I do not wish to review the strategic arguments that affect the industry's future, because we have recently had an opportunity to do precisely that, although of course in Opposition time. However, there have been a number of recent developments in the fortunes of the industry which have given me serious cause for concern and directly affect the Bill now under discussion.
I and my hon. Friends are not opposed to the further extension of the British Shipbuilders redundancy scheme. What worries us is that we are voting to extend the Bill for the last time and that what happens after that, in spite of the assurances that the Minister tried to give earlier, is by no means determined.
The industry is being forced through a period of contraction by market forces, by the present ordering programme of the Ministry of Defence and, most significantly of all, as a direct result of Government policy. It is not possible to foresee where the industry will be at the end of 1986.
The Government have committed themselves to selling off those yards that they have designated as warship yards to the private sector by March 1986. If the Minister wishes to correct me on that figure, I will willingly give way to him. I understand that it is the Government's intention that all the yards designated as warship yards shall be in private hands by March 1986, or closed. The main customer for these yards, as we all understand is the Ministry of Defence. It is a pretty safe bet that any prospective private purchaser will be looking at the Ministry of Defence ordering programme and the potential competition before making any commitment.
The brutal fact of the matter is that there is at present more warship building capacity in British shipbuilders than there is demand in the Ministry of Defence. It may well be that private investors in the pirit of free enterprise will sustain more capacity than demand in the hope of putting their rivals under. In my view, a far more likely scenario than that form of investors' Russian roulette is that the private sector will be willing to invest only in sufficient capacity to meet foreseeable demand, and who can blame it? I would not expect Conservative Members to blame the private sector for that.
Let us consider the position of a warship yard that has not been privatised possibly because nobody will buy it and whose last ship is to be completed after the end of 1986. In those circumstances, is it fair to the workers that they should stare redundancy and long-term unemployment in the face without the British Shipbuilders scheme or any properly spelt out successor, and risk leaving the industry on terms that are less favourable than those on which people left the industry when the redundancies were first announced, selling their jobs at the first opportunity? That cannot be just. We have a duty to the remaining work force in the industry, not just to those who have already left and who the Government hope will leave before 1986.
There is bound to be a suspicion that the recently announced orders in certain merchant and warship yards are only a reprieve, and that it is the Government's intention to buy some time and buy off extra trouble while the sterling crisis and the miners' strike are under way. The fear is that later that reprieve will be clawed back, and the on-cost of providing those orders will also be clawed back from savings on the British Shipbuilders redundancy scheme. At the very least, the Government have a duty to spell out what terms and conditions will prevail in the industry for redundancy payments after 1986, particularly what terms and conditions will prevail in a warship yard which, presumably, will have a peculiar limbo status if it has not been privatised and is not intended to remain in British Shipbuilders. The status of such a yard is not clear, and the terms and conditions under which the men can expect redundancy are not clear either. For example, what will happen to their accumulated rights in employment, not under the state scheme, but under the British Shipbuilders redundancy scheme? Can the Minister give the House an assurance at least on that?
Another factor affecting the defence aspect is the cost of Trident. Potential investors in warship yards must work out how much of the conventional naval programme is likely to be delayed or cancelled through the escalating cost of Trident, unless the individual is a potential investor in Barrow-in-Furness. He would have to work out whether the British economy could sustain the Trident programme and what effect cancellation would have on the Ministry of Defence's demand for Trident-bearing submarines. That is all a matter of speculation. No hon. Member can predict accurately how events will unfold. In those circumstances, it is wrong for the House to acquiesce to the redundancy provisions of the Bill as if all were settled and planned.
I remind the House that we are not talking about generous redundancy terms. Time has eroded the effect and value of the original scheme. The average redundancy payment to a British Shipbuilders employee is £5,000. The age range of those leaving the industry contains some considerable surprises. Up to the year end of 1984, over the preceding two years some 45 per cent. of those seeking voluntary redundancy were over 50, which is expected, but what is not expected is that 37 per cent. of them were under 40. They should have the prospect of a working life, yet in my constituency half the unemployed men in the four shipbuilding local Government yards are skilled, time-served men with shipbuilding and heavy engineering skills. I am told that the average age of the present round of volunteers for redundancy at Swan Hunter is 33.
The reason behind those figures, which show that younger people are leaving the industry, is not hard to find. Since 1979 the real wages of shipyard workers have steadily declined. The Chancellor of the Exchequer tells us that when real wages decline, more jobs are created. His highly dubious theory does not work out in the shipbuilding industry, where the decline in the total labour force has been paralleled by the rapid decline in the real wages of the remaining labour force. Almost all the young ancillary workers with families in my constituency and many skilled men are now in receipt of family income supplement, rate relief or housing benefit. They are caught in the poverty trap, and the on-cost of working is making many men think carefully about their commitment to the industry.
Shipbuilding has become a low-paid industry. Let no Conservative Member say that the work force has made no sacrifices to save it because the evidence shows that it has.
All the basic decency and willingness to work that typifies shipbuilding communities is played on by the Government when they say, "Be competitive and there will be work at the expense of your fellow worker elsewhere in the country." Swan Hunter has made an effort to be competitive. Recently it submitted a competitive tender for two type 22s, hoping to win both on competitive grounds. The Under-Secretary of State for Trade and Industry said, when we discussed the Bill on Wednesday, 9 January, about the decision on the type 22s:
The decision will be based on the judgment of the Secretary of State for Defence of the ability of the yards to complete those ships on spec, on time and within the contract price. In other words, it will be a competitive decision on merit, and on commercial grounds, if the hon. Gentleman wishes to call it that."—[Official Report, 9 January 1985; Vol. 70, c. 837.]
By "the hon. Gentleman" he meant me.
When the Secretary of State for Defence came to announce the orders for the two type 22s he made it clear that Swan Hunter had won the competitive tender, but one ship was going to Merseyside because of social factors, and in particular the hardship that would be caused by redundancies. I applaud the Government's willingness to consider social factors, particularly in areas of high unemployment, not least because similar arguments apply to my constituency. However, if Swan Hunter is forced to announce a further round of redundancies because it did not get the order for the second type 22, or because the promised type 23 is delayed for as long as the type 22 was delayed, the Ministry of Defence need not bother to urge competitiveness on the industry, and the people of Tyneside will know what worth to give to the words of the Under-Secretary of State for Trade and Industry.
