I begin by offering my thanks and by paying tribute to you, Madam Deputy Speaker, to the other Deputy Speakers and to Madam Speaker for allowing this debate to take place. Last week, Madam Speaker generously granted a debate on Rosyth dockyard but, for reasons of which everyone is aware, it was not possible for it to occur. I know, however, that everyone involved has been working to ensure that it takes place tonight. It is only fair that I should thank all right hon. and hon. Members, and the Whips on both sides of the House, for their assistance in ensuring that the debate takes place. In many ways, tonight could not have been a better time for this debate, as Parliament was lobbied today by workers from all the dockyards involved in defence.
I am here to speak not just for myself or on behalf of my hon. Friend the Member for Dunfermline, East (Mr. Brown); nor am I here to speak only for the work force of Rosyth—for its 4,100 direct employees and its many thousands of indirect employees. No; I am here to speak out for every man, woman and child in Scotland.
Over the years, the industrial giants of Scotland have disappeared. The only one left is Rosyth dockyard, Scotland's largest industrial complex. If the Government do not secure Rosyth's future, we in Scotland will be left with nothing but an industrial history, former employment and bitter memories.
I want to cover three main areas in this speech—employment, industrial strategy, and the strategic, security and cost implications for Rosyth. The people of Scotland fear that the Government will break their promises. Since 1985, Rosyth royal dockyard has been promised that it will be the prime submarine refitting yard. In 1985, a senior member of the Government told us that the yard could look forward with high hopes. We were told that work on the refitting of Trident submarines was guaranteed. He added that the Government would complete the building of the massive facilities required to support Trident submarines, which would be refitted at Rosyth. That Minister is still a member of the Government; indeed, he is now an even more senior member—the right hon. Gentleman is now the Chancellor of the Exchequer. I ask the Minister of State for Defence Procurement whether the Chancellor still holds the views that he expressed in 1985, and I ask him also to give us his own opinion.
I shall talk about the jobs that were guaranteed by the Government, jobs that now seem so insecure. In the dockyard, there are 4,100 direct employees. In Fife, there are certainly another 4,000 to 5,000 indirect employees. It has been estimated in a study produced by the Fraser and Allander Institute and St. Andrew's Economic Services that overall job losses throughout Scotland as a result of the closure of the dockyard, which would take place if it was not awarded the Trident refitting contract could be up to 18,000. Sub-contractors would collapse, as would small businesses, 80 per cent. of which have 50 or fewer employees.
There are 245 companies providing supplies or subcontracted services to the dockyard. A further 250 provide services to the naval base. Throughout Scotland, an additional 835 companies have some sort of business with the dockyard. What future will the Government promise 1,330 companies in Scotland if the dockyard is closed? What future will the Government promise the naval base, and especially 4,000 naval personnel, if the dockyard closes? What future will they offer 18,000 employees and their families in Scotland if they do not fulfil their promises to Rosyth? Those people are like the 18,000 who comprise the population of Buckhaven, like the 18,000 who live in Balerno and Baberton, which are in the constituency of the Secretary of State for Defence, and like the 18,000 who live in Huntingdon and Godmanchester, in the Prime Minister's constituency. What will happen to those people if the dockyard has no future?
Fife does not have low unemployment; it has the second highest unemployment in Scotland. If the dockyard closes, it will certainly come top of the list. It will have an overall unemployment rate of 17 per cent. In the Dunfermline area, we shall be talking of up to 30 per cent. unemployment—one in every three people out of work.
We are aware of the plight of many young people. At present, Rosyth dockyard still brings some hope—for example, it still trains 65 per cent. of all Scottish engineering apprentices. If it closes, the Government will be telling those apprentices and engineering firms that there is no future for them.
If the yard closes, it will cost the Government a great deal. We reckon that redundancy costs will be about £102 million. Clean-up costs will amount to £2 million and unemployment costs will reach £280 million; that is not to mention writing off the £125 million that has already been spent on the new Trident fitting work. I am suggesting to the Government that they can save more than £500 million. They can save jobs and their own reputation by adopting Babcock Thorn's proposal to have two dockyards with one management.
That proposal is for a dual-site option of submarine refitting at Rosyth and surface ship refitting at Devonport. That option would save the Ministry of Defence more than £260 million and would save the Exchequer an additional £250 million. It would preserve local economies and employment and provide a safe solution for submarine refitting. Babcock Thorn has made a fixed-term bid to the Government of £267 million. It offers Rosyth new equipment and fabric which are designed with low maintenance in mind. It offers facilities and special skills, efficiency and throughput, more jobs and minimal cost to the Exchequer.
