British Shipbuilders

HC Deb 14 November 1988 vol 140 cc747-57 3.30 pm

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton)

With permission, Mr. Speaker, I wish to make a statement on progress in returning British Shipbuilders to the private sector, in accordance with the policy described to the House by my predecessor on 18 April and 21 July. I felt that the House would rightly wish to have such a report before the forthcoming parliamentary break. I should, however, make it clear at the outset that I am not yet in a position to resolve all the remaining uncertainties.

When my predecessor made his statement in April, British Shipbuilders owned shipyards at Govan, Sunderland, Appledore and Port Glasgow, together with the Clark Kincaid marine engine builders on the Clyde and a services subsidiary, Marine Design Consultants, at Sunderland and Dundee. Together these accounted for some 6,500 employees—less than 20 per cent. of total United Kingdom employment in shipbuilding, which is of the order of 35,000.

The Govan shipyard was successfully sold in August to the Norwegian group Kvaerner Industrier. It has made a major inward investment in Govan, which is now to be the centre of its advanced gas ship technology. Kvaerner has so far placed orders for two gas-carrying ships at Govan with the possibility of similar orders to follow. The future of the yard now seems assured. Negotiations for the sale of Clark Kincaid to a management buy-out team have gone well. They have been materially helped by Kvaerner's confirmation, at the time of my visit to it, in Oslo two weeks ago, that the engines for the first two gas-carrying ships to he built at Govan would be built at Clark Kincaid. I am glad to say that all commercial matters have now been agreed. I hope that the sale will be successfully completed by the end of the year.

Negotiations have also been proceeding for the sale of the Appledore yard to Langham Industries. Langham hopes to place significant work with the yard, with continuing Government support under the intervention fund. The House will be pleased to know that Langham Industries and British Shipbuilders are now close to agreement. Again, I hope that this sale will be completed by the end of the year.

In the case of the Ferguson yard at Port Glasgow, I can also report further progress. British Shipbuilders has today named a preferred bidder. This is Ailsa Perth Ltd., which previously bought the Ailsa yard at Troon. Detailed negotiations will now get under way, and I have, of course, asked British Shipbuilders chairman, John Lister, to ensure that every effort is made to bring them to an early and satisfactory conclusion. I can also tell the House that bids have been received by British Shipbuilders for Marine Design Consultants. These are currently being evaluated by British Shipbuilders and its financial advisers.

The yards and other facilities to which I have so far referred account for nearly two thirds of those employed by British Shipbuilders at the start of this process. The other major element of British Shipbuilders is North East Shipbuilders Ltd. at Sunderland. This consists of building yards on either side of the Wear, at Pallion and Southwick, together with Sunderland Forge Services and a fitting-out yard at North Sands.

As the House knows, British Shipbuilders asked for bids for NESL by 30 September. Four bids were received. At a late stage in their evaluation during October, one of the bidders sought to modify his offer. As I told the House on 26 October, I therefore thought it right to allow a further short period for all those who had submitted bids to modify them if they wished before a final assessment was made. Subsequently, we have also given time for further talks related to the possibility of a Cuban order for cargo ships, and to seek clarification of a tentative indication of a new overseas interest.

I will deal first with the original bids, as modified. I have to tell the House that, following consideration by British Shipbuilders and its financial advisers, the chairman has told me, and I have accepted, that none of them is acceptable.

None of those bids had the combination of shipbuilding experience and solid financial backing which, in the Government's view, would be required to sustain a viable operation in the extremely difficult conditions of the world shipbuilding market. Each also raises specific difficulties. One of them was in practice not a detailed bid, and depended on the granting of a licence for dumping waste at sea which itself would take some considerable time to resolve. Another offered continuing employment for less than a tenth of the work force. The other two, which would themselves have entailed major redundancies, required a degree of subsidy which would have been highly unlikely to be permitted under the sixth directive. One of the last two was in fact last week withdrawn.

