place orders in British yards.

Mr. Malone

It would be of great interest to the shipyard workers in my constituency who work in a very profitable yard called Hall Russell if my hon. Friend gave an undertaking tonight that, when the yard is sold, it will be sold for the purpose of shipbuilding. He has said that he is keen to reward those who are successful in the industry, and my constituents would welcome his undertaking.

Mr. Lamont

I shall come to that point later and I believe that I shall be able to go a long way towards satisfying my hon. Friend with an undertaking.

Despite recent events and improvements, British Shipbuilders has unfortunately sometimes acquired a poor reputation, which takes a long time to live down. We still have a long way to go, but we must acknowledge that if the present rate of improvement and the present optimistic developments continue British Shipbuilders will certainly deserve to overcome that reputation.

I return to developments in Brussels and in the Community. Last week, I and other EC Ministers in the Industry Council agreed to a two-year extension of the Community's fifth directive on shipbuilding aids. That provides the framework for aids in 1985 and 1986. Like its predecessor, which was accepted by the Labour Government, this directive refers to degressivity of aid, but it is able to be interpreted flexibly and will permit the Commission to respond to our proposals for an improved aid regime for the United Kingdom industry.

The House will recall that the Government told the Commission that it was their view that we needed a more generous aid regime in order to get the orders that are needed by our yards. I regret that the matter has not yet been concluded.

I saw Mr. Andriesson last week and had one of the several conversations that I have had with him. I hope to talk to him again this week. I left him in no doubt that, despite our dislike of subsidies, we believe that a higher level of intervention is justified. I left him in no doubt that the Government are not prepared to tolerate the multiple collapse of our merchant shipbuilding industry. It is unfortunate that matters have not been concluded, but in the meantime, as I have made clear to the House before, the Government are prepared to help to achieve orders on a case-by-case basis.

Mr. Michael Colvin (Romsey and Waterside)

I was waiting for my hon. Friend to mention the percentage rate of grant. Currently the rate is 17 per cent. Does my hon. Friend intend to campaign for an increase to 35 per cent.?

Mr. Lamont

I do not want to quote details of individual figures and the House would be amazed if I did. That would be a remarkable step in the middle of negotiations. We have made it clear that there should be an increase in the intervention fund level.

There are grounds for concern about the order book. We need to secure orders to prevent a gap in the present work loads. For that reason the chairman of British Shipbuilders has outlined a number of potential orders that could fill the gaps.

The House will understand that because of commercial confidentiality I cannot discuss the individual orders or the terms on which such orders might be obtained. However, I can confirm that British Shipbuilders is dealing with a far higher level of inquiries than it was a year ago. It has given me a list of potential orders totalling 159,000 compensated gross registered tonnes. It remains confident that with suitable support it can secure the planned total of orders of 200,000 compensated gross registered tonnes. We remain in close touch with British Shipbuilders and we shall give all the support that we can to achieve those orders.

The Opposition may not like the principles in the EEC's fifth directive. They may not like the idea that the EEC has some say in the aid that we give to our industry. However, they accepted the principle when, in a flash of European enthusiasm, they accepted the fourth directive. With that went the principle of reducing subsidies to shipbuilding. They were right. Subsidies are not at the heart of the problem. Subsidies are not the answer.

The differing nature of aid in different countries makes it difficult to make exact comparisons. West Germany, Denmark and Belgium give smaller production subsidies than we do. The success of Finland's shipbuilding industry is much publicised here, not least after the launching of the Royal Princess. That ship was built and delivered by a private sector yard that pays high wages and receives no subsidy.

The Opposition spokesman, the right hon. and learned Member for Monklands, East, constantly reminds us that there is no free market in shipbuilding. That is true. We understand that, but it does not absolve us or the industry from the need to improve efficiency and productivity. It is not correct to say that the answer lies in more and more subsidy by the Government.

One of the ways in which British Shipbuilders can become more competitive is, as the right hon. and learned Gentleman hinted, in adopting a sensible product strategy. In the past British Shipbuilders, although only a small builder on a world scale, has tried to cover the whole market range. The result was a product range comparable with that of the old British Leyland. Far too many designs chased far too many orders. For that reason we welcome Graham Day's determination to implement a practical and realistic product strategy. Realistically and rightly he recognises that the United Kingdom cannot hope to compete with huge far eastern yards in building the largest ships— the very large crude carriers and the bulk carriers.

If British Shipbuilders attempts to cover all the markets it will fail to satisfy any of them adequately. For that reason the corporation is reshaping its product strategy. The emphasis will be on fewer basic designs but it will offer tailor-made packages around those designs to satisfy individual customers.

British Shipbuilders is concentrating its marketing efforts on the most promising growth areas such as vessels for offshore work in which it has substantial expertise. With the Stena ships at Sunderland it has two advanced vessels under construction.

Product development is a continuing requirement. British Shipbuilders has set up a number of product development groups to take the strategy through from conception to design, product engineering, production planning and to marketing. That is the right approach for a commercial, competitive shipbuilder in the 1980s. It demonstrates that the industry needs thought, planning and policies and not simply throwing more money at it. The corporation is adopting that approach.

Mr. John Smith

I expected the Minister to make some comment on Sir Robert Atkinson's views. Does he admit that it is a matter of serious anxiety when a former chairman of British Shipbuilders has such a low opinion of the Government's commitment to the industry and their current plans for its future?

Mr. Lamont

I totally disagree with Sir Robert Atkinson. The Government are committed to maintain the maximum competitive and efficient shipbuilding industry. However, we are not prepared to throw endless sums of money at the industry. I was not clear what the right hon. and learned Gentleman advocated, but he seemed to say that we should throw even larger sums of money at the industry.

If British Shipbuilders can win orders, the yards' work load will stretch through the best part of next year and beyond. It will be able to look forward to a more stable period during which it can continue to make the changes necessary to improve competitiveness. It will gain the orders only if it can satisfy customers' needs.

That also applies to engine building. British Shipbuilders has been forced to rationalise and to restructure facilities to bring capacity more closely into line with demand. The announcement by British Shipbuilders earlier this month about the formation of a new company, Clark Kincaid Ltd, with sites in Greenock and Wallsend, marks the culmination of the current rationalisation programme. It is important that its engine-building capacity should not get out of line with potential demand determined by the order book. The order book is as crucial for engine building as it is for the merchant yards.

Since July the Ministry of Defence has announced the award of a number of major warship orders. They include a nuclear submarine at Vickers, a replacement for the Sir Galahad at Swan Hunter and the first of the new type 23 frigates at Yarrow. A total of 32 ships are under construction in British yards— at British Shipbuilders and the private sector. They have a total value at today's prices of £2,800 million.

In addition, a number of other potential orders are in the pipeline to meet the Navy's requirements under the defence programme. The most imminent is the order for the type 22 frigates, for which the Ministry is currently evaluating tenders from three yards. I appreciate the keen interest and anxiety at the length of time that this is taking. The Secretary of State for Defence hopes to be able to announce his decisions before the end of the year.

Sir David Price (Eastleigh)

The tenders were originally required by last October. When I took a deputation to the Minister I was told that they should be in by last Christmas. It is now nearly a year later and I received a written reply today which merely says that the time elapsed merely because the Minister allowed it to.

Mr. Lamont

I suggest that my hon. Friend addresses his remarks to the Secretary of State. I appreciate his anxiety, but I have given the best information that I have.

British Shipbuilders has already told the unions, when warning them of the present redundancies, that they clearly need to keep the numbers employed at the warship yards under review in the light of developments in the order book. There clearly remains some uncertainty about the precise levels of demand in different yards, but the picture for the warship yards is far from discouraging.

I turn to the question of privatisation.

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


Mr. Lamont

I shall not give way.

British Shipbuilders is making progress on privatisation. It has already issued the offer for sale document for Brooke Marine. It intends to do the same for Hall Russell and Yarrow before the end of the year. We hope that the other yards will follow early in the new year. The Government's intention, wherever possible, is to sell the yards to purchasers who intend to continue shipbuilding and who can demonstrate that they have the necessary skills and finance.

Mr. Robert Hughes (Aberdeen, North)

Will the hon. Gentleman give way?

Mr. Lamont

I shall not give way.

Mr. Robert Hughes

The Minister gave way to the hon. Member for Aberdeen, South (Mr. Malone). Why will he not give way to the hon. Member for Aberdeen, North?

Mr. Lamont

This is a short debate, and I have given way several times.

Mr. Robert Hughes

On that point—

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. The Minister is obviously not giving way.

Mr. Lamont

That would be a good policy to follow.

Mr. Robert C. Brown


Mr. Lamont

I give way even to Tories on the other side. [Interruption.] I am sure that the whole House will listen to what I have to say about privatisation. It may, in some instances, be possible to have management by buyouts. We are also attracted to the idea of an element of employee participation, just as happened in the National Freight Corporation. That amounts to real public ownership. We do not intend, however, that that should be an obligation.

Final decisions will be made on an examination of the skills, the finance and the terms of the contract between British Shipbuilders and the purchasers. We shall hold in reserve the possibility of a flotation for either some or all of the yards, if necessary. We believe that privatisation holds out the hope of a more efficient industry, just as privatisation has helped to make ship repair more efficient. A number of ship repair yards which have come out of British Shipbuilders have improved their order books. They are not yet out of the wood but, as my hon. Friend the Member for Darlington (Mr. Fallon) will know, they have a remarkably improved prospect. We believe that privatisation holds out the hope of a better future both in wages and jobs for those who work in the industry.

We expect that British Shipbuilders will be able to adhere to the timetable we have set and to complete privatisation by the end of March 1986. It should now be clear to the whole House that the Opposition's motion is misconceived and has no basis. The motion refers to shipbuilding as a whole—warship building as well as merchant shipbuilding—and to recent redundancies. The most recent redundancies have been those to which the right hon. and learned Member for Monklands, East referred—in the warship building side. It is wrong to talk of a crisis in warship building. Warship builders earn their living by meeting the needs of the Royal Navy and by exporting naval craft. The recent redundancies reflect the sad fact that we have more capacity than is needed for the naval programme. We have been unable to fill that gap by export orders, as we used to do when those companies were in private ownership. Perhaps, when the yards are returned to private ownership, we shall manage again to recapture some of those export orders.

The position of the merchant yards in Britain is more difficult, as it is all over the world. Shipbuilding industries all over the world from Japan to Sweden are accepting the inevitability of contraction, and Britain cannot be insulated from this world trend."—[Official Report, 24 February 1977; Vol. 926, c. 1652–53.] Those are not my words; they are the words of the right hon. Member for Manchester, Gorton (Mr. Kaufman). Events from the Opposition Benches are better seen in perspective when standing on their heads. The Opposition are not only standing on their heads in what they say in this debate but are a little late in demanding action. We are already taking action. We are continuing to provide the essential support which the industry needs. We have appointed a chairman who is prepared at long last to tackle the problems of inefficiency and uncompetitiveness. We are seeking agreement from the Commission for improved intervention fund support. We are backing the industry to win new orders.

British Shipbuilders needs the recognition and support of the House for what it is doing to make the industry more competitive. The House should welcome the support that the Government are giving to the industry. The House should welcome also the Government's decision to return the warship yards to the private sector. Above all, we do not need the motion tabled by the Opposition. I invite ray right hon. and hon. Friends to reject it and to support the amendment in the name of my right hon. Friend the Prime Minister and my hon. Friends.

Mr. Deputy Speaker

I reinforce Mr. Speaker's appeal for brief speeches, because a number of hon. Members with strong constituency interests are anxious to catch my eye.

7.55 pm
Mr. Gordon A. T. Bagier (Sunderland, South)

As an example of complacency, the Minister of State has surpassed himself in talking about the extremely difficult position of the shipbuilding industry. His only solution appears to be privatisation. The hon. Gentleman rounded off his speech with a statement about how privatisation will save the industry. I remind him of a bit of history. When Court Lines collapsed and Sunderland Shipbuilders almost went down, it took a Labour Government to nationalise the yard way ahead of nationalisation and to save the yard from the private sector. That is a piece of history which shows how that yard was saved. The Minister's complacency in referring to privatisation saving the industry is rubbish.

I hoped that the Minister would come forward with more factual information to help the House and the industry with something a little more practical, but the hon. Gentleman failed dismally. We do not need a lecture about the state of shipbuilding throughout the world. One need only look at order books around the world to see that the Japanese and Koreans are cornering the market and that British Shipbuilders is not the only body to suffer. All the European yards are suffering at the same time. We need to make up our minds whether we want a shipbuilding industry, and that is the question that the Minister should be posing to himself. Can we, as an island trading nation, afford to go down that nick? Frankly, I suggest that we cannot go down that line.

My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) spoke of a maritime policy, and I hoped that the Minister would say something about that. Unless we have some sort of maritime policy which does not leave shipbuilding on its own to market forces without considering shipping as well, the shipbuilding industry is doomed, especially if it looks to the Government for help. During the past nine years, British shipbuilding has more than halved. Some European countries are in an even worse position. The yards in Norway and Holland have few orders on their books. Some yards have no orders.

We can examine the operations in other countries which are not, by any stretch of the imagination, well off. Most of the orders in the Italian shipyards are from Italian shipowners; most of the orders in the French shipyards are from French shipowners; most of the orders in the German shipyards are from German shipowners; and most of those in the Dutch shipyards are from Dutch shipowners. With the exception of three CEGB colliers, which are being built at Govan Shipbuilders, not one ship order has been placed in British shipyards. The only exceptions are those connected with oil exploration.

I accept that the Minister faces problems involving the confidentiality of the order books of British Shipbuilders which limits how much he can tell the House. British Shipbuilders is doing a first-class job. I agree with the first part of the Government amendment. British Shipbuilders is stumping the world looking for orders, but it needs backing from the Government. I am glad that the Minister is fighting for a larger intervention fund, but there are other sources of finance available for building ships. We have been stumping the Third world, and it is not easy to get orders there, because of difficulties over prices, credit, and so on. The Government could take immediate action to help the shipbuilding industry.

