HC Deb 27 January 1987 vol 109 cc183-8 3.34 pm
The Secretary of State for Defence (Mr. George Younger)

With permission, Mr. Speaker, I would like to make a statement about the Royal dockyards. As the House will recall, I announced on 4 December that I was satisfied that there now existed the basis for an advantageous contract to be placed for the future operation of Rosyth dockyard with Babcock Thorn Ltd.

I made that announcement some 21 months after my right hon. Friend the former Secretary of State for Defence first published his consultative document outlining plans for the future operation of the dockyards. Throughout that time we have provided this House and the trade unions representing the dockyard work force with a great deal of information on our proposals, including material on the options for the future management of the dockyards and on our preferred contractors. My noble and hon. Friends and I have been personally involved in discussions with the unions most concerned.

The trade unions continue to favour the option involving minimum change, with the dockyards remaining in the Civil Service under a system of trading funds. I have considered very carefully what the unions have said and I have explained to them why, in the Government's view, a dockyard trading fund is unlikely to secure either the improvements in efficiency we seek for the Royal Navy and the dockyards, or to compete as successfully as a commercial company for commercial and naval work.

I am, of course, fully aware of my obligations under the Dockyard Services Act 1986 to inform and consult the trade unions. I have always said that I would take final decisions only when I was satisfied that I had complied with such duties as the Act imposed on me. I am satisfied that I can take a final decision in respect of Rosyth dockyard and have today authorised the signature of a term contract for the future operation of that dockyard from 6 April 1987, with Babcock Thorn Ltd.; I have in addition authorised the signature of a service contract with Babcock Thorn Ltd. to cover its operations in the dockyard from now until vestng day; during this period, the management of the dockyard will remain the responsibility of the Ministry of Defence.

As the House knows, I announced on 20 January that Devonport Management Limited was our preferred contractor for Devonport dockyard. I have invited the trade unions to meet me on 13 February, so that I may hear their views on this. Only when I have carefully considered any such views will I take a final decision on the future operation of Devonport dockyard.

Mr. Martin J. O'Neill (Clackmannan)

The Secretary of State will be aware that his statement comes as no surprise to us, because since 1985 we have had a series of statements indicating preferred options and so far none of them has been changed as a result of consultations with the trade unions. Furthermore, the statement's dismissal of trading funds is a gross oversimplification of the unions' case for this option. Is not the Secretary of State aware that they are prepared for a wide-ranging set of changes and that they seek to co-operate with management to secure increases in efficiency and cost savings?

However, the Secretary of State will also be aware that there is evidence of indecent haste on his part in the manner that he is now rushing into signing a service contract to get Babcock Thorn into the yard as quickly as possible. In regard to the further contract starting on 6 April, can the Secretary of State tell us how long it is for? Is it to be for seven years, as was originally thought? He did not mention that in the statement. Does he agree that his decision, with the sham consultation, will only serve to exacerbate the resentment that is felt by the work force in Rosyth at the proposed loss of at least 1,200 jobs in the near future? In the eyes of the unions, this is simply an alien management coming in to do the Government's dirty work.

In his further discussions with the work force at Plymouth, Devonport, will the right hon. Gentleman examine seriously the revelations that have been appearing in The Independent and the Western Morning Post about the links of Brown and Root with Libya, which were such an embarrassment to the American Government that they required the company to remove that part of its operation from the United States. Secondly, in respect of Brown and Root, will the right hon. Gentleman examine the revelations that have come to light concerning the penalties it has had to pay because of poor quality work in some major contracts?

Will the right hon. Gentleman also bear in mind that in the view of my right hon. and hon. Friends these contracts can be severed by legislation, and that they will be as soon as there is a change of Government so that we can secure happy and harmonious service from these workpeople to the nation and to the fleet, as happened for centuries in the past?

Mr. Younger

I am grateful to the hon. Gentleman for one thing, that in his opening remarks he made it clear that this was no surprise to him, and to the House, I suppose. That I take as a clear recognition, that, whatever else is right, the consultation process must have been extremely effective. Secondly, it certainly is the case that the trade unions have made it clear that there is quite a considerable area of agreement between ourselves and them. For instance, they agree thoroughly that the present system has to be changed and they are prepared to co-operate in discussing what changes are best. As I said in my statement, they still maintain their view that a trading fund would be the best option.

I was puzzled by the hon. Gentleman's reference to indecent haste, considering that I was in a position, and made it clear that I was as long ago as 4 December, to sign a contract with Babcock Thorn for Rosyth but deliberately held that back in order to ensure that the maximum opportunity was given for all concerned to consult me about it before making such a decision.

