HL Deb 24 June 1993 vol 547 cc513-26

6.15 p.m.

The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne)

My Lords, with the leave of the House I shall now repeat a Statement being made in another place this afternoon by my right honourable friend the Secretary of State for Defence. The Statement is as follows:

"The House has been waiting to hear our proposals on the future of the Royal dockyards and in particular on the location of nuclear refitting. This is a matter which has been under long and careful consideration. I am now ready to place our proposals before the House.

"During the 1980s the size of the nuclear submarine refit programme as a whole meant that all existing submarine docks at Devonport and Rosyth were required and a new dock had to be provided for refitting Trident. We indicated at that time that the new facility was to be built at Rosyth. With the end of the cold war and the reduction in the size of the submarine and surface fleet it became possible and desirable to consider new and less expensive solutions. Accordingly, in July 1991 the Ministry of Defence invited both Devonport and Rosyth to put forward proposals for nuclear refitting work.

"Since then we have subjected the proposals made by the two dockyard companies to the most detailed and intense scrutiny. We have had three proposals: two from Babcock Thorn Limited, one in respect of the new RD57 facility at Rosyth and the other for upgrading the existing docks at Rosyth; and one from Devonport Management Limited in respect of upgrading the existing docks at Devonport. These proposals have been evaluated for comparative purposes by the Ministry of Defence, supported by independent specialist advisers.

"This evaluation has taken some time. I know that the decision has been keenly awaited, but I do not regret the time taken. The fact is that the upgrade proposals now being considered cost over £250 million less than those we originally had under consideration. I make no apologies for allowing the competitive process to push the costs down to the benefit of both the Royal Navy and the taxpayer. We were also keen to ensure that both dockyards had a full opportunity to put forward proposals on a fair and equal basis.

"The scrutiny has however not been simply a cost comparison. Before we could consider the cost of these proposals, there were two conditions that had to be fulfilled.

"The first was that the proposals had to be completely sound and technically well-founded. Our detailed examination has reassured us that the proposals from both yards can be relied upon to produce facilities of the required standard and that both yards have the skills and the experience to carry out both submarine and surface ship refitting. Over the past 10 years Devonport has refitted seven nuclear submarines as well as 72 surface ships and Rosyth has refitted five nuclear submarines as well as 79 surface ships, including 11 frigates and destroyers.

"The second key consideration has been safety. Safety is, rightly, a matter which must be subject to independent validation. Our detailed analysis over a period of months shows clearly that each of the three proposals should reach the very high standard required.

"Turning to the comparison of the cost of the various proposals, our scrutiny has taken place against the background of the need to get the best possible value for money from the defence budget. In particular I need to ensure—as do the Chiefs of Staff—that the proportion of the defence budget spent on the support of the Armed Forces is kept as small as possible, so that the proportion which can go directly to the front line should be as large as possible. I am sure that the House will join wrth me in supporting this objective.

"We have considered both the capital costs and the operating costs associated with the various proposals. With regard to the capital costs, the results of the analysis show that our estimate, on a like for like basis, of the three proposals is as follows: the proposal to build new docks at Rosyth, known as RD57, would cost some £369 million on top of the £100 million already spent; the proposals for upgrading of docks in Rosyth would cost about £248 million; and the proposals from Devonport will cost about £236 million. This shows that, despite the sums that have already been spent, the RD57 project is very much more expensive than either of the other two proposals, and I do not propose to consider it further. 'The two upgrade proposals are much closer in cost, but there is a clear difference in Devonport's favour of £12 million.

"With regard to operating costs, we have looked at these over 15 years, by which time the capital work would have been completed, the necessary rationalization taken place and the new arrangements settled down. Our analysis shows that on operating costs Devonport is again the cheaper yard, by a total of some £52 million over the period. Taking all these factors into account, the total difference between the two bids is £64 million in favour of Devonport. These figures do not include redundancy costs, which again are less if Devonport is the nuclear yard.