My hon. Friend will realise that I do not want to go into too much detail at this point, but when he is talking about competitive tendering, is he aware that, whereas Swan Hunter was allowed to compete for both frigates, Cammell Laird was allowed to compete for only one? The only coherent reason put forward for that was that if Cammell Laird had won both frigates it would have been taking on workers when Swan Hunter would have been making redundancies. My hon. Friend is right to focus attention on the competitive side, and is wise not to quote the answer given to a parliamentary question that he asked, which gave a rather different interpretation as to how the orders would be placed. However, is he aware that the basis for competitive tendering was not allowed to all the competing yards?
I understand my hon. Friend's point, which is a valid one. There is no issue between myself and my hon. Friend. The issue is between the Labour party, which has urged the Government to take account of social needs and factors such as high unemployment, and the Conservative party. The Minister said that the orders would be based on commercial factors, but the Secretary of State for Defence then made it clear that social and compassionate considerations such as unemployment played a part in placing the order. The Government have not said that before now.
This new theory raises an issue. How will the Ministry of Defence now get competitiveness from the warship yards when they are privatised? We all know that the Secretary of State for Defence now has a more wide-ranging decision-making process. Who will put money into a private business with only one major customer, an eccentric who is likely to say to a yard, "Yours was the most competitive bid, but I am placing the order elsewhere"?
The Government have now conceded that there is no free market in merchant shipbuilding, and even claim that that was always their view. They should now concede that there is also no free market in domestic warship building, even when they are the major customer. What a ludicrous state of affairs that is. The Government should think again about how they intend to approach the industry.
I do not mean to make a controversial suggestion, but perhaps the Department of Trade and Industry and the Ministry of Defence could agree a common approach. Until they have done that, the House would be unwise to set a final date to the British Shipbuilders redundancy scheme.
I made it very clear that I was concerned about the fact that this debate was so late in starting. Perhaps I should not have implied that the previous debate took longer than had been expected, but I thought I made it absolutely clear that this debate was not wasting time but was dealing with very serious issues.
The hon. Gentleman has made that clear now, but he did not make it clear before. We believe that it is important to talk about redundancy pay. It is very important to those workers in the shipbuilding industry in Tyne and Wear who are to be made redundant. Already 72,558 men are out of work in that area. Of those, 35,998—or 49·6 per cent.—have been out of work for more than 12 months. They are the long-term unemployed. Those who are to be made redundant in the shipbuilding industry will join the dole queue in that area. They will have no chance of ever getting another job. The Prime Minister refers each Tuesday and Thursday to the miners having lost £8,000 in wages in 11 months, that gives some idea of what the redundancy payments amount to. They do not amount to even 12 months' wages.
During the Second Reading debate and the Committee stage not once did we hear either the Parliamentary Under-Secretary of State or the Minister of State refer to the social consequences of redundancies in the shipbuilding industry. The shipbuilding industry, like the mining industry, is a closely knit community. My hon. Friend the Member for Wallsend (Mr. Garrett) knows how closely knit the shipbuilding industry is in his area. Almost 62 per cent. of the people who work at Swan Hunter live in Wallsend or in adjacent towns. My hon. Friend the Member for Sunderland, North (Mr. Clay) knows about the effect of Austin and Pickersgill upon that community. Most of the men live within five miles of the shipyard. That is the kind of social consequence to which we refer when we talk about shipbuilding communities.
In the 1930s, unemployment in the Tyne and Wear area was 30 per cent. above the national average. It is now 40 per cent. above the national average. Instead of deriding shipbuilding workers the Government should praise them every now and again. It was alleged that there was late delivery of the "Atlantic Conveyor". In fact, the "Atlantic Conveyor" was delivered within days of the original contract date. It is a pity that Ministers did not refer to the French shipyard workers. They had a contract for a sister ship of exactly the same design six months before Swan Hunter got theirs for the "Atlantic Conveyor" but they have not finished it yet. However, we hear nothing about the French shipyard workers. We hear only about the British shipyard workers whom the Minister and the Government seem to deride.
On Second Reading the Government referred to massive investment in the shipbuilding industry. The Minister referred to investment amounting to £1,000 million. In a previous debate the Prime Minister referred to £1,000 million of taxpayers' money having been invested in British Shipbuilders since 1979. It is time that this was put into perspective. May I quote what was said by the former chairman of British Shipbuilders. He was the last decent chairman. The present chairman is a waste of time. He is doing more damage to the shipbuilding industry than MacGregor is doing to the coal mining industry. I am referring to Graham Day. In the Sunderland Echo on 23 July 1984 Sir Robert Atkinson said:
much has been made of the £800 million Government aid to shipbuilding from nationalisation to the time I left the B.S. chair. But this was a 'half-truth' because the industry was so undercapitalised, one half of that £800 million was in fact used as working capital and in capital expenditure, not in direct subsidies.
That is what the former chairman of British Shipbuilders said about the so-called taxpayers' handout to the British shipbuilding industry.
Clause 2 talks about writing off the debt that the Clyde shipyards incurred under the shipbuilding industry board set up under the Geddes report in 1966. The British shipbuilding industry has been undercapitalised for many years. In 1962 we had the Paton report. In 1966 we had the Geddes report which set up the shipbuilding industry board which lent the industry money because people were not investing at that time. In 1973 we had the Booz Allen report. Each of those reports since the war talks of lack of investment in the shipbuilding industry.
How on earth can British shipyard workers compete with those in Sweden, on the continent or the far east when the industry was starved of investment when it was in private hands up to 1977?
In a survey carried out in the 1970s it was found that the assets in the British shipbuilding industry were £825 per worker, compared with more than £1,000 in Germany, more than £1,200 in Italy, more than £1,800 in Sweden and more than £2,800 in Japan. In 1982 British Shipbuilders invested £100 million. In 1982 the Japanese shipbuilding industry invested £620 million in their seven biggest yards. Korea has been investing £400 million a year. Yet the Minister comes along and tells us that the Government have been over-financing the shipbuilding industry.
