Dockyards

– in the House of Commons at 3:30 pm on 24th June 1993.

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Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence 3:30 pm, 24th June 1993

With permission, I should like to make a statement on the future of the naval dockyards.

The House has been waiting to hear our proposals on the future of the royal dockyards, and in particular on the location of nuclear refitting. This matter has been under long and careful consideration and I am now ready to place our proposals before the House.

During the 1980s, the size of the nuclear submarine refit programme as a whole meant that all existing submarine docks at Devonport and Rosyth were required, and a new dock had to be provided for refitting Trident. We indicated at that time that the new facility was to be built at Rosyth. With the end of the cold war and the reduction in the size of the submarine and surface fleet, it became possible and desirable to consider new and less expensive solutions. Accordingly, in July 1991, some two years ago, the Ministry of Defence invited Devonport and Rosyth to make proposals for nuclear refitting work.

Since that time, we have subjected the proposals made by the two dockyard companies to the most detailed and intense scrutiny. We have had three proposals: two from Babcock Thorn Ltd.—one in respect of the new RD57 facility at Rosyth and the other for upgrading existing docks at Rosyth—and one from Devonport Management Ltd. in respect of the upgrading of existing docks at Devonport. The proposals have been evaluated for comparative purposes by the Ministry of Defence, supported by independent specialist advisers.

That evaluation has taken some time. I know that the decision has been keenly awaited, but I do not regret the time that has been taken. The fact is that the upgrade proposals that are now being considered cost more than £250 million less than those that we originally had under consideration. I make no apologies for allowing the competitive process to push the cost down, to the benefit of both the Royal Navy and the taxpayer. We were also keen to ensure that both dockyards had a full opportunity to put forward proposals on a fair and equal basis.

The scrutiny has, however, not been simply a cost comparison. Before we could consider the cost of the proposals, two conditions had to be fulfilled. The first was that the proposals had to be completely sound and technically well-founded. Our detailed examination has reassured us that the proposals from both yards can be relied on to produce facilities of the required standard and that both yards have the skills and the experience to carry out submarine and surface ship refitting. In the past 10 years, Devonport has refitted seven nuclear submarines and 72 surface ships; Rosyth has refitted five nuclear submarines and 79 surface ships, including 11 frigates and destroyers.

The second key consideration has been safety, which rightly must be subject to independent validation. Our detailed analysis over a period of months shows clearly that each of the three proposals should reach the very high standard that is required.

Turning to the comparison of the cost of the various proposals, our scrutiny has taken place against the background of the need to get the best possible value for money from the defence budget. In particular, I need to ensure—as do the chiefs of staff—that the proportion of the defence budget spent on the support of the armed forces is kept as small as possible, so that the proportion that can go directly to the front line should be as large as possible. I am sure that the House will join with me in supporting that objective.

We have considered both the capital costs and the operating costs associated with the various proposals. With regard to capital costs, the results of the analysis show that our estimate, on a like-for-like basis, of the three proposals is as follows: the proposal to build new docks at Rosyth, known as RD57, would cost some £369 million on top of the £100 million already spent; the proposals for upgrading of docks in Rosyth would cost £248 million; and the proposals from Devonport would cost about £236 million. This shows that, despite the sums that have already been spent, the RD57 project—that is, a new purpose-built dock—is very much more expensive than either of the other two proposals, and I do not propose to consider it further. The two upgrade proposals are much closer in capital cost, but there is a clear difference, in Devonport's favour, of £12 million.

With regard to operating costs, we have looked at these over 15 years, by which time the capital work would have been completed, the necessary rationalisation taken place and the new arrangements settled down. Our analysis shows that, on operating costs, Devonport is again the cheaper yard, by a total of some £52 million over the period. Taking all those factors into account, the total difference between the two bids is £64 million in favour of Devonport. Those figures do not include redundancy costs, which again are less if Devonport is the nuclear yard.

