HC Deb 09 February 1987 vol 110 cc117-34
Mr. Speaker

I understand that it will be for the convenience of the House to take both prayers together.

10.25 pm
Mr. Martin J. O'Neill (Clackmannan)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Dockyard Services (Devonport) (Designation and Appointed Day) Order 1986 (S.I. 1986, No. 2243), dated 15th December 1986, a copy of which was laid before this House on 18th December, be annulled. As you have said, Mr. Speaker, with this it will be convenient to take also the following motion: That an humble Address be presented to Her Majesty, praying that the Dockyard Services (Rosyth) (Designation and Appointed Day) Order 1986 (S.I. 1986, No. 2244), dated 15th December 1986, a copy of which was laid before this House on 18th December, he annulled. This debate has been long awaited, as this is the third occasion on which we have tried to introduce it on the Floor of the House. It is of considerable importance to the 20,000 workers whose terms and conditions of employment will be altered from 5 April 1987. The two orders give effect to the Dockyard Services Act 1986, define the areas of the dockyard and the functions to be carried out within them, and specify the designated date of 4 April 1987 as being the date on which contractorisation will begin.

The prayers mark the end of a lengthy process which has involved consultation and Committee stages. At no stage has any of the pressure from the Opposition made any major impact on the Government's thinking of attitude. The fact that the Government are alone in support of the principle of contractorisation, that they have been discredited by Committees which have within their ranks majorities of Conservative Members, that the Public Accounts Committee, the Defence Select Committee and unanimous opinion outside the House have been against the proposal, has mattered not a whit to the Ministry of Defence.

Section 1(6)(b) of the Act, concerning the legal, economic and social implications of transfer for the employees is the most sensitive part. It was the subject of what has come to be known as the Denning amendment. In another place, Lord Denning was able to insert a provision placing responsibility on the Government to secure some form of consultation. That form of consultation has been wholly unsatisfactory. In last Monday's debate on the Royal Navy, the Minister clearly knew how many redundancies would result from contractorisation and how many contractors Babcock had in mind, but he would not tell the House and he will not tell the trade unions. It makes a complete mockery of the Government's responsibilities to disclose the economic and social implications of the transfer if the unemployment consequences are not made clear.

The unemployment consequences affect not only those who work in the yards and their families, but the communities and those who will work in the yards under different auspices—es and those in the course 'Of study and training. Those awaiting retirement are unclear about the circumstances surrounding their pension rights. The condition of employment of those who may be taken on by the new employers because of skill shortages may be different from those already in employment. People in one yard may be operating under different terms and conditions of employment from those in another, because there will be no responsibility on the employers to ensure similar standards of pay and conditions and, most importat, pensions conditions, in the two yards.

This debate comes late at night after two false starts, and I do not wish to take up the time of the House unduly, because I know that a number of right hon. and hon. Members wish to speak. I imagine that there will be few voices heard in support of the orders. Among the work force and the management there are grave forebodings about the effects that these two orders will have as they make the way clear for contractorisation.

In every debate that we have had on this topic, we have been united on the outstanding contribution of the work force in times of crisis and national emergency and, the commitment of both the management and the workers to contribute their best to the realm. For many of the workers, this has been an expression of their life's work—a continuation of service to the country that started in the Navy. For others, it is simply the maintenance of proud family traditions.

The willingness to sacrifice, as shown at the time of the Falklands conflict, can never be translated into pounds and pence. It cannot be translated into the profit and loss accounts about which the Government have been speaking, especially for the contractors who are out to make a fast buck, or for the loss of jobs of those workers for whom the accountants have no further use.

These two yards have given public expression to a rare combination of effort and skill. From the labourers and the skilled craftsmen to the designers and managers, from the deck hands to the admirals, civilian and sailor alike have combined to make sure that those who defend our shores, in whatever craft, have done so in the knowledge that no effort or expense has been spared. We believe that our seamen are the best in the world, and they are entitled to the best. Whether the new consortia can maintain those high standards remains to be seen. We hope that they will.

It has to be stressed that the disruption and uncertainty that this wretched Act and these orders will cause in the communities can end only in undermining the work of the yards. The work force feels that the consultative processes have not been fulfilled, and the communities sense that their futures are in danger, so the Government should think again about the whole scheme. Let us make sure this evening that we force the Government to think again, by voting against the orders. That will ensure that we have the time and the opportunity to look for a better solution than the crazy scheme of contractorisation which is embodied in these orders.

10.33 pm
The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Archie Hamilton)

These two orders refer respectively to the Devonport Royal dockyard and the Rosyth Royal dockyard.

The Dockyard Services Act does not specify the dockyard employees who will transfer on vesting day. Rather, section 1(1) defines the "Qualified dockyard service employees" as those persons employed in or in connection with the "dockyard undertaking" in the Civil Service of the Crown on such day as the Secretary of State appoints by order. The "dockyard undertaking" is itself defined as the provision by the Crown of "designated dockyard services", which are to be designated by order.

It follows that the question of who are qualified dockyard service employees is answered by reference to the designated services.

The orders do three things— they designate the dockyards that are to be affected, they designate the dockyards services—that may in future be provided by contractors, and they appoint the date for the purposes of determining who are the qualified dockyard service employees. With your agreement, Mr. Deputy Speaker, I shall consider those three aspects in that order.

First the dockyards. After all the debate which there has been on the Government's policy for the dockyards there can be no hon. Member who is not aware that the dockyards in question are those at Devonport and Rosyth. During the consideration of the Dockyard Services Bill the right hon. Member for Llanelli (Mr. Denzil Davies) and his hon. Friends were concerned that the arrangements in the Bill could be applied to any other dockyards that might subsequently be created. To address this concern, and with the agreement of Opposition Members, the Bill was amended to provide that the only dockyards which could be designated by order were those dockyards which are Royal Dockyards when this Act comes into force. So the Act put the matter beyond doubt, and the orders respectively designate Devonport royal dockyard and Rosyth royal dockyard.

