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Suggested Amendments

Volume 922: debated on Tuesday 7 December 1976

The text on this page has been created from Hansard archive content, it may contain typographical errors.

I should explain that I gave notice in the Lobby that Items Nos. 2 and 3 could be discussed together. Apparently, that has not met with the unanimous wish of the House. Therefore, they must be discussed separately.

4.36 p.m.

I beg to move, Item No. 2:

That, pursuant to the Parliament Acts 1911 and 1949, the House suggests to the Lords the following Amendments to the Aircraft and Shipbuilding Industries Bill:

Clause 30, page 42, line 33, after 'if', insert—

'(a) it is a transaction the effect of which is to transfer or grant to any person any property or rights belonging to the company effecting the transfer, being property or rights used by the company in connection with the business of repairing, refitting or maintaining ships carried on by it at a place which is not a shipyard or other works in which the company had an interest in the possession on the initial date, or
(b)'.

Clause 31, page 44, line 46, at end insert—

"(dd) it is a transaction the effect of which is to transfer or grant to any person any property or rights belonging to the company effecting the transfer, being property or rights used by the company in connection with the business of repairing, refitting or maintaining ships carried on by it at a place which is not a shipyard or other works in which the company had an interest in the possession on the initial date; or'.

Clause 38, page 54, line 7, at end insert—

'( ) If, pursuant to a transaction falling within section 30(2)(a) or section 31(2)(dd) above, any property or rights such as are therein mentioned have been transferred by the company in question, then, for the purpose of determining, in accordance with subsection (1) above, the base value of the securities of the company, it shall be assumed that, immediately before each of the relevant days,—
  • (a) the property, rights or liabilities so transferred were not vested in the company, and
  • (b) in place of that property, those rights or liabilities, there were vested in the company funds equal to any consideration which passed to the company as a result of the property, rights or liabilities being so transferred.'
  • Clause 56, page 79, line 44, at end insert 'or any factory, dry-dock, graving dock, or other premises or land situated in the United Kingdom in which an acquired company was entitled to an interest in possession or a licence to occupy and which on or at any time after the initial date was being used for repairing, refitting or maintaining ships unless—

  • (i) that factory, dry dock, graving dock, those premises or that land is or are wholly appurtenant to the ship-building undertaking carried on at a shipyard or other works in which the acquired company had an interest in possession on 31st July 1974 or is or are mainly appurtenant to property or rights which are wholly appurtenant to that undertaking; or
  • (ii) that factory, dry-dock, graving dock, those premises, that land, that property or those rights, as the case may be, cannot reasonably be severed from the ship-building undertaking.'
  • Schedule 2, page 82, leave out lines 19 to 30.

    Schedule 2, page 83, line 8, leave out 'a ship repairing company'.

    Schedule 2, page 83, line 38, leave out paragraph 3.

    The amendments which fall within Item No. 2 are naturally divided into two classes. The first four suggested amendments—the three on page 599 and the first one on page 600 of the Order Paper—deal with the transfer of assets between one firm and another or different parts of the same firm. My hon. Friend the Member for Tynemouth (Mr. Trotter) will be speaking to those if he has the good fortune to catch your eye, Mr. Deputy Speaker. I shall address myself particularly to the remaining parts of Item No. 2 appearing on page 600.

    Originally it was thought that it might be for the convenience of the House to discuss Item No. 3 with Item No. 2, because the last three parts of Item No. 2 work, as it were, in parallel with Item No. 3. Perhaps I may allude in passing to the reason for that. If, when the time comes, the House should see fit to pass Item No. 3, the effect would be to remove all ship repairing firms from the Bill since there were no ship repairing firms which, at the last annual general meeting before 31st July 1974, presented accounts which showed that they, or the individual firms plus firms associated with them, had a turnover of at least £3,400 million. However, as Mr. Speaker said, that is a matter to which we shall return when we come to Item No. 3.

    The suggested amendment in Schedule 2, page 82, to leave out lines 19 to 30, would leave us with a vacant list of ship repairing companies. It is entirely in line with the wish expressed in many parts of the House that ship repairing should be excludeed from the scope of the Bill.

    The Leader of the House endeavoured to seduce our Liberal colleagues by raising the ghost of Mr. Asquith, who many of us thought was sleeping peacefully in his grave. It occurred to me that a further visitation of the ghost of Mr. Asquith might be entirely appropriate in the course of this debate. Therefore, I am inviting the ghost of Mr. Asquith to put the House in mind of what the real live Mr. Asquith said in Vol. 62 of the Fifth Series of Parliamentary Debates on 12th May 1914, when as Prime Minister, he was addressing the House concerning the nuts and bolts of the suggested amendment stage. He said:

    "What is called the Suggestion stage is not really a stage at all, but it is a power which is reserved to this House by the proviso in the Sub-section, the effect of which I have already stated. The suggestion of Amendments was intended to deal, and to deal only, with exceptional cases. What are those exceptional cases? In the first place, there might be possibly, there may be, cases in which subsequent consideration of the Bill, as originally passed by this House and rejected by the House of Lords, shows some patent mistake or error. Of course it would be absurd that this House should be required to pass, over the Veto of the House of Lords, a Bill in which such an error appears, on the face of it, without the opportunity of correcting it. That is a possible case, and the case which was intended to be provided for. But there is another case in which, I think, the proviso with regard to Suggestions was intended to apply. It was intended, I think, to apply to Amendments suggested here consistent with the principle and the governing purpose of the Bill, having regard to which time and discussion have shown that there was something, at any rate, in the nature of general agreement."

    He then went on to quote from himself speaking earlier, as reported on 23rd June 1913, when he said:

    "This Suggestion Clause was intended to provide an opportunity, if the House desired, both in the second and in the third Session for submitting and discussing, and it might be for Divisions, in the House of Commons, changes in the Bill consistent with its governing purpose, and seen upon reflection to be improvements, either as correcting inadvertencies and mistakes, or as mollifying and making more acceptable its substantial provision."—[Official Report, 12th May 1914; Vol. 62, c. 952–3.]

    The ghost of Mr. Asquith may now retire in peace.

    What are the governing provisions of the Bill? First, its name is the Aircraft and Shipbuilding Industries Bill, not the Aircraft and Shipbuilding, Ship Repairing, Warship Construction, Missile Construction and Marine Engine Industries Bill. It is quite clear, as indeed the Long Title says, what it had in mind. However, as some time has now effluxed since the House considered the Long Title, it might be reasonable to put hon. Members in mind of it. It says that this is a Bill to

    "Provide for the establishment of two bodies corporate to be called British Aerospace and British Shipbuilders, and to make provision with respect to their functions; to provide for the vesting in British Aerospace of the securities of certain companies engaged in manufacturing aircraft and guided weapons and the vesting in British Shipbuilders of the securities of certain companies engaged in shipbuilding and allied industries; to make provision for the vesting in those companies of certain property, rights and liabilities; to provide for payments to British Aerospace and its wholly owned subsidiaries, for the purpose of promoting the design, development and production of civil aircraft; and for connected Purposes."

    By the end of the prolonged last Session, which most of us were glad to see end—some of us began to wonder whether it ever would end—the Government had passed through the House by one vote, however much disputed, and had got through the other place a Bill to bring into public ownership the aircraft manufacturing and shipbuilding industries. I do not think that that will be in dispute. What was in dispute between the two Houses was whether ship-repairing in particular should be brought in as well.

    The House will remember the engaging occasion when the hon. Member for Liverpool, Walton (Mr. Heffer) told us of his professional experiences as a joiner, when he said that he was equally capable of practising those skills in joinery in shipbuilding or ship repairing. Quite so, and we do not doubt that he would also be able to earn his living, were he ever in need of doing so, by making G-Plan furniture in High Wycombe.

    4.45 p.m.

    But the Government have not considered that the furniture and cabinetmaking industries should also be encompassed in the Bill because the hon. Member for Walton possesses skills, hypothetically, which are equally useful in making G-Plan furniture, in making furniture or adornments or fittings inside a ship under construction or in altering a ship in the course of repair or refitting. Therefore, although his contribution may have been a true account to the House of his particular skills, it advanced no further the case for including ship repairing within the compass of a Bill which, according to its own Title, is concerned with the aircraft and shipbuilding industries.

    There are many parts of Britain where firms in these two types of industry are not only clearly distinguishable but uniquely situated. For instance, in Falmouth one finds ship repairing rather than ship construction, and this is so in many other areas. They are distinct industries. I do not doubt that, if he is called, my hon. Friend the Member for Tynemouth will be drawing attention to the fact that if the House decides to excise ship repairing from the Bill by way of suggested amendments to their Lordships, we should have some confidence that their Lordships of all parties would not treat such suggestions with any hostility but would welcome them.

    What we would want to leave in the Bill is a viable ship building industry and not an overlap and confusion between shipbuilding and ship repairing. The first four parts of this widespread Item No. 2 would have just that effect, so that firms which will fall to be brought into public ownership as shipbuilders may nevertheless hive off parts which can stand on their own feet as ship repairers, so that they can remain as ship repairers within the private sector should this Bill as a whole pass into law, nationalising shipbuilding and aircraft construction.

    The suggested amendments to Schedule 2 included in this Item first of all suggest to their Lordships that they should leave the Bill vacant on page 82 of the names of any ship repairing companies. That is a reasonable and sensible step if it is intended not to nationalise any. The second amendment to Schedule 2, in page 83, line 8, is to do with the categories to be brought into public ownership, as will be seen. By leaving out the words "a ship repairing company", it would then make sense of Schedule 1, which would otherwise be nonsense, since it would not include any ship repairing companies after they had all been left out pursuant to the first suggestion of leaving out lines 19 to 30 on page 82.

    The third suggestion relating to Schedule 2, in page 83, line 38, to leave out paragraph 3, would remove the definition of ship repairing. If ship repairing is being taken out of the qualifying conditions in which a firm is to be taken into public ownership, it would be redundant, and indeed otiose, to leave in a definition of ship repairing to no effect.

    Therefore, those suggested amendments stand together as a cohesive and sensible means of removing ship repairing from the Bill. What they do not do is to wreck the Bill or leave the rest of the Bill unworkable. It is important to stress this because the amendments would not have the effect of blocking the operation of the Parliament Act on the remainder of the Bill. If any hon. Member who has not grasped this point claims that these are wrecking amendments, it can only be because he or she has read neither the Bill nor the suggested amendments taken together. Whether Labour Members approve of taking shopbuilding out of the compass of the Bill, they cannot claim that to do so would wreck the Bill. It would not.

    Some hon. Members may wonder, even at this stage, why ship repairing should be taken out of the Bill when shipbuilding is to remain in it. Far be it from me to justify leaving shipbuilding in the Bill. That is no task of mine, nor is it, an action that I support. My task is to justify removing ship repairing from the Bill, even though the Government are determined to use a majority—if they can find one—to enact, under the terms of the Parliament Act 1911, as amended by the Parliament Act 1949, their proposals to nationalise the shipbuilding industry.

    The Government claim that ship repairing cannot be separated from shipbuilding. That is manifestly not the case because there are many examples of its being physically separated. If I may take an analogy: when selective employment tax was introduced by a previous Labour Government there were some interesting crossovers and anomalies in it. A task performed by a car manufacturer did not attract selective employment tax, but exactly the same task performed by a garage did.

    That was not considered by the then Labour Government as a reason for putting both services in the same tax category. If an engine was reconditioned by the British Motor Corporation no selective employment tax was payable by BMC. But if the identical operation was performed by a local garage—the crank reground, the camshaft possibly reground, the bearings replaced, the timing chain replaced, the valves replaced, and the valve seats recut—tax was payable.

    The previous Labour Government never accepted as an argument for treating both services in the same way in tax law the fact that identical operations were performed. Therefore, it ill behoves the present Labour Government to claim that because the hon. Member for Walton can put up a cupboard in a new ship or install a cupboard in a ship that is being refitted, both shipbuilding and ship repairing should be placed in the same category and taken into public ownership. Yet that is the case that was made so eloquently, although so irrelevantly, by the hon. Gentleman, who has, alas, deserted the House today.

    What, then, do the Government claim? Whatever they may claim, it is clear what they really mean. Even the Economist has discovered that Ministers are cross. I quote from page 22 of the issue of the Economist of 4th December:

    "Ministers are cross. They regard complaints about hybridity as a nitpicking tactic and they are very critical of the advice which the Speaker has received. They privately admit that there are elements of hybridity in the Bill, as there have been in most nationalisation measures. They feel that there might be a more genuine hybridity point to be made on the marine engine manufacturing clauses than on the ship repairing."

    If Ministers have told the Economist that they believe that there might be a more genuine hybridity point to be made on the marine engine manufacturing clauses than on ship repairing, why have they not told the Clerks of the House?

    We have not told the Clerks of the House because we did not tell it to the Economist, and it is not true.

    I would think it highly improbable that the hon. Member for Manchester, Ardwick (Mr. Kaufman) would know what his fellow Ministers have been saying to the Press. There have been so many leaks to the Press which have caused great embarrasment to the Government that if he does know which of his colleagues make a practice of leaking to the Press, he should rush to the Prime Minister and tell the right hon. Gentleman. He might be promoted for his pains.

    It has been a standing complaint of the Government that issues of hybridity have been raised too late. Yet here are Ministers intimating to the Economist that they are aware of hybridities in the marine engine manufacturing clauses of which I am certainly unaware and of which I suspect the House is unaware. It is quite possible that the Public Bill Office is also unaware of them.

    Ministers cannot, with any degree of sincerity, complain to the House about late disclosure of aspects of hybridity when they prefer to communicate their fears on this subject to the Economist rather than to the House of Commons or to the authorities of the House. I make no complaint that Ministers have communicated their fears on that matter to the Economist. That, at least, was a very sensible thing to do. But in their sudden assumption of truthfulness and frankness, they should have extended the same courtesy both to the House of Commons and to Officers of the House.

    That, of course, was one of the major reasons why the House of Lords decided to remove, by amendment, the ship repairing clauses. In view of this revelation in the Economist perhaps the Lords should look closely at the marine engine manufacturing clauses also.

    The Leader of the House complained with considerable emotion last Wednesday about a large number of things. One of them was that the Lords had not subjected the Bill to the hybridity procedure, which would mean examination by a Select Committee, when they went through the Bill during the last Session. Yet we can be entirely certain what would have happened if their Lordships had subjected the Bill to weeks of examination by a Select Committee, and had then, by amendment, taken out ship repairing. The Leader of the House, who is not with us today—perhaps he is somewhere with the hon. Member for Walton—would then have complained that their Lordships had used a device to waste many weeks of time when progress might have been made on the Bill, already knowing in their hearts that they intended to take out ship repairing by amendment.

    We can be morally certain that the Leader of the House would have criticised the Lords equally on that account if they had taken the action which he now criticises them for not having taken. That is humbug personified. However, I hope that their Lordships will read our Hansard, just as we read theirs, and notice what the Leader of the House took the trouble to put on record—that he thought the Lords ought to subject the Bill to the full rigours of the procedure laid down by Standing Orders for dealing with Bills which are prima facie hybrid, if there are reasonable grounds for supposing that.

    In the last Session, Mr. Speaker announced that the Bill was prima facie hybrid, but the Government refused to allow it to go to the Examiners, the Standing Orders Committee or a Select Committee. They passed some amendments on Report, but, as the Bill did not go to the Examiners after that, it left this House, by form, if not by content, the same in respect of the item on which Mr. Speaker had ruled. It was still a Bill which was prima facie hybrid. However, the Government believed that they had removed the hybridity, on which Mr. Speaker had ruled, with their amendments on Report.

    5.0 p.m.

    On this occasion, if the Bill goes to their Lordships without amendment by this House, it will, since the Public Bill Office has found it to be prima facie hybrid, enter the House of Lords in the same condition as well as with the same form and status as it left this House—as a Bill which has been found by the Public Bill Office to be prima facie hybrid but which, unlike last time, has not been altered since that finding. Presumably, another place will, when their Public Bill Office looks at this measure, with exactly the same evidence before it, come to the same conclusion arrived at by the Commons Public Bill Office.

    How can we save them from putting themselves to that great labour? One thing of which we can be entirely certain is that if the Bill goes through the hybridity procedure in another place it will take a certain amount of time; and we can also be certain that, whatever comes out at the other end, a number of greatly-enriched lawyers will emerge from the procedure.

    Leaving aside for a moment the question of the potential hybridity in the marine engine part of the Bill, about which one or more Ministers have communicated their anxiety to the Economist, if my proposed amendments are suggested to and accepted by another place, the entire hybridity procedure could be cut out in good faith and the Bill could reach the statute book by agreement between the two Houses instead of as a result of the Parliament Act.

    It goes without saying that if the Bill is to be subjected to the hybridity procedures because of the intransigence of the Government—nothing else will force this action—in refusing the suggested amendments, it may be October or November of next year before the Bill receives the Royal Assent, if it does, because the Parliament Act works only when another place has rejected the Bill or when this Session comes to an end, the Bill having passed through this House the second time in a second consecutive Session more than one year after 2nd December, the date on which it was originally introduced here. If their Lordships are forced by the Government—and no one else will force them—to refer the Bill to a Select Committee for the examination of petitions, the Government will, once again, have delayed the passage of the Bill on to the statute book.

    There has been an avalanche of humbug from the Government Front Bench in the last Session and in this. Ministers have talked about jobs being at risk. If the delay in the Bill reaching the statute book has put jobs at risk, it is the Government who are deliberately doing this because they have deliberately delayed the passage of the Bill.

    I do not assert that the delay has put any jobs at risk. That is the Government's assertion, but it is they who have caused the major delays in the passage of the Bill. They withdrew it in the Session before last; they allowed between five and six weeks to elapse between 7th June and when they tried to make further progress in this House; they refused to allow it to go to a Select Committee of this House which could have got the whole thing over with in about three weeks. These deliberate delays are wholly attributable to the Government. They refused to accede to the amendments upon which their Lordships insisted. Had these amendments been accepted, the Bill would have been on the statute book by now.

    From all this, we can conclude only that the Government wish to delay the Bill—and we know why. They wish to make certain firms uncreditworthy by threatening them with nationalisation in the hope that they will collapse so that British Aerospace and British Shipbuilders are not encumbered with firms by which they do not want them to be encumbered. That is the tactic, and it is totally dishonest for the Government to accuse opposition parties of being callous about jobs.

    The Government, with quite unprecedented cynicism, are deliberately delaying their own legislation, deliberately to create unemployment. This must be said and repeated because it is possible that there are still some employees in the aircraft and shipbuilding industries who are not aware of the ride for which they are being taken. It is to be hoped that they will be made aware of the situation so that they can contact their Labour Members and Ministers and tell them "We do not care about nationalisation. We care about our jobs, and the Labour Government, which many of us helped to elect, are deliberately and cynically sacrificing our jobs for purely political reasons".

    The amendments concern the removal of ship repairing without wrecking the Bill. This is an action in good faith rather than in bad faith. There has never been any pretence by this side of the House that we did not want to take out ship repairing from the ambit of the Bill if it did not lie within our power to prevent the enactment of the Bill as a whole.

    It is an undeniable fact of public life that in the by-elections which have taken place since this matter became a major issue of public policy a large proportion of the electorate has deserted the Government. The Government's best course, having reached this stage, would be to announce that they will accept the suggested amendments.

    I support the eloquent and well-prepared speech of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). I shall be brief in support of the suggested amendments, because he has made a sound and cogent case for them, well illustrated by the way in which the Government have defined ship-repairing companies. Through that definition the Government have led themselves and the House into the problems of hybridity that we have repeatedly brought to their attention but to which they have repeatedly turned blind eyes and deaf ears though not, unfortunately, shut mouths: they have simply kept on talking.

    The Government continually represent themselves as supporting the cause of the workers in defending their reasons for promoting the Bill, but, to my great dismay, they have turned away from the workers in their hour of need. They are doing so in wanting to grab all three industries—industries which they have so inadequately defined that in another place the Bill must merely plough back into trouble again.

    I am sure that my hon. Friend is right, for all the reasons he has advanced, in saying that the Government do not really want the Bill. I go further. I do not believe that they have the opportunity to get it as an Act because the voting of this House is no longer relevant to its progress. It is the IMF which rules at Westminster now. If it says "Thou shall not have this Bill", there will be no Bill. The Government are being pushed into a corner in which they have no option but to repeat previous errors. They have advisers who, I am told, are capable men. Surely they cannot have failed to notice these problems between February 1974 and now. Yet over and over again the same errors are repeated in legislation.

    The hybridity situation caused by the Government could not only block the passage of the Bill but do tremendous damage to companies both within and outside the scope of the Bill, particularly those outside it, because the world markets in which they have to trade will ask "What is your future? There was doubt about you in the House of Commons. Why were you not included in the Bill? Why was such a strange net thrown across the activities of ship-repairing companies? Why were some included and others excluded?"

    The people who will suffer are not just the investors, about whom the Government talk so much, but the workers and their families and the communities in which they live. It is extraordinary that this Socialist Government, who always claim to speak for the workers, refuse to do what is necessary to help them.

    These straightforward amendments would preserve the Bill, and on this side of the House we would, historically, accept that as the will of the House. The votes having been recorded, we sought to preserve the Bill, but when the crunch came we found that the workers involved did not really matter to the Government.

    I remind the House of the historic words of the Minister of State at the Second Sitting of the Standing Committee. He told the truth when he said that the Bill was about the advancement of Socialism.

    5.15 p.m.

    I wish to address my remarks to the whole subject of ship repairing, but will start with the particular case of Vosper. The technical amendments I support would remove from the nationalisation net the Southampton shipyard operated by Vosper. They are needed as there is no mention in Schedule 2 of Vosper among the ship-repairing companies, because its repair yard is organised as part of the main Vosper Thornycroft group, which is included in the nationalisation as a shipbuilder.

    What are the Government's plans for the industry? Indeed, what are their plans for all the industries to be nationalised? I have repeatedly asked this question over the past year but without any answer. If I repeat the question today, perhaps Ministers will feel a degree of shame that they have never answered it. Therefore, again I ask what are the Government's plans for the ship-repairing industry apart from changing its ownership. I shall be happy to give way at once if a Minister feels able to answer.

    The nationalisation of ship repairing appears to be based on the report by PA Management Consultants in December 1973 to the then Secretary of State for Trade and Industry. It was the result of an inquiry established in February 1973. It was published only on 17th June 1974. That date is relevant because at the time the then Secretary of State for Industry said that discussion was called for, and on 3rd July he wrote to the shipbuilders' national association saying that he would appreciate its written views on this important matter.

    But on 31st July, before anyone had time to consider the report adequately and to submit views, he announced that he intended to nationalise the ship-repairing industry. That is what the Government call "consultation". They approached it with a closed mind. Nationalisation is based on their manifestos in two General Elections. I am sick of hearing that argument as an excuse for taking industries into public ownership.

    If the Government will not accept that they are a minority Government in terms of the electorate—and I can understand their argument because, as they have said, there have been such instances with other parties in the past—they nevertheless cannot avoid the fact that the Workington and Walsall, North by-elections have proved just how out of touch are their policies with the present thinking of the electorate. They have no moral mandate for their dogmatic plans.

    The PA report presented an image of a declining ship-repairing industry. But it did not spell out the reasons for that decline. First, there are almost no liners left. At one time a great deal of repair work was brought to our yards by the huge fleet of British liners, but now one can count our liners on one's fingers. Secondly, the coastal traffic has practically ceased. I was born in the North-East port of Blyth. In my youth there were probably 60 or even 70 coastal vessels in harbour there at any one time waiting to load coal for Europe or the South of England. Now there may be only two or three. It is the same story on the Tyne and at other ports. Hundreds of coastal vessels have gone.

    Thirdly, the long-distance cargo traffic has more and more gone to the large container ships, and the rôle of the tramp steamer has been reduced in importance. We have larger and fewer ships for the long-distance trade. While world trade as a whole has increased, there has been a particularly large increase in the trade which does not involve Europe.

    Again, a ship owner wanting a new ship to be built can go almost anywhere in the world for it, but the ship-repair yards need to be near where the vessels in need of repair find themselves. If, however, a ship needs repairs, common sense obviously says that those repairs must be carried out somewhere close to where the ship is operating. As the Third World has developed, more and more of that world trade is carried on between countries far distant from Europe.

    One's own everyday knowledge of cars suggests that these have tended to get more reliable, at least in theory. The same has happened in shipping. We now find that a modern ship requires far less maintenance and there is a longer interval between regular maintenances. That has led to a reduction in the work load of the ship-repair industry not just in this country but in the whole of North-East Europe. The United Kingdom repair of ships has sadly declined for the sort of reasons that I have outlined. Furthermore, the United Kingdom fleet of ships has fallen from two-thirds of the world tonnage to only one-tenth. That in itself is a major factor affecting the work load for our repair yards.

    One conclusion of the report by PA Management Consultants which has been overlooked by the Government—I have not heard anyone on the Government Benches refer to it—is that, relative to our competitors in Northern Europe, we are doing better. Everyone in Europe is having a difficult situation with a decline in the number of vessels, but Britain has actually done better than our competitors. We have obtained a higher percentage of the work load. The Government have not mentioned that statistic from the report.

    The industry is attacked for being fragmented. Of course it is fragmented. Simple geography requires that the yards should be spread around our extensive coastline. The coastline of Britain measures 3,000 miles. By contrast the coastline of Germany, Holland and Belgium—three countries together—is only 1,000 miles. This naturally leads to a fragmentation of the ship-repair industry, because the repair yards are located where the ships are and the ships go all around our 3,000-mile coast.

    The PA report says that this is an industry dependent on casual labour. That accusation has been most emphatically denied by the ship repairers who assure me that this has not been the case for quite a number of years.

    There has been a suggestion that there has not been enough capital invested in the ship-repair yards. It is hardly surprising that in the past two years there has been little or no investment. It seemed reasonable to suppose that under the disgraceful compensation terms proposed by the Government one would lose one's money if one put any more investment into plant in a ship-repair yard at this time.

    Let me warn the House against being led astray by thinking that if one spent enough capital in a ship-repair or shipbuilding yard, one could solve the problem. In shipbuilding Harland and Wolff is an example of the folly of that argument. It has had drastically increased overheads to service the enormous capital debt that has been incurred and full advantage of that investment has not been obtained.

    I suggest that often the local garage man, with a limited amount of capital, can carry out better repairs to one's car than the large city centre garage with tens of thousands of pounds available for plant. Something similar is the case in many of the repair jobs carried out by the ship-repairing industry. The relatively small man, with substantially less capital, is often best fitted to carry out the repairs.

    I do not believe that there is a salvation for this sector of British industry through massive capital injection. Indeed, it could be that the burden of debt could substantially worsen the prospects of that industry which, I believe, are not nearly as bad as has been made out by Ministers. Fundamentally, as Conservatives have repeatedly said, this is a service industry which is different from shipbuilding. The simile between the garage and the car manufacturer is very appropriate.

    In my own constituency we have Swan Hunter Ship Repairers and last year that one company alone repaired 306 vessels. But in contrast further up the river Swan Hunter Shipbuilders built six vessels. That gives the relationship between the two industries. One has massive orders fairly well spaced out in terms of time and the other is a very active day-to-day business depending entirely on the service that it gives to the individual shipowner.