"Two days ago we received a completely new suggestion from Babcock Thorn Limited. This suggestion is that the number of docks where nuclear work can take place should he reduced from two to one and that the emergency docking facility should be used as the nuclear defuelling and refuelling facility. When we received this we had already spent several months in detailed consultation with both companies on their proposals in order to be able to report with confidence the figures I have quoted today. Our period of consultation was extended in January in part to ensure that Babcock Thorn was able to propose an upgrading solution on the same basis as Devonport. It is quite unreasonable to produce completely new ideas so close to a decision, which if they were relevant could have been presented at any time over the last six months. But, more importantly, we are not able to accept any proposal which would deprive the Trident submarines of a dedicated emergency docking facility for significant periods; which would mean that the single nuclear refuelling facility was used for all our submarines, so exposing us to unacceptable risks in the event of an incident, or other difficulty; and which is untested from a technical and safety point of view.

"The view of the First Sea Lord, with which I agree, is that this suggestion imposes an unacceptable level of operational risk and that it should be ruled out. The same would apply to any proposal we received at this stage from Devonport based on the same engineering approach. The only way forward is for us to take a decision based on the analysis which we have before us.

"The Government do not believe that it would be prudent to ignore the capital difference of £12 million and the overall difference of £64 million between the Devonport and Rosyth proposals. There are no other relevant factors which point decisively or conclusively to one yard or the other. I am therefore announcing today our conclusion that, subject to satisfactory contractual negotiations, we shall proceed with the Devonport nuclear refitting facility proposals.

"I now turn to our long-term plans for the future of Rosyth. I made clear in my 9th February Statement that our aim is to achieve a healthy competitive structure for non-nuclear refitting. We wish Rosyth to develop into a yard which will bid competitively for surface ship refits and other work. Rosyth already has considerable experience of surface ship work—for example, the successful refits of Type 42 destroyers carried out over recent years—and we have every confidence in its ability to become a major and successful surface ship yard.

"I am conscious that a significant period of transition will be required to help Rosyth to restructure in order that it can concentrate on such work. To enable Rosyth to make this transition, we intend to continue with an allocated programme for 12 years, until 2005. Once nuclear work is concentrated at Devonport, the only allocation of surface ship refits will be to Rosyth: all other refit work will have to be won in competition. The programme for Rosyth would comprise over half of surface warship refitting, including all aircraft carrier refits, virtually all Type 42 destroyer refits and all Hunt Class mine warfare vessel refits, as well as other refits of Type 23 and Type 22 frigates. After the year 2000 that programme will begin to taper clown until 2005. These proposals mean that we expect Rosyth to be allocated responsibility for the refits of some 18 major warships. We expect Devonport, as the nuclear yard, to be allocated responsibility for the refits of some 12 nuclear submarines.

"Employment at the yards is a matter for the companies concerned. At present there are some 3,700 people employed at Rosyth. We estimate that there will be a reduction of about 450 in the workforce as a direct result of reduced MoD work. Employment on MoD work should continue at about this level at least to the turn of the century. The allocation should also provide the basis for Rosyth to bid for extra work and to develop new markets. There is every reason for confidence that, given the skills of the workforce and the traditionally high standard of their work, it will be possible for Rosyth to win work in competition over and above the allocated programme and this should increase employment beyond the levels I have indicated.

"Reductions in employment will not be confined to Rosyth. Because of the declining overall refit programme, we would expect reductions in the numbers employed at Devonport of the order of about 350.

"Given the benefit of competition, I am pleased to be able to say that, even during the period of an allocated programme of the kind I have indicated, there will be a higher proportion of the refit programme available for competition than at present. That proportion will increase after 2000 and will apply to the whole of the surface ship refitting programme after 2005. Both dockyards as well as shipbuilders will be able to compete for this unallocated work.

"Further information setting out the background to these conclusions will be contained in a consultative document which will be published in the near future to provide a basis for consultation with parties concerned.

