HL Deb 22 January 1969 vol 298 cc925-9

2.49 p.m.


My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government what are the financial arrangements between the Government and Upper Clyde Shipbuilders Limited—

  1. (a) in support of the "Queen Elizabeth 2" project;
  2. (b) for assistance under the shipbuilding reorganisation scheme; and,
in view of the sums involved and the general public interest in ensuring success of these ventures, what auditing procedures and management checks are being adopted by the Treasury or other Government Departments and what will be the reporting back procedures.]


My Lords, no money has been made available by the Government to Upper Clyde Shipbuilders Limited in support of the "Queen Elizabeth 2" project. The Shipbuilding Industry Board have agreed to lend £5½millon to the company under Section 4 of the Shipbuilding Industry Act 1967. The Shipbuilding Industry Board is required by the Act to submit annual reports and accounts to the Minister of Technology. The accounts are examined by the Comptroller and Auditor General. His report, the Board's accounts and the Board's own report are all laid before each House of Parliament.


My Lords, I wish to thank the noble Lord for his reply to my Question. I am aware that Upper Clyde Shipbuilders did not receive funds in respect of the "Queen Elizabeth 2" project; but there is substantial—




My Lords, would the noble Lord agree that there is substantial public interest in this project to the extent that the Government are lending £20 million o the Cunard Company based on some assumption of its success? Would he also agree that while the Government are involved in Upper Clyde Shipbuilders, through the Shipbuilding Industry Board, to the extent of £51 million, a further £1½ million is involved in the earlier investment in Fairfield Shipbuilding and that there is provision for covering transitional losses that might be very substantial? In the circumstances, would not the noble Lord agree that there ought to be a public statement covering this matter once the full facts are known?


My Lords, I agree with my noble friend that there is great public interest in this matter; but that is not the same thing as public finance to the company. The amount of the loan to Upper Clyde Shipbuilders is £5½ million and that, under the terms of the Act, is only in the general interest of the reconstruction of the shipbuilding industry there and is not for any particular project. What the Shipbuilding Industry Board may decide to do in the future is in the first place a matter for them and not one for the Government.


My Lords, in view of the allegations that have been made in the Press about the widespread pilfering and theft in connection with the building of the "Queen Elizabeth 2", have the Government any power to make inquiries as to the truth of these allegations; or is there any intention on the part of the Government to make any inquiries?


My Lords, in the first place, I should have thought that this was a management problem for the Upper Clyde Shipbuilders. As for any particular allegations, I understand that there are certain cases that will be coming before the courts, and they will be matters for the courts to decide. Having looked into this matter, I would make two points. One is that I think there are some individuals up there, not in the main regular employees of Upper Clyde Shipbuilders, who ought to be thoroughly ashamed of themselves. Secondly, it is unfair to blame the Upper Clyde Shipbuilders who, after all, have been established for only a matter of some two or three months. I have no doubt that they will draw many lessons from what has happened in recent weeks.

I should like also to take the opportunity of answering more completely the questions put to me by my noble friend. It is quite true that the Government have promised up to £24 million to the Cunard Company under Section 9 of the Industrial Expansion Act 1968. I understand that of this something of the order of £12 million by the operating company, Cunard Line, and some £7½, million by the parent company are likely to be taken up.


My Lords, I apologise for pressing the noble Lord further on this matter. No doubt these allegations of abuse are principally matters for management; but I should like to ask the Minister this question. When a large sum of public money has been advanced to a shipbuilding company, is there any intention on the part of the Government to make any inquiry into the alleged abuses in a shipyard to which they have lent this large sum of money?


My Lords, in the first place, as I have already stated, the sum of £5½ million which was advanced to U.C.S. Ltd., was advanced by the Shipbuilding Industry Board, and the Board is required by the Act to exercise its functions for the purpose of promoting the ability of the British shipbuilding industry to compete in world markets and to see that the money is used for that purpose. Therefore, in the first instance it is a matter for the Board to decide whether the money it is advancing is being used properly.


My Lords, is my noble friend able to say at what interest rates the £20 million and the £5 million are loaned to these various undertakings?


My Lords, so far as the loan to the Cunard Company is concerned, under the Shipbuilding Credits Act 1964 the interest will be 4½ per cent. for the first three years. As to the terms under which the Shipbuilding Industry Board have made available any money to U.C.S. Ltd. I cannot answer that question.


My Lords, surely this is a question of the expenditure, and possibly the wastage, of a very large sum of public money. Is it not surprising that the noble Lord seems unable to answer a question about it but has to refer us to the Shipbuilding Industry Board?


My Lords, I should have thought that the noble Earl was quite wrong to suggest that this money has been wasted. There is every reason to believe that when this ship makes her first voyage she will be one of the finest passenger liners that has ever sailed. I think it is wrong at this stage, because there has been some technical difficulty in an engine which was the biggest of its kind, to draw the sort of conclusions that the noble Earl is prepared to draw.


My Lords, will my noble friend bear in mind that the British shipbuilding industry has a very high reputation throughout the world and that during the last few years it has made a marvellous recovery from semi-depression? Does he not think that if this one incident is over-publicised it may do lasting and grievous harm to a very important British industry?


My Lords, I am grateful to my noble friend for saying what he has said. I think he is absolutely right. I think it is also right to say that most of your Lordships who know him will wish to offer sympathy to Sir Basil Smallpeice who has done so very much to give a new image and a new lease of life to the Cunard Company and who has been faced with quite unmerited and unwarranted difficulties.


My Lords, may I ask the noble Lord whether the Government would once again consider granting the shipbuilding industry a special price for steel plates to be used for shipbuilding?


My Lords, I think that most noble Lords would agree that this is a separate question, one for issue between the Steel Corporation and the shipbuilders.