Orders of the Day — Aircraft and Shipbuilding Industries Bill

– in the House of Commons at 12:00 am on 1 December 1976.

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Order for Second Reading read.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

In view of the decision that the House has just taken the Bill no longer stands referred to the Examiners, and the rubric on the Order Paper—"To be reported upon by the Examiners"—should be disregarded.

8.7 p.m.

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

I beg to move, That the Bill be now read a Second time.

It will be just a year tomorrow since I moved the Second Reading of the Aircraft and Shipbuilding Industries Bill in the last Session. I think that on that occasion I addressed the House for nearly an hour, but I do not intend to do that today, because over the past 12 months, in spite of what has been said this afternoon, no Bill has been debated with quite as much interest as this one, and certainly in the last Session of Parliament no Bill was considered at such length as was this measure.

One thing is sure: during the last Session we made clear our determination to fulfil the pledges contained in both the Labour Party's 1974 General Election manifestos to bring the aircraft and shipbuilding, ship repairing and marine engineering industries into public ownership. There are sound reasons of industrial logic for including both shipbuilding and ship repairing, but in insisting now on the scope of the proposals that were endorsed by this House I do not propose to develop the arguments as fully as they have been developed over the past 12 months.

We are proceeding because we do not think that this Government, or, for that matter, any other Government, can afford to allow the other place to emasculate their policies—policies that have been endorsed at two General Elections and on many occasions in this House. It is inconceivable that a Conservative Government would even face such a challenge, and they would certainly not allow it to succeed. We shall demonstrate that a Labour Government can carry through their policies despite the fact that we have had placed in our way obstacles that never block the path of a Government formed by the Conservative Party.

We believe that public ownership will bring great benefits to these industries. During the last Session the general arguments were often put, and we stated our belief that it will help to improve the performance of both industries and to ensure that they make the maximum contribution to the economy.

I do not expect to win converts at this stage among Conservative Members, who oppose public ownership in principle. I know that there are many outside the House who do not share my belief that the industry should be brought into public ownership, but I believe even they concede that it is in the interests of both these industries that the issues should be resolved as quickly as possible.

This continued delay will have many damaging results. First, it will add to the problems that face the two Organising Committees that I established in the early part of this year. They have made an excellent start in the most difficult circumstances and I would like to take the opportunity afforded by this debate to acknowledge their magnificent work. In both industries there has been a genuine willingness to co-operate with the Committees, which have interpreted their rôle not only as preparing for nationalisation but as providing a focus for action within the two industries to develop policy initiatives.

The Shipbuilding Organising Committee has played an important part in laying the foundations for the Corporation that will bear the responsibility for seeing the merchant shipbuilding industry through the present world crisis. The Aerospace Committee has taken the lead in negotiations with European and American companies about British participation in the next generation of civil aircraft. I have made it clear to the members of both Organising Committees that I want their work to continue, and subject to this Bill getting a Second Reading tonight, I understand that they are prepared to continue. It is my earnest hope that in future months they will continue the valuable work in which they are engaged and which will be so important to both industries.

Under the Organising Committee for British Aerospace, the two aircraft companies are now beginning to work together, so that for the first time the British aircraft industry can now speak with a single authoritative voice. In present circumstances this is essential if the industry is to play its full part in the world aircraft scene.

The scale of projects, planned and possible, is now beyond the resources of any single aircraft company and even beyond the resources of a single country. Therefore, the future of the industry in this country will depend on its participation in collaborative projects. Jobs will depend on the British industry being able to play its proper part in whatever projects emerge from the present formative discussions. The aircraft industry cannot delay vital decisions which will determine its future size and capacity in this country.

Until about six months ago there was relatively little firm activity on future projects, but the outlook for aircraft manufacturing companies, Governments and airlines is now quite different. They are beginning to enter into serious negotiations, which will lead to the formation of groupings to produce the new generation of civil aircraft.

Through the Organising Committee, the British aircraft industry has been involved in useful and promising discussions with a number of potential partners. These are now moving beyond the exploratory stage, but they will make their alliances with others if the future organisation of our industry remains in doubt. If doubts are not removed, I do not think that the collaborative projects on which the Organising Committee is having discussions can come to fruition. That is a major reason for removing doubt as quickly as possible.

Indeed, as the negotiations move towards the formative stage, these uncertainties are placing and will place our industry at a disadvantage. If groupings are being formed, the attractions of a partner whose future structure is unclear will be diminished. If opportunities are not to be missed—opportunities on which will depend jobs and the maintenance and development of a technological capacity and capability—this delay must be ended.

If the delay is serious—I hope that there will not be much further delay—the consequences will be felt even more severely by the merchant shipbuilders and the marine engine builders—not to mention the many companies who supply marine equipment for merchant ships. As we all know, merchant shipbuilding faces a world-wide crisis, the most serious for many years. There is over-capacity, and cut-throat competition for the few orders going.

The difficulties facing shipyards in other European countries have been much in the news lately. This country cannot escape those facts.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

I am interested in what the right hon. Gentleman says. He has put his finger on the button in saying that there are many more yards available to build ships than there are ships to be built and that we must compete with the rest of the world. If we cannot meet the requirements of price, delivery, and so on, which are necessary to get foreign orders, do the Government themselves intend to place orders for merchant ships? If so, what will they do when they have got them built, and what money will they use to build them?

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

The Organising Committee is having discussions with the Government to work out the industry's future structure and to identify possibilities. I agree that many difficulties will face our industry in the face of world over-capacity and cut-throat competition. That has been confirmed in three major articles in the last few days.

The Economist last week, under the headline "Delay Equals Disaster", outlined the problems and concluded that they called for putting British Shipbuilders in control right away. The Sunday Times illustrated the problems by pointing out how much the industry has lost ground in productivity and in net output from each employee and for each pound in wages or salaries.

On Monday, the Financial Times graphically described the present problems of the Scottish merchant yards.

Photo of Mr Neville Trotter Mr Neville Trotter , Tynemouth

Does the Secretary of State agree that the Economist also said in that article that nationalisation was not the best solution for either of these industries?

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

I know that the Economist took that view some months ago, but in the article that I saw on Friday it did not say so in quite such clear and graphic terms.

Photo of Mr Neville Trotter Mr Neville Trotter , Tynemouth

If I may not quote from the article, I would only say that it is at the start of the second paragraph. I believe that the wording is to the effect that nationalisation is not the best policy for the aircraft and shipbuilding industries.

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

I do not think that the hon. Gentleman will disagree with what I said just now—that that article said that British Shipbuilders should be in control right away. As a Member from Tyneside who knows how serious the situation is, he will surely agree that the doubt should be ended as quickly as possible. I hope that, as someone who knows something about the industry, he will have some influence with his hon. Friends and with those in another place when the Bill is passed to them.

There is no doubt that the picture is gloomy for parts of these industries, but there has been one hopeful sign. The advent of British Shipbuilders gave promise of a new approach to the problems and the hope of a positive national policy for the industry. As I have said, the Organising Committee has made a good start and has brought a new spirit of enterprise to the industry's needs. But for the intransigence of the Opposition in the other place, British Shipbuilders would by now be established as a statutory corporation, tackling the urgent problems facing the industry.

It has often been argued by Conservative Members that the Government can deal with these problems under existing legislation. That has usually meant—or we have taken it to mean—that we could put taxpayers' resources into these industries by using the good old 1972 Industry Act. That has been used, I think, by the hon. Member for Henley (Mr. Heseltine) and his colleague who used to support him on industry matters —the hon. Member for Bridgwater (Mr. King)—but I do not suppose that we shall hear that argument from the hon. Member for Oswestry (Mr. Biffen).

The argument that we cannot have a national strategy is unacceptable to us. Assistance has to be given on a regional basis in accordance with a national strategy. We have to take into account the social grounds, and we have to make sure that the resources that will have to be devoted to shipbuilding can be used effectively in accordance with the corporate plan that will be designed by British shipbuilders. That is why we are convinced that public ownership is the right solution for this industry. Ship repairing also faces a difficult period. Even the successful yards find orders hard to get.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

The Secretary of State has been not answered the question that I put to him. If the orders are not coming on the open market to keep these yards open, what will the Government do in order to justify taking over the shipyards? How are they going to see that the people in the yards are kept busy?

