HC Deb 02 November 1989 vol 159 cc278-9W
Mr. Clay

To ask the Secretary of State for Trade and Industry, pursuant to his reply to the hon. Member for Sunderland, North, on 20 October,Official Report, columns 268–69, if he will estimate the cost to Her Majesty's Government arising from the closure of North East Shipbuilders Ltd., excluding any costs incurred by British Shipbuilders but including (a) unemployment benefit to redundant employees, (b) housing and other social security benefits to redundant employees, (c) remedial measures taken by Her Majesty's Government and (d) any other costs.

Mr. Douglas Hogg

It is very difficult to give an assessment of the Exchequer costs, because no one can reliably forecast the circumstances of Sunderland and other places that would have been affected had those decisions not been taken. For instance, had the Government decided not to close the yards at the end of 1988, very substantial redundancies would in any event have been necessary, and costs would have been incurred elsewhere, particularly on the Clyde, had other sales notified to the Commission in December 1988 been frustrated by delayed EC clearance.

Had the Government decided to notify new shipbuilding proposals in July, the likelihood would have been a delay to the economic recovery of Sunderland as a result of the uncertainty about the enterprise zone and other measures. On the other hand, talks are taking place between British Shipbuilders and interested parties about the use of various of the assets of NESL which in turn may generate additional employment to that likely to result from the enterprise zone.

My right hon. Friend announced on 7 December a remedial package for Sunderland estimated at £45 million. Of that sum, £10.5 million is being provided through British Shipbuilders, to fund the activities of Sunderland Enterprise and Training Ltd., including those being administered by the Wearside Opportunity.