HC Deb 05 December 1989 vol 163 cc157-69 3.31 pm
The Secretary of State for Defence (Mr. Tom King)

With permission, Mr. Speaker. I should like to make a statement on the future organisation of the Atomic Weapons Establishment. [Interruption.]

Mr. Speaker

Order. Will hon. Members who are not remaining for this important statement kindly leave quietly?

Mr. King

In its fifth report 1988–89, the Select Committee on Defence drew attention to the problems that if believed risked delay to the progress of the Trident programme. The Government have been considering the best way to address these issues.

The present position is that we believe we shall achieve the intitial production at Aldermaston and the AWE sites that will enable the Trident in-service date of the mid-1990s to be met. However, the need for increased production from 1992 for later Trident deliveries, against the background of the keen demand for skilled labour in the Thames valley area, poses an increasing challenge, and one for which a greater production management capability is required.

The Government consider that the best way to address these problems is by full contractorisation, with the land, facilities, and other assets remaining in the Government's ownership. Legislation will be required to implement this and will be introduced in due course. Under this legislation, provision would be made for the present work force to be employees of one or more operating companies.

In the meantime, and until the necessary legislation is introduced, the Government intend to appoint a management contractor who will concentrate initially on manufacturing work and site support. The contractor will strengthen the establishment by bringing in, during 1990, a small number of experienced managers from the private sector. The contractor will be selected by competition, and invitations to tender will be issued as soon as possible.

There will be no change in the purpose or direction of the establishment's programme. The first objective is to reinforce rather than to replace existing AWE management, and all the existing AWE sites will continue in operation.

The Government remain fully committed to the Trident programme, together with a strong research base to underwrite nuclear weapon capability for the future. Safety will continue to be the highest priority. A compliance office, led by a senior and suitably experienced Government official based at AWE, will monitor contract compliance and observance of safety, quality and security requirements.

Under the initial arrangements I have described, AWE personnel will remain civil servants. The work force at the establishment's sites are being informed today and consultation is being set in hand with the relevant trade unions. A consultative document which sets out in greater detail the background and the proposals I have outlined will be placed in the Library of the House this afternoon.

These changes will not affect the Aldermaston new building programme, which has been managed satisfactorily since 1988 by a private contractor operating under a Government contract.

The British nuclear deterrent is committed to NATO in support of the agreed NATO strategy of deterrence based on an appropriate mix of adequate and effective nuclear and conventional forces. The arrangements that I have announced today seek to address the valid concern of the Select Committee about the need for improvements at AWE and to ensure that the Trident programme is successfully implemented. I commend them to the House.

Mr. Martin O'Neill (Clackmannan)

We have grave reservations about the privatisation of the Atomic Weapons Establishment. Frankly, we shall have to await the publication of the Bill to obtain more details, in view of the thin statement that the Secretary of State has made.

Our first concern is safety. The first report, for 1978, produced by Sir Edward Pochin, criticised the procedures. Although those procedures have been improved, we are anxious to know more about the relationship between the compliance officer and the nuclear installations inspector, for there will exist a totally different set of arrangements from anything that existed previously.

As for security, will the MOD police retain their existing responsibilities? What arrangements will exist for the four AWE sites at Aldermaston, Burghfield, Cardiff and Foulness? Will they be transferred to the same contractors and operate under the same organisational structures as at present, remembering that there is now the concept of a team approach between the four institutions?

The dockyard contractors had to await the passing of the legislation before they could take control. What statutory authority does the right hon. Gentleman have to put in management contractors before they even have any legal standing?

As the main problems concern recruitment and the retention of staff, may we be told what steps the Secretary of State proposes in the short term to ensure that, following his statement, morale will not be further damaged? For example, will he be taking any steps to enhance the pay and conditions of the work force before the contractors come in? Will there be any improvement in the present situation, with about 400 staff needed to reach the establishments' staffing levels? Will there be less need for compulsory overtime? Present staff shortages mean that people must work 12 out of every 14 days.

Does he appreciate that a tight contract the like of which I imagine he will try to introduce will have to sacrifice either staff or wages? It is clear that he will not be able to increase staff numbers and pay, if he expects contractors to come in under the sort of arrangements that were made for the dockyards.

Is the right hon. Gentleman aware that the experience of the privatisation of the dockyards has not been altogether happy? For example, progress at Devonport has been such that we have a long way to go before there is any improvement in the management of that plant as a result of contractorisation.