The Government have had to invest money because while the shipbuilding industry was in in private hands up to 1977 not a halfpenny was invested in the yards. I can recall working in the shipyards in the 1960s when we used to push shell plates round in wooden barrows. Yet at that time the Japanese and Swedish shipyards had computers. No one would invest in the British shipbuilding industry. The workers could not even have gloves to hold lugs. I recall many nights going home with septic burns on my hands because the management would not give the acetylene welders gloves. Those are the sort of conditions in which we used to work in the shipyards.
Clause 2 talks about when the shipbuilding industry was in private hands and that is what I am talking about. I recall a launch in Swan Hunter when the management stopped the workers' launch allowance of 37½p a day, yet it stripped the joiners' shop to put a champagne party on for guests at the launch. That is what happened when the shipyards were in private hands. Let me tell the Government that the shipyard workers will not go back to those days.
On Second Reading my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) talked about victimisation. It was easy then because of what were called the markets. For the benefit of those hon. Members who do not know what they were I can tell them that they were named after cattle markets. We used to go each morning at 7.30 in the hail, rain or snow and stand outside the foreman's office. He would come out and point to those he wanted to work that day. Those who were not picked out used to go home soaking wet and not get a penny piece. That is what the industry was like when it was in private hands. We need no lectures from the Government telling us that the industry will be better in private hands. The industry failed in private hands, and that is why it was nationalised in 1977.
When the ship building redundancy scheme was introduced, my predecessor, the then hon. Member for Jarrow, Ernest Fernyhough, said:
Sitting here, I wondered … whether the story of Jarrow would not have been different if we could have had something as such as this in the 1930s." — [Official Report, 16 January 1978; Vol. 942, c. 186.]
In the 1930s, in Jarrow men got nothing when they finished work. They were paid off with no notice at all.
After the war the only people who got notice were tradesmen. I got two hour's notice when I was sacked and that was to grind my tools. Anyone who did not have tools — who was not a shipbuilder, joiner, carpenter but an ancillary worker—got no notice at all. They were told by the foreman or manager that they should go to the time office and draw their books and money and stand on their own time to get their books and money. That is what it was like when the industry was in private hands. That is what shipyard workers had to experience.
We are talking about an area such as mine in south Tyneside where 60,000 people rely on state benefits. Most of the men who are paid off will join those who have to depend upon housing benefit. That is the position which prevails in areas where shipbuilding is relied upon for male employment.
Some hon. Members talk about a different scheme. Some say that the public and private schemes should be similar. The private sector has no redundancy schemes. Smith's docks on the river has no redundancy scheme because it remains in the private sector. Many private shipyards have no redundancy schemes.
The Minister says that no redundancy scheme other than the state scheme should operate. That is the truth. It is no good the Minister saying that shipyards are able to negotiate a scheme. He does not know what scheme can be negotiated. It is up to the unions and the management.
On Second Reading the Minister referred to compensation and said that it was the subject of negotiation. That was misleading. Directors from Tyne shiprepairers met me and my hon. Friend the Member for South Shields (Dr. Clark) and told us what the buy-out was to the yards and asked us to have a word with the shipyard workers and to get them to accept the scheme. I told them that I would not advise them to accept anything less than they had at the moment. We were told that there was no room for negotiation. That is the truth of the matter.
We want the Minister to give us something constructive. We do not want to argue about shipbuilding redundancies. We want stability in the industry. Workers want a job, not a buy-off which will give them less than a year's wages.
The Government should have a maritime policy and tell the workers in the industry — those who go to sea in ships—that we have a Minister responsible for shipping. Possibly we are the only maritime nation in the world without a maritime policy. When one wants to talk about maritime policies or shipbuilding, one goes to the Department of Trade. When one talks about shipping one goes to the Transport Department and when one wants to talk about warships one goes to the Ministry of Defence. We want some political and financial support for the shipbuilding industry during the recession.
Does my hon. Friend agree that, while we have been in the House, there has not been a debate on a corporate plan for the industry and the amount of money that would be needed to finance such a plan?
My hon. Friend is right. Indeed, the last corporate plan was put forward by Mr. Graham Day after he had been ordered to appear before the Select Committee that was looking into the shipbuilding industry. He was not keen on giving details of that plan to the Select Committee because the Secretary of State had instructed him not to provide that Committee with the evidence that he had given to the Department. The trade unions were not even involved in the process; he did not even discuss the matter with them.
We need a positive and co-ordinated Government policy. We should not have to stand here arguing about shipbuilding redundancy terms. The workers want to work and to build ships. The Government keep saying that we make a profit on warships and lose on merchant ships. One would think that one set of workers worked harder than another. The loss on merchant ships is easily explained. Every nation, including Japan and Germany, is having to subsidise merchant shipbuilding.
The British Government keep relying on a free market economy. That will not work, as we saw recently when the Chancellor had to intervene to stop the pound sinking further. We cannot allow our shipbuilding industry to sink. Let us have some positive plans from the Government.
I have spoken in virtually every debate on shipbuilding since I was elected in 1964. Each debate is more gloomy than the last, and this one, as we debate the ending of redundancy payments for shipbuilding workers, will not lift the gloom.
The hon. Member for Southampton, Itchen (Mr. Chope) made a Freudian slip when he said that he was worried about the spectre of privatisation. The word "spectre" was taken up by the Minister, who said that it could relate to something in the distant future. The word was also used by Karl Marx. Many hon. Members will have read the ending of the Communist manifesto, but few will have read the beginning. It begins by saying that a spectre is haunting Europe. That was written in February 1848. If, however, we change the word "Communism" for "unemployment," we can say that the spectre of unemployment is haunting Europe, no more so than in the United Kingdom, and in particular in our shipbuilding industry.
My hon. Friend the Member for Jarrow (Mr. Dixon) recalled the 1930s and the iniquitous system of employment under private ownership. Those who are still employed in the British shipbuilding industry have a deep-seated fear about the future. The only way to give them confidence is to have a degree of job security, despite the uncertain world markets. It must be possible to say that a regular work force, a minimum number, will be required for the industry.
