My Lords, I am grateful for the opportunity to have this topical debate. I declare an interest as a resident of the Isles of Scilly, off Cornwall. We are having the debate because the Appledore shipyard in north Devon is planned to close at the end of March next year, with the loss of some 200 jobs and many local suppliers to be affected. The present operator, Babcock, says that it will move all its business to Plymouth and other areas, but many people comment that the company seems to have given up on seeking work to keep the yard open. Of course, any shipyard needs orders; I hope the Minister, when she replies, will tell us a little about the Type 31e frigates.
Appledore shipyard has a proud history. While not unique, the level of expertise there is among the greatest in the country. I question whether the Government, and particularly the MoD, can afford to let it die. A good campaign has been started by the GMB and Unite unions to keep the shipyard alive. Jake McLean, the campaign manager, tells me that the yard has built 197 ships, beginning at the time of the Spanish Armada. There used to be 40 shipyards on the banks of the River Torridge; now there is just one. Most recently, Appledore built many sections for the two new aircraft carriers, the “Queen Elizabeth” and the “Prince of Wales”, and four high-quality offshore patrol vessels for the Irish navy.
As the noble Lord, Lord Greenway, said to me this morning—sadly, he could not speak today—perhaps we need some fishery protection vessels, which are cheaper and easier to build and operate than destroyers for keeping French fishermen away. That is something the Minister might want to reflect on afterwards. The quality of work in the yard is probably one of the best in the world and the prices, they say, are cheaper than those of many competitors. It can build ferries, dredgers, tankers, superyachts and naval ships.
The campaign for the yard to stay open is also being led by the Devon and Cornwall Business Council. It gives some interesting statistics about the area of Torridge: trade apprenticeships are almost double the national average, and the Appledore shipyard provides nearly 80% of all employment in the ward of Appledore. That is a very high percentage in a small town with pretty awful road access to anywhere else in the county. If the shipyard is lost, it will potentially have a serious impact on business rates. The area around the yard is one of the 20% most deprived areas in the country, but there is very strong local community and loyalty. Workplace-based earnings in Torridge are less than 79% of the English average. There are many similarities with other places that are badly connected in the south-west and the Isles of Scilly.
However, I think one of Babcock’s ideas is that many of the high-quality workforce will suddenly be happy to commute to Plymouth. It must be at least a two-hour bus journey on pretty horrible roads. I fear that the whole community and this high-quality workforce could dissipate unless it is somehow preserved by the shipyard continuing.
We all know that, for a shipyard to work, it has to have an operator and some orders. I and others have been looking at trying to help see if anyone is prepared to take over the operation when Babcock leaves. The yard owner, Langham Industries, is very keen to keep shipbuilding going and seek potential operators. I met one operator this week, Oil Gas and Marine Ltd, which is very interested in taking over the yard and restarting shipbuilding—or continuing it we hope—of any description. I know it has been in discussion with Babcock and the owner about the assets and the staff. It claims to be able to finance a start-up provided that it receives orders. So there is hope there, but orders are key.
I have mentioned the Type 31e frigates, but many other ships could be built for the UK Navy. There is fishery protection, as I have said. There are other countries’ needs and the offshore industry, such as oil and gas supply, windmills and even something that the Cornwall and Isles of Scilly LEP is promoting—offshore windmills that float on pontoons. Many of these could also be built in the Appledore yard. I am not sure how high-tech the pontoons are, but they are moored to the seabed. We will see what happens.
But we cannot expect any new owner to survive on fresh air, so we have to get some new orders going. My contribution to this is to encourage the building of a new passenger ship to replace the aged “Scillonian III”, which plies between St Mary’s and Penzance in the summer. In winter, there is no ship service; one flies in little planes, which last winter were disrupted 29% of flying days. Many of us around there think that, rather than spending £20 million on redundancies in Appledore, one should spend £20 million on building a new ferry.
That would be a challenge, but it is worth exploring. The sea conditions are worse than the Pentland Firth at the north of Scotland in terms of wave heights. I have all the data. You need a big ship to go across the rough sea but a small one to get into the harbour, so you need a compromise, which has to take the bottom at both ends. A design for a new ship—which would actually have stabilisers, which are quite common on most other ferries—was completed about six years ago. It could carry all the freight and all the passengers. The islands need this to survive and prosper.
Could the Isles of Scilly service be the saviour of Appledore? We have to move fast and the Government have to move fast. The previous ferry 42 years ago was financed by government loans, and they have been repaid. Scotland, of course, has it easy because the Scottish Government subsidise everything, but we do not so here.
Meetings with Ministers and officials have focused on how to get a winter ferry service, how to ensure that the operator does not remove the ship to make more money elsewhere—which is always a challenge—and on an operator of last resort. Ministers have made it clear that they are prepared to consider support only if there is one voice from the island community. I believe that has been delivered in its first stage. The timing is quite critical. One could start on a metal-bashing contract—as I call it—at Appledore from this design very quickly. It is all approved by the Maritime and Coastguard Agency. Then one can talk in more detail about what has to go on top.
Who would finance it is a question that needs to be asked with Ministers, local authorities and the present operator—it has just published its annual accounts this week, and they do not look too promising for funding a new ship. It would be possible for Ministers to arrange for a new “Scillonian” to be ordered from Appledore to save the yard. A new ship operating all year round would really benefit the people of Scilly and their guests. I know that Ministers believe that the modern shipbuilding facility at Appledore is worth preserving and encouraging. It has a long tradition.
I have three questions for the Minister. Do the Government believe that continuity of shipbuilding at Appledore is something that is important not only to the town itself but also to the south-west and to defence? What are the Government doing to encourage a new operator and encourage new orders for Appledore from the UK or elsewhere, naval or civilian, to reinstate a full order book for this important facility? Will the Government encourage their transport colleagues to take forward an order for a new “Scillonian”?