I should like to be able to take the Minister of State on trust. He said that there were a number of orders in the pipeline for British Shipbuilders, but that he could not tell us what they were and that we ought to trust him. The work force at Austin and Pickersgill does not have time to trust the hon. Gentleman. Lay-offs and redundancies at the yard will be announced this weekend because the order book is practically empty. That is one of the finest yards in Britain—enclosed, modernised and with a work force which has gone along with all the things that the Minister talked about, has agreed to the removal of almost all lines of demarcation and delivers ships on time.

There are orders in the pipeline, wating for the Government to give the go-ahead. We have recently built two ships for Ethiopia, which requires two more. Those orders are there for the taking. The first ship went into service in Ethiopia this week, and the purchasers are highly satisfied with it. Ethiopia is paying thousands of dollars a day for six charter ships. It wants to replace them with its own ships. It has had two from Austin and Pickersgill and two from Italy. Two more are wanted from Austin and Pickersgill.

The Minister knows that there is a section 2 grant application on his desk. Is it being blocked? If the Ethiopian orders are placed now, the Austin and Pickersgill work force will not have to be laid off and there need be no talk of redundancies. That is a positive way in which the Government could help.

I advised the Department of Trade and Industry that I would raise these matters in the debate, and I hoped that the Minister of State would mention at least the Ethiopian orders. They are vital to Sunderland, where we have 24 per cent. unemployment. It is essential that we do not add to that unemployment.

There is another order in the pipeline. I understand— I put it no higher than that, though I have checked with the Overseas Development Administration— that another ship could be ordered by the Government—the order is wholly in the Government's gift— for overseas development and that only Austin and Pickersgill could fit out that ship. It is an SD14 that is to be modified for the St. Helena shipping company to include facilities for passenger travel. I am told that the order has to be looked at by a project committee that will have to consider what sort of cabins to install and so on. Someone ought to get his finger out. This is an urgent matter, because that order could keep the work force in my constituency in work. There are ships that could be ordered now.

Mr. Jonathan Sayeed (Bristol, East)

Will the hon. Gentleman give way?

Mr. Bagier

No. This is a short debate and I am challenging the Minister of State. If he wishes to reply, I shall gladly give way to him.

I know that some of my hon. Friends, especially from Tyneside, will want to discuss the ridiculous suggestion that the naval yards should be privatised.

The Minister's speech was extremely complacent. I want to hear from the Government at the earliest opportunity what will be done about orders for Sunderland and when the Government will plan a maritime policy that covers not only shipbuilding, but shipping, so that we can have British ships built in British yards.

8.4 pm

Mr. Neville Trotter (Tynemouth)

We are indeed facing a worldwide problem, but that does not make it any less serious for those of us in the north-east who are facing a crisis. If we do not get orders within weeks, there will be more redundancies in the region. Our debate takes place against that short-term background.

In the longer term, it is important to remember the commitment to the industry made tonight by my hon. Friend the Minister of State. That commitment has been made before, but it needs to be repeated, because it is inevitable that people faced with a short-term crisis will have doubts about future support for the industry. I do not believe that the Government can be faulted in the financial help that they have given—£1,130 million. The industry has had great support from the Government and we have a continuing commitment for the future. I believe that the Government will honour that commitment, but that does not prevent short-term fears and worries, particularly in the north-east.

Like the hon. Member for Sunderland, South (Mr. Bagier), I have heard it suggested that there may be an SD14 order coming from St. Helena. If so, it should be brought forward within the next few weeks. It would be ridiculous to get the order next year when we are facing redundancies now that could be avoided.

Mr. Sayeed

The point that I wanted to put to the hon. Member for Sunderland, South (Mr. Bagier) was that the hon. Member for Wrexham (Dr. Marek) and I went to St. Helena and recommended to the Overseas Development Administration that option 2B of the ECL report should be taken up. That option proposes an SD14 with accommodation for 150 to 200 passengers. The order is in the gift of the Government, it is needed for shipbuilding in this country and it is the right option for St. Helena.

Mr. Trotter

I also understand that the ship that has been running the service is out of action following a fire on board. Perhaps the owners need a new ship as urgently as the builders need one.

In the short term, there is also the continuing problem of who is to get the order for the type 22 frigates. The Minister of State reminded us that the matter has been kicked around for well over a year. If we are to have a force of about 50 frigates, which seems to be the figure to which we are committed, and if we do not intend to spend two or three years modernising each of them in the naval dockyards, we shall need to order about three frigates in a year so that we can maintain the number in operation. Therefore, it is high time that we placed the orders for the type 22. Let us have them before the end of the year. If we do not have an announcement by then, there will be more redundancies in the warship building yards. There is a short-term crisis for jobs in the north-east and the Government can and must take action to help with that problem.

We need to speed up the consideration given to the matching of financial terms. In the present state of the world market, our overseas competitors often offer good bargains, and, although the Export Credits Guarantee Department may agree to match those bargains, orders can be lost because the ECGD does not take its decision quickly enough. It is no good eventually matching a competitor's terms if it is too late. I do not know the details, but perhaps such considerations apply in the case of the ships for Ethiopia and some for Mexico which may also be available.

The problems of the immediate future are extremely serious, but I believe that answers will be found within the next few weeks. In the longer term, there is no doubt that we shall retain a warship building industry, but we must also have a hard core of merchant shipbuilding capability. I believe that we are now close to that hard core and it is time, after all that our industry has gone through—in common with the other shipbuilding industries in Europe— that we developed a long-term plan for merchant shipbuilding in this country.

One of the problems is the intervention fund. I congratulate my hon. Friend on his sterling efforts in fighting against the people in Europe who do not agree with us on the subject. They have perhaps other ways of financing their shipbuilders. I understand my hon. Friend's not wanting to commit himself on the suggested figure of 35 per cent. mentioned earlier in the debate, but it is a simple statement of arithmetic. Unless there is that percentage of aid, there will be hardly any orders. That seems to be the level of assistance that is needed if we in Britain and the rest of Europe are to match the competition from the far east.

We cannot be optimistic about far east competition. In my judgment, it will get worse. China is looming on the horizon in the longer term as a builder of ships. In debates in this House a few years ago, when the main problem was competition from Japan, I suggested that there would soon be a problem with competition from Korea. That has proved correct. Sadly I now prophesy that China will soon be a serious competitor, with very low labour costs. That will make it very difficult for western shipbuilders to compete without maximum efficiency and a proper degree of public support.

In talking of Britain's strategic interests in shipbuilding, it is fair to mention that it is not simply the shipyards that are involved but the suppliers of pieces of ships all over Britain. The House is well aware of my interests in the marine equipment industry. There is no doubt that for every person engaged in assembling a ship in our shipyards there are three more people in factories making the parts. The firms concerned have done reasonably well in the export market because they are able to export parts of ships to foreign builders, especially in the far east, but they need a home base. If there is no hard core of shipbuilding in Britain, the marine equipment industry will have a very hard future.

I should like to say a word or two on behalf of the small shipbuilder. I am sure that British Shipbuilders, through its contacts with Ministry officials, has close contact with those handling the Community rules, but small shipbuilders do not have that ready access. They cannot sort out their problems by picking up the telephone. It is especially difficult for the small shipbuilders if we are still tied officially to the 15 per cent. or 17 per cent. intervention fund limit. It is very hard for them to obtain orders if they cannot give quotations to their customers in the knowledge that they are assured of reasonable assistance.

I congratulate the Government on the substantial support that they have given to the shipbuilding industry in the past five years, and I congratulate them on their commitment for the future. But we need the maximum assistance in the next few weeks to enable us to obtain orders and to maintain our skills and employment in the north-east. We also need, in the near future, a long-term plan for the merchant ship building industry.

8.13 pm
Mr. Ian Wrigglesworth (Stockton, South)

The speech of the hon. Member for Tynemouth (Mr. Trotter) illustrates how wrong the Minister was to dismiss the criticisms made from the Opposition Benches. Understandably, the hon. Gentleman, coming from Tyneside, made exactly the same sorts of criticisms and pleas to the Minister as were brushed aside in the Minister's speech.

I represent a part of the north-east where the Tees, one of the three rivers, has almost no shipbuilding left. We have Smith's Dock, and that is the last vestige of a great shipbuilding industry on our river. In other parts of the region—other hon. Members can testify to it—the same dreadful slide to oblivion is taking place.

This evening the Minister served the House with the usual diet of jam tomorrow. He assured us that the Government are following all the right policies and that everything will be all right at the end of the day. The Minister's speech will bring precious little consolation to the shipyards on Tyneside, Wearside, the Clyde and other parts of the country. They are tired of hearing that there will be jam tomorrow. They are tired of the way that the Government are carving up the industry while they are breaking their backs in trying to make a success of it. As the hon. Member for Sunderland, South (Mr. Bagier) said, that is particularly true of the north-eastern region, where people scrapped their summer holidays to get a ship launched on time. They have broken their backs in trying to succeed, but all they are getting from the Government is the eternal assertion that privatisation is the answer, that no more subsidies can be given, and that it is a question of market forces, when we all know that there are no market forces operating in the industry and have not been for years.

I am very disappointed with the Minister's speech and I echo what other hon. Members have said. He should not have dismissed the remarks of the former chairman of British Shipbuilders in the way that he did. He should have given a proper reply to the right hon. and learned Member for Monklands, East (Mr. Smith), who made the accusation that our shipbuilding industry is getting into an unviable state. Those remarks were echoed by the hon. Member for Tynemouth. The Minister should not brush the accusations aside, and I hope that in the reply to the debate the Minister will tell us the Government's views on the current state of the British shipbuilding industry and how they think it will be able to remain as a viable force, not only in providing a merchant marine, which the trading interests of the country require, but in meeting our defence interests.

In the shipbuilding industry, as with so many other industries in regions such as the north and north-east, we can see the chickens coming home to roost. It is an inevitable consequence of the Government's economic policies, pursued since they came into office in 1979. There is no demand for the products of the shipbuilding yards, and the Government have taken very little action internationally to stimulate demand in the world economy, which is vitally important in getting the orders that the industry so desperately needs. As a consequence, there are major question marks hanging over large sections of the industry.

The Government's answer to the problem is to sell off the profitable warship yards and to have the management of British Shipbuilders spending time not on getting orders, improving efficiency and having a competitive industry, but on privatisation. I have worked in nationalised industry and I have seen at first hand how management's time is spent in dealing with Government interference and the ideological hang-ups of Governments who try to determine the objectives of the industry. The management and the work force are deflected by that interference from their true objectives— to make the industry a success.

The Government must bear a heavy responsibility for distracting the management and work force of British Shipbuilders and of the shipbuilding industry from the major problems facing them, and for concentrating instead on the privatisation programme. The Government should drop that programme and let the management get on with the task of facing the major problems that arise from international competition and the low demand in the domestic and international economy. Great damage is being done to what was formerly a great industry. As the damage to employment in the region grows in the months ahead, one hopes that the Government will begin to understand the results of their policies.

The fear remains that the Government do not accept that there are large sections of manufacturing industry which can and should remain in operation. Since 1979, when the right hon. Member for Leeds, North-East (Sir K. Joseph) was Secretary of State for Industry, many of us have held the view that there were members of the Administration who did not believe that historically Britain could sustain a manufacturing industry. What has happened to the shipbuilding industry is a major example of that aspect of Government policy. It is a sad fact that that should be so, and it is not surprising that the work force in the shipbuilding yards around the country believes that that is true, when there is so much evidence of it, not only in that industry but in so many other sectors of manufacturing industry.

I should like to say a word on behalf of my hon. Friend the Member for Gordon (Mr. Bruce) about the Hall Russell yard. I hope that the Minister will give a much better assurance than he has so far. I should like to see him drop the proposal for selling such profitable businesses. However, if he is to allow British Shipbuilders to go ahead and sell that yard, I hope that he will go further than saying that he hopes that it will be sold to a shipbuilding enterprise, and not for North sea work. It is necessary for that area to have a continuing shipbuilding industry when the offshore work dries up. I hope that the Minister will give a firm commitment on that point.

I should like to refer to the viability of the industry. It is a crucial point for the whole of our trading and economic interests. It is vital that this country above all, with its maritime interests, should have a clear commitment to a maritime policy and a viable shipbuilding and shipping industry. I echo and agree with the remarks of the right hon. and learned Member for Monklands, East and others about the great question mark hanging over the industry.

However, it is question not just of this country's economic and trading interests but of its defence interests. Our defence capability is not just reliant upon warships. It also depends upon the merchant marine. Nowhere could that have been clearer than in the Falklands dispute. The Government should have learnt that lesson, if no one else has. Merchant ships are just as vital to our defence as warships, especially if we intend to develop the strength to provide a credible non-nuclear deterrent beyond the 30 days of war stocks now being built up by NATO. That requires the merchant ship numbers, types and capacities to maintain world-wide economic shipping, military reinforcement, resupply shipping and shipping in support of military operations, together with a substantial surplus to make good losses. Ship repair and new building capacity is essential on top of that if we are to sustain the defence.

Therefore, there is a much bigger argument about the industry's viability than simply this country's trading and economic interests. There is also the defence question, to which I hope the Minister will address himself. I hope that he will not shuffle it off to his colleagues in the Ministry of Defence, but reply to that point as we are debating such an important matter.

I hope that the House will support the motion tabled by the Labour party. My colleagues and I will do so wholeheartedly. We look to the Minister to give us more reassurance than his colleague the Minister of State did when he spoke earlier.

