HC Deb 17 February 1993 vol 219 c305
3. Mr. Byers

To ask the President of the Board of Trade what further discussions he plans to hold within the EC on the intervention fund for shipbuilding; and if he will make a statement.

Mr. Heseltine

None at present, but I am keeping the situation under review.

Mr. Byers

Will the President of the Board of Trade explain how the United Kingdom Government can agree to a 36 per cent. subsidy from the intervention fund for shipyards in Germany and yet deny access to the intervention fund for shipyards in this country? Does he agree that warship builders should have access to the intervention fund to help them to diversify into the merchant sector? Is not it about time that the Government put the British shipbuilding industry first and took positive action so that we can win new orders and keep jobs in our communities?

Mr. Heseltine

The hon. Gentleman will be aware that those arrangements were entered into as part of a reduction in capacity and it was decided in 1985 that the grants would not apply to warship manufacturers on privatisation. Their cost structures, with very high overheads because of the highly sophisticated products that they make, would not make them easily capable of competing in the merchant ship sector. In any case, there is already significant overcapacity in that form of construction.

Mrs. Browning

In putting the interests of British shipbuilding first, will my right hon. Friend not make the mistake that the Labour Government made—of subsidising shipbuilding to the extent that ships were sold off cheap to Poland, thus flooding the marketplace? We were then unable to be competitive.

Mr. Heseltine

My hon. Friend makes a most important point. I am also aware that once the Labour party had nationalised the warship builders, we secured no further export orders.

Mr. Cousins

Is the President of the Board of Trade telling us that in no circumstances would he contemplate stepping forward to protect the interests of the 50,000 workers in naval shipbuilding at Lowestoft, Southampton, Belfast, on the Clyde and the Tyne, and at Barrow, or to obtain access to intervention or any other sort of funding permitted by the European Community?

Mr. Heseltine

The hon. Gentleman obviously did not hear my reply—that I am keeping the matter under review. I do not believe, however, that access to the intervention fund would solve the acute problems of low demand that these companies face.