I can, however, tell the House that during the past few days British Shipbuilders has received three clear expressions of interest in a possible purchase of facilities at Sunderland, including the overseas concern to which I referred earlier. In these circumstances, I have agreed with the chairman of British Shipbuilders that an opportunity should be allowed to consider proposals from these interests. This will also enable those making them, if they wish, to be fully informed of the outcome of the talks which have been taking place between the Cuban shipping company Mambisa and its financial advisers in London, whose representative is due to return to this country tonight.

We want to establish, by the end of this month, whether proposals can be developed which give a firm basis for negotiation. That would entail a clear statement of the work envisaged for the yard, evidence of the technical and financial capacity of the bidder, and the prospect of arrangements likely to be compatible with the European Community sixth directive concerning state support for shipbuilding.

These are not easy criteria to satisfy, as we have seen in assessing the earlier bids. No one should underestimate the difficulties. Nevertheless, I am convinced that it is right to make this last effort to find a viable way forward for NESL on the basis that I have described, and I believe that the House will share that view.

Mr. Bryan Gould (Dagenham)

Is the Minister aware that there will be great relief at this further stay of execution for NESL, but that there will be an equally heartfelt hope that he recognises at last that merchant shipbuilding matters too much to Wearside and the British economy to be sacrificed on the altar of privatisation? Will he join me in paying tribute to the "Save our shipyard" campaign, the work force and the local community and its elected representatives who fought so hard to keep those yards open?

Will the Minister now say that his first priority is to secure the orders, especially the Cuban order, which will guarantee the future of these yards, and that this urgent and practical necessity will take priority over questions of ownership? In particular, will he guarantee that contracts will, if offered by the Cubans, be signed by North East Shipbuilders Ltd., irrespective of who is the owner for the time being?

Will the Minister concede that what matters to Sunderland and the British economy is to keep British merchant shipbuilding alive, and that the dogma of privatisation must now take second place? Will he recognise that we must now hope for more than the prolonging of a quite unnecessary agony of the Government's own creation and that he must now summon the courage to fight his corner with the EEC, to override his civil servants and to depart from the course mapped out by his predecessors and by the Secretary of State? Will the Minister now concentrate instead on building a viable future for shipbuilding on the Wear so that it can take advantage of the upturn in world demand for shipping and continue to make a vital contribution to our industrial future?

Mr. Newton

Far from the yards being sacrificed on the altar of privatisation, as the hon. Gentleman put it, the problem that we face is to rescue them from the disaster that nationalisation has been for them. It has led to British Shipbuilders costing the taxpayer overall about £2 billion since 1979, and on shipbuilding contracts alone it has lost £650 million, of which only £250 million has been within the permitted subsidy limits allowed by the agreed arrangements within the Community.

The hon. Gentleman referred to the possible Cuban order. No one should underestimate the difficulties of securing such an order against the intense competition that exists. However, in the circumstances that I described in my statement, in which further talks have been taking place in Cuba this week, I have felt it right to allow time for the outcome of those talks to be properly assessed. I cannot hold out hope, against the background of what I have already said about the losses made by British Shipbuilders, which include large losses made by North East Shipbuilders, of British Shipbuilders taking the contract, as the hon. Gentleman asked.

The hon. Gentleman also made remarks about my colleagues and my civil servants. In the past few weeks, I have given clear evidence to him and to the House that my purpose is to find a way of permitting the viable continuation of shipbuilding on Wearside, if that can be achieved. The hon. Gentleman should in turn recognise that the difficulties are great and that the optimism that has been expressed about an upturn in world shipbuilding orders, which I have read about, has to be judged against the fact that within the past few weeks the Association of West European Shipbuilders has drastically revised downwards its forecast of the upturn from annual orders of nearly 19 million compensated gross tonnes in the half decade from 1990 to 1995 to about 12.5 million compensated gross tonnes. What the hon. Gentleman has said needs to be judged against that.

