Process Plant Fabrication (Hansard, 15 November 1976)

Mr. Alan Williams

The sector working party for process plant fabrications produced a preliminary list of recommendations in July. The following is a summary of the recommendations for action by Government together with an outline of the action taken so far.Recommendation—The Government were asked to develop a comprehensive energy policy looking at least 20 years ahead, and a programme for development of the commercial fast reactor. They were also asked, in collaboration with suppliers and customer industries, to establish the volume of the main plant items and construction needed. In addition the Government were asked to take an urgent set of decisions on power station orders, conventional and nuclear, as a short-term measure to preserve the indigenous supply industry. Action—The issues are the subject of a number of reviews being carried out by the Department of Energy and by the Central Policy Review Staff. The CPRS report, which is particularly concerned with possible short-term measures to aid the supply industry, has recently been received by Ministers and is under urgent consideration. The other reviews are being carried out as expeditiously as possible. Recommendation—The Government were urged to set terms of reference for nationalised industries, and to encourage other industries, to develop long-term ordering programmes in consultation with suppliers and unions and to invest in reference plants with specifications compatible with overseas requirements. An early decision was particularly urged on the ordering of a strip mill at Port Talbot. Action—The Government have taken note of the recommendation about the development by nationalised industries of long-term ordering programmes. A committee under Sir Raymond Brown is conducting a study of measures to help align nationalised industry specifications with overseas requirements for major items of plant and equipment bought by nationalised industries. The British Steel Corporation is urgently reviewing its proposal to build a strip mill at Port Talbot Private sector customer industries are already encouraged to develop their ordering programmes through the auspices of NEDO machinery. Recommendation—The Government were asked to encourage the National Enterprise Board to share in the financial risk of large export projects; and to urge the Export Credits Guarantee Department to continue to develop its project participants insolvency cover and to make its support for performance bonds more fully available. 440W Action—The working party under Lord Seebohm is giving priority to the problems of excess risk attached to multi-million pound contracts and is no doubt aware of the NEB's potential capacity in this field. ECGD insolvency cover is now available in appropriate cases. The criteria relating to performance bonds have now been relaxed to make them more freely available. Recommendation.—Fabricators, their suppliers, bankers and the Government were asked to explore ways of enabling the industry to win exports during periods of world overcapacity. Action.—This will be examined by the working party under Lord Seebohm set up by the Roll Committee. Recommendation.—Fabricators and Government were asked to discuss possibilities of greater support for the Welding Institute. Action.—The Department of Industry is about to announce a revision of contract terms for all non-profit distributing research bodies which should help them to finance their capital expenditure. Recommendation.—The Government were asked to take into account the need for productivity negotiations when considering future income policy proposals. Action.—The working party's recommendation will be taken into account in discussions about the pay arrangements for the period after July 1977. Recommendation.—The Government were asked to seek further ways to reduce the impact of falling employment—e.g., by reducing the retirement age. Action.—Lowering of the retirement age to meet short-term problems is not practicable but the Department of Employment has recently announced a job release scheme aimed at enabling older workers, close to pensionable age, to leave employment and free jobs for younger unemployed people. Recommendation.—Management, unions and Government were asked to take note of the overcapacity in process plant fabrications when deciding the future of the offshore yards. Action.—The Government have noted this recommendation but the matter is mainly for the companies themselves.