I turn now to the designation of the "services" in the orders. Since the wording in both orders is identical, my comments apply equally to both dockyards in this respect. As I have said, the designation of services is in order to facilitate the transfer of the appropriate staff. Section 1(1) of the Act refers to the services as being for or in connection with ships or vessels or related establishments in the service of the Crown, provided at such dockyards, as may,…be designated by the Secretary of State by order. When the Bill was considered last year, my hon. Friends referred to the services that it was proposed should in future be provided by contractors. The orders are based very closely on the information provided before, but examples of particular equipment and services have been included. As hon. Members can see, the work of the dockyards has been described under five headings.

The first will be recognised as the main task of the dockyards—that of repairing, maintaining, refitting and modernising ships and vessels in the service of the Crown. The words "ships and vessels" are apt to include both surface ships and submarines. Since the latter include nuclear submarines, it might be for the convenience of the House if I were to repeat what my hon. Friends have made clear on many previous occasions.

The managing company at the dockyard will be required to comply, in the same way as does any other contractor employed on sensitive defence work, with the stringent security rules that have existed under successive Administrations. Also the company will be required to operate under the terms of a nuclear site licence issued under the Nuclear Installations Act 1965. Radiological protection of the work force will be as high a priority in future as it is now, and the contractor will have to satisfy the Health and Safety Executive that the legal obligations set out in the Ionising Radiation Regulations 1985 are being met.

As those hon. Members who have been closely involved with the dockyards will know, their work is not limited to repairs and refits of vessels. They also repair, maintain, overhaul and test naval equipment and machinery, and examples of such equipment are given under the second heading. The third refers not only to work on machinery equipment used in the dockyard but to that used in establishments related to ships or vessels in the service of the Crown".

As the order makes clear, it is not the work of other establishments that we are intending to transfer to dockyard contractors but rather work that has been traditionally carried out at the dockyard for other establishments. This includes the work of maintaining the equipment for naval training establishments, or, for example, cranes, generators and high pressure air systems for other fleet and civil shore establishments.

Some dockyard staff who have been employed on such work for other establishments— particularly those furthest away— are expected to remain in the civil service and to be transferred to the strength of the establishments concerned. Discussions on this are being held with the unions involved.

Under the fourth heading are listed examples of the naval equipments which the dockyards manufacture, and these speak, I believe, for themselves. Finally, the list refers to support and utility services, and mentions in particular compressed air, gas, electricity and water. These are services customarily provided by the dockyards, not only for themselves but also for the naval base and other local establishments and ships alongside. It is sensible that the dockyard should continue to provide such services.

I turn now to the last of the three aims of the orders— the appointment of a date for the purposes of determining who may be considered qualified dockyard service employees.

As hon. Members can see, paragraph 4 of the orders seeks to appoint that date as 5 April 1987—that is to say, the day before the planned vesting day of 6 April 1987. It is proposed, therefore, that those employees to whom the arrangements apply who are employed immediately prior to vesting day will be transferred to the contractor. As the House will know, there are some 17,750 industrial and non-industrial employees in the dockyards. Between now and the appointed day of 5 April 1987, some 400 staff at Devonport and 320 at Rosyth are planned to transfer from the dockyard to the naval base commander, remaining in the Civil Service.

As my right hon. Friend the then Minister of State for Defence Procurement said during the consideration of the Bill, we have made our proposals known to transfer to the staff of the managing director of the dockyards those employed in the dockyard laboratories. Similar arrangements will be made for those who work in the pay offices who will be required to deal with future dockyard personnel and for catering staff and estate maintenance staff. The trades unions are aware of these intentions.

Before leaving the matter of the appointed day, I can inform the House that my right hon. Friend will shortly be writing to the trades unions summarising the considerable amount of consultation which has already taken place with them and setting out his proposals for the final stages of consultation in the period leading up to vesting day on 6 April 1987. As soon as my right hon. Friend has written, I shall place a copy of his letter in the Library of the House.

Since most of the employees' conditions of service transfer unchanged, there is, we believe, sufficient time between now and vesting day for any outstanding consultations to take place. We hope, therefore, that the trades unions will now consider the way ahead speedily and approach the series of meetings we are proposing in a positive and constructive manner.

I have explained the content of the two orders and the reasons for them. They carry forward in a realistic way the Government's plans in respect of the future management arrangements for the dockyards which, as the trades unions have now heard direct from the most senior Royal Navy officers concerned on the Navy Board, offers the best way forward for the Royal Navy, the dockyards, the work force, the taxpayer and the local regions. The Government believe that there is no better way forward and that is why we ask the House to pass these orders.

10.41 pm
Dr. David Owen (Plymouth, Devonport)

The Minister's lack of enthusiasm for this legislation was quite obvious from the way that he rushed through a civil servant's brief. This is a fairly miserable day, but I suppose we ought to ask the Minister to justify the decision that he has announced to the House. There is no better starting point than a document, issued on 8 October 1986, which sets out the timetable for evaluating the bids for the two dockyards. I shall deal only with Devonport. The document says that the contract negotiations should be completed by "early December 1986" in order to meet the vesting day which was planned for 6 April.

The contract negotiations have not been completed, and here we are debating in February what should have been agreed in December. The contract, which was to be signed at the end of December, has still not been signed. The parallel running was to start in early January, but I understand it has just started. Any objective look at the Government's own timetable, published in October, shows that the vesting date for Devonport should not be 6 April. The Government find themselves in great timetable difficulties but they are intent on pushing ahead regardless.

