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Oral Answers To Questions

Volume 901: debated on Sunday 2 March 1975

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Employment

Health And Safety

1.

asked the Secretary of State for Employment when he expects to take a decision on the location of the headquarters of the Health and Safety at Work Commission.

The Health and Safety Commission has informed me that a thorough study is now being undertaken on the question of its ultimate location. The Chairman of the Commission expects to be able to let my right hon. Friend have his recommendation in the early part of the new year.

Is my hon. Friend aware that the Safety in Mines Research Establishment, which now comes under the Health and Safety Commission, and its executive, is already located in Sheffield? Does he agree that if the Health and Safety Commission and its executive are dispersed from London it will make sense for the Commission's extensive laboratories, at present situated at Cricklewood to be located near the Safety in Mines Research Establishment at Sheffield?

No doubt this will be one of the factors which the Commission will bear in mind in making its recommendations.

Is my hon. Friend aware that the Hardman Report on the relocation of Government Departments did not lead to Yorkshire and Humberside getting one extra job? Will he bear in mind that a favourable decision on the location of this body in or near my constituency, where the unemployment rate is 14 per cent., would be warmly welcomed?

I am sharply aware of the unemployment problems in the constituency of my hon. Friend the Member for Hemsworth (Mr. Woodall). I am sure that he will not let the claims for South Yorkshire go by default, but I hope that he will bear in mind our recent announcement that the Manpower Services Commission will be located in Sheffield.

Pay Settlements

2.

asked the Secretary of State for Employment if he will make a statement on increment payments and the £6 limit.

Incremental and wage-for-age payments which are made according to a well-defined range or scale, already in operation before 11th July, may continue at the same level as in preceding years for those earning less than £8,500 a year. This is on the condition that, together with the annual pay increase, the payments under such a scheme do not raise the pay bill for the group concerned by more than £6 a head.

Does my hon. Friend agree that it is not without significance that the people who drafted that reply for my hon. Friend—the same people who are advising the leadership of Birmingham city council that it must fork out £1·5 million more in increments—are the very people who stand to gain most by the continuation of incremental payments over and above the £6 limit? Is he aware that the situation is not as he has just described it?

I take full responsibility for what I have just said. Ministers who make statements at this Box have every bit as much concern for the policy accepted by the Government and the TUC as have those trade unionists who are engaged in negotiations on behalf of local authority employees.

Since the £6 limit ends next August, do the Government propose, in the new year, to publish a White Paper about their future intentions, or will they simply let matters drift?

The Government, as of now, have no intention of publishing a White Paper. Like many other people concerned with wage negotiations, we are considering the effect of the current policy in a whole series of areas. We must take account of that in discussing any developments of this subject.

Will my hon. Friend tell us where is the equality of sacrifice for those workers who produce the wealth of this country who are subjected to an increase limit of £6 a week, if they can get it—and in many cases they are having a job to get even half that—compared with the situation of people like Mr. Eric Sosnow, the boss of United City Merchants, a stockbroking firm? Is he aware that Mr. Sosnow has just awarded himself a £200-a-week pay rise, which brings his total earnings for the year to £35,756? Why does my hon. Friend not start sending messages to Mr. Sosnow?

I do not know the present salary or wage of the gentleman to whom my hon. Friend referred, but subject to its being more than the £8,500 limit, I should say that my hon. Friend has just described to the House a flagrant breach of the Government's policy.

School Leavers

3.

asked the Secretary of State for Employment if he will now take further action to help the employment prospects of school leavers and to improve training facilities.

4.

asked the Secretary of State for Employment what is the present number of school leavers still without a job.

40, 402 school leavers under the age of 18 were registered as unemployed on 13th November 1975. The question of further action to help school leavers will be considered when we can assess the impact of the measures announced by my right hon. Friend the Chancellor of the Exchequer on 24th September.

I unreservedly welcome the recent further fall in the number of unemployed school leavers, but does the Minister accept that there are strong indications, particularly among young women in the North-West, that there is still substantial unemployment among those who left school in the last 18 months, and that this goes unrecorded in the official figures?

Of course we are concerned about the unemployment figures, but of the 500,000 children who left school in July only 40,000 have not now found jobs. We regard that figure as still too high, and hope that schemes like the school leaver recruitment subsidy will substantially affect these figures shortly.

Is my hon. Friend satisfied with the speed with which applications from local authorities and others under the school leaver job creation scheme are being dealt with?

Local authorities have made a very good response, and we have approved 178 projects, creating 3,000 new jobs. This is a pretty rapid response to the initiative of the Government and the Manpower Services Commission.

Will the Minister now answer the Question put by my hon. Friend the Member for Hazel Grove (Mr. Arnold)? The situation in the North-West is not as good as that in other parts of the country, so could he or his right hon. Friend make particular reference to this region, to reduce the number of school leavers who are still unemployed?

I recognise that this region has possibly the greatest problem of any region in respect of school leavers, but it has been made a special development area and we hope that the measures that we have already announced, together with extra training facilities, and so on, will have a substantial effect on these young people's prospects.

Is my hon. Friend aware that these measures have had no substantial effect on the unemployment of school leavers on Merseyside, many hundreds of whom face a very dismal and bleak future? Will he take special and specific action in this region to ensure that these children have a prosperous employment future?

I accept that some of the prospects of young people in the North-West and Merseyside are grim, but they would have been very much worse if measures introduced by this Government had not been implemented. They have not been in operation for very long and I think it would be better to wait for a month or two to see how they work.

Is it not a fact that young people who left school, had a job for only a week or two and then became unemployed, are not included in the unemployed school leavers' figures? Is it not inaccurate to suggest that only 40,000 of the 500,000 school leavers of July are still looking for a job, because the 40,000 relates to those who have never had jobs? Many others are now unemployed. Will the Minister give an indication of the size of the youth unemployment problem?

It is true that some young people who left school and then lost their jobs will not be shown in the figures. I have tried to give figures which are properly comparable with those of previous years, and there has been a record reduction in the number of school leavers unemployed in the last two months.

Disabled Persons

5.

asked the Secretary of State for Employment if he intends to amend the employment quota scheme for disabled workers.

I plan to announce the Government's proposals on the future of the quota scheme later this month.

Is my hon. Friend aware that proposals to change the scheme will be welcomed by disabled people who have come to regard the present scheme as a cruel farce? Will he ensure that his proposals are more enforceable and effective than the present system, under which only 40 per cent. of the firms bother to meet their obligations? Will he also ensure that those firms who are in breach of the law are prosecuted?

I share my hon. Friend's concern about firms who do not comply with the quota scheme, though it is important to bear in mind that firms do not have to comply with the quota if they are given permission from my Department. I am sure that my hon. Friend and I are both concerned about the 20 per cent. of firms—totalling 10,000—who neither employed their quota nor obtain the necessary permission from my Department. I authorised prosecutions recently. In one case I was described as a bureaucratic madman and in another the defending solicitor said that he could not understand why his clients were being prosecuted. With regard to possible changes in the scheme, I think it would be unwise to anticipate the statement that I shall be making.

With regard to the 60 per cent. of firms which employ fewer people than their quotas, have the Government given any thought to a form of tax relief to firms to encourage the employment of disabled people?

Financial incentives have been considered by the National Advisory Council for the Employment of the Disabled. I repeat that it would be unwise for me to anticipate the statement that I shall be making later.

Is my hon. Friend aware that it would be disastrous for unemployed disabled workers if we simply dropped the quota scheme and left a vacuum? Does he agree that the Government have a clear duty to make the scheme work effectively, or replace it with a better scheme? Is he aware that the best way of solving the problem would be to make every employer pay for the 3 per cent. quota, whether he employs disabled people or not, because then the boot would be on the other foot and instead of thousands of disabled people begging employers to take them on, employers would be looking for disabled people to work for them?

There have been statements in the Press about the future of me scheme that my hon. Friend may eventually find to have been misleading. With regard to the other part of his question, he will know that this was one of the options canvassed in the consultative document of 1973, and it has been examined by the National Advisory Council. While the problems are easily identified, the solutions are more difficult to find.

Railway Employees

7.

asked the Secretary of State for Employment whether he is satisfied with the operation of the closed shop now in force for employees of the British Railways Board.

The operation of a closed shop agreement between the British Railways Board and railway unions is a matter for the parties concerned in the industry.

Does the right hon. Gentleman not think that it is a serious erosion of individual freedom that all future entrants into the employment of British Rail will have to belong to a union, regardless of any deeply held religious beliefs or grounds of conscience? Will he confirm that if any present employees of British Rail are dismissed for refusing to join a union, they will be entitled to unemployment benefit?

The hon. Gentleman has given a misrepresentation of the agreement reached between British Rail and the unions. It is a post-entry scheme, in any case. The agreement, in general, has taken into account decisions made by this House on the subject, and that is the right way for them to proceed. No dismissals of British Rail employees have yet taken place, so the question of eligibility for unemployment benefit does not arise.

Perhaps I may add, in view of the grotesque misrepresentations that have appeared in the newspapers over the last day or two, that I have no powers over the decisions of the Commissioners and others concerned with the payment of unemployment benefit. That is quite right. It does not enter into my powers or province in any way. A leading article in The Times today, for example, was based on wrenching a single sentence out of a whole letter, most of which the paper did not print. On the basis of that, they called me a fascist. That shows the discrimination and taste of Dr. Goebbels.

Is my right hon. Friend aware that many of us on the Labour Benches—I would hope all of us—take strong exception to the editorial in The Times today? To suggest that my right hon. Friend is a fascist, or anything like a fascist, is grotesque, as he says. Is my right hon. Friend aware that many of us, including me, have suffered over the years by being dismissed by employers and not receiving unemployment benefit, quite wrongly, because we have had an argument with a foreman and have been dismissed on the basis that we committed industrial misconduct? Is my right hon. Friend aware that we need to consider the matter with a view to protecting workers, rather than the other way round?

I am grateful to my hon. Friend for what he said. I fully agree that die circumstances in which unemployment benefit is paid are nothing to do with the other question. The two matters are entirely distinct. For anyone to try to push them together is a misrepresentation of the facts.

When the right hon. Gentleman talks about decisions made by the House, is he not aware that we expressed concern, certainly on the Opposition Benches, during the passage of the Trade Union and Labour Relations Bill and then during consideration of the amending Bill, about the erosion of personal liberty to which his measures were leading? In view of the great anxieties in the nation as a whole about the erosion of personal liberty, would it not be wise for the right hon. Gentleman to drop the amending Bill?

What I said was the literal fact. The British Rail agreement takes full account of the decisions on the subject made by the House, decisions with which the right hon. Gentleman agreed. Therefore, I do not know what the right hon. Gentleman is complaining about. British Rail took account of all that had been settled. Much misrepresentation goes on about this matter. I understand that the Opposition have agreed that the closed shop should no longer be illegal. Why do they not acknowledge that, if it is a fact? That is what they voted for. They agreed to it, so let them not make these accusations.

We are deeply concerned to ensure that the liberty of the individual shall be protected in trade unions. The proposals which we have put forward for dealing with the matter and which the General Council of the TUC has accepted, can protect the individual as well as trade unionism better than any of the proposals made by the Opposition.

The right hon. Gentleman is quick to complain about misrepresentation by other people, but he does not hesitate to misrepresent the views of the Opposition and many other people on every possible occasion. Is he aware that we have always tried to write into any provisions for the closed shop safeguards for the individual, including proper safeguards for expulsion or exclusion? We believe that there should be an independent tribunal for the purpose, and not the trade union organisation, which will be judge and jury in its own case.

It is not a question of the trade unions being judge and jury in their own case. We have argued the matter many times, and the House has voted many times for the view that we accept on the matter. We believe that those proposals will provide better safeguards for trade unionists than were provided before. The right hon. Gentleman is running away from the simple fact that he and his hon. Friends sought to deal with the matter by outlawing the closed shop. That was proved not to work, and therefore we have sought a better protection for both trade unions and the individuals concerned.

Community Industry

8.

the Secretary of State for Employment whether he is satisfied with the operation of the Community Industry Scheme; and if he will make a statement.

Yes, but if the hon. Member has any particular points to raise I shall gladly look into them.

Hon. Members on both sides of the House will wish to pay tribute to those who have contributed to the Scheme, but is the Secretary of State serious in his commitment to expand it, bearing in mind that the salaries offered to area managers approximate to those offered to personal secretaries in the Civil Service?

I am grateful for the tribute that the hon. Gentleman pays, and I add my tribute to the work of the Community Industry Scheme. I am not aware of any representations on the point that the hon. Gentleman makes, but I shall consider it. I am grateful for the response to the increase in numbers. An extra 1,000 places were announced on 26th November, and I am still considering a further expansion.

Merseyside

9.

asked the Secretary of State for Employment if he will take urgent and specific action to reduce the level of unemployment on Merseyside.

The Government fully recognise the seriousness of the employment problem on Merseyside. It formed a major topic of discussion when my hon. Friend the Under-Secretary of State for Industry and I met the Executive Committee of the North West Regional Council of the TUC on Monday 24th November. Merseyside already has special development area status and is benefiting from the measures that we have recently taken to mitigate the worst effects of unemployment.