There is a need to address ourselves again — I am glad that my hon. Friend the Member for Birkenhead (Mr. Field) referred to it—to a corporate plan. Redundancy is uppermost in the minds of all those who are fortunate enough to have a job, but in a negative sense. They are concerned about getting their money and getting out. The Bill, which will be given its Third Reading tonight, will end any speculation. When the current extension expires, that will be the end of the shipbuilding redundancy payments scheme. The negotiations that will take place with prospective private employers, assuming that there are some, will be rather different from past negotiations. I agree with my hon. Friend the Member for Jarrow that the prospects are not marvellous when one becomes aware of the extent of the under-capitalisation and the shortage of the necessary equipment to bring the yards up to a modern state to enable them to compete in world markets. Irrespective of the complexion of the Government, the first task must be to improve the morale of the work force. Secondly, we must try to ensure some continuity in spite of the volatility of the world shipbuilding market.
I wish to correct my hon. Friend the Member for Jarrow on one detail. The "Atlantic Conveyor" would have been built to time if it had not been for the Ministry of Defence input. The MOD insisted on certain modifications and they were implemented by the shipbuilders. It was a nightmare job. However, the ship sailed on time. If anyone gets the chance to tour the ship, he or she will be pleased to see that it is a dual-purpose vessel which could be the harbinger of vessels which could be used in the event of another maritime conflict.
I ask the Minister to recognise that there has been an improvement in orders since we were considering the Bill in Committee. I do not seek to belittle the efforts that he and and his civil servants have made, in co-operation with British Shipbuilders, to obtain the orders, and I hope that more orders will be gained. We, as Members must realise that there is a hell of a problem before us in dealing with the industry — "industry" includes the men, the management and everyone who is engaged in it — and we must resolve not to let it die, whatever the cost.
I shall make only a brief contribution. One of my reasons for making a short speech is that I was not a member of the Committee which considered the Bill. I was a member of another Committee and felt that I could not be a member of two major Committees.
My reaction to the Minister's remarks can best be described as mixed. I regret his rejection of the new clause, no matter how gracefully it was expressed. On the other hand, I am pleased by the announcement of the order won by Ferguson-Ailsa for the research vessel for the Ministry of Agriculture, Fisheries and Food. The vessel will be built not in my constituency but at the sister yard in Troon. It is right that the order has been won by Ferguson-Ailsa, as it is the finest yard in mainland Britain for the building of small, specialist vessels. The order is to be welcomed by the management, the work force and the communities of Port Glasgow and Troon.
After a long, difficult and distressing period, things are looking up for Clark-Kincaid, which is the last marine builder on the Clyde. I am greedy for more orders to be placed. Ferguson-Ailsa and Clark-Kincaid are fine establishments, and I speak with some experience, having worked as a shipwright. Ferguson-Ailsa has just won an order for two supply vessels for the Canadian offshore oil industry. Those Arctic 2 vessels will work in the Beaufort sea. British Shipbuilders, and particularly John Peach and his sales team, has done well in winning such a marvellous export order for the Clyde.
We have to remember that the shipbuilding industry is important not only to the maritime communities in which a shipyard is situated but to the many firms in the marine equipment industry. There are far-reaching ripples from this type of order won by shipyards on the Clyde and elsewhere. Clark-Kincaid and Ferguson-Ailsa have fine work forces and good management teams. They have a first-class record in industrial relations and can build with the best not only in Europe but worldwide.
I suppose that I should get around to considering the Third Reading. On Second Reading the Minister of State said:
My right hon. Friend the Secretary of State for Northern Ireland and I propose to ask both organisations"—
the Minister was referring to Harland and Wolff, which is another fine yard, and British Shipbuilders—
in consultation with their unions to establish appropriate successor schemes by the early autumn of 1986. It is too early to predict the details of such schemes. They will be negotiated between the management and work force, just as in the private sector. However, at this stage there is no need to worry that the work forces may end up worse off." — [Official Report, 9 January 1985; Vol. 70, c. 793.]
I sincerely hope that that wish is realised by the outcome of the negotiations between the unions and management.
These events take place against a deeply depressing backcloth of a declining western European shipbuilding industry. On many occasions we have heard — I have not heard any hon. Member challenge the statement—that it is impossible for the western European shipbuilding industries to compete successfully with the South Korean and, to a lesser extent, Japanese shipyards.
My hon. Friend the Member for Wallsend (Mr. Garrett) mentioned that during his 20 years as a Member the discussions on the British shipbuilding industry had become gloomier in each succeeding debate. During the next decade we shall face even more formidable problems from China and perhaps Brazil.
I sincerely hope that if the Government intervene in any way in these negotiations about a successor scheme to the British Shipbuilders redundancy scheme they will make a positive intervention and that the scheme that is initiated will be the equal of the one that the Government have decided to put asunder.
On Second Reading, in Committee and tonight the Opposition have been and are trying to find out what the Bill tells us about the future of shipbuilding. We have to go a long way in a short time to satisfy those inquiries. We must have a far more satisfactory explanation that we have so far received as to why the Government wish to end the statutory scheme from the end of 1986.
What is so significant about that date? If there is nothing significant about it, why not review the scheme, as Opposition amendments have suggested? The Minister might then take another view. He could come back to the House. The scheme could be extended again or we could have further details of a subsequent scheme.
The Minister has hedged around the point a great deal, and various formulations have been used, but all that we have been told is that overall no one will be worse off. I can envisage all kinds of interpretations of those words in 18 months' time. I can think of many other circumstances in which Ministers have used such phrases. Later when we have found out what they mean, Ministers have said that matters were covered by their original words.
Can the Minister give us an assurance about the subsequent scheme? Will the scheme be a national one for whatever is left of British Shipbuilders—if anything is left—or will it be a port-by-port scheme? If the amount of money available for the scheme is the same—that is questionable — as it is now, plus inflation, will it be piled up for one age group if the management at that time is keen to get rid of that age group? Those are some of the questions that have not been answered.
I do not understand how the Minister can give any assurances, because the scheme is subject to negotiation between British Shipbuilders and the work force. How can the Minister be so sure about the outcome of the negotiations and that the scheme will be no worse than the present one?
Where will the money come from? We understood in Committee that the Government would be providing some money. It would be helpful if the Minister could give an assurance, before we give the Bill a Third Reading, that the Government will give a sum of money which will provide a scheme equivalent to the present one. We have not yet had that assurance.
The more we consider the matter and the more we question the Minister, the less satisfactory the answers become, and the more we have to stick to our original conclusion that something odd is going on, that there is some intention behind this, or that the Government are considering some options which we do not believe are in the best interests of the industry.