8.23 pm
Mr. Piers Merchant (Newcastle upon Tyne, Central)

As time is so limited, I propose to make only a few brief points. However, I feel bound to speak on this occasion in view of my direct constituency interest, representing a Tyneside seat in an area traditionally dependent on shipbuilding.

The once great strength of yards on the Tyne brought in the past wealth, employment and enterprise to the city of Newcastle. Even as recently as 10 years ago, 35,000 jobs were sustained on Tyneside and Wearside in the shipbuilding yards. Ten years before that, the figure was nearer 44,000. Today, taking into account recently annouced redundancies, the figure is less than 14,000. In 1926, British shipyards produced about 40 per cent. of world demand. Today the figure is about 2 per cent. The industry is being decimated, and needlessly so. I say "needlessly" because the process is not inevitable. I do not subscribe to the view that the rundown of the shipbuilding industry is unavoidable. I do not believe that we must necessarily give up the old heavy industries as part of a historical process and restructure our industry solely along the lines of new technology, electronics and service supplies. I agree with what was said by the hon. Member for Stockton, South (Mr. Wrigglesworth) on that point.

Of course, it is eminently sensible for a region and a nation to diversify as widely as possible, and it is highly dangerous to concentrate and specialise overmuch. The Tyne— and the Northern region as a whole, for that matter— suffers from its failure to diversify over the years. Thus the shipbuilding crisis becomes more intense. However, that is a different argument.

My point is that, even in an admitted world recession and a dire shortage in the world of ship orders following a huge contraction world-wide, shipbuilding industries in some countries seem able to flourish and even to expand. Why cannot our industry flourish as well or at least hold its position in comparison with other countries?

It would be easy to find a single scapegoat. The circumstances almost cry out for scapegoat politics. Many Opposition Members find it all too easy to discover a scapegoat. Privatisation appears to be the latest one. However, I fear that the answer is not that simple. In fact, many are to blame for the present situation in British yards.

Before nationalisation, management was hardly an inspiring force powered by bright young entrepreneurs. Their attitude to management was all too often summed up not so much by the modernistic approach of, say, Japanese managers as by the worst attitudes of industrial defeatism— innovative necrosis, under-capitalisation, organisational chaos, and often contempt for their work force, which was more characteristic of the worst aspects of 19th century industrial relations than of the 20th, let alone 21st century. Then came the hand of state interference in the shape of nationalisation, a shake-up that hit the industry at a vulnerable time in a particularly painful way. It resulted in preventing an early and swift response to recession, which might have breathed life into the industry at the most critical moment.

However, finally and never to be underestimated was the effect of industrial unrest that racked the Tyne yards. The irresponsibility and short-sightedness of union leaders are widely recognised on Tyneside as constituting one of the worst records that the region can summon up anywhere. Time and again delayed orders, strikes— [HON. MEMBERS: "Rubbish."]—restrictive practices and poor productivity took their toll. Opposition Members know that fine well. Investment did not come because who would invest in an industry that itself seemed not to want a future? It is sad to see today that the price is being paid that many predicted five or 10 years ago would have to be paid. The sectarian narrowness of union leaders over this decade has contributed largely to the unemployment created in the past few years.

Mr. Nicholas Brown (Newcastle upon Tyne, East)

The hon. Gentleman must reconsider what he is saying because he is talking drivel. He must either reconsider it or cite some examples.

Mr. Merchant

The hon. Gentleman asks for examples. I shall cite some of the situations of the past few weeks. We are talking not just about industrial disputes over the past five or 10 years, from which one would think the union leaders would learn, but about industrial disputes that have occurred in the past few months in the Wearside and Tyneside yards. I shall quote from a report of 29 September in The Journal. It refers to: Sunderland Shipbuilders where 1,900 manual workers at three yards are in the fourth day of a strike following a new pay deal for 28 crane drivers. The strikers say if it can be done for the crane men, the rest of the workforce ought to have a new agreement too … Clark Hawthorn, Watlsend where 400 workers are staging token strikes in protest against nine months of short-time working … British Shipbuilders (Engineering and Technical Services), Sunderland, where 36 workers are staging a sit-in in protest against manning levels, flexibility arrangements and pay following 18 recent redundancies …A fourth dispute— an overtime ban by 1,800 men at Swan Hunter's Neptune Yard on the Tyne".

At a critical moment in the life of the industry, four disputes were running at the same time. If that can be justified, anything can be justified. The sectarian narrowness of union leaders for an entire decade has contributed greatly to the high level of unemployment and to the increase in unemployment that, regrettably, those yards are now experiencing.

It is time that everyone realised that all those faults must be tackled. The damage has already cut so deep that it will not be easy to put things right. Certainly it cannot be done overnight. How much healthier it would be to hear some positive voices from the Opposition and, perhaps more relevantly, from those who lead the men in the yards. I have catalogued disputes that have taken place in the past few weeks. The saddest perhaps was the dispute at the yard building the Atlantic Conveyor, an order specially provided to help the Tyneside yards despite better tenders elsewhere. My hon. Friend the Minister said that he was pleased that that dispute had ended, but in 1984 such disputes should never even start. Everyone in the industry must pull together to prove that British shipbuilding can be competitive, productive and profitable. That, in turn, will attract new investment.

In the short term, I entirely endorse the request made by the hon. Member for Sunderland, South (Mr. Bagier) and my hon. Friend the Member for Tynemouth (Mr. Trotter) for the swift placing of orders that are within the Government's gift. Nevertheless, I believe that the long-term solutions lie not with the House or even in the realm of politics. As with the rest of British industry, the answers lie fundamentally and ultimately in the attitudes and endeavours of both the work force and the management of the industry itself.

8.31 pm
Mr. Ernie Ross (Dundee, West)

We do not intend that the debate should concern only the thoroughly unnecessary redundancies announced last week, although we are 100 per cent. behind those workers fighting for their jobs. Conservative Members should read the Opposition motion, which continues the campaign that we have waged on behalf of the shipbuilding industry since 1979. We have always stressed that there are problems in the industry worldwide—a stagnant market and competition from the far east where the Japanese and Koreans undercut our prices by huge margins.

When the industry was nationalised in 1979 it was almost bankrupt. The nation inherited problems of overcapacity and in some cases overmanning. Machinery and equipment were out of date due to lack of investment by private owners. Yet Conservative Members want to give back to those people the parts of the industry now making a profit in the forlorn hope that they will keep it running and making profits. The nation also inherited a poor industrial relations situation. I entirely agree with the hon. Member for Newcastle upon Tyne, Central (Mr. Merchant) that this was and is mainly due to bad management without any real commitment to the industry.

Unlike Conservative Members, the trade unions have put enormous effort into tackling those problems. The trade union movement accepted changes which meant a reduction in capacity and the loss of 20,000 jobs. The number of bargaining units was reduced from 168 to one so that our commitment to the industry could be based on an overall wage agreement, and, instead of envying and competing with one another, workers in the various yards could work together to produce an industry able to compete with foreign industries. The shipyard workers have made great sacrifices, but those sacrifices have never been acknowledged or reciprocated. Management has remained intransigent and in many cases anti-nationalisation, which has been thoroughly unhelpful and sometimes actually destructive.

Workers in the industry have faced periods of great insecurity. Thousands of jobs have been axed and the threats of redundancy and privatisation have hung over the industry since the Conservative Government came to power. Meanwhile, the wages of skilled workers in the shipyards have fallen from fourth to twentieth in the league table. The Minister, who is no longer present, called on us to encourage our colleagues in the industry to make a further commitment in the recent wage negotiations. We took up the challenge and discussed it with our colleagues in the shipyards, and they made that commitment. But what has been their reward? There has certainly been no reward for the constituents of the hon. Member for Newcastle upon Tyne, Central, who have recently been made redundant or whose redundancy is imminent. The workers in the industry have constantly made commitments on wages and conditions, but the Minister failed to acknowledge that today.

Unfortunately, neither the Government nor the management have brought the same commitment to the industry. The trade unions recognised from the outset that co-operation was needed if the industry was to survive, but the co-operation has been all on one side. That is why there is now bitterness and disillusion in many areas of the industry. The workers and their trade unions have put forward constructive proposals to both Government and management over many years, but they have been almost entirely ignored.

We have consistently argued that Britain, as an island nation, needs ships for both trade and defence. That being so, we must plan and control the management of that sector through a maritime agency. We must ensure that United Kingdom owners buy ships from United Kingdom yards. The industry is competing with companies abroad which are receiving far more support from their Governments. In the past 36 years, not one Japanese domestic order has gone to a yard outside Japan. That is the kind of commitment that our shipbuilding industry needs from British owners.

We also need more flexible application of the intervention fund. Even if the Minister cannot give the figures, perhaps he will tell us whether the flexibility secured from the EEC is on the lines called for by British Shipbuilders, allowing unused funds to be carried forward to support the winning of further orders. Just how flexible is the intervention fund to be?

As we have pointed out before, British industry has lost the ability to design engines, which represent 15 per cent. of the cost of any order. We used to be good at that, but we lost that capacity in 1979. We now have only the slow-speed engines from Clark Kincaid. It is ridiculous that after spending £4.5 million on plant and machinery only 12 years ago that capacity is now lying idle and it is intended to close it down.

The story of shipbuilding in this country since the Conservative Government took office is appalling. The Government's actions have been based on ignorance and political prejudice. In 1950, the United Kingdom held nearly 20 per cent. of the world market. Today it has about 3 per cent. Last year the United Kingdom won only 1 per cent. of world orders. This year we expect perhaps 2 per cent. We all know what that has done to the work force.

Most yards are located in areas of high unemployment—the Clyde, the Tyne and the north-west. However, our argument is not based on keeping open an outdated industry for the sake of it. The introduction of new technology offers many possibilities to shipbuilding, which is an integral part of our manufacturing base. It creates wealth and generates economic activity. Instead of closing down yards, we should train our young people to participate in an advanced manufacturing industry.

What we see in the shipbuilding industry exemplifies the Government's determination to erode Britain's manufacturing base. Last year, for the first time since the industrial revolution, Britain had a deficit in trade in manufactured goods. That happened despite the fact that the vast resources of North sea oil were at the disposal of the Government. The Government have squandered that wealth. Without that oil, the trade balance and the economic pointers would have looked very much worse. In the three months to June this year, output fell by 3 per cent. compared with the first quarter of 1984, showing almost no improvement when compared with a year earlier.

We do not ask for the shipbuilding industry to be cosseted. We ask for a chance to compete fairly with other countries, including EEC countries, which recognise that shipbuilding has a prime role to play in building up the economic and industrial base.

It is ludicrous that an island nation should be prepared to abandon an industry crucial to its trading health and defence capability. The Secretary of State for Defence has announced cuts which are necessary in defence spending. There is doubt that new warships are needed by the Navy. Yet billions of pounds are squandered on Trident and cruise. The Government have rammed their inglorious escapade in the south Atlantic down our throats, but they are now failing to put their alleged patriotism into practice. They hesitate to ensure that we have viable merchant and defence fleets.

We need support not for a dying industry but for one which is being stifled. Other Governments recognise the importance of the shipbuilding industry and take steps to ensure its survival; our Government do not.

We have put forward positive proposals. We have suggested reserving the coastal trade and the offshore supply sector for vessels flying the United Kingdom flag.

We have said that we should ensure that coastal shipping users receive the same financial support as rail and inland waterway users. We have argued for supporting our shipyards to the same extent as foreign shipyards are supported by their Governments. We have demanded that British vessels should be required to be built and repaired in British shipyards. We have said there is a need to regulate working time for seafarers in coastal shipping.

The Opposition have put forward all those proposals, but all that we have heard from the Government is the repeated claim that they are helping the industry. Those who run, or used to run, the industry do not accept that claim. Those who work in the industry do not accept it. The towns, villages and cities that have been, or are about to be, hit by redundancies do not accept it. I am sure that when Conservative Members go into the Lobby at the end of the debate they will not have been convinced that the Government support British shipbuilding.

8.45 pm
Mr. Cecil Franks (Barrow and Furness)

There are many hon. Members in all parts of the House who represent shipbuilding constituencies where the shipyards face the future with considerable apprehension and fear. However, it would be wrong to allow the impression to be given that the picture is the same throughout the country. There are shipyards that face the future with optimism. Equally, we should not allow ourselves to be misled about the reasons for the parlous state of British shipbuilding, which is almost entirely due to the disastrous combination of appalling management, the Luddite mentality of the shipbuilding trade unions and a totally undisciplined work force. That disastrous combination has brought about the state of affairs that the Opposition complained about.

We can talk as much as we like about what should be done, but unless we can improve the management and the trade union leadership and bring discipline back to the work force our words will remain mere words.

Warships have been built for the best part of a century in Barrow and Furness. During that period, prosperity has ebbed and flowed. However, 20 years ago, the Vickers management took the decision to specialise and to concentrate on building submarines. That decision was due to the foresight of the then chairman of Vickers Shipbuilding, Sir Leonard Redshaw. Vickers concentrated on that sector, and although it built and launched HMS Invincible, Vickers accepted that that lay in the past and that submarine building lay in the future. Barrow shipyards were the home of the first Polaris submarine, and Trident is now being designed and is in the early stages of construction. However, what has happened in Barrow has not been matched elsewhere.

I should like to give a parallel. This afternoon I had a meeting with representatives of certain vested interests in my constituency who came to lobby me about the Government's bus policy—a topic which will no doubt consume much of our time in the future. The representatives were the chairman of my localmunicipal transport committee, the chairman of the local Transport and General Workers Union branch and his secretary and the AUEW branch secretary. I told them that they would have to accept that they would be in competition, and they replied that the competition would be unfair and that they would not be able to compete. When I asked why, they said that there were wage and hour agreements with the trade unions. I said, "I am sorry, but this is a different ball game. My prime concern is with the consumer— the man who pays his fare. If you have problems with the trade unions, they are for you to sort out. We are living in a competitive world." The same is true with shipbuilding. There is a world of difference between the Government and the Opposition. If one strips aside the philosophies of Socialism and capitalism, one sees that the Opposition are primarily concerned with the interests of the producer and that the Government are primarily concerned with the interests of the consumer. The Opposition cannot comprehend that if there is no consumer there is nothing for the producers to produce.

