Shipbuilding (Hansard, 18 April 1990)

§ 15. Mr. Galloway
To ask the Secretary of State for Trade and Industry if he will make a statement on the future of the shipbuilding industry in the United Kingdom.

§ Mr. Douglas Hogg
The future of the United Kingdom shipbuilding industry depends on its ability to win orders in the face of international competition. The Government provide substantial support to the industry to assist its return to normal competitive conditions.

§ Mr. Galloway
Is the Minister aware that the cost of building a ship has doubled in the past few years, yet worldwide demand for shipbuilding is booming and shipowners are falling over themselves to place new orders? In the light of that, do the Government not regret having done in the past 10 years what the Luftwaffe failed to do and closed down the great majority of British merchant shipbuilding capacity?

§ Mr. Hogg
That was a foolish question, and an ignorant one. As for our shipbuilding capacity, there are now about 33,000 people in the shipbuilding industry. I am happy to say that the order books are good and the yards are not losing money. When the Labour party was in power, the industry lost vast sums of money and required huge subsidies. That is not the proper way to use economic resources.

§ Mr. Barry Field
Is not it a fact that my hon. Friend fought like a tiger for the retention of the shipbuilding intervention fund, thus demonstrating that he is not the British shipbuilding industry's enemy but its friend?

§ Mr. Hogg
I am flattered by the analogy. Some tiger! I should have said, "Some hog!" None the less, I will accept the compliment and I am grateful to my hon. Friend. It is our intention, in time, to return shipbuilding to proper market conditions, but at present we thought it right that there should be a 20 per cent. ceiling on the intervention fund. We are comfortable with that figure, but our policy is to reduce the ceiling.

§ Ms. Quin
Is not it the case that in the world shipbuilding league, the United Kingdom is behind not only Japan and South Korea, but West Germany, Italy, Spain, Denmark, East Germany, Poland, Brazil, Finland and Yugoslavia? Given that fact, is not it tragic that the Government connived at the closure of the Sunderland yards even when there were bidders prepared to operate those yards without subsidy?

§ Mr. Hogg
The hon. Lady always runs down British shipbuilding—[Interruption.] I always try to be nice to her. I think that she does that because she does not know the facts. I will give her one encouraging piece of information. In the first quarter of 1989—the last period for which I have an exact figure—the proportion of world orders taken up by British shipbuilding yards substantially increased. I hope that the hon. Lady will be pleased at that.
We tried for 18 months to find a buyer for the Sunderland yards, and failed. Consequently, we put in place a closure package, of which we notified the European Commission and had it accepted. That package has greatly diversified Sunderland's economy and given the town a much better economic future than it would otherwise have had.