It is not just Rosyth's management who are arguing for two dockyards and one management. Just last week Professor Donald MacKay, the chairman of Edinburgh consultancy PIEDA Ltd., said that savings of up to £440 million in defence spending could be made if submarine work was carried out at Rosyth and work on surface ships was carried out at Devonport. He estimated that the two yards could produce cost benefits of between £320 million and £438 million over the next 30 years.
Other worldwide studies demonstrate that the best savings are made by adopting a multi-site focused approach rather than a large-scale single-site operation. Safety, decommissioning, lay-ups, operational availability and location considerations all favour the dual-site approach, with Rosyth dealing with submarines.
I have just received a report from Price, Waterhouse —hardly a firm of which I would normally speak well. About Rosyth it said:
As a result of our analysis of the projected operational costs to the MOD estimated by BTL under the two options and the sensitivity analysis which we have undertaken on certain material figures and assumptions, we conclude that costs are marginally balanced in favour of a dual site option.
In addition the MOD have a potential opportunity to save approximately £120£140 million by concentrating nuclear submarine refitting and decommissioning at Rosyth. These savings represent the differential cost of Rosyth's ability to accommodate the full nuclear programme earlier than Devonport.
The Rosyth proposals are intrinsically safe. Rosyth is much more remote from the public than Devonport, where 38,000 people live within 2 km of the dockyard. Rosyth is capable of meeting all modern safety standards and its work force have an impeccable track record in submarine refitting and technical expertise. Its safety record on nuclear refitting is second to none.
The site for a new refit facility was chosen not by Babcock Thorn but by the Ministry of Defence after intensive investigation in the early 1980s. The design of the new facilities at Rosyth is at an advanced stage. They will be built on bedrock, which is more secure than any other kind of rock anchor. Rosyth's results have been audited by the nuclear installations inspectorate.
Let me say something about industrial strategy. The Fife economy is very fragile, because of such factors as long-term structural change, peripherality and a lower level of company formation; yet the dockyard has been innovative. It has developed defence diversification up to 15 per cent. of its work load. The most famous example is probably its work on London underground carriages.
None of us is under any illusion: the new era of peace and the peace dividend is in danger of creating an economic desert in parts of the country—particularly in Fife, where 30 per cent. of all businesses are defence related. In Rosyth, 10 per cent. of regional gross domestic product is provided by the dockyard; the dockyard, together with the base, has a turnover of £394 million, the vast majority of which is spent in Fife; and the Scottish economy is further affected by related expenditure of £380 million a year.
Let me ask the Minister some questions which I should particularly like him to answer. When does he believe that Rosyth will be ready to undertake the first Trident refit? When does he believe that Devonport will be ready? What Government savings will result from the closure of Rosyth, given the massive increase in unemployment benefits and the reduction in tax and national insurance receipts? When will a decision be made and announced? Hon. Members want specific dates, rather than further generalities such as "before Christmas" or "early in the new year".
Would Rosyth be given a lifeline, just to delay its closure? Does the Minister see a future for the naval base, which I visited on Monday, if the dockyard closes? Is it true that the Navy Board has come out in favour of Devonport? Why has the Ministry of Defence rejected Babcock Thorn's proposal to take over all nuclear refitting work three years early, in 1994, which would save £150 million? Does the Minister accept that Rosyth could handle the whole operation from 1995? Are the Government in favour of a dual site or a single site? As far as the Minister knows, does the Chancellor still hold the views that he held in 1985, and does the Minister share those views?
Finally, let me ask a question that was given to me to ask tonight:
When the Government privatised the Royal dockyards…it announced that, in addition to securing better value for money, it also wanted to achieve 'scope for expansion of employment opportunities in the regions concerned' and 'an assured long-term future for the Dockyards' … It is clear that the proposal put forward by Babcock Thorn is consistent with these objectives. Can Ministers confirm that these are still aims of Government policy?
Let me be honest: I never thought that I would stand in this Chamber arguing for nuclear submarines that would assist the Government. I am prepared to do so because think that people are most important—the Rosyth work force, their families and the people of Fife and Scotland in general. It does not come easy to me, but I propose that the Government increase their popularity with the people of Fife and Scotland by retaining Scotland's largest industrial complex. I do not need to tell any hon. Member what will happen if Rosyth dockyard closes, nor do I need to tell any hon. Member that this is not just a local campaign or a Fife campaign. It is a campaign throughout Scotland, and possibly even further, by all those who care about the defence of this country.