I do not wish to be parochial, but we all wish to make points about the industry in our area. I shall deal with Austin and Pickersgill, but I shall not run up any flags for it. Sunderland Shipbuilders' Deptford yard is on its last ship. We are waiting for a decision on the Morecambe bay exploration, which could guarantee an order for that yard. It is indirectly within the Government's gift to secure that order. Nothing has happened. That yard is beginning to go through the agonies that Austin and Pickersgill have been through in the past weeks and months. It would be useful if some decisions could be made about future orders for Sunderland Shipbuilders' Deptford yard.
On Report, the Minister referred to the order secured by Austin and Pickersgill. He said that he would like to congratulate the management and the work force. We are all pleased about the order, of course, but the Minister might have mentioned the fact that 420 redundancies had been announced at that yard. That is how cavalier the attitude is now. If one order can be announced, 420 redundancies do not matter. Furthermore, as I understand it, even with the Oblendorff order there are probably more redundancies still to come.
I congratulate the local management, though somewhat halfheartedly, on what it has achieved. I certainly congratulate the shop stewards and the work force. However, I do not congratulate the Minister's Department, the chairman, the finance directors, or the senior management of British Shipbuilders. It is a disgrace that when that order was available—not for the first time—last September, it was lost because of a price gap of £2 million while the Government sat on their backside and did nothing. The order then suddenly seemed to reappear out of nowhere, and last Wednesday the shop stewards were told that if they did not agree to various conditions and sign them by Friday the yard would not get the order — it would have had it.
That was the situation that faced the workers last Wednesday. I congratulate them on not giving in to such disgraceful blackmail. In a nationalised industry, with national wage agreements, the shop stewards in one shipyard were presented with an ultimatum and told to sign for a two-year wage freeze, taking themselves out of national pay bargaining, within 48 hours. They were told that if they did not do so the yard would probably close. Is that the stage that we have reached? If it is, we need not wonder any more about what will happen after December 1986.
What will happen after the Ohlendorff order is completed? It is a sorry state of affairs. A yard originally designed to turn out 14 SD 14s a year has an order for two ships. There is a huge gap in the work programme beforehand, and nothing else on the order book. Yet that order is seen as manna from heaven — as salvation. Unless there are more orders, the order will merely give a few months' breathing space between crises.
What are the Government doing about the Ethiopian order? We have not forgotten about it because of Ohlendorff, although I suspect that the high-up management of British Shipbuilders has the worst intentions. It was not the local management that laid down the condition about the two-year wage freeze, and it was certainly not Ohlendorff. A German shipowner would have no cause to lay down such a condition. He is interested only in such matters as price and delivery.
When the question of price became crucial, the Government should have closed the gap. Instead, there was an attempt to make the work force do it by signing an agreement within 48 hours. I hope that such disgraceful tactics will not be tried again on workers in this or any other industry. I hope that the Government and Mr. Day will have learnt their lesson from the fact that the workers refused to give in to blackmail, that a reasonable agreement was eventually reached and that the order was still secured.
I hope that the Government will intensify their efforts to secure the Ethiopian order for Austin and Pickersgill, because the Ohlendorff order will provide only a brief respite for the industry on the River Wear. Sunderland Shipbuilders will soon, like Austin and Pickersgill, be in a state of crisis. The area is already soaked with redundancies, not only in shipbuilding but in many other industries, or what is left of them.
I do not like playing around with statistics, but I should like to give some that bring the scale of the problem home to me. At one school in my constituency, 80 per cent. of the children are on free school meals; at a second, 75 per cent.; at a third, 72 per cent.; and at a fourth 70 per cent. Sunderland has 26 per cent. adult male unemployment, one third of whom have been unemployed for more than two years. The rest have been unemployed for one year. Skilled workers are being made redundant from the shipyards and there are no apprenticeships. There is no other skilled work left in the town. The waves of redundancies pile up on that level of unemployment and the percentage of the long-term unemployed also increases. Literally thousands have been out of work for years. The effect on the community is terrifying. The yards are fevered with fears of redundancy and talk of redundancy and the Bill has made that ten times worse.
Nothing that the Government have said has reassured people. The Government's announcement that the scheme is to be ended in December 1986 is a message to people in my area to get out now. The message is that nothing will be certain and that the Government will do nothing to make people feel that they have a secure future. If they get out now, they argue, at least they will get what is going under the present scheme.
The events at Austin and Pickersgill confirm another worry. I should like the Minister to deny categorically that such merchant yards are being prepared for privatisation. The fear is that all of the yards on the River Wear are being slimmed down and having bits and pieces sub-contracted out as part of the push to get the work force to accept the conditions that will come with privatisation. It is clear that those who are playing around and, in some cases, holding orders off and are trying to get things out of the work force before allowing them an order are the very people who intend to buy the yards. Such has been the process with the warship yards.
People in communities around the yards expect either closure or privatisation. If that is what the Government intend, they should come clean and let us know what we are up against. I assure the Government that we know how to deal with that. If the Government intend to let the industry continue to sink by not securing orders and keeping the order books unfilled, and to stave off crises with an order from time to time so that the management can regroup and get the next lot of redundancies through, they should not assume that there will not be resistance such as has been put up and is being put up by the National Union of Mineworkers. Shipyard workers have learnt much from the NUM about defending their jobs and communities. They will not allow the Government to leave the industry to die or to hand it over to the private owners about whom my hon. Friend the Member for Jarrow (Mr. Dixon) spoke so eloquently.
I wish to make two brief points. First, in a sense this debate, and many others, represents a paradox. The Government could make a case for the amount of support that they have given British shipbuilders. Since 1979, £1 billion of taxpayers' money has been put into the industry, yet it is in a crisis. Some people would argue that that is because that sum is not adequate for the size of the problem, but it is also because of the way in which the Government have brought forward the plans for that spending.
Since 1979, the industry has staggered from crisis to crisis, and the Government have responded by changing the borrowing requirement. We have never been able to have a debate about the long-term structure of the industry and the funds needed to support it. Therefore, my first charge against the Government is that they have displayed the politics of caprice and, almost, of madness. They have put considerable sums forward, but never in such a way that we could rationally debate how best to preserve British shipbuilding.