Is my hon. Friend aware that those measures are not good enough, and that the level of unemployment on Merseyside is a terrible indictment of this Government? Does he accept that the unemployment situation there is now almost of crisis proportions? Will he give us not words but action to bring down the level of unemployment?

I do not accept that the level of unemployment on Merseyside is an indictment of this Government. The measures to assist Merseyside include an expansion of Community Industry, a vast expansion of training places, from which Merseyside has benefited, the temporary employment subsidy and the school leavers' recruitment subsidy. In addition, there were 90 offers of selective assistance under the Industry Act, which have created or saved 15,000 jobs.

Merseyside has a grim unemployment total at present. It is a serious matter. The Government have taken a number of important measures, which assist, and they will continue to view the matter with great concern.

Why will not the Government give unemployed school leavers the opportunity to create their own jobs, so long as they are for community betterment?

There is nothing to prevent arrangements of a voluntary nature, which I think the hon. Gentleman has in mind. What we have done in addition to that sort of initiative is to create jobs under the Job Creation Scheme and the Community Industry Scheme. One welcomes any initiative to ensure that young people facing unemployment are not also faced with idleness, and that they can do something of use to the community.

Is my hon. Friend aware that, in spite of the Government measures he has outlined, Merseyside has 50 per cent. of the total unemployment in the whole of the North West Region? Is he also aware that the ship repairing and shipbuilding industries face massive lay-offs in the near future, and that Plessey is in the same position? In those circumstances, there will be further lay-offs of many workers in the near future. Does my hon. Friend accept that the projected situation is one of unemployment increasing rather than decreasing, and that therefore the pointed remarks of my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk) are relevant?

We are very concerned about the prospective redundancies at Plessey. At my right hon. Friend's request, the Chairman of the Post Office has put revised proposals to the telecommunications industry which should reduce the level of redundancies.

Some of the other points that my hon. Friend raised are matters for other Departments. There is a vast programme of advance factory development for the North-West and Merseyside. The assistance given under the Industry Act, the other measures that I mentioned and the advance factory programme show that the Government and the country have faith in the ability of Merseyside and the North-West to take advantage of an upturn.

Does the Minister accept that the whole of the North-West is aware of the problems of Merseyside? The Minister has already dealt with the measures which are being taken to help that area. Does he further accept that the more he tilts the balance of advantage in favour of Merseyside, the worse it will be for the intermediate areas of Lancashire, one of which I represent, where the unemployment rate is now 7·4 per cent. and rising steeply, and where the ratio of unemployment to job vacancies is 55 to 1? Will he please assist our area to become a development area?

It is not my responsibility to declare development areas. That is a matter for the Department of Industry. The hon. Lady has a point in that if a great deal of assistance is given to one area it can drain resources from another. I defend the special development area status accorded to Merseyside. As my hon. Friends have said, the area has serious unemployment problems. It is right that the Government should recognise them and do everything in their power to relieve a difficult situation.

Unemployment Statistics

10.

asked the Secretary of State for Employment whether he is satisfied with the accuracy of monthly unemployment figures; and if he will make a statement.

The figures relate to people who register as unemployed. This is a well-defined basis used by successive administrations over many years, and I am satisfied that it should continue.

Is my right hon. Friend aware that the Centre for Policy Studies is saying that the monthly unemployment figures are misleading?

I am aware of the claims made by the Centre for Policy Studies. However, it is the claims of the Centre that are misleading. It is a fact that the Centre misleads when it subtracts large numbers from the published unemployment total and then describes the much-reduced figure as the actual figure of unemployment. I certainly do not wish to discourage intelligent analysis of the unemployment statistics—indeed, my Department is publishing full information to facilitate and encourage informed appraisal of the unemployment position. The basis of our statistics is clearly set out and it is quite untenable to claim that they are misleading. I therefore believe that the Centre for Policy Studies is doing a grave disservice to the proper discussion of this subject by trying to minimise the serious and appalling figures facing us.

Does the right hon. Gentleman not agree that one of the most significant figures in the unemployment statistics is that dealing with the number of vacancies? Is he aware that many employers do not notify local employment offices of their vacancies, and therefore the figure is suspect? What action is the right hon. Gentleman taking to ensure that we get a much more accurate figure for the number of vacancies available?

We are always hopeful that employers will notify us as much as possible, and anything that can be done to encourage them to do so will be of assistance. It would be wrong on that account to think that the figures we publish are misleading. The basis on which they are formulated is known. It is wrong for anyone to suggest that they give a misleading picture to the country.

Does my right hon. Friend not agree that the figures can be misleading, in that they include thousands of people who have had a magnificent golden handshake at 61 or 62 and have no intention of ever returning to work, but who go to the employment exchange week by week to preserve their pension rights? Does my right hon. Friend not agree that this is a contribution to misleading figures that ought to be examined?

I do not think that such people alter the total figure to any significant degree. The Centre for Policy Studies is trying to pretend that the actual unemployment figure can be almost cut in half by the methods it employs. That is a quite false representation of the situation. The figures are serious, and there should be no attempt to minimise their importance.

Whatever the arguments over the detailed interpretation of figures may be, is it not a fact that if we look at the figures we see that unemployment has doubled during the lifetime of the present Government and that it will continue at record levels through next year? Can the right hon. Gentleman give us any indication when it will be coming down?

The figures have certainly risen seriously over the past year and a half or more, just as they have in all other Western countries. In some of these other countries they have risen a good deal further than they have in this country. The cause of the problem cannot be sought solely in events that have taken place in this country. Something can be done to deal with this—only something; I do not want to exaggerate it—by the kind of measures that the Government announced in September and by further measures of that character. I fully agree with those of my hon. Friends who insist that many more far-reaching measures than that will be required to deal with the full unemployment problem. It is to those measures as well as to the intermediate measures that we must apply our minds.

Rhyl

11.

asked the Secretary of State for Employment what is the latest figures of the percentage unemployed in the Rhyl travel-to-work area.

On 9th November the rate of unemployment in the Rhyl employment office area was 12·4 per cent.

Is the Minister aware that that overall figure conceals the fact that male unemployment in the Rhyl area is now 17·6 per cent.? Does he not consider that this provides the justification for at least conferring development area status on this part of North-East Wales? Does the Minister also not consider that the limits to the extent to which the Government can help in such cases are acutely illustrated by the fact that the latest advance factory to be built in Rhyl, occupied by an enterprising firm, employs a total of six people, shortly to rise to 12? In those circumstances, should not the Government do everything in their power to assist worthwhile schemes for creating employment in the area, such as the proposed leisure centre, which is being sabotaged by the Minister's colleague in the Department of the Environment?

I confirm that male unemployment in the Rhyl travel-to-work area is about 17·6 per cent: I agree with the hon. Gentleman that one of the difficulties about new projects when they are brought to an area is that they may be capital- rather than labour-intensive. The measures that the Government have taken to aid recruitment of school leavers and to establish job creation schemes are having some effect upon unemployment in this area, which is emphasised at this time of the year by the seasonal nature of the employment in which some people engage.

Unemployed Persons

12.

asked the Secretary of State for Employment what were the figures for unemployment in October; and if he will make a statement.

16.

asked the Secretary of State for Employment how many people in the unemployment total for October were unsuited to regular full-time work.

The latest figures, for 13th November, show that 1,120,137 people were registered as unemployed in Great Britain. It is not possible to make firm estimates, each month, of the number unsuited to regular full-time work.

So as to avoid confusion in the tragic circumstances that we are discussing this Question Time, will the Secretary of State give his opinion of the figures published by the Centre for Policy Studies for October, which amounted to about half the official published total? Will my right hon. Friend cause his Department to carry out an investigation into the basis on which the Centre arrives at its figures, and will he publish the findings of his Department?

I am grateful for the Questions that my hon. Friends have tabled on this subject. I have sought to give my view and that of the Department. We regard the statistics put out by the Centre for Policy Studies, as it calls itself, as completely misleading. We think that they do not do any service to the present situation. We are fully in favour of having detailed discussion of the unemployment figures, but not for the purpose of trying to pretend that the problem is not extremely serious. It is extremely serious, and we want the real facts to be known.

Will the right hon. Gentleman say whether he regards men who belong to the wrong union as being unsuited for employment? Does he agree that in giving nods and winks to the tribunal that will hear the case of the "Ferrybridge Six" he was acting in a grossly improper way, not merely adding to his efforts to give trade unions excessive power but also attempting to influence the course of a tribunal and deny to those who are denied the right to work even the right to unemployment pay?

I repudiate entirely all the suggestions which the hon. Member made. The only excuse that can be made for his utterance in the House now and that which he has made before

is that he was presumably basing himself on a single sentence or two from my letter which has been circulated by Mr. Nicholson. If the hon. Gentleman had read the whole of my letter he could not, I hope, have sought to give circulation to the complete misrepresentation which he has now repeated in the House. If lie read the whole of the letter—[An hon. Member: "Put it in the Library"] I shall. It he reads the whole of the letter, which has not, as far as I know, been published by a single newspaper in this country, he would not make such misrepresentations.

Will my right hon. Friend confirm that he rejects the view of the Centre for Policy Studies that 250,000 of the unemployed were unsuited for regular employment? Does he realise that many of us on the Government side of the House welcome his rejection of the interpretation of the figures by the Centre and are grateful for his assurance that he will not accept advice from those who seek to minimise the unemployment problem facing this State?

I am grateful to my hon. Friend for calling attention to that claim. It is one of the claims that should be repudiated. It is quite wrong that an organisation should spread the story that several thousands of people are unsuited for regular full-time work when they are looking for work but cannot get it.

Does the right hon. Gentleman agree that the unemployment figure in Scotland is totally unacceptable to the people of Scotland? Further, does he understand that the Government's credibility over the question of unemployment will be severely tested by the decision which they take in connection with Chrysler, at Linwood?

I agree that the unemployment figure in Scotland is intolerable, just as it is in England, Wales, Mersey-side and many other areas. It is very bad in Scotland, but it is very bad in other areas, too.

I believe that the major objective of Government policy must be to take a whole series of concerted measures to try to reduce the unemployment figures. The purpose of part of those measures must be to deal with inflation, which is part of the cause of part of the problem, but there must be a whole series of measures designed to deal with this tragic problem. I am not seeking to minimise it.

Does the right hon. Gentleman agree that he and his Government and his hon. and right hon. Friends are responsible for the state of employment in Britain? Would it not be more honest and less hypocritical of him, if he were to admit that his past policies, the Government's failure to control inflation and the so-called social contract, have been, in large part, responsible for today's unemployment situation, instead of trying to worm out of it by talking about the Centre of Policy Studies?

Even the right hon. Gentleman has a duty to try to understand the problem. If he wishes to arrive at a correct analysis of the problem, he must take into account the very heavy unemployment not only in this country but throughout the Western world. No description of the situation which leaves those factors out of account can be a correct diagnosis. The right hon. Gentleman must understand that.

Moreover, the right hon. Gentleman must understand—this is extremely important—that one of the main causes of the recession throughout the country and the Western world has been the oil crisis and the increase in oil prices and, perhaps even more, the way in which different countries reacted. This country sought to secure a much more sensible policy in reacting than did some other countries. If our advice had been followed, the unemployment situation would have been a good deal more manageable than it has been. However, we intend to take all the steps we can to overcome it.

In addition to what the right hon. Member for Lowestoft (Mr. Prior) has just told us, would he like to say what impact the Opposition's demands for immediate cuts in public expenditure would have on the employment figures?

I think that the Opposition are so incapable of answering for themselves that I do not see why I should try to help them out.

Would it not be more honest of the right hon. Gentleman if he were to admit that at the election only 15 months ago the Prime Minister went round the country saying that unemployment was under control and was likely to fall? Why have not the Government the guts to admit that they were wrong? It is about time they resigned.

I do not know why the right hon. Gentleman should be huffing and puffing so much today. Perhaps he is worried about the possibility of his own unemployment. If he wishes to contribute to the debate on unemployment, he should understand the real causes and not be content with his present parrot cry.

Football Matches (Prime Minister's Visits)

Q1.

asked the Prime Minister on how many occasions during the past year he has been invited to pay official visits to football matches.

As the House knows, my right hon. Friend is attending the European Council Meeting which opened in Rome yesterday and is continuing today. I have been asked to reply.

My right hon. Friend receives numerous invitations to football matches played under a variety of different codes, and during the last 12 months he has been able to accept on five occasions.

Will my right hon. Friend ask the Prime Minister, when he is next able to accept an invitation to a football match, kindly to descend temporarily from the directors' box into Spion Kop and go outside the ground, both before and after the game? When he sees the disgusting behaviour of a section of the crowd, as he undoubtedly will, will he consult the Home Secretary, the Attorney-General, the Minister responsible for sport and all the football clubs, not just Leicester City—unfortunately, we are not clear of this trouble, nor is anyone else—to see what can be done to curb football hooliganism?

My right hon. Friend the Prime Minister is never reluctant to leave the directors' box. My hon. Friend will be aware that the Minister of State responsible for sport and recreation set up a working party to look into the question of crowd behaviour. It has already issued a number of recommendations to league clubs and will shortly be reviewing the progress that has been made. In cases where its recommendations have been fully implemented, the frequency and seriousness of incidents has been substantially reduced, and the measures taken by British Rail and the traffic commissioners have eased the problem of transport to matches.