Three days ago, we received a completely new suggestion from Babcock Thorn Ltd. That suggestion is that the number of docks where nuclear work can take place should be reduced from two to one, and that the emergency docking facility should be used as the nuclear defuelling and refuelling facility. When we received that suggestion, we had already spent several months in detailed consultation with both companies on their proposals in order to be able to report with confidence the figures I have quoted today. Our period of consideration was extended in January, in part to ensure that Babcock Thorn was able to propose an upgrading solution on the same basis as Devonport. It is quite unreasonable to produce completely new ideas so close to a decision which, if they were relevant, could have been presented at any time over the last six months. But, more important, we are not able to accept any proposal which would deprive the Trident submarines of a dedicated emergency docking facility for significant periods; which would mean that the single nuclear refuelling facility was used for all our submarines, so exposing us to unacceptable risks in the event of an incident or other difficulty; and which, indeed, is untested from a technical and safety point of view.

The view of the First Sea Lord, with which I agree, is that that suggestion imposes an unacceptable level of operational risk and that it should be ruled out. The same would apply to any proposal we received at this stage from Devonport based on the same engineering approach. The only way forward is for us to take a decision based on the analysis which we have before us.

The Government do not believe that it would be prudent to ignore the capital difference of £12 million and the overall difference of £64 million between the Devonport and Rosyth proposals. There are no other relevant factors that point decisively or conclusively to one yard or the other. I am therefore announcing today our conclusion that, subject to satisfactory contractual negotiations, we shall proceed with the Devonport nuclear refitting facility proposals.

I now turn to our long-term plans for the future of Rosyth. I made it clear in my 9 February statement that our aim is to achieve a healthy competitive structure for non-nuclear refitting. We wish Rosyth to develop into a yard that will bid competitively for surface ship refits and other work. Rosyth already has considerable experience of surface ship work—for example, the highly successful refits of type 42 destroyers carried out over recent years—and we have every confidence in its ability to become a major and successful surface ship yard.

I am conscious of the fact that a significant period of transition will be required to help Rosyth to restructure so that it can concentrate on such work. To enable Rosyth to make that transition, we intend to continue with an allocated programme for 12 years, until 2005. Once nuclear work is concentrated at Devonport, the only allocation of surface ship refits will be to Rosyth; all other refit work will have to be won in competition.

The programme for Rosyth would comprise over half of surface warship refitting, including all aircraft carrier refits, virtually all type 42 destroyer refits and all Hunt class mine warfare vessel refits, as well as other refits of type 23 and type 22 frigates. After the year 2000, that programme will begin to taper down until 2005. These proposals mean that we expect Rosyth to be allocated responsibility for the refits of some 18 major warships. We expect Devonport—as the nuclear yard—to be allocated responsibility for the refits of some 12 nuclear submarines.

Employment at the yards is a matter primarily for the companies concerned. At present, there are some 3,700 people employed at Rosyth. Taking into account the allocated programme to which I have just referred, we estimate that there will be a reduction of about 450 in the work force as a direct result of reduced Ministry of Defence work. Employment on Ministry of Defence work should continue at about this level at least to the turn of the century. The allocation should also provide the basis for Rosyth to bid for extra work and to develop new markets. There is every reason for confidence that, given the skills of the work force and the traditionally high standard of their work, it will be possible for Rosyth to win work in competition, over and above the allocated programme, and that should increase employment beyond the levels I have outlined. Reductions in employment will not be confined to Rosyth. Because of the declining overall refit programme, we would expect reductions in the numbers employed at Devonport of about 350.

Given the benefit of competition, I am pleased to be able to say that, even during the period of an allocated programme of the kind I have mentioned, there will be a higher proportion of the refit programme available for competition than at present. That proportion will increase after the year 2000 and will apply to the whole of the surface ship refitting programme after 2005. Both dockyards, as well as shipbuilders, will be able to compete for that unallocated work.

Further information setting out the background to these conclusions will be contained in a consultative document which will be published in the near future to provide a basis for consultation with the parties concerned.

I believe that the proposals I have set out today will provide a healthy future for both yards. Trident submarines will carry the deterrent well into the next century. It is therefore essential that they be refitted to the high standards that the Royal Navy expects. The taxpayer equally has a right to expect value for money. My proposals achieve both these objectives, and I commend them to the House.

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

As the Secretary of State for Defence has admitted, the statement is long overdue. The delay and the Government's indecision have caused great distress and division. The procedures adopted by the Ministry of Defence in considering the Trident refit have set yard against yard in the most divisive way, as with the helicopter landing ship, when what is needed is overall planning that gives priority to the defence and industrial needs of the whole country.

