HC Deb 07 May 1986 vol 97 cc202-13

Considered in Committee.


Clauses 1 and 2 ordered to stand part of the Bill.

Bill to be reported, without amendment.

Order for Third Reading read.

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

I beg to move, That the Bill be now read the Third time.

As the House will appreciate, we debated at length this important and serious Bill only eight or nine days ago. Rather than detain the House at this stage with a long speech, I hope that I shall be able to catch your eye, Mr. Deputy Speaker, at the end and, with the permission of the House, respond to the debate.

7.38 pm
Mr. Bob Clay (Sunderland, North)

In his brief opening remarks the Minister said that the Bill was debated on Second Reading only eight or nine days ago. I regret that it appears that the passing of eight or nine days is neither here nor there for the Minister; but my hon. Friends are entitled to say to the Minister that even eight or nine days are crucial, certainly for Britain's merchant shipyards. We have had to explain to the Minister and his predecessors that it is no good waiting for work to be completed to take serious measures to secure further orders. Even if orders were secured immediately for yards in my constituency — Sunderland Shipbuilders and Austin and Pickersgill — there would be a problem of lay-offs because of the lead-in time to order and cut steel, even if the orders were for fairly conventional work such as has been done before.

It is important that the Minister should tell us whether the Government are prepared to take radical and drastic measures to ensure that British Shipbuilders' additional borrowing powers are not pointless. We do not want to hear again tales of what a generous allocation this is and how the Government have given, grossed up and indexed, about £1.3 billion since 1979, which is what the Bill is really about.

When the Minister or his colleagues talk about the level of subsidy to British shipbuilding, they might reflect on the report of the Select Committee on Agriculture. That Committee found that just storing cereal products under EEC intervention arrangements costs about £190 million a year. The Select Committee suspects that the cost is higher, and in a footnote, says: we note that the Public Expenditure White Paper puts the figure at £371 million". Is there not something profoundly wrong with a Government who seem to take it for granted that more public money should be spent on storing cereal products, which should be going to starving people, than on supporting the shipbuilding industry in an island nation? There is nothing for the Minister to be proud of. There should be more money and it should be better directed.

There is little accountability in the House concerning British Shipbuilders' financial arrangements. I remember my hon. Friend the Member for Birkenhead (Mr. Field) mentioning the £37 million which appears to have found its way to Harland and Wolff without anybody knowing how. I notice that the report of the Comptroller and Auditor General and the National Audit Office, entitled "Department of Trade and Industry: Assistance to British Shipbuilders", says: In carrying out this examination the NAO had access to the records of the DTI but not to those of BS. I am increasingly worried about British Shipbuilders' arrangements to make the best use of its funds to secure orders, especially for merchant shipyards. When we talk of intervention fund money or credit arrangements, we are talking about merchant shipbuilding. I hope that the Minister will explain what the Government are doing to persuade the EEC to take a more serious and urgent attitude towards an increase, rather than a decrease, in intervention fund money.

I understand that the most recent written answer on the subject referred to a further meeting in July. I hope that the Minister understands that it takes so long to produce orders that any improvement then would no longer be relevant. July meetings will not help the plight of British merchant yards now.

One thing that the Government could do immediately—I mentioned this on Second Reading — would be to clarify what they are prepared to do about soft-credit packages. There has been a continuing controversy about what the Prime Minister did or did not say to me and other shop stewards when she met us a couple of weeks ago.

I understand from Mr. Chris Moncrieff of the Press Association — I have his permission to say this — that when he telephoned Gleneagles, where the Prime Minister had gone the night after the meeting with me and trade union colleagues in Newcastle, one of her aides was able to confirm our account of that meeting. The only dispute was that the Prime Minister claimed that the policies that she announced were not new.

I understand from Mr. Philip Murphy of Thomson Newspapers that he spoke to a press officer at Downing street yesterday, who said: She recognised we were now in a position to beat anyone other than the Japanese on credit terms. We are going to carry on being as imaginative and inventive as we possibly can to ensure that our packages are as good as possible. There is now clear confirmation that the Government are saying — the Prime Minister said it — that they are prepared to undercut any country on credit terms, other than Japan. I hope that, as that has been confirmed by Downing street, the Minister will withdraw his earlier statement that that would be a ridiculous thing to say. The Prime Minister is saying it, so he had better square his act with her.