The Minister must answer a few questions. The first one is about pensions. On vesting day will the dockyard work force know about its pension arrangements? Will any substantive negotiations be completed about pension arrangements? Will the workers know the detail of their redundancy payments, or will these matters be left until after vesting day, to be settled when the members of the work force are, technically, no longer civil servants? The men have a right to know the Minister's intentions and the House, which has been ignored throughout these proceedings, has at least the right to put to the Minister that it is extremely unfair to the work people to leave the matter over for decision.

It is true that the Royal ordnance factories have not settled the matter, but they were going through a transition and the workers there were still under Government control when their pension arrangements were being left open. The dockyard work force will no longer be under any form of Government control and will be the responsibility of the agency. We are entitled to be satisfied about those issues.

It is my judgment, for what it is worth, that if the unions are not given ample time for the negotiations—they cannot be rushed through between now and 6 April—they would be wholly entitled, if they saw fit to do so under the terms of the legislation and of the obligations to the European Community under its various laws, to take the Government to court. If the unions take that decision. they will have my full support.

I am glad to see the hon. Member for Plymouth, Sutton (Mr. Clark) in his place. He was the first to sense the right contractor. On 2 October, the Plymough Evening Herald made a perceptive comment on the hon. Gentleman: "Clark backs American Bid". We all wondered whether the hon. Gentleman had some special line and whether, being a member of the Government, he was going to tell us something. The trouble is that he backed the wrong American company. He was. after Foster Wheeler. There is little point in a Plymouth Member of Parliament, or anyone else for that matter, spending his whole time criticising Brown and Root, which has been given the contract. Whether we like it or not, for some months at least, we are saddled with the company and Plymouth will have to make the best of it.

As for the Libyan connection, it is a fact that it is not illegal to carry out work for the Libyan Government. It is strange that at Vickers Barrow the part of the new submarine build that cannot be seen by any American is the propulsion unit, yet an American-owned company will be responsible for repair and refit involving the propulsion unit of our nuclear submarines. Anyone who believes that the United States navy would dream of giving a contract for the nuclear propulsion unit of any of its submarines to a British company is not living in the same world as me. It is an extraordinary fact that we keep United States personnel away from the propulsion unit of our nuclear-powered submarines, yet we pass the repairing and refitting to an American-owned company, Brown and Root.

As I said, we have to live with Brown and Root. How it handles the work force in Plymouth, the wage negotiations, the pension arrangements and redundancy payments is of crucial concern to us. I make it clear that my job is to defend my constituents' interests and I shall treat Brown and Root with an open mind. If the company treats the work force well, negotiates well and takes account of the fears of Plymouth city council, Devon county council and Cornwall county council, I shall treat it well, too. I am not in the business of rubbishing that company. The problem is the Government, and I am certainly in the business of rubbishing them.

I still do not know the position of the hon. Member for Plymouth, Drake (Miss Fookes) on the preferred option. When we first considered these matters on 2 December 1985, she said that she could not support the Government. The hon. Lady said: If the Government cannot change to the plc fallback position, which is my preferred option".—[Official Report, 2 December 1985; Vol. 88, c. 46.] The hon. Lady then seemed to vacillate about supporting the agency management proposal, provided that it was the dockyard management—the very people whom we were told were not capable of running the dockyard efficiently, which was why we needed to introduce agency management. When agency management for the dockyard management was not granted. we heard little from the hon. Lady about the Government-owned plc. I do not know whether she is in favour of the agency management or whether she will vote for the order. Perhaps we shall hear from her.

I shall deal with one of the points put forward by the hon. Member for Drake. She said, mistakenly, that one cannot have a trading fund outside the Civil Service. As I made clear in the Navy debate, it is possible. I made it clear that it was possible to do so in a memorandum to the Select Committee on Defence. The only option to which the Government would possibly be converted now would be the Government-owned plc. One gathers from the management of Brown and Root that it is a ritual. No one in Plymouth believes that there is any consultation, but on 13 February the trade unions will be told that Brown and Root is the preferred contractor. I do not intend to go through the pretence of believing that the Government are listening to the debate in terms of the substantive decision. I assume that they will go ahead and railroad the date of 6 April. I reiterate my serious complaint that, as I understand it, none of my constituents know what their pension arrangements or redundancy terms will be.

It is unfair and unrealistic to pass on the redundancy commitments after a period of time to the agency management. Those redundancy commitments must be underwritten in full by the Government. To do anything else would be to treat these loyal people who have served the nation extremely well, very poorly indeed. This is a miserable order on a miserable Bill, and 6 April will be miserable day in Plymouth.

We have not discovered from Brown and Root how many redundancies there will be. It has said that there will be no more than 2,000 compulsory redundancies, but that does not give us any clue as to how many jobs will be lost in Devonport dockyard; nor does it give any clue as to how many jobs will be lost in a knock-on effect. The working assumption seems to be that over a 10-year period we will lose 6,000 jobs from the general management work force and another 2,000 to 3,000 jobs in knock-on effects in Plymouth. If that is the case, the present level of Government assistance for Plymouth to attract new industry is woefully insufficient.

I strongly urge the Minister to try to persuade the Secretaries of State for Employment and for the Environment to take more active measures to help the economy of the far south-west. We will find it difficult to replace those jobs in a male, skilled industry without greater help for the far south-west. This decision alone should justify the creation of a far south-west development agency, and the sooner the better.

10.52 pm
Mr. Robert Hicks (Cornwall, South-East)

Even at this late stage it is worth emphasising that the provisions contained in the orders relate to the defence and security of the nation and to the servicing of the Royal Navy in particular.

We have rehearsed the arguments as to why changes are necessary, and few people would dispute that fact. The majority of people recognise the changing nature and volume of the type of work undertaken in the dockyards. It stems from the fact that there are fewer ships in the Royal Navy, refits occur less frequently and less time is taken for refits.

In recognition of that fact, in April 1985 the Government published their consultative document. There were three options, but one of them was euphemistically called the preferred option—the introduction of agency or commercial management. Everything that the Government have undertaken since April 1985 has been with that sole objective in mind.