We have no doubt about the capacity of the work force at Devonport to carry out the Trident contract satisfactorily, and we acknowledge the sincerity of those in the south-west of England, such as my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson) and Plymouth city council, who have argued their case powerfully and fairly. However, I am sure that they will accept that the decision is a bitter blow for the men and women of Rosyth. It is also a betrayal of the promises given by previous Tory Secretaries of State for Defence, as Lord Younger recently confirmed. The decision to—

Hon. Members:

You would scrap it.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. The Secretary of State's statement was heard in silence. I hope that all hon. Members during these exchanges will be heard civilly.

Photo of Mr George Foulkes Mr George Foulkes , Carrick, Cumnock and Doon Valley

That defence commitment is there to provide free speech in this country, Madam Speaker. The decision announced today must also put the Secretary of State for Scotland in a difficult, if not untenable, position.

The Secretary of State for Defence must give some assurances by answering the following questions. First, as Ministry of Defence consultations have had little impact on the final decisions, will he say whether the latest Rosyth bid will be considered further during the consultation period? Will he also assure the House that the full defence assessment of the costs of both bids will be published in full—not just the totals given in his statement?

Will the Secretary of State also spell out what contractual obligations the Government will have for the refitting work at Rosyth on other vessels during the 12-year period? Such a guarantee is necessary because the Government's bland assurances have proved to be hollow. The work force at Rosyth are clearly not convinced by his promises and they deserve a firm and convincing guarantee.

Will the Secretary of State also say whether he has received an acknowledgment from Babcock Thorn that what he has announced will enable it to continue as a viable operation since, according to my count, he has guaranteed only 18 major ships in 12 years, whereas during the pact 10 years it has refitted 79 ships? Will he also say whether Babcock Thorn accepts his assessment of the work force that it can retain on the basis of future work from the Ministry of Defence?

Will the Secretary of State also assure us that if Babcock Thorn is for any reason unable or unwilling to continue with the contract at Rosyth, the Ministry of Defence will ensure continued operation of the yard? He has agreed that an alternative to Devonport is vital for reasons of competition; it is also necessary for the preservation of our strategic capacity.

This is yet another announcement from the Ministry of Defence that will result in workers losing their jobs—in this case, 800 thrown on the scrap heap in Rosyth and Devonport [Interruption.] I am coming to that. During the past three years, approximately 125,000 defence-related jobs have been lost all over the United Kingdom because of defence cuts, yet the Government continue to reject the call for a strategy for defence conversion and diversification, which was made again today by one of my hon. Friends.

Hon. Members on both sides of the House have campaigned for the future of Rosyth dockyard, which is now the largest industrial employer in Scotland. There is absolutely no doubt that it will be under the gravest threat if the Secretary of State, because of his adherence to the free market dogma of privatisation, contractorisation and competitive tendering, fails to give the commitments for which I have asked. I urge him to put the security and economy of the nation before political dogma and to give those guarantees to the House.

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

The hon. Gentleman referred to previous statements made in the 1980s. In the nicest possible way, may I remind him that in July 1987 he signed an early-day motion that called on the Government "to cancel Trident" in the light of the changing international climate and impending arms reductions? Does he not realise that, if that recommendation had been accepted by the Government, not only would there have been no nuclear work at either Rosyth or Devenport but the 3,000 civilian jobs in the west of Scotland—arising from Faslane and Coulport—would not have been available? The hon. Gentleman should reflect on what would have been the consequences of his advice. Of course, I have regretted the uncertainty that has been perpetuated over the past few months, but I think that the hon. Gentleman will appreciate, and I know that the House certainly will, that the saving of some £250 million achieved as a result of the process must be a factor that weighs heavily.

The hon. Gentleman is right to say that today's announcement will be a bitter blow for the people of Rosyth. Of course I recognise that fact, but I believe that those people will also be relieved and pleased to see that the Government are committed to a two-dockyard solution. As the hon. Gentleman himself confirmed, total job losses as a result of today's announcement will be about 800 at both yards over the next few years.

The purpose of the period of consultation is to enable all who are interested in and affected by the proposals to make suggestions to the Government so that we can see whether they are matters that should have been considered, yet were not taken into account, or they are other relevant matters. In the consultative document, we shall seek to spell out as much information as possible.