There is no reason why the Government should not pursue such a policy. It is one of the few policies that the Government could adopt immediately which would give us some chance of securing orders in merchant shipyards. I am not altogether surprised that the Government should have evolved, changed, or whatever they want to call it, to such a policy. During the debate on the Queen's Speech, the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), the former Secretary of State for Trade and Industry, said: I should like to announce today important changes in the scope and scale of the aid and trade provision—an instrument effective both in providing aid to developing countries and in helping British companies with overseas contracts … First, with the full co-operation of the financial community, we are introducing a new soft loan facility. Banks will make long-term loans at low interest rates available to recipient countries for financing sound development projects agreed intergovernmentally."—[Official Report, 12 November 1985; Vol. 86, c. 482.] I was never clear—the question was asked at the time—whether such a package for civil engineering and manufacturing applied to merchant shipbuilding. I take it from what is being said from Downing street, irrespective of what the Minister says. that such arrangements apply to merchant shipbuilding, and I should like the Minister to confirm it. If he says that that has always been Government policy, so be it. If he says that it has been Government policy for the past year or two, he must tell us why quite a number of orders, especially to Third-world countries, have been lost.

Other European countries have provided better soft credit packages. I am not bothered about arguing about the past, although it is quite clear that orders have been lost. It is sufficiently on the record that the Government are saying that, from now on, we will not lose out because of credit arrangements, unless we are competing with Japan.

The Minister should clear the matter up so that British Shipbuilders, the trade unions, the work force and hon. Members know that that is Government policy. If we feel that British shipbuilding is not making sufficient use of that policy in the desperate days that lie ahead, sufficient pressure can be exerted to ensure that it does. We do not want to hear any more about open doors on which British Shipbuilders does not knock.

As I said in the previous debate, it is extraordinary that the Minister should say that British Shipbuilders has never come to the Department of Trade and Industry and asked for help on special arrangements through the intervention fund. British Shipbuilders is justified in having that record only if it has not lost a single order for want of trying. I want the Minister to tell us that the door is still open, that if British Shipbuilders asks for help it will get it, that there is a soft loan policy to help us to get orders, especially from developing countries, and that the Government will enthusiastically pursue that policy.

Other than orders that are directly within the Government's gift—there are not many of those and the Government do not seem to be shifting on the most important one, the FSK — the only chance of the merchant yards surviving will he the sort of orders that I mentioned. The Government must have a far more dynamic and serious attitude than they have displayed so far.

7.51 pm
Dr. Norman A. Godman (Greenock and Port Glasgow)

The last line in the first paragraph of the explanatory memorandum is somewhat disconcerting. It states: The new limit will be £1,300. It is obviously an error, but it was a little worrying.

We have a campaign in Scotland with the initials SOSS—Save our Scottish Steel. Now we need another — SOSY, or Save our Scottish Yards. There are few remaining. Govan is in parlous circumstances. Ferguson-Ailsa has yards in my constituency at Port Glasgow and in the constituency of the Secretary of State for Defence at Troon. We have the last remaining marine engineering plant within British Shipbuilders — Clark-Kincaid — which still has a plant down on the Tyne. All those yards are encountering appalling problems.

With regard to the extension of the limit on borrowing, have there been recent discussions between the Minister's Department and Associated Container Line on the lengthening of several of its vessels? I understand that tenders have been sought for this work. If that shipping line chooses to lengthen its vessels in that way, would there be any possibility of financial assistance to that line or to British Shipbuilders if the contracts were awarded to British Shipbuilders' yards?

I hope to meet Mr. Eric Parker, the chairman of Scott Lithgow, which is no longer with British Shipbuilders, to discuss what could be an important order for British shipbuilding yards. Can the Minister offer me any assurances about assistance to the last remaining British Shipbuilders' yards in Scotland? The remaining yards in the control of British Shipbuilders in the north-east of England have been brought together in one enterprise, which I believe is called North-East Shipbuilders. Have there been discussions between the Department and British Shipbuilders about a similar development on the Clyde, which would bring together Govan, Ferguson-Ailsa and Clark-Kincaid?