I expressed the fear at the outset—which I have repeated on a number of occasions inside and outside the House—that the system of agency management is speculative and unproven. There is no comparable defence model anywhere in the world on the scale required for the administration of our royal dockyards. The defence and security of the nation is what we are considering. A preferred contractor has been announced for Devonport, which is the consortium comprising Brown and Root, the Weir Group and Barclays de Zoete Wedd, which currently holds 45 per cent. of the shares.

Some people have argued that with the announcement of the preferred contractor some of the anxieties and uncertainties felt locally, not only by the work force but by those in the local economy, have come to an end. I suggest that the contrary is the case. We are not certain what the projected employment figures will be. We know that the core programme represents about 40 per cent. of the existing workload at Devonport, but we do not know what proportion of the remaining 60 per cent. that will go out to commercial tender will in fact come back to Devonport. However, the Ministry of Defence has told the successful contractor that it can expect a maximum of only 50 per cent. Even if that maximum is achieved, this means that Devonport will take only 70 per cent. of its present volume of work.

The third variable is the amount of outside work that the dockyard will attract from the commercial sector. Given the depressed state of the Merchant Navy and of shipyards generally, one cannot be optimistic. Devonport represents a microcosm of British industry and technology—no doubt the same is true of Rosyth. Almost every skill and craft is represented there. With uncertainty hanging over it, perhaps for the next five years or so, there is hardly a conducive environment in which to seek new contracts.

I have been an hon. Member for 16 years and I have never witnessed such unanimity of purpose and outlook locally. The trade unions and the majority of the work force are apprehensive about developments, and the city of Plymouth, supported wholeheartedly by the Devon and Cornwall county councils and the three local district councils all express doubts and fears about the adverse effects of the change. It must be unique in the far southwest for such a consensus of view to exist. I am saddened that the Government have not taken note of that unanimous expression of local concern and anxiety.

Several Hon. Members


Mr. Deputy Speaker (Mr. Harold Walker)

Order. I hope that hon. Members seeking to catch my eye will remember that the debate must end at 11.30. It might be sensible to try to share out the time.

10.53 pm
Mr. Gordon Brown (Dunfermline, East)

As it is three years since the privatisation proposal of Mr. Peter Levene was first divulged to the House, more than two years since the right hon. Member for Henley (Mr. Heseltine) first announced his intention to go ahead with privatisation, and more than a year since we started debating the Dockyard Services Bill in Committee, the least that the House had a right to expect was that the problems that we identified at the outset about retaining a minimum strategic capability in the dockyards, about retaining British control, about the workload and about apprenticeships would have been resolved before the Minister decided to proceed with the orders before us.

After more than seven months in Committee in both Houses, after the work of 19 working parties set up by the Minister and his colleagues and after the period of promised consultation, we are no nearer a solution to all the problems that led a civil servant from the Ministry of Defence to describe the Government's plan as the high-risk option for the maintenance of the fleet, that led the Public Accounts Committee to say that on financing it had received from the Ministry of Defence the worst evidence that it had received in this Parliament, that led originally to universal condemnation of the Government's proposals and that have led the trade unions to regard the consultation process instigated by the Ministry in the past few months as nothing more than a charade.

I leave aside the question of who controls Devonport and Rosyth. In its rush to transfer the dockyards from public to private control, the Ministry of Defence has created conditions under which it has become possible to transfer the dockyards from British to foreign control. In its rush to privatise, the Ministry has failed to secure proper guarantees for jobs, apprenticeships and workloads.

When the operation began, we were assured that the dockyards would retain a strategic minimum reserve for emergencies to do exactly the sort of work which they had to do during the Falkland campaign. Yet now, one of the virtues that the Minister argues for the contract that he has signed is that there is no agreement on a strategic minimum reserve or capability.

One of the documents produced for the work force says that the figures on which the Ministry is working do not assume that additional manpower will be retained as a strategic reserve. There are no strategic reserves, no safeguards and no guarantees. The same applies to jobs, workloads and apprenticeships.

The Government have accepted an obligation under the Dockyards Services Act that they will spell out the legal, social and economic consequences of their actions. They promised only a few weeks ago that they would consult the trade unions about the consequences. The transfer concerns the number of people who will have jobs and the number who will lose them, and yet the Minister has gone ahead in the last few days and signed a contract agreeing to finance a number of redundancies at Rosyth. Tonight he refuses to give a figure, despite obligations under the Act, and claims that the figures are commercially confidential.

Mr. Archie Hamilton

I shall give the figures at the end of the debate.

Mr. Brown

Perhaps the Minister will tell us how many redundancies have been agreed at Rosyth and are likely to be agreed at Devonport and why there have been changes, even in the last few weeks, in the workload which the contractor is taking over at Rosyth. Will he also confirm that the cuts in the workload are not because of an inevitable rundown in the work at Rosyth or at Devonport, but because of pressures on the defence budget, because of an extension of intervals between refits, because of reduced engineering standards and because of everything that we feared would be the consequence of privatisation?

The only possible argument in favour of the Minister's proposals, which were accepted so readily by the Admiralty Board, is that they will save money.

Even if we accept that after 1990 some savings might be made, will the Minister accept that the figures are speculative? If we accept that the transitional cost could be spread over a number of years and not be an immediate cost on the defence budget; if we accept that the transfer of the pension fund is a book-keeping exercise and does not involve more than £200 million in the first instance, the Minister must accept that over the next three years, when the Department's budget is under pressure, we shall lose £15 million by privatisation at Rosyth—and much more at Devonport. That is before the Minister finds that he is held to ransom because of unprogrammed refits by monopoly suppliers who will get their price, not the Minister's price.