The hon. Gentleman asked me about contractual obligations for the allocated programme. That programme will work in future on exactly the same basis as we have used over the past few years. We enter negotiations with the yard; we reach agreement on a price; and on that basis the work is allocated. That has been true of both Rosyth and Devonport, and there will be no change in that position.

The hon. Gentleman misunderstood one aspect when he compared the 18 major warships that I mentioned in my statement with the 79 ships that Rosyth has completed over the past few years. He must remember that most of the ships that Rosyth has completed in recent years were fairly minor vessels.

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

Indeed, they are very important, but the 18 vessels to which I referred will be major warships. To that number has to be added a large number of smaller vesels, for which Rosyth will continue to be responsible.

Photo of Mr Phil Gallie Mr Phil Gallie , Ayr

Did my right hon. and learned Friend hear the right hon. and learned Member for Monklands, East (Mr. Smith) refer earlier today to what he anticipated would be an announcement of thousands of job losses associated with Rosyth and Devonport? Will my right hon. and learned Friend confirm that the total number of jobs that the Ministry of Defence assesses will be lost are 450 at Rosyth and 350 at Devonport?

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

I have to say that there has been a lot of scaremongering both in the south-west of England and in Scotland about the consequences of the decision. As we all really know, both companies have been primarily interested in obtaining the monopoly work that Trident represents and, in order to advance their campaign, there has been a tendency in both parts of the country to exaggerate the consequences of failure. I fully accept that, if we had not been able to announce that we believe in retaining two dockyards in order to ensure competition in the future and if we had not been able to provide the allocated programme for Rosyth, there would, indeed, have been serious and substantial consequences for jobs. However, I can tell my hon. Friend and the House that, in view of the total work that will be available to Rosyth, and the man hours that it will require, the only factor that could change the job figures that I have mentioned would be improvements in productivity at either Rosyth or Devonport.

Photo of Menzies Campbell Menzies Campbell Shadow Spokesperson (Defence), Shadow Spokesperson (Defence)

The right hon. and learned Gentleman was Secretary of State for Scotland when his predecessor, Lord Younger, gave an undertaking that the submarine work would go to Rosyth. Did the right hon. and learned Gentleman endorse that undertaking at that time; if so, what does he say in response to Lord Younger's contention that an announcement in the terms of his statement today constitutes a "breach of faith"? In the light of the departure from that undertaking, what reliance can people at Rosyth place on the undertakings that the Secretary of State has given today?

Finally, there was no reference in his statement to either strategic or operational considerations. Was any consideration given to the location of the submarine refitting work at Rosyth, in close proximity to Faslane, where the nuclear submarines are to be based?

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

My noble Friend Lord Younger was concerned—he was perfectly entitled to be concerned— about the job implications that would flow from whatever decisions might be taken on submarine matters. The hon. and learned Gentleman will be aware, as is my noble Friend, that, because of the basing of Trident in the west of Scotland, some 3,000 civilian jobs have been created and will continue to be available for the life of the Trident programme. He will also be aware that, as a result of the statement today, the employment situation in Rosyth will remain healthy for the foreseeable future.

The strategic situation is an important matter that needed to be addressed. The view of the Royal Navy and the Ministry of Defence is that the strategic considerations can be satisfied by the placing of Trident work at either Rosyth or Devonport. As to the other matters, the hon. and learned Gentleman might reflect on the vitriolic opposition to Trident which the right hon. Member for Yeovil (Mr. Ashdown) professed and which he sought to persuade his Liberal colleagues to adopt in years past.

Photo of Sir Nicholas Bonsor Sir Nicholas Bonsor , Upminster

My right hon. and learned Friend was faced with an extraordinarily difficult task. It was clear that, whichever dockyard failed to get the order, there would be recriminations from those who supported it. I congratulate my right hon. and learned Friend on the care with which he has gone into the issues before making his decision.

Clearly, the Select Committee on Defence will want to examine the figures behind the decision and be reassured that the amount of work that will be given to Rosyth will ensure that we have a two-dockyard future. I should be grateful if my right hon. and learned Friend could tell us when the detailed figures will be available so that we can examine them and get the reassurance that we need.