"I believe that the proposals I have set out today will provide a healthy future for both yards. Trident submarines will carry the deterrent well into the next century. It is therefore essential that they be refitted to the high standards the Royal Navy expects. The taxpayer equally has a right to expect value for money. My proposals achieve both these objectives and I commend them to the House." My Lords, that completes the Statement.

6.31 p.m.

Lord Williams of Elves

My Lords, first, I wish to thank the noble Viscount for repeating the Statement made in another place. As he rightly said, it is an important Statement, one for which we have been waiting a long time. I should like also to congratulate Devonport Management Limited on the contract which is to be awarded to it, subject to the conditions that the noble Viscount announced. I am sure that the company will do very well.

However, I have to say to the noble Viscount that I find the Statement which he has just repeated depressing in three respects. I shall elaborate on those respects in the questions that I shall put to the noble Viscount in a minute. First, there is the question of the good faith of the Government in the assurances that have been made. Secondly, I believe that there is no sign of serious thinking in the Government of the social and psychological effects that the decision will have in Scotland and on the Scottish economy, nor of the real social effects that it will have. Whether it is £64 million, here or there, on a contract of £5 billion is a matter within the broad range of estimates. If the noble Viscount can tell me that it is accurate within a small percentage, then he is a better estimator than I am. Thirdly, there is the question of how the decision was made and the motivation for it.

I should like to put some questions to the noble Viscount on those themes. Was it not the case that, in return for the Faslane Trident base and the Coulport storage facility, the Government promised that R.osyth would have the Trident refitting programme? Is it not the case that the noble Lord, Lord Younger, recently reminded your Lordships and the public that this was the basis on which the Government had sold Faslane and Coulport to the Scottish electorate and that he regarded it as a matter of good faith that the Government should award the Trident refitting facility to Rosyth? What has happened to that assurance upon which the noble Lord, Lord Younger, insisted?

Clearly, £120 million of taxpayers' money has been spent—money which the noble Viscount is so keen on saving—on a new facility at Rosyth, specifically designed for the refitting programme. Are we now to be told that this facility is one in which old nuclear submarines are to be buried? That is the latest supposition. Is that the programme? How will it react with the community in Scotland?

On the question of the effects on the Scottish economy and society, we welcome the allocated programme. There is no doubt that the Government have stretched a very long way in trying to keep Rosyth going as a facility. But is the noble Viscount seriously saying that that is enough to keep Rosyth going? Rosyth is, after all, the largest industrial employer in Scotland. It is rightly proud of the apprentice training scheme. Unless there is security, then there is no apprentice scheme and there is no justification for keeping Rosyth going. The Statement says: Employment at the yards is a matter for the companies concerned". Is that not a derogation of the Government's responsibilities? After all, in areas of high unemployment, British Steel and British Coal have started companies which have re-employed people, offered employment and developed industries—subsidiary manufacturing or service concerns—to employ those put out of work. What will happen in Scotland? Will the noble Viscount please respond to that?

Then I come to the question of the motives for the decision. It is, I am afraid to say, very odd. We learn that a poll was produced by Devonport Management Limited which showed that 21 Conservative seats would be in danger in the South-West if Devonport did not get the contract. The poll was submitted to the Conservative Central Office. Will the noble Viscount say what the poll indicated? Is it a public opinion poll? Are we all allowed to see the results?

We are also told that certain resignations are in view of parliamentary private secretaries, saying, "If it doesn't go to Devonport then 20 or 30 Tory MPs will find their seats in the South-West at risk". Then we are told that that might lead to the loss of the Government's majority. There are a number of questions that the noble Viscount has to answer.

However much we may say that the Government have tried—and I think that they have tried their best to cobble something together—it is difficult not to believe that this is simply a political stitch-up, to resolve an internal dispute between different interests within the Conservative Party. If the Government are prepared to make decisions of vital national interest—and I hope that your Lordships will agree that the decision is of vital national interest—on that basis, all I can say is that it is about time that they started to take decisions in the interests of the whole United Kingdom and not who gains or loses on the electoral swings and roundabouts. Decisions should he taken in the interests of the whole United Kingdom rather than on the number of seats the Government may or may not lose at the next general election.