Miss Emma Nicholson (Torridge and Devon, West)

Is my right hon. Friend aware of the constructive way in which the work force at Appledore has tackled privatisation and of its genuine gratitude to my right hon. Friend and the chairman of British Shipbuilders for the time they took to listen to the work force's views?

Mr. Newton

I am grateful to my hon. Friend for her comments and also for the constructive part that she has played in developing the arrangements. As I said in my statement, I am now hopeful that they will lead to a secure future for her constituents who work at Appledore, about whom she is rightly concerned.

Mr. Ernie Ross (Dundee, West)

Does the Minister accept that there will be great fear in Scotland about whether the Ferguson yard will continue to operate? Will the Minister give assurances that the unions at Ferguson will have an opportunity to make an input into deciding on the preferred buyers? Will he also confirm that Marine Design Consultants of Dundee has put in a bid, and that it has been accepted? Will the Minister ensure that its bid is given an equal opportunity, against the voiced intention of the present managing director, who has made it clear that if he is allowed to buy both yards it is likely that he will want to close one of them?

Mr. Newton

British Shipbuilders today named a preferred bidder for Ferguson. It will be up to the preferred bidder to decide whether to hold talks with the work force and I expect that a preferred bidder would want to do that. We should not want to place any obstacle in the way.

The hon. Gentleman asked me about Marine Design Consultants. I cannot add to what I said in my statement. Bids have been received and are being evaluated, and it would be wrong of me to comment further until I have received advice from British Shipbuilders. When I have, I shall take account of the hon. Gentleman's point.

Mr. Barry Field (Isle of Wight)

Can my right hon. Friend comment on the disputed ferry contract? Does he realise that his decision to limit the period to the end of the month will be widely accepted, not only by the work force but by the industry generally, as it will clear up the uncertainty hanging over the yard?

Mr. Newton

I thank my hon. Friend for the latter part of his remarks. The collapse of the Danish ferry order has been one of the factors that have aggravated NESL's problems in recent weeks. Of the original 24 ferries ordered, 15 are being built and nine are not. Two of the ferries have been delivered, 10 have been completed and three are yet to be finished. Some will require further modification. Negotiations are taking place in the wake of the cancellation of the contract but they have not yet been completed.

Mr. James Molyneaux (Lagan Valley)

Having visited the north-east only two weeks ago, may I ask the Minister whether the implications of the EEC sixth directive and its effects on British Shipbuilders and Harland and Wolff were fully understood when the Government embarked upon the policy of privatisation?

Mr. Newton

I do not think that there has been any mystery in the industry about the general requirements and conditions of the sixth directive, under which intervention fund payments are made in appropriate circumstances. On Harland and Wolff, the right hon. Gentleman will know that my right hon. Friend the Secretary of State for Northern Ireland is continuing discussions about the possibility of a sale.

Sir Peter Hordern (Horsham)

Will my right hon. Friend confirm that, if there is any question of the Cubans buying ships, British taxpayers' money will not be used as it was in the disastrous Polish shipbuilding order?

Mr. Newton

I can confirm that it is British taxpayers' money that meets any claims on the intervention fund, and, to that extent, taxpayers' involvement will continue. However, we have no intention of allowing the order to be taken in a form that would multiply still further the heavy losses of British Shipbuilders to which I referred in my statement.

Mr. Charles Kennedy (Ross, Cromarty and Skye)

I welcome the fact that the Minister proposes to have another try at solving the problem. However, in view of the continued uncertainty at NESL, can the Minister say what he hopes will be the nature of his discussions and how he thinks they will overcome with the three new potential interests the problems that could not be overcome with the four previous ones?

Mr. Newton

I hope that what I have said and the tone of my statement suggest that I am anxious not to raise false hopes. As I said, the original bids were in no case acceptable; indeed, I judge that some of them were not terribly well put together. I hope that those who are now expressing an interest will have learnt some lessons from the previous experience, but I would not want to go beyond that.

