HL Deb 21 February 1985 vol 460 cc712-21

5.53 p.m.

Second Reading debate resumed.

Viscount Simon

My Lords, in bringing the House back to the consideration of the Shipbuilding Bill I should like to apologise for the fact that I do not seem to have very much voice this evening, but fortunately for your Lordships and for me I also do not have very much to say.

I join with the noble Lord, Lord Bruce of Donington, in thanking the noble Lord the Minister for his introduction of this Bill: he certainly made it sound very simple. I listened with interest to the noble Lord, Lord Bruce, who certainly did not find it simple and thought of all kinds of implications which I am not prepared to follow entirely. However, in any case the noble Lord, Lord Bruce, broadened the issues of this Bill very widely. The noble Lord referred (as I was going to refer) to the exchanges at Question Time yesterday which elicited the fact that some serious investigation is to be made and has been undertaken into the adequacy of our shipping in time of war. In my view we must look at the subject very much more widely than that: we must look at the adequacy of our shipping and our shipbuilding to meet the country's requirements in peace as well as in war. For that purpose I suggest to your Lordships that a much wider debate is required. I hope that the noble Lord the Minister will suggest to his noble friend the Chief Whip that on a suitable occasion—and not too far ahead—time should be found for a wide-ranging debate on these allied subjects.

I turn to the Bill. As the noble Lord the Minister reminded us, when it was first introduced in 1978 the scheme was described by the Minister in charge of the Bill—Mr. Kaufman, in the last Labour Government—as intended to alleviate the human problems caused by any contraction of the shipbuilding industry. Therefore, unless we take the view that no further contraction is likely, it is surely wrong to remove that support now. For that reason, I should have thought that it was almost self-evident that the scheme ought to be extended. In fact, I would be inclined to ask why it should be extended for only 18 months. After all, if the position in the shipbuilding industry were radically to improve—as we would all hope, but perhaps not with much confidence—there would be no harm if the scheme still existed; it just would not be used. It would surely be much better to extend the scheme for longer than 18 months.

However, if such a course is difficult at this stage of our discussions of the Bill, then perhaps it would be better to introduce a clause which is quite common in Bills of this kind and which provided that the Secretary of State could, by order, extend it for a further period of whatever length was thought to be right. If, unfortunately, that then became necessary—and I am bound to say that I am rather afraid that it would become necessary—the whole matter could be dealt with without having to bring another Bill before Parliament. I should have thought that that course would be very much easier.

When the noble Lord the Minister addressed us, I was not quite clear about the Government's judgment. Is it presently the case that the Government believe that British Shipbuilders has now adequately skimmed down the size of the industry so that it can reasonably be hoped to survive on its own? I should not have thought so. We have all been heartened by some encouraging news in recent times, especially the large order won by Govan which was announced yesterday. But overall it seems to me that the outlook is extremely dismal. There remains massive overcapacity throughout the world in the construction of ships. I found little sign of any large recovery in demand. Therefore, I could not escape the conclusion that the scheme should be extended, and so I find myself in support of the Bill.

There is only one point upon which I should like to dwell a little longer, and that is the matter of the employees in those parts of British Shipbuilding which the Government propose to dispose of to the private sector. This matter was discussed in another place at considerable length. However, I am bound to say that, after reading through the debate, I was not very clear what decision had been reached. Has it not always been the policy that, when legislation is under consideration to transfer the ownership of particular undertakings from one body to another, from the private sector to the public sector or vice versa, Parliament has always taken the view (at least, it has always taken the view in my brief time here) that one of the most important things was to guarantee the conditions of work of the workforce? Why should that not equally apply when it is proposed that parts of the shipbuilding industry should be handed to private interests?

