HC Deb 24 February 1986 vol 92 cc677-9 3.31 pm
Mr. John Smith (Monklands, East)

(by private notice) asked the Secretary of State for Trade and Industry if he will make a statement on the Department of Trade and Industry's decision to cancel the decision to extend the deadline date for completing the sale of Vickers Shipbuilding and Engineering Ltd.-Cammell Laird Group.

The Minister of State, Department of Trade and Industry (Mr. Peter Morrison)

Last Thursday the Government proposed a short postponement in the date for the receipt of bids for the sale of Vickers Shipbuilding and Engineering Ltd. to allow prospective bidders for the company to tender simultaneously for the first Trident submarine contract. The prospective bidders, however, saw practical difficulties in such a delay and I therefore decided to proceed according to the original timetable.

Mr. Smith

Is it not the case that the Ministry of Defence made representations to the Secretary of State for Trade and Industry to postpone the date for the sale of the yard and that the Secretary of State for Trade and Industry agreed to such a postponement, that one of the bidders contacted the Minister of State, and as a result it was decided to overturn the decision to delay it, so that it is now going ahead?

Can the Minister explain how it is possible to sell a yard when the asset value of the yard is said to be £40 million but the value of a contract, which has not yet been negotiated, is £400 million? How is it possible to fix any kind of price, having regard to the public interest, when the contract remains unfixed and unagreed? Was the Ministry of Defence not right to seek a postponement until that had been clarified, and is the Minister not wrong not to accept its advise?

As the Department of Trade and Industry has fixed a deadline which is inconsistent with the negotiating timetable of the Ministry of Defence, is it not clear that we have reached another situation in which the Government appear totally incapable of co-ordinating the activity of two separate Departments? Is it not clear also that the replacement of two Secretaries of State has not made the slightest difference to the incapacity of those Departments to work together? Above all, is it not now abundantly clear that the Government's privatisation dogma takes precedence over all other consequences of the public interest, including national defence?

Mr. Morrison

The date for the bids for Vickers shipyard has been known for a long time. Indeed, at the same time, over a long period, the negotiations between the Ministry of Defence and the shipyard on the Trident contract have been continuing, and are not quite finalised. Therefore, it seemed sensible—if the prospective bidders thought it was a good idea—to offer them the opportunity of extending the date for their bids. In the event, they decided not to. Therefore, it would have been incorrect to change the goal posts.

Mr. Cecil Franks (Barrow and Furness)

Would my hon. Friend care to comment on the disgraceful interference in the privatisation programme, for purely commercial reasons, by Trafalgar House? Is he aware that, by delaying for six weeks from tomorrow the date for bids, Trafalgar House would have been able to use its City connections to know the amount of the Vickers' bid, which was to be put in tomorrow? Will my hon. Friend comment on the rumours which are rife, which appear to be well founded, that, once in control of the Vickers group, after a decent passage of time, the Trafalgar House group would close the Shipyards of Cammell Laird and transfer that business to Scott Lithgow, together with the business from Barrow? Finally, is my hon. Friend aware that, by the Ministry of Defence giving the reason for postponing the time scale and finalisation of the Trident contract, that would oblige the present Vickers management to settle that contract on terms which it would not have accepted at arm's length negotiations?

Mr. Morrison

The Government and I are concerned to get the best possible deal on Vickers shipyard so that we have a proper submarine manufacturing capacity—

Mr. John Evans (St. Helens, North)

There is one now.

Mr. Morrison

And, indeed, in the private sector. As the hon. Gentleman will recall, it was not until 1977 that the submarine manufacturing capacity of Vickers was put into the public sector.

I apologise to the right hon. and learned Member for Monklands, East (Mr. Smith) for not answering the second part of his question. I cannot anticipate what bids will come forward tomorrow or, indeed, on what terms.

Mr. Franks

On a point of order, Mr. Speaker.

Mr. Speaker

I shall take it afterwards.

Mr. Frank Field (Birkenhead)

I thank the Minister for maintaining the timetable, which prevents Trafalgar House from gaining undue advantage in the sale. I draw the hon. Gentleman's attention to the loose talk by some Trafalgar House officials that, should they be successful in the sale, they will close Cammell Laird shipyards. As Cammell Laird is the much smaller of the two yards, will the Minister pay particular attention to its interests when he decides what the future of the two yards should be?

Mr. Morrison

As the hon. Gentleman will realise, the bids go to British Shipbuilders, it examines them carefully and it then makes a recommendation to the Government, to which my right hon. Friend the Secretary of State and the Government give consent. The hon. Gentleman makes some important points about Cammell Laird. I realise that he has a constituency interest. I am sure that all those angles will be taken carefully into account before any recommendation is made to the Government by British Shipbuilders.

Mr. Alistair Burt (Bury, North)

Will my hon Friend note the strong feelings on the issue in the north-west of England and accept that the task of promoting the Government's privatisation policy in that area will be made easier by the success of the VSEL consortium bringing, as it does, the interest of management, work force, community, patriotism and the Government together for a change?

Mr. Morrison

I appreciate what my hon. Friend says, but I think he will agree that we have to look at all the bids that come forward, because if we do not look at them all and take the best, that will not be in the interests of privatisation.

Mr. John Cartwright (Woolwich)

Will the Minister assure the House that in their anxiety to encourage privatisation the Government do not intend to construct the contract for the first Trident submarine so as to make cancellation by a future Government extremely difficult even if the British people vote in a general election for such a cancellation?

Mr. Morrison

As the hon. Gentleman will appreciate, the contract is being negotiated on commercial terms. I agree with what he said about the Opposition's current policy towards the Trident missile and submarine. It makes a considerable difference.

Mr. D. N. Campbell-Savours (Workington)

Is not the bleating of the hon. Member for Barrow and Furness (Mr. Franks) predictable in the circumstances? Is it not true that over the past one and half years the Labour party has been telling the people of Barrow that massive redundancies would arise from the privatisation of those shipyards, whether they were taken over by Trafalgar House or by anyone else? Is it not true that the future of those shipyards is fully secured only while they remain in the public sector? Is not the fact that the hon. Gentleman persists in coming to the House and making such ludicrous statements only a reflection of the inadequate way in which he has represented the shipyard workers in Barrow in the House over the past one and a half years?

Mr. Morrison

The real anxiety of all those who work in the shipyards, whether in Barrow or Birkenhead, is the Opposition's policy towards Trident. If it ever comes into being, it will ensure that work prospects on Barrow amd Birkenhead are much lower than they are now.

Mr. John Evans (St. Helens, North)

How many millions of pounds of taxpayers' money have been spent over the past few years creating the facility to build Trident submarines at Barrow? How can it possibly be in the interests of those taxpayers for that yard to be privatised in advance of the signing of the multibillion pound Trident programme?

Mr. Morrison

I cannot give the hon. Gentleman the precise figure. [HON. MEMBERS: "Why not?"] I cannot give the figure off the top of my head. The sum will be taken into account when British Shipbuilders reviews the bids. I answered the hon. Gentleman's second question when I answered his right hon. and learned Friend the Member for Monklands, East.