Secondly, I wish to relate what has been happening at Cammell Laird to this measure. Many hon. Friends and hon. Members will know that in the summer there was a dispute at Cammell Laird, although the majority of workers had three mass meetings to reject industrial action. The workers decided privately and collectively to accept the tap on the shoulder to be told that they did not have a job, providing their sacrifice would be matched by the survival of the yard. There were two reasons for that decision. First, there was a redundancy payment scheme and therefore some compensation for making the sacrifice. With this measure, that compensation will no longer be available. Secondly, they hoped that others in the yard, and possibly their children and grandchildren, would have a job in the yard. My second charge against the Government is not that this is a scrappy, nasty, little measure — it is that — nor that they have not spent considerable sums supporting the industry but the courage and sacrifice of the workers at Cammell Laird and other yards in willingly taking redundancy so that the industry can survive, has not been matched by Government vision about the industry's future.
The debate is not merely about the winding up of the redundancy payments scheme, nor about the fact that the Government have not put forward considerable sums of taxpayers' money. It is about a charge against the Government that since 1979 we have never had a proper debate about the needs and future development of the British shipbuilding industry, and the resource that will be necessary to safeguard its future.
Throughout the years we have had endless debates, but always in crises, always trying to patch up differences and always knowing that after a few weeks we would be back with another crisis and a demand for more money. When the Minister replies, I hope that for the first time since 1979 he will give us some idea of when we shall debate a corporate plan for the industry.
I wish to be brief, but nevertheless I wish to endorse the comments made by Opposition Members. I have a direct personal interest, especially in the comments of the hon. Member for Birkenhead (Mr. Field). I was born within a mile of Cammell Laird and my grandfather worked in the shipyards at Hebburns. There is genuine distress that these yards are under threat at present.
I ask the Minister to address two matters that arise from the measures contained in the Bill. In Committee, the Minister said that the Government would be prepared to introduce a topping-up scheme to follow the present one. Opposition Members would prefer the present scheme not to be terminated, but the Minister said that he recognises that any scheme that follows will need a topping-up element. How much will the Government provide in that scheme? Unless we have some guidance on that, many workers will opt for the present scheme because they will be unclear about what may follow. The Minister has an obligation to explain to the House what sort of topping-up the Government will endorse.
I have many constituents who work at the Hall Russell yard, which is favoured for privatisation. Let us leave aside for the moment whether we believe privatisation to be desirable. I said in Committee that the yard was successful when it was in private ownership, and may be so again, but it has not been helped by being kicked in and out of the private sector for the past few years. The preferred option—expressed both privately and publicly—is that it should be privatised, together with Yarrows. However, during the past week, it has become clear that that is unlikely to happen. The Yarrows management pulled out of the deal because the workers at that yard were not committed to it.
That is true, but I am not sure whether it is his money. I suspect that he is acting on behalf of people who have money. Nevertheless, the consortium of which Mr. Sproat is a spokesman has expressed interest in the yard. My concern is only that the yard should continue to be as successful as it has been. I am not convinced that privatisation is helpful, and what has happened during the past two or three weeks has produced an uncertainty that the yard could do without. The yard was successful in the private sector, but it was also successful in the public sector. How can it be in the best interests of the community and the work force to have such uncertainty, with offers being made and then withdrawn, and new offers coming forward?
More specifically, will the Minister now recognise that he will not obtain a quick and easy settlement of his privatisation deal, and that the period will have to be extended to ensure that all offers are considered? The most likely offer has been withdrawn, and the one still on the table has not been considered properly. He has an obligation to tell the House what will happen.
On Second Reading and in Committee the Minister said that the Government would introduce a topping-up scheme, but he has not said how much money will be involved. The uncertainties in the industry—
Does the hon. Gentleman remember that the Minister said that the public sector schemes would be exactly the same as the private sector ones? How can he top up the public sector schemes if they are supposed to be the same as the private ones? Will he also prop up the private sector schemes?
The hon. Member for Jarrow (Mr. Dixon) knows that I share his scepticism about the scheme. In Committee, we persuaded the Minister to agree to top up the scheme, but he has not yet said that he will top it up to the same level. Unless the Minister assures the House tonight that he will do so, there is likely to be a mass exodus from the industry because the workers will lack confidence in what he has said. Unless he is prepared to say to the House that the Government recognise the need to ensure that any follow-on scheme will be topped up to the same level as the present scheme, the shipbuilding industry will be faced with a continuing crisis. He has said nothing on Second Reading or in Committee to reassure hon. Members who represent areas in which shipbuilding is important that the industry will be supported by the Government for the foreseeable future.
The remarks of the Parliamentary Under-Secretary on wasting time while he has tried to duck out of the debate will have done nothing to improve his hapless reputation for putting his foot in it. Not only was he not present for any of the preceding debate, for the best part of which I was present, but I think that it is very wrong of him to imply that the preceding debate in any way was wasting time any more than this important debate on the shipbuilding industry in any sense has been a waste of time. I hope that he will reflect on those remarks and try to stop putting his foot in it in future.
We have heard contributions from nearly all the major shipbuilding regions in the country, particularly those represented by Opposition Members. My hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown), in a powerful and logical indictment of the Government's proposals, referred to Swan Hunter. He and others of my hon. Friends were at a meeting earlier this evening with the managing director and industrial relations director of that company. In the course of the meeting, they made it clear to us that they were indeed ambivalent, if not worried, about privatisation and specifically about the provisions of the Bill for the termination of the scheme in December next year. They could not see the reason for this, and they will be making separate representations to the Government such as we will expect from other yards remaining within the public sector and those being privatised.
We heard also some powerful, emotional and emotive contributions from my hon. Friends the Members for Wallsend (Mr. Garrett), for Sunderland, North (Mr Clay) and most particularly for Jarrow (Mr. Dixon).
In the regional communities we would put it to the Government again that, as with the mining area communities, unemployment is already very often as high as 50 per cent. The unemployment is often made up of the long-term unemployed, those who have been unemployed for over one year. When my hon. Friend the Member for Jarrow referred to the practices of management in that industry, it reminded me of the practices of management in the motor cycle industry that brought that industry to its knees. No investment was being made in plant and machinery—the very fact which was so accurately and relevantly given by my hon. Friend the Member for Jarrow. This happened in the motor cycle industry in which we dominated the world market, just as we did in shipbuilding. We had 70 per cent. of the world market, not one penny was going into the industry, but the wife of the chairman was driving round Monte Carlo in a gold-plated Daimler, the late Lady Docker. That sort of attitude on the part of management has led to the crisis situations that we face in many of our traditional industries.