I welcome the right hon. Gentleman's reply to his first "First Division" question; I hope that he avoids relegation.

Is the right hon. Gentleman aware that the Government are likely to designate Category 1 grounds early next year under the Safety of Sports Grounds Act? As the question of finance is critical, may I ask what progress the Government have made with the Pools Promoters Association on the provision of finance from which clubs can help to improve their grounds?

I hope to stay in the "First Division", along with my own team, Leeds United. The Pools Promoters Association and the Football League have already established the Football Grounds Improvement Trust to assist clubs in meeting the requirements of the Safety of Sports Grounds Act and in generally improving their facilities.

Cbi

Q2.

asked the Prime Minister what plans he has to meet the leaders of British industry.

Q8.

I have been asked to reply.

My right hon. Friend is frequently in touch with leaders of British industry at NEDC—where the TUC and the CBI are represented—and on other occasions. Meetings are arranged as necessary.

Is my right hon, Friend aware that in the last 10 years London has lost 500,000 manufacturing jobs, that in my constituency of Edmonton the unemployment rate has doubled in the past year, and that there are parts of London where the unemployment rate is higher than it is in some development areas? When my right hon. Friend next meets the leaders of industry, will he propose, as a matter of urgency, that discussions take place between the Government, industry, the Greater London Council and the trade unions, to see what can be done to tackle the increasing problem of losing manufacturing jobs from London and give it the highest priority?

I am well aware that there are many parts of the country which are not assisted areas but in which the rate of unemployment is higher than in some assisted areas. That is one reason why, last September, my right hon. Friend and I extended the temporary employment subsidy for assisted areas to cover the whole country. As my hon. Friend will appreciate, it is misleading to talk about unemployment levels by constituencies, especially in London, because workers living in one part of London can and normally do find work by commuting to another part. The Greater London travel-to-work area had an unemployment rate of 3·1 per cent. in October—well below the average rate for the United Kingdom as a whole and under half the average rate for the development areas. In the light of that fact, I do not think that it would be right to take special measures to help the GLC area.

When the right hon. Gentleman and his right hon. Friend the Prime Minister meet the leaders of British industry, do they ever ask them why manufacturing industry has failed to invest over a long period? If they do, what reasons do the industrial leaders give? Is the right hon. Gentleman aware that in a recent report of the National Economic Development Office that tried to ascertain the major constraints on British manufacturing industry investment over the last 10 years, the view was put forward that the reason was not lack of finance or lack of markets but lack of continuity of Government policy, because of constant chopping and changing about? What proposals have the Government to bring continuity into industrial and economic policy?

My right hon. Friend the Prime Minister and I, and my right hon. Friends, rarely meet leaders of industry without discussing with them the problem of investment. We get varying replies about the reasons for British industry's comparative failure to invest since the war. As I pointed out in the debate in the House last week, the investment performance of our manufacturing industry has been sadly declining since the Second World War, irrespective of the rate of inflation and of the rate of return on capital. Studies done by the NEDC, which have been considered by the CBI and the TUC, suggest that the so-called stop-go policies have been no more a factor in deterring investment in this country than they have in other countries which have a better record. The question of what is required to promote and stimulate manufacturing investment is an immensely complicated one, and hon. Members on both sides of the House would be mistaken in believing that there is a single and simple answer to it.

Does my right hon. Friend recollect that the Government have said that public sector expenditure must be restrained so that the resources thus made available can be devoted for investment in the private sector? Will my right hon. Friend give an assurance to industry in London that it will receive its share of those resources which are to be made available?

I have made clear on many occasions, as has my right hon. Friend, that the Government intend to give priority to measures that will stimulate investment and improve performance in British manufacturing industry as a whole, and that this will require our giving a lower priority to other areas of public expenditure. I hope that my hon. Friend will support us.

Has the right hon. Gentleman noted the strong expression of belief by the leaders of British industry that the contents of the Queen's Speech did not honour the undertakings given to them at the recent Chequers conference? In view of the grave financial, economic and unemployment situation in this country, what proposals have the Government to restore confidence to British industry?

Of course I have noticed the statements made by Sir Ralph Bateman and those who, no less than the hon. Gentleman, have their constituencies. I also notice that in his speech yesterday Sir Ralph pointed out that next year will be a critical year for Britain. He believes that it could be the year in which we set our economy on that course which it has failed to follow since the Second World War, namely, a steady improvement in our relative performance compared with that of other parts of the world. I hope that we shall have the support of the hon. Gentleman and his hon. Friends no less than that of both sides of British industry in ensuring that next year is indeed a turning point in that sense.

Is my right hon. Friend aware that the leaders of British industry and many other people in industry are concerned about the point of re-entry after the current wage policy? Are the Government plotting a recommended course? When shall we have a statement about it in the new year?

The Government have made clear on many occasions that they believe it would be a great mistake to win one battle and then lose the war. It will, therefore, be necessary to continue an incomes policy following the end of the current wage round. My right hon. Friends and I will be discussing this policy with both sides of the House and industry in the new year. We are confident of reaching agreement on an adequate policy in good time before the next wage round begins.

Will the right hon. Gentleman explain to the leaders of British industry and the House how it can conceivably help confidence in investment in the future for the Government to proceed with the measures they are taking this afternoon for the nationalisation of the shipbuilding and aviation industry?

The right hon. Gentleman, whose integrity we respect, would not believe that it would advance the reputation of any British Government to betray the promise on which they fought and won the last General Election, and we have no intention of doing so.

Inverness

Q3.

asked the Prime Minister if he will pay an official visit to Inverness.

I have been asked to reply. My right hon. Friend has at present no plans to do so, Sir.

If the Prime Minister has no present plans to go to Inverness I am sure that the Chancellor will agree that the Prime Minister—being a kind of movable feast—will eventually arrive there. Will the right hon. Gentleman ask the Prime Minister, when he goes to Inverness, to proceed by the A9, in the hope that that will lead to improvements being made in the road? Will the right hon. Gentleman also tell the Prime Minister that the Member for Inverness, estimable as he may be, was elected by only 32 per cent. of the electorate—

Not only the pavements are cracked. It would be appreciated by the electors of Inverness if a member of the Government could explain the justification for doubling the existing electoral injustice when the Scottish and Welsh Parliaments are introduced.

I shall bear in mind in future that the hon. Member for Inverness (Mr. Russell Johnston) represents well under half his constituents. I am glad to say that that is not so in my case. I cannot guarantee, on my next visit to Inverness, to travel along the A9 road, but if I do so in the immediate future I shall be happy to find and be able to inform the hon. Gentleman that progress is satisfactory, that the first scheme at Almond Bridge, at Perth, is now open to traffic and that work is proceeding satisfactorily on six other schemes, at a cost of £29 million. I should be even happier to be able to inform the hon. Gentleman, as a minority representative of his constituency, that tenders have been invited for a further three schemes, covering 10 miles, and that procedural and technical preparations are going ahead to maintain a steady flow of other schemes.

Which does my right hon. Friend think more important to the people of Inverness—a monster plesiosaur in Loch Ness or a monster bureaucracy in Edinburgh?

I regret to say that I am incapable of deciding the precedence between those two monsters, but I do not believe that it was the purpose of my hon. Friend's supplementary question to suggest that the Government's proposals for devolution will require the creation of a monster bureaucracy.

Is the right hon. Gentleman aware that people in Inverness and the rest of the United Kingdom believe that the Government's White Paper on devolution will prove to be both unworkable and likely to threaten the unity of the United Kingdom? It is almost impossible for the House to keep its self-respect and at the same time implement proposals based on the detail of the White Paper. Will he therefore ask the Prime Minister to withdraw it in toto and start again?

I could scarcely fail to be aware that there is in the House a wide variety of views on the White Paper, but I ask the hon. Gentleman to reflect that, given the known state of public opinion in Scotland and Wales, to maintain the status quo would be quite impossible and undesirable. That being so, some means must be found of satisfying the legitimate desire of the Welsh and Scottish peoples for more influence on their own affairs.

The Government believe that they have found the right balance between a number of conflicting alternatives, and I am interested to know that the two larger Opposition parties disagree totally about the direction in which the Government's proposals are mistaken. But there will be ample opportunity to consider the proposals now that the White Paper has been published, and a further opportunity after the publication of the Bill, in the spring. I am certain that the right way to approach this immensely important problem is at a pace which enables the peoples of all parts of the United Kingdom to express their considered views.

Orders Of The Day

Aircraft And Shipbuilding Industries Bill

Order for Second Reading read.

Before I call the Secretary of State for Industry to move the Second Reading, I should inform the House that already over 40 right hon. and hon. Members wish to speak in the debate.

3.32 p.m.

I beg to move, That the Bill be now read a Second time.

This Bill fulfils a pledge contained in both of Labour's 1974 General Election manifestos. It deals with two industries which are in need of structural change and reorientation to achieve greater efficiency, secure economies, avoid duplication and facilitate rational planning and decision-taking. It deals with two industries, because we believe that a similar prescription is right for each of them. But our reason for nationalising them lies in the particular—and different—circumstances of each industry.

The Bill deals with the real world of the shop floor, the research laboratory and the sales contract, not with arid political generalities or statistical abstractions. It takes into public ownership the main companies making complete aircraft and guided weapons—the British Aircraft Corporation Ltd., Hawker Siddeley Aviation Ltd., Hawker Siddeley Dynamics Ltd. and Scottish Aviation Ltd.

This is a successful industry. It is the largest and most comprehensive aerospace industry in Europe, and second only to the United States industry in the Western world in terms of size and in terms of technical pre-eminence. The companies are profitable.

For all that, however, it is an industry that could achieve more and an industry facing big and immediate problems. The civil side particularly is faced with bleak and uncertain prospects. We need to find better ways to link our undoubted technical excellence to the needs of the market. The case for a merger between the main airframe companies—a comparable argument applies on guided weapons —is very strong and has widely-based support.

The aerospace industry has a string of technological achievements that are second to none—of recent years, for example, the Harrier vertical take-off and landing military aircraft, and Concorde. Its efficiency has been enhanced by progressive concentration into fewer units. Export orders stand high, though much of the recent increase in the figures is attributable to inflation.

As a country, we can no longer afford the luxury of two groups sometimes competing wastefully against each other in world markets, and anyway failing to realise the economies that a merged and rational structure would permit. The companies operate at arm's length and in an unco-ordinated way. Their aircraft and guided weapons overlap. Often they directly compete. Both have design teams engaged in speculative design studies across the whole range of aircraft and guided weapons. Their international collaborations and discussions have until very recently been uncoordinated if not actively competitive.

If the right hon. Gentleman believes that the merger is part of what is required, when, in order not to indulge in political dogma, did he last discuss with the companies concerned, and how often has he had discussions with them on, the the possibility of a merger, even accepting, in the hindsight of the British Leyland affair, that that is the right course?

I intend to develop the argument. I have made only a brief reference to it so far. I have had informal discussions with the industry about this matter.

I am coming to the point. The matter has been under discussion on many occasions, including under the Conservative Government.

There is a need for rationalisation and it is vital that all of us, including workers in the industry, face up to what it means. "Rationalisation" is a word which has acquired overtones of ruthless dismissals, cutting capacity and so on. I do not believe that drastic and sudden action of that kind is sensible industrially and commercially, let alone socially.

But we cannot escape the need to increase efficiency and increase manpower productivity. It is no good believing that we can go on producing what we cannot sell—and sell to the nation at a profit which can be distributed to the workers in higher wages and higher living standards and ploughed back into new capacity.

The size of the industry, like the size of any industry and the future of any individual works, depends ultimately on the ability of the industry to sell its products in world markets. To do that, improved efficiency and productivity are needed.

There are two ways of increasing productivity. One is to sell the same amount as before but with fewer people. The other is to sell more than before, with the same number of people. I hope we can achieve the second of these courses, but a sensibly planned reduction of manpower in full co-operation with the unions, over a period, mainly by controlled recruiting, will almost certainly be necessary. Given that, reorganisation of our resources under unified control, choice of the right projects and the right collaborations, I believe that the aircraft industry in this country can realise its full potential.

Manpower reductions on their own will solve no problems. A merger of the main groups will improve the quality of project choice decisions.

How much lower than its present potential will its full potential be under nationalisation?

I cannot answer that, and the hon. Gentleman knows that it is impossible, given the present state of the market and the world conditions in civil aviation—and in military aviation for that matter—to predict with any accuracy. But it is clear from my discussions with those in the industry that there will have to be some rationalisation, and the hon. Gentleman knows this.

It is absolutely essential to have common criteria and common objectives so that we shall be able to fight for our place in world markets. There is quite sufficient competitive stimulus there without our having to compete with ourselves as well. Added to that, there is the need for rationalisation of production. We shall be able to spread work loads, and it should be possible progressively to ensure that work is organised in the most efficient pattern, utilising skills and specialisms at particular plants.

The hon. Gentleman asks whether they are used to the best advantage. Has he talked to anyone lately in the industry? The people to whom I have talked over the last few weeks are convinced that they are not used to the best advantage.

The record of the aviation industry in world markets is second to none. When the right hon. Gentleman makes such a statement, he really ought to produce evidence to support it.

I am absolutely convinced that there is scope for geographical rationalisation, rationalisation between civil aircraft plants and between military aircraft plants. Some reorganisation will also be possible on the design and development side.

