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Fairfields Shipyard

Volume 722: debated on Wednesday 22 December 1965

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Would my right hon. Friend the Secretary of State for Economic Affairs care to answer the Question of which I have given him Private Notice?

Order. This is not a private matter between the hon. Member and the Minister. The House wants to know what the Question is.

It is very simple. Would my right hon. Friend care to make a statement about the future of the Fairfield shipbuilding company?

The First Secretary of State and Secretary of State for Economic Affairs
(Mr. George Brown)

Although I am not yet in a position to give the House the details, I am glad to be able to say that arrangements have been made to safeguard the future of Fairfields shipyard. This will reassure not only the people working in the yard, but also the shipowners who, from a sense of patriotism and generosity, have kept orders with the yard and sub-contractors who have continued to supply equipment to the yard despite the uncertainty which has clouded its future.

I am glad to say that we now have the foundation for a financial partnership between the Government, private enterprise and the trade unions as a result of which this shipyard can continue. The private enterprise partners will consist of Mr. Iain Stewart and his associates; Lord Thomson of Fleet; Sir Isaac Wolfson; and others with whom we are currently discussing the position. In addition two of our major trade unions have expressed their intention of participating, and discussions are going on with others.

The Government will hold half of the equity of the new company Fairfield (Glasgow) Ltd. The other half will be shared between the other partners. This will enable the shipyard to operate as a commercial concern. The shipyard will need, in addition to the equity, loan capital and this the Government are prepared to provide on normal terms. These arrangements do not extend to the engineering works Fairfield-Rowan Ltd.

The chairman of the new company will be Mr. lain Stewart, whose wide business interests are already closely associated with the West of Scotland, and Govan in particular.

In backing this new concept in British business all the partners, the Government, private enterprise and the trade unions are relying on the men in the yard to co-operate unreservedly in working the yard as efficiently as possible and in particular in achieving the flexible manning arrangements and interchangeability of workers which are essential. If this co-operation were not forthcoming the whole scheme involving the combined support of Government, the unions and private enterprise would fall to the ground and the shipyard would have to close.

I am sure the House will welcome our action as a quite new partnership not only between Government and private enterprise, but now between Government, private enterprise and the trade unions, the motive being not merely to save a recently modernised Scottish shipyard from extinction, important as that would be, but, in addition, to provide a proving-ground for new relations in the shipbuilding industry which could change the whole image of our country.

Is my right hon. Friend aware that the statement which he has just made will bring to 5,000 workers at the Fairfield shipyard the merriest Christmas and happiest New Year that they have ever known? Is he also aware that everyone of us associated with Fairfields admire the courage and the tireless energy which he has displayed in meeting file many difficulties that beset him? May I assure him that he will have the full cooperation of the Fairfield shipyard workers in promoting efficiency and increasing production?

The long Answer given by the First Secretary to the Private Notice Question raises a matter of considerable importance, with implications for the rest of industry. Is the right hon. Gentleman aware that while we on, these benches last month supported the injection of public money to keep Fairfields going until we had the report of the Geddes Committee in February, and whilst obviously any attempt to get rid of restrictive practices and to bring in the unions is welcome to us, I believe that the whole country will see the method now selected by the First Secretary as being only the beginning of an extension of nationalisation into the private sector, precisely on the lines laid down in "Signposts for the 'Sixties". [HON. MEMBERS: "Hear, hear."] The country will note the cheers of hon. Members opposite.

Will the right hon. Gentleman tell us why he has completely reversed the policy of the Chancellor of the Exchequer, who now, significantly, seems to have been pushed completely out of the picture and who only a month ago announced to the House a holding operation which involved the provision of loan capital without the slightest hint that the Government might provide equity capital? May I ask—[HON. MEMBERS: "No."] This is a very important Answer. Yesterday, in answer to a Question, the right hon. Gentleman promised a statement. I do not complain of its being done in this way, but I think, Mr. Speaker, that we must have the right to put one or two questions.

If the right hon. Gentleman says the 50 per cent. State participation which he announced today is essential to ensure the co-operation of the unions, what possible safeguard is there that this form of creeping nationalisation will not be demanded in any other case?