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

Orders are the key. I do not deny that. We have to make every effort to persuade British shipowners to place orders in British yards. When we look at the figures over the last few years we find that British shipowners have placed many orders overseas, for all kinds of reasons. I do not think that it would be proper to go into those reasons now. British shipowners have to realise that it is in their interests to have a British shipbuilding capability. If our shipbuilding industry were to go it is unthinkable that Britain, as a great maritime nation, would become permanent prisoners of foreign shipbuilders. That is the philosophy that we have to accept.

I have had informal as well as formal discussions with the General Council of British Shipping, and I think it understands the difficulties. I hope that in the months ahead it will place orders in British yards.

Photo of Mr John Evans Mr John Evans , Newton

Does my right hon. Friend accept that none of us who worked in the industry could ever understand why British shipowners were able to go to Japan, Korea and other countries and have their ships built there, with substantial Government grants, while British shipbuilding workers were unemployed? Some of us will certainly expect this rule to be changed in the future.

Photo of Mr Eric Varley Mr Eric Varley , Chesterfield

These are factors that will have to be taken into consideration. Certainly, a few years ago there was a boom in British shipbuilding and it could be argued that at that time British shipowners had to place orders abroad to fill the time scale. But the key in the future depends on persuading British shipowners to place many more orders in British yards than they have done in the past.

The ship repairing industry has also faced difficulties. That industry has a long history of decline. In the closing stages of the last Session I made clear several times the industrial reasons for this decline under private ownership. Public ownership offers the only hope of a workable industrial strategy to halt and reverse this decline.

Once again the Opposition offer no clear alternative policy—except possibly providing some 1972 Industry Act money in the way it was used in Govan and elsewhere. Anyone who refuses to accept the industrial truth about the shiprepairing industry as I have described it—and as confirmed in the PA Consultatnts' report—must have been seriously misled by the false and extravagant publicity recently disseminated about this industry.

It is a matter of regret to me that so many noble Lords in another place allowed themselves to be taken in so completely by this false picture. I regret even more that such an error of understanding led them in the end to take the serious step of obstructing one of this Government's major industrial policies, which must be urgently implemented if employment in vital industries is not to suffer drastic reduction. I urge them, when they receive this Bill, as I am sure they will within the course of the next few days, to put this right at the earliest opportunity.

We are determined that our proposals shall reach the statute book in the form endorsed by this House. We believe this to be in the interests of the industries that we intend to take into public ownership and in the interests of the whole country.

In this situation it is right to point out that the only effect of the action taken in another place is delay. The damaging effects of delay, which I have outlined, are acknowledged on all sides. In moving that this Bill be read a Second time it is my firm hope that its opponents will not, by continuing their resistance, continue to harm the industries whose interests they claim to have at heart.

What we are now debating is not some interesting parliamentary procedural tactic. We have just had a heated debate about that, and the House endorsed the Government's action by the largest majority that we have had during the whole of the time that this Bill has been before the House of Commons.

The consequences for many areas of the country will be serious if the Bill is delayed. They will be serious for Merseyside, Tyneside, Wearside and Clydeside. I am sure that members of the SNP will take that into account when we vote for the Second Reading tonight.

After the Bill is given its Second Reading, and passes to the House of Lords in the next few days, I hope that it will reach the statute book as quickly as possible.

8.28 p.m.

Photo of Mr John Biffen Mr John Biffen , Oswestry

The Secretary of State explained that he would make a reasonably brief speech not because of the insignificance of the topic but because it was one which had been widely canvassed in the House over previous months. I do not dissent from that but I must confess that I rise with all the modesty of a maiden speaker on this subject.

At the outset I would therefore like to read into the record that the register of Members' interests indicates that I am an economic adviser to a company which acts as brokers to Yarrow (Shipbuilders) Limited and that I also have a modest shareholding in that shipbuilding company. It may seem slightly pedantic to make that point but I think it ought to be on the record.

I join the Secretary of State in a common analysis of some of the background problems of the related industries. Certainly we can agree on the likely continuing low demand for shipbuilding and on the strong competitive force which is evident from some of the new centres of output both in Asia and Latin America. What is more, until recently there has been a lack of worldwide demand for civil aircraft.

I note some incipient optimism in the remarks of the Secretary of State on that account. My guess is that the military market is likely to remain a good deal more buoyant than the civil market for some time to come. We can also agree that none of these fundamental difficulties can be willed away by the proposals in the Bill.

The hon. Member for Colne Valley (Mr. Wainwright)—I have to speak as the priest on behalf of the absent congregation in this instance—said of nationalisation: This is a measure of industrial archaeology."—[Official Report, 2nd December 1975; Vol. 901, c. 1475.] During the Second Reading debate in the previous Session, my hon. Friend the Member for Henley (Mr. Heseltine) said in respect of nationalisation: It brings change more slowly and not more quickly but just as inevitably at a cost which is totally disproportionate to the illusory benefits which are claimed on its behalf."—[Official Report, 2nd December 1975; Vol. 901, c. 1462.] The major criticism that I still make of this legislation is that the Bill gives no indication of what nationalisation will mean for two significant sectors of the economy which undoubtedly will have to undergo very considerable structural change over the next few years.

I do not believe that this is a matter where the judgments of the Organising Committees should be, as it were, paramount and withheld from the House. The Government's strategy should have been evident both on Second Reading and in Committee. Here, I echo the very fair inquiry of my hon. Friend the Member for Gillingham (Mr. Burden). It was argued constantly by many supporters of the Bill that it merited support on account of its job protection potential. That is in no sense an unfair description of the arguments which were advanced both on Second Reading and in Committee. But we are bound to ask where are the expected areas of concentration under British Shipbuilders, how will the industry be re-deployed, and, above all, what investment will be made available to give substance to whatever is to be the prospective strategy.

The levels of compensation will have some impact upon the totality of the Government's public sector borrowing requirement and financial policies. In the light of the remarks of the Secretary of State today, inevitably there will be grow ing interest about the extent to which British shipping is to become a captive or a quasi-captive market for the new industry.

To none of these questions was an answer given throughout all the stages of the legislation in the preceding Session of Parliament, and Scottish National Party Members are perfectly right to argue that, in the absence of commitments of this kind, the House is entitled to question the strategy, the philosophy and the policy embodied in this Bill even though it comes to us 12 months after it was previously given its Second Reading.

Mr. Eric S. Heifer:

The hon. Member for Oswestry (Mr. Biffen) said that he had some connection with the shipbuilding industry, and I accept that. But is he not aware that the only way in which we can have job protection in the shipbuilding and ship repairing industries is to bring them under public ownership? Taking the ship repairing industry on Merseyside as an example, in 1947 it employed about 20,000 workers. They have been reduced to about 3,000 now. That has happened without public ownership, and if the industry is left in the hands of private enterprise. I think that the hon. Gentleman must agree with me that the levels of employment will get even worse.

As for shipbuilding, which is again an industry with which I have had a lot to do—indeed, I worked in it for many years —one of the problems is that managements did not keep up with the times. They never modernised. One could go to Japanese, American and other shipyards throughout the world and discover modernisation programmes which our managements—

Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill

Order. The intervention by the hon. Member for Liverpool, Walton (Mr. Heifer) is extending over quite a period.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

I apologise for that, Mr. Deputy Speaker. However I think that I have made the point adequately that there is a very important case for this Bill being passed at the earliest possible moment.

Photo of Mr John Biffen Mr John Biffen , Oswestry

As the hon. Member for St. Pancras, North (Mr. Stallard) said, it was a good intervention. In fact, it was a hybrid intervention, because it was really a speech purporting to be an intervention.

It enables me to move to my next point, which is whether, having our debate today on 1st December 1976—rather than 2nd December 1975—are there any additional factors which enable us to bring just some fresh nuance to the arguments which are tolerably familiar. Quite obviously, it is the view of the hon. Member for Liverpool, Walton (Mr. Hafer) that a publicly-owned industry would be commercially more viable, more aggressive, able to sustain higher levels of employment and able to stand ready comparison with such assets had they remained in private ownership.