The proposals arise from dogma and ideology. They mean lower standards, less Government control—although the Government foot the bill—higher costs for the Navy and the Treasury, and a reduction in standards and jobs in the dockyards. We have a loyal work force, dedicated civil servants and a concerned and supportive community, yet the Government have betrayed the workers. The workers legitimately claim that they have been let down by successive Ministers in the Department and are being transferred forcibly to the private sector. They are to be forcibly transferred to the private sector. The national interest is to be subordinated to that of commercial gain. I hope that the election comes sooner rather than later so that this insidious proposal can be immediately reversed.

11.4 pm

Miss Janet Fookes (Plymouth, Drake)

I shall make my contribution to this debate rather shorter than I would have wished, bearing in mind the need for other hon. Members to take part in what is essentially a short time in which to consider these orders.

In passing, however, I register a protest at the way in which this matter has been delayed on no fewer than two occasions. This is the third bite of the cherry, which causes considerable inconvenience to hon. Members and to those outside who take a close interest in these proceedings. We must make a decision now and end uncertainty. From that point of view I welcome the order although I wish to confine my remarks to the order that affects Devonport.

I register surprise at the fact that the right hon. Member for Plymouth, Devonport (Dr. Owen) does not appear to find my views on this subject sufficiently clear. I thought that I had made them very clear at various stages throughout the time that we have been considering this matter and especially during the Royal Navy debate a week ago today.

I have always believed that the dockyard should be taken outside the Civil Service. In other words, I have always broadly favoured privatisation in whatever form that may take. I had reservations about the agency management, and I registered those in the House. The turning point for me came when the management team put in its bid, because I felt that that dealt with many of the worries that I had expressed. I am sorry that the right hon. Member for Devonport did not feel able to join me in at least welcoming with enthusiasm that bid when it came along.

There is no lack of logic on my part in giving the management bid my support, because my point has always been that local management has never had full powers to manage and that the whole web and set-up of the Civil Service was a brake upon efficient activities. That was in no way to decry the work of the work force or the local management. Therefore, I was pleased when it became clear, when the preferred contractor was announced, that the management bid, as I call it, was to be subsumed within the winning bid and that there is therefore a strong likelihood that Mr. David Johnston and his team will be incorporated into the management and will still be responsible for the day-to-day running of the dockyard. That seems to me to be a good move.

I shall deal briefly with certain aspects of Brown and Root. Much has been made by some hon. Members tonight of the number of redundancies. Surely the number of redundancies will depend on how much outside work that consortium or any other consortium brings in when—[Interruption.] I am not sure why that is a cause for laughter. To me it is a key issue. Knowing that there are always ups and downs with Royal Naval work, it makes sense to try to embrace within the dockyard work from outside sources. I cannot tell how much will be brought in, but it is obviously of the greatest importance to the economy of Plymouth that as much should be brought in as possible.

I should have thought that a consortium with Brown and Root in it would have a reasonable chance. It is not without significance that that company is receiving the Queen's award for industry. This award is not handed out to any old company, and it is an indication of Brown and Root's stature.

I have also made particular inquiries of Brown and Root, and I have discussed with the chairman the issue of Americans in the dockyard. It is a Royal Navy rule that no foreigner, no American, can view our nuclear systems, any more than the Americans allow us to view theirs. That will continue to be the case and the Brown and Root consortium will be happy with that. It has no objection to that rule.

I understand also that Brown and Root is keenly interested in and concerned for apprentice training, and we have already had some good news about the number of apprentices who are to be taken on this year in Plymouth. I trust that that will continue to be the position. Members who take a close interest in Plymouth will know that I have always been especially keen and interested in the apprentice centre. I hope that it will become a focus for more and more training, not less and less.

At the short time at my disposal I wish to say that I do not share the gloom and doom that has been peddled by the Opposition spokesman, the hon. Member for Clackmannan (Mr. O'Neill), or the guarded approach of the right hon. Member for Devonport. I hope that once the decision is made there will be an opportunity to take a constructive approach and to make a real go of the new structure.

11.16 pm
Mr. Dick Douglas (Dunfermline, West)

I shall not necessarily take up the remarks of the hon. Member for Plymouth, Drake (Miss Fookes), but I shall address myself to the subject of Brown and Root during my contribution to the debate.

There is a great rumour circulating in Scotland that the Lord Advocate has been approached with an order, which will be accompanied by a surcharge, to find one Tory in Scotland who is in favour of the measure. I suspect that there is only one—he will be a reluctant supporter—and that is the right hon. Member for Ayr (Mr. Younger), the Secretary of State for Defence. Wee George is a pragmatic gentleman and I do not believe that he would have visited such a proposal on the House and the country. Throughout the contractorisation of the docks we have yet to hear one Tory Back Bencher who is willing to support and speak up for it. I do not believe that there is one who would be willing to do that.

It would seem that there is a serious deficiency in the order. It designates a number of services, including repair, maintenance, refit and the modernisation of ships and vessels in the service of the Crown, but there is no mention anywhere of main engines or nuclear reactors. That is a serious deficiency in an order of this sort. By their very nature, main engines and nuclear reactors for SSNs and SSBNs are quite apart from anything else. Is the order deficient or is the omission deliberate?

I have great respect and regard for the hon. Member for Drake, but I advise her not to look at the crystal ball when she can read the book. The thrust of the Brown and Root operations in the United Kingdom is oil related. The concept of an oil-related rig yard is to have a core labour force and to add to it when orders come in. I know something of the yard because I went to Nigg bay during its early operations. It is part of Highland "Fab", of which Brown and Root is a major participant. It may be suitable for oil-related work but it is not suitable for a dockyard operation, where we are looking for continuity of skill and workpeople. I offer that to right hon. and hon. Members who represent Devonport.