As to the spectre of privatisation, that was odd coming from the former leader of Wandsworth borough council, who pioneered so much of it with such enthusiasm. I refer to the hon. Member for Southampton, Itchen (Mr. Chope). I am pleased to note that he has remained present at least to hear these remarks. I hope that the spectre will come to haunt him as he now represents Southampton, Itchen. The Opposition would agree wholeheartedly with those sentiments, although they are not ones with which we would readily associate the hon. Gentleman.
I am sure that I need add nothing further to that. I will leave it to the constituents of the hon. Gentleman to interpret the obvious lack of concern that he has for them and the evident concern that he has for his own prospects on the Government Benches. There were further contributions from my hon. Friends the Members for Greenock and Port Glasgow (Dr. Godman) and for Birkenhead (Mr. Field), who accurately spoke of the crisis that we face.
However, of course, this could be an industry of the future. After all, shipbuilding is not a dying industry. It is an industry in which there are applications for the new technologies. If we do not have those, where will the new technologies be used? Where will the new materials be used? Where will the robotics be used? Shipbuilding is there for control technology, for computer-aided design and manufacture. Without those applications in industries such as shipbuilding, those new technologies have nowhere to go for their application. That is why we are doing so badly in them, as the Parliamentary Under-Secretary knows only too well. In that situation, as many of my hon. Friends have said, all that the Government can do is talk about redundancies and make it clear to the House that they want as quickly as they can to wash their hands of any responsibilities in that respect, be it to the private sector or the small part of the public sector that they intend to retain.
We need a maritime plan that would involve the shipbuilding industry, both military and commercial, and the engine-building capability, both military—where we are totally dependent on foreign licences — and commercial. We need a policy that would link Government purchasing power to shipowners based in the United Kingdom. We need a rolling and committed programme from the Ministry of Defence. To none of those things has the Parliamentary Under-Secretary given us anything more than an evasive reply. We have had his tortuous, tortured remarks and self-contradiction of, "Now we all understand that it will all be levelled down." In other words, we shall have parity—not the parity of the existing national statutory scheme, but the parity of some punitive scheme that will apply equally to the public and private sectors.
Tonight the Parliamentary Under-Secretary has lost the argument, and he knows it. He has lost it because he never had an argument. The Government's approach is negative and pathetically inadequate. We can look forward to the future only with grave doubts and many fears for the industry, which the debate has done nothing to alleviate.
I thank the hon. Member for Coventry, North-West (Mr. Robinson) for doing his impression of a Front Bench peroration, some parts of which we have heard before, some parts of which were unnecessary, and some parts of which were thoroughly and comprehensively inaccurate. If the hon. Gentleman had done his research, he would have found that the proposals that he put forward on new clause 1 were irrelevant. They would have taken twice as long as would be required under our proposal to give effect to virtually the same measure. Purely as a side issue, they would have made it very difficult for us to write off the national loans fund liability, for which we need legislation. That would have been the import of the hon. Gentleman's proposal.
I should like to clear up some of the general observations that were made. I do not know why we got involved in a post-mortem, but the hon. Member for Newcastle upon Tyne, East (Mr. Brown) seemed to imply that there was a difference between my right hon. Friend the Secretary of State for Trade and Industry and the Department on the placing of the type 22 orders. I know that the hon. Gentleman had a problem in the previous debate in checking records and establishing hard data. If he looks at the debate on 9 January, he will find that I said:
We equally recognise the concern in each"—
that is, all three yards—
at the time it has taken to reach that decision, but it is essential that in reaching it we take fully into account all the factors, including the requirements of the Navy, the cost to the taxpayer, the performance of the yards and their need for work."—[Official Report, 9 January 1985; Vol. 70, c. 837.]
After that other factors are mentioned.
The Minister is right in what he has read out, but then I rose, as I am rising now, to pin down the hon. Gentleman on whether competitive factors alone were to be taken into account, or whether wider social questions were to be taken into account. The Minister of State, who was sitting next to him, grinned because he realised the point. It was then that the Minister gave the answer that I read earlier, which was a precise pinning down to competitive factors alone. Then the Secretary of State went on to announce something quite different.
Does the hon. Gentleman agree that the biggest social factor in any constituency is the need for work — the rate of unemployment? Does he agree that the need for work is at the heart of any constituency's difficulties, in its social, welfare and other programmes? Is not the best way to ease demands on welfare programmes to increase the level of employment in a constituency?
I shall not give way to the hon. Gentleman again on this point. He is either deliberately misunderstanding it or he has difficulty in deciphering the clear language of Hansard.
The hon. Member for Birkenhead (Mr. Field) said that we do not debate the corporate plan, and that we need opportunities for bigger and broader debates to show where we are going and what the future of the industry is to be. I understand his concern, and that was a legitimate point. He will know that on 25 July my right hon. Friend the Secretary of State made a statement to the House on the 1984 British Shipbuilders' plan. The usual short debate that followed was dominated by doctrinaire arguments about privatisation, despite the fact that the plan had been made available to the House. Since then we have had several debates on various aspects of shipbuilding. On no occasion have the Opposition used the opportunity to challenge or debate the plan. Have Labour Members taken the trouble to go to the Library and to look at it? As usual, it is available there.
While we are on the subject, I hope that some Labour Members will join me in the hope—it is not too forlorn a hope, and may even be a distinct possibility—that the 200,000 compensated gross registered tonnes target in the corporate plan will be met in orders taken in this financial year.
I found the intervention of the hon. Member for Sunderland, North (Mr. Clay) disgraceful. He should at least celebrate those two orders with us. He should recognise that the improvements for which the corporate management is asking in working practices and unit labour costs at that site are necessary. He will be aware that the unit wage costs at that site are higher than they are in some of the neighbouring sites. That is a legitimate target for the corporate management to try to bring in, in the light of the new order.