I do not think that indecent haste has any relevance to that.

I confirm that the contract that we are signing today will be for seven years, as suggested. The hon. Gentleman mentioned Devonport and I want to make it clear that the suggestion of Brown and Root being involved is under consideration. I have made no final decision on that. I can assure the hon. Gentleman that Brown and Root has made it clear that there will be no connection whatever between its operation in Libya and that in Devonport, should the company receive the contract. The company has made it clear that there will be no connection of any kind in that regard.

The hon. Gentleman referred to the loss of jobs. I want to make it clear to the hon. Gentleman that I made it clear to the unions that I expect that, with commercial management, the likely loss of jobs will be no greater and will possibly be somewhat less than it would be under any other option. Under any form of organisation, even a trading fund or a Government owned public limited company, there is no altering the fact that the likely work load of the dockyard in years to come will mean some loss of jobs. We hope to make that the minimum loss of jobs, and we believe that commercial management will ensure that it is the minimum.

I want to draw the hon. Gentleman's attention, if this is necessary, to the fact that the only real threat to the substantial number of jobs in Rosyth dockyard would be the cancellation of the Trident programme, which would immediately put at risk at least 2,000 people employed at Rosyth. I know that the employees appreciate that.

Miss Janet Fookes (Plymouth, Drake)

Would my right hon. Friend confirm that the project undertaken by Brown and Root in Libya was a humanitarian civil project to bring much-needed water from a desert area to the coastal project? I would have thought that that would be very interesting to those who support the Third world.

Mr. Younger

I agree with my hon. Friend that there is no connection whatever in that matter. I repeat that Brown and Root has confirmed that in no circumstances will any Libyan nationals be allowed access to the Colliers Wood offices from which the dockyard contract would be operated. Brown and Root has also confirmed that the Devonport dockyard and the Libyan irrigation projects will be dealt with entirely separately. I hope that that will reassure my hon. Friend.

Dr. David Owen (Plymouth, Devonport)

Does the right hon. Gentleman realise that many people, especially those closely associated with the Navy, believe that the House will come to regret vesting in a private monopoly the safeguarding and refitting of this country's nuclear deterrent? Will the Secretary of State nevertheless, despite making this decision for agency management in Rosyth, which I and many others regret, at least express a readiness to consider the Government-owned option for Devonport dockyard? Will he realise that the trade unions, although preferring the other option, would far prefer a Government-owned plc for Devonport dockyard to agency management?

Mr. Younger

I fully appreciate the right hon. Gentleman's point. I can confirm that the trade unions and local representatives who saw me recently confirmed that, while they would prefer to have a trading fund, as a fallback position they would be prepared to work along with a Government-owned plc as an alternative. I can give an undertaking to the right hon. Gentleman that I do not intend to make a firm decision on this until I have had further information about the views of those concerned. At this stage, it remains open either for a Government-owned plc or for commercial management at Devonport.

Mr. Bill Walker (Tayside, North)

Does my right hon. Friend agree that the companies concerned are highly respected in Scotland, that they are noted for their management skills and that they will be appreciated by the people working at Rosyth when they realise that they are being managed effectively? Does he also agree that in the days when the Vulcan and V force were deterrents, the aircraft were serviced in part by civil contractors? There is nothing new in that practice.

Mr. Younger

My hon. Friend is correct in his last point. There is nothing new in the practice of major defence equipment being provided under contract from private enterprise. The vast majority takes place in that way and is successfully carried out.

I also agree that Babcock's is an extremely well respected company in Scotland and enjoys very good relations with its work force. My consideration of this has always been to ensure that there is the best possible chance of the dockyard not only being well managed but having the best chance of receiving extra work from private sources to help the redundancy position. Today's decision makes that more likely rather than less.

Mr. Gordon Brown (Dunfermline, East)

Will the Secretary of State confirm that this decision, which no other comparable country, including America, would contemplate, has been accurately described by one of his officials as the high-risk option for our national defences and national security? Will he further confirm that, as a result of his announcement, up to 1,000 jobs will be written off in Rosyth in Scotland? Will he explain why he will sacrifice any interest, whether it be the interest of the work force or the interests of Britain, in pursuit of the Government's privatisation dogma?

Mr. Younger

That all sounds very good, but it does not accord with the facts. The hon. Gentleman speaks about the axing of 1,000 jobs. I stress to him that that regrettable situation would arise under whatever form of management is chosen for the dockyard. Secondly, the hon. Gentleman is the representative of the Opposition and I remind him yet again that the only real threat is the 2,000-plus jobs that would go immediately if the Trident programme were to be destroyed by the Opposition. That is the matter that the people of Rosyth are most worried about, and they are right.