Is the right hon. Gentleman aware that the morale of the staff in the four establishments, who have already produced the necessary up-to-date requirements of the programme, will be severely damaged by what is proposed? That applies especially to those in middle management who have been looking forward to promotion and enhanced remuneration. Their avenues of enhancement will be blocked by the introduction of a core of professional managers.

The staff of the establishments, rather than welcoming these steps, will feel a sense of betrayal by the Government, who have not backed them with the money and support that should have been given in the past. The result is the shabby and cheap deal about which we have heard this afternoon.

Mr. King

The hon. Gentleman asked a number of serious questions that deserve serious attention, but in his peroration he got carried away into an unworthy and wholly unconnected series of remarks. I am grateful to him for clearly setting out some of the problems and concerns at AWE. He referred, for example, to the problems of compulsory overtime and of retention of staff. He clearly set out why action is needed—yet when the Government come forward with proposals he accuses us of shabby action.

The Select Committee made it clear that the Government should take action in these respects. I do not accept that our action will lead to a loss of morale. We are seeking to reinforce, not to replace, the existing arrangements. The Select Committee correctly pointed to the fact that this is very much a research-dominated establishment. The production programme has particular requirements and people are being moved across from the research side to contribute to the urgent needs on the production side. The Select Committee criticised that. The hon. Gentleman should reflect on my statement and read the fuller consultative document, from which he will see that we are seeking initially to reinforce the production side so as not to draw on the valuable expertise on the research side.

The hon. Gentleman referred to the different sites; in my statement, I referred to one or more companies. Under the proposals for full contractorisation—the legislation for this will not come before the House this Session but will be introduced as soon as possible thereafter—the whole of the AWE will be covered, but exactly where the contractors are based is a matter for further consideration.

There will be no change in security arrangements or in the role of the Ministry of Defence police—that is important. As the hon. Gentleman may know, since he has taken a close interest in this, we have been taking certain steps to enhance security.

This is not privatisation: it is what is known in the jargon as GOCO—Government-owned, contractor-operated. In case anyone thinks that an incredibly radical and unheard of concept, may I say that the whole United States weapons programme for 40 years, including the Los Alamos research and development by the university of California, has been operated under this system, so it may not be quite as novel as Opposition Members think.

Mr. Michael Mates (Hampshire, East)

Is my right hon. Friend aware that the Select Committee will be gratified to hear that its advice has been taken, and that it is grateful to him for his kind remarks?

Is my right hon. Friend further aware that, far from ruining morale at the establishments, this is likely to cause a great rise in morale and a great sense of relief among the scientists who want to get back to their jobs and of the members of these establishments who do not feel that they have had the best management over the years? An example of this came at the end of my right hon. Friend's statement, when he said that since the contractors went into the new building the contract has been working on time and to cost. That is precisely what we all want to happen in the rest of the establishment, and we wish the changes well.

Mr. King

I am grateful for my hon. Friend's comments. He made a valid point—[Interruption] The hon. Member for Dunfermline, West (Mr. Douglas) keeps muttering.

The Select Committee drew attention to the problems of retention of staff and of the difficulties posed by transfers from the research to the production side, and those are the points with which we sought to deal.

We have already moved one contract at Aldermaston from the public sector to the private sector. All who have seen the development of the new facilities there recognise the obvious success of the management of that contract in the private sector.

Mr. Menzies Campbell (Fife, North-East)

Does the Secretary of State accept that there is an apparent paradox in attempting to introduce a greater degree of privatisation into nuclear energy for military purposes so soon after the failure to do so in relation to civil purposes? If suitably qualified staff have been difficult to attrct to Aldermaston because of the existence of higher salaries in the private sector, will not the introduction of a private contractor have the effect of increasing the costs of the programme? What calculation has been made of those costs, and what is the likely effect on defence spending in other areas? Will the Secretary of State take time to consider, in the light of what he has just said, whether the four-boat Trident system cannot be as effectively deployed with the same number of warheads as the existing Polaris system without going to the increased number of warheads that the D5 system apparently requires?

Mr. King

I should take up too much of the time of the House if I deployed the whole argument about the Trident system, about the problem of the sophistication of the threat against which it would be deployed and about our intention to ensure that it remains an effective and credible deterrent. We are committed to that and that is part of our commitment to NATO. I understand that the Labour party supports that position as well and that the next. Labour Government will accept the financial and strategic responsibilities of inheriting the Trident programme. I welcome that, and the whole House recognises the importance of our contribution to NATO in that respect.