May I also stress to the Minister, as I did on Second Reading, that flexibility in the intervention fund is crucial. So, too, are good credit and loan facilities for British Shipbuilders.

7.55 pm
Mr. Don Dixon (Jarrow)

Obviously, we welcome any assistance that can be given to British Shipbuilders, even if it comes as a result of additional borrowing powers. However, the Bill does not create one order—

Mr. Frank Field (Birkenhead)

Or one job.

Mr. Dixon

Or one job, as my hon. Friend says.

On Second Reading, the Minister talked about the money that British Shipbuilders had received since nationalisation. The Government say that British Shipbuilders should be competitive, but we should compare like with like. I worked in the industry when it was in private hands, and I remember the problems caused by lack of investment. Many companies that have been privatised since then face similar problems.

At the age of 14, I joined Palmer's yard at Hebburn as a shipwright. I know a little about the industry, although only from underneath ships in the fo'c's'le or the double bottoms. I was working in the industry in 1962, when the Patton report was published. Later, the Geddes report suggested some rationalisation of the industry, said that it was not market-oriented enough and wanted amalgamations. The Booz-Allen report of 1972 criticised the shipbuilding industry and suggested that there had been a lack of investment while it was in private hands. The Secretary of State for Trade and Industry is in the Chamber. It is right to point out to him, because he may not appreciate it, the fact that British Shipbuilders has been operating at a disadvantage for many years.

A survey conducted in the early 1970s showed that, for every shipbuilding worker in British yards, there were assets of £825. In Germany, the amount was more than £1,000; in Italy, it was more than £1,200; in Spain, it was more than £1,800; and in Japan, it was more than £2,600.

Another matter that has not been pointed out during our long debates on shipbuilding is the effect that closures, unemployment and redundancies have on communities such as that of my hon. Friend the Member for Sunderland, North (Mr. Clay). To show how close-knit shipbuilding communities are, a survey conducted at Austin and Pickersgill showed that 37 per cent. of those employed in the yard lived within one mile of the yard, and only 1.5 per cent. of employees lived more than five miles away. A survey conducted at Swan Hunter's Wallsend yard showed that 62 per cent. of the employees lived in Wallsend or the adjacent towns. That should give the Government some idea of the close-knit shipbuilding communities.

Those communities are similar to the mining communities. We have had many debates on the mining industry. The mining communities are closely knit with the mines, as the shipbuilding communities are with shipbuilding. Redundancies and shipyard closures are catastrophes.

A survey in the Tyneside shipbuilding area showed that shipbuilding accounts for 44 per cent. of male employment in Wallsend, and we know of the present state of shipbuilding. In South Shields, 18 per cent. of male employment relies on shipbuilding, in Jarrow it is 16 per cent., and in North Shields it is 12 per cent. That shows how we rely on shipbuilding for jobs in our areas. I hope that the Minister will make constructive suggestions, and not merely say that the shipyards can increase their borrowing.

On Second Reading we suggested a scrap-and-build policy. We have discussed that for many years. The only way to create orders is by scrap and build — by encouraging shipowners to scrap some fairly old ships and to rebuild, placing orders in British shipyards. That is the sort of constructive suggestion that we want to make. Much of what has been said about shipbuilding has been said previously because we feel strongly about it.

Shipbuilding, like shipping, is a national strategic industry and needs a declared maritime policy. The Trade and Industry Select Committee produced a report in 1981, one of the first recommendations of which was that we should have a national maritime policy, co-ordinated by a senior Cabinet Minister and formed in consultation with trade unions, British shipbuilders and the shipping industry. That is the sort of positive policy that we want to hear from the Minister. I know that he cannot give that sort of reply tonight, but I hope that he will take those comments on board.

Finally, Mr. Deputy Speaker—no one knows better than you how our area relies on traditional industries such as mining and shipbuilding—I wish to quote from an article printed in the Sunderland Echo on 23 July 1985: 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 were 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 General Municipal, Boilermakers and Allied Trades Union or of some shop steward from Austin and Pickersgill, but of the former chairman of British Shipbuilders, Sir Robert Atkinson. I hope that the Minister will take those words on board when he replies.

