HC Deb 03 July 1985 vol 82 cc322-3
8. Mr. Robert Hughes

asked the Secretary of State for Trade and Industry if he will make a statement on the privatisation of Hall Russell, Shipbuilders, Aberdeen.

Mr. Norman Lamont

It remains the Government's intention to privatise Hall Russell.

Mr. Robert Hughes

Does the Minister accept that his frustrations in trying to privatise Hall Russell are as nothing compared with the frustration of the work force over its lack of employment? Both stem from the same source, the shortage of security of orders. Will he therefore make it clear that from the Government's point of view there is no inhibition, prohibition or bar on Hall Russell obtaining a share of any non-naval shipbuilding orders which may be available? To make those possible contracts more commercially viable, w ill he make sure that that yard is classified as a yard that has the capacity at least of having access to the intervention fund?

Mr. Lamont

I agree with the hon. Gentleman that the real problem is the shortage of orders, and it should not be confused with the issue of privatisation. As to whether Hall Russell ought to be a yard that seeks merchant orders, the hon. Gentleman will know that all but one of the orders that it has received in the last rive years have been military orders. It is a matter essentially for British Shipbuilders whether it regards the yard, if it remains within British Shipbuilders, as a defence yard or a merchant yard. Any decision that British Shipbuilders makes, of course, has an impact on other yards and other merchant yards and on the orders that they must get. That has to be taken into account. As to the intervention fund, we shall be making a statement on that soon, but we have indicated that it is unlikely that, as a general rule, the intervention fund will be available to privatised warship yards.

Mr. Malone

In view of my hon. Friend's reply, can he confirm that the best long-term prospect for Hall Russell in securing naval and merchant orders will, indeed, be in the private sector, where it will be relatively unshackled? On a more general basis, can he tell the House whether he is satisfied with the progress that has been made in selling other warship building yards?

Mr. Lamont

I agree with my hon. Friend that the yard is likely to have as good, if not better, security of employment by being in the private sector. It remains the position, of course, that Hall Russell is still pursuing certain other orders. There was the statement about the OPV3s in the defence debate the other day, and there are other tenders in which the yard is interested. As regards general progress of privatisation, my hon. Friend will know that Brooke Marine was sold in May. I am pleased to say that the sale of Yarrow to GEC has now been completed with the consideration previously announced and with the acceptance by British Shipbuilders of a small contingent liability, should further redundancies arise. The other yards will be on offer soon.

Mr. Wilson

On the question of Hall Russell, may I ask the Minister to accept that the yard has had a very high reputation for its activities and efficiency over the years, and that the confusion and uncertainty that exists about its permanent ownership cannot but make it very difficult for the management to secure the orders that are desperately needed to keep the yard going?

Mr. Lamont

I accept what the hon. Gentleman says about the concern, although, of course, the work load will continue until August 1986. As I have said, the yard is interested in certain other orders. The basic problem is the order book, not privatisation.

Mr. John Smith

Is it not clear to the Minister by now that the Government's desire to privatise the yard has added another layer of uncertainty and difficulty to the problems which the yard would have faced in any event? Would it not be wise for the Government not blindly to pursue privatisation but to reconsider whether the yard should be retained as part of British Shipbuilders? If they are not prepared to do that, will they change some of the rules and influence British Shipbuilders to ensure that a wide range of orders are available by broadening the capability of the yard? The Government can show their intention to BS because, after all, they are the authors of the privatisation policy, not British Shipbuilders.

Mr. Lamont

We must take into account — as, indeed, British Shipbuilders must—the position in other yards where jobs are at stake. There has been agreement on both sides of the House that the underlying problem is orders. The right hon. and learned Gentleman appears to think that somehow the problem can be concealed if the yard is kept in the public sector.