§ Mr. Sternasked the Secretary of State for Trade and Industry if he has received British Shipbuilders annual report and accounts for 1985–86 and the 1986–87 corporate plan.
§ Mr. Peter MorrisonIn accordance with sections 17(9) and 18(6) of the Aircraft and Shipbuilding Industries Act 1977, I am laying before each House copies of British Shipbuilders' annual report and accounts for 1985–86. I am also placing in the Library a version of British Shipbuilders 1986–87 corporate plan, with commercially confidential information deleted.
352WThe corporation made a total historic cost trading loss of £125 million in 1985–86. The trading loss on the continuing business was £137 million. This includes provisions against the possible calling of customer credit guarantees of £43 million and under-recovered overheads of £41 million. The extent of the under-recovered overheads underlines the need for the action announced by British Shipbuilders in May to bring capacity more closely into line with anticipated work load.
As I announced on 16 June, British Shipbuilders' external financing limit in 1986–87 has been increased to £130 million to accommodate the costs of the restructuring announced on 14 May. The corporate plan presented by 353W British Shipbuilders is intended to allow it to maintain its business at the size it will reach after the present restructuring. The Government accept this plan, but its success will depend on sufficient orders being won. The Government's intention is to continue to set tight and degressive levels of financial support.