8.2 pm

Mr. Gordon Brown (Dunfermline, East)

This has been a short but important debate, and the speeches of my hon. Friends reflect their concern about the shipbuilding communities which they represent. I hope that it is a measure of the Government's concern about the matter that both the Minister and the Secretary of State are present this evening.

We fear that, despite the permission which is granted in the Bill for the Government to raise the borrowing requirement of British Shipbuilders, no sanction is being given to increase borrowing. It is not an offer of increased borrowing. Our fear is that the merchant shipbuilding industry, which has been halved during the past seven years, will continue to decline, even with the Bill on the statute book.

Yesterday in an answer to me the Minister confirmed the critical position of the yards that have been mentioned. He will agree that without further orders Ferguson-Ailsa has no work beyond September 1986, Smiths has none beyond December 1986, Austin and Pickers ill has none beyond December 1986, Govan, which is completing a major ferry order, has none beyond March 1987, and that Sunderland Shipbuilders has as yet no work beyond March 1987. I hope the whole House will recognise that the merchant side of the shipbuilding industry is at the point of no return, unless the Government and British Shipbuilders are able to secure the orders that are desperately needed to retain the work force and save the yards.

As my hon. Friends the Members for Greenock and Port Glasgow (Dr. Godman) for Sunderland, North (Mr. Clay) and for Jarrow (Mr. Dixon) have pointed out, the areas already have substantial unemployment rates. The rate of unemployment in Glasgow as a whole is 18 per cent., in Greenock it is 22 per cent., in Sunderland it is more than that, and in Middlesbrough it is even higher. My hon. Friend the Member for Sunderland, North will confirm that near the shipyards he represents unemployment is as high as 45 per cent., and that many included in that figure are shipbuilding workers who have already been made redundant.

The Minister will probably have seen British Shipbuilders' estimate of the jobs that will be lost, if no further orders are provided. Will he confirm that if no further orders are forthcoming by December 1986 or the beginning of 1987, nearly 4,000 blue-collar jobs are at risk in the British Shipbuilders group, that if white-collar jobs are included, more than 5,000 jobs are at risk, and that if we include those who are dependent on the work created within British Shipbuilders, the number is substantially higher. I hope that the Minister will describe in more detail than he did in reply to Second Reading what the Government will do to retain those jobs and to maintain the yards in being.

Mr. Frank Field

Serious as the loss of those jobs is, do not the communities face a further danger, namely, that if shipyards close, we lose the training centres for skilled manpower? Cammell Laird has a training school which trains practically all the skilled tradesmen in Merseyside. If anything happened to that company, not only would those jobs be lost but also the chance of ever returning to a period of economic growth in the region would be severely retarded.

Mr. Brown

I wholeheartedly agree with my hon. Friend, and the point raised by my hon. Friend the Member for Jarrow. We are talking about the future of communities. If, during the next few months, jobs are lost in the yards and the yards reach the point of no return, adult jobs will disappear and there will be no opportunities for young people, whether or not on youth training schemes. That is why I wish to put three points to the Minister.

First, what will the Minister do to make it possible for the merchant yards to secure the maximum number of public-sector orders and, indeed, to advance them where possible so that the yards can remain in being? Yesterday, in an answer to me the Minister could only confirm that there were three orders from the public sector for which British Shipbuilders could tender during the next few months — a fisheries protection vessel, a passenger vehicle ferry and a smaller passenger ferry for the Orkney islands. While the orders are welcome—I know that at least two of them are at present being tendered for—the Minister should be consulting the Ministry of Defence and other Departments about how they can advance the public-sector orders which, particularly in the case of the Ministry of Defence, are urgently needed, and how by advancing those orders they can secure the future of the yards.

The second question has already been raised by my hon. Friend the Member for Sunderland, North, and relates to the intervention fund. The position that the Minister put to us on Second Reading seems less than satisfactory from the point of view of British Shipbuilders' activities. The Minister said that at no point had his Department been approached to use the flexibility that is available to British Shipbuilders in securing a higher amount of funding from the intervention fund so as to get orders, so that in the case, for example, of the order that British Nuclear Fuels plc placed in Japan it appears that British Shipbuilders had not even bothered to ask the Department whether there would be greater flexibility in the resources available from the intervention fund. I hope that the Minister can satisfy us that he has made it clear to British Shipbuilders that he will look favourably at applications that would secure greater flexibility and, therefore, greater funding, so that orders could be achieved.