Mr. Nicholas Brown

On a point of order, Mr. Deputy Speaker. With respect, the debate is about shipbuilding, not about buses. We all know that there is only one consumer of submarines—the Government.

Mr. Deputy Speaker (Mr. Paul Dean)

Order. Time is short, and we must get on with the debate.

Mr. Franks

What the hon. Gentleman says is not correct. Vickers have to earn export orders, and there is considerable competition in that area. There is also competition from shipyards in Britain which would dearly love to build conventional submarines. Barrow is in competition and there will be even greater competition after privatisation, but there will be greater opportunity. We are not afraid of privatisation; we are confident. We in south-west Cumbria ask ourselves why should we have had to suffer a wage freeze when we have made profits of £21 million? We are the only part of British Shipbuilders that has been consistently successful. Why should we have to suffer because of the nonsense that has gone on in Clydeside and Merseyside? Tyneside and Wearside are a little better. Why should we be held back when we have good management, a loyal work force and a successful product? Why should we be held back because other parts of the industry have no wish to survive and, frankly, do not deserve to survive?

Barrow and Furness welcomes privatisation and looks forward to its prosperity continuing to grow. We welcome privatisation— managers and labour— and the Government will give us our opportunity.

8.48 pm
Mr. Frank Field (Birkenhead)

If all our shipyards had order books the length of the Barrow order book, we would be able to give a very different message tonight. I do not want to denigrate any of the work done at Barrow. However, to turn up every day and to know that the order book extends way into the future is a very different experience from turning up each day, as many of my constituents do at Cammell Laird, knowing that the yard is on its last order. The House should bear that in mind when considering the different records in the shipbuilding industry.

I should like to give the Government three messages. They come not from me, but from my constituents. First, they are looking to this debate to get an answer to whether or not we are to have a viable shipbuilding industry. Linked to that they want to know whether the Government are bringing to the debate the urgency that reflects what is happening in our yards. The Government gave us an example of what they meant by urgency in the previous Parliament. My constituents test whether the Government consider a problem to be urgent by matching their action with getting the task force ready for the Falklands. If we compare the Government's actions to safeguard the shipbuilding industry with their efforts to attend to that island way down in the south Atlantic, which most of us thought existed only on the front of postage stamps, the Government are found wanting.

My constituents cannot understand why the Government continue to let unemployment rise generally, and especially in the shipbuilding industry. They know the line that the Government take—that it is important to contain public expenditure, that that results in a cut in interest rates and that that encourages new business. However, by containing public expenditure, an increasing number of people are put out of work. As a result, more people draw the dole and thus public expenditure rises. The Government are caught in a vicious circle. My constituents are therefore looking for some common sense to be applied to the economics of the shipbuilding industry. We are not asking for more of the enthusiastic rant of the hon. Member for Barrow and Furness (Mr. Franks). We do not want the slogans about the industry being denationalised and from that will come extra jobs. We are not interested in that; we are interested in protecting the jobs that we now have. We shall judge the Government on how well they reply in regard to protecting those jobs.

I disagree with the hon. Member for Tynemouth (Mr. Trotter), who is always listened to with respect. He said in his coded fashion— he usually presents a coded message to the Government— that they cannot be faulted on their financing of the industry. Nobody denies that that money now totals £1 billion. The Opposition's dispute has been how the £1 billion has been handed out. It has been given on a year-by-year basis, thus making it almost impossible for British Shipbuilders to plan a long-term future for the industry. We are pleading for a long-term perspective rather than endless short-term measures.

Mr. Trotter

The problem is that no one has been able to forecast demand for ships. People to whom I have spoken in the industry have been over-optimistic in their assessment of the number of orders that will be forthcoming. That has made it extremely difficult to plan for the industry.

Mr. Field

That has been part of the difficulty, but another part is the failure to bring forward orders from the public sector. My constituents want there to be urgency in bringing those orders forward and believe that money spent in securing those orders will protect their jobs, lay the basis for the shipbuilding industry of the future and play some part in giving the Government economic success. In those circumstances, fewer people would be drawing the dole and there would be less tendency to push up the public sector borrowing requirement. We have not yet heard from the Government an urgency that in any way matches the crisis of the shipbuilding industry.

The second message that my constituents want me to advance is that, if Cammell Laird is allowed to fold, that could be the end of a community in our area. Fewer than 2,000 people now work in the yard. Those jobs are important, but they are not the only ones at stake. There will be a knock-on effect to the small businesses that supply the yard. We have talked of a ratio of three jobs in outside industries being lost for every one that is lost in the yard. Moreover, if we lose our yard, we shall lose the apprenticeship school and therefore the constant stream of skilled labour to the area. Will the Government walk away and let Cammell Laird close? Will they be like Pontius Pilate and wash their hands? If not, what hope have they to offer to my constituents before we divide at 10 o'clock?

Thirdly, my constituents want me to recall a theme that now constantly recurs in the Prime Minister's speeches around the country—the enemy within. My constituents want me to tell the Government that they agree with her, that there is an enemy within, but that it is the enemy of unemployment. They want to know what the Government are doing about that enemy which is tearing the heart and guts out of our constituencies and constituents. In Cammell Laird a large number of men have bravely gone against union advice, walked through picket lines and gone back to work. In short, they have done everything that the Government have asked them to do, and they want to know what the Government now intend to do for them. Will the Government just laugh in their faces, or will they come forward with some orders and so protect jobs?

Several Hon. Members


Mr. Deputy Speaker

Order. There are five hon. Members hoping to speak, and the winding-up speeches are expected to begin at 9.30 pm. We should all be happy if the five hon. Members would divide the time between them.

8.56 pm
Mr. Christopher Chope (Southampton, lichen)

I wish to address my comments to two parts of British Shipbuilders— Vosper Thornycroft and Vosper Shiprepairers. It is a sad blow for the people of Southampton to learn that there are to be 790 redundancies at Vosper Thornycroft. I am sure that everyone hopes that those redundancies will not have to be compulsory. Lack of orders has led to those redundancies. It is scandalous that the Government have delayed for so long on a decision about type 22 frigate orders. I cannot say that if the orders had been made last year it would not have been necessary to make so many men redundant but, on the evidence, that would appear to be the case. If the Government want two type 22 frigates, is there any justification for their having placed the orders in July 1983 and, even as I speak, not having reached a conclusion?

I hope that whichever yards win—obviously I put in a strong plea for Vosper Thornycroft— the announcement will be made before Christmas so that some people who work in the warship building sector of British Shipbuilders have a more cheerful Christmas than might otherwise be the case.

I am sure that the people of Southampton will sympathise with those in Vosper Thornycroft who are victims of market forces, as a result of which redundancies have arisen. I am also sure that people in Southampton are saying, "Is it not a pity that there are other people in Southampton who are determined to impose self-inflicted wounds?" I refer, of course, to the docks. Tomorrow there is to be a mass meeting of people employed in the docks in Southampton. I hope that they will come to their senses and realise that they, too, will be redundant unless they try to make the port competitive, as have workers in British Shipbuilders.

The privatisation of Vosper Thornycroft could not be any worse than the present situation, and I would expect it to be much better. It would mean that the millstone around the neck of Vosper Thornycroft at the loss-making yards would be removed and that would allow the profits which have been made over the years to be reinvested. That would be a strong base from which to win fresh export orders.

The refit of the Indonesian frigates is an indication that export orders can be won by Vosper Thornycroft. If a quick decision is taken—I implore the Government to make it quick—on privatisation, I am sure that Vosper Thornycroft will be able to win more orders in the world markets.

Vosper Shiprepairers is in my constituency, but at present it is in limbo because it is awaiting consideration of tenders for privatisation. When does the Minister expect a decision to be taken on the privatisation of Vosper Shiprepairers, and does he expect that firm to be privatised as a whole or in parts? There are three parts of the shiprepair business in Southampton, but the work force and management simply do not know whether British Shipbuilders is planning to sell those parts individually or collectively.

This is also an area in which an urgent decision is needed. There was the disappointment of losing the quote for the QE2 refit this year, and the 1985 cruise liner refits will be considered early in the new year. Vosper Shiprepairers wishes to prove itself to be more competitive than, sadly, it has been in the past.

Labour Members who think that competition and competiveness play no part in British shipbuilding will be interested to know that when the QE2 refit was put out by Cunard the lowest tender was £1.8 million from Hapags in Bremerhaven. Other tenders were £1.9 million from a Dutch shipyard; £2.18 million from a shipyard in Hamburg; and £2.7 million from Vosper. Who can expect divisions of British Shipbuilders to win orders if they are as uncompetitive as that? I very much hope that when Vosper Shiprepairs is privatised it will become much more competitive and will win back the cruise line orders.

Vosper need not necessarily be the lowest tenderer, because travelling from Southampton to the northern European yards involves much steaming time. Nevertheless, it must be more competitive than previously. The figures which I have quoted, which were given to me by Cunard. demonstrate that the yards in Southampton must be more competitive if they are to survive.

9.2 pm

Mr. Nicholas Brown (Newcastle upon Tyne, East)

I shall, Mr. Deputy Speaker, take note of what you said about brevity.

The charge against the Government is twofold. First, they have failed to analyse correctly the nature of the crisis in the shipbuilding industry, and from that failure they have moved to the most Lamontable of conclusions. They believe, quite wrongly, that there is a free market in shipbuilding. There is no such thing. If Government policy assumes that there is or, even worse, that there should be, unfortunately our major competitors such as Japan and Korea do not take that view.

Instead of supporting the industry, the Government intend to smash it and to sell a small part of the remnants to the private sector—almost solely to deal with the requirements of the Ministry of Defence. There is no commercial reason for this, because of the nature of pricing naval work. Such privatisation will mean ruination for a fair part of my constituency.

Swan Hunter, a magnificent yard, is our major employer which deals with both naval and merchant work. It is our belief that the Government are deliberately holding back type 22 orders in order to shed labour prior to privatisation. That is a despicable way in which to treat my constituents, yet that is what they and I believe the Government aredoing.

The workers there ask, "And what of Swan's management? Where do their loyalties lie? Are they with the interests of the current owners or those of the private consortium which seeks to buy the profitable bit after the Government have killed the rest?" What confidence can that work force have in a senior management which is literally planning to jump ship?

The Government do not even care about merchant shipbuilding. Swan Hunter is being told "The future lies with warship work"— Conservative party code for saying that there will be no more merchant work. Labour Members understand that there is a world over-capacity, but why do the Government meet that crisis by pulling out of the market rather than protecting a share of it for our nation? The Koreans and Japanese do not believe in free markets. They will buy their share of the world market, and we shall give them ours. If ever the Government protect our merchant shipbuilding, I believe that they will do so when the remnants of the merchant yards have been handed over to private industry, and not before.

I wish to kill the nonsense about subsidy. Miners, shipbuilders, heavy engineering workers and all the manual workers in the north-east who form part of the industrial base of our nation through their work, wages, insurance premiums and bank accounts subsidise and carry the burden of much of the south-east based service sector of the economy. The Government seek to isolate shipbuilding from the rest of the economy, but that is not possible.

The Government's policy is disastrous for my constituency. Of the seven wards there, four are shipbuilding wards. In those four wards 49 per cent. of male unemployment is made up of time-served men with five-year apprenticeships behind them. All that skill, is wasted. Despite that dramatic statistic, unskilled workers will suffer even more, if that were possible. They face returning to the days of standing at the gate and trying to get a day's work or of having a three-day contract. My constituents will not accept that.

In the Rochester estate in Walker, which is in the heart of the shipbuilding community, male unemployment is 73 per cent. At Walker school, which is the community school that serves the shipbuilding area, more than 90 per cent. of school leavers will not find jobs. At my surgery, grown men have broken down and cried because they have no work. There has been a steady increase in hard drug taking and addiction. Last weekend, I met a delegation of mums, all of whom had come to see me about glue sniffing and solvent abuse and wanted to know what could be done to stop their youngsters doing that. That was a clear statement of personal tragedy. What could I say to them?

Newcastle local authority is having to work hard to prevent council estates in east Newcastle from becoming no-go areas. I have a keen interest in housing, both as a councillor and as a Member of this House. It is the first time that we have faced these sad circumstances.

This may sound odd, but all credit is due to the Conservative group on Newcastle city council, which does not share the views of Conservative Members. When the council last debated shipbuilding, the Conservative group behaved in a most constructive and generous way about an area which they do not represent—it is clear why they do not. The Conservative group called for state intervention to support a level of employment in the community, for which Conservative Members seem to have no sympathy. All credit is due to that group of councillors but shame to Conservative Members. All credit is due to Tyne and Wear county council, which the Government vindictively seek to abolish, for trying to state the case for the industry through the "Save our shipyards" campaign.

My constituents demand that the Government change their policy. If they do not, the state will not be able to cope with the consequences, and respect for parliamentary democracy and the law will be irrevocably undermined. They will be undermined by the Ministers' complacency.

9.9 pm

Mr. Richard Ottaway (Nottingham, North)

Not surprisingly, the tenor of the Opposition's contribution tonight is that if more money could be pumped into shipbuilding, all would be well. Many people wish that that was the case. The harsh economic facts of life are such that shipping does far more than merely subsidise our home industries. Shipping is an international business and relies on a flow of trade. Ships are required to service the flow of trade. If there is no demand for trade, there is no demand for ships.

