§ Mr. Stevensasked the Secretary of State for Defence if he will make a statement on the future management of the royal dockyards.
§ Mr. YoungerI am now satisfied that there exists the basis for an advantageous contract to be placed for the future operation of Rosyth dockyard with Babcock Thorn Ltd. Under the arrangements that have been negotiated to date, a contract could offer the possibility of saving some £38 million over the seven-year term contract, with the prospect of annual savings exceeding £15 million 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. I have provided further774W information to the trade unions in a response to their paper of 24 November, and do not intend to take a final decision on the placing of a contract until I have taken account of any further trade union views and have satisfied myself that the continuing process of consultation with the trade unions has fully met my obligations under the Dockyard Services Act.
Negotiations for a contract for the operation of Devonport are continuing, and I expect to be able to make a further announcement shortly.
A copy of my letter to the trade unions has been placed in the Library of the House.