§ Viscount Mersey
asked Her Majesty's Government:
Whether they will make a statement on the future management of the Royal Dockyards.
§ The Minister of State for Defence Procurement (Lord Trefgarne)
We are now satisfied that there exists the basis for an advantageous contract to be placed for the future operation of Rosyth Dockyard with Babcock Thorn Limited. Under the arrangements which have been negotiated to date, a contract could offer the possibility of saving some £38m over the seven-year Term Contract, with the prospect of annual savings exceeding £15m thereafter under any subsequent contract. The contract would encourage improvements in efficiency and enable the contractor to compete for commercial and naval work with no possibility of cross-subsidy from the core programme of naval refitting.
My right honourable friend the Secretary of State for Defence has provided further information to the trades unions in a response to their paper of 24th November and does not intend to take a final decision on the placing of a contract until he has taken into account any further trades union views and has satisfied himself that the continuing process of consultation with the trades unions has fully met his obligations under the Dockyard Services Act.
Negotiations for a contract for the operation of Devonport are continuing and we expect to be able to make a further announcement shortly.
A copy of my right honourable friend's letter to the trades unions has been placed in the Library of the House.