There is no paradox, as the hon. and learned Gentleman maintains. I thought that his party recognised that one of the great benefits of privatisation, which eastern Europe now seeks to achieve, is that one can have better wages, better performance and better productivity at lower overall public cost. The message has been learnt in British Steel, in National Freight, in Associated British Ports and in the other organisations that are now privatised. Those benefits are available to the work force in AWE as well.

Sir Geoffrey Johnson Smith (Wealden)

I congratulate my right hon. Friend on his practical solution to a difficult problem. Although we all hope for the day when nuclear weapons are no longer required for our security, I assure my right hon. Friend that Conservative Members do not think that that day has come and we welcome his commitment to the Trident programme.

Mr. King

I am grateful for my hon. Friend's comments. It is true that, although I have made clear beyond question from this Dispatch Box our support for the improvement of relations between East and West, for the conventional arms reduction talks, for the START negotiations and for a reduction in strategic nuclear weapons, neither side believes at present that there is not a need to maintain adequate defences and the credible deterrent of NATO. In that connection, it is necessary to make these changes to ensure that we maintain the credibility of our contributions to NATO.

Mr. John Cartwright (Woolwich)

Will the Secretary of State accept that the main threat to Trident warhead production has been the inability of Aldermaston to recruit and to retain the key industrial staff who are needed? Will he assure us that the new arrangements will enable the contractors to operate without the dead hand of Treasury control and to offer the competitive wage rates that are necessary? If that is the case, what additional cost will be added to the Trident programme?

Mr. King

I was quite sympathetic to what the hon. Gentleman said until he came to his final remark. I have sought to make the point that, with the best possible production management expertise, and with properly motivated and rewarded staff, who have properly recruited skills and who are properly organised, we may see rather better remuneration for those working in some of the key areas at Aldermaston and they will be operating under efficient and well organised production systems. That will lead, very possibly, to no increase in costs, but to a far better guarantee of performance and an assurance that the Trident programme will be implemented.

Sir Michael McNair-Wilson (Newbury)

Can my right hon. Friend say what difference contractorisation will make to the role of the director of the establishment? Can he give some assurance about employment security for the 7,000 employees, most of whom are my constituents? Would it not make sense for Burghfield to be included with Aldermaston as both are called atomic weapons establishments and are the only two in the county?

Mr. King

I apologise to my hon. Friend if I did not make that clear. It includes Burghfield, Cardiff and Foulness. It covers all the establishments of the AWE and the Blacknest activity contained within Aldermaston. The director is due to retire in the middle of next summer and I then envisage that the management-contractor will become the chief executive of AWE.

On redundancy, the problem—particularly at Aldermaston—is one of considerable shortage, not a surplus, of people. As hon. Members have said, there is a need to improve recruitment.

Mr. Dick Douglas (Dunfermline, West)

Will the Secretary of State accept that, when the Select Committee on Defence examined the contractorisation of the dockyards, it rejected the idea in two reports? Will he also accept that what is being suggested today is the privatisation of plutonium and nuclear warheads? That is not acceptable to the vast majority of Opposition Members. Will the right hon. Gentleman concede that he is creating competition to supply nuclear warheads to Her Majesty's Government?

Mr. King

In kindness to the hon. Gentleman, he should read the document containing greater detail which is in the Library and he will then see how inaccurate his comments are.

Dr. Michael Clark (Rochford)

Will my right hon. Friend take this opportunity to acknowledge the contribution made by AWE Foulness to the overall atomic weapons programme? Is he aware that employees at Foulness do not enjoy all the financial benefits of those employed by AWE in the Thames valley? Will he ensure that those employees have a competitive salary now so that they can be retained rather than pay a competitive salary later to regain them?

Mr. King

I should like to look further into my hon. Friend's point as I have not heard it raised before. I can assure him that either myself or the Minister will look into it.

