Dockyards Decision: Social Effects (Hansard, 6 July 1993)

§ Viscount Goschen
My Lords, the Ministry of Defence estimates that there will be a reduction of about 450 in the workforce at Rosyth as a direct result of reduced Ministry of Defence work and about 350 job losses at Devonport because of the declining overall refit programme. A consultation document will be issued by the Ministry of Defence shortly and copies of this will be placed in the Library.

§ Lord Sefton of Garston
My Lords, I thank the Minister for that reply, particularly as it comes from the Department of Employment. Is he aware that it featured in the Statement made by the Defence Minister but that it comes nowhere near to answering, either directly or in principle, the substance of my Question? May I therefore repeat it? Did the department or the Government carry out a proper analysis of the social and employment prospects when coming to a decision that is vitally important to the whole nation? If I have to give examples, on employment a comparison was made by the Minister between the South, which includes Devonport, and Scotland. Did that comparison take account of the type of unemployment that exists in the South? How many people in the South have been made redundant and taken early retirement with a good income in addition to being registered as unemployed as compared with those in Scotland? What would be the total effect on the nation as a whole if there were a transfer of skills from Scotland to Devonport, so exacerbating the situation in already congested areas of the South? The third question that needs answering—

Noble Lords
Oh!

§ Lord Sefton of Garston
Noble Lords are only wasting time. The third question that needs answering is: when the economy picks up again, how much do the Government estimate that there will be further overcrowding in the South and the South East, so exacerbating the difficulties of people in the North?

§ Viscount Goschen
My Lords, the figures for potential job losses were calculated by MoD consultants on the basis of projected workloads. These draw upon the business plans submitted to the MoD by the dockyard companies. Unemployment is high in both areas. The figure for Plymouth is 12.6 per cent. and for Dunfermline 11.2 per cent. Although higher in Plymouth than in Dunfermline, the difference is not great.

§ Lord Ewing of Kirkford
My Lords, is the Minister aware that one of the problems with the Government's 1201 job loss projection is that the Government are talking about direct jobs whereas in fact the net loss will be well over 1,000 when we begin to look at the linked jobs? Is he further aware that it is not only the Dunfermline travel to work area that is affected by the decision in relation to Rosyth? The whole of central Scotland, from where Rosyth draws its labour force and its supplies, is affected by the decision on Rosyth. Does he agree that the one thing that could instil confidence into the area is for the Government to give a guarantee of the surface fleet refitting work and not merely a promise? The workers want the guarantee. Will the Minister give that guarantee this afternoon?

§ Viscount Goschen
My Lords, the long-term effects of this proposal on the areas concerned will depend largely on the effectiveness of supplier companies in finding other markets. But the work that the MoD will allocate to Rosyth is by any standards a substantial amount of work for which the yard will not have to compete. Any business would welcome such a large allocation.

§ Baroness Turner of Camden
My Lords, does the Minister agree that it is about time that the Government had an overall strategy in regard to industry? Can they look again at some of the recommendations made by the Engineering Employers' Federation, among others, and endeavour to develop an overall strategy? Otherwise do we not simply have constant repetition of groups of employees being put in a competitive situation one with another over scarce amounts of work? Have we not already had the same situation with Barrow-in-Furness and Swan Hunter? Now we have the situation with Devonport and Rosyth. Is it not time that the Government had an overall policy in these matters?

§ Viscount Goschen
My Lords, the Government firmly believe that in the long term jobs are best created by an economy which is efficient. Decisions are best made on those commercial grounds.

§ Lord Thomson of Monifieth
My Lords, the noble Lord, Lord Ewing, talked about guarantees. Why did the Government not keep to the guarantee that was given on their behalf by the noble Lord, Lord Younger? Did it have anything to do with the public opinion poll conducted by Devonport Management Limited which was passed on to Conservative Central Office, claiming that 21 Conservative seats in the West Country would be lost if the decision was not taken in favour of Devonport?

§ Viscount Goschen
My Lords, we have already stated that that difficult decision was made on the firm basis of the key factors of soundness, safety and cost.

§ Lord Sefton of Garston
My Lords, the Minister, the noble Viscount, Lord Cranborne, said that the only way forward would be to take a decision based on the analysis that we had before us. That analysis merely dealt with the cost to one dockyard as opposed to the other. The question now facing the Government is what will happen in the future. Do the Government have any plans at all to redistribute job resources from the South to the North?

§ Viscount Goschen
My Lords, important though the employment effects are, the result would have been roughly neutral whichever yard had been selected. Therefore that could not be a decisive factor. I should add that the Government are committed to Rosyth. We wish Rosyth to develop into a yard that will bid competitively for surface ship refits and other work.