Orders of the Day — British Shipbuilders Bill

Part of the debate – in the House of Commons at 5:31 pm on 17th November 1982.

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Photo of Mr Donald Dixon Mr Donald Dixon , Jarrow 5:31 pm, 17th November 1982

I entirely agree with my hon. Friend. If the Falklands crisis had occurred in two years' time, the result might have been very different. We are talking not just about a few jobs lost in shipbuilding but about whole communities which rely on shipbuilding for their social and economic health.

Shipbuilding and the connected industries have formed an important base in the North-East for many years. I shall give one or two examples. A survey was carried out in the constituency of my hon. Friend the Member for Wallsend, and 62 per cent. of the work force employed there lived either in Wallsend or in adjacent towns.

As my right hon. Friend the Member for Sunderland, North (Mr. Willey) said, a survey was taken of the work force at Austin and Pickersgill's Southwick yard. It revealed that 37 per cent. of the work force lived within one mile of the yard, and that only 1·5 per cent. lived more than five miles from it. These figures give us some idea of what would happen if the yard were to close. It is a highly skilled labour force and, as my hon. Friend the Member for Wallsend says, if its members are out of work for a long time we shall not be able to recruit them again.

In the North-East nearly 8 per cent. of employment in manufacturing industry is in shipbuilding, ship repairing or marine engineering. In the rest of the United Kingdom such activity provides only 2·5 per cent. of employment. In certain areas in the North-East it is more concentrated. For example, on the Wear 20 per cent. of employment depends on shipbuilding, ship repairing and marine engineering. On the Tyne it is 17 per cent.

There exists within the North-East an integrated shipbuilding and ship repairing industry that is supplied mainly by services within the region. The work that is done within a shipyard amounts to only 40 per cent. of the cost of a ship. This means that the services of contractors and the cost of materials amount to 60 per cent. of the cost. My right hon. Friend the Member for Sunderland, North talked about the consequences of the Bill and said that one in every so many members of the shipbuilding industry's work force would be put out of work. The Bill will also have consequences for those outside the industry. It could mean that two men in every so many members of the ancillary industries will be put out of work.

Within the region which I represent in part there are many organisations connected with shipbuilding and ship repairing. Newcastle university has the largest and the foremost naval architecture department of all universities in Britain. The South Shields technical college has an internationally known marine college. The British Ship Research Association has its headquarters in Wallsend. British Shipbuilders has its headquarters in Newcastle. British Ship Repairers has its headquarters in South Shields. If the Government destroy the shipbuilding industry, there will be serious consequences in the North-East, including the Tyne and the Wear.

In October the Tyne and Wear county council published a paper in which it listed the firms that announced redundancies between June and August. The following major job losses were reported in the press: Tyne Ship Repairers, South Shields, 1,000; Comings, Sunderland, 440; William Press, South Shields, 330; H. K. Porter Ltd., Newburn, 86; Lack-Johnson, Washington, 70; Caterpillar Tractors, Birtley, 60; Crompton Parkinson, South Shields, 60; and Ronson, North Shields, 50. The list is almost endless. The purpose of the Bill is to sell off the naval warship yards, and if it is enacted it will destroy the British shipbuilding industry. That will put another 200,000 in the Northern region on the dole, workers who rely on shipbuilding, ship repairing and marine engineering.

It is nonsense to talk about saving public expenditure when it costs £5,000 a year to put a shipbuilding worker on the dole. Jarrow is known as the town that was murdered in the 1930s. It already has one of the highest rates of unemployment in Britain. The last ship repairing yard in my constituency, Mercantile Dry Dock, is being closed this year. The last pit in my consituency, Bolden colliery, is being closed this year. The last steel plant in my constituenccy is under threat. The South Tyneside metropolitan district council, which embraces the constitueny of my hon. Friend the Member for South Shields (Dr. Clark), recently commissioned a survey. It revealed pockets of over 50 per cent. male unemployment.

The Mercantile Dry Dock, Bolden colliery and other work places worked throughout the Second World War despite Hitler's bombs, but they cannot continue under the policies introduced by the Government. Their policies are having more effect on my constituency than the German bombers.

The result of the survey that was undertaken by the North-East Centre for Community Studies in part of the South Tyneside district showed that 22 per cent. of heads of households were unemployed. It showed also that 53 per cent. of the respondents to the survey relied on help towards rent, rates and mortgage repayments, that 28 per cent. had difficulty in paying their rent, that 37 per cent. had difficulty in paying heating bills and that 14 per cent. could not pay heating bills. Other studies that have been carried out on Tyneside have drawn links between longterm unemployment and health problems, suicide, marriage break-downs, heavy demand on social services and a variety of other social consequences.

During her famous speech in Swansea the Prime Minister said that the unemployed should be mobile. No doubt she was referring to the young and active. When those who are young and active leave the areas to which I have referred they do not take with them the community centres, hospitals, old people's homes or parks. These facilities remain and the older population has to pay for them.

It is criminal to talk about putting British Shipbuilders back into the hands of private owners. The industry would have been finished if it had not been nationalised in 1977. Private ownership virtually bankrupted the industry. The Minister talked about massive investment in the 1970s. I do no know the source of his facts, but a survey that was undertaken in the early 1970s showed that the assets of the British shipbuilding industry amounted to £825 for every worker. In West Germany the assets were valued at £1,000, in Italy at £1,200, in Sweden at £1,800 and in Japan at £2,800.

A survey that was undertaken later in the 1970s showed that in the British shipbuilding industry an extra £80 had been invested per man whereas West Germany had invested a further £162 per worker, Japan had invested an additional £409 per worker and Sweden had invested an extra £554 per worker. In September 1981 Lloyd's List reported that the seven largest shipbuilding yards in Japan had earmarked £626 million for investment in plant and equipment.

It was lack of investment in British shipbuilding that put it in the state in which the Labour Government found it in 1977. There was a lack of investment on the part of the private entrepreneurs about which we hear so much. The Geddes report of 1966 made a similar statement. The Booz-Allen report also referred to lack of investment in the industry. The case for nationalisation was proved by that report.

The industry requires a national policy. The Government should take the advice of the Select Committee on Industry and Trade, which suggests the setting up of a high level interdepartmental working party to consider the full implications of maritime policy for the United Kingdom, which embraces shipbuilding and shipping generally. We cannot isolate shipbuilding from shipping. Instead of introducing a Bill that will destroy shipbuilding the Government should have produced a measure that embraced the suggestions that have been made on numerous occasions by my right hon. and hon. Friends, including an effective scrap and build scheme. We have talked about such a scheme for years and we know that it is being blocked by certain European countries.

We should provide more attractive credit terms for prospective buyers and ensure that British shipping companies build in this country. There is not a shipbuilding company in Japan that builds outside Japan. It is about time that we adopted a similar national policy for supplying British shipowners. We should bring forward defence programme orders and, for example, orders that stem from North Sea oil production programmes. We should ask harbour authorities and other such bodies to bring forward their vessel replacement programmes. We should press the EEC to increase the amount available from the intervention fund.

Many of my hon. Friends wish to speak in the debate. Many of them already have far too high a level of unemployment in their constituencies and cannot accept any more. We in the Northern region have been quiet for far too long and have accepted unemployment far to easily. Unemployed people over the age of 45 who live in the North-East are finished. They have no chance of getting another job. Furthermore, there are young people leaving school who have no chance of a job.

I finish by repeating what I said in my maiden speech. It is about time that the Government took heed of some of the warnings that Labour Members have given them. The young people of today are not so steeped in democracy that they will accept the solutions of the 1930s for the problems of the 1980s. The sooner Ministers get that in their heads the better.