    The managements of ship-repair yards are thinking in terms of days and not years. In that respect they are in a different situation from shipbuilders. Efficiency in terms of cost and speed of delivery are the essential factors if the ship-repair yards are to continue to have a future.

    I fail to see how anyone can suggest that nationalisation will lead to greater efficiency. The United Kingdom customers are appalled by the idea. The General Council of British Shipping has made quite clear that while it is not taking a line on the nationalisation of shipbuilders, it is appalled by the suggestion that the repair yards should come into the nationalised industry.

    The image of nationalisation abroad is understandably dreadful and the recent NEDO report reinforced that image abroad. I shall not detain the House by going through that report, but we all know that the NEDO report was absolutely right about the nationalised industries. Their giant bureaucracy with constant arguing and change to their system of management is absolutely the worst form of organisation for a highly skilled, fragmented industry like ship repairing. There could not be a worse form of organisation for that industry.

    I have heard it suggested that one reason for the nationalisation of ship-repair yards is that they are profitable. It seems that once one is on the dogmatic list for State ownership nothing one does will make one escape. If one is not profitable one is letting the nation down and if one is profitable one is behaving immorally. There is a third category—that one is owned by the Americans. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) argued in an excellent speech that Marathon had been excluded from nationalisation because it was American owned.

    My hon. Friend the Member for Hastings (Mr. Warren) put his finger on it when he talked about the future and the continued employment for the people in those yards. Some of them have been deluded by Ministers into believing that nationalisation will provide a security of job for the rest of their lives.

    All one need do is refer to the case of Greenwells. As a result of the Court Line collapse, quite a number of ship-repair yards in the North-East are now State owned. But what has happened? We have seen Greenwells close and several hundred men lost their jobs. The shop stewards' representative there said:
    "If private enterprise had tried to perpetrate some of the evils that this present Government have done on the members employed in this industry, probably the whole river would have been out on strike, let alone just Greenwalls. They would never have dared to attempt to get away with the skullduggery".
    I hope that this message will be taken to heart by anyone in the other yards now threatened by nationalisation who thinks that by passing into public ownership their future is assured.

    I believe that there is a considerable degree of ignorance among Ministers about the real nature of ship repairing. The Minister of State referred to how he walked from the Wallsend slipway into Swan Hunter ship repairers. It is about a one-mile walk. Probably he did not walk to that particular repair yard at all but went to the small Swan Hunter repair yard next to its main building yard at Wallsend.

    I am sure that the Minisster is capable of walking a mile, but he is such a busy man that he has not got the time to do it. It is a situation which many of us in the House fact. If one reads back through Hansard and the comments of various Ministers about ship repairing, there seems to have been a fundamental ignorance of the nature of this industry.

    The Secretary of State referred to the ship-repair industry being closely integrated with shipbuilding. Nine out of the 12 repairing companies listed for nationalisation are quite separate and the other three are separately managed. Ministers referred to the exchange of labour, and to repairs being done by those otherwise engaged in the building of ships. But it is only in one case—in Scott Lithgow on the Clyde—that this is practised. In the other cases this is not so.

    5.30 p.m.

    A more enlightened and knowledgeable member of the Labour Party is Lord Shinwell, and I remind hon. Members that at one time Lord Shinwell was chairman of his party's shipbuilding and ship repairing committee in this House. He speaks, therefore, with a great deal of knowledge and expertise on these matters, and, although I must not quote from the Official Report of the other House, I draw attention to the fact that he is on record as saying that he believes that it would be a disaster for the ship-repairing industry if it were taken into public ownership. He believes that there would be great harm to the nation, and that it would do no good either to the industry itself or to the workers in it.

    I believe that that knowledgeable and experienced member of the Labour Party is more in tune with reality than Ministers are, and I am therefore pleased to have an opportunity once again to speak in favour of the exclusion of ship repairing.

    I am grateful for this opportunity to speak, because my constituents have been in a peculiar situation throughout the discussions on the Bill thus far. During the past Session they were effectively disfranchised and had little opportunity to express an opinion to their Member of Parliament, which was to their disadvantage, but, on the other hand, they have had one great advantage, which has come to few British citizens recently, in that they had an opportunity to vote directly on the Labour Government's programme and to express their opinion in a by-election. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has already referred to the results of that by-election.

    The citizens of Walsall, taking a broad view of the world shipbuilding trade and of United Kingdom shipbuilding in particular, are concerned because they feel that substantial sums of taxpayers' money are to be devoted to the preservation of the industry, and they wish to see precisely what impact the expenditure of their money through taxes will have of their money through taxes will have, and they want to know how the money will be spent.

    First, I ask the House to look at the broad picture of world shipbuilding since the war. In 1949 world launchings were 3·1 million tons, and they rose to 21·7 million tons by 1970—a sevenfold increase over 21 years. But this substantial increase concealed significant changes in the pattern of world production. Historically, the main maritime Powers were also the major shipbuilding nations, and there were relatively few exports from one maritime nation or shipbuilding nation to another. There was relatively little world trade in ships.

    In recent years, however, there has been a dramatic change, with the result that in 1970 of British-registered ships 74 per cent. were launched in foreign yards, and the British share of world trade had declined from 74 per cent. in 1947 to 6 per cent. in 1970.

    Why did the British industry fail to expand its production in post-war years in line with growing world production? Second, will the implementation of the Government's proposals in the Bill have any effect on the factors involved?

    There are four main reasons why British shipbuilding has had its difficulties in the post-war period. First, there has been a shift in world demand away from sectors in which the United Kingdom has specialised—that is, warships, passenger liners and specialised vessels generally—towards large tankers and dry cargo ships. As a result, United Kingdom production facilities have been left under-utilised.

    Second, there has been insufficient technological progress in construction methods in British yards, and British firms have undertaken insufficient capital investment to produce ships of over 200,000 tons, for which world demand has grown the fastest. Thus, the number of man-hours per ton of output in Sweden and Japan is now 20 to 30, whereas in British yards the figure is 70 to 80 man-hours.

    If we are to achieve reductions of labour input of that magnitude in British yards, we can do it only by massive capital investment to achieve flow-line production from the steel stockyard at one end of the yard, through fabrication and to final construction. This will take place only if there are huge—I mean huge—rebuilding and capital investment programmes in British yards.

    Third, there is the multiplicity of unions within the industry, a factor which has led to frequent demarcation disputes and excessive wage claims. The Trade Policy Research Centre estimates that throughout the late 1960s and the early 1970s wages rose by 10 per cent. per annum while the fixed prices contracted for by the shipyards allowed for only 3 per cent. or 4 per cent. per annum.

    Fourth, and even more important than the other factors to which I have referred, there is the impact of the protection given to their own domestic shipbuilding industries by other Governments. Even if we were able to make labour relations in our yards better, if we were able to achieve high capital investment and if our shipyards were better placed to build the ships for which world demand is growing, such is the protection given to their own industry by many major maritime nations that we should not be able to compete effectively.

    Against that background the Bill is irrelevant, and the Government have not shown how their proposals will solve the problems which I have outlined. As I say, there has been a shift in world demand for ships. How will the Government's proposals change that? There has been a lack of technological progress and investment in British yards. How much money do the Government propose to spend to change that?

    Order. I hope that the hon. Gentleman will in due course relate what he is saying to ship repairing.

    Certainly, Mr. Deputy Speaker. I have referred to the multiplicity of trade unions. How will the Government ensure that there are guarantees of behaviour and fewer union disputes within the yards?

    How will the major requirements to which I have referred be tackled by the Government through their proposals in the Bill? The citizens of Walsall, North have demonstrated that there is little or no popular support for the Bill. Apart from my hon. Friend the Member for Cambridge (Mr. James), I have most recently been on the hustings. I have talked to many people in Walsall, North, and they have made plain to me that they see the Bill as irrelevant and damaging, as well as potentially hugely expensive for the taxpayer. They showed what they thought in the by-election on 4th November, just as the electors of Cambridge showed their opinion on 2nd December.

    It is my pleasure to congratulate the hon. Member for Walsall, North (Mr. Hodgson) on his maiden speech. [HON. MEMBERS: "No, his second speech."] At any rate, it is the first speech which I have heard him make, and it was certainly his maiden speech on this Bill. Since the hon. Gentleman has obviously done some very detailed research into the subject, I am sure that he would have found an admirable slot in the debates we have had about these industries over the past year or so.

    The nationalisation of the aircraft and shipbuilding industries, together with as many associated industries as can possibly be dragged in under the same umbrella, is becoming the longest running farce in Whitehall and Westminster and, whatever happens—whether these industries are or are not to be nationalised—it is essential that a decision be reached as quickly as possible. The greatest danger to the industries is that the uncertainty of the past six months in particular will be prolonged for another six or nine months if, as the hon. Member for Tiverton (Mr. Maxwell-Hyslop) suggested, delays may take place in the House of Lords. If these uncertainties continue, only one set of people will be the losers, and they will be the employees.

    We cannot expect the industries to live with uncertainty. We cannot expect their customers to place orders with this uncertainty hanging over them. The uncertainty applies not just to the ship repairing industry but also to the much larger aircraft and shipbuilding industries.

    As the House knows, we on this Bench have taken the line that the Bill is very much a curate's egg. There are some parts of it which are worth while, there are some parts which are necessary and there are some parts which we might not have liked to start with but with which we are now willing to live. It was for that reason that my hon. Friends and I abstained on the Second Reading second time round, taking the view that it was essential to get an answer as quickly as possible. Having done that in order to facilitate the progress of the Bill, I come back to the same arguments as I made during our debates in the last Session concerning the total irrelevance of nationalisation of the ship repairing industry.

    Pertinent points have been made already by many hon. Members, and I underline them. There is a need for speedy reaction in the ship repairing industry, which is a service-based industry, and a need to take instant decisions on whether to go ahead. These are not the sort of decisions that will come from centralised bureaucratic State corporations. Swift movement is so necessary to enable us to compete effectively with our overseas competitors in this industry.

    The nature of the ship repairing industry itself and the problems facing it are very different from those facing the shipbuilding industry. I accept that there is a certain amount of logic in State participation in the aircraft industry. I see dangers in it—dangers are inherent in any nationalisation—but I also see the logic. I see the crisis facing shipbuilding, and believe that there will be closures of yards whether there is nationalisation or not. What I cannot see is the need or the relevance to nationalise the ship repairing industry. It can have no possible relevance whatever.

    If the Government are determined to press ahead and insist on this small 5 per cent. of the Bill and jeopardise the other 95 per cent. relating to the aircraft and shipbuilding industries which they have very fixed, firm and commendable reasons for nationalising, it strikes one as a very odd situation. If it is a decision of the Government's own making and not one which has been imposed from outside, we must question the Government's reasoning. The only conclusion we can arrive at is that the Government want to see the Bill go forward in full to show up another Chamber, and to have a reason for constitutional changes for the other place in their next election manifesto. Also the Government want to show that it is the failure of the capitalist system which has led to the closure of shipbuilding yards, even though this is inevitable anyway with or without nationalisation, so that they can then take over the rump of the industry at a lower price in the hope of doing something with it later.

    None of those reasons is good enough to enable the Government to look into the eyes of the employees in these industries. The Government are writing off the employees in order to make spurious political capital. The only option open to Back Benchers on the Government side is to pass the amendment cutting out ship repairing, in order to see their objectives in relation to the shipbuilding and aircraft industries, with which I do not agree entirely but which I recognise, come forward as quickly as possible.

    The alternative is for the Government to withdraw the whole Bill immediately and say that they will not go ahead. One way or the other, the result is an immediate decision which will allow the companies concerned to know exactly what they face in the next 12 months.

    The worst of all possible worlds is the possibility of the Bill going to another place without this suggested amendment, going on for discussion on hybridity in the House of Lords—taking another six to nine months—and then perhaps losing it altogether at the end of the day. That is the worst possible disservice that the Government can do to the employees of all the industries involved in the Bill. If the Government will not face up to this situation, the onus is on Back Benchers to take the decision for them.

    5.45 p.m.

    We have heard that speech from the hon. Member for Caernarvon (Mr. Wigley) many times. In fact, this whole debate is rather like a re-run of a bad film.

    The hon. Member for Caernarvon suggested that the Government's unwillingness to yield the ship repairing part of the Bill was a sinister plot designed to enable them to go to the country and call for the reform of the House of Lords. He suggested that it would give the Government an opportunity to say that the House of Lords, having done this to the Bill, was irresponsible and unrepresentative. In my view, reform of the House of Lords can stand on its own feet, and is justified in any event. I would give far greater weight to the reform of the House of Lords than to the devolution measure which the hon. Member for Caernarvon and many of his friends are urging forward.

    The hon. Member also suggested that there was a danger of nationalising an industry which required speed of decision and turnaround. He suggested that a vast bureaucratic structure would stifle enterprise and turn away business which would have otherwise come to this country. That argument may have had some justification before the Government amendment to Clause 5 at the start of the long march on this measure. Following that amendment to Clause 5, there is no possible justification for his comments. That amendment, with its decentralisation—which I should have hoped would have attracted some response from the hon. Member—will provide separate profit centres, and it is a recognition by the Government that the monolithic structure was inappropriate to the operation of this industry.

    The amendment allayed my own concern about ship repairing and the future employment prospects in the Bristol Channel. Had the headquarters of the corporation been sited in the North-East, and given the relatively small work force in the Bristol Channel compared with the greater ship repairing capacity in the North-East and other centres, I feared that there would be strong political pressure which might have led to the closure of yards in the Bristol Channel. But the Government recognised the case and made a substantial concession. I cannot see how the picture of a monolithic structure stifling democracy which the hon. Member has painted has any relevance to the Bill as it is now compared with as it was at the start of the process.

    The hon. Member made a number of other points, including a suggestion that the type of business done in ship repairing is so fundamentally different from shipbuilding that there is no conceivable case for putting the two elements together in the same Bill. This has been canvassed on many occasions, but the fact is that in many yards there is an interchange of personnel in refitting and repairing and this argument has been met by arguments advanced by Government spokesmen.

    Finally, the hon. Member made the point that this measure cannot be justified to the work force. I do not wish to be unfair to him, but it is clear that he has drawn most of his inspiration and example from Bristol Channel Ship Repairers, and no doubt from his own constant relationship with that concern. I wonder whether he has visited my yard in Swansea, which employs more than a quarter of the work force of the Bristol Channel, and asked the men there for their views on nationalisation.

    Although they have been subjected to the same blandishments as men in other yards, and given the same encouragement to come to London and meet hon. Members, they have steadfastly refused to jump at the bait. Indeed, they sent a message to the Government, signed by abour four-fifths of the work force at Swansea—a brave gesture in view of what has happened since—saying that they were convinced that nationalisation of their own yard was very much in their interests and in the interests of the ship repairing capacity in South Wales. They have argued that point to me strenuously. There have been a number of unfortunate repercussions—I say no more than that—since then, and there have been a number of restrictions and reactions by the company which perhaps the hon. Member for Caernarvon was not told about during his rather partial collection of facts about the ship repair facilities in our part of the world.

    We have talked sufficiently long about this subject. I think that the arguments have been canvassed at extreme length. Certainly my hon. Friends who, like myself, represent ship repairing interests want the industry to be nationalised as speedily as possible.

    Let me take up the point about the wishes of the employees in the hon. Gentleman's constituency and in other companies involved in ship repair. Given the hon. Member's own extreme enthusiasm for referenda, why did he refuse to support the amendment which would have allowed employees to take a vote on whether they wanted to be nationalised?

    I do not know the views of workers in other yards, but I have been in close contact with the men in my yard, and I know that four-fifths of them support nationalisation of their industry. The men have shown me a number of planted dummy letters which were drafted for them by the company. I could show the hon. Member a dossier of them to prove that a large part of the protest is highly spurious and is fomented and encouraged by the company and is ghosted for individuals. I fear that in spite of his normally reasonable approach the hon. Member for Caernarvon has been taken in by this publicity campaign. I am disappointed in him for being so taken in.

    It is clear that the Bill should get through, not only in the national interest, but in the local interest of areas such as mine. The other place should have no rôle in matters such as this. It is wholly unrepresentative and is thwarting the will of the majority of the elected Commons. I and, I am sure, all other hon. Members with ship repairing interests will fully support the Government in this matter.

    First, I declare an interest. A company of which I am a director has an association with a company in the ship repairing industry.

    I entirely support the suggested amendment so ably moved by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). I have listened to all the speeches this evening, but I am still brought back to admiring his great grasp of parliamentary procedure in this complicated matter of hybridity.

    I was interested in the answer of the hon. Member for Swansea. East (Mr. Anderson) to the hon. Member for Caernarvon (Mr. Wigley) when he was asked why he did not support a referendum of workers in the ship repair industry. The hon. Member for Swansea, East seemed to suggest that while he did not know what the workers wanted, he had guessed at a figure of four-fifths of the work force in favour of nationalisation which he felt would get him by in case anybody pressed him further.

    I replied that I did not know what areas other than my own were feeling about the matter. However, I do know what my constituents who work in the industry believe. I have been in constant contact with the shop stewards and the men there. The Swansea yard sent a letter to the Minister, signed by 78 per cent. of the work force, supporting the Bill.

    I am grateful for that clarification. Nevertheless, I suspect that the Government and most hon. Members do not know what those who work in the ship repair industry want. I am not prepared to accept that everything that emanates from British Channel Ship Repairers is necessarily tainted, false or inaccurate. Nor do I see any reason to suppose that Mr. Christopher Bailey is an evil man who is seeking to do down those who work for him. I believe that he is concerned about his business, which has proved extremely successful, and that he wants to continue with it.

    Let us consider the document which we received from the other place on 22nd November setting out the reasons why their Lordships were insisting upon their amendments relating to ship repairing. In setting out those reasons they said that
    "The Lords insist on their amendments in lieu of certain of their amendments … to which the Commons have disagreed … Because the ship repairing companies named in the Bill are likely to be less competitive and less successful and to be able to provide less employment if they are nationalised."
    This gives rise to three questions that the Minister must answer. He must say that he believes that the ship repair companies will be as competitive or more so, as successful or more so, and will provide as much employment or more than at present. If he cannot give those three answers he should adopt a different attitude towards what the other place has said to the House of Commons. It is conceivable that their Lordships are not quite so coloured by party prejudice or by a belief in sticking to some so-called mandate given to them at a General Election which returned a Government with the smallest total of votes ever in our history. Perhaps they can look at the arguments objectively and can advise the House of Commons that if it pursues the Government's policy it will damage, not help, part of the shipbuilding industry—and I include ship repairing in that term—and harm the chances of prosperity both for the country and for those who work in the industry.

    My hon. Friend the Member for Tiverton has explained that the hybridity which may or may not be in the Bill, but which is clearly a source of doubt, could require the Bill to go to Examiners and then to a Select Committee. I was a member of such a Select Committee which dealt with the Maplin Development Bill. I believe its procedure was very similar to that which will apply to this Bill when it returns to the other place. It was a long-winded and painstaking procedure, as it should have been.

    The Minister of State, however, knows perfectly well that such a procedure will cause a great measure of uncertainty about the date upon which this Bill can finally become law. He well knows that uncertainty exists in the shipbuilding and particularly the ship repairing companies which will be left in a state of limbo. That can only harm their chances at a time when any work they can find is crucial to the employment and prosperity of their yards.

    Therefore, the argument has been advanced that the other place are responsible for creating that uncertainty, and possibly the catastrophe, which I think was once referred to by a Minister, if the Bill were not passed. In fact, the responsibility lies firmly and squarely upon the Government. They should not try in any sense to suggest otherwise.

    6.0 p.m.

    Various arguments have been advanced by the Government to support their contention that the whole of the shipbuilding industry must be taken into public ownership. We have had the argument about the party programme. It is suggested that it is written on a tablet of stone and everyone in the nation is waiting to see the Government honour every pledge, the promise of "Back to Work with Labour", although unemployment is running at record levels.

    We have had the arguments that shipbuilders often carry out ship repairing, that we should not make a fuss, and that there is great commonality between the two parts of the industry. We have had the argument about accountability. That was totally and utterly destroyed by the NEDO study on the nationalised industries.

    We have also had the argument about protecting jobs. However, at the end of the day the Government know as well as I do that the damning study from NEDO makes the accountability argument a non-starter. They also know that the nation is not hanging on every promise in the Labour Party's programme. If it were, it would not have returned to this place my hon. Friend the Member for Walsall, North (Mr. Hodgson); it would have returned a Member to sit on the Labour Benches.

    If the Government consider those facts and say that they are not real, they are not living in a world of reality. The Government are considering the party programme not in contemporary terms but on the basis of old-fashioned Socialist halcyon days. Those days have long since passed to be replaced by an appalling nemesis when the next General Election is called.

    Members of another place have laid great stress on jobs, and that is the central argument tonight. There is only one place in the Bill where there is a suggestion that there may be an increase in employment in these industries. Admittedly it does not say that there will be a long-term increase. In page xii we are told that
    "There is unlikely to be any net long term increase in the staff of the Department of Industry or any other Government Department in consequence of the Bill."
    Presumably if there is not to be any net long-term increase there will be a short-term increase. I say "Good luck" to those who hope to find work as a result of the Bill.

    Has my hon. Friend noticed, that, despite what the Government have said about putting jobs at risk, they still make the same estimate of the number of people who will become employees of British Shipbuilders and British Aerospace as they made two years ago when they first introduced the Bill.

    I am grateful to my hon. Friend for pointing out that fact. I was about to touch on it myself. That fact seems to demonstrate the unworldly nature of those who drafted the Bill and their inability to recognise that circumstances have changed since the Bill was first debated by the House. They have shown their short-sightedness. I believe that there is an exact optical word for "short-sightedness", but it is clear that the Government have shown shortsightedness.

    The employment figures are unlikely to be the same in these industries today as when this Bill was first presented but the Government choose to live with the original estimate. I suggest that they have chosen to mislead ever so slightly anyone who may wonder about employment prospects in these industries. Of course, they tell us that, of the 95,000 people who are likely to go into the shipbuilding corporation, 20,000 are already in State companies. I am concerned about the 75,000 who are not. I want to know what guarantee the Minister of State can give, if the Government defeat the amendment and the ship repairing companies finally find their way into British Shipbuilders, that the work force will stay at exactly the same level. If he cannot give that guarantee, what on earth is he doing asking the House and another place to nationalise the industries? Why is he taking this course when those in another place have warned us of the danger?

    The Minister of State is like a motorist who sees the lights turn to red in front of his face but puts his foot on the accelerator on the offchance that he will get across. He is not only playing with his reputation and with his words at the Dispatch Box. This is not a question of turning another place into some sort of mausoleum of fuddy-duddies. The hon. Gentleman is refusing to recognise that there might be more wisdom along the corridor than in this Chamber. There is certainly a good deal less bigotry along the corridor. Above all, the hon. Gentleman is refusing to recognise that their Lordships might be more concerned about the future of those who work in the industries than party politicians who clutch a piece of paper and say that it is their mandate for doing anything that they like, and that if others do not like it it is just too bad.

    The ship repairing companies are fighting for their lives but they are successful. They have been built up by the hard work of their managements and workers. Most of the companies are profitable. They are living in a world of international competition. They are meeting that competition successfully and giving employment to many people. If we do something tonight that reduces that employment or damages the companies' profitability, all of those who vote against the amendment must feel guilty.

    As I feel that it is my duty to do so, I shall read two or three sentences from the NEDO study on the nationalised industries for the Minister of State to digest and absorb, I hope, before he replies. The study reads:
    "The system by which Government seeks to influence or control the nationalised industries is characterised by a lack of incentives for adequate or improved performance."
    It also states:
    "The twists and turns of interventions give ample opportunity for management alibis. The result is what can be called a 'minimising environment', with few rewards for real success and negligible sanctions for failure."
    I hope that the Minister of State has found time in his conversation with his colleague the Under-Secretary of State to listen to those words. If that is what he is bringing to the ship repairing industry, all I can say is Lord help those who work in the yards.

    I support the suggested amendment. That will not surprise those who have heard me speak on these matters on previous occasions. I give the amendment my support for simple reasons. First, throughout our debates it has been emphasised that the nature of the Bill was the advancement of Socialism. Some of us on the Conservative Benches still believe—we shall long continue to do so—that we are here to preserve good employment where that can be done, even in the face of the dogmatism of Socialism.

    The hon. Member for Caernarvon (Mr. Wigley) said that we are dealing with a small section of those who will be affected by the Bill. We are discussing a suggested amendment concerning only a small section of British industry—namely, 5 per cent. of the total work force of the industry with which we are dealing. It is a successful section, which in our view is in no way related to the other units that we shall be discussing.

    When we began discussion on the Bill about a year ago many hon. Members, particularly those who represent industrial areas, were sincerely and anxiously concerned about the employment situation and the direction in which we were heading. We knew from experience in our areas that there was no alternative work available for those whose jobs were likely to be put at risk through the passage of the Bill. At no time during the discussions on the Bill has there been any question other than that the ship repairing companies with which we are concerned in this amendment have supplied, and continue to supply, very good employment and have every prospect of continuing to do so. If that is the case, I find it extremely difficult to accept that the Government are serious in their alleged intention of securing, and indeed increasing, employment. Labour Members from industrial constituencies must know, as Conservative Members certainly know, that in the majority of those areas there is no alternative work available for those who find themselves out of work today or who will face that situation tomorrow. It must be hard for those concerned to recognise that their elected Members are not prepared to give every support to the units of industry which are successful.

    In the ship repairing battle over a period of a year there has been a great deal of unnecessary acrimony. If it is the purpose to advance Socialism by putting this Bill on the statute book, the delay occasioned by this small part of the Bill could not justify the uncertainties which inevitably have arisen in all other sections of the industry in this long and protracted debate. Therefore, it does not seem realistic that this has been done in the best interests of the ship repairing industry as such, of those employed in the industry or in the national interest. It must be clear by now that we should seek to secure employment without the help of vast hand-outs from those who lend money from abroad. That must be our prime concern.

    I have expressed my point of view many times, but I make no apology for so doing again tonight because we have at no stage heard one reason which is industrially acceptable for the inclusion of those concerns that we seek to exclude from the Bill. We have heard only that this will extend the dogma of Socialism to an area where, in my view, it can only do increasing damage. Therefore in supporting the suggested amendment I ask the Minister to give, for the first time, one good reason for saying that benefit will accrue to the industry, to the people employed in this part of the industry or to the nation.

    In these lengthy proceedings, which have now occupied this House for a year and a week, it appears that the ship repairing industry has for some strange reason constantly been overlooked in terms of justification from the Government. It is a most unfortunate fact that in recent weeks there appears to have been a vendetta of spite from the Government Benches against the attitudes taken by one small independent ship repairing yard. I refer specifically to Bristol Channel Ship Repairers.

    Then will the hon. Gentleman explain why he wrote to me, towards the end of last Session, asking me to ensure that that company was nationalised?

    I shall gladly reply to the Minister. He will recall exactly the nature of the conversation I had with him. I put to him in respect of certain sections of the industry it was due for nationalisation for purposes of political motivation that on a technicality the Government might have the intention of dropping the Bristol Channel Ship Repairers from the Bill. I hope he will accept my recollection of that correspondence as being correct.

    The hon. Gentleman wrote to me and asked me to ensure that Bristol Channel Ship Repairers was not removed from the Bill. It was not just a conversation; the hon. Gentleman wrote to me on the subject and we discussed the matter. It ill becomes him at this stage to say that we have a vendetta by seeking to retain in the Bill a company which he demanded should be retained in the Bill.