Mr. Rhodri Morgan (Cardiff, West)

Contrary to the belief of the Secretary of State and the Government that commercialisation can solve all problems, will the right hon. Gentleman give some thought to the probability that the setting up of a single purpose commercial organisation to increase production at Aldermaston may create a different form of problem for Aldermaston and Cardiff, which is where many of my constituents work? If the Trident system becomes the subject of multilateral negotiations, one problem will be how one has a commercial organisation able to handle—with the same flexibility as when it is under Ministry of Defence control—the conversion of factories. For example, the AWE factory at Llanishen needs to be retained as one of the premier precision engineering factories in south Wales so that we do not lose those skills if the Trident programme becomes part of disarmament negotiations in the next couple of years.

Mr. King

This proposal is intended to reinforce production skills and the capability of production organisation and management. That is important as there is a production job to be done. It is generally recognised by all who have studied that problem at Aldermaston that there is a shortage of adequate production management expertise. We are seeking to address that problem in an effective way while retaining Government ownership of all the assets and facilities involved. That must be right.

The compliance office will be responsible directly to me for safety and security, which are obviously of great concern to the House. However, we see no early prospect of any change. We have made it absolutely clear that we are not prepared to leave the country defenceless while other countries retain nuclear weapons. Therefore, although the Trident programme represents only a modest and limited deterrent when compared with the Soviet Union and its scale of nuclear weaponry, we believe that we should maintain our limited but credible and effective deterrent. That is the Government's policy, but others may intend to get rid of it. If I were a constituent of the hon. Member for Cardiff, West (Mr. Morgan), I would be worried about that.

Sir David Mitchell (Hampshire, North-West)

Can my right hon. Friend assure me that the changes he announced today will have no effect on the status of AWE housing in Tadley, Baughurst and other places where employees are now housed in property owned by those establishments?

Mr. King

I give an absolute assurance about interim arrangements. As far as I know, it will make no difference to subsequent arrangements after the House has approved the legislation for full contractorisation. In the short term there will be no difference, but we shall need to give that point careful consideration when drafting the legislation. I am grateful to my hon. Friend for raising it.

Mr. John McFall (Dumbarton)

The Secretary of State's statement was extremely thin. As a member of the Select Committee, I do not welcome it because I do not know what it involves. All that the Secretary of State says is that it is contractorisation. The report of the Select Committee referred to the problems with contractorisation at the A90. The "World in Action" programme on Balfour Kilpatrick also referred to those problems. Contractorisation is already causing great problems. Exactly what does the Secretary of State mean by it? The Select Committee found that pay and conditions and staff shortages were a problem. Contractorisation will achieve nothing. It is a smokescreen.

Mr. King

We recognise that there are problems in retaining staff and there have been complaints about pay and remuneration in this area, which is probably the most competitive in the United Kingdom for skilled labour. I say that in respect of Aldermaston and Burghfield; it is not so true for Cardiff. Against that background, as the hon. Member knows—he is a member of the Select Committee that studied the matter—there are real problems in this research-dominated establishment. There is a shortage of production management expertise. With such a shortage of skilled labour, it is important that labour is properly and effectively organised—

Mr. McFall

And properly paid.

Mr. King

Exactly—under schemes that ensure that productivity is achieved and that people are rewarded for it. Perhaps hon. Members did not hear what I said to the hon. Member for Woolwich (Mr. Cartwright). I made it clear that there will be new contractors with properly organised production management and arrangements under which it is likely that people will be better rewarded for productivity in a well-run production unit.

Mr. Gwilym Jones (Cardiff, North)

Although I welcome the statement, nothing that my right hon. Friend has said should he seen as a reflection on the factory in my constituency in Cardiff where an excellent work force strives for the highest standards. On the contrary, he is proposing a way to create a better basis for employment for all the employees in the Cardiff factory and in other AWEs which remain a vital part of our country's defences.

Mr. King

As we know, that has been the experience. We do not have to make extravagant claims because the experience is firmly established. It has attracted the attention of many other countries, not least in eastern Europe, which sees the great damage that state ownership and public control and management can cause and the benefits from contractorisation.

Mr. Alex Salmond (Banff and Buchan)

Does the Secretary of State understand that some Opposition Members unambiguously welcome any problems and delays in the implementation of the Trident programme? Why does he expect the attempt partially to privatise the military nuclear industry to be any more successful than the attempt wholly to privatise the civil nuclear industry?

Mr. King

The hon. Gentleman and his party are entitled to their view about the need for Britain to maintain a nuclear deterrent and to be a loyal and effective member of NATO. I am not sure what his party's defence policy is, but if it does not support NATO, it is in a small minority in the House and in the country.