The new factor, which I draw to the attention of the House, has been the report of the National Economic Development Office on the experience of our nationalised industries in major positions of economic influence in the totality of the economy. The National Economic Development Office report clearly indicates that nationalised industries under successive generations of politicians—no one is engaging in a policy of comparative neglect as between the pot and the kettle—have been subject to constant and well-documented political interference which has impeded correct pricing policy, distorted preferred investment policies and led to the destruction of managerial morale.

The destruction of managerial morale goes far wider than that. It has an impact on the morale of those who work on shop floor levels in those industries. I am not such an elitist that I think that managerial morale only could command the attention of this House. The latest evidence of that was the departure of Mr. Farrimond from his rôle as British Railways industrial relations expert. His parting shot was a testimony to some of the shortcomings of nationalisation as an instrument for promoting the effective economic use of our resources. Whatever may be the strictures of the hon. Member for Walton, I do not regard the misdemeanours of the aircraft and shipbuilding industries as being so demonstrably evident.

The aircraft industry has a commendable pattern of success. The four companies contained in the schedule for nationalisation have an enviable export record. In 1975 exports totalled £800 million out of a turnover of just double that figure. Even in the last few days we have seen the welcome evidence of the successful commercial skills of the BAC 1–11 series 475 jet airliner. It was observed by Michael Donne in the Financial Times:The possibility of a Japanese order for the BAC 1–11 series 475 jet airliner now appears to be strengthening. I could quote many other instances of the profound success of our aerospace industry in the markets of the world.

I turn now to the shipbuilding industry. There is a considerably varied pattern of commercial experience, which is hardly surprising in the face of the development of the tremendous competitive strength of the shipbuilding industries outside the United Kingdom and Western Europe. We do ourselves—and certainly those in the shipbuilding industry—no service if we lead them to believe that these profound structural competitive forces can somehow or other be set at naught. That is not so.

Many of the companies contained in the schedule dealing with the shipbuilding industry have patterns of commercial success. I should have thought that that was particularly true of naval shipbuilders. Obviously, one expects both industries to alter their structure in the next two or three years. But the history of both these industries since the end of the war has been a history of ownership concentrating on restructuring in the face of market conditions without recourse to nationalisation.

One is driven increasingly to relate back to the previous Second Reading debate as the Secretary of State did in our earlier debate on the procedural motion. It is difficult to believe that we are in the same House of Commons. The emotions that were evident just a short while ago—and I do not suppose any of my words could raise the temperature much above—

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

What about those who are making a fortune on television?

Photo of Mr John Biffen Mr John Biffen , Oswestry

The hon. Member for Central Ayrshire (Mr. Lambie) says that a fortune is being made on television.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

The gentlemen we are talking about are making a fortune on television.

Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill

Order. If the hon. Member for Central Ayshire wishes to make an intervention, perhaps he will try to catch my eye.

Photo of Mr John Biffen Mr John Biffen , Oswestry

I think that the hon. Member for Central Ayrshire owes us an explanation. I do not think that I am the only person in this House who would like to know how one could make a fortune on television. Could he indicate the hon. Members who are doing so, and how it is achieved? I shall willingly give way to him. I had hoped that at least that pearl could be extracted from this debate.

There is no doubt that nationalisation of the aircraft and shipbuilding industries is part of a compact to keep together the restless, and possibly disintegrating, factions that comprise the Labour Party. The orthodox member of the Tribune Group in the Department of Industry may laugh, but I notice that the Minister, who is a less orthodox member of the group, is less amused by that commonsense and self-evident observation.

This measure has no friends outside the Labour Party. The hon. Member for Walton is making sedentary and bellicose noises. All right, the measure has the support of the Scottish Labour Party, and during the last parliamentary Session it had the support of the hon. Member for Fermanagh and South Tyrone (Mr. Maguire). That support was much welcomed by the hon. Member for Central Ayrshire. I sent a note to the hon. Member for Fermanagh and South Tyrone, which I dare say he has received, indicating that I would mention his vote, because it has interested me. I envy him. When I came into the House of Commons it was seven months, or perhaps slightly more, before I made my maiden speech. That stood as a record until the arrival of the hon. Member for Fermanagh and South Tyrone and he has deprived me of my record because he has yet to make his maiden speech. Obviously he wishes to say something now.

Photo of Mr John Biffen Mr John Biffen , Oswestry

Of course I am jealous because I have lost my record for having observed the longest silence between entry to this House and maiden speech. I had trusted that my record would eventually find its way into the "Guiness Book of Records". Naturally, I am jealous because I have lost my record, but my jealousy has been matched only by my fascination to hear the hon. Member for Fermanagh and South Tyrone making his maiden speech on this Bill, because it was upon this Bill that his vote proved vital. I think that considerable care was taken to persuade him on this matter. He has certainly not been the most active participant in our affairs.

Photo of Mr Frank Maguire Mr Frank Maguire , Fermanagh and South Tyrone

Would the hon. Gentleman repeat that statement? I did not hear it properly.

Photo of Mr John Biffen Mr John Biffen , Oswestry

I said that I did not think that the hon. Member for Fermanagh and South Tyrone had been the most active participant in our affairs. I had understood that the hon. Gentleman did not have perhaps the same devotion to the constitutional arrangements of Westminster and all they entail as the rest of us.

Photo of Mr Frank Maguire Mr Frank Maguire , Fermanagh and South Tyrone

The hon. Gentleman has made some statements which I think that he cannot back up. My commitment to the Bill is well established in Parliament. If the hon. Gentleman is prepared to make the same statements outside this Chamber, I shall deal with him.

Photo of Mr John Biffen Mr John Biffen , Oswestry

I am delighted that the hon. Gentleman says that his commitment to the Bill is whole-hearted and well known. If I have said anything which was offensive to him, I withdraw it at once. If the hon. Gentleman's attachment to the constitutional arrangements of the United Kingdom stands foursquare with that of the hon. Member for Belfast, West (Mr. Fitt), I have clearly misunderstood the situation. I had understood that there were differences between the hon. Members.

Photo of Mr Frank Maguire Mr Frank Maguire , Fermanagh and South Tyrone

Is the hon. Gentleman withdrawing his original statement? It is nice to see that you appreciate the error of your ways.

Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill

Order. I hope that so far any error of my ways has not been detected.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

I have always had the highest respect for the hon. Member for Oswestry (Mr. Biffen). We have had many serious theoretical arguments in the House on economic policy. But if the hon. Gentleman continues along the road on which he has been travelling for the past five minutes, my respect will be seriously diminished.

Photo of Mr John Biffen Mr John Biffen , Oswestry

I am happy to put that respect at risk on this issue. I say that without meaning offence to the hon. Member for Fermanagh and South Tyrone I believe that any person who comes here has a right to be judged on his views and opinions over the whole range of issues within the ambit of Parliament. I am fascinated that the hon. Gentleman should have conferred his support on the Bill and I do not question the integrity with which he does to.

Perhaps we can part as friends if I say that I hope that the hon. Gentleman will show the same devoted interest to other items of domestic legislation covering the full range of matters in the Queen's Speech.

Photo of Mr Frank Maguire Mr Frank Maguire , Fermanagh and South Tyrone

May I ask the hon. Gentleman to cut out the red herrings, please?

Photo of Mr John Evans Mr John Evans , Newton

The time taken by an hon. Member before making his maiden speech is a matter of interest mainly to parliamentarians. The length of time which the hon. Member for Oswestry (Mr. Biffen) and his party are keeping the shipbuilding, ship repairing and aircraft industries in a state of suspense is a matter for the country, and that is what we are debating.

Before the hon. Gentleman started his haranguing of the hon. Member for Fermanagh and South Tyrone (Mr. Maguire), he claimed that the only support for the Bill was within the ranks of the Labour Party. Will he recognise that shipbuilding and ship repair workers on Tyneside, Wearside, Merseyside, Teesside and Clydeside want the Bill quickly? That is where we have the support for the Bill.

