THE SHIPBUILDING INDUSTRY: DENATIONALISATION (Hansard, 10 March 1980)

§ Baroness EMMET of AMBERLEY
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard)
My Lords, as my right honourable friend the Secretary of State for Industry has recently confirmed, the Government remain committed to the principle of denationalisation in the shipbuilding industry. When the time is right we intend to come forward with appropriate measures.

§ Baroness EMMET of AMBERLEY
My Lords, I thank the Minister for that Answer. In view of the recent decline of a large order by nationalised shipbuilding firms, may I ask whether there is some way of hastening the proceedings of denationalisation, because a private firm might have snapped up that order?

§ Viscount TRENCHARD
My Lords, I believe that my noble friend is referring to the special ships for car transportation; it was reported in the Press that British Shipbuilders had referred the order to the Japanese. That is not quite either the whole story or a fair story. As I understand it from British Shipbuilders, this was one of approximately 1,500 inquiries that they receive every year. It was a rather tentative inquiry at that stage, as are so many such inquiries. British Shipbuilders respond positively to about 850 such inquiries. I think that the Answer to my noble friend's original Question is not to any major extent influenced by her supplementary question. The original Question relates to the stage in the restructuring programme which we announced on 23rd July and the progress made in that restructuring programme in order to reach a position where "privatisation "of the mainline activities becomes practical.

§ Lord LEE of NEWTON
My Lords, if indeed the Government are to go ahead at some stage with this suggestion, will the noble Viscount confirm that they will not simply try to denationalise those sectors which are making profits, but will, in fact, look at the whole industry and not leave the public to look after the sectors which are not making profits?

§ Viscount TRENCHARD
My Lords, I cannot give the noble Lord any assurance about the idea of "privatising "as a whole rather than in parts. Indeed, we have encouraged British Shipbuilders to 547 receive any serious inquiries in relation to any parts of their activity which they do not feel are vital to their mainstream activities. I know that they are in discussion on a number of inquiries in relation to fairly peripheral, but in some cases important, activities.

Lord CAMPBELL of CROY
My Lords, can my noble friend give the House the latest report on the associated matter of compensation, particularly where the three principal companies in naval shipbuilding are concerned?—as they were flourishing concerns at the time of nationalisation. At least three years have passed and as yet nothing appears to have happened.

§ Viscount TRENCHARD
My Lords, I think that compensation is a separate question from the Question on the Order Paper. However, the position on compensation is that since a declaration as long ago as 1975 was made on the principles of compensation that went into the 1977 Act, we have a situation where some cases for compensation have been settled in accordance with that Act, others have not, and where share dealings have continued for some five years since the original declaration on a basis of the provisions of the Act. So there are very real complexities regarding going back in any way on the 1977 Act.

§ Lord SHINWELL
My Lords, when the Government adopt the principle of denationalisation of the shipbuilding industry, can the noble Viscount say in what circumstances they will adopt it—when it is making a profit or when it is making a loss?

§ Viscount TRENCHARD
My Lords, I cannot answer the noble Lord in full, except to say that in the middle of the immense restructuring programme which we announced in July, which has been agreed with both sides of the industry, which involves a reduction from 28,000 people to a little under 20,000 people (that is going to be a slightly higher reduction, by agreement with the trade unions, in relation to the latest wage settlement) with order books in 1979 still running at only a little over half the target agreed between British Shipbuilders and the last Administration and endorsed by 548 us, is certainly not the moment to move at the present time.

§ Lord BROOKS of TREMORFA
My Lords, could the noble Lord not have been a little more explicit in his answer to my noble friend Lord Lee? Is it not the case that if the Government were to suggest selling those parts of publicly-owned industries which did not show a profit, they simply would not be able to sell them for that very reason? Private investors would not be interested in purchasing them. Therefore that leaves only the profitable parts of public ownership, and it is the intention of the Government to sell off the profitable parts of publicly-owned industry.

§ Viscount TRENCHARD
My Lords, I do not necessarily or fully agree with the noble Lord, Lord Brooks of Tremorfa. It is more than possible, when the restructuring programme is complete, with a loss-making activity which nevertheless has the possibility of being turned by a private enterprise interest with knowledge of that particular activity, that it might well make inquiries and take it over before profit is made.