Will the hon. Gentleman accept that the nearest that British Shipbuilders has ever been to breaking even came during the 1982 financial report — when it got to within £19 million of breaking even, within the £25 million limit set by the Government — when it had a throughput of 400,000 tonnes? That corporate plan was suggested by the previous chairman, and it is only since the present chairman took over that there has been talk of the 200,000 tonne limit. That is one of the problems of British Shipbuilders.
In his speech, the hon. Gentleman made comments about the previous and present chairmen. Time will tell, but at the moment the present chairman is out there fighting for orders. Some of the recent observations of the previous chairman do not seem to hold up under close examination. It would be far better if he spent a little less time justifying some of his past decisions, and a little more time in looking at the future of the industry. I am prepared, as the House should be, to give Graham Day the credit for fighting for the industry. He is out there now getting orders, and he will come back tomorrow, we hope, with an announcement on further orders. He is motivated to look after the interests of the industry, and I resent the comments made by the hon. Member for Sunderland, North and the way that he has sought to ascribe motives to the current chairman that are not of the best possible kind.
The hon. Member for Sunderland, North talked about the Scargill factor. It is regrettable that that was introduced into the debate. There will be another debate on another occasion, when no doubt that will be examined. I recall that my last visit to the north coincided with the day when the hon. Gentleman, who I understand is proud of being a member of the hard Left or is on the borderline between hard and soft Left, was having a contretemps on the picket lines. I recall that the hon. Member got the kind of publicity which no doubt he welcomes. When he talks about the Scargill factor, I would advise him, through you, Mr. Deputy Speaker, not to seek to link it to the shipbuilding industry, because one day people will discover that the Scargill factor caused great sadness and great bitterness.
The record will clearly demonstrate that I never used the name "Scargill" in any of my contributions. This indicates the hysteria on the Government Benches about the mining dispute. Conservative Members can talk about nothing but that particular name. I talked about massively high rates of long-term unemployment. Unemployment is a factor in both the mining and shipbuilding industries. In my constituency there are both mining and shipbuilding communities. That is why people are sick and tired of the Government's attitude. For the Minister to get up and talk about the Scargill factor when we are trying to talk about the fear of long-term unemployment in both mining and shipbuilding communities which are suffering from the same problem shows the Government's total lack of understanding and care.
Members of the hard Left, both inside and sometimes outside the House, come dangerously close to celebrating human misery. They may view that as a driving force for their political ends, but the hon. Gentleman did not find it possible in his contribution to celebrate what could be a future for the yard about which he made representations both to the Department of Trade and Industry and in Committee upstairs.
When Opposition Members, in the context of shipbuilding, talk about the Government's social responsibility, they correctly say that there are other aspects of Government policy which should be of help in these hard-pressed regions and constituencies. Therefore, I remind the House once again that, in terms of regional aid alone, not even including Department of the Environment aid, since this Government came to power aid to Wearside has amounted to £31 million. In Teesside it amounts to £181 million, in North Tyne to £57·8 million and in South Tyne to £50·3 million. In Scotland — across the four travel-to-work areas where shipbuilding is still a major source of employment — we are talking about £137·6 million of aid. In Birkenhead the aid amounts to £174 million. That is not the behaviour of a Government who do not recognise that there are other ways of tackling the problems which Opposition Members have—
No. I gave way to the hon. Gentleman on two occasions in the last debate. Once was certainly enough tonight.
The hon. Member for Jarrow (Mr. Dixon) made an obviously heartfelt contribution. I have already said that I cannot go along with the assertions that he made about the current chairman of British Shipbuilders.
The hon. Member for Wallsend (Mr. Garrett) linked his comment with a comment made by the hon. Member for Birkenhead and asked whether the industry has a future. That depends upon a number of factors. It has never been within the gift of an Industry Minister, of any political complexion, to say that there shall be a shipbuilding industry with a merchant sector of a certain tonnage for a certain period of years. The market that affects that question has always been out there somewhere. What we have said in the House ad nauseam is that this Administration — like the previous Administration — recognise that, given that there is not a free market in international shipbuilding and that subsidies are paid by all of our international competitors, we have legitimately to do something to stay in the race. Would that we did not. It is absolutely right that my hon. Friends should fight for fairer competition so that we can escape from the subsidy spiral.
It is our duty to keep our industry in the race and not to throw public money at problems such as unit wage costs, new procedures and new investment, which may therefore be more difficult to solve. Through the intervention fund and other measures, we should find room to manoeuvre for our domestic shipyards.
The hon. Member for Gordon (Mr. Bruce) understood the Bill's basic point. An employee cannot opt to be made redundant. He must be asked if he wishes to be made redundant by the employer, who must first declare the redundancy programme. I cannot remember the hon. Gentleman's exact words, but whole droves cannot say that they wish to take advantage of the scheme in spite of the fact that a shipyard may not want a particular redundancy programme. Workers cannot exit in large numbers.
I was asked whether the deadline of 15 February can be extended for the bidders of a yard about to be privatised. Yes, the deadline will be extended if existing bidders have difficulties and—
Is my hon. Friend aware that the management of Hall Russell shipbuilders advised me yesterday that an extension of the deadline was not necessary and that our right hon. Friend the Secretary of State had been advised of that? Indeed, the management of Hall Russell no longer wishes the deadline to be extended, it having reconsidered its position over the weekend.
I am grateful to my hon. Friend. I shall confirm that in the aftermath of the debate.
I commend these words to Labour Members:
The Bill was not introduced in any way as part of a plan for redundancies. We do not have such a plan. It is designed to cope with the redundancies which will inevitably occur. I agree that it is not a happy Bill. We should have preferred not to introduce it, but we believe that it is right to do so and we ask the House to pass it."—[Official Report, 7 February 1978; Vol. 943, c. 1416.]
I asked specifically what kind of topping-up scheme the Government would contemplate to succeed the present scheme, and the Minister has not answered that. I should be grateful if he would tell the House.
That question was answered in Committee. The Government have said that they are prepared to cover the costs of the successor voluntary scheme within BS. The hon. Gentleman will recall that he asked the question in a slightly different way. He asked whether it was self-funding. The answer was that the transaction is neutral.
The right hon. Gentleman should be aware that the scheme is identical for Harland and Wolff. That yard too will be covered by a December 1986 deadline and will be given exactly the same detailed payments at exactly the same rate as will pertain on the mainland of the United Kingdom.