Mr. Edward Taylorasked the Secretary of State for Trade and Industry whether he will make a statement on Govan Shipbuilders Limited.
§ Mr. John DaviesI am now able to confirm the arrangements foreshadowed in my speech on 28th February, in relation to Govan Shipbuilders Limited, when I announced that support would be given to the company on certain conditions, among them the conclusion of an agreement on working practices accepetable to the Government. These conditions have now been met. The Government will therefore provide adequate financial support for the company for a period of five years or until the company attains commercial viability, whichever is less, provided that, first, the agreement on working practices continues to be respected by both sides and, secondly, that the financial provision is related to contracts for ships on terms acceptable to the Government.
The company is to begin trading with effect from 1st July, and the Government will advance the necessary working capital to it. Until approval by Parliament of Supplementary Estimates to be presented in due course, recourse may have to be made to the Contingencies Fund.
The company has received a number of firm enquiries for ships and, to avoid any disruption in employment, it is embarking shortly on the building of two vessels in anticipation of orders being confirmed. The company will find the costs from the working capital made available by the Government.
The transfer and sale of the three yards concerned to the new company cannot be 446W completed before September and the Government have agreed to make a further short-term loan of £800,000 available to the UCS liquidator for additional working capital to cover the interim period. I am meeting the board of Govan Shipbuilders Limited today to review the progress made so far.—[Vol. 832, c. 49–55.]