Mr. Andrew Hunter (Basingstoke)

I applaud my right hon. Friend's decision. I believe that it will be widely welcomed. Is he aware that a handful of my constituents who work at Aldermaston will be apprehensive? Will he address himself to the familiar argument, which I expect that we shall hear again, that any delay in the Trident programme has been caused more by private contractors than by public servants and that the introduction of private management will not get to the heart of the problem?

Mr. King

I am grateful to my hon. Friend for his broad welcome. I understand entirely the initial feeling of the workers there. When any change is announced it creates uncertainty and anxiety. That is why I have sought to ensure that full consultative arrangements and consultative documents are available. In that way the proposals can be explained as quickly as possible to the people involved. The proposals can only be of benefit and will he of material advantage to many of the workers because of the problems that we face. Any competent management contractor will need to get the support of the work force if he is to do an effective job. Indeed, that will be one of his objectives and he will seek to address those points. The proposals are not bad news for the work force.

My hon. Friend asked for the reasons for the delays. A shortage of management expertise in production has been identified. We have addressed that shortage in construction, and I reported to the House that that is going well, but we must still address that problem on the production side. That is why I have made the statement. The other issues which hon. Members have raised—what about this, what about that—will become the responsibility of those who can bring considerable expertise and abilities to tackling the problems.

Several Hon. Members


Mr. Speaker

Order. I must have regard to the subsequent business. There is a heavy demand to speak in the debate, so I shall end questions on the statement by 4.15 pm. If hon. Members ask brief questions, I shall be able to call all of them.

Mr. Tam Dalyell (Linlithgow)

May I voice extreme technical scepticism? Even given the Government's assumptions on Trident, why is more research and a greater capability needed if the programme is going as smoothly as we are told? What does the Secretary of State say in answer to the anxiety expressed at the recent Royal Society meeting that our real problem is that, whereas the Japanese spend 2 per cent. of their research and development budget on military research and the Germans spend 12 per cent., we in Britain spend 47 per cent? A shortage of technical skill is precisely one of the problems of the British economy and British industry.

Mr. Speaker

Briefly, please.

Mr. Dalyell

Is that not adding to the problem? Is not the Secretary of state being taken for a technical ride?

Mr. King

The hon. Gentleman asked my permission to express extreme scepticism. I doubt whether I could prevent him from expressing scepticism on any issue which he chose to raise. I explained the background and said that the programme seemed to be going well, so the hon. Gentleman asked why there was a need for change. As I said in my statement, we believe that we shall achieve the initial in-service dates, but there is a need for increased production for Trident deliveries from 1992. We face real problems with the operation in the Thames valley area and there is no realistic prospect of relocating those facilities. It is perhaps the most difficult area in which to recruit scarce skilled labour resources. Against that background, the Select Committee identified problems of retention and skills shortages, and we have taken the action that we have.

Mr. Robert Key (Salisbury)

My right hon. Friend can rest assured that those of us who have major defence interests in our constituencies understand the difference between contractorisation and privatisation, and that we welcome the sensible way forward. Will he, however, clear up the confusion that arose at the start of questions following the statement? Reference was made to the Ministry of Defence police role. Surely what is meant is the role of the Atomic Energy Authority constabulary. Will he confirm that Mr. Reddington, the chief constable of that authority, has been consulted and that operational arrangements in particular for atomic energy transport and for guarding nuclear convoys will not be changed?

Mr. King

I am grateful to my hon. Friend for what he said about the arrangements and for his emphasis on the clear distinction between contractorisation and privatisation. I can confirm that there is no change in security arrangements.

Mr. Alun Michael (Cardiff, South and Penarth)

Does the Secretary of State accept that safety and security are extremely important matters and that both of them are as important as productivity? Is he not creating a fragmented management structure and chain of command, which is likely to cause difficulties? Is he not insulting the standard of management at the establishments, including the one in Cardiff, in a way that seems gratuitous, or is he simply confessing that he and the Government have not done a good job of managing resources over the years?

Mr. King

The hon. Member is giving the problem serious consideration and I agree with the first part of what he said. On reflection, he may recall that I said that safety will continue to have the highest priority. I also made it clear, when I set up the compliance office, that it will have direct responsibility to me for issues of safety, quality and security. That is important, and I shall certainly insist on it.