Photo of Mr John Biffen Mr John Biffen , Oswestry

Well, if there were such substantial support for this legislation as the hon. Member indicates, there would have been much more powerful evidence of it in recent electoral tests to which the Labour Party has been subjected.

I believe that this measure is short of friends outside the Labour Party. I believe that this measure is a high price to pay in divisive legislation when the nation needs a strategy of conciliation.

The Government have shown a perverse determination to proceed with this Bill. I say that on three counts. First, I believe that the Bill is slipshod in its drafting. The very fact that the Public Bill Office pronounced a prima facie case for considering it as hybrid is evidence of that fact. It is particularly sad that we should have had recourse to the measures of the particular procedural device to deal with that. The burden of the case of the Leader of the House was that the issue of hybridity had been raised at an inconvenient time. It is not the purpose of Members of this House to conduct operations for the convenience of the Executive. That was never the view of the Leader of the House when he sat below the Gangway.

Secondly, I believe that ship repairing could have been excluded. In the debates between the House of Commons and the House of Lords, the whole issue of ship repairing, which after all encapsulated the problems of hybridity, became as it were the topmost peak of the commanding heights of the economy. I cannot understand how it came to be elevated into a kind of political Everest, which had to be scaled at any cost. I believe that the Minister of State is principally the arch-mountaineer in this case, and he carries with him a number of uncertain and bewildered Sherpas bearing the ideological baggage of this measure.

Thirdly, there is an ultimate motive in this Bill. It is that of a despairing Cabinet seeking an external diversion on the issue of peers versus people. I believe that the Government are mistaken if they think that that isssue can be raised on this legislation. Not even the formidable oratory of the Leader of the House can inflame the long-dead embers of that controversy. I urge my hon. Friends to vote against the Second Reading of this Bill tonight.

8.53 p.m.

Photo of Mr Bob Mitchell Mr Bob Mitchell , Southampton, Itchen

Never before have I had the opportunity of following a maiden speaker. However, I do not intend to extend to the hon. Member for Oswestry (Mr. Biffen) the courtesies normally extended to maiden speeches because his speech tonight was the worst I have heard him make in the House. I had a lot of respect for the hon. Member and the speeches he made as a Back Bench Member. Perhaps he feels uncomfortable on the Front Bench, but it was really a bad speech. He never made out a case against the Bill, and at least five minutes were wasted over arguments leading to the intervention of the hon. Member for Fermanagh and South Tyrone (Mr. Maguire), which had nothing whatsoever to do with the Bill.

Photo of Mr Bob Mitchell Mr Bob Mitchell , Southampton, Itchen

I believe very strongly that if we do not have public ownership in the aircraft and shipbuilding industries we shall not have these industries at all in a few years. It is essential for the survival of the industries that public ownership takes place. However, I do not believe that the mere act of public ownership will solve the many problems that face these industries. The problems will still be there, but at the moment the very worst thing is happening. The action of the other place in turning out the Bill was an utter disgrace. The very worst thing we could have is another long period of uncertainty. That would kill the industries.

I agree with the hon. Member for Oswestry, who contrasted this debate with the previous three hours, when we had all sorts of people sitting on the Back Benches making speeches about parliamentary procedure. I do not know why the hon. Member for Tiverton (Mr. Maxwell-Hyslop) did not stay for this debate, after his previous remarks. He has gained a reputation as an expert on parliamentary procedure, but in doing so he has threatened the jobs of thousands of shipyard and aircraft workers. People outside the House do not understand what it is all about.

If the Bill does not go through quickly, we face the prospect of shipbuilding firms going into liquidation. Shipbuilding throughout the world is already in great difficulty. There is a recession in world trade, spare shipping capacity, and strong competition from Japan.

I want to diverge slightly to urge the Minister to co-operate with the EEC countries in forming a common policy towards the threat of Japanese shipbuilding. Britain, Germany and other European nations are involved. I should like to see a European shipbuilding policy established.

Some hon. Members are constantly calling for extensive import controls. If we imposed extensive import controls there would be retaliation, the net effect of which would be still further to reduce the volume of world trade. A reduction in the volume of world trade would lead to a further reduction in the demand for ships to carry goods from one country to another. The shipbuilding industry would thereby be further threatened, and that could be the final blow.

What is endangering the aircraft industry is the delay and uncertainty about the future. Will the Minister give us more information about the future of the HS 146 aircraft? The decision is long overdue. I saw a deputation last weekend consisting of middle management from Hawker Siddeley, at Hamble. They came to see me on a different matter relating to the certification of their union. They said "We may not be particularly in favour of nationalisation, but for goodness' sake let us have a decision one way or the other."

The Vosper Thornycroft shipyard, which builds warships, is in my constituency. It has extensive export orders. It is one of the three specialist warship-building companies in the country. I hope that the Government will stick to their policy of the past seven or eight years, of placing most warship orders with the three specialist companies, Vosper Thornycroft, Vickers and Yarrow.

When the Bill was first introduced, there was considerable apprehension among management and trade unions. They feared that the Government would set up a Morrisonian national structure for the shipbuilding industry. I am pleased to say that their fears have been considerably allayed by the Organising Committee. I pay tribute to the Minister for appointing Admiral Griffin as Chairman of the Organising Committee. It is an excellent appointment, which has dispelled the rumours about who would be appointed.

The Organising Committee has done an excellent job. It has made clear that British Shipbuilders will not be a decision-making centralised bureaucracy. Local management is to retain a great deal of freedom. I hope that Vosper Thornycroft will retain its name. I think that has almost been agreed. In such matters the Organising Committee has shown a practical approach to its job.

The hon. Member for Oswestry asked why we do not choose to leave ship repairing out of the Bill. It so happens that in Southampton the ship repairing firm of Vosper Thornycroft also carries out naval shipbuilding. There is an agreement and interchangeability of labour. For example, if a couple of ships need urgent repairs, Vosper Thornycroft can transfer men from the shipbuilding yard to get on with the job. If the demand works in the other direction, men can be transferred from ship repairing to shipbuilding. Pension and welfare arrangements are almost identical.

What would happen if we took out ship repairing—

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

The hon. Gentleman says that Vosper Thornycroft builds warships and that it should therefore repair warships. What would happen to the Royal naval dockyards, which are now repairing warships, if Vosper Thornycroft and other yards took on that work?

Photo of Mr Bob Mitchell Mr Bob Mitchell , Southampton, Itchen

Either I did not make myself clear or the hon. Gentleman did not listen. I said that the ship repairing yard in Southampton repairs merchant ships, not warships. The yard that is owned by Vosper Thornycroft used to be two yards. One was owned by Vospers and the other by Harland and Wolff. There was an amalgamation, and the two yards are now owned by Vospers.

What would happen in Southampton if ship repairing were split from the Bill? It is clear that the interchangeability agreement would be threatened. There would have to be a new agreement. If one section were owned by British Shipbuilders and the other remained in private ownership, there would be a disastrous situation. Southampton claims to be one of the most efficient shipbuilding and ship repairing yards in the country. No doubt others will dispute that, but that is its claim. One of the reasons for its efficiency is its excellent industrial relations. There is a proper agreement covering all the ship repairing and shipbuilding workers in the port. The arguments in another place and in this place to split ship repairing from the Bill would result in utter disaster in my area.

I accept that under the Parliament Act their Lordships have acted constitutionally. However, I believe that they have acted unwisely. One of the arguments was that the Government have a small majority and were elected on a minority vote. The latter point applies to every Government since 1945, Labour or Conservative. They have all been elected on a minority vote. The only time that the other place puts its foot down or wields the big stick is when a Labour Government presents it with Labour legislation. It has never taken that stand with Conservative legislation.

Surely the other should have put its foot down when one of the most ridiculous measures ever passed was presented to it by the previous Conservative Government—namely, the Industrial Relations Act. Many peers from the Cross-Benches, and even from the Conservative Benches, warned the then Government what would happen if that measure reached the statute book.

Photo of Mr John Evans Mr John Evans , Newton

They still voted for it.