If Opposition Members want to know where the crisis in the shipbuilding industry is, I suggest that they fly to Athens. A third of the world's shipping is controlled from Athens. As one flies into Athens over the Bay of Corinth and then Elefsis bay and looks out of the window, one sees rows and rows of ships laid up. There are not tens or hundreds but more than 1,000 ships laid up in the bays around Athens and in the Corinth canal. That is where the crisis in the shipbuilding industry is.

One must ask what those ships are doing there. The simple reason is that the cost of operating a ship is fixed. If a ship's earnings are less than its running costs, the shipowner will lay it up. The world's sea lanes are full of ships slow steaming at break-even prices. The days of the get-rich-quick ship operators of the 1950s and 1960s are over. The days of Onassis and Livarnos are finished. There is no demand for shipping any more.

If a shipowner who has not gone bust occasionally has need of a ship, he has no loyalty which will cause him to come to England. He may have been educated in England, but if he can build a ship more cheaply elsewhere, he will go there. He will turn to the shipbuilding yards of the far east and the Pacific basin where he can have a ship built for two thirds of what it would cost in England. Opposition Members may argue that that is because Asian yards subsidise ship owners. The difference in the price is greater than the subsidy. The work force is more efficient and more productive than the work force in this country.

The South Korean industry is second only to that of Japan. In 1974 the Korean industry ranked 70th in the world. Last year, it increased its share of the world's order book from 9 to 14 per cent. compared with the United Kingdom's share of 2 per cent. Western yards often blame that on unfair competition. The Korean Government are accused of granting excessive subsidies and export credits to enable their yards to quote prices up to 35 per cent. cheaper than those of their European rivals.

The Koreans, however, will argue that their two largest yards, Daewoo and Hyundai, receive no direct Government subsidy, although they benefited initially from a five-year export credit. The terms, however, are said to be less favourable than those offered by the Japanese.

The Korean yards are cheaper because they are more modern and more efficient; their raw materials, particularly steel, are cheaper than those in Europe; and they have a disciplined work force. The average working week in Korean shipyards is 60 hours and wages are about one third of those paid in Japan. There is no doubt that their continued expansion is unhelpful to present world over-capacity.

Mr. John Smith


Mr. Ottaway

I am trying to explain why no one buys British ships.

Mr. Smith

What is the hon. Gentleman going to do about it?

Mr. Ottaway

Ask my hon. Friend the Minister. It is not only the far east that can compete on better terms; the Finnish yards built the Royal Princess within the right time and at the right price. That is why a shipowner will go to Finland. As my hon. Friend the Member for Southampton, Itchen (Mr. Chope) said, if Hapags can convert the QE2 more cheaply than British yards, the contract will go to Germany.

The Government should give some financial assistance to shipbuilding. As hon. Members will remember earlier this year we had "Exercise Lionheart" where a number of—

Mr. Smith

So what?

Mr. Ottaway

I listened to the right hon. and learned Gentleman. The least he can do is to listen to me.

In that exercise, a large number of soldiers were carried to Europe by foreign ships. The Government should consider what will happen if those ships are not available in wartime. If we cannot rely on such ships, as the hon. Member for Stockton, South (Mr. Wrigglesworth) said, the Government should consider providing some subsidy out of the budget of the Department of Trade and Industry or the Ministry of Defence to build up the merchant marine so that such exercises can be carried out in the future.

Money is not the only consideration. We have only to look at the traumatic events that took place in Birkenhead. When a shipowner is deciding whether to build in Birkenhead he will remember the scenes that he saw there earlier this year. A militant core of workers held up construction of a gas rig and HMS Edinburgh. He will decide that it is not worth while building his ship or rig in Birkenhead.

Mr. Frank Field


Mr. Ottaway

When the hon. Gentlemen say that something has to be done, I agree. We have to be able to build ships as efficiently as they do in Korea, and we have to sort out our industrial relations. Until that is sorted out, we shall always have a crisis in the shipbuilding industry.

9.15 pm
Mr. Ted Garrett (Wallsend)

Unfortunately, the Minister of State, Department of Trade and Industry, is no longer in his seat. Had he been so, he would have agreed that in Committee and on the Floor of the House he and I have debated, and disagreed, and sometimes agreed on, all the facets of the shipbuilding industry. One thing is certain: he and I have been witnesses to a play that has become a tragedy. We have watched and have now become aware of the inexorable end to this tragedy. Despite some of the statements that we have heard tonight, that inexorable end seems to be that we shall not have a shipbuilding industry. We have been told tonight that the industry is in trouble at the moment, but that it can be more lean and efficient and still have a future. That may be the case, but the proof has not emerged in the debate so far.

I was singularly unimpressed by what the Minister said. Perhaps I have become cynical and have heard the arguments too often. I know that the 2,100 people employed in the Wallsend yard of Swan Hunter have no possibility of a reprieve from redundancy. The Government have not had the courage to say that the position of the redundant workers is infinitely worse than has been suggested. The Minister said that the future orders were a matter of confidentiality. I have the statement that was made to the employees last week and it lists six options, which obviously include the notional contracts and perhaps some of the tenders being negotiated now. If work resulted from these, I would be a little more cheerful, but it does not seem likely.

I am beginning to think that the Tyne and Wear will again become isolated industrial deserts. The Government's policy of standing away from the manufacturing base and pretending that it does not exist is to blame. We have seen the near extinction of the steel, cotton, textile and machine tool industries, and so it goes on. It cannot continue. The difference of philosophy between the parties must be submerged in the national interest. We must have a manufacturing base, which must include shipbuilding. If we have not, we are doomed as a nation.

If the Government's decision to keep away from getting involved in the future of the manufacturing base continues, there is not much hope. The famous rivers of the Tyne and the Wear will be all right because both banks will have green verdant pastures on which the cattle and the sheep will graze. There will be trees, but there will be no people and no jobs. The Minister must sacrifice his blind ideological belief in free enterprise as the answer to our problems. It is not. We must get rid of this ideology and think of the well-being of the 57 million inhabitants of our island. We must think of the people whose jobs depend on some of the decisions that we make tonight.

9.18 pm
Mr. Michael Fallon (Darlington)

I speak in this debate, as I have spoken in previous debates, as someone who has a close interest in Redheads Shiprepairer. It is not a financial interest. My hon. Friend the Minister will know, because he was with me on the day that the yard was opened, that I have taken an interest in its work and have kept in close touch since then with Jack Richardson and his men.

It is worth putting on record that the Government have made it possible for the men in that yard, and for the men in Tyne Shiprepairer Ltd. alongside it, to take a stake in their company and to continue to work in jobs which they inevitably lost under nationalisation. Both those yards are already successful. Redheads now has a turnover of some £2 million. Tyne Shiprepairer Ltd. has an order book worth some £3 million.

Redheads in particular is more than simply a commercial success. I hope that all hon. Members would wish it to be a commercial success in a hostile ship repair environment. It is also a shining example to the rest of the industry, not simply the repair industry, of the much more flexible approach that is required in working practices, entrepreneurship and by going out across the continent of Europe to market one's product.

I ask Labour Members to reflect on one question. Would Redheads and the men who work in that yard have enjoyed that success and continued to enjoy that success had we gone on with the same old nationalised bureaucratic inflexible industry that they chose to establish in 1977?

I suggest that the Government should look again at Redheads and consider whether the flexibility there— which both management and staff have shown can change a yard which BS closed because it was making a loss into a yard that the men themselves now own and which is making a profit—can be adopted on a much wider basis in merchant shipbuilding.

9.21 pm
Mr. Bob Clay (Sunderland, North)

This debate, like previous debates on shipbuilding, has revolved around clear expositions from Labour Members and pathetic excuses from Conservative Members. We have heard the same excuses tonight that we have heard in the past. Nothing has moved on for Conservative Members. We have already lost some yards. But things have moved on for Labour Members because in the next few weeks— not months or years— a massive slice of the industry will go under. Some announcements have already been made in the past few days.

My constituency is facing sell-offs, closures already announced or closures that will take place if there are not orders at the Deptford yard of Sunderland Shipbuilders and Austin and Pickersgill in the next few days. We are talking about over 3,000 redundancies on the river by March next year. We cannot wait until March next year to get the orders to right that situation.

I am glad to see that the Minister of State has just returned. I want to remind him of the questions asked by my hon. Friend the Member for Sunderland, South (Mr. Bagier) to which we would like specific replies. There is an Ethiopian order. It lies with the Minister's Department. He has had that application now for some weeks, having suggested that Austin and Pickersgill should put it in. When will he respond? Time is running out.

The Government also have within their gift a decision on the St. Helena order. That again could keep the yard open. The Deptford yard of Sunderland Shipbuilders is also working on its last ship. As I understand it, BS says that that yard is unlikely to get a further Mexican order which it could have had because it cannot compete with cheap French credit. Those are not my words, but those of BS.

We also understand that ITM Middlesbrough Ltd. would order immediately from Sunderland Shipbuilders a heavy lifting barge for the Morecambe Bay gas exploration if the Department of Energy would make up its mind that it wants to place that contract. The Government can make an immediate decision on such matters, and if they do not do so thousands of jobs will be lost. Indeed, no one now disputes that for every one job lost directly in the yards, another three are lost in the immediate vicinity, in subsidiary and ancillary services. Therefore, on one river in my constituency 10,000 jobs will be at stake in the next three months, despite the fact that the area already has a 26 per cent. male unemployment rate and that in some parts of the town, particularly in those where many shipyard workers live, the rate is well above 50 per cent. That is what is at stake.

The simple questions that we ask about the orders available give the lie to the defeatist claptrap that we have heard from Conservative Members about there being no orders and about the recession making it all impossible. Recession or no recession, we are talking about orders that exist. Someone will obtain them, and it is a question of whether the Government will ensure that they are placed in British yards. In the past few months orders have been lost. Austin and Pickersgill could have had an order from West Germany for two or three ships. There was a price gap of £2 million. So £2 million of further Government intervention could have placed orders in that yard and kept it open.

I, along with others, wrote to the Minister urging him to ensure that British Shipbuilders and his Department did something to secure that order. But the Department dithered, underbid and lost the order, as some of us predicted would happen. It has now done that twice on the same order. That is either incompetence or a sign that the Department intends to run down the industry and let the yards close.

Some hon. Members believe that there is incompetence and misunderstanding, but, as I have said before, the evidence points more and more to the fact that the Government have a wilful policy of eliminating merchant shipbuilding in this country. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) quoted the comments of Sir Robert Atkinson in a lengthy and interesting interview with the Sunderland Echo. Since then, Sir Robert has said something even more damning. On regional television, in the north-east of England, he said: When I tried to talk to them"— the Government and the Minister— about investment they did not want to know. When I wanted to talk about Research and Development they weren't interested. But if I talked about closing yards or sacking workers, a light shone in their eyes. Those are the words of the former chairman of British Shipbuilders, who was appointed by the Government.

Opposition Members must decide whether Government incompetence is to blame or whether, as Sir Robert Atkinson says, the Government have a policy of deliberately destroying the industry. Unless the Minister can give concrete answers tonight to the questions that have been asked by my hon. Friend the Member for Sunderland, South and me about those orders and about the Sunderland yards, the shipyard workers will believe, just as we must believe, that they could not give a damn and that they intend to close the yards.

I shall conclude on a point that has already been made by my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown). Conservative Members are reaping the whirlwind that they sowed with pit closure after pit closure and the appointment of Mr. MacGregor and Graham Day. They will have the same problem twice over or more if they continue with this policy. Those communities will not tolerate that level of unemployment and hopelessness any more than the NUM does. In some areas, including mine, the workers will fight alongside each other. They have started doing so already. The Government should realise the trouble that they will store up if they allow the yards to close. I only hope that if the violence that comes from the hopelessness and despair, and that is the product of this Government's policies, is unleashed in areas such as Wearside, we shall not hear nauseously hypocritical tut-tutting from Conservative Members. They have been warned. If Ministers do not take action immediately, that will be the inevitable consequence of their abandonment of those communities.

9.30 pm
Mr. Don Dixon (Jarrow)

I congratulate my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) on making a first-class case for our motion. The Minister accused my right hon. and learned Friend of getting his needle stuck. That is a cheek because the Minister has offered the same arguments ever since he became Minister. His only offer is more privatisation. He said that the Government have helped the shipbuilding industry since 1979. That reminds me of the person who said "If things don't improve I shall have to stop asking for your help."

The shipbuilding industry is in such a state that it cannot afford any more redundancies or contraction. My hon. Friend the Member for Sunderland, South (Mr. Bagier) talked of practical ways in which we can help in the short term. The hon. Member for Stockton, South (Mr. Wrigglesworth) asked about the industry's viability and the Government's commitment. My hon. Friend the Member for Dundee, West (Mr. Ross) talked about a maritime policy, as recommended by the Select Committee on Trade and Industry way back in 1981. The Government have taken no action.

Redheads has been mentioned, as it was during a debate on the Queen's Speech. I agree that more talent is stagnating in the labour exchanges than is speculating on the stock exchanges. Redheads prove that the men themselves can run an industry. Perhaps too much say has been given to management in the nationalised industries. Shop stewards certainly complain about that to me.

My hon. Friend the Member for Sunderland, North (Mr. Clay) spoke about the expected massive redundancies and how communities will react. My hon. Friend the Member for Wallsend (Mr. Garrett) talked about tragedy hitting the shipbuilding industry and said that nothing would be left. My hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) talked about the number of skilled unemployed males in his constituency.

The Minister never mentioned the community or the social consequences of redundancies. As my hon. Friend the Member for Sunderland, North said, shipbuilding communities are like mining communities. The living and working environments are tied. When a shipyard closes, a town closes.