    6.15 p.m.

    The Minister has made a typically spirited reply. I trust that he will refresh his mind, as I shall, on that correspondence, and I hope he will agree that we have a point of compromise regarding our specific recollections. I see the Under-Secretary of State for Industry nodding his head, but since, with the greatest respect, he must be unaware of the purpose of this exchange, I should be grateful if he would not make any further sedentary contributions. If the Under-Secretary of State wishes to make a contribution, I shall be willing to give way to him. Clearly he has nothing to add to this debate—which is hardly surprising.

    I was about to point out that one of the great problems in the last few weeks has been the hostility from the Government to Bristol Channel Ship Repairers. This has created a massive red herring over the entire length and breadth of the ship repairing industry. The great irrelevancy seems to have become, by default, the great debating issue. I recall a situation in the West Country 16 years ago when various groups of business men were after the franchise to set up independent television. One group went rushing off and signed up all the bishops and the lord lieutenant, while another group went off and signed up the high sheriffs and chairmen of county councils. It was only when they reached the stage of putting in their tenders that they realised they were totally out of balance. Some horse-trading followed in which, I gather, two bishops were worth one lord lieutenant.

    It seems that at present Bristol Channel Ship Repairers faces the same situation. The Opposition say that 200 letters have been written saying that, according to the work force, nationalisation is wrong. Then up get the Government and say that 250 letters have been received by them stating that the work force wants nationalisation. The Opposition, not to be outdone, then instance 300 letters against nationalisation, and the Government counter with 350 letters in favour of such a move. Although I recognise the problems, feelings and wishes of those who are employed and involved in the future of Bristol Channel Ship Repairers, I believe it must be accepted that the majority of yards in the ship repairing industry have treated the matter fairly and properly and have not sought to encourage workers to go into a great debate, nor have they sought to suppress the right of workers to express their feelings on the future of their yards.

    It should go on record that the majority of men in the ship repairing industry have behaved creditably and have not sought to influence any hon. Member one way or the other. It is true that at Falmouth Docks the joint yard committee has rightly dealt with issues of concern rather than entered into a great vendetta for or against the case for nationalisation. Its fears and reservations on matters which it would like to see sorted out are as vivid and as realistic now as they were a year ago. Unless there is a definite statement of intent, it feels that the headquarters of the British Shipbuilders Corporation will be placed so far from the West of England as to put Falmouth in a position of being out of sight and, therefore, out of mind.

    The people in the ship repairing industry at Falmouth have been reassured that there will be no direction of work away from existing yards, but time and again we are told that it is possible for shipbuilders to undertake ship repairing work and that interchangeability of skills is acceptable. Such an interchangeability of skills is acceptable if the shipbuilding yard is next to the ship repair yard. If, however, the shipbuilding yard happens to be 300 miles away from the repair yard, that interchangeability is irrelevant. The shipbuilding yard can be used for repair work when the order book is low, but one cannot say the same in reverse because a ship repair yard cannot be used for shipbuilding.

    We are also worried by the constant reassurances by the Government that they will do all they can to create full employment in the ship repair industry. I do not doubt the Government's willingness to do that, but it is not in the gift of the Government to provide work for ship repair yards. The only people who can do that are the shipowners. Unless there is to be a direction to specific yards—and the Minister has said that there will not—the small, independent ship repair yards such as Falmouth are out on a limb, and that must cause great concern to the people who work in the industry.

    I hope that this will be my last contribution in the series of debates that we have had on this issue. Personally I do not care who owns Falmouth Docks at the end of the day. The only thing that matters to me and to the people who work there is that there should be 1,500 reasonably secure jobs and a sustained and maintained programme of investment, and that its strategic importance to NATO and European shipping should not be undermined, diminished or lost to world shipping, the people of Britain or those who work there.

    I have not had the pleasure of corresponding with the Minister of State, or perhaps I should say that I have denied him that pleasure. If I had written to him on the subject, I should have written in terms different from those of my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd). I should have made clear to the Minister that it does matter to me in whom the ship repairing industry is vested. It matters to me in whom the docks in my hon. Friend's constituency are vested. If one examines the history of the 14 years of Socialist Government since the war—two periods of six years, from 1945 to 1951, and from 1964 to 1970, and the two years since 28th February 1974—one finds that the appetite of the Government to vest more of the nation's assets in themselves and to concentrate more of the financial and commercial decision-making in themselves has grown.

    If at some later date there should be another Labour Government, they will move on from the stage in which we find ourselves tonight. It is one of the inevitable consequences, as we have seen in each of the three periods of Socialist Government since the war, that they are never satisfied. A Socialist Government resemble an insatiable lion which must go on devouring whatever meat it can find. That analogy is not false, and that is why my hon. Friends and I are anxious to exclude from the Bill the ship repair element—an important, though small, element which is the subject of the Bill.

    We do that for reasons which not only involve employment, important though that is. We do not have confidence in the wisdom of politicians. The economic decisions that are likely to be made by the Treasury Bench and the decisions about the future levels of employment in the industry and about the levels of investment will be worse if made by the Government than if left to those in the industry.

    The issue is one of principle, and it is here that I part company with my hon. Friend the Member for Falmouth and Camborne. He said that ownership did not matter, but I disagree with him. Ownership is everything. If we concen- trate more of the nation's assets in the State, if we concentrate decision-making in this small group of politically-motivated men and women in Whitehall, we shall have political rather than economic decisions. The screws will be put on the ship repair industry in a way that would not happen if the industry were still in private ownership.

    It is becoming increasingly difficult for the Government to borrow money. Once they have taken over the ship repair companies—12 are listed in the schedule—the Government will have to provide the finance ncessary for the ship repair industry either through the National Enterprise Board or by some other means. Will the Government be able to find the money in the climate that they have created? I doubt it. The level of employment in the industry will be put grievously at risk if ship repair is not taken out of the Bill.

    I hope that, when we come to divide on the suggested amendments and on whether the other place is right, we shall carry the amendments and save ship repairing for the free enterprise system, which has served it and its employees well.

    From the tone of the debate one would think that Bristol Channel Ship Repairers Limited was the only ship repair company of any merit in the United Kingdom, but on the North-East Coast there are more ship repair workers than in the whole of the Bailey organisation.

    I am disturbed at the gay manner in which the Lords bandied strong language about the industry. How many noble Lords have actually been in a ship repair establishment, let alone worked in the industry? I have never worked in the ship repair industry, but I have worked in its shadow all my life. I urge hon. Members to cast back their minds to the precarious position of ship repair workers only a few years ago. Then it was a casual job in which workers traded for a post in a manner resembling a slave market. But as a result of union influence, the position has improved. The equipment in the yards is still the old-fashioned equipment that was used when labour was cheap and dehumanised.

    Most ship repair yards in the North-East are in desperate need of capital. The hon. Member for Eastbourne (Mr. Gow) should remember that at the end of the day the State will have to provide the money to maintain the efficiency and competitiveness of the yards, even when they are nationalised. That is a very important point to bear in mind.

    6.30 p.m.

    I have never been in any of the ship repair establishments owned by the Bailey organisation, but I have seen aerial pictures of them. Some proud boasts are made about those yards and their size and capacity. However, one could put them in one corner of some of the yards that operate in the North-East. It is a very modest effort of ship repair—I say this with respect to those who have them in their constituency, such as the hon. Member for Falmouth and Camborne (Mr. Mudd), who would probably agree—compared with the main efforts of ship repair in the United Kingdom.

    It is for that reason that I shall be supporting the Government tonight concerning ship repairing, because, unless the new equipment is put in and unless the new layout and design of these ship repair establishments is completed very quickly, the position concerning further ship repair orders will worsen.

    Hon. Members who, with me, sat in on the long, weary debates on the Bill a long time ago—we have had a new Prime Minister since then—will recall that we became very friendly in spite of our differences about the issues involved. We had long, weary debates on all the aspects—perhaps not as long as some would have liked. There were strong differences of opinion which have been expressed again by members of the Committee, such as the hon. Member for Tiverton (Mr. Maxwell-Hyslop) and the right hon. Member for Renfrewshire, East (Miss Harvie Anderson). However, we should try to look at the United Kingdom as a whole and recognise that ship repair and shipbuilding are desperately in need of capital.

    Our differing ideologies must be forgotten now. It is a question not of Socialism or capitalism but of reality. The reality at present is that only the State is prepared to push in the capital required. The sooner we set about preparing the ground so that capital investment can start, the sooner our aircraft, shipbuilding and ship repairing industries can be put in a position of competitiveness in a very competitive world.

    I have not so far intervened in the debate on the Bill on the Floor of the House. However, I should like to do so briefly, simply to follow up something that was said by the hon. Member for Wallsend (Mr. Garrett) and to make a fairly general point.

    The argument has been put forward with great conviction that the future will depend on the amount of capital that the State is prepared to put into the shipbuilding and aerospace industries. I should like to throw a little cold water perhaps on that concept.

    The Swedish yards really set the technological pace for the development of the Japanese shipbuilding industry. The Swedish yards had a great deal of both private and, eventually, public capital put into them. When one looks at them now, one sees a virtually nationalised industry into which the Swedish Government have been pouring capital by the million krone for a considerable time. The net result on the capacity, output and employment in those yards has been simply to stabilise a situation which I am convinced the Swedish Government will not be able to sustain. Precisely the identical position will arise in the United Kingdom.

    The key to the whole situation is not whether the Government will pour capital into the shipbuilding industry. It is whether the world shipping industry will supply a market that the British shipbuilding industry will be able to meet at a competitive cost level.

    As far as I can see and judge, the evidence is that that will not be achieved necessarily or even inevitably, no matter how much capital the British Government pour into the shipbuilding and ship repairing industries. Even if they were to pour in the capital, that would be no guarantee that the only kind of employment that matters in the United Kingdom today, which is employment with the highest productivity in activities which are economically viable, would be maintained or necessarily preserved.

    The real danger is that precisely the opposite will happen and that by pouring capital into what is a sector of the United Kingdom economy which, over the secular term—which we should be examining—should be declining or changing, all that the Government will be doing will be turning more of British industry into an industrial museum.

    I happen to have seen recently a very small device, which the Minister of State will doubtless know when I describe it as a micro-processer—something as small as my thumb—which can now supply any industrialist anywhere in the United Kingdom with what I am told is the computing power that the whole of the United States enjoyed in 1939. This will have the most dramatic effect on the whole British industrial system, by comparison with which anything that the Secretary of State or the Minister of State may be discussing or legislating about now will be minimal in effect.

    These are the things that really decide whether employment is maintained in the only type of industry in which it must be maintained in the future—the type of industry which has the highest effective technological and productive output. The micro-processer may not have a great influence on shipbuilding. It is unlikely to do so. However, it may have a great influence on the devices that are put into ships. Certainly the British shipbuilding industry and its component suppliers should be looking at that.

    If we are looking at where capital should be invested in the shipbuilding and ship repairing industries, we should be looking very carefully at the whole of the component structure of the industry. From one end of these debates to the other, we have hardly heard this subject mentioned. Why does not the Minister of State give us a constructive, active and relevant discussion of the real industrial problems in the shipbuilding and aerospace industries? Why does he come here with this antiquated quackery of nationalisation in the face of probably the most dramatic, critical and damning report, referred to a few moments ago, on nationalised industries that has ever been published?

    How the Government can have the sheer brazen effrontery to say that this is the view of a major sector of British industry, that these are the techniques that will help us through and produce real wealth and guarantee markets and, by guaranteeing markets, produce employment, and how the Minister of State can expect serious people in the House and in the country to listen to all that claptrap and be in the least convinced, leaves me absolutely astonished. The relevance is so far from the realities that we should be discussing that the House is absolutely justified in rejecting what the Government say.

    I have been trying to follow the hon. Gentleman's argument closely. Is he arguing that the capital investment to which my hon. Friend the Member for Wallsend (Mr. Garrett) was referring is not necessary in British shipbuilding and repairing? Is he arguing that the capital investment that has taken place in the past under private ownership is equal to that which has been put in by the Japanese, the Koreans and others?

    I am not attempting necessarily to justify what may have been a partial failure to invest by the British shipbuilding industry. I have always admitted that. However, there is an enormous investment in the Japanese shipbuilding industry. It is clear from OECD discussions that the Japanese will not wind down their industry to satisfy the United Kingdom or Europe.

    Surely logically what we should be doing now is to say "Capital is very scarce in the United Kingdom. Where shall we put it so that there is a reasonable possibility of creating industries of the highest technologies which will command the world markets?" That is what the Japanese are doing. From the document recently made available to the Select Committee on Science and Technology it is clear that the equivalent of £6,000 million will be spent on research and development next year in Japan. The vast proportion of it is going into electronics, because the Japanese realise that that is where the future lies.

    I hear all the discussion about capital and employment, but what I want to hear from the Government is whether they have made this kind of appraisal, whether they have looked across the spectrum of British industry and whether they have made the judgment that capital should now be concentrated above all else in shipbuilding so that we shall have a little more of the industrial museum preserved in the United Kingdom, at the expense of employment and industrial development elsewhere and a continuing decline in the British standard of living and British standards of performance.

    Those are the questions that we should be asking, and we have utterly and singularly failed to ask them.

    The hon. Member for Havant and Waterloo (Mr. Lloyd) was living in a fantastic world. If we were to accept his philosophy, we should close every shipyard and every ship repair yard in Great Britain. Britain is a maritime nation. It will be a sorry day for Britain when it is not a maritime nation, because then it will be at the mercy of the world.

    I wonder whether the hon. Member would agree with the Government giving to British Channel Ship Repairers Limited the £20 million that the firm has been seeking. I shall give the hon. Gentleman the chance to answer.

    The answer is that I should look at such a proposition on its merits. The right hon. Gentleman said that my point of view was that there should not be a British shipbuilding industry. I did not argue that. There may be a case for a highly selective investment in a very highly selective area of shipbuilding. In that direction lies the future. I believe that disaster will result from trying to keep the whole of the existing pattern of shipbuilding alive by pouring money simultaneously into every yard.

    The hon. Gentleman is saying that the Government would do the overall sanctioning and would say "This yard could be made viable, but that yard could not be made viable." Irrespective of whether it was British Channel Ship Repairers Limited or a ship repair yard in my constituency, the decision would be made by the Government and not by those who at present control the yards.

    I wonder whether the hon. Gentleman would accept the situation in which those who own and control a yard would be denied the right to say whether they should continue, and whether he would agree to transfer to the Government the power to say that a yard should close because it was not thought to be worth investing capital in it whereas another yard should be kept open because it was worthy of investment.

    I want to put to the hon. Gentleman a point which is a reflection on the private ship repair industry. We can build tankers of 250,000 tons. They sail from British shipyards for their trials, but they do not return to be repaired because we do not have big enough yards to repair them. If the industry had been run as a successful nationalised industry, as we made provision for building bigger ships we should have made similar provision for repairing bigger ships. Half the tonnage which leaves British shipyards can never return because we do not have the capacity to do the pob.

    We know that private enterprise will not provide the necessary capital. That is why it is so essential that the Bill goes through. We are a martitime nation depending upon ships for our imports and our exports. No matter how large and successful the aircraft industry becomes, no one can imagine that we shall ever be able to manage without ships. If they are not built and repaired here, we shall be at the mercy of those who make them and repair them.

    For every historical reason, leaving aside two world wars, it is necessary for us to have viable shipbuilding and ship repairing industries. The post-war years have shown that, given all the desire and good will in the world, private enterprise has not been able to do the job; it has fallen down upon it. I repeat that as a maritime nation we cannot do without shipping. It is therefore time that the Government stepped in and did the job.

    6.45 p.m.

    The speeches of my right hon. Friend the Member for Jarrow (Mr. Fernyhough) and of my hon. Friends the Members for Wallsend (Mr. Garrett) and for Swansea, East (Mr. Anderson) have brought a much-needed breath of reality to our debate, because they represent ship repair workers and they actually have something relevant and valid to say about this subject. That is in contrast to the arid technicalities that Conservative Members, who do not represent ship repair workers and who have never been into a ship repair yard, introduced into our debate.

    The hon. Member for Eastbourne (Mr. Gow), speaking for all the ship repair workers and shipyards in his constituency, and other hon. Members who have made speeches of that kind regard today's proceedings as some frivolous interlude in which they can participate because the Opposition Whips have invited them to fill up time. My right hon. and hon. Friends speak for workers who are keenly interested in the future of these industries.

    The hon. Member for Tiverton (Mr. Maxwell-Hyslop), who moved the item which we are discussing and who has been intermittently present for a fragment of the debate, has a lately-found interest in the whole subject of ship repair. During the 58 sittings of the Standing Committee, which again he attended intermittently, his voice was not heard very often on this subject, nor did he in any way make an issue of the matters he raised today.

    The hon. Member raised these matters in recent weeks only because he has been briefed to raise them. As I shall have to point out, either the hon. Gentleman has been briefed badly or he has been invalidly briefed, or he himself has deliberately sought to present to the House only part of his brief, and a part of it which misrepresents fact in a most disgraceful way. The hon. Member for Tiverton, who, as I say, has shown at best only an intermittent interest in the proceedings on the Bill and in ship repairing as a whole, is the last hon. Member to raise these matters. He started out as a good joke. He developed into a bad joke. Now, on this Bill, he is simply a sick joke.

    The hon. Gentleman said that the Government wished to delay the Bill. He was supported by his hon. Friend the Member for Hastings (Mr. Warren). The hon. Member for Caernarvon (Mr. Wigley) said that the Government wanted to see the Bill fall. Hon. Gentlemen have a very simple way of calling our bluff—by assisting the passage of the Bill. They can assist the passage of the Bill as it was introduced and passed intact by the House of Commons after the most prolonged consideration of any Bill in the history of Parliament. If they wish to see the Bill enacted, they can assist by voting for the Government for the rest of today.

    When hon. Gentlemen somehow imply that all will be set at naught because the House of Lords may take further action, they speak as though it is a remorseless fate that will drive the House of Lords to take such action. The House of Lords can refrain from taking such action. Indeed, the House of Lords did refrain from taking such action, because the Bill as we are debating it today went to the House of Lords. This Bill, with all the suspicions of hybridity which the hon. Member for Tiverton has been briefed to raise in the House, was before the House of Lords for two solid months. Noble Lords tabled Questions to my right hon. and noble Friends who are the Ministers in the House of Lords. The information that is available now was made available then.

    Nobody in the House of Lords moved that the Bill should undergo the hybrid procedure, and there is no reason whatever why the House of Lords should submit the Bill to the hybrid procedure when, if this House passes it tonight, it goes there later this week. Therefore, it is completely wrong for hon. Members to imply that blind fate will drive the Bill to the Examiners when it goes to the House of Lords. These are human acts which can be changed by other human acts, and hon. Gentlemen who use that threat are using a threat that is not valid.

    The hon. Member for Hastings, in speaking of the speech made by his hon. Friend the Member for Tiverton, said that it was well prepared. Not only was it well prepared: it was over-prepared. In introducing these matters during the debate on the procedural motion last week, the hon. Member for Tiverton treated the House to a great deal of information that had been fed to him, and he accused the Government of a deliberate attempt to conceal relevant information from Parliament and to mislead the House of Lords in Written Answers. It is as well that I take the opportunity of a debate on a suggested amendment introduced by the hon. Gentleman, and on which he spoke before leaving the House and coming back for the winding-up speeches, to deal with some of the matters which he presented to the House so that the House can know how the hon. Gentleman sought to mislead it last week.

    As the hon. Gentleman made allegations about misleading Parliament, it is my duty to draw to the attention of the House the full correspondence between the London Graving Dock Company Limited and the Department of Industry, from part of which the hon. Gentleman quoted in some detail in an attempt to demonstrate that the company did not meet the definition contained in the Bill.

    The hon. Member for Tiverton quoted only selected letters from a series. The first letter, it is true, indicated that in the view of the company it was a subsidiary and not the parent which met the definition, but, after further correspondence and two meetings with the Department of Industry, the managing director of the company, Mr. Donald S. Crighton—whom the hon. Gentleman gravely insulted—came to the conclusion, when all the facts had been thoroughly gone into that the parent company was the company that met the definition.

    That was confirmed without any doubt in a letter from the company secretary to Mr. A. McDonald of the Department dated 10th April 1975, which I quote in full:
    "Further to our letter of 8 inst. and our meeting of today with Mr. Marchant and your goodself, together with Messrs. Evans and Walker, we are now able to reply to your letter of 26th March. We would confirm that the company named in the statements made on March 17, 1975 of the Secretary of State for Industry for public ownership of the shipbuilding, ship repair and slow diesel marine engine industries, that is, the London Graving Dock Co. Ltd., meets the appropriate definitions, and that no other companies in our group which meet any of the definitions and which are not subsidiaries of companies already on the lists are omitted fom the lists."
    The hon. Member for Tiverton, in quoting from an earlier letter, drew false conclusions from it. He said:
    "A company does not say that it most nearly meets the criteria if it meets them. Clearly, the managing director"—
    these are grave accusations made by the hon. Gentleman that I am about to repeat—
    "having been forbidden by his board to communicate truth to the Department, and the secretary of the Company having been given the job of trying to accommodate the Department to back up this untruthful representation to Parliament—"
    this was the slur that the hon. Gentleman was casting on a member of the public who had no opportunity of answering back, a slur that he made deliberately, wantonly and disgracefully. The hon. Gentleman said:
    "the secretary of the Company, having been given the job of trying to accommodate the Department to back up this untruthful representation to Parliament, we get this unhappy situation that, even when given that task"—
    that is, the task of lying—
    "the secretary has to say not that the company has met the conditions laid down in the Bill but that it is the company which most clearly meets the criteria set down."—[Official Report, 1st December, 1976; Vol. 921, c. 948.]
    That was what the hon. Member for Tiverton said in a deliberate slur on two people outside the House who had no power to reply to him. The hon. Gentleman did not mention that in a later letter the company specifically confirmed that it met the definition. The hon. Gentleman's limited reference to the correspondence left a completely false impression.

    It could be that the hon. Gentleman did not have access to all the correspondence between the company and the Department and, therefore, did not know of that letter. Let us give him the benefit of the doubt on that, but there can be no doubt about the use of a partial quotation which the hon. Gentleman made from the letter in his possession. His quotation from the third paragraph ends at the point which best suits his case. The rest of the paragraph reads as follows:
    "2a. After careful consideration we have now concluded that on 31/7/74 the London Graving Dock Co. Ltd. was engaged in the business of ship repair in that it employed staff who were so specifically engaged in the management and support of ship repairs.
    b. The London Graving Dock Co. Ltd. was at 31/7/74 entitled to an interest in possession in a dry dock or graving dock.
    c. The turnover of the London Graving Dock Co. Ltd. when aggregated with the turnover of the year ended 31/3/73 (the relevant year) of all of the group companies engaged in ship repairing, did exceed £3·4 million.
    5. As mentioned above, changes in the group's structure have made it very difficult to compare present activities with those relevant prior to 31/3/73 but we would be pleased to attend on you or welcome your representative, to supply you with the information you require."
    The letter concludes:
    "In order to come to an early conclusion to this rather complicated matter, we would suggest a meeting with you, representatives of this board and such other advisers as it is mutually agreed would be desirable."
    That meeting took place on 10th April 1975 and is fully recorded in the Depart- ment's files. In the course of the meeting Mr. Donald Crighton, the company's managing director—the gentleman of whom the hon. Member for Tiverton said that he had been forbidden by his board to communicate truth to the Department—explained that in recent correspondence he had not taken fully on board the fact that the definition related to a past period, and that further consideration showed to his satisfaction that the parent company was at the relevant date engaged in the business of ship repair in that it had contracts with certain shipping firms and Trinity House, and that the company had on the relevant date employed certain staff in the higher grades engaged in ship repair work, although the contracts had been sub-contracted to a subsidiary.

    So much for the completely false assertion made by the hon. Member for Tiverton that Mr. Crighton was not himself prepared to pull the wool over the eyes of Parliament and had left the correspondence to the company secretary. That is the kind of stuff that the hon. Gentleman is feeding to the House in his endeavours to frustrate the Bill.

    For the correspondence to be pursued by the company secretary was natural, as the initial correspondence from the Department on the definition was addressed to the company secretary. Here again the hon. Member for Tiverton misled the House by making a false inference and presenting it to the House as a fact, a fact which, I repeat, is an unwarranted slur on the officers of the company concerned.

    I very much hope that the hon. Gentleman, who has taken it upon himself to be a spokesman on this matter, whatever he says about the Government, will at least withdraw his slur on those two officials of the company. He raised the matter, he pushed it forward. It is not true, and it is disgraceful that he should have done so.

    The meeting between the company and the Department on 10th April, at which the Department's solicitor was present, established beyond any doubt that the London Graving Dock was the company which met the definition. This was confirmed by the letter from the company to this Department on 10th April which I previously mentioned but of which the hon. Member for Tiverton has apparently no knowledge since he did not inform the House that it existed.

    7.0 p.m.

    I hope I have said enough to show that the question whether the London Graving Dock Company met the definition in the Bill was explored with extreme thoroughness by the Department of Industry. I felt it necessary to put all this information before the House because it is entirely wrong that the hon. Member for Tiverton, by not choosing his words in any careful way, should cast a slur on those two men.

    The Minister of State has proved the case for allowing this matter to be examined by the Examiners rather than by reading letters across the Floor of the House. He has entirely proved the case for matters of this kind to be examined by Officers of the House—the Examiners—and by a Select Committee. He has destroyed his own case.

    The hon. Gentleman did himself no credit by his speech last week, and he does himself less credit by that intervention. The hon. Member read the letters to the House, and now he says that I must not read letters to the House and neither should other hon. Members. I read the letters to the House because the hon. Gentleman chose to give a partial, incomplete, false and insulting version of those letters. The hon. Gentleman sought deliberately to mislead the House—

    On a point of order, Mr. Deputy Speaker. Is the Minister using parliamentary language? Surely he should not be allowed to use expressions such as "false" and "deceitful". He should be asked to withdraw.

    I happened to be in the Chair last week when the hon. Member for Tiverton (Mr. Maxwell-Hyslop) read this lengthy correspondence, and I was almost led to say at the time that it proved that the art of letter-writing was not dead. The Minister is now replying, perhaps a little belatedly, to the speech made by the hon. Member for Tiverton last week.

    Further to that point of order, Mr. Deputy Speaker. With the greatest respect, that was not the point I made. The Minister was saying that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) was guilty of misleading the House and that he sought to do so by quoting letters. That is not the point. Surely, for the Minister to accuse my hon. Friend of deliberately misleading the House is to use unparliamentary language.

    We had the word "misleading" used by another hon. Member this afternoon. The original wording used was that the House had been "deceived". This was during Mr. Speaker's occupancy of the Chair. When the hon. Member was asked to withdraw, Mr. Speaker allowed the word "mislead" to be substituted.

    Further to that point of order, Mr. Deputy Speaker. It was within your hearing that the Minister accused my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) of deliberately misleading the House. Are not those words out of order and unparliamentary? Should not the Minister withdraw them?

    In my view, the Minister is not guilty of using any unparliamentary language.

    I said that the hon. Member for Tiverton sought to mislead the House. He did not mislead the House, because he was beaten by 18 votes in the Division. Therefore, he failed in his attempt to mislead the House.