It is arguable how far competition between design teams ought to be stopped, and that is a matter that the new Corporation and the organising committee will have to consider in the first instance. On any basis, however, it ought to be possible for unified control to eliminate wasteful duplication in this area and deploy the resources more efficiently. Again, there will be administrative savings from elimination of duplicated services. [Interruption.]

Sales operations will be able to cover a wider range of consumer needs—[Interruption]—and to do so without having to sell against other—

Order. The right hon. Gentleman has given way three times in 10 minutes, and 40 right hon. and hon. Members wish to speak. I appeal to hon. Members to bear in mind that the fewer the interruptions and the less giving way there is, the more speeches we shall be able to have.

We are absolutely convinced, in spite of the interventions of hon. Members, that a merger between the two big groups offers great opportunities for doing the same things more efficiently and more cheaply, and for selling more British goods by deploying our resources better.

Structural reorganisation has long been talked about. The Plowden Committee of Inquiry in December 1965 discussed what it called "the main question" of
"whether the two existing airframe groups…should be merged".
It dismissed the idea that competition between them was sufficiently strong or useful to have a significant bearing on future organisation. The report stated flatly that
"the Government should not seek artificially to maintain the present two group structure of the industry".
Those words are not from the Government but from the independent Plowden Committeee of Inquiry in 1965, and I do not think anyone could claim that the case for maintaining two groups has strengthened since the mid-1960s.

Most people, I believe, would agree that amalgamation of the resources of the two main groups is urgent and long overdue. I understand that the hon. Member for Henley (Mr. Heseltine) told workers in the industry, when he was Minister for Aerospace, that he had made strenuous efforts lo bring about a merger of the companies.

Put plainly, everyone knows that these firms have to be merged. Everyone knows that under private enterprise it has not happened, nearly a decade after it became clear that it should happen. The private sector in this respect has failed to deliver the goods. That, in a nutshell, is one—and only one—unanswerable argument for nationalisation.

There are other arguments which are equally strong. It has become increasingly clear in the aerospace sector, as in some other sectors, that private sector firms are not able to finance the huge scale of current projects from their own resources. Firms have had to come to the Government for help. That help has been provided through launching aid and special arrangements as in the case of Concorde. We have also financed basic research to the benefit of the industry.

An industry which depends for its existence and progress on public money on this huge scale cannot be called a genuine example of private enterprise. It is much better that this massive public stake should be based on public ownership. Moreover, the provision of money on that scale to private firms means detailed monitoring—it has to be so—to achieve the degree of accountability that we all expect in this House.

If, instead, the public money is channelled into a publicly-owned undertaking, the accountability can be at the strategic, corporate level, and the substance of accountability can be maintained and improved, but the detailed intervention and monitoring by the Government under public ownership can be dispensed with.

It is not the Government's intention that new civil projects by British Aero-space will normally be monitored by the Government in detail at factory level, as has been the case of necessity in the past.

There may be some Opposition Members who are trying to stem off full public ownership. They may ask why we cannot have a kind of Government minority shareholding in the aerospace industry. They may even contend that the Plowden Committee in 1965 suggested that. The hon. Member for Henley shakes his head, but I have heard it expressed in the House on previous occasions by supporters of his party that we could perhaps deal with these problems by taking a minority stake. But it was never suggested by any Minister in the Conservative Government when they were in power. When the Conservatives were in power they could have taken many more active steps to bring about a merger of the two main companies.

We rejected a solution along those lines because there was no indication that it would bring about a merger, because it would not resolve the issue of accountability, because it would continue the confusion of roles—which has bedevilled the industry, for example, in project choice—and because it would not be satisfactory and would not relieve the Government of the need to carry out the detailed monitoring of the projects they support.

I can see right hon. Members opposite who know this to be the case, because they held varying ministerial positions in connection with aviation. The monitoring required has been of terrifying proportions, and we believe that public ownership will at least overcome that difficulty.

But the major factor in our decision is that the workers, expressing their wishes and aspirations through their unions, have made it abundantly clear that they want the industry in which they work to be taken into public ownership.

That goes also for the workers of Scottish Aviation, whom hon. Members from the Scottish National Party claim on occasion to represent. I address these remarks to the Scottish National Party Members because they have an amendment on the Order Paper. The workers have asked to be included within British Aerospace not as a separate corporation but within the general framework, and I am utterly surprised that the Scottish National Party, if it believes that it represents the interest of Scottish workers, can put down an amendment of this kind and propose to vote with the Conservatives tonight.

Would not the right hon. Gentleman consider that the reason for worry among the work force of Scottish Aviation is that the present Government have done nothing to remove many of the problems facing that company? When we consider the vast sums of money, something like £800 million, poured into the English aerospace industry, is it not time that more money was put into the Scottish industry?

First, it is much more money than the hon. Gentleman suggests. If, however, he and his hon. Friends purport to represent Scottish interests, he should know what Scottish workers in Scottish Aviation are saying about this.

We want public ownership, as do the workers in the industry, not because we want to subsidise it. There is no intention to subsidise the building of aircraft which no one wants. We want public ownership because the changes that it will make possible will increase the structural efficiency of the industry, release the energies and loyalties of the workers in it and give them their opportunity to compete in world markets.

The purposes that I have outlined dictate the scope of the companies to be nationalised. The formula set out in the Bill—companies in Great Britain making complete aircraft or guided weapons with a turnover exceeding £7·5 million in the relevant year—excludes helicopters. These are a substantially separate business. We do not judge that there would be significant advantages in terms of economies or increased flexibility from including helicopters. For similar reasons we have excluded firms such as Britten-Norman making light aircraft and Short Brothers and Harland, which in the Government's view is best handled within the context of the Northern Ireland economy. As regards equipment and avionics manufacturers, we do not feel that there is a strong case at this stage for amalgamating any of them with the airframe manufacturers.

As I have explained, the main objective of nationalisation is to achieve a structural reorganisation of the airframe industry. On the other hand I emphatically do not believe that it is sensible to put statutory barriers in the way of future acquisitions if at some future stage, in the view not only of both parties but of the Government, it seems sensible in the conditions then prevailing for some specific activity to be brought within the Corporation.

That is the case for nationalising aircraft manufacture. The case for doing it is clear and convincing.

No, I cannot give way. I had given way on three occasions when you, Mr. Speaker, reminded the House that more than 40 right hon. and hon. Members wanted to speak, and I have given way again since then.

The case for nationalising the shipbuilding industry is equally compelling. The intention of this Bill is to take over all the main companies in Great Britain engaged in shipbuilding, ship repairing and slow-speed diesel marine engine building. These three sectors have a long tradition.

The shipbuilding industry provides a balance of payments benefit of around £200 million each year. Although it is not, in national terms, a major employer, in the main shipbuilding areas—which are all in assisted regions—whole communities depend on the industry for their livelihoods. Often it has a high technology content—for example, in naval ships or in the offshore drill ships now being built on Clydeside.

The history of British shipbuilding over the last 20 years has been, I am sorry to say, one of decline compared with the substantial expansion and progress of yards abroad. Launchings of merchant ships have fallen from 26 per cent. of the world tonnage output in 1955—20 years ago—to less than 4 per cent last year. Over the same years world output has grown at an annual rate of just over 10 per cent. each year while British output has actually declined, from 1·41 million gross registered tons to 1·12 million tons. Our output is one-sixteenth that of Japan. It is half that of Sweden and Germany. Britain is the only major shipbuilding nation not to have achieved any growth in output in the last 20 years.

But it is not only total output which has remained static. Since 1968 output per employee in British yards, despite some significant investment projects in the same period, has also remained virtually static while in all our major competitors it has increased between 20 and 90 per cent. That disparity is largely the result of poor investment.

Since 1966 a total of £299 million has been given or committed by the taxpayer to United Kingdom shipbuilding to promote reorganisation and new investment in the industry. That figure excludes investment grants, regional development grants and other assistance given to industry generally on a non-selective basis. Only the aircraft industry, in the private sector, has received more taxpayers' money.

Moreover, the claims on the public purse from the shipbuilding industry are likely to continue and to grow further.—

No. I have given way on too many occasions already.

What I have just said was acknowledged in an article in the Economist on 6th June last year, which said:
"it is almost impossible for shipyards to raise capital, and the main reason for this is the poor reputation of the industry….Government finance is therefore essential if the industry is to survive the decade."
Certainly a large proportion of the money which has been given has gone to three companies already under Government control—that is, Govan Shipbuilders, which, we fondly recall, was nationalised by the previous administration, Harland and Wolff, and Cammell Laird. The support provided by successive Governments to keep these companies going on social grounds, to achieve viability in the long term, was necessary because of the weaknesses identified generally in the Geddes and Booz-Allen Reports into the industry.

Although there are, of course, exceptions, in general the shipbuilding industry is still suffering from outdated facilities, bad labour relations, weak financial control, low productivity and late deliveries.

New investment per employee is higher in every one of our competitor countries. For example, it is twice as high in Germany, five times as high in Japan, and seven times as high in Sweden. Output per employee also is lower than in any other country.

The underlying causes of the industry's problems can be traced to its fragmented structure and the failure of the individual shipbuilders to act together in a co-ordinated manner to match the power of their main customers and of their competitors. In general, shipbuilders have found it more difficult to take intiatives in marketing and design.

Another factor has been the excessive concentration by managers on production, at the expense of marketing, financial control and industrial relations. We build ships of as high quality as any country in the world, but we are unable to make sufficient profits partly because of our shortcomings in the commercial side of the business.

The Geddes Report in 1966 clearly highlighted the shipbuilding industry's problems. As recommended in that report, the Shipbuilding Industry Board was set up to encourage the necessary rationalisation and new investment in the industry. In its existence, which came to an end in December 1971 when the previous administration decided that they could not continue that assistance, the SIB gave some £19 million in grants and £18 million in loans to the industry, and several major mergers took place. Yet when Booz-Allen and Hamilton investigated the industry again in 1972–73 they found almost exactly the same shortcomings and failures as those identified by Geddes. The necessary changes simply cannot be achieved within the existing fragmented structure.

We believe that the shipbuilding industry should make its full contribution to the economy, justifying the use of the resources provided for it. Some of the companies to be acquired do this already. It is my hope that they will act as catalysts to change in the other companies which will be vested in the Corporation. Nationalisation offers an opportunity to make a fresh start in the industry.

I shall give way to the hon. Gentleman because he wants to make a shipbuilding point and I have not given way on that subject.

If the only criterion on which the right hon. Gentleman plans to nationalise the shipbuilding industry is its relative weakness, will that not apply to ship repairing where economies of scale do not come into the matter and the companies concerned might be profitable?

The weaknesses of ship repairing are similar to those of shipbuilding. I intend to make that point clear later. We are trying to save the shipbuilding industry and, for that matter, the ship repairing industry. The figures of investment by our major competitors are devastating and, I am sure, will convince the hon. Gentleman that it is necessary to call a halt now so that we can save something of the industry. Nationalisation will give us that opportunity.

It is agreed by all concerned, including the Shipbuilders and Repairers National Association on behalf of the existing management, that what is needed is a strategy for a co-ordinated national shipbuilding policy. That will enable the shortcomings and difficulties to be dealt with on an industry-wide basis. They are not at the moment dealt with on an industry-wide basis. Benefits could be derived from a combined approach to export markets, collective forecastings of demand trends, co-ordinated research and development and the co-ordination of operating plans between the different yards.

Nationalisation will also ensure that the public money which will no doubt be needed by the industry over the next few years will be forthcoming to make sure that we have an industry with proper public accountability so that the rationalisation of the structure can go ahead in a proper manner. I must stress that, as hon. Members who come from shipbuilding areas will certainly appreciate, we do not accept that nationalisation is necessary as a soft option. If it were, we would have proceeded in this way much earlier. I am absolutely and utterly convinced that if we are to save shipbuilding it will be on the basis only of public ownership. Without nationalisation we shall miss the last available chance to put the industry on a better course for the future. That better course must include everything, including management and labour relations.

The Corporation will be required by Clause 2 of the Bill to have full regard to the need to promote industrial democracy so that the workers will be entitled by law to be involved in the decisions which affect their livelihoods. The present relationship between workers and management is one of conflict, and it must now be placed on a more constructive basis. The unions themselves will have to contribute to this process.

It is no use the hon. Gentleman just blurting out "British Leyland". He had responsibility in the previous Government for the shipbuilding industry and contributed very little to try to smooth out some of these difficulties.

We must find ways for the unions represented in each yard to work more closely together and ensure that close links are maintained between the workers in the yards and the national bodies involved in the future planning of the industry.

What applies to shipbuilding equally goes for ship repairing. PA Consultants, reporting on the ship repairing industry, highlighted problems remarkably similar to those of the shipbuilding industry and found that there was insufficient investment, outmoded facilities, poor labour relations and late deliveries, all of which combined to make some shipowners prefer to repair and refit their vessels abroad. PA pointed to the need for rationalisation, recommending that there should be one major repairer to each main estuary.

I know that my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) has raised this matter time and again. I hope he will forgive me if I do not give way. I have already given way a great deal.

I do not want to be discourteous to hon. Members on either side of the House. I have given way a great deal and I do not think that I ought to give way further.

