HL Deb 27 July 1983 vol 443 cc1579-87

5.23 p.m.

Lord Trefgarne

My Lords, with your Lordships' permission, I should like to repeat a Statement being made in another place by my honourable friend the Under-Secretary of State for Defence Procurement. The Statement is as follows:

"Following close consultation and detailed discussions between Her Majesty's Government and the Government of Gibraltar on the arrangements for the closure of the Royal Naval Dockyard at Gibraltar, the establishment of a commercial ship repair yard to take its place, and certain related matters, the Government of Gibraltar have agreed to recommend to the Gibraltar House of Assembly, and to support fully, the terms which have been agreed between us. The Chief Minister of Gibraltar is proposing a Motion to this effect in the house of Assembly this afternoon.

"The Royal Naval Dockyard will now close by 31st December 1984, a year later than originally envisaged. To this end a state of redundancy will be declared in respect of the rundown of the Royal Naval Dockyard on 1st September 1983. Individual

redundancy notices will be issued thereafter as appropriate. Full redundancy payments will be made. It has been agreed with the Gibraltar Government that, following closure of the Royal Naval Dockyard, the yard will re-open immediately as the Gibraltar Ship Repair Company which will be a commercially managed enterprise with A & P Appledore International Ltd. acting as managers on behalf of the Gibraltar Government.

"Associated with the closure of the naval dockyard and the establishment of a commercial yard, Her Majesty's Government have agreed on a number of measures of support to the Gibraltar economy. The land and assets for the commercial ship repair yard will be handed over free of charge to the Gibraltar Government. A total of up to £28 million will be provided to meet the initial cost of conversion, working capital and operating losses, if any, in the first two years of commercial operation of the new yard. These funds will be committed only after satisfactory assurances have been obtained by the commercial operator from the work force on new working practices. Subject to those assurances, funds could be disbursed before closure of the naval dockyard. The flow of funds thereafter will depend on the maintenance of these working practices.

"During the first three years of operation of the commercial yard, work will be provided by the Ministry of Defence on Royal Fleet Auxiliary vessels to the value of £14 million at current prices. Work will also be available on other Ministry of Defence vessels to the approximate value of £0.5 million to £1 million per year. In addition the Ministry of Defence is leasing accommodation to the Gibraltar Ship Repair Company for use by management staff so as not to throw an additional burden onto Gibraltar's scarce stock of housing.

"Agreement has been reached on new arrangements for the transfer of surplus defence land to the Gibraltar Government. The Ministry of Defence has also undertaken to release to the Gibraltar Government a number of sites which will facilitate the development of tourist and commercial facilities on the Rock. Release will take place when present facilities on these sites have been reprovided elsewhere and when the Gibraltar Government are ready to proceed with development. In addition, the Ministry of Defence has agreed to review its long-term property requirements to see what other sites might in future be available for transfer to the Gibraltar Government.

"If there are any future difficulties for the Gibraltar economy, Her Majesty's Government would be prepared, in line with the policy of supporting Gibraltar during the present border restrictions, to look at the whole economic and budgetary situation with a view to considering whether, and if so what, further measures of support might be necessary or justifiable in the circumstances of the time.

"The closure of the Royal Naval Dockyard at Gibraltar inevitably poses great problems of readjustment for those who work there and for the economy as a whole. Nevertheless, given the substantial measures of support which I have announced, both for the dockyard and for the broader development of the economy, I am confident that the establishment of a commercial yard will provide a real opportunity for Gibraltar and its people to create a viable and effective alternative".

My Lords, that concludes the Statement.

Lord Bishopston

My Lords, may I thank the Minister for repeating the Statement made in the other place. Is he aware that there is concern that the practice of Statements on important policy matters such as this being made as the House goes into recess allows no opportunity for the House to examine matters in more detail and to debate the various aspects?