    It was my duty to inform the House of these matters. The hon. Member says that because he read part of a letter, which I have now been able to refute and because there has been an exchange, the Bill must be examined for hybridity. The fact that the hon. Member makes a bogus point on the Bill does not mean prima facie that it is hybrid. If that was so, any Bill on which the hon. Member spoke would be prima facie hybrid.

    My hon. Friend did not read out the letter dated 14th April from the Minister of State to Lord Beswick. If he had, he would have given the House a clearer impression that Mr. Crighton was in some difficulty as to which of his companies met the definition. He clearly makes the point, made by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), that until the Bill goes to the Examiners no one will be sure about the matter.

    I am glad that the briefing has been spread around a bit. I do not think that this expensive material should be confined in its circulation to the hon. Member for Tiverton, who seems to have been favoured a little more than some of his right hon. and hon. Friends by those who have been involving themselves in this activity.

    The hon. Member for Chingford (Mr. Tebbit) is a connoisseur at smears.

    The hon. Member for Tynemouth (Mr. Trotter), who is a representative of an area which includes both shipbuilding and ship repairing and with whom I had the pleasure of attending meetings on Tyneside when I paid visits to various Swan Hunter establishments on Tyneside, claimed that ship repairing was different from shipbuilding. If that is so, I am still awaiting an answer to the question I have put on many occasions: why is there a Shipbuilders' and Repairers' National Association? Why have the shipbuilders and repairers joined together in an association jointly to represent their interests? I have also asked why it is that one of the leading shipbuilding companies—I see that the hon. Member for Tiverton is now feeding some of his briefing material to the hon. Member for Oswestry (Mr. Biffen). The outside interests which gain access to our Galleries so easily have managed to pass a note down. No doubt the hon. Hember for Oswestry, after his display of last week, is ready to sink as low as is necessary to repeat that performance.

    I will not give way to the hon. Gentleman under any circumstances whatever. I can tell the hon. Member for Tynemouth that I have spoken to a leading shipbuilder who also has ship repairing interests, both of which are liable to be nationalised, who has told me that it would be absurd not to nationalise his ship repairing interests together with his shipbuilding interests because the two are so congruent.

    Surely one trade association can represent two trades. Obviously there is some contact between shipbuilding and ship repairing, but it is not fundamental.

    Will the Minister deal with my question about plans for this industry? In every debate in which I have asked him about the plans, he has always got away from that point by talking about other subjects.

    I shall come to the hon. Member's question later. I was seeking to reply to points made in the debate before making a general case. I assure the hon. Member for Tynemouth that I shall come to his point.

    My hon. Friend the Member for Walls-end represents both shipbuilding and ship repairing workers. The House will be aware that the ship repairing workers in his area have sent telegrams to the Department of Industry through their trade union representatives demanding that the ship repairing yards in the North-East, on the Tyne and elsewhere in that area be retained in the Bill because of the urgency of the situation. When hon. Members ask what is the urgency, I refer them to the situation on Merseyside.

    When I visited Western Shiprepairers on Merseyside earlier this year, I had a meeting with the workers' representatives and discussed the redundancies which were then taking place and which we were unable to avoid. In recent weeks there have been more redundancies on Merseyside. The hon. Member for Newbury (Mr. McNair-Wilson) asks whether we can guarantee jobs in the ship repair industry when it comes into public ownership. If we do not get the ship repairing industry into public ownership pretty quickly, there may not be all that many jobs to protect because the number of redundancies which have taken place recently on Merseyside among Western Shiprepairers is extremely disturbing. My hon. Friend the Member for Swansea, East knows of the threat hanging over the ship repair yard in his constituency and the great dangers to that yard if it is not taken into public ownership quickly.

    My hon. Friend will be aware that not only in Western Shiprepairers Limited but in the Merseyside industry generally there is great anxiety about the future. As to the comments made by my hon. Friend the Member for Swansea, East (Mr. Anderson) about redundancies, Western Shiprepairers Limited now faces further redundancies and the loss of 8,000 jobs in the near future. Both the Confederation of Shipbuilding and Engineering Unions and management have shown real anxiety about the future of their industry. They are not too pleased about the length of time it has taken this House to deal with the Bill and about the frustrations that the Government have faced in both this House and the Lords.

    I am aware of that. When I visited Western Shiprepairers Limited earlier this year and discussed public ownership with the shop stewards, it was at the request of my hon. Friend the Member for Liverpool, Garton (Mr. Loyden) as well as his Merseyside constituents.

    Can the hon. Gentleman be clearer about nationalisation guaranteeing employment? There are only three possibilities: that the voluntary shipbuilding or ship repair purchase market will increase by a measurable amount, that British shipowners can be compelled to buy more ships than they would normally buy, or that the Government will build for stock There are no other ways in which employment can be maintained. To which of the three was the Minister referring?

    The hon. Member for Newbury asked a specific question on this. I shall answer both questions soon.

    The hon. Member for Tynemouth (Mr. Trotter) asked why ship repairing should be nationalised in this country when our industry seemed, in his view, to compare favourably with the ship repairing industry abroad. The PA report, which has often been mentioned in the House, said a number of things on this. It said:
    "Whilst we visited some of the leading companies in Europe, we also met port management and discussed their attitudes to the repair activities in their ports. In summary, the visits, which were to eight companies, have produced a formidable picture of competitive strength in relation to the industry in the United Kingdom. In terms of size of turnover, quality of facilities, operating expertise, labour relations and breadth of economic support from local ports, State, area or Government, they are considerably in advance of their United Kingdom counterparts."
    It also said:
    "In general, the leading European companies are better equipped, usually larger, and probably better managed than their United Kingdom counterparts. Their strength is founded not only on a past level of capital investment several times larger than the United Kingdom's but also on a continuation of this investment programme."
    That is on pages 27 to 29 of the report.

    The report also pointed out that a particular problem of the industry in this country was that so many of the docks that it used were publicly owned. Public ownership there has not helped one jot. Where are the ships coming from for repair at Western Shiprepairers Limited? Will ships on the Tyne be directed there?

    Of course there is to be no direction. I have made that clear many times. As my right hon. Friend the Member for Jarrow said, ships will come to be repaired in British shipyards only if we can offer the right facilities. But investment in this industry has been so scandalously inadequate that only with proper capital investment can we hope to attract customers. The hon. Member for Havant and Waterloo (Mr. Lloyd) was right in saying that one cannot force people to have ships repaired in our yards. One can only attract them and hope that it will come to be accepted that our yards are good places to use.

    The hon. Member for Walsall, North (Mr. Hodgson) made a formidable case for the nationalisation of shipbuilding. He spoke of the problems which affect shipbuilding in this country and of the inadequacies of the shipbuilding industry. In capsule form, he made a very satisfactory case for public ownership. But the hon. Gentleman implied that, because he had been elected to this House last month, this Government in some way no longer had any mandate to proceed with the legislation which they promised to the electorate at the last General Election.

    It may be that I did not study the election campaign of the hon. Gentleman as closely as I should have done. I do not know whether he made nationalisation of shipbuilding a major issue at the by-election. If so, no doubt he can speak with some authority about the issue. But my hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr. Cowans) certainly made the Bill an issue in his election campaign, when, as I have said before, the Tory candidate was hard put to retain his deposit.

    The hon. Member for Walsall, North has come here, very understandably, flushed with a victory in which he overturned a Labour majority and won a considerable majority of his own. Mr. Terry Davis, whom I hope we shall soon see in the House as my hon. Friend the Member for Birmingham, Stechford, won a by-election at Bromsgrove and Redditch—a seat as safe for the Tories as Walsall, North was for the Labour Party. During the April when that by-election at Bromsgrove and Redditch took place, the Tories lost many seats. The hon. Member for Isle of Ely (Mr. Freud) is here because of a by-election at that time, and he had hon. Friends here representing Sutton and Cheam and Ripon. But the Tory Government did not say that because they had lost seats in by-elections their mandate was removed and that they would not proceed with the Industrial Relations Bill, the European Communities Bill or the Housing Finance Bill. Far from doing that, they slapped the guillotine on all Bills and pushed them through this House in much shorter order than the 58 sittings that we have had to endure on this Bill.

    7.15 p.m.

    When those momentous events took place, the Tory Government had a sizeable majority—something which this Government do not have.

    It was a sadly reduced majority. Had it not been for the Liberal vote, that Tory Government would not have been able to carry the European Communities Bill through the House. The Tory Government won the Second Reading of that Bill by a majority of eight votes and they would have been beaten had the Liberals abstained, let alone voted against it. Majorities vary from Bill to Bill, as we find under this Government, with its present majority.

    The hon. Member for Caernarvon implied that if we brought ship repair into public ownership there would be centralisation. My hon. Friend the Member for Swansea, East referred to that point in his speech and said that our amendment to Clause 5 provided for a greater degree of decentralisation than had ever been provided in any previous public ownership Bill. That also answers the question of the hon. Member for Falmouth and Camborne. The centralisation provisions in the Bill were inserted to meet the needs and aspirations of areas such as his constituency.

    The hon. Member for Newbury asked me whether the Government would guarantee jobs in the industry if the Bill was passed. The answer is "No". I have said, not just in the House but on visits to shipyards, aircraft factories and ship repair yards, that this Government will not guarantee one job in any of these industries. The Bill cannot do that. What it does is to provide a framework within which it will be possible to maintain the maximum level of employment. Without the Bill, shipyards will fall down like dominoes and so will ship repair yards, while the aircraft industry will be in very great trouble indeed.

    The hon. Gentleman asked for a guarantee which the previous Tory Government were unable to provide. With his vote, as I recall, that Government sensibly nationalised Rolls-Royce, although the hon. Member for Oswestry did not agree that it was sensible. The then Government did not guarantee that every job in Rolls-Royce would be maintained, and that did not happen. But Rolls-Royce survived to provide opportunities for employment which would not have been there if the Government had not sensibly nationalised the company.

    Will my hon. Friend remind the Opposition of what happened in Sunderland Shipbuilders and the gratitude felt by the workers in that firm towards the Labour Government who took it into public ownership when it crashed along with Court Line?

    Since Sunderland Shipbuilders was taken into public ownership, we have seen the development of the Pallion yard, which offers probably the most modern facilities in Europe and maybe the world. That is one of the benefits of nationalisation for the constituents of my hon. Friends the Member for Sunderland, South (Mr. Bagier) and the right hon. Member for Sunderland, North (Mr. Willey).

    The Minister now says that it is not the Bill but the framework which it creates that will help the industry. What are the characteristics of the framework which enable him not to ask which part of the market will provide employment? Will it be the free market? If so, how will it be induced? Will it be the domestic market, and, if so, what incentives will be given? Or will the Government subsidise shipbuilding by building for stock or in some other way?

    We have been holding talks with the Organising Committee and the Confederation of Shipbuilding and Engineering Unions, and a report is to be produced which will make proposals on these matters. I advise the hon. Gentleman to await that report.

    These experienced and responsible people have been trying to work out the first policy ever drawn up for British shipbuilding. It is difficult in the present international climate, but the effort is being made. The report is confidential, so I cannot give the hon. Gentleman specific information at present.

    We have never pretended that it will be easy—it will not. My right hon. Friend the Secretary of State said this on the Second Reading of the Bill on 2nd December last year. My noble Friend Lord Melchett said in another place that the industry faces grave problems but that nationalisation gives it hope and prospects. We have never said more than that. We have never offered guarantees, despite the pressure from hon. Members who have said that they would support us if we did so. We cannot be dishonest about this matter.

    Will my hon. Friend remind the Opposition that in April 1970 Vickers decided to close the Palmer ship repair yard in my constituency which was then employing 800 people? The then Labour Government decided that it should not be closed and provision was made to keep it open, but one of the first decisions of the right hon. Member for Knutsford (Mr. Davies), within a month of being made Secretary of State, was to close that yard and to put the workers on the dole.

    Yes, indeed. I visited that yard with my right hon. Friend earlier this year.

    A number of hon. Members have asked about our general approach to the ship repair industry. We have put forward many times, both here and in another place, the logical industrial case for taking ship repairing into public ownership along with shipbuilding. Nothing that has been said in these debates has altered our belief that the ship repairing companies in Schedule 2 of the Bill should vest in British Shipbuilders.

    We have a clear mandate for nationalising ship repair. It is there in black and white in both our 1974 election manifestos. This is a firm commitment that we are determined to fulfil. This commitment followed an earlier recommendation by a Labour Party-TUC-CSEU working party 1973 that all significant companies in the shipbuilding and ship repair industries should be acquired by a national shipbuilding corporation.

    The working party's report was unanimously endorsed by the annual conferences of all those bodies in the autumn of 1973. The working party identified what was wrong with the industry and came to conclusions almost identical with those later reached by PA Management Consultants, which was commissioned by the previous Conservative Administration.

    Naturally enough, in view of the Government by whom they were commissioned, PA did not advocate public ownership as the remedy for the industry's problems. The PA report showed that the ship repair industry in this country had consistently declined over the last decade, during which employment in the industry had halved. I have been asked about guarantees under public ownership. There are certainly no guarantees under private ownership.

    PA identified a number of major obstacles to growth, including the existence in some cases of several ship repairers on one estuary competing against each other instead of concentrating on overseas competition; the outdated facilities of many ship repairers—which I have discussed with the hon. Member for Tynemouth—which do not compare with those of their rivals on the Continent and which will become even more unsatisfactory in the longer term; and unsatisfactory labour relations and their impact upon international competitiveness. My hon. Friend the Member for Swansea, East mentioned the problem of labour relations in his area.

    The industrial case for nationalising ship repairing is that the badly-needed improvements in investment, productivity and industrial relations are unlikely to come about otherwise. Under private ownership, it has been an industry generally noted for outdated, run-down facilities and poor working conditions.

    In competitive world conditions, the industry must now pursue an active marketing policy at home and abroad. It can best do this under a unified organisation. Our proposals for the ship repair industry are clearly part of a logical industrial strategy for this sector.

    But ship repairing's close integration in many cases with shipbuilding is another reason for its inclusion in the Bill. Many shipbuilding firms in the Bill also carry out considerable ship repair work, including Swan Hunter, Hall Russell, Robb Caledon, Smith's Dock, Vosper Thorny-croft and the Goole Shipbuilding and Repairing Company.

    It would be impossible in most of those cases to split the two activities. In many cases there is an interchange of labour and common facilities are used. It would be wrong to break up the company structure in these cases in the way envisaged in the suggested amendments. Shipbuilding groups like Swan Hunter and Scott Lithgow also have separate ship repairing subsidiaries. Here also, shipbuilding and ship repairing complement each other to a great extent. There is an interchange of facilities and, at Scott Lithgow at least, there has been an interchange of labour. Unless ship repairing companies in these groups come into British Shipbuilders, there will be a loss of flexibility and an inefficient use of resources.

    Of course there are independent ship repairing companies named in the Bill, but the case for nationalising these is no less clear than that for the other companies. These are major companies with significant dry dock facilities which carry out large repair jobs, not just voyaging repairs and maintenance.

    Can the Minister confirm that he has been speaking for such a long time because of the rumour that the hon. Member for Fermanagh and South Tyrone (Mr. Maguire) has been lost?

    I have been speaking for a long time because a remarkably large number of the hon. Gentlemen's hon. Friends have sought enlightenment from me during my speech. I have done my best in the difficult task of enlightening Members of the Conservative Party.

    A number of the Minister's hon. Friends have made the point that the Bill has already been discussed for longer than any other measure in history. Will he note that a number of us on this Bench would be glad if the debate were now brought to a close?

    While the hon. Member for Western Isles (Mr. Stewart) has had dubious views on the Bill as a whole and I wish, even tonight, that he would attempt to reform them, I admit that with one rather sad exception his party has been very sensible in speeding up our debates and in voting. I shall do my best to accede to the hon. Gentleman's wishes. I have one or two more remarks which will take me three or four minutes, unless there are other dark patches in the minds of hon. Gentlemen opposite which require enlightenment.

    7.30 p.m.

    So we have good industrial reasons for taking into public ownership the ship repair companies named in the Bill. A great deal has been said about the definitions of ship repair companies used in Schedue 2. The criteria in Schedule 2 were drawn up with one objective in mind—to nationalise the major ship repair companies situated on the major estuaries. The public ownership proposals embraced these major companies because they were the companies essential to the plan for a coherent strategy for the industry.

    The selection of the companies listed in the schedule was therefore made for good industrial reasons, and the definitions were framed to include these companies and to omit others which were not as relevant to the Government's proposals because they were too small or because they carried out ship repairing only as a sideline. For example, the ship-repairing companies of British United Trawlers Group were mainly engaged in carrying out repairs to the group's own trawler fleet and their facilities consisted of slipways used for this purpose. It was decided that public ownership of these companies would not be relevant to the Government's plan for a coherent strategy for the industry. [Interruption.] The hon. Member for Kingston upon Thames (Mr. Lamont) apparently does not find this interesting, but it is interesting to the workers involved, who want the Bill.

    Although those companies met the turnover criterion, they were excluded from the Bill as they did not meet the dry dock criterion. On the other hand, it was decided that Scott Lithgow Dry Docks Ltd., which owns an important dry dock facility on the Clyde and which is closely integrated with the shipbuilding activities of the Scott Lithgow Group, should, for reasons I have already explained, logically be taken into public ownership with the group's shipbuilding activities. The turnover definition was therefore set to include this company.

    Another example is given by the two Merseyside companies, J. B. Howie Ltd. and Western Shiprepairers. These companies own and operate major dry dock facilities on Merseyside, and together with other associated ship repairing companies in the Laird Group they constitute a major ship repairing activity. But because neither company on its own met the turnover definition, the concept of aggregation of turnover with associated companies was brought into include these companies within the scope of the Bill.

    The Government remain convinced of the strength of their case for nationalising the major companies in the ship repairing industry. I urge the House, therefore, not to support the motion to suggest these amendments to the other place.

    Just over three and a half hours ago the House began this debate on a most important matter, but I sense that throughout the House there is a feeling that we might now reasonably proceed to a Division, so I shall not try to match the Minister of State's speech with one of correspond- ing length. I hope that he will acquit me of any discourtesy in the brevity with which I shall address myself to these suggested amendments.

    I want to underline the significance of the hybridity issue, mentioned by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), but would prefer to do so on Third Reading. But it seems to me that in the exchanges between the Minister of State and my hon. Friend it clearly emerged that there was a whole tangle of correspondence which might appropriately be considered by the Examiners.

    The whole House will have been touched by the consideration that the Minister of State's last words are uttered about those outside who might bear resentment against them and have no recourse. He has been zealous in his anxiety never to say anything offensive about anyone outside the House, or to use the privileges of the House to make and advance his argument in fairly rough and personal terms about his adversaries. If there was a mark of conversion in what he said this evening, that at least will be welcomed.

    My right hon. Friend the Member for Renfrewshire, East (Miss Harvie Anderson) commented that what was so much at stake was little more than perhaps 5 per cent. of the whole Bill. A great deal of this turns upon the robust and flamboyant way in which the opposition to the Bill has been conducted in certain quarters, but let us always remember that liberty traditionally has been entrusted to the hands of people who are awkward, flamboyant and do not fit the generally acceptable pattern. I dare say that a good deal of the opposition which has been conducted is as unacceptable to the trade associations as it is to some of the politicians. So I do not think that the House need be intimidated by some of the ways in which the opposition to the proposals on ship repairing has been conducted.

    The burden of our case is that ship repairing is a service industry and that it has, broadly speaking, a different strategic direction and thrust from shipbuilding. The Minister in Korea found evidence of shipbuilding and ship repairing as an integrated activity, and one can find that also in this country. But there is also developing evidence of ship repairing proceeding distinctively in nearby shipbuilding countries, such as Sweden, Spain and Italy.

    The hon. Member for Caernarvon (Mr. Wigley) had it right when we last debated this subject on 11th November. He said then:
    "The people in the ship repairing industry may have the same skills as those working in the yards but it is the marketing that is the critical factor for the repairing sector."
    It is clear that hon. Members on this side of the House developed an anxiety that that marketing facility, that marketing capability, might be affected by the process of nationalisation. There is a feeling that the commercial criteria might be infringed—a point made by my hon. Friend the Member for Newbury (Mr. McNair-Wilson). There is an anxiety—expressed at the outset and still not removed by amendments to Clause 5—that public ownership will confer the dead hand of centralisation, of politically rather than economically determined decisions, on the ship-repairing industry. That point exercised my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd).

    This is not a new consideration or a new dimension to the debate. I think that I can carry the Minister of State with me in saying that there is not a great deal to be said on this occasion that is striking, original or new. When the matter was debated on 11th November, the hon. Member for Newton (Mr. Evans) tried to counter these anxieties. He said:
    "The shipowner has the final power to send his ship to be repaired where he thinks he will get the best deal and where he will get the job done at the time he requires it."—[Official Report, 11th November 1976; Vol. 919, c. 743–7.]
    That is a very reasonable proposition, but I think that in the argument that took place between the hon. Member for Swansea, East (Mr. Anderson) and the hon. Member for Caernarvon about the commercial sensitivity of ship repairing under nationalisation the laurels undoubtedly went to the hon. Member for Caernarvon. For there is already sign that some political authority will be exercised in what properly should be a commercial judgment.

    If there is one factor that is additional to the debate we had on 11th November it is the debate on 1st December, on Second Reading. It was on that occasion that the Secretary of State said:
    "We have to make every effort to persuade British shipowners to place orders in British yards."
    Later, he said:
    "But the key in the future depends on persuading British shipowners to place many more orders in British yards than they have done in the past."—[Official Report, 1st December 1976; Vol. 921, c. 1018–19.]
    One does not need to be an acute judge of distance to see that one is already moving to a state where there is interplay between political and the managerial execution of ship repairing which will tend precisely in the direction feared by the hon. Member for Caernarvon. I think that it will be tried pre-eminently in respect of shipbuilding, but we shall be foolish to suppose that it will stop there.

    The danger also exists in respect of ship repairing, even if it is to a lesser extent. We have only to think of the way in which the National Coal Board tries to persuade the Government to require the Central Electricity Generating Board not to import coal to realise that once one creates this political framework one has these political pressures as a consequence.

    There is anxiety that the ship-repairing business could become at least an attempted quasi-captive business for British ship owners, in order to contrive some enforced profitability to deal with the considerable investment sums which would admittedly be necessary for the re-equipment of British ship-repairing yards.

    I would say to all parties that not only on the issue of hybridity, which casts an uncertain shadow over the whole progress of the Bill, but on our experience of political intervention in publicly owned industries we have every right to believe that the Bill will not be ruined by the successful passing of this amendment, but that it will be immeasurably improved.

    Question put:—

    Division No.13.]

    AYES

    [7.41 p.m.

    Adley, RobertFox, MarcusMacGregor, John
    Aitken, JonathanFraser, Rt Hon H.(Stafford & St)Macmillan, Rt Hon M.(Farnham)
    Alison, MichaelFreud, ClementMcNair-Wilson, M.(Newbury)
    Amery, Rt Hon JulianFry, PeterMadel, David
    Arnold, TomGalbraith, Hon T. G. D.Marshall, Michael (Arundel)
    Atkins, Rt Hon H.(Speithorne)Gardiner, George (Reigate)Marten, Neil
    Awdry, DanielGardner, Edward (S Fylde)Mates, Michael
    Bain, Mrs MargaretGilmour, Rt Hon Ian (Chesham)Maude, Angus
    Baker, KennethGilmour, Sir John (East Fife)Maudling, Rt Hon Reginald
    Banks, RobertGlyn, Dr AlanMawby, Ray
    Beith, A. J.Godber, Rt Hon JosephMaxwell-Hyslop, Robin
    Bell, RonaldGoodhart, PhilipMayhew, Patrick
    Bennett, Dr Reginald (Fareham)Goodhew, VictorMeyer, Sir Anthony
    Benyon, W.Goodlad, AlastairMiller, Hal (Bromsgrove)
    Berry, Hon AnthonyGorst, JohnMills, Peter
    Biffen, JohnGow, Ian (Eastbourne)Miscampbell, Norman
    Biggs-Davison, JohnGower, Sir Raymond (Barry)Mitchell, David (Basingstoke)
    Blaker, PeterGrant, Anthony (Harrow C)Moate, Roger
    Body, RichardGray, HamishMolyneaux, James
    Boscawen, Hon RobertGriffiths, EldonMonro, Hector
    Bottomley, PeterGrimond, Rt Hon J.Montgomery, Fergus
    Bowden, A. (Brighton, Kemptown)Grist, IanMoore, John (Croydon C)
    Boyson, Dr Rhodes (Brent)Hall, sir JohnMore, Jasper (Ludlow)
    Bradford, Rev RobertHall-Davis, A. G. F.Morgan, Geraint
    Braine, Sir BernardHamilton, Michael (Salisbury)Morgan-Giles, Rear-Admiral
    Brittan, LeonHampson, Dr KeithMorris, Michael (Northampton S)
    Brocklebank-Fowler, C.Hannam, JohnMorrison, Hon Peter (Chester)
    Brotherton, MichaelHarrison, Col Sir Harwood (Eye)Mudd, David
    Brown, Sir Edward (Bath)Harvie Anderson, Rt Hon MissNeave, Airey
    Bryan, Sir PaulHastings, StephenNelson, Anthony
    Buchanan-Smith, AlickHavers, Sir MichaelNeubert, Michael
    Budgen, NickHayhoe, BarneyNewton, Tony
    Bulmer, EsmondHeath, Rt Hon EdwardNormanton, Tom
    Burden, F. A.Henderson, DouglasNott, John
    Butler, Adam (Bosworth)Heseltine, MichaelOnslow, Cranley
    Carlisle, MarkHicks, RobertOppenheim, Mrs Sally
    Carson, JohnHiggins, Terence L.Page, Rt Hon R. Graham (Crosby)
    Chalker, Mrs LyndaHodgson, RobinPage, Richard (Workington)
    Churchill, W. S.Holland, PhilipPaisley, Rev Ian
    Clark, Alan (Plymouth, Sutton)Hooson, EmlynPardoe, John
    Clark, William (Croydon S)Hordern, PeterParkinson, Cecil
    Clegg, walterHowe, Rt Hon Sir GeoffreyPattie, Geoffrey
    Cockcroft, JohnHowell, David (Guildford)Penhaligon, David
    Cooke, Robert (Bristol W)Howells, Geraint (Cardigan)Percival, Ian
    Cope, JohnHunt, David (Wirral)Peyton, Rt Hon John
    Cormack, PatrickHurd, DouglasPink, R. Bonner
    Corrie, JohnHutchison, Michael ClarkPowell, Rt Hon J. Enoch
    Costain, A. P.Irving, Charles (Cheltenham)Price, David (Eastleigh)
    Craig, Rt Hon W.(Belfast E)James, DavidPrior, Rt Hon James
    Crawford, DouglasJames, R. Rhodes (Cambridge)Pym, Rt Hon Francis
    Crilchley, JulianJenkin, Rt Hon P.(Wanst'd & W'df'd)Raison, Timothy
    Crouch, DavidJessel, TobyRathbone, Tim
    Crowder, F. P.Johnson Smith, G.(E Grinstead)Rawlinson, Rt Hon Sir Peter
    Davies, Rt Hon J.(Knutsford)Jones, Arthur (Daventry)Rees, Peter (Dover & Deal)
    Dean, Paul (N Somerset)Jopling, MichaelRees-Davies, W. R.
    Dodsworth, GeoffreyJoseph, Rt Hon Sir KeithReid, George
    Douglas-Hamilton, Lord JamesKaberry, Sir DonaldRenton, Rt Hon Sir D. (Hunts)
    Drayson, BurnabyKershaw, AnthonyRenton, Tim (Mid-Sussex)
    du Cann, Rt Hon EdwardKilfedder, JamesRidley, Hon Nicholas
    Dunlop, JohnKimball, MarcusRidsdale, Julian
    Durant, TonyKing, Tom (Bridgwater)Rifkind, Malcolm
    Eden, Rt Hon Sir JohnKitson, Sir TimothyRoberts, Wyn (Conway)
    Edwards, Nicholas (Pembroke)Knight, Mrs JillRoss, Stephen (Isle of Wight)
    Elliott, Sir WilliamKnox, DavidRoss, William (Londonderry)
    Emery, PeterLamont, NormanRossi, Hugh (Hornsey)
    Evans, Gwynfor (Carmarthen)Langford-Holt, Sir JohnRost, Peter (SE Derbyshire)
    Ewing, Mrs Winifred (Moray)Latham, Michael (Melton)Sainsbury, Tim
    Eyre, ReginaldLawrence, IvanShaw, Giles (Pudsey)
    Fairbairn, NicholasLawson, NigelShaw, Michael (Scarborough)
    Fairgrieve, RussellLester, Jim (Beeston)Shelton, William (Streatham)
    Farr, JohnLewis, Kenneth (Rutland)Shepherd, Colin
    Fell, AnthonyLloyd, IanShersby, Michael
    Finsberg, GeoffreyLoveridge, JohnSilvester, Fred
    Fisher, Sir NigelLuce, RichardSims, Roger
    Fletcher, Alex (Edinburgh N)McAdden, Sir StephenSkeet, T. H. H.
    Fletcher-Cooke, CharlesMacCormick, IainSmith, Dudley (Warwick)
    Fookes, Miss JanetMcCrindle, RobertSpeed, Keith
    Forman, NigelMcCusker, H.Spence, John
    Fowler, Norman (Sutton C'f'd)Macfarlane, NellSpicer, Michael (S Worcester)

    The House divided: Ayes 279, Noes 281.