To ensure that the necessary changes occur, we propose taking into public ownership the larger ship repairers situated on the main estuaries.

Moreover, in many instances shipbuilding cannot realistically be separated from ship repairing.

No, I will not give way. I understand that 40 hon. Members wish to speak in the debate. I have already given way many times. I think it would be best if I were to get on.

Several shipbuilding companies carry out ship repairing activities. Most of the ship repairers listed for acquisition are in the same group as shipbuilding com-panies—all but six of the 12 listed—and are closely integrated with them, exchanging labour, and with the repairers doing the outfitting on new ships.

The Bill also provides for the acquisition in Great Britain of the builders of slow-speed diesel marine engines whose fortunes are completely bound up with those of the shipbuilders.

I cannot give way further. I am sorry. I usually give way freely, and I have already done so this afternoon. However, I must get on.

No. The Bill also provides, as I said, for the acquisition in Great Britain of the builders of slow-speed diesel marine engines. The performance of marine engine builders has not been outstanding. Apart from Doxford, all the engines built are foreign-designed and made under licence.

On a point of order, Mr. Speaker. I am sorry to do this, but I understand that 40 hon. Members wish to take part in the debate. Many hon. Members who have no intention of trying to speak in the debate may wish to raise important questions on the points made by my right hon. Friend. For example, my right hon. Friend has raised a point of information. I, too, would like to raise a point of information but am unable to do so because my right hon. Friend refuses to give way. Surely we are entitled to put points of information, not Committee points. For example, why have some firms been included and others not, despite arguments about one major firm in an estuary?

I must be permitted to deal with what has been said. The House is in a difficulty. There are constant complaints about the length of Front Bench speeches. I constantly hear hon. Members complain that they cannot get in because the Front Bench speakers have taken an hour or so. The Secretary of State has already given way six times. If he goes on giving way, his speech will last for an hour. It is for him to decide, but he has my support if he does not give way.

On a point of order, Mr. Speaker. Are we not in order to ask why firms which were included in the first Bill—

Order. If the hon. Gentleman were to catch my eye during the debate, he would be in order in putting that question.

I have already been speaking for about 35 minutes and I still have some way to go. I am not normally discourteous to my hon. Friends, or to hon. Gentlemen opposite for that matter. I usually give way freely.

I was referring to the builders of slow-speed diesel marine engines. The inability of individual companies to act together—for example, to develop facilities for making their own equipment or to support research—has been a weakness contributing to poor performance, and it is one which ought to be overcome under public ownership.

In addition, the closer integration with the shipbuilders which nationalisation will facilitate will enable the engine builders to schedule their production more efficiently and to become involved in the total engineering of the ship to the mutual benefit of themselves and the builders.

There will be many matters of importance and complexity to be discussed when the Bill goes into Committee, as I trust it will, if the House gives it a Second Reading this evening. I have no doubt that the Opposition will wish to deal with such matters as the compensation terms, public accountability and the important provisions for industrial democracy in great detail.

We are taking these industries into public ownership at a time when both of them face grave difficulties. The world civil aircraft market is depressed and has been for some time, and no early relief can be expected. However, the civil market will improve. There will again be more promising opportunities. The new Corporation will be ready to make the most of these.

The aircraft industry has unique resources, but it has great problems and some structural weaknesses. Public ownership is the way to resolve these weaknesses and give the aircraft industry a new opportunity to find and fulfil its proper role in the country's economy.

The prospects for shipyards throughout the world are bleaker than perhaps at any time in the past 20 years. The demand for new merchant ships, especially oil tankers, has slumped to almost nothing. Existing orders are currently being cancelled. Many ships are being laid up. New orders for all types of vessel will be very hard to come by. Shortage of orders will, if present conditions persist, start to become critical and many British companies will find themselves in difficulties when they seek to obtain orders by the middle of next year. The prospects for new merchant ship orders remain poor.

During the first six months of 1975 the tonnage of total orders world-wide was less than the tonnage of tanker orders cancelled. Japanese yards are now quoting prices of new orders that are below the price a United Kingdom shipyard would need to break even, and Japan is obtaining the great majority of the available orders. It will be more important than ever for the British shipbuilding industry to become fully efficient and competitive in the present situation.

Many new major yards are still coming into operation in developing countries such as South Korea, Brazil and India.

It will be of paramount importance for the new Corporation to overcome the weaknesses that it will inherit as a task of great urgency. It is vitally important to thousands of workers especially in assisted areas—the weaker economic regions of Britain—that we succeed.

The shipbuilding industry, together with the closely related ship repairing and marine engine building industries, is faced with deep-seated and longstanding difficulties which have combined to put the industry in the state in which we find it today. We have seen that private enterprise has proved incapable of eradicating these difficulties and failings. In an article published in the Economist recently it was said that public ownership was now the last hope of the industry if it was to survive. It must be made to work, and I hope that all concerned with the industry will do all they can to ensure that it does

No. Our proposals for the shipbuilding and aircraft industries are part of the Government's programme to instigate and encourage new investment, to restore British industry to a competitive position in world and home markets. They, too, are part of our objective of changing the structure of British industry and of ensuring that it is more responsive to the needs of our economy.

Above all, the Bill helps to fulfil our aim of bringing about a fundamental and irreversible shift in the balance of wealth and power in favour of working people and their families. It is in that spirit that I commend the Bill to the House.

4.15 p.m.

Last week the House debated the generalisations of the Government's latest strategy for industry. Today is a day of reality, because the Labour Government, faced with the problems of two totally different industries, have one, and only one, response—nationalisation. They have failed to appreciate what is now apparent to the entire nation; namely, that, far from solving the intransigent problems of industry, the process of transferring ownership to the State actually worsens the situation. It brings change more slowly and not more quickly but just as inevitably at a cost which is totally disproportionate to the illusory benefits which are claimed on its behalf.

Every speech over three decades that we have heard from the Government Dispatch Box could broadly have been couched in the same language as the Secretary of State has used today. There has always been the promise, but when it is matched against the reward and the performance of the nationalised industries, the Government, far from being more responsive to the nation's needs, are less responsive.

The current losses of the nationalised industries are £1,000 million a year. I shall put it more graphically. Half of the tax paid on the profits of every company in this country now go to subsidise the nationalised industries. To put it another way, approximately half the wage of every employee in the British Steel Corporation is paid by the taxes levied on fellow workers in other industries. A total of £3,750 million worth of capital has been written off in the nationalised industries since the war. Put more realistically, it means that of our National Debt 7½ per cent. consists of capital transferred from the nationalised industries which they are unable to service and which the general taxpayer now has to service at an annual cost in the region of £270 million.

Every time we have listened to these proposals we have been promised reform and success. It was the Prime Minister who told us of the proposals to nationalise iron and steel. He said:
"In the view of the Government the economic problems of the country cannot be solved, nor the industry enabled to make its full contribution, except on the basis of full public ownership."
Every time the consequences have belied the promise. This year the British Steel Corporation is expected to lose £300 million. So it will always be, because the assumptions upon which the claims are made are wholly fallacious. It is the tragedy of this nation that what is self-evident to other advanced industrial competitors is beyond the comprehension of half the Labour Party to understand, and beyond the will of the other half to resist.

I turn to the specific Bill which we are asked to read a Second time today. The Bill breaks new ground in a number of ways. First, it is without precedent for two wholly dissimilar industries to be nationalised in one Bill. Secondly, it is without precedent for two industries to be nationalised in a one-day debate. Thirdly, it is without precedent for 43 companies to be nationalised by one Minister. Fourthly, it is without precedent for 140,000 people to be transferred from the private to the public sector without any but the most slender of reasons.

The process is clear. The more indefensible the legislation becomes, the shorter is the parliamentary process, and the further into the economy the State progresses, the more extensive are the powers it takes at every step it advances. It creates the platform from which to spring the subsequent leap. If anyone was deluded for one instance about the outcome of the Chequers exercise, let him or she look no further than the deliberations this afternoon. When the phrases of the so-called new industrial strategy have long grown cold, the reality of this legislation will remain.

I want to deal with the Bill as it applies to the manufacture of aircraft and aero-space equipment. There are five reasons that could be put forward to support such a concept: that the industry has failed the nation; that, because the industry sells a substantial part of its output to Government or nationalised bodies and receives development support, it should be publicly owned; that there is a long-term strategy that can be pursued only in public ownership; that it is the intention of the Government to run it down; or that it should become possible to abandon the monitoring which the Civil Service has hitherto had to maintain on the private sector.

Let me deal with the last two of those reasons, because they are the two that I did not anticipate when I was thinking of the Minister's possible advocacy this afternoon. One of them is that it is the intention of the Government to run down the industry. What an extraordinary posture for a Secretary of State for Industry to bring to this House; to tell the industry, its employees and its new management, that the strategy of a Labour Government is to help in dismantling the industry as effectively as possible! What an advertisement for the salesmen of British industry travelling across the world to be told that the activities of the Minister behind them are actually to produce a lower level of industrial support for their activities! What a concept that now that the public is going to take on the industry it will be possible to abandon the monitoring process whereby the Treasury and the Department of Industry probe into every last detail of the activities of the private sector in this industry!

Does the Secretary of State honestly believe that? Does he for one moment understand what civil servants are doing to the steel industry or to the energy industries? They are crawling over them day by day. No worthwhile decision is made in those industries unless it is approved by the Treasury or the civil servants at the Department of Industry. Indeed, the whole essence of the Prime Minister's argument in favour of the controls of the National Enterprise Board is that the Treasury would be there to keep a watching eye on what it was doing. The argument that suits the Secretary of State is to come here today and say "Do not worry. Monitoring is no longer in fashion; it is out of date. We shall pass control back to the management that we shall appoint in place of the free enterprise management".

The pious thought will last as long as the first crisis. The first crisis will bring a demand from the Secretary of State for Industry for cash, and the Treasury will respond with the ruthlessness with which it controls all the rest of the public sector. Anybody who has ever been in government will know that.

However, there are the first three reasons. By no argument that I have ever heard can it be supposed that the aerospace industry has failed this nation. In the last 10 years the industry has contributed £3,300 million to exports. In 1974 it achieved a record export total of £600 million. In the first 10 months of this year it has reached the even higher figure of £653 million, and I understand that an additional order worth £180 million was placed today.

In the last 10 years the British Aircraft Corporation and Hawker Siddeley have contributed more by way of tax on profits than was contributed by the whole of the nationalised industries put together. Throughout the period from 1955 to 1973 the net return on assets in the nationalised industries was in the range of 2 per cent. to 6 per cent. per annum. In the private sector as a whole it was 19 per cent. In the British Aircraft Corporation in 1973 it was 26 per cent. In the aerospace division of Hawker Siddeley it was 30·8 per cent.

So let us not hear any more about "failing the nation".

The second argument depends on the assumption that where the State is a major customer or a significant contributor—

Order. If the hon. Gentleman is not giving way, the hon. Member must resume his seat.

The second argument depends on the assumption that where the State is a major customer or a significant contributor of development finance, it has some moral or political right to ownership. It is an argument, I understand, of particular charm to the Left but of sinister foreboding for the rest of us—for it is relentless. The more that the State buys, the more it owns, but the greater the claims that it can then make.

What began for this industry as a partnership between private sector companies working for the Ministry of Defence or as the joint development of projects with the Department of Industry has now, without notice or agreement, become an arbitrary claim to convert that partnership into take-over. Once the aircraft industry joins the airlines and the aero-engine companies, it will be claimed that it is logical that the avionics industry should head the next shopping list. Once shipbuilding and ports are in public ownership, for how long does the shipping industry believe it will remain free? It is a remorseless process. To accept it in any context is utterly impossible on the Opposition side of the House.

The interest of observers and employees in the industry will centre on the future of this industry. The argument that one might have expected to hear from the Secretary of State today is that there is some positive, outward-going purpose in it all, a strategy, a plan or a vision for the future. However, when on 20th October the Secretary of State for Industry was asked specifically what changes would take place under nationalisation which would affect the shipbuilding industry, his answer was not to produce a strategy but to rest on the mere act of nationalisation itself leading to solutions. No answer so reveals the bankruptcy of the legislation.

The reality is that the Government place faith in the change of ownership out of all account with the record of that particular process in the past. They have no idea of how to set about creating a new framework of confidence and opportunity for either of these industries.

Perhaps I may ask, by way of illustration of this point, who will be heading the two new Corporations which have been announced today. Why is it that after two years of preparation the Government are not able to give a single indication as to the men who will take over from the existing management in these companies? May I ask, for example, where the Secretary of State will find men such as Lord Robens, Sir Arnold Hall or Sir Arnold Weinstock, and the guiding influences that they have contributed, or the industrial skills of Sir John Lidbury or Sir George Edwards?

Does the hon. Gentleman deny that most of the shipbuilding companies in this country—not all of them, but most—are sustained only through Government assistance and that without the public money that has been pushed into those companies we would not now have a shipbuilding industry, and certainly not a ship repairing industry? Therefore, is it not logical that if public money is being pushed in to the extent that it is, the public have a right to have control over these industries and to use them in the best interests of the nation?

The hon. Gentleman will be as aware as I am that of the £156 million that has gone into the industry, well over £100 million has gone into three companies which the Government already own, and that the losses rise proportionately to the degree of public support. I doubt very much whether the hon. Gentleman has an argument there.