Although according to the Statement the Government of Gibraltar support fully the terms of the agreement, is it not a situation where they have no alternative but to accept what is really the doctrinaire policy of Her Majesty's Government, which may not contribute to a sensible overall Mediterranean foreign and defence policy? The Statement says that the £28 million of aid and funds: will be committed only after satisfactory assurances have been obtained by the commercial operator from the work force on new working practices". and: will depend on the maintenance of these working practices". May I ask whether consultation has taken place with the trade unions and the work force; and, if so, with what result? Has there been any welcome for the proposal? Is it not also in addition dependent on the acceptance of 900 redundancies? The Statement later says that there is also the possibility of "great problems of re-adjustment".

On 19th July, at col. 177 of the Official Report, the Prime Minister stated in another place: we have made it clear to the Spanish Government that we have a firm commitment in respect of the wishes of the people of Gibraltar, as enshrined in the Gibraltar constitutional document". Can we be told what those commitments are and how this Statement is compatible with them?

Since, as reported in the next column (col. 178), the Prime Minister said, Spain cannot enter the EC until the restrictions on the border between Spain and Gibraltar are lifted", can we be told whether the European Community has been consulted about the contents of the Statement, and, if so, with what result? Clearly, as the Prime Minister indicated in her reply to questions on Gibraltar on 19th July in the other place, these policy changes will affect relations with Spain. Can we be told whether the Lisbon Agreement will be fully implemented, and does this Statement help towards that situation? Also—and this is of great importance —have our NATO allies been informed of the details of the Statement, and is there agreement with what the Government intend to do?

Finally, will Her Majesty's Government be surprised if, as in the case of the Falklands, the Spanish Government get the wrong message, and is there not here the beginning of yet another very heavy financial and long-term commitment, arising from this policy Statement?

Lord Mayhew

My Lords, I thank the noble Lord for repeating the Statement. May I ask, first, for some detail about the redundancies? How many redundancies will there be? How many of those made redundant will be taken on by the United Kingdom Government, especially in the base at Gibraltar, and how many will be taken on by the new company? May I ask what is to be the future position regarding local employment in the base? And how does NATO view the base? Have we had assurances of the value that NATO places on the naval base?

May I ask what provision has been made for continuing the capacity for major naval ship repairs in the new ship repairing unit? We were told about a very small, three-year arrangement, but can the noble Lord not reassure us that there will be a continuing capacity for emergency naval ship repairs? Finally, may I ask what is the value of the land and assets and the surplus defence land being transferred? I should be obliged to the noble Lord if he will answer those questions.

Lord Trefgarne

My Lords, I am grateful to both noble Lords, and I shall endeavour to answer as many as possible of the points which they have put to me. The noble Lord, Lord Bishopston, first asked me about consultation with the trade unions. As the noble Lord will know, the trade unions are very adequately represented within the House of Assembly in Gibraltar, and they are fully aware of what is going on. I should not want anything that I have said today to detract from the commitment that we have long made with regard to Gibraltar in her present difficulties concerning the border, which I think is well known to the noble Lord; and there is certainly no change in our position on that.

This is not specifically a matter for the European Community, because the main purpose of these arrangements is to rationalise the dockyard capacity available to the Royal Navy; that is why we have though it right to make these arrangements. Indeed, that is why this is not really a matter for NATO, since all the members of NATO make their own national provision with regard to the maintenance and repair of their ships.

The naval base in Gibraltar, which is quite separate from the naval dockyard, is indeed a facility used by NATO, and there is of course no change in the arrangements there. Indeed, 200 of the staff currently working at the dockyard will be taken on at the naval base, leaving about 900 people immediately redundant from the dockyard; but a number of those—at least 300—will be taken on as soon as the dockyard reopens, and for them at least therefore, there will be more or less continuity of employment. We expect that a large additional number of personnel from the dockyard will be taken on by the new commercial managers. I cannot be specific as to quite how quickly that will happen. It will depend how quickly the capability of the dockyard builds up, and in particular on how quickly it is possible to bring into effect the new working practices which have been referred to.

Both noble Lords asked me, too, about the importance of this matter with regard to the Lisbon Agreement. So far as the British Government are concerned, we are now able and willing to implement the Lisbon Agreement. It remains only for the Spaniards to implement their side of the agreement, and I hope that they will agree to do that very soon. We have a formal agreement with the Spaniards, and we now look to them to honour their side of it. In that context, there is really no question of any message, good or bad, being sent to the Spaniards in regard to this matter. Our naval posture in Gibraltar remains, as I say, unaffected.