Mr. Neville Trotter (Tynemouth)

Does my right hon. Friend accept that there has been great concern in Sunderland since the disastrous collapse of the ferry order earlier in the year? Does he also accept that there will be great relief that he is obviously genuinely trying to find a solution to a serious problem and an acceptable bidder to provide a sustainable future for the yard? Does he agree, however, that world prices are the basis of the problem in the industry, that a rise in prices of about 30 per cent. is needed, and that international action will be necessary if that is to come about?

Mr. Newton

I thank my hon. Friend for the earlier part of his remarks. The existence of the intervention fund, operating under the sixth directive, is directed at the problem to which he has referred. We have made it clear that intervention fund support would continue to be available on the terms current at the time in the event of the successful sale of the Sunderland yard.

Mr. Nicholas Brown (Newcastle upon Tyne, East)

Can the Minister assure the House that merchant shipbuilding orders that are wholly within the gift of the Government will be committed to British yards and not committed abroad? What does the future hold for the headquarters of British Shipbuilders at Benton house, in my constituency?

Mr. Newton

I am not entirely sure what the hon. Gentleman means by the first part of his question.

Against the background of good progress towards the successful sale of most of the main remaining ingredients of British Shipbuilders—and our hopes and efforts in connection with the sale of the remainder—it will be necessary in due course to arrange for an orderly rundown of the headquarters, although I cannot speculate about the timing of that.

Mr. Robin Maxwell-Hyslop (Tiverton)

Could my right hon. Friend tell the House what is the position vis-a-vis him and the Secretary of State for Northern Ireland, both of whom presumably have intervention funds at their disposal? If the sum of money is the same, who decides whether it goes to Harland and Wolff in Northern Ireland or to the north-east?

Mr. Newton

Both my right hon. Friend the Secretary of State for Northern Ireland and I operate within the same general framework of policy on shipbuilding. Intervention fund support is not set in terms of a finite amount but depends on any particular proposal fulfilling the conditions and is then up, in shorthand terms, to 28 per cent. of the cost of the ship as things stand at present.

Mr. Bob Clay (Sunderland, North)

I am genuinely grateful for the stay of execution which the Minister has given us once again. I know that he has been genuinely trying to find a solution to the problem within the context of the Government policy that he has inherited.

If the Minister must persist in privatisation rather than follow the logical course of allowing British Shipbuilders to take the Cuban contract and another which might be available, does he accept that the best way to achieve a workable solution by the end of the month in the time that he has given would be to follow these steps: first to ensure that there is generous Export Credits Guarantee Department or other cover on the Cuban order or any other that is available; secondly, to take an extremely robust attitude towards the European Commission and its interpretation of the situation—Commissioners in Brussels should not be able to close British shipyards, with the Government then saying simply that it is the European Commission's fault, not theirs. Thirdly, it would help a great deal if the very narrow guidelines given to British Shipbuilders on the cost of closure were widened so that the real cost of closure, as outlined in recent reports, was taken into account.

Mr. Newton

I thank the hon. Gentleman for his generosity in the first part of his remarks. I shall try to respond in the same spirit to his more specific questions.

We would consider any proposal made to ECGD in the same way that we consider any other proposal for help. In other words, if the proposal falls within the general parameters of policy, it would qualify. I can undertake to adopt a robust attitude with regard to the European Community, but it must also be a realistic attitude bearing in mind that all the relevant Governments have a common interest in not having a subsidy war between their shipbuilding undertakings.

With regard to the basis on which bids are judged, necessarily British Shipbuilders must consider bids in the light of its commercial interests. The advice that I have been given—and the view I have taken—also tries to take account of wider considerations in the way in which I am sure the hon. Member for Sunderland, North (Mr. Clay) would wish.

Mr. Allan Stewart (Eastwood)

Does my right hon. Friend agree that the Clark Kincaid order from Kvaerner for engines for the gas-carrying ships not only underlines Kvaerner's commitment to the Clyde, but should give the management buy-out at Clark Kincaid confidence for a successful future? Does he also agree that the announcement that Ailsa Perth is to be the preferred bidder for Fergusons should be welcomed because it will continue and maintain a long-standing and successful relationship between the two yards?