I believe that Mr. Deputy Speaker will want to reinforce the problems indicated by Mr. Speaker a few minutes ago. We are desperately short of time. This is one of the hardest speeches that anyone has had to prepare, because of its complexity and length. I have no wish to detain the House for longer than is absolutely necessary.

The situation, however, is more serious than that which arises simply because there is now no strategy, or, indeed, no apparent leadership for the future of the aerospace industry. The Secretary of State talks today of the need for an integrated industry. But I had already agreed in 1973 with Hawkers, GEC and Vickers that this should happen. Detailed talks were already being conducted with Sir Henry Benson acting as mediator to speed the process. There was no question of shareholdings or Government finance. There was to be no cost to the taxpayer. It was a great process of voluntary rationalisation. Behind that process two years ago the strategy for the future was clear. Just as we forged a European partnership in space, just as we saw major advances in the creation of an integrated European structure for helicopters, so we had already started discussions in Europe to lay the foundations of the one strategy for our industry that offers a prospect of long-term strength.

The ad hoc, bilateral and multilateral inter-company and inter-Government arrangements that have become accepted in the development of major aerospace projects must now be extended into a more comprehensive agreement that recognises the need for common European civil and military procurement policies.

If Europe worked together for a common strategy, not only could we create a manufacturing base much nearer to the American scale than is now possible, but the strength of that base, backed by concerted procurement, would enable Europe to insist on partnerships with America, or possibly other world manufacturers, that would guarantee a technological presence and a design leadership in Europe which I do not believe to be maintainable in any other way except at prodigious and totally unacceptable cost. As the largest industry in Europe, this must be in our interest. The alternative is to watch other European Governments build up their industries in competition with ours, when in fact we should unite with them in competition with the rest of the world.

In terms of work for our factories—this is where the right hon. Gentleman has totally failed to understand the positive opportunities which lie ahead of our aerospace industry—the gap between what Europe will manufacture and what it will purchase in the next 20 years is measured in thousands of millions of pounds. Our priority should be to close that gap with possibilities of enhanced employment and technological prospects, and that can be done only by pressing on with European integration, which is so obviously in the long-term interest of this industry.

All this was known to the present Ministers when they came to power. They could easily have continued the talks which we had initiated with the companies. They could have pressed ahead with discussions with our European partners. But it conflicted with their nationalisation obsessions. It did not suit their anti-European prejudices. For two years we had a cynical dereliction of duty, when there were no policy, no direction and no initiatives. As they pursued then-narrow dogmatic aims they left a policy vacuum which will have its consequences immediately in additional unemployment, and in the long term it may have prejudiced the viability of the British civil industry.

I should like to turn now to shipbuilding, ship repair and marine engine companies listed in Schedule 2 of the Bill. The fact which the House should be debating is that world over-capacity in this industry is reckoned to be of the order of 40 per cent. to 50 per cent. Certain low-cost countries—the Secretary of State knows them; he listed them; Korea, India and Brazil—are expanding that capacity. The question, therefore, is: what is the likely future role of our shipyards? Immediate answers present themselves, but none of them will be advanced by nationalisation and many of them will be positively impeded. Particularly is this so because the answers differ from shipyard to shipyard, company to company and from the major industry to its subsidiary ones. But the present Government for two years have produced no answers of any sort. They have persistently turned down every offer from the industry to start on the difficult reappraisals that are needed. Consequently, the Government have put off solutions and thus have made them more painful when inevitably they come.

The framework of nationalisation will, by its essential political and compromising nature, at first delay and then blur the dawning of reality. Not only will the least efficient parts of our industry not be saved but the strong parts will be seriously weakened.

Take the ship repair industry first. This industry is essentially very competitive. It is dependent on a high degree of salesmanship and entrepreneurial skill, and is one where the reputation for quality of service and turnround to the shipowner is of critical importance. Despite the cyclical depression at this time, the companies in this field, relatively small and highly flexible are better left to flourish and face the problems on redeploying their activities under their own devices.

In the shipbuilding industry there can be no generalisations. The warship builders—Vospers, Yarrows and Vickers—are highly specialised, have good work loads and have every prospect of maintaining their positions. They are amongst the most successful of our yards. Nationalisation to them poses special threats. Overseas Governments will undoubtedly fear the closer relationship which comes from buying their equipment from nationalised yards in a country whose Government are increasingly prone to interfere for political reasons in the list of customers which our industry may supply.

Secondly, the warship builders since 1973 have worked under the discipline of the Carrington policy of specialisation, exactly the sort of rationalisation which one would have thought the Secretary of State was advocating. Will he or his Minister of State, whoever is to reply to the debate, state that the Carrington policy of specialisation still stands, or are we to see an increasingly harassed and politically controlled shipbuilding corporation diverting naval orders to the less specialist yards? That is the way in which nationalised industries have always been pressed to behave in the past, with the consequence that what might in the short term appear to be short-term help for ailing yards will in practice weaken our warship builders' competitive position.

That was the message yesterday in the answer of the Secretary of State when he told us that the specialist policies of the Carrington directive would be up for consideration by the new British Shipbuilders Corporation. Undoubtedly the most emotive argument centred around the capacity which will be available in the construction of the large merchant ships, tankers and bulk carriers. It dates from 1973 when the world boom conditions filled every berth in every nation. It is to understand our problems to remember that much of our capacity was the last to be filled and, therefore, will be the last to become empty. We delude ourselves if we are lulled by any complacency at the present work flow. The real questions must be directed to the reasons why our yards were the last to be filled.

In searching for answers about the future a totally varied pattern emerges. Some of our yards, such as Austin and Pickersgill, have been modernised, have specialised and can look forward to independent trading conditions. Other of the smaller yards have their own specialisations and operate at the smaller end of the market where the number of contracts on offer at any one time is bound to be incomparably larger. Their problems are peculiarly unsuited for centralised nationalisation conducted inevitably in conditions of heavy pressure from politicians and unions. Where this legislation is at its most defective is where it comes to the intractable problems of a world scale for the giant modern vessel. For two priceless years when the order books were full, when something could have been done, the Government have held no dialogue about the future. Now, when the crisis is nearly on us, their only response is to set up a nationalised body. Not one single idea have we heard today of the plans which are to flow from that body, not one idea as to how the industry's performance will be improved. We are not told how capacity is to be reduced, what parts should be maintained, how large an industry this nation can sustain, what cost is involved in doing that, what alternative work could be done.

It is curious that the Secretary of State's one apparent contradiction is that he is in favour now of running down the aircraft industry but is actually trying to build up the shipbuilding industry. I should have thought that the question he should be asking himself is whether there really is a future for this country in trying to compete with virtually all the underdeveloped world in trying to take on the most important work of this sort, and whether the nation would not be better off in assessing where we have skills and where there are particular techniques on which we should concentrate. I strongly doubt whether that will lead us into the construction of heavy shipping in the shipyards which we shall need to modernise at prodigious cost.

Order. I believe the hon. Member was here when Mr. Speaker made his appeal. There is no sign that the hon. Member for Henley (Mr. Heseltine) is giving way.

The shipbuilding industry has been urging the Government to discuss the issues for nearly two years. But once again dogma has been accorded a higher priority than industrial rationalisation. The urgent problems which have been evident throughout the period have not only not been solved; they have not even been discussed. The threat of nationalisation destroyed the industry's ability to pursue its own solution. The delays have exacerbated the problems, and when it comes to the machinery itself it is the least suited and most expensive for the job. As I pointed out to the hon. Member for Liverpool, Walton (Mr. Heffer), let us never forget that of the £156 million worth of Government money which has gone to shipbuilding since 1965, £115 million went to the shipyards with a high degree of Government ownership and involvement.

These were the private companies that had failed. The hon. Gentleman knows that very well.

The question which we should ask is whether it would not have been better to redeploy our assets rather than pour our money in where we have already lost it. It is incredible that every time we have a debate on industrial policy, hon. Members regard it as axiomatic that because a party in Government did one thing, that is a justification to believe that it will always do that again in the future. We should learn from our mistakes. If hon. Members opposite were a little more flexible in their approach to the mistakes they have made, we might be able to find a basis of a dialogue about industrial policy which would give industry the consistency of approach it requires in order to flourish.

I always give way whenever we have debates, but I am very concerned at the length of this Bill and its complexity and the fact that a number of hon. Members wish to speak.

I am concerned about two aspects of compensation—the effect of the terms on individual companies and their effect on our general economic situation. The terms proposed to companies are more like confiscation than compensation. During the six-month valuation period to the end of February 1974, share prices were artificially depressed because of the Yom Kippur War, the state of emergency, the three-day working week, price control, dividend restraint and, most of all, because of the commitment in the Labour Party's February 1974 General Election manifesto that the industry would be nationalised. When steel was nationalised, there were alternative bases of valuation which provided a reference to periods outside the immediate threat of nationalisation. The compensation terms now bear no relation to the asset value of the companies concerned. The value of Hawker Siddeley for compensation purposes is just over half its asset value of 1st January 1973. Does the Minister really believe this is fair to the 60,000 direct shareholders and hundreds of thousands more whose savings are invested through pension funds, insurance companies and investment clubs? When the current Secretary of State for Energy announced that Court Line had collapsed and that he was going to nationalise it, he referred to the valuation being based on the special circumstances of the case and, in particular, the past trading record of the company, the future prospects and the net assets. What an incredible position—a bankrupt company can sell assets to the Government at one price while a whole industry can be purchased on terms incomparably less fair and honest under legislation passed by this House.

I am also concerned about the effect on public expenditure. The Secretary of State claimed yesterday that there was no direct effect on demand. That was a wholly misleading view. Compensation will be paid in Government stock, and that will affect the gilt market, tending to increase interest rates generally. The interest payable on Government stock is higher than the return the Government will get from the equity holdings, and the difference means increased public expenditure. Government stock will be given to industrial companies which will have no use for it. They will, therefore, sell it and, in the main, spend the proceeds. Is the Secretary of State seriously suggesting that this is not a pull on resources? At the end of 1967 the sale of steel stock was so great that the then Labour Government had to introduce special provisions to cope with the demand for cash, as opposed to the Government stock they had issued under their legislation. There is no extra pull on resources only when expenditure is matched by restraint elsewhere. To the extent that the money supply is not increased to match the compensation in the Bill, cash absorbed by this stock will not be available elsewhere. So at the very least it is a switch in the demand on resources. All over Whitehall, the knives are out and public expenditure programmes everywhere are under scruitny. The Government's policies in this Bill will affect overall demand in the economy so that expenditure on schools, hospitals and pensions will be the low or inflation will be the higher.

The priorities of this Government are clear. The majority of its members know, the House knows and the nation knows that these two giant bureaucracies will end up just like all the others, but there is no will in the Government to resist the appetite of its extremist Left. It has been said recently:
"People should take seriously fears about the growth of State power especially given the penchant of some socialists for the continual spawning of giant new institutions under centralised control. We should not be in the business of creating endless giant leviathans manned by armies of bureaucrats."
Those are not my words. They were spoken by the Secretary of State for the Environment, though he had to go to Costa Rica to say them.

The contemptible truth remains. After two years of the most cynically opportunist mismanagement of our industrial affairs, the only positive proposals from the Government are yet more nationalisation. I am sick and tired of listening to the Left indulging in its ever more exaggerated misrepresentations about the strike of capital. Its policies deprive industry of funds, its speeches destroy industry's confidence, and its legislation removes industry's freedom. I am appalled at the complacency with which these bleeding hearts and vacuous minds contemplate rising unemployment, the investment collapse and the emigration of our talent, of which this Bill is an encouragement.

This Bill will be fought at all stages by the Conservative Party, and I urge the House to refuse to give it a Second Reading.

4.47 p.m.

This is a measure of industrial archaeology, and the Minister at the Dispatch Box should have been the Minister in charge of museums, galleries and folkcraft.

I support the view already expressed that, apart from the insult to democracy and to this House caused by combining about five major industries in one Bill, it is a monstrous injustice that only one day is being allowed for the debate. This reflects the total failure of the Leader of the House to protect Back Benchers, and the result is that we shall have a shapeless muddle of a debate. Constituents with a vital interest will feel very frustrated at the outcome. There is worse muddle and confusion because these proposals include firms which, even under the last Conservative Government, have not had to put out the begging bowl. They have been successful, yet they will now be confused with a number of concerns which have not been viable and whose future is extremely dubious.

The one modest piece of congratulation I can offer to the Government is on their recognition that the Drypool Group should be split into small groups and that they should seek their future under private enterprise. That is the only feature of this measure which gives us even a minor degree of comfort.

The House is being asked to consider all the wrong questions. The question which the nation has to face, and which will have to be faced eventually by some Government or other, is how far we should continue to commit a skilled work force to the various industries in the Bill, to what extent those industries have a future in these islands, and what their future size and shape should be. The answers to those questions are currently so uncomfortable, owing to decades of delay and cowardice, and particularly in view of the poor state of world demand, that the Government have funked facing them and have simply introduced a Bill aimed at trying to preserve the industries in their existing shape and, as far as possible, with their existing manpower levels.