Photo of Mr Bob Mitchell Mr Bob Mitchell , Southampton, Itchen

As my hon. Friend says, they still voted for it and turned out in force to do so. They did not then argue "Let us give time for thought. Let us postpone the matter for a little while and give the Government another chance."

We cannot allow the other place to continue with its practice of delaying only that legislation which emanates from a Labour Government. What alarms me even more is that it seems that the other place has yielded to pressure from a public relations organisation working on behalf of certain ship repairing firms. We have all been subjected to this to some extent. At the beginning of the campaign I went to a lunch organised by a public relations firm. I was invited to a second lunch and to a third one, but I declined. Many hon. Members probably went to one of the lunches. We all know what the object of the exercise was. I believe that the Lords yielded to pressure in a disgraceful way.

I fervently believe that unless the Bill gets on to the statute book as soon as possible the whole future of the shipbuilding industry in particular will be threatened. I hope that the Minister will be able to assure us that vesting day will be, at the latest, in June 1977.

9.1 p.m.

Photo of Mr Michael McNair-Wilson Mr Michael McNair-Wilson , Newbury

I shall not follow many of the comments of the hon. Member for Southampton, Itchen (Mr. Mitchell), except to say that I agree, to some extent at least, with his concept of a European approach to the shipbuilding industry. I hope to return to that point later in my speech.

I was interested to hear the hon. Gentleman telling us of the good things that may come from the nationalisation of the shipbuilding industry, and to hear him express the hope that Vosper Thornycroft would still look much as it does today. That showed his split-mind approach to the Bill, because, by its nature, the Bill will create a single industry rather than independent industries throughout the country.

Unlike the hon. Member for Southampton, Itchen, I was impressed by the speech made by my hon. Friend the Member for Oswestry (Mr. Biffen), although I was a little sorry that my hon. Friend allowed himself to get landed in a rather awkward Irish bog. However, these things happen when one tangles with Irishmen. What my hon. Friend said had much force, in particular his accusation that the Government have not thought out in great detail the strategy that should underlie the Bill.

I think I am right in saying that this is the third attempt by the Government to get the Bill through the House of Commons. It is the grandson of Benn, and much time has passed since the first draft was presented to us. In that time, many things have happened. Yet, so keen are the Government to get the Bill on to the statute book that they seem prepared to assume that the circumstances that held sway in 1974 and 1975 still hold good in December 1976. Given that fallacy, the Government are bound to produce a Bill that is inadequate for the task for which it has been designed.

Photo of Mr John Evans Mr John Evans , Newton

Does the hon. Gentleman accept that the only thing that has happened in the shipbuilding and shiprepairing industries since 1974 is that things have got much worse and that unless we take action quickly, irrespective of nationalisation, we simply will not have a shipbuilding industry left?

Photo of Mr Michael McNair-Wilson Mr Michael McNair-Wilson , Newbury

That interjection does not help the argument that I want to advance. If the hon. Gentleman thinks that if the Bill had been on the statute book by the end of the summer the shipbuilding industry would have been in a different situation, he knows less about the industry of which he claims to be an expert than he believes.

A number of factors have come to light in the past 12 months, and it is very disappointing that the Government showed no willingness to take note of those factors and decide that the Bill should be redrafted in certain important respects before they brought it back to the House as they are doing in their effort to scramble it through this Chamber and then the other place, and so get it on to the statute book.

I want to look at the prospects that lie before the two industries as we approach the end of this year. The lesson that we are learning about the aircraft industry is that it is not likely to develop many new civil aircraft projects in the foreseeable future. In fact, the British industry and the industries in Europe and America will be developing existing aircraft as far as they can before investing the vast sums needed to produce a whole new generation of civil aircraft.

Reference has been made to the BAC 1–11 series 475. That aircraft shows that the British industry is looking realistically at the market, clearly with success just round the corner. It is saying "We have a good aeroplane. Let us see how far we can stretch it in terms of the numbers of passengers that it can carry. Let us see if we can make it quieter, by introducing either hush kits to its engines or a new generation of engine." The industry is resisting, saying "Let us spend a lot of money on a completely new aircraft, with all that that involves." That is the right and sensible approach. I have no doubt that, if the Bill goes through the British Aerospace Corporation will take a broadly similar approach.

Regarding collaboration in Europe, the industry and, in particular, Mr. Alan Greenwood, of BAC, are making approaches to various West European companies with a view to setting up the right collaborative projects. But no one need tell me that these collaborations depend on this Bill, because they do not. The aerospace industry is doing and has done well. It has turned in record profits year after year, though a fat lot of thanks it gets from Labour Members.

The shipbuilding industry is in a different position. I know not enough about it to want to say very much, except later in my speech when I touch on the problems of Harland and Wolff.

The hon. Member for Liverpool, Walton (Mr. Heffer) expressed concern about yards not having had enough investment put into them. I wish he would go to Belfast and look at Harland and Wolff. There has been huge investment in that company. The hon. Gentleman would see marvellous machines and great cranes. If he asks, "Why are there no ships on those slipways?" the answer is not lack of investment in that yard but lack of ships wanted in world markets.

I am sorry that the Secretary of State has left the Chamber, but I am sure that the Minister of State will listen with the attentiveness that he always displays. On Second Reading of the Aircraft and Shipbuilding Industries Bill in 1975 the Secretary of State claimed that one reason why these industries should be brought into public ownership was that if public money was to be spent on them there there had to be public accountability. Indeed, as I want to make the point as strongly as I can, I shall quote from the right hon. Gentleman's speech in Hansard. Talking about the financial assistance which had been given to the aircraft industry, the right hon. Gentleman said: An industry which depends for its existence and progress on public money on this huge scale cannot be called a genuine example of private enterprise. It is much better that this massive public stake should be based on public ownership. Moreover, the provision of money on that scale to private firms means detailed monitoring—it has to be so—to achieve the degree of accountability that we all expect in this House.If, instead, the public money is channelled into a publicly-owned undertaking, the accountability can be at the strategic, corporate level, and the substance of accounability can be maintained and improved, but the detailed intervention and monitoring by the Government under public ownership can be dispensed with."—[0fficial Report, 2nd December 1975; Vol. 901, c. 1450–51.] I have no doubt that the right hon. Gentleman believed those words absolutely. I am sure that, as a Socialist, he would like to think those words are always the truth. But, as my hon. Friend the Member for Oswestry suggested, the Secretary of State has presumably read "A Study of UK Nationalised Industries" recently published by the National Economic Development Office. If not, I shall read a short extract from it. A part of that document refers to this kind of accountability. It states: Ministerial responsibility for nationalised industries is … ill-defined. The resulting confusion leads to a situation in which boards are not effectively required to account for their performance in a systematic or objective manner …Despite the investigations and continuous efforts of the Select Committee on Nationalised Industries, Parliament has not been able to reassure itself, the general public or individual interest groups about the performance of nationalised industries.Annual reports and accounts perform a limited function in their present form and are not an adequate means of assessing the performance of statutory duties;There is widespread uncertainty in government departments about the underlying performance of nationalised industries;Targets for return on net assets have proved an insufficient and misleading means of assessing the adequacy of current and past performance …The consequences of government influence on board decisions cannot be disentangled from the results of decisions made at the board's own discretion;Boards of nationalised industries sometimes seem to aspire to a freedom from public scrutiny which is at odds with their corporations' status as publicly owned enterprises. and so on and so forth.

This is the public accountability that we are told we shall now achieve as a result of the Bill. That report was published a few weeks ago, and no one need tell me that we can pass this Bill tonight and believe in our hearts that we are establishing a new form of public accountability that will make the aircraft or shipbuilding industries more accountable than they have been in the past. Tell that to Sir Arnold Weinstock. Ask him what he thinks about public accountability? He will say that his companies involved in aircraft projects have been made to monitor everything that they do. He will also explain about Ferranti and the Bloodbound deal, when companies were asked to pay back vast sums of money because they were said to have overcharged. Has any nationalised industry been put in that state? Has any nationalised industry ever made such a large profit that it has been asked to pay money back? No hon. Members will be able to tell me of one, because none exists.