Mr. Newton

The answer to both parts of my hon. Friend's question is yes.

Mr. Chris Mullin (Sunderland, South)

Is the Minister aware of any study by his Department or any other Department to assess the social and human costs of closure and to match those against the cost of keeping the yards open and going for the Cuban order?

Mr. Newton

In trying to reach conclusions on those matters, we tried to take account of all the issues involved. However, some of the figures that I have seen—for example, those in the lengthy paper published by the "Save our shipyard" campaign—seem questionable and we would have to look at them very closely.

Mr. Tim Smith (Beaconsfield)

If British Shipbuilders has cost the taxpayer £2,000 million since it was nationalised, does not that underline what a disaster nationalisation has been? Will my right hon. Friend ensure that the interests of the taxpayer are fully considered in any arrangements that he is about to make?

Mr. Newton

The basis of our policy is to provide a future for merchant shipbuilding that strikes a better balance between the interests of the taxpayer and other considerations. We have made great progress towards securing that with the successful sale of Govan and the progress on other fronts that I have announced. If we can carry further that progress with NESL, no one will be more delighted than me.

Mr. Alex Salmond (Banff and Buchan)

What responsibility do the Government have or feel for continuing employment and capacity in the yards that have been privatised or are being privatised?

Mr. Newton

The Government's first priority has been to ensure that the yards, wherever possible, were placed in a position in which they could have a secure long-term future in shipbuilding. It is not possible for me to give absolute guarantees about the numbers employed, no more than it has been possible for BS to give such guarantees. During the time that BS has owned the yards there have been substantial reductions in employment in response to the inescapably difficult conditions in world shipbuilding.

Mr. James Cran (Beverley)

As BS has had trading losses of £1 billion and has received £250 million in intervention fund support since 1979, does my right hon. Friend agree that that public money could have been far better spent in generating economic development within areas such as Sunderland and elsewhere?

Mr. Newton

I think that there will be many who will share my hon. Friend's view.

Ms. Joyce Quin (Gateshead, East)

As the British merchant shipbuilding industry has lost more jobs over the past decade than the shipbuilding industry in any other EEC country, will the Minister agree that if Britain is to be a credible part of shipbuilding in Europe in future the NESL yards must stay open and the skills that are to be found within them used for the future?

Mr. Newton

I rather doubt whether the hon. Lady is entirely accurate in her opening statement, when she compared the position here with that in other countries in Europe. It is certain that all the shipbuilding centres in western Europe have experienced drastic and dramatic reductions in their shipbuilding work force in recent years. As I have said, that is an inescapable consequence of the difficult conditions in the world shipbuilding market.

Mr. Teddy Taylor (Southend, East)

I appreciate the constraints that are placed upon my right hon. Friend by the sixth directive, but will he give an assurance to the workers in the north-east and on Clydeside that he will take urgent steps to ensure that other European countries, especially France, do not get round the directive because of the complications of their company structures? Despite the new-found enthusiasm of those who sit on the Opposition Front Bench and of the Scottish National party for the Community, can the Government give an assurance that there will be a fair deal for Scottish and English yards in Europe?

Mr. Newton

I can give my hon. Friend a clear guarantee that we shall remain supportive of efforts to ensure even-handed dealing throughout the Community with the shipbuilding industries of the member states, and thus a fair deal for British shipbuilders in that context. I think that everything that I have said this afternoon demonstrates our concern to do that.

Mr. Ted Garrett (Wallsend)

Will the Minister accept that he is one of the few Ministers that I would consider having some interest in the principle of caring capitalism, which is the theme that is often adopted by the Conservative party? Will he accept also that those on the Tyne who have suffered grievous losses because of the decline in shipbuilding fully sympathise with those who are likely to lose their jobs in Sunderland? Will he stop harping on about the amount of money that is coming from the public purse? The amount of public money that will be used to keep shipbuilding jobs in Sunderland is peanuts when compared with the money that is spent on farming, for example. Will the right hon. Gentleman accept that it would be cheaper to keep the jobs of the men in Sunderland for a few more months, or even years, than pay them social security and unemployment benefit?

