HL Deb 22 December 1965 vol 271 cc1048-53

2.56 p.m.


My Lords, I am sure it would be for the convenience of the House if I were to repeat a Statement which has been made by my right honourable friend the First Secretary in regard to the Fairfields Shipyard. These are his words:

"Although I am not yet in a position to give the House the details, I am glad to be able to say that arrangements have been made to safeguard the future of Fairfields shipyard. This will reassure not only the people working in the yard, but also the shipowners who, from a sense of patriotism and generosity, have kept orders with the yard, and sub-contractors who have continued to supply equipment to the yard despite the uncertainty which has clouded its future.

"I am glad to say that we have now the foundation for a financial partnership between the Government, private enterprise and the trade unions as a result of which this shipyard can continue. The private enterprise partners will consist of Mr. kin Stewart and his associates; Lord Thomson of Fleet; Sir Isaac Wolfson; and others with whom we are currently discussing the position. In addition, two of our major trade unions have expressed their intention of participating, and discussions are going on with others.

"The Government will hold half of the equity of the new company, to be known as Fairfield (Glasgow) Ltd. The other half will be shared between the other partners. This will enable the shipyard to operate as a commercial concern. The shipyard will need, in addition to the equity, loan capital, and this the Government are prepared to provide on normal terms. These arrangements do not extend to the engineering works, Fairfield-Rowan Ltd.

"The Chairman of the new Company will be Mr. Iain Stewart, whose wide business interests are already closely associated with the West of Scotland, and Govan in particular.

"In backing this new concept in British business all the partners, the Government, private enterprise and the trade unions, are relying on the men in the yard to co-operate unreservedly in working the yard as efficiently as possible and, in particular, in achieving the flexible manning arrangements and interchangeability of workers which are essential. If this co-operation were not forthcoming this whole scheme involving the combined support of Government, the unions and private enterprise would fall to the ground and the shipyard would have to close.

"I am sure the House will welcome our action as a quite new partnership, not only between Government and private enterprise, but now between Government, private enterprise and the trade unions; the motive being not merely to save a recently modernised Scottish shipyard from extinction, important as that would be, but, in addition to provide a proving-ground for new relations in the shipbuilding industry which could change the whole image of our country."

3.0 p.m.


My Lords, I am grateful to the Chief Whip for having made that Statement to the House. We shall study with great care the details of the proposals when they are known. May I put two questions to the noble Lord? First, why did the Government consider it necessary to take a 50 percent. equity interest in this undertaking, rather than provide loan capital? Is this not really nationalisation by the back door, as demonstrated very clearly in the Labour Party Pamphlet,Signpost to the 'Sixties?Secondly, may I ask whether the sentence in the Statement in which we are told that the unions are relying on the men in the yard to cooperate unreservedly in working the yard as efficiently as possible and, in particular, in achieving the flexible manning arrangements", and, lastly, that the motive is to provide a proving-ground for new relations in the shipbuilding industry", mean that the unions are prepared to do away with the rule book? If that is so, why is it possible to do it only at Fair-field's and not at other shipyards?


My Lords, I am partially grateful, I think, for the welcome that the noble Lord has given to this Statement. This is not a question of nationalisation. Here was an important and modern shipyard which was, for one reason or another, in difficulties and faced with extinction. The Government thought it right, particularly in view of the fact that we have not yet received the Geddes Report, that this yard should not close. The Government offered £1 million to the Company when it was in the hands of a manager and receiver to keep the yard going. The Government had consultations to see whether there was a future for the yard at all. It was clear that, unless the Government were prepared to take part, there was no future for the yard. The Government therefore took the view that they should become a shareholder in what was a possible operation for new capital, and as noble Lords will see, we have been able to succeed in forming a broad and wide partnership consisiting of private enterprise and the trade unions.

This is quite new, and in the field of co-operation it may well have some significant pointers to the future, particularly in regard to the point that the noble Lord, Lord Carrington made, the cooperation of the trade unions. We know of the difficulties that confront the trade unions and management in regard to restrictive practices from, I would say, both sides of industry. A great deal has been done and, no doubt, will have to be done, but these situations cannot be transformed overnight. We believe—and I certainly hope that this will be so—that the workers of Fairfields, being faced with the stark realities of their own industry, and their particular effect on their own company, will realise that if we are to be able to play our part in world competition, most of the restrictive practices that exist throughout the shipbuilding industry—and, I would say here, throughout all industry—should be reduced. But that will not be done by a sweep of a pen or a declaration; it will be done only by solid consistent work by both sides of industry.


My Lords, may I ask the Minister one question on this very welcome news? Does the new arrangement mean the discharge of the receiver and manager who is at present in charge, on behalf of the creditors? And will the infusion of the new capital be such that the creditors will be satisfied either wholly or in part?


My Lords, in regard to the shareholders, I obviously cannot speak for them as to whether they are satisfied or dissatisfied. But I understand that the receiver and manager is in agreement with the final proposals, once the final arrangements have been made as to the distribution of the 50 per cent. shareholding between private enterprise—Lord Thomson of Fleet and Sir Isaac Wolfson, the trade unions, Mr. Iain Stewart and others. I may say that, apart from the initial capital, which will be provided by all the parties involved, there will be sufficient Government backing to see that this company is viable and that it will be able to meet the fairly large and welcome orders that have been placed with the yard.


My Lords, could my noble friend say whether, with this experiment of the trade unions coining into this undertaking, there will be experimentation to end the lines of demarcation which may spread to other shipyards if the experiment proves successful?


My Lords, I am sure that this is so. We are living in a period of change. I think change is extraordinarily welcome. One does not know how management and trade unions will evolve; but I, for one, believe that the future of this country will rest very much on the spirit that exists between unions and management and that the type of experiment now being conducted at Fair-fields will be a decisive pointer to it.


My Lords, I wish only to ask a question on this last point. Is the noble Lord aware that many of us will agree with him that this question of demarcation practices is not altogether simple? But the point raised by my noble Leader is, in the view of some of us, very important indeed. Am I right in assuming that Her Majesty's Government expect the unions throughout all the shipyards to behave in exactly the same way as regards demarcation as has been promised in the case of this particular shipyard?


My Lords, the noble Lord has been in the public eye sufficiently long to know one of the reasons why there are restrictive practices on both sides of industry. It is largely a question of fear. The Government hope that in time we shall be able to reduce this fear on both sides. Once we have done that, the reduction of most of these restrictive practices will follow. But in the end it is the question of spirit; and we believe that this new experiment in Fairfield, where management and trade unions, representing the workers, can work in harmony and give security and decent standards of employment, will set an example not only to the rest of the shipbuilding industry but to the whole of the industries of this country.


My Lords, I am reluctant to ask anything further; but the Minister has not quite met the point I have in mind. The trade unions concerned are presumably the same trade unions as operate in all other yards. Whatever the motive of making the experiment, it should, should it not, in the view of the Government, apply forthwith to all shipyards.


My Lords, the noble Lord will remember that I referred to the particular trade unions taking part in this experiment. As the noble Lord knows, there are many more unions connected with shipbuilding. But this is a question of spirit; certainly the trade unions and the Government particularly through D.E.A., will do their utmost to see that this spirit of enterprise will go through the whole of the shipbuilding industry.


My Lords, may I ask what will be the proportion of union participation?


My Lords, that I could not answer at the moment. I would say that the Government participation would be 50 per cent.