    Sproat, IainThomas, Rt Hon P.(Hendon S)Weatherill, Bernard
    Stainton, KeithThompson, GeorgeWells, John
    Stanbrook, IvorTownsend, Cyril DWelsh, Andrew
    Stanley, JohnTrotter, NevilleWhitelaw, Rt Hon William
    Steel, David (Roxburgh)van Straubenzee, W.R.Wiggin, Jerry
    Steen, Anthony (Wavertree)Vaughan, Dr GeraldWigiey, Dafydd
    Stewart, Donald (Western Isles)Viggers, PeterWilson, Gordon (Dundee E)
    Stewart, Ian (Hitchin)Wainwright, Richard (Colne V)Winterton, Nicholas
    Stokes, JohnWakeham, JohnWood, Rt Hon Richard
    Stradling Thomas, J.Walder, David (Clitheroe)Young, Sir G. (Ealing, Acton)
    Tapsell, PeterWalker, Rt Hon P.(Worcester)Younger, Hon George
    Taylor, R.(Croydon NW)Wall, Patrick
    Taylor, Teddy (Cathcart)Walters, DennisTELLERS FOR THE AYES:
    Tebbit, NormanWarren, KennethMr. Spencer Le Marchant and
    Thatcher, Rt Hon MargaretWatt, HamishMr. Michael Roberts.
    Thomas, Dafydd (Merioneth)

    NOES

    Abse, LeoDormand, J. D.Jones, Barry (East Flint)
    Allaun, FrankDouglas-Mann, BruceJones, Dan (Burnley)
    Anderson, DonaldDuffy, A. E. P.Judd, Frank
    Archer, PeterDunn, James A.Kaufman, Gerald
    Armstrong, ErnestDunnett, JackKelley, Richard
    Ashley, JackEadie, AlexKerr, Russell
    Ashton, JoeEdge, GeoffKilroy-Silk, Robert
    Atkins, Ronald (Preston N)Edwards, Robert (Wolv SE)Kinnock, Nell
    Atkinson, NormanEllis, John (Brigg & Scun)Lambie, David
    Bagier, Gordon A. T.English, MichaelLamborn, Harry
    Barnett, Guy (Greenwich)Ennals, DavidLamond, James
    Barnett, Rt Hon Joel (Heywood)Evans, Fred (Caerphilly)Latham, Arthur (Paddington)
    Bates, AlfEvans, Ioan (Aberdare)Leadbitter, Ted
    Bean, R. E.Ewing, Harry (Stirling)Lee, John
    Benn, Rt Hon Anthony WedgwoodFaulds, AndrewLestor, Miss Joan (Eton & Slough)
    Bennett, Andrew (Stockport N)Fernyhough, Rt Hon E.Lever, Rt Hon Harold
    Bidwell, SydneyFitch, Alan (Wlgan)Lewis, Ron (Carlisle)
    Bishop, E. S.Fitt, Gerard (Belfast W)Lipton, Marcus
    Blenkinsop, ArthurFlannery, MartinLitterick, Tom
    Boardman, H.Fletcher, Alex (Edinburgh N)Loyden, Eddie
    Booth, Rt Hon AlbertFletcher, L. R. (Ilkeston)Luard, Evan
    Bottomley, Rt Hon ArthurFletcher, Ted (Darlington)Lyon, Alexander (York)
    Boyden, James (Bish Auck)Foot, Rt Hon MichaelLyons, Edward (Bradford W)
    Bradley, TomFord, BenMabon, Dr J. Dickson
    Bray, Dr JeremyForrester, JohnMcCartney, Hugh
    Broughton, Sir AlfredFowler, Gerald (The Wrekin)McDonald, Dr Oonagh
    Brown, Hugh D. (Provan)Fraser, John (Lambeth, N'w'd)McElhone, Frank
    Buchan, NormanFreeson, ReginaldMacFarquhar, Roderick
    Buchanan, RichardGarrett, John (Norwich S)McGuire, Michael (Ince)
    Butler, Mrs Joyce (Wood Green)Garrett, W.E. (Wallsend)MacKenzie, Gregor
    Callaghan, Rt Hon J. (Cardiff SE)George, BruceMackintosh, John P.
    Callaghan, Jim (Middleton & P)Gilbert, Dr JohnMaclennan, Robert
    Campbell, IanGinsburg, DavidMcMillan, Tom (Glasgow C)
    Canavan, DennisGolding, JohnMadden, Max
    Cant, R.B.Gould, BryanMagee, Bryan
    Carmichael, NeilGourlay, HarryMaguire, Frank (Fermanagh)
    Carter, RayGrant, George (Morpeth)Mahon, Simon
    Cartwright, JohnGrant, John (Islington C)Mallalieu, J. P. W.
    Castle, Rt Hon BarbaraGrocott, BruceMarks, Kenneth
    Clemitson, IvorHarrison, Walter (Wakefield)Marquand, David
    Cocks, Rt Hon MichaelHart, Rt Hon JudithMarshall, Dr Edmund (Goole)
    Cohen, StanleyHattersley, Rt Hon RoyMarshall, Jim (Leicester S)
    Coleman, DonaldHatton, FrankMason, Rt Hon Roy
    Colquhoun, Ms MaureenHayman, Mrs HeleneMaynard, Miss Joan
    Conlan, BernardHealey, Rt Hon DenisMeacher, Michael
    Cook, Robin F. (Edin C)Heffer, Eric S.Mellish, Rt Hon Robert
    Corbett, RobinHooley, FrankMikardo, Ian
    Cowans, HarryHoram, JohnMillan, Rt Hon Bruce
    Cox, Thomas (Tooting)Howell, Rt Hon Denis (B'ham, Sm H)Miller, Dr M. S. (E Kilbride)
    Craigen, Jim (Maryhill)Hoyle, Doug (Nelson)Miller, Mrs Millie (Ilford N)
    Cronin, JohnHuckfield, LesMoonman, Eric
    Crosland, Rt Hon AnthonyHughes, Rt Hon C. (Anglesey)Morris, Alfred (Wythenshawe)
    Crowther, Stan (Rotherham)Hughes, Robert (Aberdeen N)Morris, Charles R. (Openshaw)
    Cryer, BobHughes, Roy (Newport)Morris, Rt Hon J. (Aberavon)
    Cunningham, G. (Islington S)Irvine, Rt Hon Sir A. (Edge Hill)Moyle, Roland
    Cunningham, Dr J. (Whiteh)Irving, Rt Hon S. (Dartford)Murray, Rt Hon Ronald King
    Davidson, ArthurJackson, Colin (Brighouse)Newens, Stanley
    Davies, Bryan (Enfield N)Jackson, Miss Margaret (Lincoln)Noble, Mike
    Davies, Denzil (Llanelli)Janner, GrevilleOakes, Gordon
    Davies, Ifor (Gower)Jay, Rt Hon DouglasOgden, Eric
    Davis, Clinton (Hackney C)Jeger, Mrs LenaO'Halloran, Michael
    Deakins, EricJenkins, Hugh (Putney)Orme, Rt Hon Stanley
    Dean, Joseph (Leeds West)John, BrynmorOvenden, John
    Dell, Rt Hon EdmundJohnson, James (Hull West)Padley, Walter
    Dempsey, JamesJohnson, Walter (Derby S)Palmer, Arthur
    Doig, PeterJones, Alec (Rhondda)Park, George

    Parker, JohnSilkin, Rt Hon John (Deptford)Wainwright, Edwin (Dearne V)
    Parry, RobertSilkin, Rt Hon S. C. (Dulwich)Walden, Brian (B'ham L'dyw'd)
    Pendry, TomSillars, JamesWalker, Harold (Doncaster)
    Perry, ErnestSilverman, JuliusWalker, Terry (Kingswood)
    Phipps, Dr ColinSkinner, DennisWard, Michael
    Prentice, Rt Hon RegSmall, WilliamWatkins, David
    Price, C. (Lewisham W)Smith, John (N Lanarkshire)Watkinson, John
    Price, William (Rugby)Snape, PeterWeetch, Ken
    Rees, Rt Hon Merlyn (Leeds S)Spearing, NigelWeitzman, David
    Richardson, Miss JoSpriggs, LeslieWellbeloved, James
    Roberts, Albert (Normanton)Stallard, A. W.White, Frank R. (Bury)
    Roberts, Gwilym (Cannock)Stewart, Rt Hon M. (Fulham)Whitlock, William
    Robertson, John (Paisley)Stoddart, DavidWilley, Rt Hon Frederick
    Robinson, GeoffreyStott, RogerWilliams, Alan (Swansea W)
    Roderick, CaerwynStrang, GavinWilliams, Alan Lee (Hornch'ch)
    Rodgers, George (Chorley)Strauss, Rt Hon G. R.Williams, Rt Hon Shirley (Hertford)
    Rodgers, Rt Hon William (Stockton)Summerskill, Hon Dr ShirleyWilliams, Sir Thomas (Warrington)
    Rooker, J. W.Swain, ThomasWilson, Alexander (Hamilton)
    Rose, Paul B.Taylor, Mrs Ann (Bolton W)Wilson, Rt Hon Sir Harold (Huyton)
    Ross, Rt Hon W. (Kilmarnock)Thomas, Jeffrey (Abertillery)Wilson, William (Coventry SE)
    Rowlands, TedThomas, Mike (Newcastle E)Wise, Mrs Audrey
    Ryman, JohnThomas, Ron (Bristol NW)Woodall, Alec
    Sandelson, NevilleThorne, Stan (Preston South)Woof, Robert
    Sedgemore, BrianTierney, SydneyWrigglesworth, Ian
    Selby, HarryTinn, JamesYoung, David (Bolton E)
    Shaw, Arnold (Ilford South)Tomlinson, John
    Sheldon, Robert (Ashton-u-Lyne)Torney, TomTELLERS FOR THE NOES:
    Shore, Rt Hon PeterTuck, RaphaelMr. Joseph Harper and
    Short, Mrs Renée (Wolv NE)Varley, Rt Hon Eric G.Mr. James Hamilton.

    Question accordingly negatived.

    Motion made, and Question put,

    That, pursuant to the Parliament Acts 1911 and 1949, the House suggests to the Lords

    Division No.14.]

    AYES

    [7.57 p.m.

    Adley, RobertClark, Alan (Plymouth, Sutton)Fox, Marcus
    Aitken, JonathanClark, William (Croydon S)Fraser, Rt Hon H. (Stafford & St)
    Alison, MichaelClegg, WalterFreud, Clement
    Amery, Rt Hon JulianCockcroft, JohnFry, Peter
    Arnold, TomCooke, Robert (Bristol W)Galbraith, Hon T. G. D.
    Atkins, Rt Hon H. (Spelthorne)Cope, JohnGardiner, George (Reigate)
    Awdry, DanielCormack, PatrickGardner, Edward (S Fylde)
    Bain, Mrs MargaretCorrie, JohnGilmour, Rt Hon Ian (Chesham)
    Baker, KennethCostain, A. P.Gilmour, Sir John (East Fife)
    Banks, RobertCraig, Rt Hon W. (Belfast E)Glyn, Dr Alan
    Beith, A. J.Crawford, DouglasGodber, Rt Hon Joseph
    Bell, RonaldCritchley, Ju'ianGoodhart, Philip
    Bennett, Dr Reginald (Fareham)Crouch, DavidGoodhew, Victor
    Benyon, W.Crowder, F. P.Goodlad, Alastair
    Berry, Hon AnthonyDavies, Rt Hon J. (Knutsford)Gorst, John
    Biffen, JohnDean, Paul (N Somerset)Gow, Ian (Eastbourne)
    Biggs-Davison, JohnDodsworth, GeoffreyGower, Sir Raymond (Barry)
    Blaker, PeterDouglas-Hamilton, Lord JamesGrant, Anthony (Harrow C)
    Body, RichardDrayson, BurnabyGray, Hamish
    Boscawen, Hon Robertdu Cann, Rt Hon EdwardGriffiths, Eldon
    Bottomley, PeterDunlop, JohnGrimond, Rt Hon J.
    Bowden, A. (Brighton, Kemptown)Durant, TonyGrist, Ian
    Boyson, Dr Rhodes (Brent)Eden, Rt Hon Sir JohnHall, Sir John
    Bradford, Rev RobertEdwards, Nicholas (Pembroke)Hall-Davis, A. G. F.
    Braine, Sir BernardElliott, Sir WilliamHamilton, Michael (Salisbury)
    Brittan, LeonEmery, PeterHampson, Dr Keith
    Brocklebank-Fowler, C.Evans, Gwynfor (Carmarthen)Hannam, John
    Brotherton, MichaelEwing, Mrs Winifred (Moray)Harrison, Col Sir Harwood (Eye)
    Brown, Sir Edward (Bath)Eyre, ReginaldHarvle Anderson, Rt Hon Miss
    Bryan, Sir PaulFairbairn, NicholasHastings, Stephen
    Buchanan-Smith, AlickFairgrieve, RussellHavers, Sir Michael
    Budgen, NickFarr, JohnHayhoe, Barney
    Bulmer, EsmondFell, AnthonyHeath, Rt Hon Edward
    Burden, F. A.Finsberg, GeoffreyHenderson, Douglas
    Butler, Adam (Bosworth)Fisher, Sir NigelHeseltine, Michael
    Carlisle, MarkFletcher-Cooke, CharlesHicks, Robert
    Carson, JohnFookes, Miss JanetHigglns, Terence L.
    Chalker, Mrs LyndaForman, NigelHodgson, Robin
    Churchill, W. S.Fowler, Norman (Sutton C'f'd)Holland, Philip

    the following Amendment to the Aircraft and Shipbuilding Industries Bill:

    Schedule 2, page 84, line 4, leave out '£3·4' and insert '£3,400'.—[ Mr. Maxwell-Hyslop.]

    The House divided: Ayes 279, Noes 283.

    Hooson, EmlynMitchell, David (Basingstoke)Shepherd, Colin
    Hordern, PeterMoate, RogerShersby, Michael
    Howe, Rt Hon Sir GeoffreyMolyneaux, JamesSilvester, Fred
    Howell, David (Guildford)Monro, HectorSims, Roger
    Howells, Geraint (Cardigan)Montgomery, FergusSkeet, T. H. H.
    Hunt, David (Wirral)Moore, John (Croydon C)Smith, Dudley (Warwick)
    Hurd, DouglasMore, Jasper (Ludlow)Speed, Keith
    Hutchison, Michael ClarkMorgan, GeraintSpence, John
    Irving, Charles (Cheltenham)Morgan-Giles, Rear-AdmiralSpicer, Michael (S Worcester)
    James, DavidMorris, Michael (Northampton S)Sproat, Iain
    James, R. Rhodes (Cambridge)Morrison, Hon Peter (Chester)Stainton, Keith
    Jenkin, Rt Hon P. (Wanst'd & W'df'd)Mudd, DavidStanbrook, Ivor
    Jessel, TobyNeave, AireyStanley, John
    Johnson Smith, G. (E Grinstead)Nelson, AnthonySteel, David (Roxburgh)
    Jones, Arthur (Daventry)Neubert, MichaelSteen, Anthony (Wavertree)
    Jopling, MichaelNewton, TonyStewart, Donald (Western Isles)
    Joseph, Rt Hon Sir KeithNormanton, TomStewart, Ian (Hitchin)
    Kaberry, Sir DonaldNott, JohnStokes, John
    Kershaw, AnthonyOnslow, CranleyStradling Thomas, J.
    Kilfedder, JamesOppenheim, Mrs SallyTapsell, Peter
    Kimball, MarcusPage, Rt Hon R. Graham (Crosby)Taylor, R. (Croydon NW)
    King, Tom (Bridgwater)Page, Richard (Workington)Taylor, Teddy (Cathcart)
    Kitson, Sir TimothyPaisley, Rev IanTebbit, Norman
    Knight, Mrs JillPardoe, JohnThatcher, Rt Hon Margaret
    Knox, DavidParkinson, CecilThomas, Dafydd (Merioneth)
    Lamont, NormanPattie, GeoffreyThomas, Rt Hon P. (Hendon S)
    Langford-Holt, Sir JohnPenhaligon, DavidThompson, George
    Latham, Michael (Melton)Percival, IanTownsend, Cyril D
    Lawrence, IvanPeyton, Rt Hon JohnTrotter, Neville
    Lawson, Nigelpink, R. Bonnervan Straubenzee, W. R.
    Lester, Jim (Beeston)Powell, Rt Hon J. EnochVaughan, Dr Gerard
    Lewis, Kenneth (Rutland)Price, David (Eastleigh)Viggers, Peter
    Lloyd, IanPrior, Rt Hon JamesWainwright, Richard (Colne V)
    Loveridge, JohnPym, Rt Hon FrancisWakeham, John
    Luce, RichardRaison, TimothyWalder, David (Clitheroe)
    McAdden, Sir StephenRathbone, TimWalker, Rt Hon P. (Worcester)
    MacCormick, IainRawlinson, Rt Hon Sir PeterWall, Patrick
    McCrindle, RobertRees, Peter (Dover & Deal)Walters, Dennis
    McCusker, H.Rees-Davies, W. R.Warren, Kenneth
    Macfarlane, NeilReid, GeorgeWatt, Hamish
    MacGregor, JohnRenton, Rt Hon Sir D.(Hunts)Weatherill, Bernard
    Macmillan, Rt Hon M. (Farnham)Renton, Tim (Mid-Sussex)Wells, John
    McNair-Wilson, M.(Newbury)Ridley, Hon NicholasWelsh, Andrew
    Madel, DavidRidsdale, JulianWhitelaw, Rt Hon William
    Marshall, Michael (Arundel)Rifkind, MalcolmWiggin, Jerry
    Marten, NeilRoberts, Wyn (Conway)Wigley, Dafydd
    Mates, MichaelRoss, Stephen (Isle of Wight)Wilson, Gordon (Dundee E)
    Maude, AngusRoss, William (Londonderry)Winterton, Nicholas
    Maudling, Rt Hon ReginaldRossi, Hugh (Hornsey)Wood, Rt Hon Richard
    Mawby, RayRost, Peter (SE Derbyshire)Young, Sir G. (Ealing, Acton)
    Maxwell-Hyslop, RobinSainsbury, TimYounger, Hon George
    Mayhew, PatrickSt. John-Stevas, Norman
    Meyer, Sir AnthonyShaw, Giles (Pudsey)TELLERS FOR THE AYES:
    Miller, Hal (Bromsgrove)Shaw, Michael (Scarborough)Mr. Spencer Le Marchant and
    Mills, PeterShelton, William (Streatham)Mr. Michael Roberts.
    Miscampbell, Norman

    NOES

    Abse, LeoBuchan, NormanCryer, Bob
    Allaun, FrankBuchanan, RichardCunningham, G. (Islington S)
    Anderson, DonaldButler, Mrs Joyce (Wood Green)Cunningham, Dr J. (Whiten)
    Archer, PeterCallaghan, Rt Hon J.(Cardiff SE)Davidson, Arthur
    Armstrong, ErnestCallaghan, Jim (Middleton & P)Davies, Bryan (Enfield N)
    Ashley, JackCampbell, IanDavies, Denzil (Llanelli)
    Atkins, Ronald (Preston N)Canavan, DennisDavies, Ifor (Gower)
    Atkinson, NormanCant, R. B.Davis, Clinton (Hackney C)
    Bagier, Gordon A. T.Carmichael, NeilDeakins, Eric
    Barnett, Guy (Greenwich)Carter, RayDean, Joseph (Leeds West)
    Barnett, Rt Hon Joel (Heywood)Cartwright, JohnDell, Rt Hon Edmund
    Bates, AifCastle, Rt Hon BarbaraDempsey, James
    Bean, R. E.Clemitson, IvorDoig, Peter
    Benn, Rt Hon Anthony WedgwoodCocks, Rt Hon MichaelDormand, J. D.
    Bennett, Andrew(Stockport N)Cohen, StanleyDouglas-Mann, Bruce
    Bidwell, SydneyColeman, DonaldDuffy, A. E. P.
    Bishop, E. S.Colquhoun, Ms MaureenDunn, James A.
    Blenkinsop, ArthurConlan, BernardDunnett, Jack
    Boardman, H.Cook, Robin F.(Edin C)Eadie, Alex
    Booth, Rt Hon AlbertCorbett, RobinEdge, Geoff
    Bottomley, Rt Hon ArthurCowans, HarryEdwards, Robert (Wolv SE)
    Boyden, James (Bish Auck)Craigen, Jim (Maryhill)Ellis, John (Brigg & Scun)
    Bradley, TomCrawshaw, RichardEnglish, Michael
    Bray, Dr JeremyCronin, JohnEnnals, David
    Broughton, Sir AlfredCrosland, Rt Hon AnthonyEvans, Fred (Caerphilly)
    Brown, Hugh D.(Provan)Crowther, Stan (Rotherham)Evans, loan (Aberdare)

    Ewing, Harry (Stirling)Lever, Rt Hon HaroldRose, Paul B.
    Faulds, AndrewLewis, Ron (Carlisle)Ross, Rt Hon W.(Kilmarnock)
    Fernyhough, Rt Hon E.Lipton, MarcusRowlands, Ted
    Fitch, Alan (Wigan)Litterick, TomRyman, John
    Fitt, Gerard (Belfast W)Loyden, EddieSandelson, Neville
    Flannery, MartinLuard, EvanSedgemore, Brian
    Fletcher, L. R. (Ilkeston)Lyon, Alexander (York)Selby, Harry
    Fletcher, Ted (Darlington)Lyons, Edward (Bradford W)Shaw, Arnold (Ilford South)
    Foot, Rt Hon MichaelMabon, Dr J. DicksonSheldon, Robert (Ashton-u-Lyne)
    Ford, BenMcCartney, HughShore, Rt Hon Peter
    Forrester, JohnMcDonald, Dr OonaghShort, Mrs Renée (Wolv NE)
    Fowler, Gerald (The Wrekin)McElhone, FrankSilkin, Rt Hon John (Deptford)
    Fraser, John (Lambeth, N'w'd)MacFarquhar, RoderickSilkin, Rt Hon S. C. (Dulwich)
    Freeson, ReginaldMcGuire, Michael (Ince)Sillars, James
    Garrett, John (Norwich S)MacKenzie, GregorSilverman, Julius
    Garrett, W. E. (Wallsend)Mackintosh, John P.Skinner, Dennis
    George, BruceMaclennan, RobertSmall, William
    Gilbert, Dr JohnMcMillan, Tom (Glasgow C)Smith, John (N Lanarkshire)
    Ginsburg, DavidMadden, MaxSnape, Peter
    Golding, JohnMagee, BryanSpearing, Nigel
    Gould, BryanMaguire, Frank (Fermanagh)Spriggs, Leslie
    Gourlay, HarryMahon, SimonStallard, A. W.
    Graham, TedMallalieu, J. P. W.Stewart, Rt Hon M. (Fulham)
    Grant, George (Morpeth)Marks, KennethStoddart, David
    Grant, John (Islington C)Marquand, DavidStott, Roger
    Grocott, BruceMarshall, Dr Edmund (Goole)Strang, Gavin
    Hamilton, James (Bothwell)Marshall, Jim (Leicester S)Strauss, Rt Hon G. R.
    Harper, JosephMason, Rt Hon RoySummerskill, Hon Dr Shirley
    Harrison, Walter (Wakefield)Maynard, Miss JoanSwain, Thomas
    Hart, Rt Hon JudithMeacher, MichaelTaylor, Mrs Ann (Bolton W)
    Hattersley, Rt Hon RoyMellish, Rt Hon RobertThomas, Jeffrey (Abertillery)
    Hatton, FrankMikardo, IanThomas, Mike (Newcastle E)
    Hayman, Mrs HeleneMillan, Rt Hon BruceThomas, Ron (Bristol NW)
    Healey, Rt Hon DenisMiller, Dr M. S. (E Kilbride)Thorne, Stan (Preston South)
    Heffer, Eric S.Miller, Mrs Millie (Ilford N)Tierney, Sydney
    Hooley, FrankMoonman, EricTinn, James
    Horam, JohnMorris, Alfred (Wythenshawe)Tomlinson, John
    Howell, Rt Hon Denis (B'ham, Sm H)Morris, Charles R. (Openshaw)Torney, Tom
    Hoyle, Doug (Nelson)Morris, Rt Hon J. (Aberavon)Tuck, Raphael
    Huckfield, LesMoyle, RolandVarley, Rt Hon Eric G.
    Hughes, Rt Hon C. (Anglesey)Murray, Rt Hon Ronald KingWainwright, Edwin (Dearne V)
    Hughes, Robert (Aberdeen N)Newens, StanleyWalden, Brian (B'ham L'dyw'd)
    Hughes, Roy (Newport)Noble, MikeWalker, Harold (Doncaster)
    Irvine, Rt Hon Sir A. (Edge Hill)Normanton, TomWalker, Terry (Kingswood)
    Irving, Rt Hon S. (Dartford)Oakes, GordonWard, Michael
    Jackson, Colin (Brighouse)Ogden, EricWatkins, David
    Jackson, Miss Margaret (Lincoln)O'Halloran, MichaelWatkinson, John
    Janner, GrevilleOrme, Rt Hon StanleyWeetch, Ken
    Jay, Rt Hon DouglasOvenden, JohnWeitzman, David
    Jeger, Mrs LenaPadley, WalterWellbeloved, James
    Jenkins, Hugh (Putney)Palmer, ArthurWhite, Frank R. (Bury)
    John, BrynmorPark, GeorgeWhitlock, William
    Johnson, James (Hull West)Parker, JohnWilley, Rt Hon Frederick
    Johnson, Walter (Derby S)Parry, RobertWilliams, Alan (Swansea W)
    Jones, Alec (Rhondda)Pendry, TomWilliams, Alan Lee (Hornch'ch)
    Jones, Barry (East Flint)Perry, ErnestWilliams, Rt Hon Shirley (Hertford)
    Jones, Dan (Burnley)Phipps, Dr ColinWilliams, Sir Thomas (Warrington)
    Judd, FrankPrentice, Rt Hon RegWilson, Alexander (Hamilton)
    Kaufman, GeraldPrice, C. (Lewisham W)Wilson, Rt Hon Sir Harold (Huyton)
    Kelley, RichardPrice, William (Rugby)Wilson, William (Coventry SE)
    Kerr, RussellRees, Rt Hon Merlyn (Leeds S)Wise, Mrs Audrey
    Kilroy-Silk, RobertRichardson, Miss JoWoodall, Alec
    Kinnock, NeilRoberts, Albert (Normanton)Woof, Robert
    Lambie, DavidRoberts, Gwilym (Cannock)Wrigglesworth, Ian
    Lamborn, HarryRobertson, John (Paisley)Young, David (Bolton E)
    Lamond, JamesRobinson, Geoffrey
    Latham, Arthur (Paddington)Roderick, CaerwynTELLERS FOR THE NOES:
    Leadbitter, TedRodgers, George (Chorley)Mr. Joseph Ashton and
    Lee, JohnRodgers, Rt Hon William (Stockton)Mr. Thomas Cox.
    Lestor, Miss Joan (Eton & Slough)Rooker, J. W.