Mr. Newton

The point at issue was raised by one of my hon. Friends in a supplementary question a few moments ago. The question that everyone should ask is whether taxpayers' money on the scale that has been spent on British Shipbuilders since 1979 would not, with hindsight, have produced more secure jobs had it been applied in other ways.

Mr. Roger King (Birmingham, Northfield)

Is my right hon Friend aware that there are certain parallels between the position in which British Shipbuilders currently finds itself and the old British Leyland Motor Corporation—an unlamented state-owned organisation that owed billions of pounds? Privatisation, management buy-outs and partnerships with other businesses have turned subsidiaries such as Leyland Trucks into highly profitable operations. Privatisation of British Shipbuilders in the way that my right hon. Friend has described must be the way forward.

Mr. Newton

We believe that it is the appropriate way forward, and we are encouraged by the experience at Govan and the prospects there about which I have spoken. I hope that my hon. Friend is right in the wider optimism that he expresses.

Mr. Robert Hughes (Aberdeen, North)

Leaving aside for the moment the ideology of privatisation, does not the Minister realise that experience has shown that privatisation is not a panacea for all evils and that selling off public enterprises to under-capitalised firms sows the seeds of its own disaster? Failure to give intervention fund support has also led to difficulties, such as in the case of Hall Russell shipbuilders in Aberdeen. Privatised two years ago, that company went into liquidation last Wednesday. Will the Minister give Hall Russell the support that it needs to complete its current order? Above all, will he make it clear to the people of Sunderland that privatisation is not the answer and that what is required is a commitment from the Government to keep jobs going—with less of the ideology, please?

Mr. Newton

The hon. Gentleman will know that the receiver is now at Hall Russell and he has expressed the hope that he will find a way of ensuring a continuing future for shipbuilding there and that the St. Helena ferry will be completed. I cannot say more at this stage.

The hon. Member is right when he says that there is no panacea, for such a thing does not exist either way. It is clear that nationalisation has not proved to be a panacea. It is my view, though not one with which the hon. Gentleman may agree, that the private sector ownership we have sought to bring about offers a better hope of a viable future for the yards.

Mr. Richard Page (Hertfordshire, South-West)

The House is grateful to my right hon. Friend for literally bending over backwards to explore every option before making any decision about the future of the yards. Bearing in mind the catastrophic world situation, intense international competition and the limits of the sixth directive, can my right hon. Friend guarantee that support and an aid package will be available to the areas affected if, unfortunately and sadly, a yard has to close so that they may enjoy economic regeneration and hope for the future?

Mr. Newton

Yes, I can. Both my predecessor and I have made it clear that, in the event that we are forced to see the end of shipbuilding on the Wear, we would expect to announce measures for a remedial package for the development of a new industrial future for the town. There would be a good foundation on which to build, given what is already happening there, including the arrival of Nissan.

Ms. Hilary Armstrong (Durham, North-West)

Does the right hon. Gentleman recognise that investment in other areas of the northern region when major industries have fallen, such as in my own constituency of Consett, has not led to a retention of the skill base? That will be a major problem if the shipbuilding industry in Sunderland is lost. Does the Minister further recognise that people in Sunderland fear that, because, along with people in the northern region, they have consistently voted against the Government—more so than in Scotland—closure will be an ideological decision? Will the Government make a decision that will do more for the future of industrial and skill development in the town?

Mr. Newton

I will say as calmly as I can that I reject absolutely the hon. Lady's suggestion that Government policy is dictated by the north-east's political complexion. That is an extremely unhappy suggestion.