I am not sanguine about Rosyth. I also prefer to read the book and not look at the crystal ball. We are told that Mr. Allan Smith, the managing director designate, is already in the yard. He seems to be quite an honest fellow. in an interview that he gave a few weeks ago in Spotlight, he said: I have a contention which I believe is fundamental. You should never tell an employee a lie. That is good so far as it goes. We are told that later on we are likely to get the redundancy figures. Mr. Smith says: There is no need for anything other than natural wastage and, in certain cases, limited voluntary redundancy. Enforced redundancy is a last resort which we would wish to avoid under any circumstances. As Mr. Smith is in the yard, I presume that the consultation process will become meaningful and that someone will have told the Minister what redundancies he can communicate to the work force.

Further on in the interview, Mr. Smith is asked: Will pay scales within the new company be substantially different from the present Civil Servant rates? Employees want to know that. Mr. Smith's answer is interesting: Pay scales will be related to the success of Rosyth Dockyard. All employees' earnings are related to company earnings. I don't see that anyone would allow us to cut wages. There is no guarantee in that. There is no guarantee that the remuneration of the work force will be commensurate with what it is now earning. That is a bit of sleight of hand. It is not a lie that Mr. Smith is telling, but it is certainly something that is a little different from the truth.

There is also the concept of bringing new work into the yard. Mr. Smith is asked: There is a great deal of mistrust of commercial management in the Dockyard, how will you overcome those fears? Mr. Smith tells us that new work might be coming in. But there is no guarantee about the type of work. He continues: Babcock Thorn have every intention of coming into the Dockyard and staying, not just for the seven years of the Term Contract, but beyond that although a second Term Contract would have to be negotiated. Mr. Smith looks forward to other further work, but it is not clear what it will be. Essentially, the dockyard has a guaranteed workload with a core programme. It is always much easier to attract new business if one already has a heavily loaded core programme. One has a yard with a core programme, and trying to attract new work that may not be related to it is the problem. There are real dangers in that.

Anyone who thinks that this cock-eyed idea will facilitate servicing and keeping the Navy afloat, which is the sole purpose of the dockyard, is stoned out of his tiny mind. It is significant that the Minister cannot move from his brief. He shows the flexibility of mind of someone learning to read by rote. He has no idea whatsoever. I doubt whether he has ever been near a dockyard. I advise him, for goodness sake, not to attempt to go near Rosyth because I would not be willing to guarantee his well-being.

11.19 pm
Mr. Willie W. Hamilton (Fife, Central)

After listening to the Minister tonight, the House will know that I will be the next Member of Parliament for South Hams. We need a swing of about 45 per cent. and anything is possible after listening to the Minister's comments tonight.

Last Monday the Minister referred to the savings that the exercise would produce. He said that more than £320 million would be saved over the next four years and more than that thereafter. Not one person in Devon, Cornwall or anywhere else in the country would believe that. The Minister did not say where he got the figure from; he probably just thought it up. It was not in his brief tonight. However, perhaps he has the figures in his brief for the redundancies.

The redundancy figure has varied. Brown and Root estimated the figure to be 2,400 on one occasion and 3,200 on another. The right hon. Member for Plymouth, Devonport (Dr. Owen) on Monday and again tonight has estimated the figure to be about 6,000 plus about 2,000 indirect job losses. The hon. Member for Plymouth, Drake (Miss Fookes) does not know how many redundancies there will be but hopes that they will all be taken up by private work in the dockyard. We hope that the hon. Lady is right. However, I guess that she is not. The industry is in such a state that the amount of work coming from that source will be very marginal indeed.

I want to thank the Minister for making the arrangements for my visit to Devonport dockyard just before the Recess. I must report to the hon. Member for Drake that the people I met did not have anything nice to say about her. She will have to get off the fence before the next election because everyone in Devon and the local authorities in Devon and Cornwall are opposed to the Government's actions at the moment—

Miss Fookes


Mr. Hamilton

And many Conservative Members are opposed to this including the hon. Member for Plymouth, Sutton (Mr. Clark) who says that he will try to get extra money from the Government because of the enormous loss of jobs that will result from this exercise.

This exercise will be the biggest issue in the election in the south-west, including my Bill for the establishment of a south-west development agency which I asked the right hon. Member for Devonport to support. He refused, as did the hon. Member for Drake. That was a wonderful idea to resolve the unemployment problems of Devon and the south-west, but Conservative Members turned it down, with the exception of the hon. Member for Devon, North (Mr. Speller) who agreed to sponsor my Bill.

The consequences of the Government's policy will be devastating in terms of jobs and job opportunities in the south-west. Every hon. Member from the south-west is aware of that. If they had the faith in their convictions that they should have, they would join the Opposition in the Lobby to support the workers in their areas by opposing the Government's dogmatic approach to a very important issue of national security.

11.22 pm
Mr. Michael Foot (Blaenau Gwent)

If there is anything more disgraceful than the proposition that the Government have put before us, it is the way in which they have pushed this measure through the House. I remember vividly on the Second Reading of the Dockyard Services Act 1986 that the former Secretary of State for Defence, the right hon. Member for Henley (Mr. Heseltine) did not even turn up to move the Second Reading.

On this squalid occasion tonight, the Minister has not answered any of the arguments and the Government have not carried through any of their commitments. They should have consulted properly with the workers concerned. Those discussions and negotiations have been a farce, as everyone who has read the reports in the Western Morning News and elsewhere will be aware. This has been an absolutely disgraceful way in which to treat people who have given tremendous service to this country for nearly 400 years.

The Royal dockyards have served the nation and the Navy and have been publicly owned. The Government have, without any consultations or commitments to the people involved, wrecked the whole of that process. They cannot even tell us how many people will be thrown out of their jobs and what will happen to those people when they have lost their jobs. They cannot tell us what will happen to the royal dockyards when that happens. As soon as the Labour party wins the next election, we will scrap this measure which should never have been brought before the House.