Photo of Mr Bob Mitchell Mr Bob Mitchell , Southampton, Itchen

Will the hon. Member quote from the report of Slater Walker?

Photo of Mr Michael McNair-Wilson Mr Michael McNair-Wilson , Newbury

I would have loved to quote from that enormous tome but I have not got it with me.

Public accountability is one of the planks on which those who advocate nationalisation so often stand. I suggest that the NEDO report absolutely damns the argument that nationalisation gives public accountability. In fact, it gives nothing at all. Until we have a nationalisation Bill that makes the type of proposals contained in that study workable, we shall not get public accountability. That means that we shall waste Britain's public funds on worthless projects. It means a waste of labour and people's efforts—a waste of money and resources that could go to other badly needed projects, particularly those required for their social consequences.

The Secretary of State told us that he was so sure that public accountability would exist that any future projects would not be monitored on the factory floor. Let us think of what he is really saying. He is saying that if Concorde were built by a nationalised industry the detailed monitoring which took place and which still cost Britain £600 million, would not have taken place. I hesitate to think what figures we would now be discussing in terms of the cost of Concorde if he had his way.

I say to the Minister of State that until the Government take the question of public accountability more seriously than they have, until they cease to live in their dreams about what Socialism should be rather than what in fact it turns out to be, this nation will pay a very high price. It will be a very much higher price than just taking these companies into public ownership.

I make this last point on the question of accountability: we of the Opposition believed that there was an argument for rationalising the aircraft industry and for BAC and HSA getting together in one company. However, we also believe, as we have always believed, that the private enterprise system and structure allows for the sort of monitoring about which we are really concerned. It means that the companies have to use their assets as well as they know how, because for them there is always the possibility of bankruptcy. But within nationalised industries that final sanction never exists. Because it never exists, there is never the ultimate discipline which makes those in those industries use their money wisely. As Flight International said in its edition of 6th November 1976: Nationalisation remains a maximum gross irrelevance, and it will almost certainly weaken rather than stiffen the Government's control of public spending. But, to be positive, a merged BAC/HS—which could be stronger than the sum of its parts—is worth having. Those are my sentiments.

I want to turn briefly to the second part of what I want to say. This Bill, which was introduced in 1975 and which is being reintroduced tonight, contains certain amendments, some of which are due to the Standing Committee, of which I was a member, and some of which are due to the other place—although one would not think so to hear some of the comments that have been made. One of those amendments has created Clause 48, which is the clause that now requires British Shipbuilders and British Aerospace to pay some heed to the fact that there is a State-owned aircraft factory in Northern Ireland called Short Brothers and Harland—which once was sited in Rochester and which can lay claim to the proud title of the oldest aircraft company in the world—and to the fact that there is Harland and Wolff.

Both of those companies are absolutely State-owned, yet, as we know—because we have raised this question previously —the present Government, for reasons best known to themselves, will have nothing to do with the suggestion that Harland and Wolff should be in British Shipbuilders, or that Short Brothers and Harland should be in British Aerospace. The Government have produced all sorts of reasons, all of which persuade me that they are terrified that if that were to happen someone might say Oh Lord, they have actually integrated something in Northern Ireland into a British institution."

So that that should not happen, the Government have kept this arms-length relationship going, despite the fact that they know, as I know, that the Chairman of Harland and Wolff at least would like to have a director on the main board of British Shipbuilders. As those companies are State-owned, one could hardly describe them as being in competition with each other. But a close link is not to be.

However, at least Clause 48 imposes a duty upon British Aerospace and British Shipbuilders to have full regard to the need to consult these companies. What a strange set of words. Why is it not simply "consult"? It is just to have full regard to the need to consult so the option is theirs. If they do not want to consult they do not have to. That is meant to satisfy all those whose livelihood depends on Short Brothers and Harland and on Harland and Wolff, who are subjects of Her Majesty the Queen and whose lives are decided by this Parliament. That is all that they are to have.

The clause goes on to say: and wherever possible co-ordinate their activities with those of, any company incorporated in Northern Ireland". It is "co-ordinate", but not "co-operate". They must get the division to make absolutely sure that they do not get closer than that.

Again I ask the Government why this should be so. The Minister of State must know—in case he does not, I have brought a copy of Hansard for him—that on 22nd November, only a couple of weeks ago, the Minister of State, Northern Ireland Office, told us that the Government have agreed to waive the accumulated interest due on all Government loans outstanding —to Short Brothers and Harland— to write off loans of £5·05 million related to certain aircraft produced in the past: and to convert the remaining Government loans, totalling £8·95 million into share capital. We know that the ownership of that company is in the following terms: The issued share capital, as increased, will be held as follows: 61·45 per cent. by the Northern Ireland Department of Commerce; 33·85 per cent. by the Department of Industry; and 2·35 per cent. each by Harland and Wolff and the Rolls-Royce receiver."—[Official Report, 22nd November 1976; Vol. 919, c. 932–3.] The Department of Industry now owns 33·85 per cent. of Short Brothers and Harland and the Minister of State, Northern Ireland Office says that the Secretary of State for Industry, as sponsor of the United Kingdom aerospace industry, will continue to have the same sort of responsibility for Shorts as for any other part of that industry. What absolute, arrant nonsense. The Government hand out the money to Shorts. They admit that the Department of Industry owns part of Shorts, and that the Secretary of State is responsible for Shorts, yet if one tells the Government that Short Brothers should be in the Aerospace Corporation they run a mile. I could say almost the same thing for Harland and Wolff, except that the plight of the people in the company will be so awful if it does not continue that I want nothing that I say to be treated flippantly or facetiously.

It seems to me inconceivable that we should set up two State industries, one in Northern Ireland and one in Great Britain, and that the Leader of the House should then tell my hon. Friends from Ulster, as he did last night, that he has been thinking of devolution not just in terms of Scotland and Wales but possibly in terms of Northern Ireland. Perhaps he recognises that it is under-represented, as heaven knows it is, for Northern Ireland is denied democracy and is different from any other region in the United Kingdom. I say that my hon. Friends from Ulster should remember the old Latin exhortation to "fear the Greeks even when bringing gifts."

This Government's concern is about survival and about Socialism. They are not concerned about Northern Ireland. If they were, they would see, as anyone can, the ridiculous absurdity that they are creating by setting up these two State industries so that they are in effect in competition with each other, but may consult if Big Brother requires.

If the Government are really serious in their intentions towards Northern Ireland, if they have set their hearts on this devolution that was referred to so amiably last night, and this greater representation at Wesminster, let them show their good faith by listening to the words of Dr. Quigley, whose report also came out a few weeks ago. The Minister of State blinks and wonders what it is all about. So that there will be no misunderstanding, let me say that the report was written by a civil servant, and its title is "Economic and Industrial Strategy for Northern Ireland".

In that report the author says that shipbuilding affords a practical example of regional and national policies. He goes on: The future of Harland and Wolff is clearly of vital significance for the Northern Ireland economy. Equally clearly, the problems of Harland and Wolff cannot be viewed or treated in isolation from the shipbuilding industry in the United Kingdom as a whole. We believe this observation to be valid, whatever the institutional arrangements within which Harland and Wolff operates. As a sign of the good faith of the Government towards Northern Ireland and its shipbuilding industry, perhaps the Minister of State can say tonight that even though it is not in the Bill he intends that the link between British Shipbuilding and Harland and Wolff and British Aerospace and Short Brothers and Harland shall be close, shall be to consult and shall be to co-operate. Until he puts something like that before the House, i shall vote against the Bill, as I did in 1975.

9.30 p.m.

Photo of Mr Stanley Thorne Mr Stanley Thorne , Preston South

I will resist the temptation to follow the comments of the hon. Member for Newbury (Mr. McNair-Wilson) about Northern Ireland and increased representation. It is a strange suggestion when his party has had a great deal of opportunity over the years to take some steps in that regard but has not pursued it.

The hon. Gentleman said that this was the third time that we had discussed the Bill. I think that it is the second, since the first time it was not proceeded with. But if he is right, for us it is third time lucky.