    Question accordingly negatived.

    That, pursuant to the Parliament Acts 1911 and 1949, the House suggests to the Lords the following Amendments to the Aircraft and Shipbuilding Industries Bill:

    Schedule 2, page 82, leave out lines 15 to 17.

    Schedule 2, page 83, leave out lines 26 to 29 and insert '15,000 gross tons'.

    Schedule 2, page 84, line 38, leave out 'except in the case of a warship'.

    Schedule 2, page 84, leave out lines 45 to 49.

    The effect of the amendments would be to exclude the specialist warship builders from Schedule 2. Those companies are the Vickers Shipbuilding Group Limited, Vosper Thornycroft Limited and Yarrow (Shipbuilders) Limited. The arguments for the exclusion of these companies have been well rehearsed in Committee and on the Floor of the House. However, I do not believe that the answers to the many questions asked or about the suggested positive advantages of exclusion have been sufficiently well taken up by the Government Front Bench.

    There are powerful and persuasive arguments for the exclusion of the warship manufacturers. Let me first, however, express my small constituency interest in the matter in that quite a large number of my constituents are employed by Vosper Thornycroft, particularly at the Cosham division which is just outside my constituency nearby in Portsmouth, North. I am sure that the hon. Member for Portsmouth, North (Mr. Judd), the Parliamentary Secretary to the Ministry for Overseas Development, would join me, if he were here, in paying tribute to the dynamic performance of the company in recent years, and to the way in which its export growth has provided a good example not only for the shipbuilding industry but for other companies of what can be done with a high level of reinvestment of profits and an adequate and growing level of orders.

    There are three fundamental reasons which make it desirable for these companies to be excluded. The reasons are somewhat different from those expressed in support of the exclusion of ship repairing. They are also quite different from the reasons why the Opposition oppose the Bill in its entirety. Without creating a value judgment on ship repairers or the Bill generally, there are powerful arguments for excluding the warship builders.

    By definition, Government funds are limited, and it should therefore be a prime purpose, certainly of the most ardent Socialist to ensure that they are used to the best possible advantage. Government and public funds will always be limited, and I believe, therefore, that in the first place they should be used for optimum benefit and in the most effective way. There is what the economists call the element of opportunity cost which involves judging the use of public funds or investment by what can be done with those funds if they are not applied in that particular way. Therefore, if these companies were excluded from the Bill, that would free substantial resources for investment in the rest of the merchant shipbuilding industry and would enable the profitable performance of the warship builders to continue in the private sector.

    8.15 p.m.

    The Bill provides for a total of £550 million to be drawn down on the transfer of ownership from private to Government hands, but this very high price will not in itself provide a single extra job. Simply transferring ownership from one hand to another will not of itself increase jobs or improve performance. The only factor which will provide jobs and enable reinvestment and investment in the shipbuilding industry is orders. Only orders will enable the industry to survive, no matter how much one may invest or spend on transferring ownership.

    There is therefore a fundamental misconception about the way in which Socialist policy and philosophy are being reflected in the proposals in the Bill. The money the Government have available for nationalisation should go to where it is most needed. I should have thought that Socialists would be the first to support that. They do not want to support those who are able to help themselves when there are other desperate areas of social and industrial need to which the money could be far better applied. That view ought to be the basis of concession on both sides. We should all agree with that concept across the party lines.

    The three companies I am describing have been tremendously profitable. We have been told by Ministers that their exports have been at the rate of £15 million to £40 million a year. They employ more than 20,000 people, and over the past five years have contributed about £273 million to the balance of payments. All this points to an industry that has been highly successful in regenerating itself with a high level of reinvestment, which undoubtedly displays its ability to continue the performance that it has produced in the past.

    Nevertheless, both the Under-Secretary and the Minister of State have been at pains in Committee and in the House to put forward a fundamental point of view.

    Earlier this year the Under-Secretary, in considering these factors, said:

    "Those seem all very good reasons for including within the nationalisation proposals the yards and the companies which these amendments seek to exclude."—[Official Report, Standing Committee D, 11th May 1976; c. 3070.]

    It is this fundamental view on which both sides of the House are at variance.

    If a sector of industry is to be nationalised it seems that there can be two reasons for so doing. It can be said that the industry is not at present providing jobs, investment, profitability, or a contribution to the balance of payments—in global terms the performance that it should have. If it is providing them but it is being given substantial Government orders so to do, the only other reason might be that the margin it is making and is not distributing is unacceptable and the Government feel that they must vertically integrate into that company to strip out the wastage of the money it is expending by way of orders.

    In other words, if the company is not doing well enough, there might be a case for nationalising it. On the other hand, if it is doing well but is not reinvesting its profits, there might equally be a case for nationalisation. However, these companies have all provided outstanding examples of profitability, job security, contributions to the balance of payments and reinvestment. Vosper Thornycroft has been of prime importance in this respect.

    The second reason it is important to consider excluding these companies concerns the need to increase their exports. Of the 20,000 people employed in them Vickers employs 13,000. Half of this number are engaged in submarine construction, and a large proportion of the balance are concerned with surface vessels and cruisers.

    With the defence cuts we have been told that we must look forward to the prospect of a reduction of jobs amounting to about 11,000 across the whole warship industry. I have not been able to understand why job losses should be as large as the Government have said. A high proportion of the production of the three companies is exported—an average of between 60 per cent. and 70 per cent. As I have said, a large portion of the employees at Vickers are engaged on United Kingdom maritime defence projects.

    The job losses do not seem to amount to 11,000, unless figures have been put forward by the companies because in some way they want to hold out for larger orders from the Ministry of Defence, or unless they are figures that the Government have deduced on false information. I do not know the origin of the figures, but they are extremely important because of their great significance both to the future industry and to the attitude that the House will adopt.

    As for the amendment, we have seen some substantiation of the figure that the Government have given us, but at present some 60 per cent. of total foreign orders for warships are directed to this country. That is a reflection of the outstanding marketing success of the three companies and other companies. If that is to be maintained along with jobs, new investment and profitability, it will be necessary substantially to increase the export performance of the companies. How do the Government propose to do that?

    We have no indication that the Government will facilitate a substantial export drive in the three companies. There would be a substantially better chance of a successful export drive if the companies were allowed to remain in the private sector. There are powerful reasons for that argument. First, there is the good will, the personal relationship, the confidentiality and the secrecy between manufacturers and foreign customers. That is a prerequisite to the placing of any orders and the future profitability of the companies. That is tremendously important. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) said that it is the golden thread that links manufacturers to foreign customers. Surely it is something that we should be careful to note.

    With nationalisation and the degree of decentralisation of British Shipbuilders that we have been promised, there will be fear on the part of foreign customers and Governments on the one hand and a lack of confidentiality vis-à-vis British Shipbuilders and the Government on the other. Secondly, a good deal of the good will and personal relationships that have

    been built up with particular yards will be destroyed, orders placed with British Shipbuilders being transferred to other yards where there are political pressures.

    I know that we have had some reassurance from the Government but I express the same fears that were put to the House by my hon. Friend the Member for Oswestry (Mr. Biffen) about ship repairers. It is clear that political pressures are strong. We must recognise that there will be pressures for certain orders to be transferred within British Shipbuilders if the three companies are brought within one national umbrella.

    In his usual way the hon. Gentleman has tried to lead the House astray in what he has said about confidentiality. Has he any reason or evidence for making that accusation?

    The evidence is that at present foreign Governments and customers are able to order British warships either directly with a yard or company or through the Ministry of Defence. In the overwhelming majority of cases where orders have been made they have been made directly with the yard. That indicates clearly that foreign customers wish to deal directly with the company or yard where they have an ongoing relationship and a presence during the period of design and construction rather than to deal with a governmental bureaucracy. The hon. Gentleman asked for an example and that is my answer. I believe that it is a real answer.

    Secondly, I believe that there would be less political intervention in the completion of orders if the three companies were to remain in the private sector. I put forward the view that there is probably a degree of acceptance on both sides of the House that there has to be some governmental scrutiny of the acceptance of defence contracts by British manufacturers. However, once orders and contracts have been placed and investments made, I am against situations or foreign relationships changing substantially so that the progress of a contract for a warship may be disrupted.

    That is a situation which may be allowed to happen—with political pressures being exercised to a much greater extent throughout the nationalised Indus- tries, such as British Shipbuilders—if these three companies are drawn into the net. I believe that there would be more incentive for the so-called lead yards to succeed in undertaking the specialised design, research and development of new models in export markets if they were allowed to do so independently. It would certainly be highly undesirable if the research and development work were to be transferred to other yards.

    The performance of companies such as Vosper Thornycroft, which has built up 60 orders for 29 companies, points to the way in which private enterprise has been highly successful and dynamic in earning its keep. Export earnings of £300 million since 1960 are not to be sniffed at. I emphasise that there is a distinct possibility that orders might be transferred to other yards.

    I shall not repeat all the arguments that I have expressed on other occasions, but I wish to emphasise that there will be a danger of contracts being placed elsewhere. Since the Booz-Allen Report and the Carrington policy of concentrating production on these three yards, these concerns are well suited to the areas of work in which they specialise. If we allow a situation in which some merchant ship manufacturers can undertake production work on warships, I believe that this would act to the detriment of these three companies in terms of the contribution which they make to our national economy and to our security.

    It makes sound financial sense for the Government to be sympathetic to this amendment. We hear a great deal from Labour about the amount of money which the Government are pumping into this and other industries by way of grants and other assistance. The shipbuilding industry has been a substantial recipient of Government aid and funds under a variety of legislation. This is true of the warship manufacturers. This aid has been made available only for export production and also by way of regional aid, for Yarrow. Vosper has not benefited in the latter respect.

    One cannot look simply at Government grants without taking into account the net return to the Government by way of taxation. Let me give figures in respect of the two companies about which I have information. In the past six years Vosper has received grants of £2 million, but it has paid tax of £6 million. Yarrow has received grants of £4·6 million by way of direct shipbuilding grant and regional aid, but has paid tax of £6·34 million. If we take into account the one figure as against the other, we see that there is a net credit to the Government of £6 million in respect of the two companies. That may not appear to be a great deal of money in Government terms, but even that contribution to Treasury funds may be prejudiced by the action which the Government now propose to take.

    The companies have shown themselves willing to undertake a high degree of reinvestment. They have good relations with their employees, and I know from my constituency work that they are highly regarded by the community in which they operate. When we add to this situation the contribution which these companies made to the national economy and to governmental coffers, I believe that it is the height of ill-will that the Government should now extend to them the clammy hand of nationalisation.

    The nationalisation of warship builders cannot be justified in terms of jobs, profitability or an increased contribution to the balance of payments. We can only guess at the Government's reasons for including these three companies. Is it because of their doctrinaire policy to extend State ownership regardless of its contribution to the welfare or finances of our national economy? Is it because it is convenient to throw in warship manufacturers since the Government are nationalising the rest of the industry? Or is it because they feel the need for a profitable element in British shipbuilders to cover up some of the less profitable areas. We can only guess at their reasons.

    8.30 p.m.

    With these provisions the Government are playing with the jobs of thousands of skilled workers and with an invaluable contribution to our defence and balance of payments. If the Government decide to oppose the motion, they will be indulging not in pragmatic Socialism but in doctrinaire folly.

    I was interested in the approach taken by the hon. Member for Chichester (Mr. Nelson). I understand his constituency interest, which he has a right and duty to defend. There is a wider application which manifests a general Conservative attitude to the relationship between defence industries and the responsibility of the Government. An appropriate shorthand term is the warfare State.

    The debate and some of the reports of the multiple stages of this Bill indicate that the Opposition are exercising dual standards in their approach to this matter. The hon. Member for Chichester disingenuously said that we should operate a Socialist analysis of public expenditure so that we can relieve ourselves of the necessity of paying to the shipbuilders involved—Vickers, Yarrow and Vosper—and so make available to ourselves money for other purposes. There was a re-jigging of Nye Bevan's famous aphorism about religion and priorities.

    The hon. Member gave us a mini-lecture on opportunity costs. But the idea of a reallocation of priorities on the basis of calculating which opportunity costs are the most expensive in the whole process reveals a belief that, no matter what the input by the taxpayer to these industries, no matter what the commitment to public expenditure and no matter what proportion of total output is purchased by the State in a monopsonistic fashion, the industries should not be subject to the action or control that is a direct consequence of nationalisation.

    Hon. Members on this side and many taxpayers feel that the time is long past when we can keep on pumping out substantial sums of money without the accountability and control that would go with it if the industry was in the private sector—for instance, in the form of purchase of stock. There is a similarity between the money that the State pays into enterprises of this type and the money that people on the open market would put into such an enterprise if they were willing. The least one can demand for this contribution is some type of control, participation and management supervision which, because it involves the State, amounts to nationalisation. Therefore, there is every justification for bringing these substantial providers of shipping to the Government, because the Government are the only institution in Britain buying for the Merchant Navy and keeping them in the general ambit of the Bill.

    The hon. Member for Chichester said that he would use powerful arguments for excusing and excluding the warship builders. There was, first, the question of opportunity cost, the optimum use of public funds. There was then the argument about freeing the cost resources for investment in the rest of the merchant shipbuilding industry. The fact is that, as these yards are substantially dependent upon Government purchase, all we are doing is following up the monopsonistic purchase of the ships with the control that should go with it.

    The hon. Gentleman gave us a lecture on Socialism. He is a Conservative. The Conservatives uphold the general principles of consumerism. Perhaps I may give him a slight lecture on consumerism. The finest assertion of power that the consumer could have is to make the provider dependent on his consumption. Indeed, that is the relationship that the State has with these yards, which provide substantially for the Royal Navy and, therefore, are substantially within the custom of the Government.

    The hon. Gentleman's arguments are always respected by the Opposition. I am as anxious as he is that he should remain accurate in his assessment. Is he aware that Vosper Thornycroft, for instance, exports more than 70 per cent. of its products?

    On that subject the Opposition—or, at least, Opposition Back Benchers—are not guilty of dual standards. However, I shall come to the matter of exports shortly.

    I think that we have had a fair definition of the Conservative attitude towards the whole question of nationalisation. Again, it was either innocence or disingenuity, but the hon. Member for Chichester said "If the company is not doing well, that is a good reason for nationalisation, or if it is not maximising its use of resources, that is a good reason for nationalisation." I am surprised, therefore, to note that on other substantial parts of the Bill he has been notably absent from the Division Lobbies. I suppose that on other proposals that we have made—and many more that I hope we shall make—for nationalisation in the two areas in which the hon. Gentleman is prepared to operate these criteria—a company not doing well or not maximising its use of resources—he will be prepared to support the taking of such companies into public ownership.

    On the first criterion of a company not doing to well, that is a justification for much of the nationalisation that we have had up to now. Indeed, the greatest complaint of major enthusiasts for nationalisation in the Labour Party—and there are many—is the fact that we have successively and traditionally nationalised the loss-makers. We consider that in many cases this has crippled our whole ideology of nationalisation before we have started, and in some cases it has necessitated decades of reinvestment and development, and cutting. paring, courageous management decisions and the closest trade union co-operation, to overcome the fact that we were taking over the cripples of British industry. Nevertheless, it has been done.

    On the other criterion, the company that is not maximising its use of resources, according to the hon. Gentleman that is a justification for nationalisation. I am very glad about that, although unhappy in one way. It is a justification for nationalising just about everything short of a fish and chip shop on the corner of my street in the constituency of Bedwellty. What is significant in British industry—indeed, almost congenital—is the fact that it does not maximise its use of resources. That is one of the reasons for our having to try, for four decades under Governments of both major parties, to induce, cajole, assist and attract industries to what at various times we have called development areas, deprived areas or assisted areas, or whatever description various areas have been given. We have done that to try to stimulate the use of manpower and capital resources, and resources of good will and skill, which are invaluable.

    If the hon. Gentleman is prepared to use that criterion—I hope he will write it into the next Conservative manifesto—that where companies are not maximising the use of their resources there is a significant and acceptable reason for taking them into public ownership, I shall even be tempted to vote Conservative at the next General Election. It is by a strange and weird stretch of the imagination that I see that possibility occurring. Probably the commitment is at least as determined as it will be in our manifesto for the next election. I am sure that the hon. Gentleman knows what I mean.

    The question of exports must exercise our minds. There is an important division of opinion between the two sides. There is even a division of opinion on these matters, strange though it may sound, within the Labour Party. It may well come as something of a surprise to Conservative Members to learn that there should be a division of opinion on such matters within the Labour Party.

    The general philosophy of the Conservative Party on these matters is, always has been and, I expect, always will be that there is no particular moral assessment to be applied to the sale of arms, that it is a fairly straightforward matter of trade, and that the judgment is exercised within a general ambit of strategic necessity.

    It is only for that reason that we do not sell, say, submarines or tanks or warships to Iron Curtain countries, because they are about the only dictatorships that within the general and generous Conservative criteria are excluded from being prospective customers. The Conservative Party's policy is that we should sell to any Government as long as they will pay, or at any rate will make a promise to pay, because there are frequent occasions on which the less stable dictatorships do not pay. Indeed, there have been occasions when even stable dictatorships such as the Chilean junta have not paid or even honoured their commitment to pay an instalment on a certain date.

    The Conservative Party's attitude is that whether such dictatorships honour their commitments in relation to the payment for certain arms and the circumstances in which they may be killing fellow human beings by the use of those arms are not matters for Conservative consideration. Conservative Members argue that in making that general moral point we should not discriminate as to whom we sell armaments to without asking workers on the shop floor what they think of the prospect of becoming unemployed if we do not sell to the sheikh of one country or the dictator of another.

    I know what the response of the shop floor workers would be. Generally speaking, though far from always, the shop floor response understandably would be "If the difference between supplying the dictator with his guns and not supplying him with his guns is my job, the dictator shall, regrettably, have his guns". That is because of the whole preoccupation with the idea that we should sustain the rôle of being a major international arms selling economy. There has been no serious investigation of the alternative uses of the manpower and the capital skills and resources.

    It is a matter of serious complaint that there has not been such an investigation, because it would be to the great advantage of all parties and to the whole of Britain if we dismantled our commitment to the warfare international State and replaced that commitment with a commitment to the production of consumer goods, investment goods and all the things that are much more needed throughout the world than guns, bombs, warplanes and other weapons of death. That is not a simplistic point. I do not expect it to happen tomorrow.

    8.45 p.m.

    Apart from the moral question, there will be a great deal of money to be made by this country throughout the world if we use the finely developed and honed skills required to make the weapons of death in making articles of peace. There is a broad request to all parties—we all have a vested interest in it—to turn our swords into ploughshares. The British worker and British management are at least as capable of doing that on a large scale as are any other country's workers and management. With the cushion removed, with the relatively protected market of arms sales removed, managerial, investment and governmental minds might be concentrated on alternative production from these highly skilled and well developed engineering enterprises.

    Before my hon. Friend leaves that extremely interesting and important point about arms sales abroad, particularly to dictatorships, will he comment on arms sales to South Africa?

    South Africa is a white racialist dictatorship. The only reason why South Africa needs arms is the suppression of its own people. There is a myth abroad—it has been shown to be a myth by a significant number of independent strategic observers—that South Africa is required as an essential link in the Western Alliance chain that prevents the Indian Ocean from being carpeted wall to wall with Russian submarines. That has been demonstrated to be nonsense by people who have no axe to grind over South Africa and no desire to sustain the Soviet interest there or anywhere else in the world. South Africa needs to maintain a virile defence posture to give it all the seal-studded importance of the dictatorship that it is.

    Yes, South Africa definitely is a dictatorship. Any country that will, as is reported in the latest Sunday Times, incarcerate the journalist Abraham—an intelligent 24-year-old man—and pressurise him to the point of suicide, any State that will throw out Dennis Herbstein, is as much a dictatorship as any squalid—

    Order. The hon. Gentleman is going rather wide of the mark. We are getting involved in detail other than the principle of the motion.

    I quite understand, Mr. Deputy Speaker. I was in danger of being carried away.

    It would be useful to enter a moral consideration into the general criteria that are employed in deciding to whom we should sell arms, the products that the hon. Member for Chichester wishes to remain under private production. The hon. Gentleman readily acknowledged the need for the Government to supervise defence contracts as being only sensible. Indeed it is a treaty requirement for any prospective sales to Soviet countries or Soviet satellites. I would not sell so much as a spur or a button to them. I think they are lunatic in making the commitment to the weapons of death which they do. I only wish that we had more influence in getting them to dismantle their stupid structure of war. The fact is that we have not.

    This requirement is necessary because of general strategic and moral questions and because there is always a distant prospect of any country in the world, especially the more unstable system of government, using these weapons against our own armed forces. Obviously, we have systematically to overlook them. That function could be more satisfactorily performed by a corporation under national ownership than by any other system. Of course the hon. Member for Chichester fears that, because of the prospects he feels of there not being the same level of good will or the guarantee of secrecy in the event of these yards becoming publicly owned.

    I know the hon. Member will understand that we can accept absolutely that those who run nationalised industries are at least as scrupulous and delicate in their concern for secrecy and the maintenance of good will as anybody in private enterprise. I go so far as to say that the development of business espionage is probably the highest form of private enterprise. The fact is that it is only the same temptations of financial gain or of treachery that could persuade a nationalised company employee as could persuade a private company employee to break a code of secrecy.

    I do not think that there is any danger, if secrecy is necessary, that the people managing and working in those yards will change in their general disposition towards the need for secrecy and the maintenance of good will simply because they become publicly owned. Anybody would think, from what the hon. Member for Chichester says, that on vesting day all workers and managers who have previously worked in the yards and built up an enormous reputation throughout the world will be shipped off by the lorry load and the yards will then be occupied by people whose trustworthiness is, to say the least, in question. That will not happen. The same people will be there the day after.

    I hope that there will be changes in attitude, but we cannot legislate for it nor can we dictate it. The main complaint has been that in nationalised industries, on the day after vesting day, nothing has changed. This is the broad complaint from generations of miners—including my own family—and generations of steel workers that the industry is being run by the same team as before but in different jerseys. I hope that it will mean more than a mere change of ownership. There is every prospect that it will not mean a great deal more. In one way that is disappointing. But it should be a reassurance to the hon. Member that there will not therefore be any breach of the best traditions of secrecy and good will which have been built up in the past.

    There is also the question of a nationalised industry being more prone to political intervention than is a private industry. In practice, this is highly unlikely. Because of the procedure for granting exporting licences the Government can in any case intervene, and that procedure will not change substantially. If the hon. Member is worried about political intervention, I share his worry. The kind of political intervention we have had in nationalised industries, from Governments of both parties has resulted in their being used as a means of policing a deflationary policy which the Government could not police in the private sector.

    My major worry is in terms of the flow of investment cost structure, pricing opportunities and the employment policy of those industries. But I do not think that that is what the hon. Gentleman meant by speaking of political intervention. Political intervention can be used as a malevolent description. My description would be in the carrying out by a democratically-elected Government of the will of the people. A Tory Government have just as much right, in those terms, to expand our commitment to armament as a Labour Government have to bring about breaches of contractual agreements with dictatorships with which they are in the most profound disagreement.

    That is a considered opinion, after two years' experience, during the term of the Labour Government, of dealing with dictatorships—for example, in Chile. I have spent many hours with Ministers trying to persuade them to break contractual relationships. It was not until the Chilean junta in its incompetence—its Friedmanite incompetence—played into our hands by defaulting on staged payments on the debt it owed for ships being built in this country that there was an opportunity to persuade Ministers that therefore we had no obligation at all.

    It would amaze the hon. Member for Chichester to learn how doughty the members of a Labour Government are in defending contractual obligations to the most hideous régimes, which would shock even the hon. Gentlemen with their bestiality, their treatment of citizens and their abuse of democratic rights. Therefore, the hon. Gentleman should not worry too much about this point until the day when I become Minister of Defence, or one of my hon. Friends with similar views hold that office. On that day there will be a great deal of worry, not only in the Tory Party but among the dictatorships of the world, because all deals will be off.

    As to the financial sense of not taking these industries into public ownership, the hon. Gentleman put forward the proposition that these were profit-making companies, paying taxes, and that the total amount of tax they had paid had exceeded the amount of aid granted to them by the Government through various assistance schemes, such as regional or investment assistance. But would those companies have been in a position to produce and to make profits without the pump-priming, the assistance and the subsidy? Would those profits have been as considerable, or are we just talking about the financial net difference between the taxes paid and the amount of grant paid out?

    If the hon. Gentleman thinks that there is an equation between the two, that is an extremely simplistic attitude from someone who has a professional connection with the world of finance, let alone a public duty to represent companies in Parliament. That is a perfectly honourable duty which we all carry out for companies in our constituencies. We obviously try to get the best deal we can for anyone we represent. But if the hon. Gentleman thinks that there is some kind of systematic relationship between the tax paid by a company, which can be offset, and grants paid to that company, that is not realistic. We are talking about dynamic, developing companies that live from year to year, not a still photograph of relationships between taxation and public funding of various kinds.

    Is it not a feature of existing nationalised industries that they do not pay tax because they do not make any profit, so that the problem does not arise?