11.24 pm
Mr. Archie Hamilton

With the leave of the House, Mr. Deputy Speaker, I shall reply to the debate.

The right hon. Member for Plymouth, Devonport (Dr. Owen) wanted details of the information given to the work force on pensions. A consultative document on pensions and an outline of the proposed new scheme were sent to the unions in April 1986. The non-industrial unions attended a joint meeting in August 1986 to which the industrial unions were invited. Industrial and nonindustrial unions declined to partake in further discussions until a meeting this month. Our intentions for the new pension scheme are clear. We shall set up schemes which replicate the Civil Service scheme as closely as possible. The consultative document fully illustrates that intention. I hope that the unions will come and talk, which so far they have been slow to do. It is in their interests.

On redundancy, we have always made it clear that redundancy requirements under the new employer would take full account of reckonable service in the Civil Service pension scheme, would reflect Civil Service redundancy procedures and would pay equivalent levels of benefit. Babcock Thorn and Devonport Management Ltd. have given undertakings, written into the term contract, that existing Civil Service terms will not be changed without negotiation and agreement with the trade unions. A paper setting out those arrangements in more detail will be passed to the unions later this month. I hope that they will come to discuss it.

I told the hon. Members for Dunfermline, East (Mr. Brown) and for Dunfermline, West (Mr. Douglas) that I would tell them about job losses rather than redundancies at Rosyth. Under the Government-owned plc, we forecast 1,160 job losses during the first four years. Since we signed the contract with Babcock Thorn, it has said that it expects no redundancies in the first year, because the workload is such that it will be unnecessary. The company believes that there will be job losses of 200 a year for the next three years. So they will be running at half the rate that we expected under a Government-owned plc. It is expected that those losses will be covered by natural wastage, although there will be some voluntary redundancies. It is highly unlikely that there will be compulsory redundancies.

If either of those hon. Members was my Member of Parliament, I would resent the alarm and despondency that they are trying to spread among the work force at Rosyth. It is the most appalling nonsense, when one considers that those job losses will be covered by natural wastage. What on earth do they think they are doing?

As the House will know, for Devonport we have only a preferred contractor, although my right hon. Friend the Secretary of State wishes to make a decision on the future of Devonport later this month. In those circumstances, we cannot come to a firm agreement over job losses there.

Mr. Gordon Brown

Does the Minister accept that 600 redundancies in an area of high unemployment are wholly unacceptable and unnecessary? What is the status of the assurance from Babcock International about the first year of the contract?

Mr. Hamilton

The hon. Gentleman did not hear me. They are not 600 redundancies; they are 600 job losses, and most will come from natural wastage. It is a great pity that he cannot even hear.

My hon. Friend the Member for Cornwall, South-East (Mr. Hicks) reflected the worry at Devonport. I accept that, but we must remember that what is worrying the work force at Devonport is the falling workload of the naval refitting programme. That would be a problem whatever management we had at Devonport. We have always believed that if we introduced private contractor management to Devonport, much more work would be brought in. My hon. Friend the Member for Plymouth, Drake (Miss Fookes) also mentioned that. We cannot avoid the problem of a declining workload. Far fewer ships are coming in to be refitted, and we must amelioratethe job losses whatever form of management the dockyard has. My hon. Friend the Member for Drake was right to say that we must make the decision now. I am glad that she does not share the gloom and doom of Opposition Members. She is right not to.

Apprentices were mentioned. This matter is an important criterion when assessing the bids. Both Babcock Thorn and Devonport Management Ltd. have stated a commitment to apprentices and the continuation of training. Babcock Thorn intends to take on about 100 at Rosyth in 1987 and Devonport Management Ltd. intends to take on about 125 or 150 in 1987 and much the same in the following two years, according to its preliminary indications.

The hon. Member for Fife, Central (Mr. Hamilton) has great ambitions in the west country, as we can see, but I am not sure that they are shared by many right hon. and hon. Members. My hon. Friend—

It being half-past Eleven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 15 (Prayers against statutory instruments, &c. (negative procedure)).

The House divided: Ayes 104, Noes 152.