I appreciate that this is difficult, and it may be that it is impossible to apply the scheme in its present form precisely to those who will no longer be employees of British Shipbuilders. But I believe that we have a duty to make sure that in one way or another the employees do not lose these advantages merely because Parliament decides to transfer the undertaking in which they work to the private sector. When this matter was raised in another place the Minister could say only: There may be an opportunity to negotiate compensation".—[Official Report, Commons, 9/1/85; col. 827.] He went on to emphasise that the employees who find themselves with a new master will have no statutory right. Is that really good enough? Should not employees in this position be given a statutory right? I suggest that it would not be very difficult to do this by making it a condition of the sale of any enterprise to a new buyer that the purchaser must provide the same conditions as exist today under the Bill. I hope that when the Minister replies he will be able to say something about that.

I want to refer to one other matter. When we say that the object of this whole exercise is to alleviate the problems which arise from the dwindling of the shipbuilding industry, surely there are other steps that could be taken in that direction? Can the noble Lord the Minister tell us whether anything is being done in the shipbuilding areas which have suffered so heavily (after all, the areas in which the shipbuilding industry provided most of the employment are fairly small) on the lines of what has been done, perhaps rather tardily, in the coal industry and what I believe has been done in the steel industry, actively to stimulate the setting up of new industries in those areas? I have never seen any reference to that; it may be that some work is going on. But I believe that, when we have this tremendous fall in the number of people employed, more is needed positively to encourage and make possible the introduction of new industries over and above what is already provided by the Government's regional policy.

Those are the only two points that I wanted to raise at this time. I look forward to the big debate, which I am sure we must have, but I think it would be better to have it at a time when we can devote a whole day to it.

6.3 p.m.

Lord Molloy

My Lords, as has been indicated by my noble friend Lord Bruce of Donington, I believe that this Bill has the wrong title. It is not a shipbuilding Bill at all; it is a Bill to prepare for the selling off, to private folk, of the British public's assets in shipbuilding, rather than that they should be owned by the nation. In consequence, the Minister painted the Government's usual plastic, rosy picture of how they will throw to the workers the redundancy lifebelt of cast-iron or both ends of the lifeline at the same time. What they are really doing is wrecking the old Red Duster, which has served this nation so very well for almost 100 years, in war-time and in peace-time.

I believe that it is a great tragedy that an industry such as the British shipbuilding industry should have been treated as it has over the past few years. As a consequence, I believe that the rosy picture of saving people from joining the dole line too quickly by offering some redundancy pay is an appalling policy. If we are to say that every time a few hundred thousand work people are sacked, it is quite all right because they will receive redundancy pay, we shall all be starving. It is an appalling policy.

My noble friend Lord Bruce mentioned the vast array of skills involved in building a ship. At one time no one could build ships like us. If the industry had been given some encouragement and the research, which was started four or five years ago, had not been abandoned, the probability is that British shipbuilding would have been picking itself up despite harsh competition. We must realise the skills and crafts involved in building a ship, the skills of British workmen—the carpenters, joiners, engineers, heavy and light electricians, shipwrights, boilermakers, "red loaders" (they are the rough painters who do a very skilful job in applying the first coat of paint), riveters, plumbers, cranemen, riggers, storemen, progress chasers, scaffolders, and the sheet metal and ventilating engineers. That vast array of British craftsmen will be dispensed with by this Conservative Government. That is one thing that Mrs. Thatcher is not telling the Americans, or for that matter anyone else.

Therefore, I believe that the end of redundancy in 1986 means much more than just the end of redundancy. There will be no schemes for craftsmen who are sold off to private organisations but only, as the Bill indicates, hopes of a scheme which might be negotiated. I ask the Minister for an assurance that such schemes will be as good as the one which exists at the moment.

Privatisation threatens the future of shipbuilding craftsmen engaged in sectors where promises have already been given that they will be sold off. Consequently, I can understand that these workmen have been tempted to apply for redundancy now, and that they want to ensure that the compensation which is paid now is better than nothing when privatisation becomes a reality. They do not want to give up their jobs; they do not want to lose their crafts. But they sense that the Government's policy is to end British shipbuilding; so they think that they will get out now and receive £2,000. I believe that any Government which put that kind of thought into the minds of the craftsmen whom I have listed ought to have second thoughts.