Mr. Rilkind:

The decision which we reached and which I announced today was a difficult and painful one because we were conscious of the fact that, whatever decision was reached, it would have sad consequences for the other yard. I hope that hon. Members will understand that, because the Cabinet reached its conclusion this morning, it is not possible to have the consultative document available today. Of course, we will make it available in the near future and I appreciate the point made by my hon. Friend.

Photo of Henry McLeish Henry McLeish , Central Fife

Does the Secretary of State appreciate that today's statement will be met with profound disappointment by the workers at Rosyth and their families? There will be widespread anger about the breach of faith, betrayal of promises and classic Tory treachery. What do we tell the young apprentices at Rosyth about what will happen after 2005? Can we believe anything that the Secretary of State says, in view or what has happened in the past? Does he acknowledge the comments made by the Secretary of State for Scotland in the Glasgow Herald on 14 May 1993, "Rosyth will survive. I want Rosyth. to survive with Trident. There is a level playing field. It is half time and we are up three goals to nil."? Why was he defeated yesterday by 11 goals to one? What a team and what a disgrace. Both Secretaries of State should consider resigning.

Mr. Rilkind:

I would say to the young apprentices at Rosyth that there are few other firms or industries that have an allocated programme of work for the next 12 years. The programme will provide a substantial amount of work and ensure that, over the next 12 years, Rosyth will have the time that it requires to adapt to a surface ship role. It already has considerable experience in that area—as I said earlier, over the years it has refitted no fewer than 79 surface ships.

The hon. Gentleman should share my belief in the quality of work and expertise at Rosyth. If he has the interests of the yard in mind—I am sure that he has—I suggest that he will do no service to the young people at Rosyth if he implies that the 12 years of guaranteed work somehow means that they have no prospect of a long-term future. He might end up willing the end that he so obviously wishes to avoid.

Photo of Mr Robert Hicks Mr Robert Hicks , South East Cornwall

Is my right hon. and learned Friend aware that the decisions will be received with eager anticipation and enormous relief not only in the Plymouth travel-to-work area but throughout the west country? Does he agree that securing the Trident refit contract reflects enormous credit on the management and work force of Devonport Management Ltd.? They have put together an attractive package which secured the contract on the basis of the defence needs of the nation and value for money.

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

I can certainly confirm that both companies made their proposals with a great deal of care and preparation. It fell to us to take the difficult decision of identifying where the conclusion should lie. I said in my statement that the consideration that had to prevail was the gap of some £64 million between the total cost of the two projects. In all other aspects, the position was too close to call on the merits of either bid.

Photo of Mr John McWilliam Mr John McWilliam , Blaydon

Given that the savings to be made in future are speculative and that the investment of £130 million in Rosyth will not now be used and has been poured down the drain, will the Secretary of State tell us who were the specialist external advisers who assisted him in making that difficult decision?

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

The money invested in Rosyth was for the RD57 new-build project. It is an inescapable fact that, even if one takes that investment into account, more than £350 million would remain to be spent on Rosyth for a new-build dock. That is £100 million more than the upgrade proposal at either Rosyth or Devonport. Therefore, I do not believe that any serious arguments can be made that it would have been sound or responsible to continue with the new-build project, even taking into account the money already spent. We considered the matter on that basis, but that was the unavoidable conclusion.

Photo of Mr Raymond Robertson Mr Raymond Robertson , Aberdeen South

Is my right hon. and learned Friend aware that, although there will be bitter disappointment in Rosyth at the fact that it did not land the Trident contract, there will also be a great sense of relief that together my right hon. Friend the Secretary of State for Scotland and my right hon. and learned Friend the Secretary of State for Defence can guarantee Rosyth's long-term future? Does he further agree that Conservative Members should take no lectures from the Labour party on our commitment to Rosyth? In particular, we will not take lectures from the hon. Member for Dunfermline, East (Mr. Brown), who has spent his entire political career campaigning against Trident and talking down Rosyth and its work force.

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

The hon. Member for Dunfermline,East was, indeed, a passionate opponent of Trident. If his views had been accepted, neither the 3,000 jobs in the west of Scotland nor any jobs in nuclear work in any other part of the country would exist.