Mr. Tony Speller (Devon, North)

Is my right hon. Friend convinced that, in time of emergency, let alone in time of war, the control exercised over a dockyard operation would in any sense be as efficient under a private company as it would be under the control of the Government?

Mr. Younger

In every respect it can be as efficient. There is nothing new about it, because it is done in many other spheres of defence procurement, both in war and in peace. I have every confidence that the control which we shall exercise over the contractors not only in the form of the Government's share and so on but in other ways will ensure that these facilities will remain available to the nation in times of need. The facilities will be as good as, and I hope better than, they have been in the past.

Mr. Dick Douglas (Dunfermline, West)

Can we get some assurances from the Secretary of State about the new or projected management structure for Rosyth? Who will be in charge of the Rosyth dockyard? Will it be Mr. Smith of Babcock Thorn, or will it be Rear-Admiral Burgess? What assurances do we have about the technology for the new PWR that is likely to go into Rosyth in terms of an SSBN or an SSN? How can we ensure that that technology will not leak to Babcock Thorn, which might be highly interested in new developments in relation to Sizewell?

Mr. Younger

The hon. Gentleman asks about management. I can assure him that Babcock Thorn fully shares our concern that the skills and experience of those who are at present responsible for running the Rosyth dockyard should not be lost to its future operation. A measure of continuity over the period of change ahead must also be an important consideration in selecting senior managers to run the dockyard after vesting day. Although discussions between the contractor and existing senior management are not yet fully complete and the final management plot cannot therefore be made public, I am satisfied that the arrangements for the future will meet our requirements in this vital area. I can assure the hon. Gentleman that any secret matter in the Rosyth dockyard will be as secure in future as it is today.

Mr. James Couchman (Gillingham)

Will my right hon. Friend say what plans he has for the storage and disposal of low and intermediate radioactive waste from the refuelling and refitting of SSNs at Devonport should commercial management take over there? Will he reassure my constituents in Gillingham that he has no intention of transferring such waste to the Royal Navy facility at the former naval dockyard in Chatham?

Mr. Younger

I appreciate my hon. Friend's concern about this matter, but, as he knows, we never comment upon the methods of transport of such materials. I can assure him that the greatest care is taken in all such matters and, in any case, the safety measures and the care taken will not in any way be adversely affected by the change that I have announced.

Mr. Nicholas Brown (Newcastle upon Tyne, East)

What information and what commitments has the Secretary of State given the new management of the dockyards about a future work programme? Has he been more candid with the privatised dockyard management than the Government ever were with the new owners of the privatised warship yards?

Mr. Younger

As the hon. Gentleman knows, we have had discussions with the proposed contractors about the likely work load at the dockyard and they have made their calculations based on that. They hope that, under their management, it may not be necessary to have as many redundancies as were previously announced as likely some weeks ago. Although there can be no guarantee of that, it is a somewhat hopeful sign. I hope that that reassures the hon. Gentleman as about information on other contractors. We have been extremely free with giving information to Swan Hunter, which is the hon. Gentleman's constituency interest—and rightly, because it is a valued contractor.

Mr. Frank Cook (Stockton, North)

The Secretary of State will already be aware of my coming inquiry, as during business questions last Thursday the Leader of the House gave an assurance that he would acquaint him with it. Therefore, he will be aware of my question. What truth is there in the reports that Brown and Root refused to accept responsibility for the irradiated materials stored at Devonport? Without disclosing any official secret, will the Secretary of State tell the House what broad arrangements will be made to take care of the material because of that refusal?

Mr. Younger

Again, I cannot comment directly on the precise methods or the routes for transporting such material. I make it clear that every possible safety measure has been taken up to now and will continue to be taken in the future under the new form of management at Rosyth dockyard. That is the reassurance that I think the hon. Gentleman seeks.

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

What sort of arguments would convince the Secretary of State in favour of a Government-owned plc or trading fund at Devonport as against privatised management? Of what must he be convinced before he will change his mind in favour of the arguments being deployed by the unions, because they will have to deploy them at the meeting on the 13th.

Mr. Younger

I wish to have the fullest expression of the views of the unions and others involved before I come to a final decision, but what I hope and intend to take into account principally in making my final decision is which of these alternative methods is likely to bring the most outside work into the dockyards while allowing them to do an efficient job with the work they have. Any of these alternatives will be preferred, if I believe that it is the most likely to produce more work for those in the dockyard.