This is a sinister Bill. Perhaps I may quote from Lewis Carroll. The way in which the Government are doing this reminds me of the lines: How cheerfully he seems to grin, How neatly dressed his claws; and welcomes little fishes in— with gently smiling jaws". But this Government are not so much a crocodile but more a shark, floating around on the political scene to look after one tiny sector of their political supporters and ignoring the mass of workmen who are the real creators of the wealth of our nation. We saw this when the workers at the Tyne Shiprepairers were bought out of a scheme. Then—as even now—craftsmen who left British Shipbuilders were compensated. Those who leave after 1986 face the possibility of suffering tremendously and getting nothing.

What does this add up to? Workers in yards to be privatised leave. They receive the benefit of redundancy pay. This advantages the purchasers—those about to buy—and privatisation. Half the work force is bought off, not by them, but by the taxpayer whom this Government love so much. That is who will pay the redundancy, ready for the private people who will purchase what is left of British industry. There will be a smaller work force and, of course, there will be no social obligations. That bill is going to be left for the taxpayer.

There is great worry and fear, and it is dominant in the industry at all levels. There has been a crisis for a number of years. The agonies of this crisis in our shipbuilding industry have been shared right from the top industrialists down to the craftsmen who work to make a reality where at first there is nothing but a few lumps of wood at the bottom of a dry dock and where there emerges a massive ship. Over the last few years they, too, have been wondering when is something going to be done.

My noble friend Lord Bruce of Donington quoted the chairman of British Shipbuilders, Sir Robert Atkinson, and I should like to quote what it was said that he had uttered. In another place, as reported in Hansard, at column 797 of 9th January, my honourable friend Mr. Smith said that Sir Robert Atkinson had said that, during his period in charge of British Shipbuilders he was never asked by Ministers about research and development and about the future of the industry. He added: 'But if I talked about closures or redundancies, their eyes shone'. That is the former chairman of British Shipbuilders…". That was not from an extreme left-wing politician; it was from Sir Robert Atkinson himself. I would have hoped that this Government would at least have taken some cognisance of what he had to say.

Our island, Great Britain, is a maritime nation, and I believe that it is essential that we should have a proper shipping industry. If we are going to have a shipping industry—because there is a difference; and it is vital to this country—we must have a shipbuilding industry. A shipbuilding industry is crucial to a shipping industry. Therefore I believe that we ought to end the folly of this privatisation. I hope that the Government will have second thoughts and put the nation before their private political friends, irrespective of what party they might belong to.

It is true that we were up against it in the past few years against Japan and Korea. Much of our British skill was exported over there, and the Government should have been aware of that at the time. But now what should we do? It is not too late. We should establish a Royal Commission to look at this fundamental and great British industry of shipbuilding, which is so vital to a maritime nation.

It is sometimes said that Royal Commissions take a long time. We have all said that, and we all know it, but I am of the opinion that there are enough experienced Members in this House who know full well that often Royal Commissions have been a boon. Admittedly, they need to be stirred up now and then. If a Royal Commission were established, it could be told, under the terms of reference, that it had about 12 or 18 months to report. With the best minds in Britain concentrating on this subject, something would emerge which would help us. I want to see manufacturing industry given at least the same importance, if not more, than is presently being given to the service sector.

This Bill also provides for more unemployment. I do not believe that that is a humorous matter in any way. More unemployed! We have 4 million unemployed. The dole queues will be lengthened by the list of skilled craftsmen who will not be building ships under this Government but will be getting a few pounds redundancy money; and then, it seems, they will for years be joining the dole queues. There will be more unemployed; more degradation; more upsets in families; and more hopelessness for British craftsmen.

Let the Government show confidence in this industry and in the men at all levels who work in it. Let us plot a new course for the British shipbuilding industry. Let us acknowledge that this shipbuilding industry is a great industry, and that if we are prepared to say so, we can chart a course so that it will sail into the seas of success. I have some knowledge of this industry, of all the men who work in it from the top levels of management right through to all the skilled craftsmen, and I believe that this is a valuable asset for my nation. The Government should have second thoughts and save this industry from the destruction they are anticipating.

