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Orders of the Day — European Community (Shipbuilding)

Part of the debate – in the House of Commons at 12:00 am on 4th July 1975.

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Photo of Mr James Kilfedder Mr James Kilfedder , North Down 12:00 am, 4th July 1975

I represent a constituency in Northern Ireland. The Belfast shipyard is the largest single industrial company in the Province, and I am concerned about its future as a result of this directive.

This matter is important because, as has been pointed out, it is the first debate that we have had on the directive since we entered the Common Market after the referendum. Secondly, it is important because, as the hon. Member for Cheadle (Mr. Normanton) pointed out, the shipbuilding industry is in a catastrophic state. I believe that money is needed to help, perhaps even save, the Govan shipyard. Will the directive prevent money from being granted for that purpose? I should like an absolute assurance on that point.

About 6,000 people are employed in the Belfast shipyard, and I would hate to think that their future is to be dealt with in the manner described by the hon. Member for Cheadle (Mr. Normanton). I fear that the article in the Economist of 21st June indicates what the Common Market has in mind for the Belfast shipyard and others in the United Kingdom. The article concluded: In the early autumn, after completing a hard look at French and German State aids, the competition office plans to start an investigation into British State aids. In the renegotiations, Britain's regional employment premium, loathed in Brussels as a continuing subsidy of industry's production costs, was allowed to go on until 1977. But the Commission is unlikely to agree to another stay of execution…The most frequently cited example is Harland and Wolff, the Belfast shipyard. Its trading loss last year was £15 million on a turnover of £40 million, but Government handouts are keeping it afloat. The Belfast shipyard received a total of £13 million in loans in 1974 an d1975 and £6 million in grants between 1973 and 1975. Can the Minister assure us that if the Belfast shipyard needs money, it will be forthcoming?

The United Kingdom depends on its shipbuilding industry more than does any other Common Market country and we ought to be very concerned about unfair competition from nations outside the EEC including, for example, Japan. I wonder how Italy will fare? Together with France and the Irish Republic, it will get benefits only until 1977.

I understand that, overseas, the shipbuilders' relief is not regarded as a subsidy because it is a rebate of indirect taxes. But shipbuilders all over the world are allowed some rebate on indirect taxes to help them. Shipbuilders in the United Kingdom are not treated more fairly than those in other countries. In Japan, they get all sorts of aid. Is the 2 per cent. relief likely to be reduced? Does that percentage correspond in value to the burden of these taxes?

I am concerned about this directive. Money has been going to the Blefast shipyard to help pay off fixed-price contracts.

Although it is right that much money should have been put into the shipyard, it has been at the expense of other services in Northern Ireland. The Minister has said that the directive will not prevent aid to development areas. I hope he can give us an assurance that the Belfast shipyard will not suffer and that not a single job will be put in jeopardy.