    If the hon. Member for Tynemouth (Mr. Trotter) thinks it is a fact that nationalised companies do not make profits, I suggest that he pops along to the Library and goes through the annual accounts of nationalised industries over the last 30 years. In fact, he should examine the accounts for the last 50 years for the various nationalised industries—ever since we started the whole idea back in the 1920s. He could even go back before that, to the odd exercises in nationalisation carried out by Liberal and Tory Governments. He would find that in most years most of the nationalised industries made working surpluses. In most years, the reinvestment of these industries has been substantially higher than that of comparable industries in the private sector and higher than the investment of similar industries in other countries, their productivity levels have gained at a faster and more profitable rate and their labour costs have been reduced at a more significant and substantial rate than those of comparable industries.

    9.0 p.m.

    If the hon. Gentleman wants to study these matters, I can refer him to several articles which boil down the wisdom of the annual reports into a more digestible form and show that, far from being unprofitable, nationalised industries, even in the most unfortunate and counter-productive economic circumstances and against the most crippling policies of Governments of both parties, have in the main continued to make surpluses.

    Would not the hon. Gentleman agree that the quantity of investment has nothing to do with this matter? The fact that the quantity of investment in nationalised industries has been higher than in the private sector is neither here nor there. What matters is whether the investment makes a profit, and the public sector cumulatively has made a loss since the war.

    The hon. Gentleman should recognise that it is the rate of investment and the proportion of investment to other sums such as total sales, turnover and capital value which really matters. If he studies any independent analysis using all these criteria, he will find that nationalised industries at least match, and in many cases are superior to, comparable industries in the private sector in their investment record.

    Might I suggest that an appropriate measure would be the amount of tax paid by nationalised industries and private enterprise companies? Between 1962 and 1972—years in which the Labour and Conservative Parties spent an equal time in government—the taxation contribution of nationalised industries was £81 million while the contribution of the private sector was more than £13,700 million.

    Order. The Chair must intervene at this stage. The debate is becoming extremely wide and is dealing with issues that are not strictly concerned with warships.

    If a company in the warship-building industry—to take an example which is entirely relevant to the Bill—prefers to be absolved from taxation in return for an undertaking to invest any surpluses, which is the obligation of nationalised industries, that is fair exchange and no robbery to anyone.

    The prospect in the warship-building industry is that instead of the incubus of taxation—as Conservative Members seek to represent it—and avoiding silly transfer payments which would otherwise be involved, there is immediately available an additional liquid source of finance or a means to cut the selling price. Surely that is to the general advantage of this country and customers throughout the world, provided we want to continue selling to some of the people who insist on providing us with their custom.

    All I hope is that this aspect of the new nationalised industries will not suffer from the same constraints and vagaries of Government policy as other nationalised industries have had to suffer. We have better guarantees in the Bill than in any previous nationalisation Bill that there will be substantial autonomy of management and that industrial democracy will be developed. These disciplines and supervisions, taken together with necessities of the market—which, regrettably, not even nationalisation can insulate us against—will mean that we have a productive, secure warship-building industry. That very security and excellence of production will encourage the industry to transfer itself gradually from weapons of death into the means and necessities of peace, because the skills are there.

    I know that the hon. Gentleman's attitude will not change once the industry is nationalised. He will still want to visit the yards and to keep in the closest association with the workers and management, and he will still seek to represent the best interests of the workers in them. He will find ready allies for the protection of nationalisation and for the sustenance of the yards and the development of those skills on this side of the House. That is an advantage that he would not have enjoyed otherwise. He will have an authority of supervision which he cannot have now. That is why I hope that the proposition in the Bill and in what my hon. Friend the Minister has said will entice him to withdraw the suggested amendment, because it would be counter-productive to the interests of the workers he represents.

    I greatly admire the talent of the hon. Member for Bedwellty (Mr. Kinnock). He always reminds me of Caruso singing nursery rhymes. I seek to make my remarks at least half an hour more briefly than his, and I am aided in doing so because my hon. Friend the Member for Chichester (Mr. Nelson) has deployed the arguments so powerfully already.

    Warship manufacturers are completely different from other shipbuilders. They are highly technical and highly skilled specialist manufacturers who have their own teams of specialists. This is recognised by the nomination of the three principal companies, Vickers, Vosper and Yarrow, as leading manufacturers of warships.

    The export potential of these companies has been recognised. Vosper, for example, exports more than 70 per cent. of its order book. Foreign Governments can already order either direct from the warship manufacturers or through the British Government. The point about secrecy and confidentiality is not that when these companies are nationalised the controllers or managing directors, or whatever they may be called, will immediately start to breach confidentiality, but that overseas purchasers will see that others are placing orders through British Shipbuilders.

    I take an extreme example. At the moment, the Israeli Government can order one warship through one of the three designated manufacturers and the Arab countries can order products from one of the other British manufacturers without either feeling that there is any centre where information may be given from one to the other. Because each is ordering through one company, they have no risk or fear that the information will be passed on to one of the other companies. That is the real strength of this particular industry at the moment. If the industry were to be nationalised I am sure that, rightly or wrongly, foreign Governments would feel that information would be given to other manufacturers.

    If Vickers, Vospers and Yarrow are specialists in their own fields, how does the hon. Gentleman explain that a ship has recently been taken from Vickers to be completed on Tyneside by Swan Hunter?

    I am grateful to the hon. Gentleman for that illuminating point. But I do not think it is relevant to the point that I am making, which is that there is a risk that foreign Governments will feel that there is a loss of confidentiality if all warship manufacturers come under one control.

    The next point is that some of the better initiatives in warship construction have been taken by one of the three yards and not by the Admiralty giving the direction. The three yards have their own local initiative which they can exercise. If the whole of the industry were under central control those yards would need to get central clearance before they could go off on a foray or a design of their own. I feel that local initiative would be stifled.

    A further point is that foreign Governments can place orders at the moment with one of the three yards and the orders stay there. Assurances can be and have been given that there will be no direction of orders within the United Kingdom. But I simply do not believe that if an order is given to, say, Vosper Thornycroft in Southampton—where there is a lesser unemployment problem than elsewhere in the United Kingdom—central pressure will not be exerted to divert that order from Vosper to another part of the United Kingdom. Perhaps I am cynical but I simply do not believe that the Government would not seek to use this pressure.

    All the arguments are against including warship manufacturers in the Bill. All the arguments deployed by the Government to maintain the Bill during its long months of passage through both Houses had nothing to do with warship builders.

    The hon. Member for Bedwellty made some cogent points and said—it is a point of view that one respects—that we should not be producing items in this country which are capable of killing people. In a perfect world who could disagree with that entirely valid point? But that is not what we are discussing. We are discussing whether warship manufacturers should be natioalised.

    If the hon. Gentleman wishes to run down the construction of warships in this country, he is entirely justified in pushing his party to bring forward legislation to diminish the amount of warship manufacture in this country. What the hon. Gentleman should not do is hide behind the Bill and suggest that nationalisation will in some way enable the Government to run down warship manufacture. I hope that the points the hon. Gentleman has made will be noted by those who are responsible for the manufacture of warships.

    If the hon. Gentleman reads Hansard tomorrow he will find that I regretted that the rundown in our commitment to the arms industry is no more likely under nationalisation than it has been under private enterprise, despite the fact that we have a Labour Government. I was not so much talking about the desirability of simply running down the warship industry but of transferring the skills, manpower and managerial expertise from that industry into producing for peace instead of prodncing for other people's wars.

    The broad point which the hon. Gentleman made was that he would be prepared, indeed willing, to see a diminution of the amount of all warship manufacture in this country. If the three nominated warship manufacturers are under national control, it is more likely that this will happen than if they are not under national control. It is for the employees of the companies to judge for themselves whether that is true.

    The final point is how we are to pay for the nationalisation of warship manufacturers and others. These days we have come to believe that leaks are quite reliable. There have been leaks that the Government are contemplating the sale of shares in British Petroleum in order to pay for their current programme. Are we really contemplating a situation in which the Government are selling shares in one company in order to buy shares in another? It simply does not make sense. It is far mor logical for the Government at least to accept that in respect of this narrow sector nationalisation should not take place.

    If logic had any place here, warship manufacturers would be excluded from the Bill. I urge the Government to forget their manifesto and simply look at the common sense of the situation and to accept the amendment.

    9.15 p.m.

    I represent an area which is known worldwide for its shipbuilding industry. All the world knows of Govan Shipbuilders, formerly Upper Clyde Shipbuilders. Everyone knows the story of UCS and how the workers held out and fought to retain their jobs. They will continue to do so. In the meantime, I am receiving delegations from Yarrows, another shipyard on the Clyde, which makes gunboats, and those delegations request me to press for the inclusion of Yarrows in the nationalised industry and to fight to the bitter end for its nationalisation.

    During the war, every shipyard on the Clyde was capable of building warships and ships of every kind. The workers say that if a man can read one blueprint, he can read any blueprint, so why can we not have shipbuilding as a viable integrated industry in this country?

    I have here the bulletin of the Shipbuilders and Repairers National Association. A new president has been appointed. The headline on the front page is
    "Shipbuilding policy needed now."
    The new president calls for an integrated shipbuilding, ship repairing and marine engine industry. The theme the whole way through is "no separation". The new president represents a ship-repairing company, and he is calling for integration of the industry. If firms make tables or chairs, they can be integrated, and the same applies to the making of ships for cargo or ships for war.

    One message given to me by the Yarrow shop stewards was "Congratulations, Harry, on your stand against the building of those ships for Chile. We would rather build other ships than ships for Chile." They take a stand and recognise a capitalist dictatorship or Fascist dictatorship for what it is.

    Perhaps the hon. Gentleman will enlighten the House further about the representations made to him regarding ships built for Chile. My clear understanding—I am sure that he will confirm that I am right—is that there was no dispute whatever in the yard about the completion of those ships.

    I agree that at that time there was no dispute in the yard. But three weeks ago the workers came down here and said that they were concerned. Workers usually carry on in the normal way when there is no crisis and they are not concerned in those circumstances, but they become concerned when their daily lives are affected. We are discussing the whole of the shipbuilding industry, and their daily lives are affected.

    We receive all manner of delegations and deputations. I received a deputation in this building from Stephens Engineering. The firm was in financial trouble. Our assistance was refused. The firm was likely to declare itself bankrupt—and I can understand why, because the SNP did not help. All the way through the shipbuilding industry we find these problems.

    I have here one of the reports of the Public Accounts Committee. A little time ago, I interrupted the hon. Member for Tynemouth (Mr. Trotter) on the subject of Govan Shipbuilders and the PAC report and the statement that the Govan yard was not financially successful. Govan Shipbuilders has not spent all the money allocated to it. The hon. Member for Tynemouth visited Govan the same day as I did and he saw the most modern shipyard in Britain. We can build a ship on the Clyde every six weeks. Our problem is that we cannot cell them. As this report says, there is a diminution in the world market.

    I ask the hon. Member for Tynemouth why we are 30 years late in modernising our yards. Why has Japan stolen the march on us? We built ships during the war, at cost plus 10 per cent., which were very often sunk the day after they were fitted out. Where did this 10 per cent. go? It went into the pockets of the shipyard owners, not into modernising the yards. Japan came on the scene late and built the most modern shipyards in the world. Now 75 to 80 per cent. of the world's shipbuilding industry is in that country. We are competing with that, and also with South Korea which has hidden subsidies—

    We have a situation now in the constituency of the hon. Member for Glasgow, Govan (Mr. Selby) where £60 million of the taxpayers' money has been given in unhidden subsidy. What modernisation has been done to these yards?

    If the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) had joined the delegation which visited Govan he would have seen the modernisation which has taken place there. I give them credit for that. When Stephens Engineering closed down, Govan took on all its apprentices. Hon. Members opposite should not forget that Govan belongs to the country already. These shipyards, given guaranteed orders and subsidies from the Government and building battleships, were late on delivery and very often incompetent when privately owned, run and managed.

    It is time the Opposition realised that one of our basic industries cannot be run when it is broken up into small parts. Therefore, we must have planning ahead and orders ahead and we must be prepared to repair ships which have accidents. There is no difference between building a ship and repairing a ship. Hon. Members should remember while they are still shedding crocodile tears over this that at least the other place was in favour of part of the Bill.

    If we are to survive in a capitalist world we must compete with the capitalist and the only way we can do this is by having the most efficient and most progressive industry. We can do this only by public ownership.

    I return to the subject of plans. Have the Government any plans for the warship builders? We have asked them whether they have any plans for the repair yards, the shipbuilding industry in general or the aircraft industry, and we have had no answers. Now I ask them whether they have any plans for warship builders.

    The history of the warship builders in this country is a success story. The Government are proposing to put these three successful companies at risk through their insistence on the dogma of public ownership. We have heard how the work is divided between Royal Navy orders and export orders. The world's warships—whether or not we like the Governments who purchase them—from Argentina to Zanibar are the products of these three companies. Ships from these yards are to be found all over the world.

    Labour Members refer with all sincerity to the way of life in other countries. They refer to democracy but they should reflect on how few democracies there are. I believe that almost the only ones are in Western Europe, the countries which originated from Western Europe, and Japan. There are very few others. This is a moral problem, but I do not believe that warships can be used to repress people in countries which do not have democracy.

    I can give one example, but there are many more. We are talking about guns that can fire 30 or 40 miles and about missiles which can move from sea to land over extensive distances. At its widest point Chile is 104 miles across. Half the population of that country is within reach not just of an 8 in. gun from a battle cruiser—if such things are still used—but within reach of quite light armament which was pointed directly at towns as a means of securing the junta in power in 1973.

    I think that in the case of Chile the vessels in question are submarines, and I think that even the most modern submarines will encounter difficulty in trying to keep down a population ashore. I do not think one can quote an instance when warships have been used in that way. I cannot remember ever hearing of one.

    Let us consider the Royal Navy side of the programme. Public money is used to purchase these ships, but it is strange to advance the argument that because public money is being spent in these yards, they must be taken into public ownership. The logical conclusion of that argument is that the manufacturers of chalk and blackboards should be taken into public ownership.

    We are now getting proof that many Labour Members do not believe in the private ownership of industry and the mixed economy. If the State spends 60 per cent. of GNP, one can see how easily the remaining 40 per cent. could be gobbled up. Let us consider the amount of paper used in this place and throughout our bureaucracy. It leads me to wonder whether the paper industry should be one of the first to be nationalised.

    We are now hearing the real beliefs of many Labour Members. They may be genuine in their beliefs, but they are mistaken.

    There is also the question of cuts in the Royal Navy. One of the Defence Ministers told me that 11,000 men would lose their jobs as a result of the cutbacks. My hon. Friend the Member for Chichester (Mr. Nelson) queried the figure because he said it seemed a very large reduction. We are, however, facing very large reductions in the Royal Navy and thus in the level of orders for these yards. There will be a cut of one-seventh in destroyers and frigates, of one-third in Royal Fleet auxiliaries, of one-seventh in minesweepers, with no more amphibious ships and no new depot ships. There will not only be a reduction in the number of ships, but ships will be retained in service for longer and this will cut down the amount of work. Because of this the dependence of these yards on foreign orders will be more important than ever before.

    I agree with a good deal of what the hon. Member for Glasgow, Govan (Mr. Selby) said about Korea and the Govan yard. I regret that the hon. Gentleman has had to leave the Chamber. I draw different conclusions from some of his, but some of the facts that he put forward are correct and should be acceptable to both sides of the House. It is clear that if the Koreans are subsidising their shipbuilding it is by underpaying the work force. That is a fact of life and it is difficult to see what we can do about correcting the situation. Korea is in direct competition with Govan. It is building the same type of ship as Govan and is able to do it reasonably satisfactory. The Korean ships are sold and they sail away and do not break in two.

    9.30 p.m.

    When we turn to warships, that sort of competitor is not able to enter into the game. We have the advantage. We have the edge in higher technology in comparison with our cheap labour competitors in the developing countries. It would be a tragedy if Britain, which is now all too short of success in industry, were to throw away one of its few successful industries.

    I suspect that there is a great deal of disagreement across the Chamber about the likely degree of political interference. However, the remarks that have come from the Labour Benches must give some strength to the fears of foreign buyers of our warships—namely, that for moral or political reasons there might be interference in future with the delivery of vessels to foreign Governments.

    Surely the hon. Gentleman should know that in every post-war year there has been political interference by Government. Under the first Labour Government two tankers were built in my constituency for Poland, but they were not allowed to be delivered. Orders from Russia and Bulgaria were refused. That was not because the yards refused to take the orders but for political reasons advanced by Government. Throughout my political life there has been interference by Government in deciding whether private shipyards should take foreign orders, whether military or commercial.

    The difference is that in the examples that the right hon. Gentleman has given we are talking about a potential enemy. That is not the case with the Third World. I think on the last occasion that we debated these matters it was suggested that we might build ships for the Warsaw Pact.

    The hon. Gentleman knows that the yard in which he is interested has recently built three tankers for Russia.

    I think that the right hon. Gentleman is talking about the yard that is represented by the hon. Member for Wallsend (Mr. Garrett). In fact they were merchant tankers, not warships. I do not think that there is any point in taking the line that we might sell warships to the Soviet Union because the Russians do not need any more warships. They have a navy of their own and are building new warships very satisfactorily in their own yards. There is no hope of even a Left-wing Government in Britain obtaining such business from that side of the Iron Curtain.

    I cannot accept that the Government's argument about the Royal Navy makes sense. We know that public accountability is a sham when it comes to existing nationalised industries. Does anyone really think that our naval vessels would be cheaper as a result of the yards passing into State ownership? I believe that costs will rise as a result of State ownership.

    Reference has been made to the record of nationalised industries. In a brief visit to the Library I was not able to obtain a great deal of information and I had to add up the figures for myself while sitting in the Chamber. It seems that during the 30 years up to 1975 the losses amount to over £1,000 million. The sums written off amount, according to my arithmetic, to £3,700 million. Surely that money could have been better spent in other directions.

    Perhaps the hon. Gentleman will get some more figures to take into account the compensation that has been paid, the interest that has been paid and the way in which the nationalised industries, because of enforced cheap pricing policies, have indirectly subsidised the rest of British society to the tune of billions of pounds over all those years. Those figures must be taken into account.

    I cannot accept the compensation argument. Let us consider the possible compensation for the shipyards that we are talking about—namely, Vospers and Yarrow. They will be paid one year's profit. That would be regarded as theft if carried out by an individual.

    As for pricing policies, I go along with the hon. Gentleman in as much as part of the losses are due to those policies, but that is not the only reason. These losses are due partly to pricing policies but also to the inefficiency that is built into the bureaucracy of the system. So far as this relates to pricing policy, it results from political interference.

    That is one of the arguments that we have been advancing against any further expansion of State ownership. If Labour Members say that they dislike profits so much that they would rather see naval ships costing more to prevent profits, that surely is a stupid argument.

    To return to the subject of foreign customers, under State ownership I can see it being argued that new orders should be placed with the Govan yards which are desperate for work rather than with the well-known, established, profitable yards at Yarrow down river. There was an unfortunate experience at Yarrow a few years ago when it was amalgamated with Govan, but fortunately Yarrow managed to escape that mess.

    But if rush orders are to be placed at Govan because it is felt that that is where the jobs are needed most rather than from considerations of which is the best yard, that will lead to extra costs for Royal Navy ships and put off foreign customers.

    I turn to the subject of plans. We had the first sign of an admission from the Minister of State, who said that a plan had been delivered by the Organising Committee and that it would eventually be published. Why is it so secret? We are talking about the future of this vital industry and there is it seems a plan, but we do not know what it contains. Why can we not have this debate in the light of the knowledge of what that plan contains? I see the Under-Secretary of State shaking his head, and perhaps there is no plan. However, I understood the Minister of State to say that there was a plan. I thought he said earlier that a plan had been delivered and that he hoped it would be published in due course.

    It is hard to get Ministers to intervene on the subject of plans. They do not want to know about this subject. They are concerned only with taking the industry into public ownership. The only sensible thing for the Government to do about the building of warships is to leave well alone and to accept the amendment.

    I must tell the hon. Member for Tynemouth (Mr. Trotter), who has been reading Scottish newspapers, that no plan has been delivered from the Organising Committee for British Shipbuilders to my Department.

    The hon. Gentleman does himself, his constituency or the shipbuilding industry no credit with the kind of speech he made this evening.

    I am willing to concede that the hon. Gentleman probably knows a fair amount about the shipbuilding industry. I wish he would place some of that knowledge at the disposal of the House rather than pursue the arguments we heard in his speech.

    We have made the position of my right hon. Friend the Secretary of State for Industry absolutely clear time and again, and I stress that position once more. We believe that we must take warship builders into public ownership. They are successful companies mainly because they are contractors for the Government. It is the height of illogicality to omit from the provisions of the Bill the companies that are most dependent for their existence on Government orders, but that is the kind of doctrine that is propagated by Conservatives. Furthermore, the main purpose of British shipbuilders will be to look at the whole shipbuilding industry, from which it must be apparent that other yards build warships. The Opposition spoke of only three yards that build warships, but eight build for the Royal Navy. Cammell Laird and Swan Hunter are two of the yards to which the Opposition have failed to refer.

    I prefer to make my own speech.

    The hon. Member for Chichester (Mr. Nelson), with his vast repository of shipyard experience, made an incredibly doctrinaire speech which was exposed for what it was by my hon. Friend the Member for Bedwellty (Mr. Kinnock). The hon. Member for Chichester wondered why we need to take such successful companies into public ownership. I do not decry the record of success of the warship builders, but over the past 10 years the successful warship builders have received no less than £12·4 million in special assistance. When the hon. Member for Chichester refers to their success, I hope he will bear in mind that on at least one occasion one of those successful warship builders would have been in severe financial difficulties if it had not been for Government assistance.

    The Minister has borne out the point I made towards the end of my speech. How can he give figures for the grants made available without also mentioning the contribution that those companies have made by means of paying tax? Will he give us those figures for the same period? Of course companies will not invest unless they have incentives, but repayment by way of taxation is a reflection of the use that companies make of grants.

    The figures for investment and other grants are on top of the figures I have already given. I wish that the hon. Member for Chichester would listen to me. Despite the success of these companies, on one occasion one of them would have been in severe financial difficulties without Government assistance. When it comes to experience of the difficulties in the shipyards, I would rather listen to the authentic voice of the Govan yard than the unauthentic voice that we have heard from the Conservatives.

    The hon. Member for Chichester expounded an incredible doctrine, particularly for a member of his party, although it is perhaps not so incredible bearing in mind the company with which the hon. Member was and still is connected. He said that Government policy should be to put public money only into less successful companies, not where it will produce greater efficiency or where the Government place their own orders. If that is an enunciation of new Conservative policy, it is another about-turn. We all know of the trench warfare within certain sections of that party, and perhaps we have uncovered yet another trench. We often hear speeches about the divi- sions within the ranks of my party, but if hon. Members penetrated deeper the feelings on the Opposition Benches they would find fundamental divisions on policy.

    9.45 p.m.

    The hon. Member for Chichester put forward a quite fallacious doctrine of putting money where it will produce the lowest return and, perhaps, less efficiency. That has been comprehensively exposed and denounced by my hon. Friend the Member for Bedwellty. However, the hon. Member for Chichester was not satisfied with that. Again with his vast wealth of shipyard experience, he produced the hoary old myth of the run-down in shipyard jobs because of the defence review.

    The hon. Gentleman does not know the shipyard industry very well. He ought to know that, as a result of orders placed and being placed by the Royal Navy, employment in this kind of yard is expected to increase over the next few years by from 20,000 to 24,000. Of the 24,000 jobs, about 18,000 are expected to be in development areas. I hope that the next time the hon. Gentleman comes along with a prepared speech he will at least have it prepared by someone apart from himself. I am informed that there are in the House tonight expert preparers of speeches. We could even send them to the hon. Gentleman. [Interruption.] I only wish that all the preparers of speeches could be accounted for on the Floor of the House tonight.

    The Royal Navy orders and buys many of the ships which are produced in these yards. Once the ships are built, that automatically gives some kind of seal of approval for other navies. We have to bear in mind that the warship-building yards are major Ministry of Defence contractors. It is the Ministry of Defence sales team that procures many of the orders for these yards.

    I say to Opposition Members, particularly the hon. Member for Gosport (Mr. Viggers), that when the Ministry of Defence procures these orders it is already accustomed to procuring them, and overseas Governments are already accustomed to dealing with the Ministry of Defence procurement team. I cannot see any reason why there will be less security of information. As my hon. Friend the Member for Bedwellty said, Government Departments have a good record in confidentiality. I should like to think that the prospects and success of confidentiality will be increased even more. I see no reason at all, from anything that Opposition Members have said, to think that overseas navies will be less willing to place their orders in British yards once those yards are part of British Shipbuilders.

    We have heard the doctrine that the Government are entitled to do everything for the warship builders except to own them. That is what has been enunciated. It does not matter if the warship builders provide ships for the Royal Navy. We can again use the Ministry of Defence sales team for procuring overseas orders for these yards. If they get into difficulties, we can even use public money for helping the yards. We can do all that for these warship builders—place more orders, help them out in times of difficulty and help them to get overseas orders—yet we must not, apparently, own them.

    I reject that doctrine, as do my right hon. and hon. Friends. What Opposition Members are really saying is that they do not like the fact that the Government will be taking into public ownership a section of the shipbuilding industry which has a taste of success. They do not mind the Government taking over the loss-makers or putting public money into them. We believe that we must look at the totality of British shipbuilding and at the whole potential of the yards in Britain. Above all, many of us believe that one of the tasks and one of the possibilities that now lie before the Government is a shift of public ownership not into loss-making public industry but into profit-making public industry.

    It is for those reasons that I urge my hon. Friends to reject the suggested amendment and to ensure that the Bill goes forward to another place with warship builders included.

    Before I comment on what the Under-Secretary said and on some of the other points raised in the debate, I want to refer to one matter which by itself would have been sufficient reason for excluding the Navy shipbuilders from the Bill. That is the basis on which compensation is being offered.

    As we shall be unable to reach our amendment on compensation later, I wish to place it on record that we regard the terms of compensation, such as they are—they are very badly and unclearly defined—as unsatisfactory. It is essentially unfair, when all the companies being nationalised by the Bill except one are unquoted companies, that the basis of compensation should be calculated by reference to share prices.

    It also seems to us to be unfair that it should be done on the basis of share prices when what is being talked about is getting control of a company. As Opposition Members at least know, ordinarily even in stock market takeovers when the whole of a company is bought one has to pay a substantial premium on the price of the shares.

    I emphasise this point. It is not here a question of compensating some rich private shareholders. The companies we are talking about are unquoted companies owned by other companies. The basis of compensation, whether or not it is fair, will have a profound effect upon the overall position of the parent companies.

    To quote but one example, Yarrow (Shipbuilders) Limited in its most recent year to June 1976 made a pre-tax profit of £4·9 million. On the basis of the compensation as far as one can work it out the parent company above the shipbuilding company, if nationalised in toto, would get compensation of only £4·6 million.

    Therefore, we believe that the compensation could be extremely unfair and I hope that the Government will give further consideration to this matter. I hope that they will give further consideration to the whole way in which the arbitration tribunal operates and consider whether it could go beyond the rather narrowly defined criteria laid down in the legislation.

    My hon. Friends have developed the argument that the naval shipbuilders fall into an entirely different category from the other shipbuilding companies that are being nationalised by this legislation. As my hon. Friend the Member for Gosport (Mr. Viggers) said, we are talking about very specialised companies, companies with very specialised design teams and very complicated projects which often have to be altered substantially during the course of construction.