6.38 p.m.

Lord Mayhew

My Lords, it is not my intention now to raise the question of the political motivation, if any, of the Government in putting forward these proposals; or the political motivation, if any, of the Opposition in resisting the proposals. I think that we on these Benches would say that the Government have had a difficult decision to take. They have taken a long time about it. It is easy to understand their decision not to entertain the last-minute new offer from Rosyth. The news will be sad for Rosyth and Scotland, especially in view of the pledges made to them in the past, about which the noble Lord, Lord Williams, spoke perfectly correctly. The pledges were quite clear that they were to have the Trident refitting task.

On the other hand, I must concede that the Government have offered Rosyth quite substantial conscience money in the allocation programme that they have stated. The refit of 18 major warships is a substantial offer. It is a refit outside the competitive process. I should like the noble Viscount to comment on that point. Elsewhere in the Statement the Secretary of State points out that the competitive process has reduced the overall bids of the two sides by £250 million. He said: I make no apologies for allowing the competitive process to push the costs down to the benefit of both the Royal Navy and the taxpayer". It occurs to me, however, that the withdrawal of 18 major warship refittings from the competitive process is likely to increase the cost to the Royal Navy and to the taxpayer. I do not oppose this proposal for allocation£far from it. But I would like the noble Viscount to explain what is the cost of removing this very considerable project from the competitive process. The Statement should have made some reference to that. It is a major factor involving the Government in their attempt to square the circle on this matter. I suspect that somewhere in Whitehall there is a Treasury paper estimating the extent of that cost, and without opposing the proposal, I should like to know what it is.

We could then ask: is it right that the Navy should pay that cost? It will indeed fall on the Navy. It will lead to the cancellation or postponement of projects in order to balance the budget. It is a question as to whether perhaps the Scottish Office or the Department of Employment should pay part of it. The Government had a very difficult problem, and they have obviously done their best to work out carefully the relative cost of the two bids and to do justice to both sides. But there is a hidden cost behind this Statement, and I am sorry that the noble Viscount has not divulged it to the House.

Viscount Cranborne

My Lords, I am sorry that the noble Lord, Lord Williams, found the Statement depressing. He asked a number of questions which were of some interest—certainly to me, and I hope also to noble Lords. He asked whether good faith could be placed in the assurances that the Government have given today. I do not want in any way to make a cheap party political point to the noble Lord, but I would infinitely prefer to rely on the good faith of this Government than on an Opposition whose representative in another place was perfectly happy to put the British nuclear deterrent into future disarmament negotiations. If that happened, I suspect that under a Labour government there would not be much in the way of good faith that Labour Party supporters in Rosyth could rely on.

The noble Lord also asked what would be the effect on the Scottish economy. We are well aware of the dependence of the Scottish economy, and indeed of the West Country economy, on the Navy's efforts at Rosyth and Devonport. We are equally conscious of the economic difficulties that both areas have been suffering. Were I to draw a comparison between the current official unemployment rates in Scotland and those in the West Country, I suspect that the West Country would suffer greatly. I know that it is sometimes very difficult in our confrontational politics to accept this in public, and for that reason I am particularly grateful to the noble Lord, Lord Mayhew, for his cautious welcome of the Statement. I would say to the noble Lord, Lord Williams, that the Government found themselves reduced to a very difficult decision. The factors that had to be taken into account in coming to a decision between the two dockyards were very finely balanced, as the Statement, I believe, makes clear. In the end, because only one dockyard is possible under present conditions (or indeed economically) for nuclear refitting, it is perfectly clear that if there is a difference between the two we have to estimate where that difference comes. That difference came down essentially to price.