Division No. 86] [11.30 pm
Alton, David Foot, Rt Hon Michael
Anderson, Donald Foster, Derek
Archer, Rt Hon Peter Foulkes, George
Atkinson, N. (Tottenham) George, Bruce
Barron, Kevin Godman, Dr Norman
Beckett, Mrs Margaret Golding, Mrs Llin
Benn, Rt Hon Tony Hamilton, James (M'well N)
Bray, Dr Jeremy Hamilton, W. W. (Fife Central)
Brown, Gordon (D'f'mline E) Hancock, Michael
Brown, Hugh D. (Provan) Hardy, Peter
Brown, N. (N'c'tle-u-Tyne E) Harrison, Rt Hon Walter
Caborn, Richard Haynes, Frank
Callaghan, Jim (Heyw'd & M) Hicks, Robert
Campbell-Savours, Dale Hogg, N. (C'nauld & Kilsyth)
Carlile, Alexander (Montg'y) Howells, Geraint
Clay, Robert Hoyle, Douglas
Clelland, David Gordon Hughes, Robert (Aberdeen N)
Clwyd, Mrs Ann Hughes, Simon (Southwark)
Cocks, Rt Hon M. (Bristol S) Jones, Barry (Alyn & Deeside)
Coleman, Donald Kaufman, Rt Hon Gerald
Cook, Frank (Stockton North) Kennedy, Charles
Cook, Robin F. (Livingston) Kirkwood, Archy
Corbett, Robin Lamond, James
Crowther, Stan Leadbitter, Ted
Dalyell, Tam Leighton, Ronald
Davies, Rt Hon Denzil (L'lli) Lewis, Terence (Worsley)
Davies, Ronald (Caerphilly) Livsey, Richard
Davis, Terry (B'ham, H'ge H'l) Lloyd, Tony (Stretford)
Dewar, Donald Loyden, Edward
Dixon, Donald McDonald, Dr Oonagh
Dormand, Jack McNamara, Kevin
Douglas, Dick Marek, Dr John
Dubs, Alfred Marshall, David (Shettleston)
Eadie, Alex Maxton, John
Eastham, Ken Maynard, Miss Joan
Evans, John (St. Helens N) Millan, Rt Hon Bruce
Fatchett, Derek Morris, Rt Hon J. (Aberavon)
Fields, T. (L'pool Broad Gn) Nellist, David
Fisher, Mark Oakes, Rt Hon Gordon
O'Brien, William Skinner, Dennis
O'Neill. Martin Soley, Clive
Owen, Rt Hon Dr David Spearing, Nigel
Park, George Steel, Rt Hon David
Patchett, Terry Strang, Gavin
Pike, Peter Thompson, J. (Wansbeck)
Powell, Raymond (Ogmore) Wallace, James
Redmond, Martin Wardell, Gareth (Gower)
Robinson, G. (Coventry NW) Wareing, Robert
Rogers, Allan Welsh, Michael
Ross, Ernest (Dundee W) Winnick, David
Rowlands, Ted
Sheerman, Barry Tellers for the Ayes:
Short, Ms Clare (Ladywood) Mr. John McWilliam and
Silkin, Rt Hon J. Mr. Allen McKay.
Alexander, Richard Dorrell, Stephen
Amess, David Dover, Den
Ancram, Michael Dunn, Robert
Ashby, David Durant, Tony
Atkins, Robert (South Ribble) Evennett, David
Atkinson, David (B'm'th E) Fairbairn, Nicholas
Baker, Nicholas (Dorset N) Fallon, Michael
Baldry, Tony Favell, Anthony
Bellingham, Henry Fenner, Dame Peggy
Biffen, Rt Hon John Fookes, Miss Janet
Biggs-Davison, Sir John Forman, Nigel
Blackburn, John Forth, Eric
Blaker, Rt Hon Sir Peter Franks, Cecil
Boscawen, Hon Robert Fraser, Peter (Angus East)
Bottomley, Peter Gale, Roger
Bowden, Gerald (Dulwich) Galley, Roy
Brandon-Bravo, Martin Garel-Jones, Tristan
Bright, Graham Goodhart, Sir Philip
Brinton, Tim Gow, Ian
Brown, M. (Brigg & Cl'thpes) Gower, Sir Raymond
Bruinvels, Peter Gregory, Conal
Buck, Sir Antony Griffiths, Peter (Portsm'th N)
Budgen, Nick Ground, Patrick
Burt, Alistair Hamilton, Hon A. (Epsom)
Butterfill, John Hamilton, Neil (Tatton)
Carlisle, Kenneth (Lincoln) Hampson, Dr Keith
Carttiss, Michael Hannam, John
Cash, William Hargreaves, Kenneth
Chalker, Mrs Lynda Harris, David
Channon, Rt Hon Paul Harvey, Robert
Chope, Christopher Haselhurst, Alan
Clarke, Rt Hon K. (Rushcliffe) Hawkins, Sir Paul (N'folk SW)
Cockeram, Eric Hawksley, Warren
Cope, John Hayes, J.
Couchman, James Hayward, Robert
Crouch, David Heddle, John
Hickmet, Richard Mills, Iain (Meriden)
Hind, Kenneth Mitchell, David (Hants NW)
Hirst, Michael Moate, Roger
Holland, Sir Philip (Gedling) Morris, M. (N'hampton S)
Holt, Richard Murphy, Christopher
Howard, Michael Neubert, Michael
Howarth, Alan (Stratf'd-on-A) Newton, Tony
Howarth, Gerald (Cannock) Norris, Steven
Howell, Ralph (Norfolk, N) Oppenheim, Phillip
Hubbard-Miles, Peter Ottaway, Richard
Hunt, David (Wirral W) Page, Sir John (Harrow W)
Jackson, Robert Page, Richard (Herts SW)
Jessel, Toby Pawsey, James
Johnson Smith, Sir Geoffrey Peacock, Mrs Elizabeth
Jones, Gwilym (Cardiff N) Percival, Rt Hon Sir Ian
Key, Robert Pollock, Alexander
King, Roger (B'ham N'field) Powell, William (Corby)
King, Rt Hon Tom Powley, John
Knight, Greg (Derby N) Price, Sir David
Knowles, Michael Proctor, K. Harvey
Lawler, Geoffrey Raffan, Keith
Lawrence, Ivan Rhys Williams, Sir Brandon
Leigh, Edward (Gainsbor'gh) Ridsdale, Sir Julian
Lennox-Boyd, Hon Mark Roe, Mrs Marion
Lester, Jim Rowe, Andrew
Lilley, Peter Ryder, Richard
Lord, Michael Sainsbury, Hon Timothy
Luce, Rt Hon Richard Shepherd, Colin (Hereford)
Lyell, Nicholas Skeet, Sir Trevor
McCurley, Mrs Anna Stewart, Andrew (Sherwood)
Macfarlane, Neil Stradling Thomas, Sir John
MacKay, Andrew (Berkshire) Taylor, Teddy (S'end E)
MacKay, John (Argyll & Bute) Thompson, Donald (Calder V)
Maclean, David John Thorne, Neil (Ilford S)
McLoughlin, Patrick Thurnham, Peter
McNair-Wilson, P. (New F'st) Wheeler, John
Madel, David Wiggin, Jerry
Major, John Wood, Timothy
Marlow, Antony
Mather, Sir Carol Tellers for the Noes:
Maude, Hon Francis Mr. David Lightbown and.
Meyer, Sir Anthony Mr. Michael Portillo.

Question accordingly negatived.

  1. PRIVILEGES 22 words
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