Devonport Dockyard (Hansard, 20 January 1987)

§ Mr. Younger

[pursuant to his reply, 19 December 1986, c. 778]: I am now satisfied that there exists the basis for an advantageous contract to be placed for the future operation of Devonport dockyard with Devonport Management Limited, a consortium formed by Brown and Root(UK)Limited, the Weir Group plc and Barclays de Zoete Wedd Limited.

Under arrangements that have been negotiated to date, such a contract could offer the possibility of saving some £123 million over the seven-year term contract, with the prospect of annual savings thereafter of about £40 million under any subsequent contract. As with our preferred contractor for Rosyth dockyard, Babcock Thorn Limited, the contract with Devonport Management Limited 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.

As my hon. Friend knows, when I announced our preferred contractor for Rosyth dockyard on 4 December [Official Report, Vol. 106, c. 771–2] I provided the trade unions with a full paper setting out the arguments in favour of commercial management, which I believe are valid both for Rosyth and Devonport, and providing information on the preferred contractor for Rosyth dockyard. I have invited trade union representatives to meet me again on 21 January before I take a final decision on the future management arrangements for Rosyth dockyard, and I have today provided further information to the trade unions summarising the main aspects of the draft contract arrangements negotiated with Devonport Management Limited. I will consider with the trades unions the question of additional time for them to make representations to me in respect of this latest paper before I take a final decision on the placing of a contract for the future operation of Devonport dockyard.

A copy of my latest paper for the trades unions has been placed in the Library of the House.