LORDS AMENDMENT (Hansard, 16 November 1976)

§ Lord MELCHETT
My Lords, I beg to move that this House doth not insist on their Amendment No. 21, to which the Commons have disagreed for the Reason numbered 22. As I have explained on previous occasions the new clause would represent an attempt to limit the scope of the activities of British Shipbuilders. We want the Corporation to have maximum flexibility to operate commercially whilst at the same time remaining fully accountable. Quite apart from the desirability of the Corporation having the powers to 1179 seize commercial opportunities, this clause could have the effect of preventing the carrying out of existing activities by a subsidiary, for example the operation of tugs.
I hope the noble Earl is able to hear what I am saying above the general hubbub. I know he takes a particular interest in this Amendment and I think it would be rather unfair to him if those people leaving the Chamber prevented his hearing the remarks I am making on this Amendment. We do not want to set up British Shipbuilders as a major power in the shipping field. All we want to do is to ensure that the Corporation can assist the British shipbuilding industry in every possible way and we believe the subsidiary could be a means of securing orders which might otherwise have gone abroad.
As I have made clear on other occasions, British Shipbuilders cannot undertake any new activity without the consent of the Secretary of State, and such consent would not be forthcoming unless he was convinced the activities contemplated were in the national interest. Naturally one of the things he would consider most carefully would be the effect of the activities of the subsidiary on the British shipping industry. The occasions in practice when British Shipbuilders would operate ships on its own account or participate in joint ventures on a profit and loss basis—the two activities to which I know most concern the noble Earl—would be rare. Normally ships would be built for a specific owner to be put on long-term charter, and any other ships acquired would be put out to bareboat charter or long-term period charter at commercial rates. But occasionally British Shipbuilders might find itself with a ship on its hands, as for example when a charter arrangement fell through or an owner was unable to take delivery. In such cases the Corporation would normally seek an alternative charter, but it would make sense for it to operate the ship in the meantime.
Similarly there might be occasions when by participating in a joint venture the Corporation could induce an owner to place orders for say three ships in United Kingdom yards instead. This is another example I gave when discussing the Bill 1180 at the Committee stage. I can give an assurance that the number of occasions on which the Corporation would be likely to engage in ship operating or partcipate in joint ventures with an equity interest would be very rare, and on such occasions the Corporation would be expected to operate in a genuinely commercial manner. We believe that the Corporation must be able to take every opportunity to assist the shipbuilding industry, and that it must be able to operate so as to take advantage of commercial opportunities. Nor can we accept that the public sector should be subject to restrictions not imposed on the private sector. In view of the assurances I have given which go further than I was able to go at the previous stage when we discussed this matter, I hope that noble Lords will not persist with the Amendment.

§ The Earl of INCHCAPE
My Lords, the new clause which your Lordships have inserted was intended to provide a valuable safeguard against British Shipbuilders embarking on ship operation or ship management. The other place has disagreed with it on the grounds that it represents an undesirable restriction on the activities of British Shipbuilders. For the reasons I advanced when I moved the insertion of this clause at the Committee stage I thought, and still think, that such a restriction would not be undesirable, in fact quite the contrary. It would be in the interests of the British shipping industry which both the Government and British Shipbuliders must look to as the main customer of the shipbuilding industry. However, in view of the assurances which the noble Lord, Lord Melchett, has given me, and for which I am most grateful, I certainly do not press for this Amendment to be reinserted.

Lord CAMPBELL of CROY
My Lords, when this new clause was being considered at the Committee stage the Government gave certain assurances and they were repeated today. The noble Lord said he thinks he went further today, but until I read what he has said I have not been able to detect that he has gone very much further. What the Government visualised in Committee, and have not 1181 changed their mind about, is that there could be situations in which the new Corporation might operate ships. The point here is whether they would operate ships and it is not a question of owning ships; they may own ships. The new clause would have ensured that they did not go into the business of operating ships.
The noble Lord indicated that there were technical objections to the Amendment which we sent to another place; for example, it might have stopped the Corporation from using a tug. Those technical objections were clearly not insurmountable and we had hoped that the Government would have been able to respond with an alternative Amendment which would have given an assurance to the British shipping industry. I therefore regret that the Government have not felt able to make some move to the shipping industry by putting forward an alternative which would have avoided the technical defects.