I shall not talk about what happened to the town in which I lived in the 1960s, but in Tyne and Wear 20 per cent. of manufacturing jobs are connected with shipbuilding. For every job inside the shipyard two exist outside to service it. In Wallsend 44 per cent. of male employment is in the shipbuilding industry. In Jarrow and South Shields 18 per cent. of male employment is in the shipbuilding industry.

In my constituency 31.3 per cent. of the male population is out of work. In addition, we heard this week that British Steel is to close its rolling mill there, throwing 246 men out of jobs. Swan Hunter sacked 2,100 men and decided that Palmers at Hebburn would be put into mothballs.

This is the first time in living memory that no ships are being built on the south side of the Tyne. This Government have done what Hitler's bombers could not do during the last world war. The Government have no feeling for the shipbuilding communities. The reduced spending power of the workers is devastating businesses and shops in our areas. Since the Tyne and Wear "Save our shipyard" campaign started, I have received letters from shopkeepers and other business men who are worried about the effect of redundancies. If the Government had showed spirit and had fought to create employment in our area, they would have done what the Tyne and Wear county council has done. Instead of trying to eliminate the council, the Government would have been emulating it.

An article in the local paper stated: Any further contraction in shipbuilding and in engineering activities on the north-east coast would do irreparable damage to the future of the nation. If the skills and knowledge invested in this area were lost through any further contraction they would never be regained. This would be a great loss to the nation as a whole as they are the skills which would be needed in the future. All good men and true the length and breadth of the north-east coast should come forward to join a concerted bid to save the industry. Now is the time for all men of good standing who are interested in this country and its future to forget their political and other differences and speak out for the sake of the nation. Those were the words not of the general secretary of the boilermakers union, or the regional secretary of the TUC but of the former chairman of British Shipbuilders, Sir Robert Atkinson, in an article printed in the Sunderland Echo on 23 July.

The hon. Members for Barrow and Furness (Mr. Franks), who has disappeared at the moment, and for Southampton, Itchen (Mr. Chope) talked about privatisation. I can tell them about privatisation because I worked in the British shipbuilding industry from the time I left school when I was 14 until I became a Member in 1979. Until 1977, the British shipbuilding industry was in private hands, and they made an almighty mess of it. That is why the industry was nationalised in 1977. If the Labour Government had not achieved orders for Polish ships, there would have been no British shipbuilding industry.

The Government talk about the entrepreneurs in private industry. There was the Paton report in 1962, the Geddes report in 1966 and the Booz Allen report in 1972. Every one of those inquiries, which were conducted when the British shipbuilding industry was in private hands, complained about the lack of investment and bad management. It was not the men who worked in the industry but the management who had the say about investment during that time.

A survey conducted in the 1970s showed that there were assets of £825 per British shipbuilding worker. In Germany the amount was more than £1,000 per worker. Initially, it was more than £1,200. In Sweden there were assets of more than £1,800 per shipbuilding worker and in Japan there were assets of more than £2,800 per shipbuilding worker. The Minister talked about the £1 billion that has been invested since nationalisation. He said that last year £100 million was invested. In 1981–82 the Japanese merchant banks invested £620 million in seven shipyards. The Korean shipyards, in spite of the fact that they started from a good base, have invested £400 million a year. How on earth do the Government expect the British shipyard workers to compete?

The Government amendment states that the House welcomes the efforts of the industry's management to achieve that objective". I refer the House to the evidence given to the Select Committee on Trade and Industry. The chairman asked: I have a personal question for you, Mr. Day. When you took up your job, was your remit given to you … to privatise? Mr. Graham Day replied: I was aware from the media what the government policy was and I was told that in effect my remit had two parts. He did not accept any brief in writing from the Government. He learnt about the Government's policy through the media, and took the job on that basis.

As my hon. Friend the Member for Sunderland, North said, Graham Day is doing to British Shipbuilders what MacGregor is doing to the British mining industry. Is it a coincidence that both men come from the western hemisphere? The best thing that the Government could do would be to put them both on a boat and send them back to North America. We would probably have a better industry as a result.

We are not discussing only shipbuilding. We must consider the shipping industry. For a long time, that industry relied on 100 per cent. depreciation to give it the edge. It was dealt a savage blow when that provision was withdrawn by the Chancellor of the Exchequer.

Since the Falklands operation, when 54 merchant ships were in the task force, there has been a reduction of more than 200 ships in our merchant fleet, totalling over 8 million deadweight tonnes.

Apart from Greece, the United Kingdom has the largest fleet in the EC and, consequently, the largest ordering requirement. It is about time that some British shipowners showed the same loyalty to British shipyards that Japanese shipowners show to Japanese yards. Not one Japanese shipowner has ordered a ship outside Japan since 1947. Everyone knows that the Koreans can build ships cheaper than the Japanese, so if we are talking about an open market in shipbuilding, why do Japanese shipowners not have their ships built in Korea? It is because they show a loyalty to their industry that British shipowners do not show to our industry.

In the past five years, the number of ships ordered by EC shipowners in their own countries has totalled 98 per cent. in Italy, 97 per cent. in Belgium, 82 per cent. in West Germany, 77 per cent. in France, 74 per cent. in the Netherlands, 73 per cent. in Denmark and only 44 per cent. in the United Kingdom. Last year, out of 360,000 tonnes of British owners' shipping orders, 311,00(1 tonnes went abroad. If those orders had been made in this country, our industry would not be in its present state.

Not only have the Government hit shipping and shipbuilding, but they have hit the people who sail on the ships. They even took away the 25 per cent. tax deduction that seafarers have been given for so long. That costs those men an average of £10 a week and penalises them in comparison with their counterparts in western Europe.

Some Conservative Members claim that British shipbuilding workers have made no sacrifices since 1979. In fact, they made so many sacrifices that they have fallen from fourth to below 20th in the wages league and they have reduced the number of wage bargaining units from 160 to two— one manual and one staff. It was said some time ago that if British shipyard workers worked for nothing, they would still not be able to compete with the Koreans. It is nonsense for Conservative Members to say that the workers are the main problem in the shipbuilding industry.

We want the Government to call a halt to all closures in the industry. We have reached the bare minimum for survival and we cannot contract any more. At one time, we used to produce 80 per cent. of the world's tonnage; now we produce less than 2 per cent. We want a halt to privatisation, which would be nonsensical at a time when the industry is facing such severe problems. The private sector has already failed the industry.

We need a maritime policy and a new system of financial aids to replace the intervention fund. As an island nation, we must retain the shipbuilding, marine engineering and shipping industries. 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. It cannot be used intermittently, turned on and off like a hot water tap and available only when required. To be effective it needs continuous use and constant improvement. It needs continuous investment in men and materials. Once that capability is allowed to be displaced, it will never be recovered. Under the Government's policy, what will happen to the shipping and shipbuilding industry will be the same as happened to the motor cycle industry.

In the paper this morning I read that the Prime Minister had given a lecture in the Carlton club to some Conservative body on why democracy will last. I have no doubt that many of the people in her audience have never seen a pair of overalls, let alone worn them. If the Prime Minister and her Government let the shipbuilding industry go to the wall, they will be the "enemy within", and they will never be forgiven by the British people.

9.45 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher)

I should like first to respond to the very distinguished speech of the hon. Member for Wallsend (Mr. Garrett), who correctly drew the attention of the House to two themes which concern any hon. Member representing and industrial constituency.

I reassure the hon. Member that it is the Government's view that manufacturing matters. Eighty per cent. of what we make within our economy is internationally tradeable, and 18 per cent. of service sector activity is similarly internationally tradeable. Therefore, those members of our work force who are committed to manufacturing activity give us very good value for money, and it is this Administration's intention to see that our manufacturing base continues to provide the core of our wealth-creating activity.

I assure the hon. Member for Wallsend that I do not take the view that long-term unemployment is to be tolerated. I do not take the view that is sometimes taken in fashionable debating circles, that somehow structural unemployment is with us for ever. Indeed, I will give the hon. Gentleman two figures which support me in that contention. In 1966, our share of the world's export trade was 14 per cent. In 1983, it was 8 per cent. The steepest falls were not during Conservative Administrations.

According to the CBI, every 1 per cent. reduction in our world trade represents 250,000 jobs lost. If we are to believe those figures—and I do—surely it is not too risky to say in this House that we can and should regain the level of trade that we had such a short time ago. By getting back to the share of trade that we once had, we can regain 1.5 million jobs. I believe that that is a legitimate target.

When there is a whirlwind of international competition in the shipbuilding industry, how can we regain our share of the market? How can we fight back in the domestic and the international markets?

Mr. Robert C. Brown


Mr. Butcher

I hope that the hon. Gentleman will allow me to proceed. Several of his hon. Friends have made distinguished contributions to the debate and I have many questions to answer. I shall try to answer them all in the time available.

The right hon. and learned Member for Monklands, East (Mr. Smith) understandably and correctly voiced his concern. He talked about a crisis. A large number of redundancies are contemplated at Swan Hunter and at Vosper Thornycroft. I assure the right hon. and learned Gentleman that it is not my intention tonight to criticise the work force or the working practices of the industry at this time. One has to concede that in the past they were not of the best, but lessons are being learned, and people are learning to work together. That gives us the best element of hope for the future.

Incidentally, I accept the right hon. and learned Gentleman's figure that for every job in the shipbuilding construction industry, downstream there are three further jobs to consider. That also has an effect on the communities with which we are concerned. I shall refer to his comments about Graham Day and particularly about competition from the far east. I should like to report, for the time being, that next week we shall be involved in bilateral talks with the Koreans and it is our intention to place at the top of the agenda of the talks the effects that Korean pricing is having in distorting the market for shipping and in eroding their competitive position, which in turn is driving the rest of the world's industry into a downward spiral of ever-increasing subsidy. That cannot be right in the long-term for the Pacific basin. It is certainly not right for the United Kingdom.

The hon. Member for Sunderland, South (Mr. Bagier) asked about the SD14 order for St. Helena, which involves the Overseas Development Administration's position on the matter. I assure him that we shall make strong representations to my right hon. Friend the Minister for Overseas Development and ask that the decision be urgently reviewed, although the situation is not quite as straightforward as hon. members on both sides of the House may think.

My hon. Friend the Member for Barrow and Furness (Mr. Franks) talked accurately about the key role of management. Without a good management and a good work force, no amount of public money can rescue any company from uncompetitive practices and uncompetitive behaviour. My hon. Friend also talked about the farsighted decision of Vickers. That company specialised; it produced successful results. It produced an excellent facility upon which we can build. I commend my hon. Friend on—

Mr. Dick Douglas (Dunfermline, West)

The Minister has never been in a shipyard.

Mr. Speaker


Mr. Butcher

I commend my hon. Friend on his robust and pugnacious assertions—

Mr. Douglas

He has never been in a shipyard.

Mr. Butcher

May I say to the hon. Gentleman that I have worked—[Interruption.]

Mr. Speaker

Order. That is not seemly conduct.

Mr. Butcher

I neglected to say to the hon. Member for Stockton, South (Mr. Wrigglesworth) that at the moment we are negotiating on the intervention fund. We are arguing, as we were reminded by the hon. Member for Jarrow (Mr. Dixon), for increased flexibility, and my hon. Friend the Minister for State is asking for a much better deal from the European Community on the intervention fund.

I commend the hon. Member for Birkenhead (Mr. Field) on his courage to support those who want to work. He has supported the real right-to-work campaign, which concerns preserving jobs for those who wish to go to work.

My hon. Friend the Member for Southampton, Itchen (Mr. Chope) said that he would like to see the earliest resolution of the type 22 issue. My hon. Friend the Minister of State will be minded to bring his decision forward during this year. He is aware that many shipyards, like the one my hon. Friend the Member for Itchen represents, are waiting for that early decision. With regard to the position of Vosper Thornycroft on privatisation, I can confirm that British Shipbuilders is pursuing the privatisation of Vosper ship repair as fast as it can and has had several serious expressions of interest.

The hon. Member for Stockton, South, together with other hon. Members, asked whether we can predict or guarantee that those who may be bidding for and may eventually take over the Hall Russell facility will continue shipbuilding at Hall Russell. It is the intent of the Department of Trade and Industry that that should be so, subject to the usual questions on viability and the company's competence to continue shipbuilding activity on that site. I hope that that response gives some reassurance to the hon. Gentleman.

My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Merchant) rightly pointed to the roller coaster progression— some might call it regression— of the industry. He correctly said that working practices were now improving. That improvement must continue because, like a runner, our shipbuilding industry must gather pace and run faster and faster to haul back on the lead gained by our competitors. I hope that the examples of bad practices that he cited will be the last examples of bad industrial relations in the industry. He also reminded us that the capability of both work force and management is the key to success for all the sites up and down the country.

The hon. Member for Dundee, West (Mr. Ross) through his trade union associations has a special interest in technology. I am afraid that he will have to wait for a written reply to some of his questions, not least because I suspect that the House is in no mood to discuss the £30 million that British Shipbuilders has committed to projects such as CADCAM— computer aided design and manufacture—automated manufacturing techniques and so on. The hon. Gentleman is well versed in those disciplines and I undertake to give him the appropriate information on investment in those categories by letter. He also asked for greater flexibility in the intervention fund. That is precisely our negotiating position, and we shall continue to press for that.

My hon. Friend the Member for Nottingham, North (Mr. Ottaway) vividly pointed out why there is a crisis, illustrating the problem of surplus capacity by pointing to the 1,000 ships laid up in the bay of Greece. My hon. Friend the Member for Darlington (Mr. Fallon) asked us to look again at Redheads. I confirm that we shall reaffirm the lessons of privatisation there and take on board the lessons learned at that excellent site.

The hon. Member for Jarrow asked us to think of the community. Of course we bear in mind the effect on communities. That is why we are negotiating the continuation of the shipbuilding redundancy payments scheme.