The hon. and learned Member for South Fylde (Mr. Gardner), who is not here now, unfortunately, made a contribution to our earlier debates about public ownership of the aircraft industry when he referred specifically, in a story straight from the horse's mouth, to the attitude of workers at the BAC factory at Warton in his constituency. Some of those workers live in my constituency. The hon. and learned Gentleman said that a Mr. Andrew Ridley, a member of my trade union and a member and supporter of the Conservative Party, has made it absolutely clear that most workers at that factory opposed nationalisation.

I do not wish to question the credentials of Mr. Ridley, but it is relevant to point out that we have never claimed 100 per cent. support for our measures. That would be absurd—as it would be for the Conservative Party to claim that it has over the centuries had majority support for the measures that it has pursued. One has to judge how one interprets the election of Members and Governments. As my hon. Friend the Member for Southampton, Itchen (Mr. Mitchell) has said, it has been custom and practice, certainly since the war, to accept that the party with the majority of seats, even if it does not have a majority of votes, should form a Government and then pursue generally speaking the policy that it had advocated in the election. Therefore, when we in the Labour Party say—one can only applaud the Government for taking this course so firmly—that we have the support of the British people, we do so against that background.

I attended a weekend school of my union last weekend, where one of the students was Mr. Andrew Ridley. He broadly confirmed what the hon. and learned Member for South Fylde had said, but he also said that over recent months there had been a shift of opinion at BAC Warton and that more and more of the work force—including the white-collar workers, of whom he is one—were coming round to the view that the Bill was desirable.

I say this deliberately because there is a growing consciousness of the connection between the prospects of the aerospace industry and the likelihood of Government intervention, because of the general problem which faces producers of aircraft not only here but in France, Germany, America and elsewhere.

People are becoming aware that it is possible to make the advances that are increasingly required within that industry only on the basis of national and international co-operation. The workers are increasingly coming round to believing that the best way of achieving that national and international co-operation is through Government intervention in that industry. Yet again my value judgment has been strengthened by relatively minor discussions with a few people within the industry.

We inevitably come back to the whole question whether the actions that the Government are taking are legitimate. Over the years both sides of the House have accepted that Governments govern by consent. Without consent, the difficulty of governing is obvious. The hon. Member for Gillingham (Mr. Burden) may find that remark rather humorous, but there is something very fundamental in it.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

I am grateful to the hon. Gentleman for giving way. What I found rather humorous was the fact that recent by-elections seemed to imply—I put it no higher—that the Government are not now governing with the support of the people of this country.

Photo of Mr Stanley Thorne Mr Stanley Thorne , Preston South

I am quite sure that the hon. Gentleman put forward a similar point of view during his own Government's rule when it was clear from the expressions outside what objections there were to the Industrial Relations Act. I recall the notice that the hon. Gentleman took to those objections and I recall the way in which his party steamrollered that measure through the House irrespective of growing public opinion and abhorrence with regard to that Act. I cannot accept the hon. Gentleman's point of view.

How do we determine consent? The hon. Gentleman and his party have always argued that one determines consent on the basis of the results that take place in a general election. The party that wins the majority of seats, and the party that is called upon to form the Government, has the consent to govern on that basis. There is therefore no argument but that the Government are proceeding in a perfectly legitimate fashion.

One thing that is worthy of note is that this Government, unlike some of the Governments that have been formed by the Conservative Party, are doing something that the public sometimes feel is rather rare in terms of Government actions. They are carrying out what they put to the electorate in their manifesto. I am one of those hon. Members who believe that even this Government do not always do that. I would seek to criticise them when they fail to carry out the promises that they made to the electorate. But that claim cannot be made with regard to this legislation.

The public know where the Labour Party stands on this issue. They are confident that the Labour Government will continue to carry out this measure despite the difficulties with which they are being presented by gentlemen down the corridor and by their friends in this House. The Government are standing four-square behind the undertaking they gave to the electorate. They will see this undertaking carried through. That does not often happen in the history of Governments, and it is worth recording.

Why are workers giving support to this measure? It is because they recognise increasingly that Government intervention in these industries is vital and that planning is required—not entirely centralised planning but some regional planning and some planning within the various divisions of the industries. They also recognise the need for industrial democracy.

It may be suggested that Government intervention in these industries has been going on for many years. That is perfectly true. One of the appalling features of the present situation is that literally hundreds of millions of pounds of the taxpayers' money have been poured into these industries, without any accountability by the firms concerned other than in certain areas where researeh has been carried out and has been subsidised by Government Departments.

My increased contact with workers in the aerospace industry has made me feel that over recent months there has been increasing optimism and expectancy linked directly with this question of public ownership. Far from seeing it as a threat to their future, increasingly they are confident that in British Aerospace under Government control they can make real progress and be able to lead more secure lives with the possibility of being involved in decision making in such a way that increasing satisfaction will be derived from their participation in this valuable industry.

9.42 p.m.

Photo of Mrs Margaret Bain Mrs Margaret Bain , Dunbartonshire East

I listened with interest to the speech of the hon. Member for Preston, South (Mr. Thorne) and I was greatly impressed by his argument about a mandate for a Government. When the next General Election comes and the Scottish National Party emerges as the major party in Scotland, I hope that he will support our demands to set up a Scottish Government.

Photo of Mr Stanley Thorne Mr Stanley Thorne , Preston South

The hon. Lady may be interested to know that I believe that we should have a system of proportional representation for the election of the Scottish Assembly. If we do, I am not too sure that her party will emerge with a majority.

Photo of Mrs Margaret Bain Mrs Margaret Bain , Dunbartonshire East

If the hon. Gentleman has not done so already, I hope that he will sign the Early-Day Motion urging the adoption of a system of proportional representation.

Photo of Mr Stanley Thorne Mr Stanley Thorne , Preston South

I have already done so.

Photo of Mrs Margaret Bain Mrs Margaret Bain , Dunbartonshire East

There was another point in the hon. Gentleman's speech, and it echoed that made by the hon. Member for Southampton, Itchen (Mr. Mitchell), on which I wish to comment because my party agrees that, if there is one situation that we do not want to see continued, it is uncertainty about this Bill.

People outside will notice that SNP Members deliberately did not vote against the Government's procedural motion. Our reason is that we feel quite definitely that there is nothing to be gained by putting the Bill into limbo for another six months. It is disappointing that all the official Opposition Members who came into the Chamber for that debate have not seen fit to come in for this one.

Photo of Mr David Lambie Mr David Lambie , Ayrshire Central

I know that the hon. Lady is new to the game of being her party's industrial spokesman, but may I remind her that, if she and her hon. Friends had voted for the Government in the spring of last year, this Bill would have been passed six months ago and the Scottish firms in the aircraft and shipbuilding industries would have been nationalised and assured of a good future. It is strange to hear this deathbed repentance now.

Photo of Mrs Margaret Bain Mrs Margaret Bain , Dunbartonshire East

That is the only speech tonight that the hon. Gentleman has not made from a sedentary position. If he and his hon. Friends from Scotland had joined us in trying to put pressure on the Government to set up a Scottish entity, they could have had this Bill. The hon. Gentleman knows the arguments perfectly well. There is no need for me to reiterate them now.

I know that I am speaking for the first time in this debate but I have followed it with great interest because many of my constituents work in the shipbuilding industry and have spent most of their lives in the industry. They, like me, feel that there has been a certain immorality and unreality about this debate in recent months. There is an immorality in the threats we have had that if the Bill is not passed jobs will be lost.

Representatives from all parties have challenged the Department of Industry time and again to give a guarantee of no redundancies and no closures but we cannot get such a categorical assurance. I am not convinced that somehow or other the passage of this Bill will guarantee jobs in industries which are under a severe threat and severe pressure. I cannot accept that one can just wave a magic wand and everything will be solved.

I see that the hon. Member for Renfrewshire, West (Mr. Buchan) has returned to the Chamber. He is always present when a Member of the SNP speaks. It is very flattering. He would love to see a situation where there were redundancies in the privately-owned shipbuilding and aircraft industries in Scotland so that he could blame the Scottish National Party. He could use this as a political argument because the other political arguments of the Labour Party in Scotland are ineffective. The Labour Party is looking for some weapon to stop the SNP in its tracks.