The noble Lord, Lord Mayhew, also asked me about the value of the lands being transferred. I must tell him that it is very difficult to arrive at a proper value for the lands because the market forces in Gibraltar are particularly unusual. I do not have a figure I could give him that I think would be at all meaningful.

The noble Lord also asked me about the capacity of the dockyard and the future capability in regard to looking after Royal Navy ships. As was indicated in the Statement, for the first three years the dockyard will be seen to work on certain Royal Fleet Auxiliary vessels, and it certainly will be possible for us to use the dockyard after that if we so require.

Lord Boyd-Carpenter

My Lords, my noble friend told your Lordships that the government of Gibraltar were recommending acceptance of this arrangement to the Gibraltar House of Assembly this afternoon, but can he confirm that Sir Joshua Hassan and his colleagues have made it absolutely clear that they would infinitely prefer the continuance of the operation of the historic naval dockyard? Is my noble friend also aware, as was suggested by the noble Lord opposite, that there is an unhappy connection—psychological, perhaps, in some people's minds—between this step and the really disastrous decision last year by the Ministry of Defence to withdraw the Arctic patrol ship "Endurance" from the Arctic, which was undoubtedly understood by certain people in the Argentine as being an indication of at least diminished British concern with the Falkland Islands?

Is my noble friend aware that in view of what would be the disastrous consequences of creating any similar impression in Spanish minds, the taking of this step and the closure of the dockyard make it all the more incumbent on Her Majesty's Government to be brutally clear to the Spanish Government that there is, and can be, no question of even discussing the handing over of sovereignty of Gibraltar to any country—Spain or anybody else—without the consent of the people of that loyal colony?

Lord Trefgarne

My Lords, I can certainly confirm what the noble Lord asked me in the last part of his remarks. As I said earlier, the Lisbon Agreement is already in force, and it paves the way to settle all outstanding differences. That is perhaps the fundamental difference between this situation and the situation which prevailed last year elsewhere in the world, in particular in the South Atlantic. We have an agreement with the Spanish Government over ending the restrictions on the border at the frontier with Gibraltar, and that agreement also provides for subsequent discussions on anything which the Spaniards seek to raise. So I do not think that the situation is in any way parallel. In any event, as I say, the NATO posture in Gibraltar remains unaffected.

Lord Boyd-Carpenter

My Lords, will my noble friend answer my first question as to the attitude of Sir Joshua Hassan and the Gibraltar Government?

Lord Trefgarne

My Lords. I apologise for not answering that question. Sir Joshua appears to be very happy with the arrangements that have been reached. No doubt he would have preferred the Royal Naval Dockyard to have remained forever exactly as it is, but I am afraid that that was not one of the possibilities open to us. It was clearly very much part of the excess capacity that we had apprehended in the Royal Naval Dockyard system generally, and I think that Sir Joshua is well pleased with the agreement that he has reached with the British Government.

5.40 p.m.

Lord Kilmarnock

My Lords, we should like to thank the noble Lord for repeating the Statement. I wish to put one or two questions. The Statement refers to a total of up to £28 million that will be provided to meet the initial cost of conversion. It is not made clear in the Statement whether that will be in the form of a loan or subsidy. The noble Lord can perhaps clear that up.

The work that is likely to come from the Ministry of Defence is mentioned in the Statement. I wonder whether the noble Lord has any news of any other work in prospect. I have considerable doubts about the viability of this enterprice. That does not mean that we do not wish it fair wind. On jobs, priority should obviously be given to those who have been made redundant by the closure of the dockyard. But will the Government, if the enterprise goes well, give some consideration to encouraging the Gibraltar Government to offer some work permits for Spanish workers? Do the Government not agree that this would be the best way of improving relations with the mainland leading to full implementation of the Lisbon Agreement?