6.15 p.m.

Lord Lucas of Chilworth

My Lords, I am grateful to the four noble Lords for their positive contributions this afternoon. Perhaps, however, they were positive contributions which might have been better placed were we discussing the shipping industry in the wider context. I find it absolutely incredible that when we come forward with a Bill to extend for 18 months a scheme to help those who suffer the hardships inherent in a declining shipbuilding industry—a shipbuilding industry that is declining across the world—noble Lords should attack us and accuse us, the Government, of having some devious reason.

The noble Lord, Lord Bruce of Donington, said in his opening remarks that it was a "seemingly innocuous little Bill", and he ended up in somewhat robust and characteristic fashion by saying that it was a "squalid little Bill". There is nothing squalid about continuing a scheme which cost some £36 million last year, and probably a little less this year, to alleviate the hardship, on top of—if I may remind your Lordships—the normal Department of Employment redundancy payments scheme. I do not find that squalid at all.

The noble Lord, Lord Molloy, and the noble Viscount, Lord Simon, asked for a debate. That is not within my gift. They have their Chief Whips. If they care to give up their day to debate the industry, I know that either my noble friend Lord Brabazon of Tara or I, or another noble colleague, will be delighted to answer such a debate. But let us now just have a look at what has been happening—

Viscount Simon

My Lords, before the noble Lord leaves that point, may I ask him whether he is saying that this enormously important issue cannot be discussed in Government time?

Lord Lucas of Chilworth

My Lords, I did not say that. I just suggested that if they wanted to debate it, they might ask their noble friends the Chief Whips whether they had the time. I do not know; I cannot answer that. It is not for me to answer.

I want briefly to refute the charge that we have abandoned the shipbuilding industry. Nine-hundred-and-thirty-four million pounds in public dividend capital since nationalisation has gone into the shipbuilding industry. Another £250 million has gone to British Shipbuilders from the intervention fund. Sadly, although some of that money has gone into re-equipping some of the yards, the vast majority of it has gone to fund production costs. It has in fact gone to fund bad debts from the years when the industry was nationalised. There can be no doubt that plenty of support has been given.

When this Government came into power in May 1979 we introduced some reality into the business, on the basis that you cannot continue to throw good money after bad. That is exactly what we have done. The industry is better today than it was. It is more competitive. I said earlier this afternoon about Austin and Pickersgill that when disaster threatened them in the face only a few weeks ago it did not take long for management and unions to find new working practices and arrangements which secured for them an order.

I totally refute the argument that this Government have abandoned the industry. If this Government have abandoned anything, it is the principle of throwing good taxpayers' money after bad in a declining industry. We have done much to alleviate the hardship outside by paying redundancy payments. There is no doubt about that.

The noble Lord, Lord Bruce of Donington, and the noble Viscount, Lord Simon, in a different way, asked me why we have given notice of discontinuance of the scheme at this time. The Bill does not abandon the scheme at all: it continues it for 18 months. In the past we have had extensions of two years and two years. What we have said—and I give notice today—is that we do not see the necessity or the desirability of continuing the scheme after 18 months or so. There is no case for maintaining the bureaucracy of a statutory scheme for the two nationalised concerns after 1986.

Although I do not look for further redundancies, should there be some, both British Shipbuilders and Harland and Wolff will be employing, as I said in my opening remarks, one-third of the entire industry. Is it right that one-third of the industry should have preferential treatment? I do not believe that is so, and that is why I gave notice today, which is a proper and honourable thing to do, that this is our current thinking. There might be some truth in the allegation made by the noble Lord, Lord Bruce of Donington, were I to have withheld that information.

I find it not untypical of the noble Lord, Lord Bruce of Donington, to seek to find the very worst aspects of our Bill. He said to us this afternoon that the Bill provides the means to induce much redundancy before privatisation in order to enhance the value to the private sector. I do not say that I have quoted him absolutely precisely, but I wrote down those words. What a perverse way of looking at things! I sometimes despair.