What further intrigues me is that we are told that somehow the workers are the only people interested in nationalisation. Some of the people who are keenest to see nationalisation in Scotland, particularly in shipbuilding, are the managers, because they want compensation from the Government when they close down the yards and men are made redundant.

I wish that Labour Member would try to take a more balanced attitude on the whole question and not sacrifice jobs on an ideological altar.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

Would the hon. Lady explain what she means by managers looking for compensation? As I understand it any worker made redundant is entitled to redundancy pay, provided that he has worked for the qualifying period. That would be the case whether or not the industry is nationalised. Does she mean compensation for the owners, the managers or the men?

Photo of Mrs Margaret Bain Mrs Margaret Bain , Dunbartonshire East

I am talking about compensation for capital equipment and all the rest—for owners. Redundancy money is paid anyway as the hon. Member knows. That was a silly intervention.

The hon. Gentleman also knows the kind of rumours circulating in Scotland about what the Organising Committee has been saying. The rumours circulate because there is no categorical assurance that the three yards will continue.

Over the weekend members of my party received telephone calls indicating which yards would be closed down. These came from someone highly placed in the trade union movement. I find this extremely worrying. Unless the Government can give a guarantee that jobs will be preserved I cannot see why on earth they are insisting on bringing back this Bill time and again.

If we are concerned about jobs in those industries we should be looking at alternative ways of helping them. I draw attention to what has been happening in Norway, a country to which the SNP frequently looks. Norway has just announced measures to help the shipbuilding industry. Provisions will be made in the Norwegian Government's budget next year for the purchase of ships to help the hard-pressed shipbuilding industry and to protect employment. The sum being talked about is 157 million kroner. Also, on an interim basis, there will be 50 million kroner for immediate use in connection with coastguard vessels, 49 million kroner for construction of defence ships, 37 million kroner for repair work and naval vessels, and 19·3 million kroner for the fisheries budget, for lighters, tugs and so on.

This is a more constructive approach to the industry. If the Government are genuinely concerned about protecting employment I hope that they will look at what is happening in Norway.

No matter what happens to the Bill there will still be problems in the shipbuilding industry. I hope that the Government will give the kind of guarantee for which we have asked, that they will order ships and operate a Norwegian system of preference. We shall be consistent tonight in our vote. Obviously we are concerned about jobs in Scotland. But my party is not convinced that the Government are doing anything to preserve jobs in the aircraft and shipbuilding industries in Scotland, and until such time as we hear to the contrary we shall continue to vote against the Government.

9.50 p.m.

Photo of Mr John Evans Mr John Evans , Newton

I am sure that the Member for Dunbartonshire, East (Mrs. Bain) understands why the Government and her party part company. I think only of shipyard workers—Clydeside shipyard workers, Tyneside shipyard workers, Merseyside shipyard workers or Wearside shipyard workers. Where they work is immaterial. They are all interchangeable, and all can work in one another's yards and on one another's ships. My party's concern is not particularly for the Scottish shipbuilding industry, the English shipbuilding industry, or even the Welsh one. Our concern is for the British shipbuilding and ship repairing industries.

Photo of Mrs Margaret Bain Mrs Margaret Bain , Dunbartonshire East

I think that the hon. Member for Newton (Mr. Evans) will accept that I am frequently on record as saying that I am concerned about unemployment and poverty wherever it occurs. But I belong to a party which seeks alternative solutions to our problems in Scotland. At the same time, I can accept that there are problems elsewhere and I shall do anything I can to help.

Photo of Mr John Evans Mr John Evans , Newton

That was a long intervention. The workers in the industry, whether on Clydeside, Tyneside, Wearside or Merseyside, want the industry nationalised. They are not seeking to create the divisions for which the hon. Lady cries.

I think that the House will agree that this must be the longest-running Bill in the whole history of the House of Commons. I wish that hon. Members who represent Scottish constituencies would quieten down and allow a mere Englishman to address himself to the Bill.

It is all very well for parliamentarians to exchange pleasantries or insults, but these great industries are sliding down the hill and unless action is taken quickly shipbuilding will slide into oblivion. The problems of that industry are not exclusively British or Scottish problems; they are ones which face the industry throughout the world.

Something which struck me as peculiar, particularly during the debates at the end of last Session, was that everyone—the House of Lords, the Conservative Party and the minority parties—agreed that the Government should be allowed to nationalise the shipbuilding, marine engineering and aircraft industries if only they would let go of the ship repairing industry. It was easy to see that these groups were able to swallow the camel of nationalisation of major parts of the industry but were straining on the gnat of the minor part.

It is difficult, after 12 months of debate, to find anything new to say, but I draw attention again to the fact that the shipbuilding, ship repairing and marine engineering industries are major employers in developing regions of the country and that many thousands of jobs are at stake. The hon. Member for Dunbartonshire, East referred to the fact that there were no guarantees that there will be no redundancies, but she has been in politics long enough to know that she can never be given such assurances, because of the many problems facing the shipbuilding industry throughout the world. I shall not, as she did, refer to Norway. My hon. Friend the Member for Southampton, Itchen (Mr. Mitchell) earlier drew attention not to the dangers of self-protection, but to the fact that in the last two weeks, according to Lloyd's Register of Shipping, the United States of America has moved into second place in the world shipbuilding league, although it has undoubtedly the highest-cost industry in the world. The reason for the United States moving up behind Japan is their protective measures.

It causes considerable concern, not only to shipbuilding workers but to many other people, to learn that British ship owners, who have been given substantial grants from taxpayers' money, are going to Japan, Korea and other parts of the world to have ships built, while British shipbuilding workers are unemployed. I hope that my hon. Friend the Minister of State will note that in future we expect British ship owners to place a little more emphasis on patriotism and a little less emphasis on profit. There have undoubtedly been many instances where other countries have adopted strange tactics to win orders. British ship owners are prepared to admit that fact.

It is a matter of concern that while the industry is facing a bleak period, British ship owners, who have been given considerable sums of taxpayers' money, are still placing orders abroad.

Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill

Order. It would be convenient if any urgent conversations could take place outside the Chamber, so that we might all hear what the hon. Member for Newton (Mr. Evans) is saying.

Photo of Mr John Evans Mr John Evans , Newton

I am grateful, Mr. Deputy Speaker.

I endorse what my hon. Friend the Member for Southampton, Itchen said about the necessity of the Government taking part in EEC discussions to work out protective action against Japan. I hope that in these discussions the Government will bear in mind that British shipbuilding has a prime place in the shipbuilding industries of the Western world and will ensure that our industry starts on an equal footing with the rest of the world's producers.

Even if we had very well-organised industry, it would be difficult for us to compete against some of the low-cost, low-wage industries. One of our terrible problems has been the lack of investment in the shipbuilding and ship repairing industries.

On Tyneside, workers in many yards are attempting to build ships with cranes which were installed in the Second World War. Workers in other parts of the world not only have new cranes but new yards, with new techniques and technology. If we want a modern industry in this country we must ensure that our workers at least have an equal chance to compete with workers in the rest of the world. Until that investment takes place—I recognise the financial difficulties and problems faced by the Government —and we are put on an equal footing, we must have protective measures to ensure that we retain a shipbuilding industry.

Great Britain is one of the greatest trading nations in the world, and we must retain a domestic shipbuilding capacity. It would be the height of criminal folly to allow that industry to slide into oblivion and to rely on other countries, particularly in the Far East and South America, for our shipbuilding capacity. We could run into very grave difficulties if we allowed that to happen.

Many speakers, particularly in another place, have referred to the fact that the ship repairing industry is a separate entity. Of course, some of us have tried to answer that repeatedly, but unfortunately our words seem to have fallen on stony ground.

The two things these industries have in common are ships, and the men who build and repair ships. The workers are joined with the Confederation of Shipbuilding and Engineering Trade Unions—

It being Ten o'clock, the debate stood adjourned.