We on the Liberal Bench reject that strategy entirely. We believe that some very unpleasant but nevertheless necessary questions should have been asked and some very painful decisions taken. It is clear that the industry concerned with building conventional shipping faces probably a generation of gross overcapacity. It has been estimated that if by some appalling stroke all the shipping in the world were to be sunk tonight, world capacity could replace it all within 14 years. In various parts of the world there will have to be sharp reductions in capacity.

We should be asking ourselves whether that is the case for this country too, and whether a skilled and experienced labour force should be allowed to get cracking on much more rewarding industries. Much of the blame for avoiding these painful decisions during the last few crucial years must rest on the last Conservative administration, which, as in the case of Upper Clyde and particularly the airframe industry, dodged the questions by handing out enormous and demoralising sums of taxpayers' money.

Whatever has happened in the past, the time has now come to face up to these problems. We believe that the strategy should be to leave alone those companies within these various industries which have shown themselves to be viable on an independent basis, and that the rest should be enabled by a modest expenditure of public money gradually to adjust. That means running down their activities to a scale which accords with the poor state of world demand.

It is no service to skilled people to tempt them to go on in a particular industry until they reach an age at which it is unreasonable to expect them to retrain. It is very much more the job of the Government to give leadership to such people and to lead them out of industries which have an extremely dubious future, giving them the opportunity, while they are still young enough, to get into activities with much more rewarding prospects.

I take it that it was because of this situation that the National Enterprise Board would not take on either of these industries at any price. Lord Ryder knew that if he were once to touch the shipbuilding, ship repairing or marine engine industries, or the greater part of the airframe industry, his reputation for avoiding lame ducks or for taking on profitable concerns with a viable future would be destroyed. Instead, in a Bill which is extraordinarily bare of any details and which has as few new concepts as the Secretary of State's speech had enthusiasm—in other words, nothing at all—we are asked to give a blank cheque for that old, utterly played-out recipe of nationalisation.

Because the Bill is dodging the real issues and because the solutions put before us have already proved bankrupt, I and my right hon. and hon. Friends will vote against it tonight.

4.56 p.m.

I wish to confine myself to shipbuilding, which probably epitomises more than any other industry the faults with post-war British industry. After the war we had far and away the best shipbuilders in the world. For several years we accounted for about half the total world output. Shipbuilding became one of the greatest boom industries in the world.

What advantage did we take of that? By the time of the Geddes Report in 1965 our share of world output had fallen to 8 per cent. What we forget about Geddes is that its recommendations were based on the objective of restoring that figure to 12½ per cent. with the expansion of British capacity to 2¼ million gross tons. In fact there was no expansion and the recommendations were not fully implemented because the Tory Government of the time, against the wishes of the industry, wound up the Shipbuilding Industry Board.

The position today is that we account for less than 4 per cent. of world output. The Booz-Allen Report came out in 1972. It made several predictions and I shall deal with two of them. It predicted a surplus of world capacity lasting at least until 1980, and it said, which is important in the context of this debate, that this would lead to intense competition not between shipbuilding industries but between Governments. That is the situation we must face in world shipbuilding. It also said that, even if we assumed continuing substantial State support for British shipbuilding, there would be a decline of employment of between 27,000 and 35,000 in 1977. It predicted that there would be one major closure. It is in that position that we have to consider what should be done for shipbuilding.

Twenty years ago in writing about shipbuilding I argued that it should be a national responsibility, but I did not then argue that it should be nationalised. I anticipated the Geddes Report by 10 years. We have to face the fact that Geddes was 10 years too late and that it was sabotaged. I acknowledge that the Industry Act came along with a special provision for shipbuilding, but by then the damage had been done. In this situation it is difficult to see any alternative to nationalisation. Moreover, haphazardly and fortuitously, Government investment in the industry has often taken the course of putting Government money into the least efficient and the least viable yards. That is not always the case, because we have Sunderland Shipbuilders of course.

In this situation, I can see no other course but nationalisation to help the industry. But the troubles of shipbuilding will not be solved by legislation. It provides only an opportunity to give rational aid, a chance for the industry to deal with its problems rationally. I emphasise this because since the nationalisation of Sunderland Shipbuilders the management has expressly declared that things are exactly the same as they were under private enterprise. The shop stewards have expressly declared that they cannot find out what is going on and what will happen. Both management and shop stewards complain of the dead hand of the Department of Industry.

If we give the industry this opportunity, we must do it with more imagination and vigour and recognise the needs of the industry. We must also do it with some flexibility. Last year Austin and Pickersgill offered the Government 25 per cent. of its equity. I discussed the matter and reinforced the firm's case. But the Government would not accept the offer. That shows a rigidity that we cannot afford.

We must recognise that different conditions obtain in different yards. My hon. Friend the Member for Sunderland South (Mr. Bagier) and I have an interest because Austin and Pickersgill pays the highest wages in the country and Sunderland Shipbuilders pays the second highest. We have the most efficient, well-managed yards in the country. The sooner we can get the organising committee set up, with the industry feeling that it is dealing with its own problems, and the sooner the yards' autonomy is acknowledged, the better it will be for everyone.

There is still a good deal to be done if we are not to set out to help the industry too late. With inflation, the cost of a ship now doubles in four years. That is relevant to Sunderland, because we have orders lasting until the end of 1978. The cost-inflation insurance scheme was introduced too late. Prompted by the industry and the precedent of France, I raised the matter several years ago. We have it, but we have it late and we do not have it right. So far, not one policy under the scheme has been signed. We must improve the scheme and extend it. I support the view of the General Council for Shipping that the scheme should be extended to British owners. That would give us a peg to persuade British owners to put more orders into our own yards.

The problem is immediate. We must deal with the threat of the import of shipping. Let us be realistic. The Japanese dropped their prices by 30 per cent. to 40 per cent overnight. We must face up to that. I know that discussions are going on in the EEC and the Association of West European Shipbuilders, and there have been discussions in Tokyo, but something must be done immediately and, if necessary, unilaterally. We cannot afford to allow an unfair challenge to prejudice a basic, essential industry.

I promised to be brief, so I conclude by saying that the Government's steps are inevitable. The sooner the organising committee is set up, the better for everyone in the industry. We have the headquarters ready in Sunderland, and the committee will receive a warm welcome. I look forward to the opportunity in Committee to press upon my right hon. Friend the need for action now to protect British shipbuilding.

Would not this be an opportune time to put everyone's mind at rest with an announcement of where the head-quarters will be?

5.5 p.m.

The right hon. Member for Sunderland, North (Mr. Willey) confined his remarks to the shipbuilding industry. I propose to confine mine to the aircraft industry.

I hope that the Secretary of State will forgive me if I start on a slightly personal note. In recent months he has built up a position of considerable respect on both sides of the House, but the only thing I could respect in his speech this afternoon was his evident embarrassment at having to introduce a double-barrelled Bill concerning two major industries, and the way in which, far from trying to argue or justify the points he was making, he fell back on statements such as "I am convinced", "I believe" and "I am sure", without producing the kind of evidence that we are used to having in the House.

Perhaps half the trouble about our debate stems from the fact that we are talking about ownership. It is a great mistake to think that the owner is the employer. In all businesses the employer is basically the customer. There are two major customers for the aircraft industry—the Government, operating through the Defence Department or the airline corporation, and the foreigner. To a small extent there is also the private airline sector. In judging whether the industry has done well up to date, we must look at the record to see whether it has satisfied the two employers that count, the customer in the shape of the Government and the customer in the shape of the foreigner.

I do not want to revive old controversies about particular aircraft projects, closely associated as I was with some of them. But I do not think anyone would deny that the TSR2 fully lived up to the specifications laid down by the Air Ministry laid down the operational talked about nationalisation easing the choice of projects. That is not so. The Air Ministry laid down the operational requirement that produced the TSR2. Whatever may be said about the TSR2's cost and delay in the programme, it undoubtedly would have been a very successful project compared with the abortive F111. It could have been earning a good deal of foreign exchange today.

The same is true of the P1154, and it is already proving to be true of the Harrier. It was true of the Trident and the VC10, ordered to the specification of the British airline corporations, and aircraft such as the BAC111 and the Skyvan, ordered privately. It is true of multinational aircraft such as the Concorde. Of course, there is room for debate about whether Concorde should have been ordered, but it has met the specifications laid down for it. I am a fervent supporter. The Jaguar has also met its specifications, and it looks as though the MRCA will do the same.

Where the Government are the customer, we have had full satisfaction on both the defence side and the civil side. Where the foreign customer is concerned, the facts speak for themselves. The sum of £700 million is the minimum expected to be earned by the aircraft industry this year. Even allowing for inflation, that is a formidable contribution to our balance of payments.

Until I was about 40 I believed only in intelligence. Since passing that age, some months ago, I have come increasingly to believe in experience. I want to say a word from my experience of this industry which I have seen as a customer at the Air Ministry, and as the intermediary in transactions at the Ministry of Aviation.

What is the object of this Bill? It is—the Secretary of State tells us—to achieve greater control and greater accountability. Let me tell what I experienced in the two offices I held which were directly concerned with the aircraft industry, particularly at the Ministry of Aviation. There I was, on one side, the sponsor of the private industry which the Government now propose to nationalise. I was also the Minister responsible for the two nationalised Corporations, BOAC and BEA as they then were.

I can tell the Secretary of State that I had no less control over the private enterprise sector than I had over the publicly-owned sector. No changes were made in the boards of the private companies without the chairman consulting me or my Permanent Secretary. When it came to any major project, any important change in the project management team was discussed with me, the experts from the Ministry or with the experts from the RAE at Farnborough who helped to monitor the project. The Contracts Branch kept a close eye on all that was going on. We had complete control.

The Secretary of State was pleading the case for a merger of the remaining groups. We do not need nationalisation to bring about a merger. Lord Duncan-Sandys brought about a merger of far more disparate organisations without any nationalisation. He did it purely by personality, influence and argument. I do not believe that the right hon. Gentleman would be unable to do this if he put his mind to it. He may not be as formidable a figure as Lord Duncan-Sandys, but he has quite enough ability and intelligence to bring it about. I have no doubt that the Civil Service would back him.

The liaison between the Minister, the Ministry's top echelons and the company boards over all senior appointments was extremely close, as it was over policy. The liaison on technical management was intimate between the Ministry, the RAE, the firm concerned and the contract branch. I had less control in that respect over BOAC and BEA because I did not have any team monitoring what they were doing. I do not believe that the Secretary of State, as the Minister responsible for other nationalised industries like steel, has any more control over that industry than I had over the privately-owned aircraft industry at the time I speak of.

The privately-owned aircraft industry had certain advantages which will be denied to a nationalised industry. It had greater flexibility in dealing with foreigners. In the credit terms which it advanced and the prices it charged, it was much less subject to political pressure. If the industry is taken over tomorrow the right hon. Gentleman will find that foreign Governments will say that for political reasons he must reduce the price, improve credit terms or extend the length of time over which repayment is made. The private companies also had a stronger bargaining power, not only with the trade unions, which is important—as a partially reconstructed Labour psychology will now admit—but also over sub-contractors. The aircraft industry is dependent on its subcontractors to an extent which has not yet emerged in this debate. There are dozens of little firms throughout the country that make nuts and bolts and spare parts for any big aircraft project. The big groups can negotiate with them on a purely commercial basis. Once they begin negotiating with a nationalised industry the bill is bound to rise. It may be argued that Ferranti made a £5 million excess profit. At least we got it back. There will not be a £5 million excess profit if the industry is nationalised—there will be a £5 million excess loss.

Beyond this, the private firms have a certain amount of money with which they carry out private research. That is how they started the Concorde project, by arranging with the French for the wing of the VC10 to be built in France. That is how they designed a special experimental aircraft to test whether the Concorde shape could be used for slow landing. This was done out of their own money. They have the discipline and the incentives of private enterprise which, leaving aside social and political considerations, are, I think, accepted in all parts of the House as being the best disciplines and incentives yet devised.

Why are the Government doing this? I think it must be accepted that the private enterprise approach is the most efficient economically, leaving aside the other considerations. We do not want to see Marks and Spencer changed into GUM. We have had a look at both and we know how they work. We know that even in France Aerospatiale has not done very well in comparison with Marcel Dassault, although the French Government as the owner of Aerospatiale have every incentive to push things to it. The answer is that the Government are doing this purely for ideological reasons because of Clause 4. Well, we can say of Clause 4 what the American novelist said many years ago; "It all happened long ago in a far-away country, and, besides, the wench is dead."

In the old days, when Clause 4 was first debated by the Labour Party, the owners were largely the managers of a business. That is not the situation today. In today's aircraft industry the owners are the shareholders. They are widely scattered, with the shareholdings being largely in the hands of institutions. Management is independent of ownership and in so far as it is disciplined or responsible to anyone it is to the customer and, therefore, in this case, largely to the Government. The issue is not one of ownership but one of control.

The Government are in the wonderfully lucky position of having it both ways. They have control of the industry as customers and they have the advantages of the private enterprise system in that they are not responsible for its management and direction. The Government have as much control as any Socialist could wish and yet there is enough freedom to satisfy most Conservatives.

I wish that I could let the matter rest there, but I fear that there is another motive in the minds of those in the Labour Party—perhaps not the Secretary of State—who have insisted in manifesto after manifesto on nationalising the aircraft industry. They have insisted upon this despite the employment that it brings.