Mr. Julian Brazier (Canterbury)

Does my right hon. Friend agree that there is nothing radically new in involving contractors in work at the AWE at Aldermaston? When I worked there as a project manager for an outside company in 1985, there were many other companies on site. Does he also agree that the greatest single problem, apart from pay, in terms of job satisfaction which faces scientists there is that they are not able to get on with science? They are sucked into production or other peripheral management duties. Does my right hon. Friend agree that the statement will enable them to get back to the work that they want to do and that the nation needs them to do?

Mr. King

I never cease to be amazed by the breadth of my hon. Friend's management experience. The whole House has listened to his first-hand and interesting report, and I am grateful for his strong endorsement of the changes.

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

Is it not true that the real reason for contractorisation is that the Government have lost confidence in the science-based management at Aldermaston? Is it not true that there have been repeated arguments between departmental officials and the people who run the site there? If all that I have said is true, would it not have been better to have cleaned out the management and put in a management representing the state rather than the curious system of contractorisation that is being proposed?

Mr. King

I think all hon. Members know of the hon. Gentleman's ability to translate any situation into the most malign scenario.

There have been problems needing the transfer of people on research, and the Select Committee commented on that in its report. That was due to shortages on the production side. Being science-based does not mean that one is a great expert on modern management and production techniques. We believe that contractorisation is the best way to approach the problem and get the most effective people available.

Mr. Neil Thorne (Ilford, South)

Will my right hon. Friend confirm that, if the new system works effectively, it will be possible for scientists to get on with their research, and to spend a lot more of their time doing so, rather than being bogged down in red tape? Will he also confirm that security will be considerably enhanced because turnover should drop dramatically, and that will lead to greater stability in the work force and to a more secure work force?

Mr. King

I am grateful to my hon. Friend for raising that important issue. It is not satisfactory when, albeit under public management, a number of people are recruited but not retained. We incur considerable costs and requirements for vetting procedures are obviously necessary. If we can establish a stable and effective private management contractual operation, which will be subject to the normal vetting requirements, the operation will be able to retain people, and we are likely to have a more secure operation than in the present unsatisfactory situation.

Mr. Norman Buchan (Paisley, South)

When one considers the implications of the subject, is it not the height of folly to introduce any element of profit or privatisation into it? After the events of the past few months, and the talks in Malta and elsewhere, is it not the height of frivolity to continue the production of what are, presumably, bigger and better weapons? Who are we likely to use them against? Is it not true that the only safe way forward for contractors and the rest of humanity is to end the proliferation, and is that not best achieved by Britain taking the lead?

Mr. King

I know that the whole House recognises the consistency of the hon. Gentleman's position, but his argument is really more with his Front Bench and the leader of his party, who made it clear that the next Labour Government will accept the financial and strategic responsibilities of inheriting the Trident programme. The Leader of the Opposition said that Labour has an "absolutely dependable defence policy". The hon. Gentleman had better direct his questions in that direction.

Mr. Jonathan Sayeed (Bristol, East)

Does my right hon. Friend agree that the explanation is rather more simple than the hon. Member for Workington (Mr. Campbell-Savours) suggests with his conspiracy theory? The very good quality people at Aldermaston were trained as scientists, not as industrial engineers and production managers. They should be allowed to get back to the work they do best and people who can do the other job best—outside contractors—should be brought in. If that were not done, the Government would be failing in their duty to defend the country, as we would not have the fissile material we need for our submarines.

Mr. King

I am grateful to my hon. Friend. He has explained the situation simply, clearly and precisely. That is why we have taken these steps.

Mr. James Lamond (Oldham, Central and Royton)

Despite all the Secretary of State's bluster about defence, was he not faced with the straightforward problem of staff shortages and difficulty in recruiting people because conditions of employment do not match up to what can be obtained in outside industry? Instead of allowing the law of supply and demand to work, he has put forward this extraordinary solution of putting the work out to contract. The contractors will have to pay better wages and provide better conditions to attract the men they want. They are not like contractors in the Health Service and elsewhere for cleaning services, who can force people who cannot find work anywhere else to accept low pay and poor conditions. The people whom the Secretary of State is trying to recruit are in what they regard as a seller's market, so it must cost the country more to pursue this solution.

Mr. King

When I was Secretary of State for Employment, we conducted a study of the training needs of, and skilled labour problems in, the Thames valley. Every firm that identified a shortage of skilled labour as the greatest difficulty for the coming 10 years said that it would poach staff from the firm next door. Putting up wages is manifestly not the whole solution to the shortage of skilled labour. We must ensure that skilled labour, which I believe will continue to be a scarce commodity in the Thames valley, is managed and used efficiently and effectively.