The noble Lord, Lord Williams, as did the noble Lord, Lord Mayhew, asked how the decision was made. The noble Lord, Lord Williams, suggested that in coming to their decision and announcing it, the Government were breaking undertakings given by my noble friend Lord Younger during the 1980s. He asked the question: what has happened in the meantime? I think the noble Lord knows as well as I do what has happened in the meantime. It is made perfectly clear in the Statement. What has happened in the meantime is that the Berlin Wall has come down. The number of nuclear submarines which the defence department feels it has to maintain is being reduced. It is therefore cost-effective only to refit those submarines in one yard. One yard can cope not only with the hunter-killer submarines, but also with the four Trident submarines. It would be thoroughly irresponsible for any government, particularly when they had to face the Public Accounts Committee in another place to account for their decision, to keep open two dockyards for nuclear refitting at a time when it would be grossly extravagant to do so. I am sure that anybody who looks at this matter with any form of dispassion—as I know the noble Lord, Lord Williams, does—would accept that only one dockyard is sensible under present circumstances.

The noble Lord asked, with an admirable rhetorical flourish, whether Rosyth would merely be a place where old nuclear submarines would be buried. It is perfectly possible to move decommissioned nuclear submarines, and studies will be made in that respect to see what is the most cost-effective way of dealing with them. But, certainly, there is no dedication on the part of Her Majesty's Government to keep Rosyth as a nuclear graveyard. Very much the reverse. Apart from the allocated programme, which the Statement mentions, it is perfectly clear not only that there will be substantial activity there, but also that the naval base will continue substantially unaffected by the changes.

The noble Lord also asked whether the Government's proposals are enough to keep Rosyth going. It is perfectly clear from the Statement that many of the stories which the press has been peddling with such gusto over the past few months anticipated an announcement which would force the Government to anticipate very much more substantial redundancies in Rosyth if they plumped for Devonport than in fact we estimate will be the case. We are perhaps rather more confident than the noble Lord is in the skill, self-reliance and adaptability of the people of Scotland. If I may in part answer the question which the noble Lord, Lord Mayhew, put to me, one of the reasons why we were so happy to produce a 12-year transition period rather than the 10 years asked for by the Opposition spokesman, Mr. George Foulkes, in another place was that we were well aware that a period of readjustment would be necessary in order to give Rosyth a chance to be able to compete—I hope the noble Baroness, Lady Seear, will forgive me—on a level playing field with other dockyards in bidding for other work; Ministry of Defence work and other work.

The noble Lord, Lord Williams, indulged in a most agreeable piece of knockabout, if I may say so. He questioned the reason for the Government's decision. He suggested that it was no more nor less than a political "stitch up". I am well aware that it is very easy for the Front Bench representatives of the Labour Party to make such a remark. We know that the Labour Party virtually does not exist any more in the south western peninsula and that one of its few remaining bastions in the United Kingdom lies in the industrial belt in Scotland. No doubt that makes them somewhat parti pris in this matter, rather more so perhaps than the Liberal Party, who have a somewhat different difficulty. We are aware that the right honourable Member for Yeovil is rather closer to Devonport than is his party's defence spokesman who, I understand, represents a Fife constituency. Therefore, it is perhaps all the more understandable, were I to impute low motives (which I certainly do not) to the noble Lord, Lord Mayhew, that the Liberal Party should feel constrained to take a more detached attitude to these matters than the noble Lord, Lord Williams, might feel inclined to do.

Finally. I come to the very pertinent question asked by the noble Lord, Lord Mayhew. I am grateful for the welcome (however guarded, which is understandable) that he gave to the decision that the Government have announced. The allocated programme, in the view of Her Majesty's Government, is not as effective a means of ensuring best value to the taxpayer as is competition. Despite the greatly improved and constantly improving procurement and contract methods of the Ministry of Defence, there is no doubt that competitive processes are more effective in securing a contract, as the last few months have shown.