I found over the years when I was responsible for the industry that there was a deep aversion towards the aircraft industry on the part of many Labour Members. I say that with regret. In many minds the industry is connected with the armaments business. It is also connected with luxury transport, with Concorde, and with money spent on speed and comfort when it might be spent on other things. This is what frightens me. The British aircraft industry is today the leader among the European aircraft industries and in certain respects—such as the murdered TSR2 and, I am glad to say, the living Concorde—it is ahead of anything the Americans or Russians have done.

I have a terrible fear that the aircraft industry may well be sacrificed when it is nationalised by the Government and will become the Cinderella of our industrial complex. For this reason, I hope and pray that all hon. Members on this side of the House, not only in my party but in other parties, and members of the Labour Party will resist, and will take every possible step to defer, the passage of the Bill.

5.20 p.m.

Like the right hon. Member for Brighton, Pavilion (Mr. Amery), I propose to talk about the aviation side of the Bill, but I am sure that he will not expect me to agree with some of the points which he made. The proposal to take the aircraft industry into public ownership will be widely welcomed by the employees in the industry. I say that as a Bristol Member of Parliament who has been concerned with the aviation industry for many years and many of whose constituents are employed on aviation projects at Filton and Patchway.

I congratulate the Secretary of State for Industry on introducing the Bill so early in the Session in order to ensure its passage. Governments have always had a hand in the aviation industry, and they have been key investors by financing successive projects. Many of us want the industry to be taken into public control so that we can decide the way in which the money shall be spent, because we have serious reservations about the way in which the managements of the companies have handled matters.

What the right hon. Member for Henley (Mr. Heseltine) and the advertisements in today's newspapers by the Society of British Aerospace Companies Limited have not said is that the research and development on defence and civil projects has been financed by the Government. None of those projects would have succeeded or been pursued without Government finance. We believe that there must be a measure of public accountability for the way in which the money is spent.

I must, however, express my concern and alarm about the proposed cut-backs in the BAC Concorde work force. I regard Concorde as being the jewel in the crown of the British Aerospace Corporation. Like the right hon. Member for Pavilion, I fully support Concorde, and have done so all the time that I have been a Member.

For far too long we have witnessed cutbacks in industries prior to their being taken into public ownership. I ask my right hon. Friend the Secretary of State not to let that happen with the aviation industry. It tends to put jobs in jeopardy before the Government have had time to set up the new corporation. We are awaiting the certificate of airworthiness for Concorde; the French have already had theirs. It is madness to contemplate the break-up of the Concorde team just before the aircraft goes into passenger service.

I believe that the world airlines will have to operate Concorde once it has gone into service. In spite of the despicable way in which the Americans have treated us by trying to prevent the aircraft from landing at New York, I believe that once it is in service the world airlines will want to use it. If the Government are stupid enough to contemplate the possibility of cut-back or cancellation, our technology will simply be exported to America. That is the only way in which the Americans will catch up in the supersonic race. It would not be the first time that that had been done. There is a distinct resemblance between the MRCA and the TSR2.

Is the hon. Gentleman aware that the British Aircraft Corporation is contemplating making 2,400 workers redundant in the commercial aircraft division as a whole, about half of whom are in my constituency, where some of the hon. Gentleman's constituents work, but the Government have expressed the view to BAC that the number of jobs lost should be 4,000?

I expect that the figure of 4,000 has been mentioned to the hon. Gentleman through the same source as it came to me. I have had no confirmation of it. Perhaps the Under-Secretary of State will have something to say about that.

The Concorde team must be kept intact. We must not lose our nerve. It is no use the Department of Industry or anyone else getting cold feet at this stage after millions of pounds have been spent. All that would be lost if there was a cutback. I appreciate that Concorde has powerful enemies, but I hope that premature cut-backs will be resisted.

Bristol has been the main home of British aviation since the 1920s, and the workers have suffered because they are reliant on Government projects. Their jobs have often been put in jeopardy because of decisions made by successive Governments. I shall not bother the House with giving all the cancelled projects which have affected the work force. The proposal to take the aircraft industry into public ownership must put an end to all that. Men must not fear losing their jobs, and they must not be reliant on the whims of Government and Government money. For far too long we have footed the bill and the money has been frittered away.

I agree entirely with what my hon. Friend has said about Concorde. Does he accept that private companies such as the British Aircraft Corporation tend to blame Governments for all their mistakes but credit private enterprise with all their achievements? Also, does he agree that the workers in the aircraft firms in Bristol whom he and I represent are anxious to see the promotion of industrial democracy as set out in the Bill?

My hon. Friend knows about these problems, as I do. I hope that the question of shop floor involvement in the new Corporation will be discussed fully in Committee. The Bill will go a long way towards banishing the fear of unemployment.

I wish to put two main points to my hon. Friend the Under-Secretary of State. First, does the Department of Industry agree with the proposed cut-back just when we are about to take over the industry and set up the new Corporation? This is a key point, and we should like an answer to it today. Secondly, we should like an assurance that, in the management of the new Corporation, power will not be allowed to fall into the hands of those who have failed so abysmally in the past. I hope that new people will come into the industry. A fresh approach is needed; that is what the employees in it deserve. I hope that in setting up the new Corporation a start will be made on making the industry viable.

5.30 p.m.

It is incredible that when two such important industries are to be taken over by the Government the House should be allowed only one day's debate. There are 42 constituencies affected by the shipbuilding side alone, and their 42 hon. Members will no doubt wish to take part in the debate, and that is apart from the aircraft side. I note the contrast with the Government's procedure on the Hare Coursing Bill, when they found unlimited time to put forward arguments on the chasing of hares.

I shall concentrate on shipbuilding, which is vital for the future prosperity of Tyneside, where nearly half the industrial capacity for shipbuilding is concentrated. Throughout the world the industry faces a crisis greater than any it has faced in modern times. On the one hand, there has been a doubling of capacity to construct vessels and, on the other hand, a halving of demand. That extra capacity has come largely from countries in the Far East which have received considerable Government aid. Japan alone can now build more than all the ships which are likely to be needed in the world for the next few years.

Another formidable challenge comes from the new industry in Korea, where four or five new giant yards are being constructed. The first was built in only 15 months and was designed and supervised by a British company. That is a tribute to the management skill of the British shipbuilding industry, which is often falsely maligned. It is ironic that the first major order obtained by the new Korean yard was for vessels to Govan design for Kuwait. This is an order which would have gone to the nationalised Govan yard if it had been in any state to take on the work. Korea is a hard-working nation, labour is abundant, there are no strikes and the quality of the ships is apparently satisfactory. The pay is £9 for a 44-hour week. The Government make available 80 per cent loans over 15 years at 7 per cent. That is the measure of the competition which faces the British and Western European shipbuilding industries.

When we look at the present state of the British industry we find that the private yards on the whole are in good heart and the naval yards are doing extremely well with up to 80 per cent. of their orders coming from abroad. They are world leaders, but we are already receiving reports that foreign Governments are worried at the prospect of nationalisation and the dead hand of Government applied to naval exports.

The private yards have two problems. One is raging inflation. They cannot be blamed for that. That is the fault of right hon. and hon. Gentlemen on the Government Front Bench. Their second problem is the difficulty they are experiencing in competing in present world conditions, especially when they do not receive Government aid comparable with that received by their competitors. I might add that none of the Western European Governments have suggested that their shipbuilding industries should be nationalised because it is necessary to provide them with aid.

What a contrast when we look at the other side of the British industry! The State-controlled yards tell a horrifying story. Harland and Wolff lost £60 million in a year. Contrast that with Swan Hunter, which made £14 million in a year. The aid committed to Harland and Wolff is now no less than £140 million. The total committed aid for Govan is betwen £50 million and £60 million, which represents £10,000 for every person working in that yard. Tens of millions of pounds of public money are being poured into Cammell Laird. The Public Accounts Committee recently deplored the lack of effective control over public funds put into this yard. That is what is known by the Government as "public accountability". What examples for public ownership; what examples for State control! Yet this example of public ownership is to be applied to the flourishing or reasonably successful private yards.

Let us look at the reasons put forward for the nationalisation of the yards.

The first is that they have failed the nation and taken public money. The total State aid made available to shipyards over the past 10 years and commited for the future is £300 million. Of that, 90 per cent. has gone to yards controlled by the Government. The private companies have had £18 million in loans, which they are required to re-pay in the normal way with interest, and £8 million in grants. A further £4 million in grants in now available to them. So 90 per cent. of that public money has gone to the State-controlled yards.

The second argument is that the private yards have failed to modernise. In fact, the private yards have spent tens of millions of pounds of their own money on modernisation. The picture now is very different from what it was a few years ago. One of the main problems with Harland and Wolff is that money has been poured from a bottomless public purse into an enormous new outfit which is capable of building 1 million-ton ships at a time when no one wants large ships. How wise the managements in the private yards were not to follow down the false path of building huge ships. Had they done so, it would have led to disaster all over the country and enormous redundancy now.

Is the hon. Gentleman advancing the argument that the Government or the Northern Ireland Office should cease to support Harland and Wolff by subsidy?

In a Written Question which should have been answered yesterday I asked the Secretary of State for Northern Ireland whether the Government's policies required redundancy in Harland and Wolff. The Secretary of State has not yet been able to answer that Question.

I am expecting the answer from the Minister. The hon. Gentleman's Government will answer in the near future.

Will the hon. Gentleman answer my question? Should the Government cease to support Harland and Wolff?

I will turn round the question. How much more public money is the hon. Gentleman prepared to put into Harland and Wolff? Is £140 million not enough?

I realise that the hon. Gentleman has been trying repeatedly to get into the debate. I have given way to him twice, and I shall not do so a third time. My view is that £140 million is enough public money for any one shipyard.

During the past year I have been able to visit many of the leading yards in Europe and North America. Without exception, all the yards that have been constructed anew for the building of large vessels have no new orders. In the other yards I found a similar state of affairs to that which exists in our own industry. The yard by which I was most impressed was that of Blom and Voss in Hamburg, whose attitude, efficiency and order book were similar to those of Swan Hunter on Tyneside.

The third argument put forward for nationalisation is that the industry has not maintained its share of the market. That is true, but there are understandable reasons for it. There has been a complete change in world trade and, especially, a change in Britain's world position. Our merchant fleet at one time was two-thirds of the world fleet. With the emergence of developing countries which have their own flag fleets, ours is now only 10 per cent. of the world. That is the fault neither of our shipbuilders nor of our shipowners. One-third of the free world's demand for shipping is not open to competition by our builders because of restrictions imposed by Governments. Our output has remained the same, but the export figures which are so often quoted ignore two important factors: first, the high value of our naval exports in which we are a world leader; and, secondly, the great sophistication of many vessels built in our yards.

The fourth argument is poor labour relations. The House is well aware that labour relations have been a weakness throughout the whole of British industry. They are especially bad in nationalised industries. Those who work for the State after nationalisation do not seem to have found that the change of employer has brought happiness to their lives. If the shipbuilding industry is to be nationalised, one can expect in future that labour troubles will be on a national scale instead of only on a local level, as they have been in the past.

Perhaps the most noticeable feature of a visit to a foreign yard in almost any other country is that management has to deal with only one union and not with the multiplicity of unions which has bedevilled relationships in this country. I shall be interested to know what proposals the Government have for the reform of that side of the shipbuilding industry, about which we have heard not a word. I suggest that no single factor could do more to improve relationships in the shipbuilding industry than a reform of the union structure.

The fifth argument put forward is that there will be greater job security under nationalisation. I ask those who think that: How many jobs have been lost in the other nationalised industries—coal, railways and steel? Anyone who thinks that the industry will be run in future for the benefit of the workers is mistaken. Apart from the naval orders, our industry is entirely subject to fierce foreign competition, and the shipbuilding industry will remain subject to hard economic forces. The effect of these forces may be delayed if the taxpayer is required to pay up. Subsidies from the taxpayer for the running of the industry can, however, only delay the economic forces and not prevent them.

The final argument is one of poor management, but in general I believe that the management is not poor. On my visits abroad I found that the calibre of management is very much the same as one finds in leading yards in this country. One might ask what is the standard of management in existing nationalised industries of all descriptions. If there is to be a change after nationalisation where are these wonderful new managers to be found? The last Secretary of State for Industry has said that if there is one thing clear about British shipbuilding it is that it must be run by people who believe not only in it but in its being in the public sector. The present Secretary of State will find it extremely hard indeed to find enough people to run the industry in future who believe in such a foolish idea.

The ship repairing industry is completely different from the shipbuilding industry. It is a service, not a productive, industry. To nationalise it because the Government are nationalising shipbuilding is as logical as to nationalise all the garages because the car manufacturers are to be nationalised. What will nationalisation do to help this highly competitive industry?

The reasons put forward by the Minister for nationalising both the shipbuilding and the aircraft industries—he has given no real reason for nationalising ship repairing—are really excuses. This debate is a sham. The real reason is purely political. It is based on emotion and not on economics. The present Secretary of State for Energy was the evil genius who designed this scheme and he has left the present Secretary of State for Industry to implement it. I imagine it is perhaps now being implemented, therefore, not with the zeal of a fanatic but more with a view to appeasing the Left Wing.