Lord Bruce of Donington

My Lords, if the noble Lord will excuse me for just a moment, he is very courteous and I am much obliged to him. The noble Lord seemed to indicate that the decision of the Government to terminate the scheme in December 1986 was not final. I refer the noble Lord to column 51 of the proceedings of the second day of the Standing Committee in another place, where the Minister's statement is quite specific. He was asked the question whether the present scheme would end in December 1986: Am I correct? Mr. Butcher: Absolutely".

Lord Lucas of Chilworth

My Lords, I do not know why the noble Lord should have read that out, because that is exactly what I said. We have given notice—and I repeated that notice in your Lordships' House this afternoon—that it is our intention that the scheme shall end in 18 months, in December 1986. That is 18 months from June 1985. I do not know what the noble Lord is arguing about, because I am not arguing. I am saying that this Bill does not stop the scheme. We have given notice of our intention that it will stop. In other words, we have given notice of our intention that in December 1986 we shall not be bringing forward another Bill to extend the life. That is fair, reasonable and proper.

We have said that we will underwrite the cost of a successor scheme through the public dividend account. I do not know what can be more honest and open than that. What I do say without any shadow of doubt in answer to the noble Lord, Lord Molloy—who, in his usual voluble way and emotive words, said, "We are wrecking the Red Duster" is: what an absolute lot of nonsense! We are ensuring that we do not continue to fossilise our industrial structure by pouring in more and more money and deriving no benefit. What we have to do—and he jolly well knows it—is to facilitate essential change. We have at the same time to pay regard to those people who suffer thereby. It is not just a couple of thousand pounds, as he said—

Lord Molloy

My Lords, may I—

Lord Lucas of Chilworth

My Lords, perhaps the noble Lord will allow me to finish. If a man aged 50 with 20 years' service accepts redundancy, he receives a cash lump sum payment of £5,300 and he receives £46 a week for two years. That is on top of the ordinary employment redundancy scheme arrangements. I do not believe that that is just a couple of thousand pounds.

Lord Molloy

My Lords, the idea of this Bill is to privatise the shipbuilding industry, and then it will be purchased by certain people thinking that they will make a lot of money out of it. But if the Minister keeps up his argument now the Government will be lucky if they can give it away.

Lord Lucas of Chilworth

My Lords, notice of the Government's intention to sell a number of the yards was given. I repeated it in your Lordships' House over a year ago. This is not a privatisation measure. If those who buy the yards are able to make a profit, that will be absolutely splendid because the nationalised industry has not made a profit. It has made losses successively year after year, as high as £161 million. If somebody can turn that into profit, I think that is splendid.

I do not think there are any other main questions to be answered, other than one asked by the noble Lord, Lord Bruce of Donington, in relation to the writing off of the Upper Clyde Shipbuilders' loan. He said that that was linked with privatisation. Of course, it is nothing of the sort. It has nothing whatsoever to do with privatisation; nor has it very much to do with British Shipbuilders. It writes off a loan which was made directly by Government to a company which went into liquidation in 1972. It is sensible to remove from the accounts an amount of that kind.

The noble Viscount, Lord Simon, thought that perhaps we should require new owners to offer the same redundancy schemes as apply now. While in general terms any new owner who buys an undertaking from the state accepts in principle the contractual obligations with regard to work methods, employment conditions and so on, including redundancy schemes, it would be quite wrong to bind that new owner to schemes, particularly in the shipbuilding industry, which has grasped the nettle and the men in which have grasped the nettle. They have responded to change, and it is up to the companies to negotiate those changes with the new employer.

I do not know why the noble Lord, Lord Molloy, laughs. I said at the outset that this is a simple and generous, small Bill. It will go some long way towards ensuring that the hardship that occurs in necessary change is alleviated to some extent. I ask your Lordships to give this Bill a Second Reading this afternoon.

On Question, Bill read a second time, and committed to a Committee of the Whole House.