Nevertheless, particularly in the light of the debate in your Lordships' House over the past couple of days, cohesion funds are perhaps the sort of things which on the whole are accepted by your Lordships as desirable in equalising the economic condition of different parts of the country. Also, in order to give Rosyth a chance, we will forgo in the intervening 12 years some element of the competition that eventually we shall fully impose upon Rosyth after 2005, merely to try to give Rosyth a chance to attain that level playing field, of which the noble Baroness, Lady Seear, is so dismissive as an expression. We believe that that is a price well worth paying, particularly when, as the Statement says, it is perfectly clear that even during the transition period a greater proportion of the refit programme for the surface fleet will be competed for than at present.

I apologise for the length of my reply but there were a number of questions asked. In conclusion, I am content to rest (as I do not often find myself content to rest) on the judgment of The Times in this matter. Anticipating the announcement that we have made today, the headlme in today's issue reads: Taxpayers are clear winners in contest for Navy contract".

6.55 p.m.

Lord King of Wartnaby

My Lords, I have listened with considerable interest to the noble Viscount's explanation of the sad tidings. I should tell the House that I have a vested interest. I am chairman of Babcock International, the controlling shareholder of Babcock Thorn, which manages the Rosyth dockyards. In addition, 1 happen to be the largest employer —not in shape but in fact—of engineering labour in Scotland. At least I was until this afternoon. I must begin tomorrow to look at new numbers.

We have been speaking about being near to Devonport, near to Plymouth and being an MP here or elsewhere. Let us turn away from all that and consider Rosyth: the community, the manner in which it has grown over the years, the skills that exist there and the dedication of the people. They can make maps, repair nuclear engines and build ships. But they are not best known or best qualified for surface ship refitment. For that Devonport has one of the best facilities anywhere in the world. At this time Devonport has a workload and a workforce. It may be that with the addition of the Trident submarines to its programme, it will recruit more people. Some skills will have to be recruited for that.

So far as concerns Rosyth, we shall have to learn to develop the business that we have. It is with sadness that I see the jolt to the pride of Rosyth, its people and its community. The Government have had a very difficult decision to make. But for the past two years workmen have been going home and have heard their wives asking, "Do you have a job? 'Will you have a job?" It is rather a pity that one cannot bring decisions forward a little. The uncertainty about whether or not one has employment must be as unbearable as the uncertainty of not knowing whether or not one will get whatever it is one most wants, So there is disappointment.

There is some uncertainty about the £64 million alleged difference in cost and the 450 redundancies at Rosyth. I wonder how the Government arrived at those figures. We shall wish to examine the details of the proposed allocated programme which, to the Government's credit, certainly sounds impressive. I presume that all these matters will be included in the consultative document. I ask the noble Viscount to confirm that. He shakes his head—up and down, I think.

Finally, despite my sadness and regret at today's announcement, I reaffirm our determination to serve the Royal Navy to the best of our ability and to provide the very best possible value for money for the taxpayer.

Viscount Cranborne

My Lords, I am extremely grateful to my noble friend for what he said. The Navy has been consistently satisfied by the work that Rosyth has carried out on its behalf. I am sorry if my noble friend in any way is doubtful about the ability of the workforce to maintain those high standards. I hope that what I felt he was implying is not true. 'Those doubts are certainly not shared by the Ministry of Defence.

My noble friend asked by implication how we arrived at the 450 redundancies estimate. As the Statement says, the number of redundancies are entirely a matter for his company. At the same time, in order to make a reasonably clear estimate, we have an idea of what is likely to transpire. As my noble friend is aware, we tend to estimate the contracts in terms of man hours. Those man hours, on current working practices, can readily be translated into man years and therefore jobs.

I am grateful to my noble friend for the predictable undertaking he has given to make sure that the service that his company has given in the past, which is second to none, will continue in the future.

Lord Ewing of Kirkford

My Lords, is the noble Viscount aware that there is a certain irony in this announcement being made on the anniversary of the Battle of Bannockburn? There will be a feeling in Scotland tonight that it is the English getting their own back: they have waited a long time for it. I do not hold any grudges against Devonport—I want to make that clear—although I was sad at some of the tactics employed during the competitive bidding that was taking place.