Photo of Alex Salmond Alex Salmond Leader, Scottish National Party

When the Secretary of State for Defence heard about the nuclear alert at Faslane last weekend, did he recall the words of Lord Younger when he said that he had sold the siting of nuclear bases in Scotland by making the specific commitment that the associated work would go to Rosyth? That being the case, why should people in Scotland today take the Rifkind combination of radioactivity in Faslane and redundancies in Fife? Is the commitment to Rosyth today as firm as the commitment to Ravenscraig that was accepted in 1987?

If, as Lord Younger says, the primary issue here is faith, how does the Secretary of State for Defence have the brass neck to remain in office? Why is not the Secretary of State for Scotland taking stock of his position?

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

My right hon. Friend the Secretary of State for Scotland played a major part in ensuring that Rosyth had an important future to which to look forward and that the job implications were as modest as I was able to state earlier. If the Labour party wishes to forget its past policies, the hon. Gentleman might at least admit the current policies of the Scottish National party. Those policies not only would have been of little benefit to Rosyth but would have destroyed 3,000 jobs associated with Faslane and Coulport. In recent weeks, the SNP has been noticeably quiet about the matter. We all know perfectly well why. None of the defence-related jobs would last a moment if the hon. Gentleman's views were endorsed.

Photo of Mr George Kynoch Mr George Kynoch , Kincardine and Deeside

I am disappointed for, and sympathise with, the management and staff at Rosyth, who must be disappointed after having put so much work into their bid for the contract. I welcome the positive package that my right hon. and learned Friend has provided. I am disappointed that the Opposition seem to have little faith in the ability of management and staff to build on that programme. Until the year 2000, will the allocated programme be sufficient to enable the yard to be profitable without attracting extra work, or will it be required to bid for non-allocated work to be profitable?

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

The allocated programme will continue until 2005, not the year 2000. I am not in a position to comment immediately on the profitability of Babcock Thorn, which is the contractor at the present time. The contractual arrangements with Babcock Thorn will continue for two or three years unless they are renewed. Just as Devonport in the next few years will benefit from the nuclear work, which is in effect an allocated programme because of its monopoly characteristics, so Rosyth will benefit from the large programme that I have announced today. That means that, for example, aircraft carriers such as Ark Royal and Invincible will be available for refitting in Rosyth. That was not the case in the past and is well worth reflecting on.

Photo of Mr David Jamieson Mr David Jamieson , Plymouth, Devonport

On behalf of my constituents in Devonport, may I say that the statement that the Secretary of State has made today about the nuclear refit contract will be greeted in my constituency and the south-west with great relief at the knowledge that many thousands of jobs will be secure? That sense of relief will be tempered by the knowledge that many jobs will be lost in Scotland.

Does the Secretary of State share my concern at the way in which the tendering process has been handled, as it has caused much distress and worry in both Plymouth and Scotland? Will he review the way in which contracts are awarded to prevent communities such as those in my region and in Rosyth from suffering the sort of agony that they have endured in the past six to eight months?

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

I appreciate that the period of uncertainty has been a problem; in ideal circumstances, we would want to avoid it, but the responsibility does not lie purely with the Government. Over the past six months, both Devonport and Rosyth have brought forward several modifications to their proposals and requested us to take them into account before reaching a decision, which we have done. That has been an important factor. We could have refused to consider them, but I feel that the hon. Gentleman would have been the first to complain that the case put forward by his local community had not been fully considered. The hon. Gentleman should bear that in mind.

Photo of Anthony Steen Anthony Steen , South Hams

I welcome today's historic decision, which will delight the west country taxpayers—as well as the Royal Navy—who believe in fair competition and the principles of the citizens charter. Will my right hon. and learned Friend confirm that unemployment levels in the west country, which are currently higher than those in Scotland, will remain at the same level? Will Devonport Management Ltd. be allowed to release the land that is surplus to its requirements so that it can be used for industrial development and further job creation?

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

I am sure that we all wish to welcome those benefits. The matter of most important comment today is that, because of the overall implications of our announcement, the reduction in employment at both Devonport and Rosyth will be far more modest than many anticipated or predicted. Clearly, with the Royal Navy declining in size, it is inevitable that fewer people will be required for refit work, but a reduction in employment in Devonport of 350 and in Rosyth of 450 between now and the turn of the century can be absorbed in both communities without significant difficulty.