Mr. Clay

Does my hon. Friend not think that another lesson could be learned from the particular example that he gave? The Prime Minister's explanation of the loss of that order was that, because the main trading nation whose waste would be carried by the ship was Japan, the Japenese Government insisted that the ship be built in Japan. In that case, it seems to have been a political decision rather than a mainly financial one. Does my hon. Friend not think that it is extraordinary that the Japanese can not only oblige their own shipowners to build in Japanese yards but can oblige foreigners to do so as well? Should the Government not take a leaf out of the Japanese Government's book?

Mr. Brown

My hon. Friend has a point and it has not yet been answered satisfactorily by the Government, why that order, which was vital to the yard represented by my hon. Friend, was lost, and why it is that Governments who seem to have least to gain do most while we, an island, a maritime nation, whose shipbuilding industry is directly related to our defence needs, we who have the most to gain, seem to be able to do least to secure orders that are essential for the maintenance of our shipyards.

Also on the intervention fund, what are the Government doing in Europe to secure a proper continuation of the arrangements that would guarantee support and subvention when new orders were being competed for? When the Minister was battling in Brussels last year, he had to accept the watering down of his original demand of 35 per cent. to no more than 20 per cent. I am talking about the Under-Secretary who is not here this evening. When he started negotiations in Brussels a few weeks ago, he seemed to be talking about free market theories, suggesting that there should be an end to worldwide subsidies, suggesting that Europe might take the lead in stopping the business of buying orders and implying that Britain might be prepared to accept a lower amount of subvention as a result of the present negotiations. I hope that the Minister is in a position to confirm that the Government will fight to continue at least the existing level of support, and will not settle for less as a result of the pressure of the commissioner for competition and pressure of other member states.

The third point that has been raised by all three of my colleagues is what packages British Shipbuilders is able to offer, and what packages are available to both British shipowners and other shipowners if they will buy British. When the Prime Minister met representatives of the trade union side of Sunderland Shipbuilders, she seemed to give an assurance—indeed a guarantee—that no orders would be lost because we could not match credit packages offered by other countries. I have the advantage of having here a minute prepared by the trade union side on these conversations, a minute that appears to have been confirmed by statements from Downing street to the Press Association.

The Prime Minister said that no orders would be lost because another country had provided a more attractive credit arrangement. She said that the one exception to this would be Japan. She said that, with the exception of Japan, Britain could compete successfully on soft loan arrangements. Whether she was announcing a new policy or whether that was a continuation of a policy announced in October or whether that has been Government policy for some time is immaterial. Are the Government in a position to say to British Shipbuilders and to the shipyard workers that no order will be lost because of a failure to offer sufficiently attractive credit terms to compete at least with every other country except Japan?

What the Minister's Department has said to the Committee looking at the future of the European maritime industry, what the Under-Secretary appears to have said in his negotiations with the Commission and what is stated in the National Audit Office report on British Shipbuilders does not seem to confirm what the Prime Minister has been saying. The Minister may read the evidence given by his Department to the Committee in another place, which made it absolutely clear that, in the Department's view, other countries were able to beat us because of their ability to offer better credit and better loan packages.

In the negotiations in the Commission, the Under-Secretary appeared to be saying that France and Germany could do far better than Britain when it came to producing packages. Worse than that, from the report prepared by the National Audit Office it appears that the Government have told British Shipbuilders that they were limiting its ability to take on new subsidised work.

Whether that report has the position right, I do not know, but the Minister could resolve this whole question very easily tonight by telling us that he is in a position to say, on behalf of his Department, that in future no orders will be lost which could save and secure the future of the yards in British Shipbuilders, that no orders will be lost because of a failure to offer proper credit and loan packages.

Since the Second Reading of this Bill, the Minister will have had a chance to study the recommendations of the Committee which sat in another place and which was looking at the future of the European maritime industry. Perhaps he will take on board its recommendation, that the Government should give urgent consideration to longer periods of repayment of shipbuilding loans. He might also take on board the recommendations made by the Committee and by Opposition Members that there should be adequate and appropriate assistance available to British shipowners to buy British, repair British, and sell British, because that is in the interests of the future not only of our industry but also of our defence and of the maintenance of a proper level of merchant fleet. Perhaps the Minister is in a position tonight to tell us that he will take these recommendations seriously and act on them quickly.

