Warship Yards

HC Deb 23 June 1993 vol 227 cc287-8

4. Mr. Clelland

To ask the President of the Board of Trade what plans his Department now has to ask the European Commission for access to the intervention funds for British warship yards; and if he will make a Statement.

Mr. Sainsbury

I asked Commissioner van Miert on 26 May to reconsider the circumstances under which British warship building yards might become eligible for the shipbuilding intervention fund.

Mr. Clelland

It is regrettable that the President of the Board of Trade cannot be here to deal with this matter and we sympathise with him about his illness—[HON. MEMBERS: "Oh!"]My hon. Friends must be patient. 'There are thousands of people in this country whose health has also suffered as a result of 14 years of Tory Government, but they are not being looked after quite as well as the President of the Board of Trade.

Is the Minister aware that what the people of Tyneside now want from him is direct action? He should get across to Brussels, speak to the Commission and obtain the preventive medicine which is needed to relieve the stress on the workers of Swan Hunter. As the Minister's right hon. Friend the President of the Board of Trade will no doubt now confirm, it is far better to prevent collapse in the first place than to have to live with the hope of recovery afterwards.

Mr. Sainsbury

I am grateful for what the hon. Gentleman said about my right hon. Friend—I am only sorry that he ruined it by what he said subsequently. As for Swan Hunter's eligibility for the shipbuilding intervention fund, I wrote to the Commissioner. I have not yet had a reply to my letter. I hope that it will be a reply in the affirmative. If it is not, I shall certainly be ready to go to Brussels to discuss the matter with him, because I share the hon. Gentleman's belief that eligibility for the shipbuilding intervention fund would help the receiver in his task of finding a buyer for the Swan Hunter yard.

Mr. Wilkinson

Has not Swan Hunter had a unique capability among British yards over the years in being dual-capable, inasmuch as, in addition to building some of the very best warships that the Royal Navy has ever received, it has built geographic survey vessels for the Antarctic, cable-laying ships and auxiliaries? In those circumstances, how can the Commission of the European Community rightfully deny intervention funding to that yard? Is it not about time that Her Majesty's Government did what is in the interests of the British shipbuilding industry and the British nation, rather than always acting at the behest of Brussels?

Mr. Sainsbury

I am sure that my hon. Friend would like the Commission to exercise restraint in giving state aid in other countries of the Community. Quite rightly, the shipbuilding intervention fund is regarded as a state aid and is, therefore, controlled under the seventh directive. If we were to go against the arrangements, we should be doing what we sometimes rightly complain about other countries doing.

My hon. Friend will also be aware that the arrangements under which warship building yards are not eligible for the shipbuilding intervention fund were approved by the Commission in 1985 because we had considerable state aid to the shipbuilding industry at the time, which we agreed with the Commission on the understanding that warship building yards would not be eligible for the shipbuilding intervention fund. I have approached the Commissioner now because I believe that the circumstances have changed sufficiently to justify reconsideration of that ruling.

Mr. Bell

The House will welcome the Minister's reply to my hon. Friend the Member for Tyne Bridge (Mr. Clelland). The Minister will know that there are those who wish to buy Swan Hunter's yard. Will he confirm that Swan Hunter has a role to play in the building of warships and merchant vessels? If he could see Commissioner Karel van Miert very early on, he would give the country and the people of the north-east the impression that his Department is serious, anxious and positive about the matter.

Mr. Sainsbury

As the hon. Gentleman knows, the receiver has received a number of strong expressions of interest from reputable parties for the Swan Hunter yard. We are keeping in the closest possible touch with the receiver and we will certainly do all that we can to help him in his task of finding a buyer. I recognise that the Swan Hunter yard has had great achievements in the past and has great skills in the present which could be used in warship and merchant shipbuilding.