Mr. David Shaw (Dover)

Can my right hon. Friend explain why the hon. Member for Dagenham (Mr. Gould) concentrated his remarks on the one third of British Shipbuilders—

Mr. Speaker

It will not be in order because the hon. Member for Dover (Mr. Shaw) must ask questions concerning matters for which the Chancellor of the Duchy of Lancaster has responsibility.

Mr. Shaw

Will my right hon. Friend note that this debate has concentrated on points concerning the one third of British Shipbuilders that it has been difficult to sell? Does he agree that there should be statements of support for and best wishes expressed to the employees of the two thirds of British Shipbuilders who will be assured of a good future in the private sector? Is that not what Lech Walesa would do—look for the good news for the future and not for the bad news of the past?

Mr. Newton

Certainly there has been a remarkable absence of any reference to the successes to which my statement referred. However, I have been long enough in politics to know that it is not unusual for attention to be concentrated on the less satisfactory parts of an announcement of that kind.

Mr. Bob Cryer (Bradford, South)

To what degree has the attempt at privatisation produced uncertainty and therefore lost orders? Why does the Minister attack the concept of supporting shipbuilders in this country when other countries adopt such a policy—generating jobs not only in shipbuilding but also in steel making and in engineering in other parts of the country? Why is the Minister so rabidly opposed to providing support when this year, as in past years, the EC will spend more than £20 billion on farming? We should surely be prepared to support British manufacturing industry and our nation's assets and skills.

Mr. Newton

I do not accept that the policy we have adopted and are pursuing has had any deleterious effect on orders. The prospect that there will be more viable shipbuilding firms in this country is more likely to assist in obtaining orders than the reverse. On the hon. Gentleman's second point, we are not declining to give help. We are offering assistance within the terms agreed within the European Community, which is the sensible procedure.

Mr. David Wilshire (Spelthorne)

I congratulate my right hon. Friend on what has been achieved, and it is a tribute to his personal stickability that we have got this far. Does he agree that the concept of a nationalised British Shipbuilders in 1975 owed more to Socialist dogma than to practical common sense, and that that policy and party political involvement caused more problems than it solved?

Mr. Newton

Certainly no serious observer could suggest that nationalisation has answered these yards' problems. I repeat that returning the yards to the private sector, with which we have already made good progress, will secure a much better future than they otherwise would have had.

Mr. Ian Bruce (Dorset, South)

Does my right hon. Friend agree that denationalisation of the yards is by far the best way of securing their future? It is essential for many reasons, not least for those of strategic defence, that there should be a shipbuilding industry in this country. What is my right hon. Friend's Department doing about confronting other nations which are unfairly trading in shipbuilding by giving excessive subsidies? What can we look forward to by way of the Government protecting a private shipbuilding industry from unfair competition?

Mr. Newton

My hon. Friend's latter questions return us to the sixth directive and to the Community's general collective aim of ensuring a reasonable basis on which European shipbuilding can continue. We shall continue to play our part in that.

Mr. Dennis Skinner (Bolsover)

Is this not the same Government who allocate £13 a week out of the taxpayers in every family in Britain to the Common Market to provide subsidies? Is it not the same Government who handed over £400 million to British Aerospace before it was privatised—another fat subsidy? Is this not the same Government who handed over £4.5 billion when they transferred Rover? Is this not the same Government who gave a licence to Barlow Clowes, but who cannot give a licence to—

Mr. Speaker

Order. The hon. Member is himself a chairman and must know that he should stick to the question and not go wide of it.

Mr. Skinner

My question is about subsidies—this place is subsidised as well. The Government will be symbolised by the picture of the Prime Minister in Gdansk, trying to save a shipyard there and shutting shipyards in the north-east. The Government are prepared to hand out subsidies to their friends but are not prepared to look after working people.

Mr. Speaker

Order. The hon. Member must not debate the matter.

Mr. Newton

It is the same Government who, like successive Governments, have carried through a policy of privatisation, covering about 40 per cent. of what was the nationalised sector, which is widely copied throughout the world and has produced a massive expansion in share ownership.