Mr. Eddie Loyden (Liverpool, Garston)

Will the hon. Gentleman give way?

Mr. Butcher

That is why we, too, are interested in preserving skills.

Mr. Loyden


Mr. Speaker

Order. The Minister is not giving way.

Mr. Butcher

Our help and concern has been very tangible indeed. Regional support on Wearside has been £31.5 million, on Teesside £181 million and on north Tyne £57.8 million. That is not complacency. For south Tyne the figure is £50 million and for Glasgow £88 million. Not only have we put more than £1 billion into the industry: we have recognised the social consequences of redundancies and the particular difficulties faced by communities experiencing structural unemployment.

We have been accused of complacency. I reject that accusation on four main counts. The first is the now much debated £1,170 million. The second is the negotiation for an increase in our take from the intervention fund and a much better deal for the United Kingdom in Europe. The third is our negotiations with Korea. The fourth is our commitment in hard cash in orders from the public sector for £2,800 million worth of naval vessels spread over nine yards and involving 32 vessels. That is not complacency. We take the comments made in the debate very seriously indeed. We affirm our concern for the industry.

Mr. Loyden


Mr. Butcher

Unfortunately, the hon. Member has not been here for much of the debate.

On that basis, I ask my hon. Friends to reject the motion. The motion is flawed. It does not identify the key considerations for profitability, competitiveness and our ability to beat international competition. I therefore ask my hon. Friends to vote for the Prime Minister's amendment.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 188, Noes 267.

Division No. 22] [10 pm
Abse, Leo Garrett, W. E.
Adams, Allen (Paisley N) George, Bruce
Anderson, Donald Gilbert, Rt Hon Dr John
Archer, Rt Hon Peter Gould, Bryan
Ashdown, Paddy Gourlay, Harry
Ashley, Rt Hon Jack Hamilton, James (M'well N)
Ashton, Joe Hamilton, W. W. (Central Fife)
Atkinson, N. (Tottenham) Hardy, Peter
Bagier, Gordon A. T. Harrison, Rt Hon Walter
Banks, Tony (Newham NW) Heffer, Eric S.
Barnett, Guy Hogg, N. (C'nauld & Kilsyth)
Barron, Kevin Home Robertson, John
Beckett, Mrs Margaret Howell, Rt Hon D. (S'heath)
Benn, Tony Howells, Geraint
Bennett, A. (Dent'n & Red'sh) Hoyle, Douglas
Bermingham, Gerald Hughes, Dr. Mark (Durham)
Bidwell, Sydney Hughes, Robert (Aberdeen N)
Blair, Anthony Hughes, Sean (Knowsley S)
Boothroyd, Miss Betty Hughes, Simon (Southwark)
Boyes, Roland Janner, Hon Greville
Bray, Dr Jeremy John, Brynmor
Brown, Gordon (D'f'mline E) Johnston, Russell
Brown, Hugh D. (Provan) Jones, Barry (Alyn & Deeside)
Brown, N. (N'c'tle-u-Tyne E) Kaufman, Rt Hon Gerald
Brown, R. (N'c'tle-u-Tyne N) Kennedy, Charles
Brown, Ron (E'burgh, Leith) Kilroy-Silk, Robert
Bruce, Malcolm Kirkwood, Archy
Buchan, Norman Lambie, David
Callaghan, Rt Hon J. Leadbitter, Ted
Campbell, Ian Leighton, Ronald
Campbell-Savours, Dale Lewis, Ron (Carlisle)
Canavan, Dennis Lewis, Terence (Worsley)
Carlile, Alexander (Montg'y) Litherland, Robert
Carter-Jones, Lewis Lloyd, Tony (Stretford)
Cartwright, John Lofthouse, Geoffrey
Clark, Dr David (S Shields) Loyden, Edward
Clay, Robert McCartney, Hugh
Clwyd, Mrs Ann McDonald, Dr Oonagh
Cocks, Rt Hon M. (Bristol S.) McKay, Allen (Penistone)
Cohen, Harry McKelvey, William
Coleman, Donald McNamara, Kevin
Concannon, Rt Hon J. D. Madden, Max
Conlan, Bernard Marek, Dr John
Cook, Frank (Stockton North) Marshall, David (Shettleston)
Cook, Robin F. (Livingston) Mason, Rt Hon Roy
Corbyn, Jeremy Maxton, John
Cowans, Harry Maynard, Miss Joan
Cox, Thomas (Tooting) Meacher, Michael
Crowther, Stan Meadowcroft, Michael
Cunliffe, Lawrence Michie, William
Dalyell, Tam Mikardo, Ian
Davies, Ronald (Caerphilly) Millan, Rt Hon Bruce
Davis, Terry (B'ham, H'ge H'l) Morris, Rt Hon A. (W'shawe)
Deakins, Eric Morris, Rt Hon J. (Aberavon)
Dewar, Donald Nellist, David
Dixon, Donald Oakes, Rt Hon Gordon
Dobson, Frank O'Brien, William
Dormand, Jack O'Neill, Martin
Douglas, Dick Orme, Rt Hon Stanley
Dubs, Alfred Park, George
Duffy, A. E. P. Parry, Robert
Dunwoody, Hon Mrs G. Patchett, Terry
Eadie, Alex Pendry, Tom
Eastham, Ken Penhaligon, David
Edwards, Bob (W'h'mpfn SE) Pike, Peter
Evans, John (St. Helens N) Powell, Raymond (Ogmore)
Ewing, Harry Prescott, John
Fatchett, Derek Radice, Giles
Faulds, Andrew Randall, Stuart
Field, Frank (Birkenhead) Redmond, M.
Fisher, Mark Roberts, Ernest (Hackney N)
Flannery, Martin Robertson, George
Foot, Rt Hon Michael Robinson, G. (Coventry NW)
Forrester, John Rogers, Allan
Foulkes, George Rooker, J. W.
Fraser, J. (Norwood) Ross, Ernest (Dundee W)
Freeson, Rt Hon Reginald Ross, Stephen (Isle of Wight)
Freud, Clement Rowlands, Ted
Ryman, John Thorne, Stan (Preston)
Sedgemore, Brian Tinn, James
Sheldon, Rt Hon R. Torney, Tom
Shore, Rt Hon Peter Wallace, James
Short, Ms Clare (Ladywood) Wardell, Gareth (Gower)
Short, Mrs H.(W'hampfn NE) Wareing, Robert
Silkin, Rt Hon J. Weetch, Ken
Skinner, Dennis Welsh, Michael
Smith, C.(lsl'ton S & F'bury) White, James
Smith, Rt Hon J. (M'kl'ds E) Williams, Rt Hon A.
Snape, Peter Wilson, Gordon
Soley, Clive Winnick, David
Spearing, Nigel Woodall, Alec
Stott, Roger Wrigglesworth, Ian
Strang, Gavin
Straw, Jack Tellers for the Ayes:
Taylor, Rt Hon John David Mr. John McWilliam and
Thompson, J. (Wansbeck) Mr. Frank Haynes.
Adley, Robert Cranborne, Viscount
Aitken, Jonathan Critchley, Julian
Alison, Rt Hon Michael Dickens, Geoffrey
Amess, David Dicks, Terry
Ancram, Michael Dorrell, Stephen
Arnold, Tom Dover, Den
Ashby, David Dunn, Robert
Atkins, Rt Hon Sir H. Durant, Tony
Atkins, Robert (South Ribble) Dykes, Hugh
Atkinson, David (B'm'th E) Edwards, Rt Hon N. (P'broke)
Baker, Nicholas (N Dorset) Emery, Sir Peter
Baldry, Tony Evennett, David
Batiste, Spencer Eyre, Sir Reginald
Beaumont-Dark, Anthony Fallon, Michael
Bellingham, Henry Farr, Sir John
Bendall, Vivian Favell, Anthony
Benyon, William Fletcher, Alexander
Bevan, David Gilroy Fookes, Miss Janet
Biffen, Rt Hon John Forman, Nigel
Biggs-Davison, Sir John Forsyth, Michael (Stirling)
Blackburn, John Fox, Marcus
Blaker, Rt Hon Sir Peter Franks, Cecil
Body, Richard Fraser, Peter (Angus East)
Bonsor, Sir Nicholas Gale, Roger
Boscawen, Hon Robert Garel-Jones, Tristan
Bottomley, Mrs Virginia Gilmour, Rt Hon Sir Ian
Bowden, A. (Brighton K'to'n) Glyn, Dr Alan
Bowden, Gerald (Dulwich) Goodhart, Sir Philip
Boyson, Dr Rhodes Goodlad, Alastair
Braine, Sir Bernard Gower, Sir Raymond
Brandon-Bravo, Martin Grant, Sir Anthony
Bright, Graham Greenway, Harry
Brinton, Tim Gregory, Conal
Brittan, Rt Hon Leon Griffiths, E. (B'y St Edm'ds)
Brooke, Hon Peter Grist, Ian
Brown, M. (Brigg & Cl'thpes) Grylls, Michael
Bruinvels, Peter Hamilton, Hon A. (Epsom)
Buchanan-Smith, Rt Hon A. Hamilton, Neil (Tatton)
Bulmer, Esmond Harg reaves, Kenneth
Burt, Alistair Harris, David
Butcher, John Harvey, Robert
Butler, Hon Adam Heath, Rt Hon Edward
Butterfill, John Heddle, John
Carlisle, John (N Luton) Hicks, Robert
Carlisle, Kenneth (Lincoln) Higgins, Rt Hon Terence L.
Carlisle, Rt Hon M. (W'ton S) Hind, Kenneth
Carttiss, Michael Holland, Sir Philip (Gedling)
Chalker, Mrs Lynda Holt, Richard
Chapman, Sydney Howard, Michael
Chope, Christopher Howarth, Gerald (Cannock)
Churchill, W. S. Howell, Rt Hon D. (G'ldford)
Clark, Dr Michael (Rochford) Hunt, David (Wirral)
Clark, Sir W. (Croydon S) Hunter, Andrew
Cockeram, Eric Irving, Charles
Colvin, Michael Jessel, Toby
Conway, Derek Johnson Smith, Sir Geoffrey
Coombs, Simon Jones, Robert (W Herts)
Cope, John Joseph, Rt Hon Sir Keith
Cormack, Patrick Key, Robert
Corrie, John King, Rt Hon Tom
Knox, David Ryder, Richard
Lamont, Norman Sackville, Hon Thomas
Lang, Ian Sainsbury, Hon Timothy
Lewis, Sir Kenneth (Stamf'd) St. John-Stevas, Rt Hon N.
Lightbown, David Sayeed, Jonathan
Lilley, Peter Scott, Nicholas
Lloyd, Ian (Havant) Shaw, Giles (Pudsey)
Lloyd, Peter, (Fareham) Shaw, Sir Michael (Scarb')
Lord, Michael Shepherd, Colin (Hereford)
Luce, Richard Shepherd, Richard (Aldridge)
McCrindle, Robert Silvester, Fred
Macfarlane, Neil Sims, Roger
MacGregor, John Skeet, T. H. H.
MacKay, Andrew (Berkshire) Smith, Sir Dudley (Warwick)
MacKay, John (Argyll & Bute) Smith, Tim (Beaconsfield)
Maclean, David John Soames, Hon Nicholas
McNair-Wilson, P. (New F'st) Speller, Tony
McQuarrie, Albert Spence, John
Madel, David Spencer, Derek
Major, John Spicer, Jim (W Dorset)
Malins, Humfrey Spicer, Michael (S Worcs)
Malone, Gerald Squire, Robin
Maples, John Stanbrook, Ivor
Marland, Paul Stanley, John
Marlow, Antony Steen, Anthony
Marshall, Michael (Arundel) Stern, Michael
Mather, Carol Stevens, Lewis (Nuneaton)
Maude, Hon Francis Stewart, Allan (Eastwood)
Mawhinney, Dr Brian Stewart, Andrew (Sherwood)
Mayhew, Sir Patrick Stokes, John
Merchant, Piers Stradling Thomas, J.
Meyer, Sir Anthony Sumberg, David
Miller, Hal (B'grove) Taylor, John (Solihull)
Mills, Iain (Meriden) Taylor, Teddy (S'end E)
Mills, Sir Peter (West Devon) Temple-Morris, Peter
Mitchell, David (NW Hants) Thatcher, Rt Hon Mrs M.
Moate, Roger Thomas, Rt Hon Peter
Monro, Sir Hector Thompson, Donald (Calder V)
Montgomery, Fergus Thompson, Patrick (N'ich N)
Moore, John Thome, Neil (Word S)
Morris, M. (N'hampton, S) Thornton, Malcolm
Morrison, Hon C. (Devizes) Thurnham, Peter
Morrison, Hon P. (Chester) Townend, John (Bridlington)
Moynihan, Hon C. Tracey, Richard
Mudd, David Trippier, David
Murphy, Christopher Trotter, Neville
Neale, Gerrard Twinn, Dr Ian
Needham, Richard van Straubenzee, Sir W.
Nelson, Anthony Vaughan, Sir Gerard
Newton, Tony Waddington, David
Nicholls, Patrick Walden, George
Onslow, Cranley Walker, Bill (T'side N)
Oppenheim, Phillip Waller, Gary
Oppenheim, Rt Hon Mrs S. Walters, Dennis
Ottaway, Richard Ward, John
Page, Sir John (Harrow W) Wardle, C. (Bexhill)
Page, Richard (Herts SW) Warren, Kenneth
Parris, Matthew Watson, John
Patten, John (Oxford) Watts, John
Pawsey, James Wells, Bowen (Hertford)
Peacock, Mrs Elizabeth Whitfield, John
Percival, Rt Hon Sir Ian Whitney, Raymond
Pollock, Alexander Wiggin, Jerry
Powell, William (Corby) Winterton, Mrs Ann
Powley, John Winterton, Nicholas
Price, Sir David Wolfson, Mark
Proctor, K. Harvey Wood, Timothy
Raffan, Keith Woodcock, Michael
Rhodes James, Robert Yeo, Tim
Rhys Williams, Sir Brandon Young, Sir George (Acton)
Ridley, Rt Hon Nicholas Younger, Rt Hon George
Ridsdale, Sir Julian
Rippon, Rt Hon Geoffrey Tellers for the Noes:
Roberts, Wyn (Conwy) Mr. Michael Neubert and
Robinson, Mark (N'port W) Mr. Mark Lennox-Boyd.
Roe, Mrs Marion

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments):—

The House divided: Ayes 259, Noes 185.