Lord Trefgarne

My Lords, I think that the last point is a matter for the Gibraltar Government and not for me. In the first part of his supplementary question, the noble Lord asked about the terms on which the money would be made available. As I said in the Statement, subject to the implementation of the improved working practice referred to, the money will be made available on grant terms. There is no question of a loan being involved in this case. The work that we are providing will, in the early months and years of the new commercial dockyard, be substantially all that it can cope with. I hope therefore that by the end of that time it will be in a position to take on a good deal of other outside commercial work.

Lord Bishopston

My Lords, may I follow up the Minister's replies to my own and other supplementary questions. I am sure that there is a feeling of some doubt about the Government's knowledge of the meaning of the word "consultation". It seems that what the Government mean by consultation is just telling people what they have decided, whereas true consultation is telling people what you have in mind, asking their views and being prepared to modify your plans. In the case of NATO, the EEC, the Lisbon Agreement and in relation to the noble Lord's question about the experience of the Falklands, there is still an element of doubt. I believe that the House will go into the Recess with a feeling that the wording running through the Gibraltar Rock is one of compromise which will cost us dearly in the future.

Lord Trefgarne

My Lords, cost us dear it will, in terms of £28 million—

Lord Bishopston

That is the beginning.

Lord Trefgarne

—over the next three years or so. That is a substantial amount of money. The Gibraltar community is of course important; but a fairly small community nonetheless by our standards in terms of the number of people living in Gibraltar. I believe that we have provided them with a very effective and appropriate package for the problems that they have put to us. As I have stated, Sir Joshua Hassan is entirely happy apparently with the arrangements.

Lord Merrivale

My Lords, while welcoming the Statement, particularly that part which states that the closure of the naval dockyard will be delayed by one year, may I ask my noble friend the Minister whether his attention has been drawn to the July report on Gibraltar maritime policy drawn up by the Gibraltar branch of the British Maritime League, referred to in an article in the Daily Telegraph by Desmond Wettern, its naval correspondent, last Monday? Would he care to comment on one or two of the statements made in the report and referred to in the article; namely, that over the period of a decade and a half, there has been a falling offin the number of ships calling in at Gibraltar of 50 per cent; while on the other hand, there has been an increase in the number of ships calling in at the port of Algeciras to an extensive degree? Does my noble friend not consider that the developing ship repair yard at Algeciras will pose a threat to the future of the Gibraltar Ship Repair Company when it comes to be constituted in early 1985? In other words, does he not feel that the number of ships that might be willing to call into Gibraltar for repair might desire instead to go to Algeciras and that this would be regrettable?

Lord Trefgarne

My Lords, it will of course be necessary for the new commercial shipyard in Gibraltar to operate on an efficient and competitive basis. I have no doubt that under the new arrangements it will do so. The facilities at Algeciras to which my noble friend refers are I understand, fairly modest; but I do not think that the Gibraltar shipyard will be afraid of genuine competition.

Lord Hatch of Lusby

My Lords, I think that the noble Lord will agree that this is an extremely generous package to Gibraltar, much more generous than the Government have shown themselves towards dockyards closing in this country. I should like to ask two specific questions. Is the sum in the grant, of up to £28 million, to come out of the British provision for overseas aid? If so, although, presumably, he does not have the figures, can the noble Lord publish the figures showing how much per capita this means in terms of overseas aid provision to the population of Gibraltar? Secondly, can he say whether there have been any consultations between Her Majesty's Government and the democratic and socialist Government of Spain before this arrangement was finalised? If so, what comments have the Government of Spain made over the package as a whole?

Lord Trefgarne

My Lords, the population of Gibraltar is something in the region of 20,000. If the noble Lord's agile brain can divide 28 million by 20,000, he will arrive at the figure which he requested in the first part of his supplementary question. As to consultation with the Spanish Government on the matter, I do not think that this would have been appropriate in this case, and it did not take place.

Lord Hatch of Lusby

My Lords, that really does not answer the question. Is this money coming out of our overseas aid? I can divide 28 million by 20,000, but how does that compare with the average per capita aid that is given by this country to the developing world as a whole?

Lord Trefgarne

My Lords, I think that I can answer that supplementary in one word: generously. I can also say that the sum of £28 million does indeed come from the overseas aid budget.