HL Deb 24 February 1977 vol 380 cc384-9

4.4 p.m.


My Lords, with the permission of the House, I shall repeat a Statement being made in another place on assistance for the shipbuilding industry. The Statement is as follows:

"This House is aware of the serious crisis facing the world shipbuilding industry.

"Without swift action by the Government much of the merchant shipbuilding industry in the United Kingdom could close within two years. There would be heavy unemployment on the Clyde, the Tyne, the Wear and Tees and the Mersey, and in Belfast.

"This is unacceptable to the Government. Shipbuilding industries all over the world, from Japan to Sweden, are accepting the inevitability of contraction, and Britain cannot be insulated from this world trend. What we must do is ensure that it takes place within a positive forward looking policy framework.

"The Government are determined to emerge from this crisis with a substantial and viable shipbuilding industry with secure long-term employment prospects.

"The Government have therefore decided to use their powers under Part 2 of the Industry Act 1972 to assist the yards in Britain to obtain orders. A sum of £65 million has been set aside for this purpose, of which half will be available during the next six months. This figure will be the control ceiling and will operate in place of the cash limit covering all forms of assistance for building ships, which will be terminated. The Industrial Development Advisory Board will be consulted about the fund.

"Harland and Wolff, which is already in public ownership, will not be part of British Shipbuilders and will continue to be dealt with by my right honourable friend the Secretary of State for Northern Ireland.

"In accordance with our obligations under the Treaty of Rome we have informed the Commission for the European Economic Community of our intention to introduce this intervention fund as a matter of urgency. In our view these proposals conform with our Treaty obligations. We continue to be firm advocates of a Community policy for shipbuilding.

"The intervention fund will be operated selectively to secure the maximum benefit at least cost. In its administration my Department will work in consultation with the organising committee for British Shipbuilders, which will have an important advisory role. In considering the use of the fund my Department will wish to discuss with the companies concerned the scope for reducing costs and improving performance.

"National Shipbuilders and Repairers Limited will have an important role in seeking new orders for the industry, and its activities will be assisted by the creation of the intervention fund. I shall be placing in the Library of both Houses a copy of the company's memorandum and articles of association as soon as the company is registered.

"To complement this action a major advance factory programme costing over £12 million has been put in hand in shipbuilding areas.

"To assist British Shipbuilders, when it is created, to alleviate the human problems caused by the contraction of the industry I shall be bringing forward proposals to Parliament for a redundancy scheme similar to that for the British Steel Corporation. Similar arrangements will be made for Harland and Wolff.

"My immediate concern is to secure orders in order to promote the increased competitiveness needed to secure a future for the industry. These measures to alleviate the industrial and social effects of the world shipbuilding crisis are important and must form part of a longer term strategy of modernisation and rationalisation following upon public ownership."

My Lords, that is the end of the Statement.

4.8 p.m.


My Lords, we thank the noble Lord for having repeated the Statement being made in another place. The British merchant shipbuilding industry has certainly been facing most grave difficulties during recent months. We welcome the fact that the Government have now decided to take some action, and are not just waiting for the Bill. Is the noble Lord aware that the Government could have used the Industry Acts at any time during the last two years to carry out what they are now proposing?

In case there are any allegations that there has been deliberate delay arising from action in your Lordships' House, would the noble Lord agree that the determination of whether or not the Bill was hybrid was carried out under procedures laid down by officials of Parliament, and that the time has been spent on this procedure before any noble Lord in this House had an opportunity to speak on the Bill during this Session? That procedure exists in order to protect the rights of the individual. Further, does the noble Lord recall that we warned him and his colleagues in the last Session that the ship repairing section of the Bill might be hybrid, and that we proposed a course which would not have delayed the rest of the Bill?

My Lords, as regards the inevitable contraction of the industry and the redundancies to which the noble Lord referred, from this Bench we welcome the action which is proposed, though it is belated. Is the noble Lord aware that last September I drew attention in your Lordships' House to the need to start dealing with these human problems, which are going to become very real in merchant shipbuilding areas in the coming months?

4.10 p.m.


My Lords, we on these Benches would also like to thank the noble Lord for having repeated this Statement. We are not necessarily opposed to this grant from public funds. We are, however, concerned about the absence of any comprehensive policy in regard to this kind of expenditure. Does the noble Lord agree that Government aid to industry may now arise from the 1972 Industry Act, as in this case, from the Industry Act 1975, from the Industrial Common Ownership Act, from accelerated investment project grant, from Bills such as that seeking to nationalise the shipbuilding industry itself and so on? Is it not time to set up a satisfactory general administrative framework for the purpose of financing industry, an adequate system for monitoring such expenditure, business like budgeting arrangements for allocating grants and procedure for determining the relative merits of claims for assistance?

We welcome the reference in the Statement to the need for modernisation and rationalisation, and the intention to discuss with the companies concerned means of seeking to improve productivity; but I should like to ask, what is the position regarding the shipbuilding industry now? What is going to be done to rationalise it in view of the grave threat to thousands of jobs posed by world over-capacity? In particular, would not the best possible course be for the Government now to dismiss all idea of nationalising the ship repairing industry so that we can get down to business and see what is the best possible solution for shipbuilding?

4.12 p.m.


My Lords, I accept completely what the noble Lord, Lord Campbell of Croy, has said over drawing our attention to the powers existing under the 1972 Act in the course of the discussion of the Aircraft and Shipbuilding Industries Bill, on which we spent a little time before Christmas. I am not going to enter into a discussion on that aspect of the problem today. We should have an opportunity to do so later, on 8th March, I believe. I am not going to accuse any noble Lord here, or this House as a whole, of causing any delay. What has happened is that the Government have decided that action must be taken, and action will be taken under Part II of the 1972 Act.

The points made by the noble Lord, Lord Rochester, were very valid but they spread wider than simply how we propose to allocate the £65 million for the purpose of aiding shipbuilding in what is really the short-term. This is what we are doing now, to meet an immediate crisis. The longer-term solution we shall have an opportunity to discuss in the immediate future.


My Lords, is my noble friend aware that nothing is to be gained by re-opening the controversy over previous legislation? We must be concerned not with the past but with the future. It is about the future that I want to ask a few questions. Have the Government, by analysis or other means, discovered what shipping surplus exists not only in this country but throughout the world—in Japan, Germany, America and elsewhere? Are they not aware that there is far too much shipping, and that there is an excessive surplus? Are they aware that if they are proposing to build ships now of whatever kind, giant cargo vessels, medium liners, vessels to contain liquids and so on, all of this is highly speculative? Would it not be essential, before embarking on a venture of this kind, to discover what are the prospects for new shipping in the foreseeable future? Since there is a surplus of industrial shipping, might it not be more appropriate to order a few naval vessels (in spite of the arguments against further defensive apparatus) which are very much required and could provide employment for large numbers of people? If, merely to provide employment, we are going to build ships of an industrial character which may not be used for several years and may become redundant after construction, we might as well build naval vessels which are far more useful.


My Lords, I am confident that my right honourable friend the Secretary of State studied all the available statistics and information about world shipping before he reached the decision which I have announced today. Regarding the second point made by my noble friend, this is a question which is as close to my heart as it is to his, but it is not what we are talking about today.


My Lords, may I ask my noble friend whether any portion of this £65 million will be spent in aiding the ship repairers; particularly in view of the statement in today's newspapers that the Baily Company, which owns Bristol Channel Shipbuilders, has after two delays in presenting its annual accounts, presented a most unsatisfactory set of accounts having spent such an enormous amount of money during the year on publicity?


My Lords, that is an interesting point, but I do not think it has much relevance to what we are talking about today.