Division No. 23] [10.12 pm
Aitken, Jonathan Favell, Anthony
Alison, Rt Hon Michael Fletcher, Alexander
Amess, David Fookes, Miss Janet
Ancram, Michael Forman, Nigel
Arnold, Tom Forsyth, Michael (Stirling)
Ashby, David Fox, Marcus
Atkins, Rt Hon Sir H. Franks, Cecil
Atkins, Robert (South Ribble) Fraser, Peter (Angus East)
Atkinson, David (B'm'th E) Gale, Roger
Baker, Nicholas (N Dorset) Garel-Jones, Tristan
Baldry, Tony Gilmour, Rt Hon Sir Ian
Batiste, Spencer Glyn, Dr Alan
Beaumont-Dark, Anthony Goodhart, Sir Philip
Bellingham, Henry Goodlad, Alastair
Bendall, Vivian Gower, Sir Raymond
Benyon, William Grant, Sir Anthony
Bevan, David Gilroy Greenway, Harry
Biffen, Rt Hon John Gregory, Conal
Biggs-Davison, Sir John Griffiths, E. (B'y St Edm'ds)
Blackburn, John Grist, Ian
Blaker, Rt Hon Sir Peter Grylls, Michael
Body, Richard Hamilton, Hon A. (Epsom)
Bonsor, Sir Nicholas Hamilton, Neil (Tatton)
Boscawen, Hon Robert Hargreaves, Kenneth
Bottomley, Mrs Virginia Harris, David
Bowden, A. (Brighton K'to'n) Heddle, John
Bowden, Gerald (Dulwich) Hicks, Robert
Boyson, Dr Rhodes Higgins, Rt Hon Terence L
Braine, Sir Bernard Hind, Kenneth
Brandon-Bravo, Martin Holland, Sir Philip (Gedling)
Bright, Graham Howard, Michael
Brinton, Tim Howarth, Gerald (Cannock)
Brittan, Rt Hon Leon Howell, Rt Hon D. (G'ldford)
Brooke, Hon Peter Hunt, David (Wirral)
Brown, M. (Brigg & Cl'thpes) Hunter, Andrew
Bruinvels, Peter Irving, Charles
Buchanan-Smith, Rt Hon A, Jessel, Toby
Bulmer, Esmond Johnson Smith, Sir Geoffrey
Burt, Alistair Jones, Robert (W Herts)
Butcher, John Joseph, Rt Hon Sir Keith
Butler, Hon Adam Key, Robert
Butterfill, John King, Rt Hon Tom
Carlisle, John (N Luton) Knox, David
Carlisle, Kenneth (Lincoln) Lamont, Norman
Carlisle, Rt Hon M. (W'ton S) Lang, Ian
Carttiss, Michael Lennox-Boyd, Hon Mark
Chalker, Mrs Lynda Lewis, Sir Kenneth (Stamf'd)
Chapman, Sydney Lightbown, David
Chope, Christopher Lilley, Peter
Churchill, W. S. Lloyd, Ian (Havant)
Clark, Dr Michael (Rochford) Lord, Michael
Clark, Sir W. (Croydon S) McCrindle, Robert
Cockeram, Eric Macfarlane, Neil
Colvin, Michael MacGregor, John
Conway, Derek MacKay, Andrew (Berkshire)
Coombs, Simon MacKay, John (Argyll & Bute)
Cope, John Maclean, David John
Cormack, Patrick McNair-Wilson, P. (New F'st)
Corrie, John McQuarrie, Albert
Cranborne, Viscount Madel, David
Dicks, Terry Malins, Humfrey
Dorrell, Stephen Malone, Gerald
Dover, Den Maples, John
Dunn, Robert Marland, Paul
Durant, Tony Marlow, Antony
Dykes, Hugh Marshall, Michael (Arundel)
Edwards, Rt Hon N. (P'broke) Mather, Carol
Emery, Sir Peter Maude, Hon Francis
Evennett, David Mawhinney, Dr Brian
Eyre, Sir Reginald Mayhew, Sir Patrick
Fallon, Michael Merchant, Piers
Farr, Sir John Meyer, Sir Anthony
Miller, Hal (B'grove) Soames, Hon Nicholas
Mills, Iain (Meriden) Speller, Tony
Mills, Sir Peter (West Devon) Spence, John
Mitchell, David (NW Hants) Spencer, Derek
Moate, Roger Spicer, Jim (W Dorset)
Monro, Sir Hector Squire, Robin
Montgomery, Fergus Stanbrook, Ivor
Moore, John Stanley, John
Morris, M. (N'hampton, S) Steen, Anthony
Morrison, Hon C. (Devizes) Stern, Michael
Morrison, Hon P. (Chester) Stevens, Lewis (Nuneaton)
Moynihan, Hon C. Stewart, Allan (Eastwood)
Mudd, David Stewart, Andrew (Sherwood)
Murphy, Christopher Stokes, John
Neale, Gerrard Stradling Thomas, J.
Needham, Richard Sumberg, David
Nelson, Anthony Taylor, John (Solihull)
Neubert, Michael Taylor, Teddy (S'end E)
Newton, Tony Temple-Morris, Peter
Nicholls, Patrick Thatcher, Rt Hon Mrs M.
Onslow, Cranley Thomas, Rt Hon Peter
Oppenheim, Phillip Thompson, Donald (Calder V)
Ottaway, Richard Thompson, Patrick (N'ich N)
Page, Sir John (Harrow W) Thorne, Neil (llford S)
Page, Richard (Herts SW) Thornton, Malcolm
Parris, Matthew Thurnham, Peter
Patten, John (Oxford) Townend, John (Bridlington)
Pawsey, James Tracey, Richard
Peacock, Mrs Elizabeth Trippier, David
Percival, Rt Hon Sir Ian Trotter, Neville
Pollock, Alexander Twinn, Dr Ian
Powell, William (Corby) van Straubenzee, Sir W.
Powley, John Vaughan, Sir Gerard
Price, Sir David Waddington, David
Proctor, K. Harvey Walden, George
Raffan, Keith Walker, Bill (T'side N)
Rhodes James, Robert Waller, Gary
Rhys Williams, Sir Brandon Walters, Dennis
Ridley, Rt Hon Nicholas Ward, John
Ridsdale, Sir Julian Wardle, C. (Bexhill)
Rippon, Rt Hon Geoffrey Warren, Kenneth
Roberts, Wyn (Conwy) Watson, John
Robinson, Mark (N'port W) Watts, John
Roe, Mrs Marion Wells, Bowen (Hertford)
Rumbold, Mrs Angela Whitfield, John
Ryder, Richard Whitney, Raymond
Sackville, Hon Thomas Wiggin, Jerry
Sainsbury, Hon Timothy Winterton, Mrs Ann
St. John-Stevas, Rt Hon N. Winterton, Nicholas
Sayeed, Jonathan Wolfson, Mark
Scott, Nicholas Wood, Timothy
Shaw, Giles (Pudsey) Woodcock, Michael
Shaw, Sir Michael (Scarb') Yeo, Tim
Shepherd, Colin (Hereford) Young, Sir George (Acton)
Shepherd, Richard (Aldridge) Younger, Rt Hon George
Silvester, Fred
Sims, Roger Tellers for the Ayes:
Skeet, T. H. H. Mr. John Major and
Smith, Sir Dudley (Warwick) Mr. Peter Lloyd.
Smith, Tim (Beaconsfield)
Abse, Leo Boothroyd, Miss Betty
Adams, Allen (Paisley N) Boyes, Roland
Anderson, Donald Bray, Dr Jeremy
Archer, Rt Hon Peter Brown, Gordon (D'f'mline E)
Ashdown, Paddy Brown, Hugh D. (Provan)
Ashley, Rt Hon Jack Brown, N. (N'c'tle-u-Tyne E)
Ashton, Joe Brown, R. (N'c'tle-u-Tyne N)
Atkinson, N. (Tottenham) Brown, Ron (E'burgh, Leith)
Bagier, Gordon A. T. Bruce, Malcolm
Banks, Tony (Newham NW) Buchan, Norman
Barnett, Guy Callaghan, Rt Hon J.
Barron, Kevin Campbell, Ian
Beckett, Mrs Margaret Campbell-Savours, Dale
Benn, Tony Canavan, Dennis
Bennett, A. (Dent'n & Red'sh) Carlile, Alexander (Montg'y)
Bermingham, Gerald Carter-Jones, Lewis
Bidwell, Sydney Clark, Dr David (S Shields)
Blair, Anthony Clay, Robert
Clwyd, Mrs Ann McDonald, Dr Oonagh
Cocks, Rt Hon M. (Bristol S.) McKay, Allen (Penistone)
Cohen, Harry McKelvey, William
Coleman, Donald McNamara, Kevin
Concannon, Rt Hon J. D. Madden, Max
Conlan, Bernard Marek, DrJohn
Cook, Frank (Stockton North) Marshall, David (Shettleston)
Cook, Robin F. (Livingston) Mason, Rt Hon Roy
Corbyn, Jeremy Maxton, John
Cowans, Harry Maynard, Miss Joan
Cox, Thomas (Tooting) Meacher, Michael
Crowther, Stan Meadowcroft, Michael
Cunliffe, Lawrence Michie, William
Dalyell, Tam Mikardo, Ian
Davies, Ronald (Caerphilly) Millan, Rt Hon Bruce
Davis, Terry (B'ham, H'ge H'l) Morris, Rt Hon A. (W'shawe)
Deakins, Eric Morris, Rt Hon J. (Aberavon)
Dewar, Donald Nellist, David
Dixon, Donald Oakes, Rt Hon Gordon
Dobson, Frank O'Brien, William
Dormand, Jack O'Neill, Martin
Douglas, Dick Orme, Rt Hon Stanley
Dubs, Alfred Park, George
Duffy, A. E. P. Parry, Robert
Dunwoody, Hon Mrs G. Patchett, Terry
Eadie, Alex Pendry, Tom
Eastham, Ken Penhaligon, David
Evans, John (St. Helens N) Pike, Peter
Ewing, Harry Powell, Raymond (Ogmore)
Fatchett, Derek Prescott, John
Faulds, Andrew Radice, Giles
Field, Frank (Birkenhead) Randall, Stuart
Fisher, Mark Redmond, M.
Flannery, Martin Roberts, Ernest (Hackney N)
Foot, Rt Hon Michael Robertson, George
Forrester, John Robinson, G. (Coventry NW)
Foulkes, George Rogers, Allan
Fraser, J. (Norwood) Rooker, J. W.
Freeson, Rt Hon Reginald Ross, Ernest (Dundee W)
Freud, Clement Ross, Stephen (Isle of Wight)
Garrett, W. E. Rowlands, Ted
George, Bruce Ryman, John
Gilbert, Rt Hon Dr John Sedgemore, Brian
Gould, Bryan Sheldon, Rt Hon R.
Gourlay, Harry Shore, Rt Hon Peter
Hamilton, James (M'well N) Short, Ms Clare (Ladywood)
Hamilton, W. W. (Central Fife) Short, Mrs R.(Whampfn NE)
Hardy, Peter Silkin, Rt Hon J.
Harrison, Rt Hon Walter Skinner, Dennis
Heffer, Eric S. Smith, C.(lsl'ton S & F'bury)
Hogg, N. (C'nauld & Kilsyth) Smith, Rt Hon J. (M'kl'ds E)
Home Robertson, John Snape, Peter
Howell, Rt Hon D. (S'heath) Soley, Clive
Howells, Geraint Spearing, Nigel
Hoyle, Douglas Stott, Roger
Hughes, Dr. Mark (Durham) Strang, Gavin
Hughes, Robert (Aberdeen N) Straw, Jack
Hughes, Sean (Knowsley S) Taylor, Rt Hon John David
Hughes, Simon (Southwark) Thompson, J. (Wansbeck)
Janner, Hon Greville Thorne, Stan (Preston)
John, Brynmor Tinn, James
Johnston, Russell Torney, Tom
Jones, Barry (Alyn & Deeside) Wallace, James
Kaufman, Rt Hon Gerald Wardell, Gareth (Gower)
Kennedy, Charles Wareing, Robert
Kilroy-Silk, Robert Weetch, Ken
Kirkwood, Archy Welsh, Michael
Lambie, David White, James
Leadbitter, Ted Williams, Rt Hon A.
Leighton, Ronald Wilson, Gordon
Lewis, Ron (Carlisle) Winnick, David
Lewis, Terence (Worsley) Woodall, Alec
Litherland, Robert
Lloyd, Tony (Stretford) Tellers for the Noes:
Lofthouse, Geoffrey Mr. John McWilliam and
Loyden, Edward Mr. Frank Haynes.
McCartney, Hugh

Question accordingly agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House recognises the efforts being made by the British shipbuilding industry to overcome its present difficulties; notes that the Government has provided over £1,000 million of taxpayers' money to British Shipbuilders since 1979; recognises that only by becoming more competitive can the British shipbuilding industry have a secure future; welcomes the efforts of the industry's management to achieve that objective; and endorses the Government's decision to return British Shipbuilders' warship building interest to the private sector as soon as possible.