Photo of Gary Streeter Gary Streeter , Plymouth, Sutton

Is my right hon. and learned Friend aware that his announcement will be widely welcomed by my constituents and will be seen as a turning point in the economic fortunes of the west country? He will understand that I also wish to pay tribute to the skill and tenacity of the management and work force of Devonport Management Ltd. in winning the contract race. Will he confirm that it is not just my constituents or DM L that will benefit from the announcement? The British taxpayer will also benefit from the excellent decision which he has made today.

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

Not only the taxpayer but the Royal Navy will benefit from the decision, which had to be taken on the basis of the relative cost of the two tenders. It was a hard-fought compaign by both yards and one pays tribute to the tenacity of both companies. At the end of the day, the significant difference between the costs of the two proposals proved to be the decisive factor.

Photo of Mrs Irene Adams Mrs Irene Adams , Paisley North

The Secretary of State will recognise that there was concern not only at Rosyth but in many constituencies throughout Scotland where there are ancillary jobs connected with the work at Rosyth. Did he make his estimate of 450 redundancies with Babcock Thorn? What is his estimate of job losses in ancillary industries throughout Scotland as a result of this decision?

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

Obviously, we have not been able to inform Babcock Thorn of the details of the proposals before informing the House—[HON. MEMBERS: "Oh."] Opposition Members should not be surprised about that; they would have been concerned had it been otherwise. We know Babcock Thorn's expectations of job changes over the next few months and years. The company has been contemplating certain redundancies that are totally unconnected with Ministry of Defence work, but that has nothing to do with Ministry of Defence work—it is something on which Babcock Thorn will need to comment. We have been able to determine the volume of work which the allocated programme that I am announcing today represents. We know the number of man hours of work it represents and how many employees it has required in the past; therefore, unless there are improvements in productivity, which would be welcome, the figures are a consequence of the decision have announced today.

Photo of John Reid John Reid , Motherwell North

No one ever thought that it would be an easy decision, but the manner in which the Secretary of State has conducted it and his previous record on commitments have left him wide open to accusations of a lack of defence strategy, months of dithering and distress and years of deceit, particularly to Rosyth and Scotland.

Will the Secretary of State answer one or two simple questions? The first has already been put to him. When he was asked by the hon. and learned Member for Fife, North-East (Mr. Campbell) about the remarks made by Lord Younger, he commented that naturally Lord Younger was distressed, but that was not the question. Did not the noble Lord say that the decision which has been taken today would be a breach of faith for the Scottish people by the Tory Government? Will the right hon. and learned Gentleman confirm that, when that initial promise was made, he was in the Scottish Office and was 100 per cent. party to the decision that he has rescinded today?

Secondly, if the facts and figures are so obvious and were put out in such detail today to the Cabinet, will the Secretary of State guarantee that they will be available to the House and right hon. and hon. Members, not tomorrow, not next week, but today, right at the beginning of the consultation period?

Thirdly, will the right hon. and learned Gentleman confirm to us the following simple figures? How much expenditure is he committed in his proposals to making, first, at Devonport and, secondly, at Rosyth by the year 2005? Those figures were missing today and will be extremely interesting. I have no doubt that will continue questioning, but we want the ammunition made public and not kept behind the closed doors of the Cabinet so that genuine consultation can take place.

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

The hon. Gentleman might have begun his comments by confessing that he, too, called for cancellation of Trident in past years.

Photo of John Reid John Reid , Motherwell North

It is another lie. It was not the Trident system.

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. The hon. Gentleman has put his question. I have allowed him to do so. He must now contain himself and hear the answer.

Photo of Malcolm Rifkind Malcolm Rifkind The Secretary of State for Defence

The hon. Gentleman must appreciate that the number of Trident boats determines the number of jobs and the refitting work that is required, and the hon. Gentleman's opposition to a crucial part of the Trident programme does not square well with his comments today.

The hon. Gentleman also referred to the views of my noble Friend Lord Younger. He should consider the views of my noble Friend, who, in his letter to The Times, said: I know that many in Scotland would therefore feel badly let down if a major part of these jobs were now to be removed from Scotland. The consequence of the statement today is that employment in Rosyth and in Devonport is broadly the same. The hon. Gentleman might like to reflect on that.

Several hon. Members:

rose

Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. We are now moving on to the business statement.