Several Hon. Members


Mr. Speaker

Order. I hoped to be able to call all hon. Members who have been rising in their places, but I shall call only two more from each side and then move on to the next business.

Mr. Teddy Taylor (Southend, East)

As major changes such as this, however well directed, cause great distress and uncertainty about pensions, promotion and housing, will my right hon. Friend tell many of my constituents who work in Foulness whether they will get a small pamphlet, not a bulk consultation document, setting out the implications of the changes for employees and giving the name of someone who can be consulted if there is any doubt? Will he use as a guide the especially bad performance, sadly, of the Treasury's announcement in the Autumn Statement of the decision to move about 700 jobs from Southend? Will he try to consult employees and tell them all the facts promptly and where they can go if they do not know the answers?

Mr. King

I am grateful to my hon. Friend, and entirely agree that statements such as these often confuse more than they clarify. I am willing to respond. If my hon. Friend would like to give me the questions that he thinks his constituents would like to be answered, I shall try to reply to them.

Mr. Bruce Grocott (The Wrekin)

Does the Secretary of State understand that the real anxieties being expressed, not least by Conservative Members, arise because we all know from reading the history books, not from consulting a crystal ball, that contractorisation inevitably leads to worse working conditions, including pension rights, training and hours of work? What assurance can he give that, under the new arrangements, such rights, which have been hard won, will be protected? In view of recent events, what assurance can he give that a contractorised service will not be a far greater security risk than a public sector service?

Mr. King

I sought to address the hon. Gentleman's last point when I answered the interesting question put by my hon. Friend the Member for Ilford, South (Mr. Thorne) when I said that we faced some unsatisfactory situations with the rapid turnover of employees, some with quite short service. That is not at all satisfactory from the security point of view. The background against which the proposals have been made is an acute shortage of people and a recognition of the fact that there may well have to be some improvement in opportunities for people within the plants so that we can attract people with the skills that we need, and against that background the hon. Gentleman's comments do not stack up. It is not open to the sort of criticisms that he seeks to make.

Mr. Cyril D. Townsend (Bexleyheath)

Should not this be seen as a thoroughly sensible management decision to deal with a particular production problem in this area? My right hon. Friend also mentioned the American experience —publicly owned, privately run—and many of us feel that that example could be followed throughout his Department. Will he give us some guarantee that it will have further application?

Mr. King

I am not sure whether my hon. Friend is suggesting that that is the way that we should operate the Ministry of Defence, but I shall take his suggestion seriously. The application where possible of that principle can have benefits. What it comes down to, as several of my hon. Friends have perceptively said, is the need to get the best people available to do the jobs that need to be done. That is not a radical concept, and it should be applied wherever possible.

Mr. Roland Boyes (Houghton and Washington)

In view of the acute shortage of workers, will the Secretary of State reassure the work force on safety at the AWEs under the new procedures? The right hon. Gentleman has said that safety is important, and we welcome that, but has he studied the problems in the United States, particularly the Savannah river arms plant in south Carolina, which caused two of its four plants to be abandoned and two others to be temporarily closed because production was placed above health considerations and a safe environment?

Does the right hon. Gentleman recall what Admiral Watkins, the Secretary of State for Energy in the new Administration, said when he first took over his department? He accused America's crumbling nuclear weapons industry of ineptitude, mismanagement and deliberately ignoring safety rules". Will the right hon. Gentleman give us an assurance this afternoon that our work force will not be subject to such conditions and risks?

Mr. King

I am grateful to the hon. Gentleman for his comments. We looked carefully at the American experience in that respect. There have clearly been difficulties in some areas, but I shall say no more because some legal actions are flying around on some of the comments that have been made. We shall learn from America's experiences. There are some aspects of the American contract that we shall not follow. For example, we shall make sure that the contractor's contract includes incentives on the important matter of safety, quality and security, as well as on production matters. But it is interesting that the Americans are convinced that, whatever the problems that they have to sort out, the Government-owned, contractor-operated system—the GOCO method—is the right approach to take.

Several Hon. Members


Mr. Speaker

I am sorry that I have been unable to call all those hon. Members who wished to speak, but I shall bear in mind their undoubted claims when we return to the subject.