The Minister gave us reassurances on the Second Reading of this Bill. He said that the Government were as interested as Opposition Members and shipyard workers in maintaining the merchant shipbuilding yards. The Government have given us reassurances for the past seven years, as the numbers employed in merchant shipbuilding have continued to fall and as they are still falling now. Perhaps when he gives us reassurances the Minister should recall what Sir Robert Atkinson, a former chairman of British Shipbuilders, said, that while reassurances were being given in public, in private at no point did Ministers ask him, as the chairman of British Shipbuilders, about the future of the industry, about research and development and about maintaining jobs, but that when he talked about redundancies and unemployment in the industry a glean came into their eyes. The Minister will have to give us more than verbal reassurances if we are to believe that the Government are committed to maintaining the present level of jobs in the industry.

We now have a new chairman of British Shipbuilders, a new Bill extending the borrowing requirement and a new company in the north east which is charged with managing the Sunderland and Middlesbrough shipyards. Apparently we have a new system of financial control that has been dealt with in the National Audit Office report. We need from the Government new orders to retain jobs, save the yards and secure the future of an industry which is vital to our trade and industry, to our shipbuilding communities and, as my hon. Friend the Member for Jarrow has said, to our defence needs.

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

As the hon. Member for Dunfermline, East (Mr. Brown) has said, this has been a short debate. None the less, I agree that it has been very important. I assure him that I and my right hon. Friend the Secretary of State perceive the shipbuilding industry in precisely that context.

As the House knows, British Shipbuilders is facing a very difficult time. As the hon. Member for Dunfermline, East pointed out, in referring to a parliamentary answer which I gave him recently, it is in a very critical position. The fact remains that world capacity outstrips demand. The hon. Gentleman rightly stated that the key was new orders. He referred to help that we may be able to give, but he, and I hope all hon. Gentlemen, will agree that the price of the ship, the quality of the design and the delivery date are key and important matters which any prospective purchaser of a ship will wish to take carefully into account.

The hon. Gentleman asked me to confirm the number of jobs which may be at risk. I do not wish to dodge the question but I cannot confirm the specific numbers which he gave. Although I have stated that I am not running away from reality, I do not wish to be as pessimistic as the hon. Gentleman was.

The hon. Member for Birkenhead (Mr. Field) referred to training which will take place in all parts of the country, including the north-east. I know personally the apprentice training school to which the hon. Gentleman referred. I take on board fully the point which he made.

The hon. Member for Dunfermline, East asked me to co-ordinate—I think that is the right word—public sector orders. He welcomed the prospect of orders. Again, I refer to my reply to him recently. He asked me to put forward the case of the FSK 20/20. I dealt with that last week. One has to take into account the fact that, if the FSK 20/20 is ordered regardless, other ships or submarines which are currently further up the list of priorities of the Ministry of Defence may not be ordered.

The hon. Member for Sunderland, North (Mr. Clay) asked about the intervention fund. I confirm 100 per cent. that I am prepared to consider seriously any prospective increase in flexibility in the intervention fund.

Reference was made to the loss of the BNFL ship to a Japanese yard. All hon. Members will be aware that that was the fifth ship ordered by BNFL. The company is jointly owned by Japanese, French and British interests. The first four ships had been built in the United Kingdom. The tender for the fifth ship was so low that it was impossible for British Shipbuilders to compete. However, it is pursuing an anti-dumping case in Brussels.

The hon. Member for Sunderland, North inquired about what we were doing on the intervention fund and what arrangements we would make after the conclusion of the fifth directive at the end of the year. I understand the point he made about having to wait too long. I hope that he will understand my point of view—that it is not a moveable feast and that the Government cannot act unilaterally. It is a matter for joint action.

The hon. Member for Dunfermline, East referred to my hon. Friend the Under-Secretary of State being at the Council of Ministers. I do not want to repeat what I said last week but at this early stage we are seeking to ensure that we know precisely what subsidies, whether through the intervention fund or otherwise, are going to other European Governments so that when we come to the negotiations, which we have not reached yet, we will be in a position to ensure that we are trading on a like with like basis. That is precisely our objective.