The noble Viscount asks the rhetorical question about what has happened since the noble Lord, Lord Younger, gave the undertaking that if Scotland accepted Coulport and Faslane, we would get the nuclear refitting work at Rosyth. The answer is that we have the worst of both worlds. We have Coulport and Faslane but we do not have the nuclear refitting work at Rosyth. I am sure the Minister accepts that there will be some feeling of, if not betrayal, then certainly being let down, that we accepted Coulport and Faslane but have not received the other part of the bargain.

Will the Minister confirm that it is the Government's view that the £236 million upgrading costs at Devonport cannot possibly remain constant? Before that capital is expended and the work completed, the strong possibility is that the upgrading work will cost much nearer £400 million.

This is a sorry day for Rosyth, for Fife, the Lothians and for central Scotland as a whole. But, in the words of a good doctor friend of mine, I never like to leave the patient without hope. In the 12 years that lie ahead we, as politicians, have a responsibility to make sure that the workforce at Rosyth sees a future way beyond that 12-year period.

Viscount Cranborne

My Lords, I am well aware of the close personal ties that the noble Lord, Lord Ewing, has with Rosyth. He spoke movingly in our recent debate on the subject in terms which I shall long remember. However, I thought that the English had replied to Bannockburn with Flodden and that we decided then to call it a day. The compromise reached between the noble Lord's nationals and the English was that the Scots would come down to London to govern us and that people like the noble Lord would dominate your Lordships' House in the way that they do.

With regard to Coulport and Faslane, I am well aware that Dumbarton District Council is a nuclear-free zone. Nevertheless, the biggest concentration of nuclear power east of the Atlantic and west of the Urals provides the councillors and their constituents in the nuclear-free zone with 3,000 jobs. I hope that the noble Lord will accept that if what he implies happened, and we were to close it down, both he and I would be extremely interested in the reaction to that proposal of the nuclear-free zone council. I hope that it would resist it. However, we are unlikely to put such a proposal to the test.

Like the noble Lord, I have enormous faith in the capacity of the Scottish people, particularly the people of the Scottish Lowlands and the industrial belt, to adapt and compete. Like him, I have absolute confidence that they will show that they are a match for the English any day.

Lord Boyd-Carpenter

My Lords, can my noble friend say whether, in addition to the considerations which he has so eloquently set out, there are also strategic and operational arguments in favour of Devonport? Is it not the fact that the Trident submarine, in the event of major war, would be expected to operate from the open Atlantic? Is it not a much nearer and quicker route to the open Atlantic from Devonport than it would be going out into the North Sea from Rosyth?

Viscount Cranborne

My Lords, I have certainly heard that case argued in a number of quarters. People with a greater knowledge of naval strategy than I have told me that the case between Devonport and Rosyth—taking into account the factors my noble friend mentioned—is evenly balanced.

Lord Sefton of Garston

My Lords, the Minister referred to the unemployment problems which may be occasioned in both areas. He said what he suspected the result would be. Is that the extent of the Government's analysis? The Minister nods. Perhaps he will allow me to finish the question before nodding or shaking his head. When I have finished the question, perhaps he will answer it, though I doubt it. If that is not the extent of the analysis and the Government have made an analysis of the consequences of the social and employment prospects in both areas, will they publish it and place it in the Library so that we can all see it?

Viscount Cranborne

My Lords, the best indication that I can give is to refer the noble Lord to the answer I attempted to give a moment ago to my noble friend Lord King. We have a very clear idea of what the employment consequences of MoD actions in these instances will be. We estimate work in terms of man hours. Assuming current working practices, that can be translated into man years and therefore numbers employed.

Lord Sefton of Garston

My Lords, I knew the Minister would not answer the question. I shall repeat it. Was a proper analysis made of those results? If so, will he put it in the Library or publish it?

