HC Deb 20 July 1989 vol 157 cc510-1
6. Mr. Cran

To ask the Secretary of State for Northern Ireland if he will make a further statement on the privatisation of Short Brothers plc.

Mr. Viggers

Since the announcement on 7 June of heads of agreement whereby Bombardier of Canada will acquire Shorts, good progress has been made on the necessary legal documentation. I am pleased to inform the House today that approval to the terms of the transaction has been given by the European Commission. It is our intention to complete the transaction in September.

Mr. Cran

Does my hon. Friend agree that the public purse facilitated—quite rightly—the takeover of Shorts by Bombardier, in the form of sales worth £762 million, and that the quid pro quo is that the House and the taxpayer are entitled to know how much Bombardier will contribute towards investment in the company? Can my hon. Friend tell us the amount specified in the corporate plan? If he cannot be specific, why?

Mr. Viggers

The details of the agreement between the Government, Shorts and Bombardier are matters of commercial confidentiality. I can, however, tell my hon. Friend that Bombardier will be making a substantial investment in Shorts—supported, of course, by Government assistance. The cost of the transaction, some £750 million, has been projected by some as the cost of privatisation, but I think that my hon. Friend will realise that the reverse is true. All but £115 million is the cost of the company in public ownership and the cost of outstanding contracts. That sum will go to support further investment in Shorts.

Mr. A. Cecil Walker

Is the Minister aware of the deep public concern in Northern Ireland about job losses that have occurred at Harland and Wolff since privatisation? Can he give us any assurance that such job losses will not occur in the privatisation of Short Brothers, and can he give us any guarantee that jobs there will be secure?

Mr. Viggers

The long-term future of employment at Shorts will depend on the profitability of the company and on its ability to deliver, on time, high-quality products that people wish to buy. I believe that the deal between Shorts and Bombardier is the best possible framework for that to happen.

I can assure the hon. Gentleman that there are no plans for further redundancies at this point. Let me draw to his attention the fact that when Bombardier acquired Canadair it acquired a loss-making company with 5,000 employees; it now owns a profitable company employing 6,500. We hope that the same will apply at Shorts.

Mr. Peter Robinson

What share might Shorts expect of the Canadian company's regional debt programme?

Mr. Viggers

I cannot answer that question precisely, but I can assure the hon. Gentleman that, having visited Bombardier in Montreal last month, I am very impressed by the fit between Shorts and Bombardier. I will write to the hon. Gentleman on the details.

Mr. McGrady

While all the communities in Northern Ireland welcome this vast investment in Shorts, it is important that both communities share in that prosperity. Is the Minister aware that the rate of recruitment from the Catholic population fell from 17 per cent. in the second monitoring period in 1983 to 14 per cent. in the third monitoring period of 1984? That trend is not welcomed by those whom we represent. Will the Minister ensure that the new company adopts proper recruitment procedures based on fair employment principles?

Mr. Viggers

The new company will indeed respect the application of fair employment in Northern Ireland. I can update the hon. Gentleman's information by telling him that the latest available figures for 1988 show that 19 per cent. of Short's recruits were Catholics. [Interruption.]

Mr. Speaker

Order. I ask hon. Members to desist from private conversations in the middle of these important questions.