Finally, there is one question which I have put to the right hon. Gentleman before. When the First Secretary last made a statement in connection with Fairfields, I asked for a simple assurance that any arrangements made would have the approval of the Geddes Committee. The right hon. Gentleman failed to answer that question. Will he now tell the House whether this form of nationalisation, which many people will see as putting a premium on bankruptcy, has or has not the approval of the Geddes Committee?

I am rather surprised at the ungracious way in which the right hon. Gentleman has accepted this statement, and in particular his attempt to complain, although he said that he was not complaining, about the form in which I have made it. The right hon. Gentleman did not draw attention to the fact that, although I was under no obligation to do so, I saw to it that the Opposition had more than one copy of the statement fully 15 minutes before I made it so that they might have the opportunity to look at it.

As to the right hon. Gentleman's second point, this issue is not within the terms of reference of the Geddes Committee. When we get the report of the Geddes Committee about the future and any necessary reorganisation of the industry, we shall be able to take that into account in relation to this shipyard as to any other shipyard. But if I had done what the right hon. Gentleman wanted me to do the shipyard would not have been there to take it into account.

May I make quite clear that the 50–50 partnership arrangement has not been demanded by the trade unions or insisted upon by anybody except those of us who were concerned to keep this shipyard going? This is not, as the right hon. Gentleman has said, a form of nationalisation. We are not compulsorily acquiring anything here. Nobody is being compelled to take part. The existing private enterprise company has run the yard into bankruptcy. A receiver is there. There are excellent assets. There are orders. "Keeping the yard going to next February" was about the most pointless remark that the right hon. Gentleman could make, because the ships ordered but not yet started will not be completed for two years or more, and if one is to do any good with the injection of public money one must try to use the period which it buys to try to arrange for the yard to stay in business so that these orders can be dealt with. That is what we have done.

I can tell the House that in all the discussions, which have seemingly been endless, over the past few weeks, the only people who have objected to something like this being done have been the right hon. Gentleman and the other shipbuilders who would have been only too glad to see the yard shut down.

Will my right hon. Friend take it that the carping and short-sighted attitude of the right hon. Gentleman will be noted in Scotland by unions and management—and I repeat management —alike in firms other than Fairfields? Is he aware that we welcome what he has called a new concept in British business, and those of us who know lain Stewart welcome his participation? We welcome also the participation of Sir Isaac Wolfson and Lord Thomson, but perhaps my right hon. Friend will tell us to what extent Sir Isaac Wolfson and Lord Thomson will be involved in decision-making.

As regards decision-making, questions of company policy and actions will be controlled by the new board when it is established. We are now discussing with the partners the composition of that board and the details, and no one is going into this with any intention of trying to dominate others. [Laughter.] There will be a fair arrangement, but, had I waited for the details to be settled and announced—perhaps the hon. Gentleman opposite who laughed derisively will recognise this—the shipyard would have gone.

The shipowners who have got orders there have kept them, under great personal pressure and at great cost to themselves. They have several times pointed out to me that they could not go on. They are currently negotiating this week with a foreign shipyard which was ready to give them a very attractive deal to take the orders over. Therefore, I had to give them the assurance this week. The receiver, who has kept the creditors off for two weeks, has told me that he has to make an arrangement this week. Therefore, I have to ask the indulgence of the House if I have made the statement in the broadest terms. I shall, of course, come before the House and the country as soon as I can with the details.

In view of the stress which the right hon. Gentleman laid on securing the co-operation of the working force, will he, in considering the composition of the new board, consider inviting representatives of the employees to sit on the board?

Before the undertaking took its present form, we had drawn up a possible board and arrangements had been made even then to see that trade unions were represented on it. I am sure that this will be borne in mind now.

Order. Hon. Ladies and Gentlemen have questions which they would like to ask, but we must move on.

On a point of order, Mr. Speaker. Last week, when I wanted to ask a question, I was not able to get my go in owing to the muddle. Would it not be in order for me to have a go now?

Order. I must deal with the one point before I deal with the further point which I already know is coming. I know that it would be convenient for the hon. Lady if she managed to get in. It is not a question of order whether she does or does not.

Further to that point of order, Mr. Speaker. In view of the important repercussions of this statement, both favourable and unfavourable, in other shipyards and industry generally, would it not be possible on this occasion to allow a few more back-bench questions?