Viscount Cranborne

My Lords, that is an analysis. The exact employment consequences are a matter for the company. There is no doubt that the records of the Ministry of Defence show that, although our job is to defend the country and we leave the social consequences to other government departments, which are more than capable of looking after those matters, we have shown a sense of considerable responsibility in taking into account the consequences of our actions. If the noble Lord doubts that, I would refer him to the managers of the Plymouth urban renewal programme. He can ask them how much money the Ministry of Defence has contributed from its small budget to that programme.

Lord Mackay of Ardbrecknish

My Lords, does my noble friend recall the speech I made during the short debate on the matter? If so, he will not be surprised to learn that I am extremely disappointed by the results of the study as between Devonport and Rosyth. Does he further accept that I am still convinced that the strategic proximity of Coulport and Faslane to Rosyth should have overpowered even the argument on the financial savings.

However, will my noble friend accept from me that at least one Scot will not claim that the game was rigged and that we were robbed? Does he accept that our right honourable friend Malcolm Rifkind will have ensured that it was done on a fair basis and that the figures were in favour of Devonport? If they had come out the other way, I would certainly have expected Rosyth to obtain the contract, regardless of other factors. Can he assure me that the guarantee of ships going to Rosyth in the future for 12 years is absolute and unconditional? Is it the case that the consultation paper will outline how Babcock Thorn will negotiate its contract with the Government and Navy for these ships?

Lastly, does my noble friend agree with me that the positive response from our noble friend Lord King—who must be much more disappointed even than I—at least suggests that the company and the workforce there will try to make the best of what they will consider to be a bad job?

Viscount Cranborne

My Lords, I am extremely grateful to my noble friend Lord Mackay of Ardbrecknish. I know all too well—particularly as I recall his most eloquent speech during our recent debate on the subject—the fervour with which he has espoused the cause of nuclear refitting at Rosyth. I am all the more grateful to him for the generous and fair-minded way in which he has responded to this afternoon's announcement. I am only too pleased to associate myself with the remarks that he has made about my noble friend Lord King whom I know both of us greatly admire.

As far as the Ministry of Defence is concerned, the 12-year allocated programme is a very clear and unequivocal commitment. I will not try to repeat to your Lordships the reasons for it. I have already attempted to do so this afternoon. The consultative paper will, I believe, go into the arguments and financial considerations in greater detail than it has been possible for me and my right honourable friend to do this afternoon.

Lord Clark of Kempston

My Lords, would my noble friend agree that whichever way the decision had gone criticism would have been made of it and that wherever the nuclear base was sited the social effects would have been the same? I cannot understand how the noble Lord, Lord Williams of Elvel, can believe that it will affect only Scotland.

Will the Minister also agree that the suggestion of a saving in public expenditure funded by the taxpayer of £64 million is something that no government can overlook? Is it not the case, reflecting on the position now, the savings to the taxpayer and the fact that the surface work will go to Rosyth and the nuclear work to Devonport, that people will think that this is a fair decision?

Viscount Cranborne

My Lords, I am most grateful to my noble friend Lord Clark. He is a well known exponent of the importance of rigour in matters of public expenditure. In 'that regard his record in another place stands unchallenged. I have no doubt at all that he is right when he says that defence Ministers and other Ministers in Her Majesty's Government approach this matter in the spirit of trying to do the best under the circumstances in terms of cost-effectiveness and fairness to the people involved.

I have to say that my right honourable friend the Secretary of State for Defence was in a particularly difficult position as a Scottish Member of Parliament. If your Lordships want any guarantee of the fairness and dispassion with which Ministers have approached this question, I believe that I need only refer to the potential consequences for my right honourable friend if he had not taken this decision in the skilful and dispassionate way that he has. That is perhaps the best guarantee I can give to my noble friend Lord Clark on the subject.

Lord Tordoff

My Lords, does the Minister not agree that that would be as nothing to the consequences in the southwest of England for his party?

Viscount Cranborne

My Lords, I am conscious of the time. All I say to the noble Lord, Lord Tordoff, is that he is in a very difficult glasshouse if he wishes to pursue this subject. I referred to it earlier. I would hate that he and I should come to blows on the subject.