The hon. Member for Sunderland, North and the hon. Member for Dunfermline, East pressed me about our position on soft loans. I do not think that there is a great difference of opinion between the hon. Gentleman and myself. The United Kingdom stands ready to be as imaginative and competitive as any of its competitors in putting forward packages. I hope that, on reflection, the hon. Member for Sunderland, North will realise that to push me on the details of any particular loan that may be under consideration might not be in the interests of British Shipbuilders and of the United Kingdom. One has to tread carefully on these matters. I do not think that it is in the interests of British Shipbuilders that everything is made known automatically to the world and his wife.

Mr. Clay

I understand what the Minister is saying. The point has been made to me by his predecessors and by senior managers in British Shipbuilders. Can the Minister understand my frustration? Despite the argument about commercial secrecy and about it being better not to show all one's cards openly, how is it that British Shipbuilders always seems to know the precise terms offered by its competitors before the orders are placed? In other words, if the Italian Government can be open about the soft credit arrangements they are making and an Italian yard can still get an order, why must British Shipbuilders be so secretive?

Mr. Morrison

With respect to the hon. Gentleman, he may be looking at the matter too simplistically. It is not as simple as he makes out. The negotiations and dealings are very complicated. The last thing that he would want me to do, and the last thing that I would want to do, would be, as it were, to play the poker hand right up front arid as a result not to win the order. I have stated the current position, which I hope is helpful.

Mr. Gordon Brown

Despite what he calls the imagination of the Government and of British Shipbuilders, is the Minister not worried that new orders are not being won? Is there not a need for a more imaginative examination of the system of soft loans and credit packages? Will he agree that that at least will be done, if just to satisfy himself that what the Prime Minister told my hon. Friend is accurate?

Mr. Morrison

The hon. Gentleman pushes me to be even more imaginative, even more flexible and even more generous. I have listened carefully to what he has said, but I shall not be pushed publicly from the position which I hold, for reasons which I hope he will readily understand.

The hon. Member for Greenock and Port Glasgow (Dr. Godman) reasonably and understandably talked of the Scottish dimension. I would be blind and deaf if I did not realise how big the Scottish dimension was in terms of the Scottish economy. He asked whether there had been discussions between ACL and my Department. I understand that ACL is a consortium of a number of different interests, including Trafalgar House. As the hon. Gentleman will know, it has recently announced its intention to enlarge four of its recently built ships, including the Atlantic Conveyor. It has invited tenders from a number of United Kingdom, European and Japanese yards. It has not approached my Department for assistance.

The hon. Gentleman might be disappointed, but as the tenders are currently framed, intervention fund support would not be available. However, assistance through the home credit scheme for shipbuilding could be available. I do not say that it will be available.

The hon. Member for Greenock and Port Glasgow also asked about flexibility within the intervention fund. I have already dealt with that. He questioned whether a coming together of the Scottish yards would be sensible on the basis of the coming together of the north-east yards. That is a matter for British Shipbuilders. It must make the proposals, but it has not yet done so. I heard what the hon. Gentleman said about that.

The hon. Member for Jarrow (Mr. Dixon) told us—he knows better than any one—about the importance of the shipbuilding industry, not just to his constituency and the north-east but to the country and its history. He reminded us of the effect which redundancies and closures can have on tightly knit communities. I well understand his remarks; I am deeply concerned about redundancies and closures of any sort.

The hon. Member asked me again to consider the idea of scrap and build. That policy was abandoned 50 years ago because it did not seem to be sensible or economic. That remains so. The hon. Gentleman also cajoled me in an effort to persuade me to adopt a national maritime policy. I can assure him that both shipbuilding and shipping are co-ordinated.

The debate last week and the debate tonight on the Bill have been considered and serious. They have not been party political and I welcome that. They have been debates about an important and great industry which is going through a critical and difficult time.

I commend the Bill to the House because it increases the borrowing limit of £1,200 million by £100 million now and a possible further £100 million. I commend the Bill because it will go some way towards ensuring that British shipbuilding can continue, albeit with difficult and critical decisions ahead.

Question put and agreed to.

Bill accordingly read the Third time, and passed.