    One of our fears is that in the mammoth corporation that is being created there will be too much decision-taking at the centre. I know that the Under-Secretary will say that provision has been made for decentralisation, but all the history of nationalised industries is against such decentralisation occurring. We think that the bureaucratic practice of nationalised industries in the past will will be entirely unsuited to this industry.

    Then there is the point made by my hon. Friend the Member for Chichester (Mr. Nelson). We are dealing with very successful companies. There are so few successful companies in Britain and we have such tremendous economic problems that it seems crazy, when there are first-rate internationally competitive companies, that the Government should decide to take them into State ownership for very insubstantial reasons. The Government cannot advance the usual arguments about a declining industry, a declining share of the market, and inadequate returns. Those arguments do not apply. As my hon. Friend the Member for Chichester said, they make a contribution to society through the corporation taxes that they have paid on their profits in the past.

    The hon. Member for Bedwellty (Mr. Kinnock) argued that we could not add up the corporation taxes paid and offset them against the grants made because profits were created on more than a one for one basis. All I can say to him is that I only wish that the nationalised industries had achieved some of that dynamic out of the substantial grants they have reecived.

    In the corporation that is being established for the shipbuilding industry we are putting—

    Why is it a grant when a nationally-owned industry gets the necessary finance from the owning concern and an investment when a privately-owned industry raises finance from the people who own it? What is the difference between the two?

    The nationalised industries have received enormous subsidies and enormous write-offs, but that has not prevented them from having a total net accumulated loss since their establishment.

    In this corporation we are putting together a series of disparate interests. I hope that no one in the House would wish to repeat the arguments that led to so many different interests going into British Leyland. With hindsight, many people would argue now that it would have been better to have several corporations instead of putting into one mammoth corporation a series of firms making various products that were unsuitable for collective management in one firm. That is one fear we have about the way in which the Government are proposing to organise the industry.

    Another fear we have that Labour Members might take into account is that nationalisation will not save jobs in the shipbuilding industry. It so happens that in the naval shipbuilding yards there are secure jobs and employment has been expanded. Those are the only jobs that count. They are sound, unsubsidised jobs, established by firms that sell goods that customers want to buy on world markets.

    If Labour Members were really concerned about the employment prospects, they would not go on about private profit. They would realise that private profit is essentially the basis on which jobs are secured. That is why employment has expanded in this industry and why Labour Members, if they had any logic, should have some fear that this doctrinal, irrelevant measure will in the long term undermine employment in the industry.

    We fear that politics increasingly will enter into the award of defence contracts. What was said by the hon. Member for bedwellty confirmed our fears. He thought that politics should enter more into defence contracts. So Ministers cannot dispense with the argument in that way.

    For all those reasons we argue that the industry is totally unsuited to nationalisation. I commend the motion to my hon. and right hon. Friends.

    Question put:—

    Division No. 15.]

    AYES

    [9.59 p.m.

    Adley, RobertFox, MarcusMcCusker, H.
    Aitken, JonathanFraser, Rt Hon H. (Stafford & St)Macfarlane, Neil
    Alison, MichaelFreud, ClementMacGregor, John
    Amery, Rt Hon JulianFry, PeterMacmillan, Rt Hon M. (Farnham)
    Arnold, TomGalbraith, Hon T. G. D.McNair-Wilson, M. (Newbury)
    Atkins, Rt Hon H. (Spelthorne)Gardiner, George (Reigate)Madel, David
    Awdry, DanielGardner, Edward (S Fylde)Marshall, Michael (Arundel)
    Bain, Mrs MargaretGilmour, Rt Hon Ian (Chesham)Marten, Neil
    Baker, KennethGilmour, Sir John (East Fife)Mates, Michael
    Banks, RobertGlyn, Dr AlanMaude, Angus
    Beith, A. J.Godber, Rt Hon JosephMaudling, Rt Hon Reginald
    Bell, RonaldGoodhart, PhilipMawby, Ray
    Bennett, Dr Reginald (Fareham)Goodhew, VictorMaxwell-Hyslop, Robin
    Benyon, W.Goodlad, AlastairMayhew, Patrick
    Berry, Hon AnthonyGorst, JohnMeyer, Sir Anthony
    Biffen, JohnGow, Ian (Eastbourne)Miller, Hal (Bromsgrove)
    Biggs-Davison, JohnGower, Sir Raymond (Barry)Mills, Peter
    Blaker, PeterGrant, Anthony (Harrow C)Miscampbell, Norman
    Body, RichardGray, HamishMitchell, David (Basingstoke)
    Boscawen, Hon RobertGriffiths, EldonMoate, Roger
    Bottomley, PeterGrimond, Rt Hon J.Molyneaux, James
    Bowden, A. (Brighton, Kemptown)Grist, IanMonro, Hector
    Boyson, Dr Rhodes (Brent)Hall, Sir JohnMontgomery, Fergus
    Bradford, Rev RobertHall-Davis, A. G. F.Moore, John (Croydon C)
    Braine, Sir BernardHamilton, Michael (Salisbury)More, Jasper (Ludlow)
    Brittan, LeonHampson, Dr KeithMorgan, Geraint
    Brocklebank-Fowler, C.Hannam, JohnMorgan-Giles, Rear-Admiral
    Brotherton, MichaelHarrison, Col Sir Harwood (Eye)Morris, Michael (Northampton S)
    Brown, Sir Edward (Bath)Harvie Anderson, Rt Hon MissMorrison, Hon Peter (Chester)
    Bryan, Sir PaulHastings, StephenMudd, David
    Buchanan-Smith, AlickHavers, Sir MichaelNeave, Airey
    Budgen, NickHayhoe, BarneyNelson, Anthony
    Bulmer, EsmondHeath, Rt Hon EdwardNeubert, Michael
    Burden, F. A.Henderson, DouglasNewton, Tony
    Butler, Adam (Bosworth)Heseltine, MichaelNott, John
    Carlisle, MarkHicks, RobertOnslow, Cranley
    Carson, JohnHiggins, Terence L.Oppenheim, Mrs Sally
    Chalker, Mrs LyndaHodgson, RobinPage, Rt Hon R. Graham (Crosby)
    Churchill, W. S.Holland, PhilipPage, Richard (Workington)
    Clark, Alan (Plymouth, Sutton)Hooson, EmlynPaisley, Rev Ian
    Clark, William (Croydon S)Hordern, PeterPardoe, John
    Clegg, WalterHowe, Rt Hon Sir GeoffreyParkinson, Cecil
    Cockcroft, JohnHowell, David (Guildford)Penhaligon, David
    Cooke, Robert (Bristol W)Howells, Geraint (Cardigan)Percival, Ian
    Cope, JohnHunt, David (Wirral)Peyton, Rt Hon John
    Cormack, PatrickHurd, DouglasPink, R. Bonner
    Corrie, JohnHutchison, Michael ClarkPowell, Rt Hon J. Enoch
    Costain, A. P.Irving, Charles (Cheltenham)Price, David (Eastleigh)
    Craig, Rt Hon W. (Belfast E)James, DavidPrior, Rt Hon James
    Crawford, DouglasJames, R. Rhodes (Cambridge)Pym, Rt Hon Francis
    Critchley, JulianJenkin, Rt Hon P. (Wanst'd & W'df'd)Raison, Timothy
    Crouch, DavidJessel, TobyRathbone, Tim
    Crowder, F. P.Johnson Smith, G. (E Grinstead)Rawlinson, Rt Hon Sir Peter
    Davies, Rt Hon J. (Knutsford)Johnston, Russell (Inverness)Rees, Peter (Dover & Deal)
    Dean, Paul (N Somerset)Jones, Arthur (Daventry)Rees-Davies, W. R.
    Dodsworth, GeoffreyJopling, MichaelReid, George
    Douglas-Hamilton, Lord JamesJoseph, Rt Hon Sir KeithRenton, Rt Hon Sir D. (Hunts)
    Drayson, BurnabyKaberry, Sir DonaldRenton, Tim (Mid-Sussex)
    du Cann, Rt Hon EdwardKershaw, AnthonyRidley, Hon Nicholas
    Dunlop, JohnKilfedder, JamesRidsdale, Julian
    Durant, TonyKimball, MarcusRifkind, Malcolm
    Eden, Rt Hon Sir JohnKing, Tom (Bridgwater)Roberts, Wyn (Conway)
    Edwards, Nicholas (Pembroke)Kitson, Sir TimothyRoss, Stephen (Isle of Wight)
    Elliott, Sir WilliamKnight, Mrs JillRoss, William (Londonderry)
    Emery, PeterKnox, DavidRossi, Hugh (Hornsey)
    Evans, Gwynfor (Carmarthen)Lamont, NormanRost, Peter (SE Derbyshire)
    Ewing, Mrs Winifred (Moray)Langford-Holt, Sir JohnSainsbury, Tim
    Eyre, ReginaldLatham, Michael (Melton)St. John-Stevas, Norman
    Fairbairn, NicholasLawrence, IvanShaw, Giles (Pudsey)
    Fairgrieve, RussellLawson, NigelShaw, Michael (Scarborough)
    Farr, JohnLester, Jim (Beeston)Shelton, William (Streatham)
    Fell, AnthonyLewis, Kenneth (Rutland)Shepherd, Colin
    Finsberg, GeoffreyLloyd, IanShersby, Michael
    Fisher, Sir NigelLoveridge, JohnSilvester, Fred
    Fletcher-Cooke, CharlesLuce, RichardSims, Roger
    Fookes, Miss JanetMcAdden, Sir StephenSkeet, T. H. H.
    Forman, NigelMacCormick, IainSmith, Cyril (Rochdale)
    Fowler, Norman (Sutton C'f'd)McCrindle, RobertSmith, Dudley (Warwick)

    The House divided: Ayes 279, Noes 282.

    Speed, KeithTebbit, NormanWarren, Kenneth
    Spence, JohnThatcher, Rt Hon MargaretWatt, Hamish
    Spicer, Michael (S Worcester)Thomas, Dafydd (Merioneth)Weatherill, Bernard
    Sproat, IainThomas, Rt Hon P.(Hendon S)Wells, John
    Stainton, KeithThompson, GeorgeWelsh, Andrew
    Stanbrook, IvorTownsend, Cyril DWhitelaw, Rt Hon William
    Stanley, JohnTrotter, NevilleWiggin, Jerry
    Steel, David (Roxburgh)van Straubenzee, W. R.Wilson, Gordon (Dundee E
    Steen, Anthony (Wavertree)Vaughan, Dr GerardWinterton, Nicholas
    Stewart, Donald (Western lsles)Viggers, PeterWood, Rt Hon Richard
    Stewart, Ian (Hitchin)Wainwright, Richard (Colne V)Young, Sir G. (Ealing, Acton)
    Stokes, JohnWakeham, JohnYounger, Hon George
    Stradling Thomas, J.Walder, David (Clitheroe)
    Tapsell, PeterWalker, Rt Hon P. (Worcester)TELLERS FOR THE AYES:
    Taylor, R. (Croydon NW)Wall, PatrickMr. Spencer Le Marchant and
    Taylor, Teddy (Cathcart)Walters, DennisMr. Michael Roberts.

    NOES

    Abse, LeoDoig, PeterJohn, Brynmor
    Allaun, FrankDormand, J. D.Johnson, James (Hull West)
    Anderson, DonaldDouglas-Mann, BruceJohnson, Walter (Derby S)
    Archer, PeterDuffy, A. E. P.Jones, Alec (Rhondda)
    Armstrong, ErnestDunn, James A.Jones, Barry (East Flint)
    Ashley, JackDunnett, JackJones, Dan (Burnley)
    Atkins, Ronald (Preston N)Eadle, AlexJudd, Frank
    Atkinson, NormanEdge, GeoffKaufman, Gerald
    Bagier, Gordon A. T.Edwards, Robert (Wolv SE)Kelley, Richard
    Barnett, Guy (Greenwich)Ellis, John (Brigg & Scun)Kerr, Russell
    Barnett, Rt Hon Joel (Heywood)English, MichaelKilroy-Silk, Robert
    Bates, AlfEnnals, DavidKinnock, Neil
    Bean, R. E.Evans, Fred (Caerphilly)Lambie, David
    Benn, Rt Hon Anthony WedgwoodEvans, Ioan (Aberdare)Lamborn, Harry
    Bennett, Andrew (Stockport N)Ewing, Harry (Stirling)Lamond, James
    Bidwell, SydneyFaulds, AndrewLatham, Arthur (Paddington)
    Bishop, E. S.Fernyhough, Rt Hon E.Leadbitter, Ted
    Blenkinsop, ArthurFitch, Alan (Wigan)Lee, John
    Boardman, H.Fitt, Gerard (Belfast W)Lestor, Miss Joan (Eton & Slough)
    Booth, Rt Hon AlbertFlannery, MartinLever, Rt Hon Harold
    Bottomley, Rt Hon ArthurFletcher, L. R. (Ilkeston)Lewis, Ron (Carlisle)
    Boyden, James (Bish Auck)Fletcher, Ted (Darlington)Lipton, Marcus
    Bradley, TomFoot, Rt Hon MichaelLitterick, Tom
    Bray, Dr JeremyFord, BenLoyden, Eddie
    Broughton, Sir AlfredForrester, JohnLuard, Evan
    Brown, Hugh D. (Provan)Fowler, Gerald (The Wrekin)Lyon, Alexander (York)
    Buchan, NormanFraser, John (Lambeth, N'w'd)Lyons, Edward (Bradford W)
    Buchanan, RichardFreeson, ReginaldMabon, Dr J. Dickson
    Butler, Mrs Joyce (Wood Green)Garrett, John (Norwich S)McCartney, Hugh
    Callaghan, Rt Hon J. (Cardiff SE)Garrett, W. E. (Wallsend)McDonald, Dr Oonagh
    Callaghan,Jim (Middleton & P)George, BruceMcElhone, Frank
    Campbell, IanGilbert, Dr JohnMacFarquhar, Roderick
    Canavan, DennisGinsburg, DavidMcGuire, Michael (Ince)
    Cant, R. B.Golding, JohnMacKenzie, Gregor
    Carmichael, NeilGould, BryanMackintosh, John P.
    Carter, RayGourlay, HarryMaclennan, Robert
    Cartwright, JohnGraham, TedMcMillan, Tom (Glasgow C)
    Castle, Rt Hon BarbaraGrant, George (Morpeth)Madden, Max
    Clemitson, IvorGrant, John (Islington C)Magee, Bryan
    Cocks, Rt Hon MichaelGrocott, BruceMaguire, Frank (Fermanagh)
    Cohen, StanleyHamilton, James (Bothwell)Mahon, Simon
    Coleman, DonaldHarper, JosephMallalieu, J. P. W.
    Colquhoun, Ms MaureenHarrison, Walter (Wakefield)Marks, Kenneth
    Conlan, BernardHart, Rt Hon JudithMarquand, David
    Cook, Robin F. (Edin C)Harrersley, Rt Hon RoyMarshall, Dr Edmund (Goole)
    Corbett, RobinHatton, FrankMarshall, Jim (Leicester S)
    Cowans, HarryHayman, Mrs HeleneMason, Rt Hon Roy
    Cox, Thomas (Tooting)Healey, Rt Hon DenisMaynard, Miss Joan
    Craigen, Jim (Maryhill)Heffer, Eric S.Meacher, Michael
    Crawshaw, RichardHooley, FrankMellish, Rt Hon Robert
    Cronin, JohnHoram, JohnMikardo, Ian
    Crosland, Rt Hon AnthonyHowell, Rt Hon Denis (B'ham, Sm H)Millan, Rt Hon Bruce
    Crowther, Stan (Rotherham)Hoyle, Doug (Nelson)Miller, Dr M. S. (E Kilbride)
    Cryer, BobHuckfield, LesMiller, Mrs Millie (Ilford N)
    Cunningham, G. (Islington S)Hughes, Rt Hon C. (Anglesey)Moonman, Eric
    Cunningham, Dr J. (Whiteh)Hughes, Robert (Aberdeen N)Morris, Alfred (Wythenshawe)
    Davidson, ArthurHughes, Roy (Newport)Morris, Charles R. (Openshaw)
    Davies, Bryan (Enfield N)Irvine, Rt Hon Sir A. (Edge Hill)Morris, Rt Hon J. (Aberavon)
    Davies, Denzil (Llanelli)Irving, Rt Hon S. (Dartford)Moyle, Roland
    Davies, Ifor (Gower)Jackson, Colin (Brighouse)Murray, Rt Hon Ronald King
    Davis, Clinton (Hackney C)Jackson, Miss Margaret (Lincoln)Newens, Stanley
    Deakins, EricJanner, GrevilleNoble, Mike
    Dean, Joseph (Leeds West)Jay, Rt Hon DouglasOakes, Gordon
    Dell, Rt Hon EdmundJeger, Mrs LenaOgden, Eric
    Dempsey, JamesJenkins, Hugh (Putney)O'Halloran, Michael

    Orme, Rt Hon StanleyShaw, Arnold (Ilford South)Varley, Rt Hon Eric G.
    Ovenden, JohnSheldon, Robert (Ashton-u-Lyne)Wainwright, Edwin (Dearne V)
    Padley, WalterShore, Rt Hon PeterWalden, Brian (B'ham L'dyw'd)
    Palmer, ArthurShort, Mrs Renée (Wolv NE)Walker, Harold (Doncaster)
    Park, GeorgeSilkin, Rt Hon John (Deptford)Walker, Terry (Kingswood)
    Parker, JohnSilkin, Rt Hon S. C. (Dulwich)Ward, Michael
    Parry, RobertSillars, JamesWatkins, David
    Pattie, GeoffreySilverman, JuliusWatkinson, John
    Pendry, TomSkinner, DennisWeetch, Ken
    Perry, ErnestSmall, WilliamWeitzman, David
    Phipps, Dr ColinSmith, John (N Lanarkshire)Wellbeloved, James
    Prentice, Rt Hon RegSnape, PeterWhite, Frank R. (Bury)
    Price, C. (Lewisham W)Spearing, NigelWhitlock, William
    Price, William (Rugby)Spriggs, LeslieWilley, Rt Hon Frederick
    Rees, Rt Hon Merlyn (Leeds S)Stewart, Rt Hon M. (Fulham)Williams, Alan (Swansea W)
    Richardson, Miss JoStoddart, DavidWilliams, Alan Lee (Hornch'ch)
    Roberts, Albert (Normanton)Stott, RogerWilliams, Rt Hon Shirley (Hertford)
    Roberts, Gwilym (Cannock)Strang, GavinWilliams, Sir Thomas (Warrington)
    Robertson, John (Paisley)Strauss, Rt Hon G. R.Wilson, Alexander (Hamilton)
    Robinson, GeoffreySummerskill, Hon Dr ShirleyWilson, Rt Hon Sir Harold (Huyton)
    Roderick, CaerwynSwain, ThomasWilson, William (Coventry SE)
    Rodgers, George (Chorley)Taylor, Mrs Ann (Bolton W)Wise, Mrs Audrey
    Rodgers, Rt Hon William (Stockton)Thomas, Jeffrey (Abertillery)Woodall, Alec
    Rooker, J. W.Thomas, Mike (Newcastle E)Woof, Robert
    Rose, Paul B.Thomas, Ron (Bristol NW)Wrigglesworth, Ian
    Ross, Rt Hon W. (Kilmarnock)Thorne, Stan (Preston South)Young, David (Bolton E)
    Rowlands, TedTierney, Sydney
    Ryman, JohnTinn, JamesTELLERS FOR THE NOES:
    Sandelson, NevilleTomlinson, JohnMr. A. W. Stallard and
    Sedgemore, BrianTorney, TomMr. Joseph Ashton.
    Selby, HarryTuck, Raphael

    Question accordingly negatived.

    On a point of order, Mr. Speaker. I give you notice that tomorrow, at a time convenient to you, I would like to raise a substantive point of order under the Parliament Act 1911 relating to the Bill. I give you notice tonight merely to warn you and to invite you to refrain from signing any certificate under subsection (2) of Section 4 of the Act until you have heard my point of order.

    I am obliged to the hon. and learned Gentleman, and I take note of what he has said.

    10.16 p.m.

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

    This measure has been under consideration here and in the House of Lords for some 300 hours. Whenever we have considered it on the Floor of this House, our proposals have been fully endorsed. The elected Chamber has repeatedly given its support for the public ownership of these industries as embodied in the Bill.

    During the passage of the Bill, the Tory Opposition have forced 139 Divisions and have been defeated on every occasion. Once it has been given its Third Reading tonight, the Bill will have been passed in the same form by this House in two successive Sessions. I hope that the House of Lords will observe this and draw the necessary conclusion from it. The House of Commons has once again debated ship repair, the issue on which the Bill fell in the last Session, and for the thirteenth time has voted to include ship repair in the Bill.

    The hon. Member for Oswestry (Mr. Biffen) has said that he will discuss hybridity in his speech on Third Reading. The question of hybridity has been deliberately deployed by the opponents of the Bill—opponents who have never once been able to defeat us by fair debate and fair vote—by a fall-back technical device. There is no excuse for the House of Lords to delay the Bill on alleged grounds of hybridity. Hybridity will not be accepted as an excuse by the tens of thousands of workers in these industries who are desperately anxious for the urgent passage of this vital measure. The notice that we have been given by the hon. and learned Member for Wimbledon (Sir M. Havers) of yet another legal device that the Opposition are to attempt to deploy will be treated with the same scorn by the aircraft and shipyard workers who are anxious for the Bill to be passed.

    We want this Bill not just to resist the encroachment of another place on the supremacy of this House, not just because it is in the manifesto, but because it is the right policy for these two particular industries. The Bill aims to help workers make their full contribution to the aircraft and shipbuilding industries through the industrial democracy provisions. These provisions will provide a favourable climate within which industrial democracy will grow and develop naturally from the wishes and aspirations of those in the industries.

    This will not take place overnight, but I am convinced that in due course the development of industrial democracy will yield substantial and important benefits. It will contribute to the well-being of those who work in the industries by allowing them to make their full contribution to their success. In turn, the performance of each industry will improve immeasurably if the skills, energies and enthusiasm of those who work in it are fully harnessed. As a result, our industrial wealth will be increased. Efficiency follows consent—[Interruption.] The hon. Member for St. Albans (Mr. Goodhew) has scarcely taken part in these proceedings, and when he has done so he has scarcely improved them.

    Order. If the Minister of State is not giving way, the hon. Member for St. Albans (Mr. Goodhew) knows that he must resume his seat.

    I shall not ask you, Mr. Speaker, to call the hon. Gentleman to order. I do not mind what he calls me. Any insult from him is a compliment.

    Order. We have had enough in this place today. Did the hon. Member for St. Albans call the Minister a coward?

    I did indeed, Mr. Speaker, because I thought that he, having attacked me, was not prepared to face what I had to say to him. If you wish me to withdraw the word, I will do so with pleasure, but the hon. Gentleman might give way.

    The participation of the hon. Member for Macclesfield (Mr. Winterton) today has been to fail to help the aircraft workers in his constituency who want the industry nationalised.

    As I have said, efficiency follows consent, and participation and consent are at the heart of our strategy for the regeneration of industry. But public ownership also has other advantages for both industries. It combines public accountability—important in industries which depend to an unusual extent on Government support—with the necessary independence and flexibility which the industries must have if they are to operate successfully as commercial concerns.

    Public ownership has another vital advantage. It will make it possible to take key strategic decisions on a coherent basis. The need to combine the resources of the two main airframe companies is widely accepted. For 10 years after the Plowden Committee's report, private ownership has failed to bring this about. For the first time in the history of this great industry, the companies are beginning to work together instead of in competition. This is because of the lead given by the Organising Committee under Lord Beswick.

    Within the framework of the Organising Committee the industry is considering all the available options and is discussing them with prospective collaborative partners. The momentum of these studies is being stepped up and significant progress is being made. For example, our industry is working with the German industry on a joint approach to the French on the advanced short-medium range aircraft in which McDonnell Douglas is involved.

    A team is visiting Boeing later this month to evaluate United Kingdom participation in the proposed 7N7. The prospect of public ownership has made this promising position possible. It is essential that the industry should now move forward and play its proper part in any future collaborative projects. This is what will determine the size and shape of the industry and the prospects for those who work in it.

    The proposals in the Bill offer the only hope of achieving a stable and effective national policy for shipbuilding—a policy which must be established urgently. The Government are determined to maintain a viable merchant shipbuilding industry in this country. That is why we have had intensive discussions over the past year with the Organising Committee and with both sides of the industry on steps to help the industry. I pay tribute to the Organising Committee for British Shipbuilders under Admiral Sir Anthony Griffin for the fine work that it too has done.

    But it is essential to tackle these problems within the framework of public ownership under a corporate strategy provided by British Shipbuilders. Without this there is little hope of achieving what we want—a stable long-term policy for this industry as opposed to the ineffective stopgap measures.

    The Organising Committee has gone a long way in preparing plans for vesting. It has been actively exploring many possible ways of helping the industry to get work. And it has established a high reputation both in this country and overseas among those associated with shipbuilding, not least the industry's customers

    In the ship repairing industry, modernisation is essential to avoid further decline. For this, Government funds will be needed. Here again the Government are determined that such public investment must be carried out within the framework of public ownership and under a corporate strategy provided by the new corporation. That is why the Bill lists all the most significant ship repairing companies which own or operate large facilities in the main port areas. This will provide the new Corporation with a sound industrial base from which to develop a coherent strategy for these major companies as a whole. But this strategy will be combined with effective decentralisation as specified in Clause 5.

    I urge the House to give the Bill a Third Reading to enable these important industries to secure the benefits which public ownership should provide. I hope that on this occasion the other place will read the clear message from this House and end uncertainty by allowing the Bill to pass quickly on to the statute book.

    10.24 p.m.

    The Minister of State has commended the Bill for Third Reading with a speech that blended ideological zeal and a certain touching hope about the prospective benefits of public ownership. I shall be immensely traditional and confine myself to the strict interpretation of what a Third Reading necessitates—which is merely what is in the Bill. Therefore, I shall not follow the wider considerations of the Minister of State, although I think he would agree with me that those wider considerations have been given fairly considerable debate over the weeks and months, if not years, that have preceded this evening.

    I shall recommend to my right hon. and hon. Friends that the Bill should not go forward for Third Reading. I say that it should not go forward because I believe that its status is suspect, and the suspect nature of its status turns on Schedule 2.

    My observations here are in no way connected with the comments of my hon. and learned Friend the Member for Wimbledon (Sir M. Havers), who makes an entirely different point in respect of the Parliament Act, as the Minister understands. But the whole question of the part of the Bill relating to ship repairing has raised the controversy about hybridity. The Minister of State has occasionally reacted with a little emotion on this subject, and I feel that his reaction is almost that of a great art connoisseur who, having regarded the Bill as the finest Constable in his collection, now discovers that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) is nudging his elbow to suggest that perhaps Tom Keating was behind the brushwork after all.

    The Minister of State has got himself into a great state of excitement at times, and the phrase which I particularly recall came in what he said on 11th November, when he referred to.
    "the tired and tattered issue of hybridity."
    Let us pause for a moment and consider the position in which the House finds itself, through no choice of mine and no choice of the Treasury Bench. The Public Bill Office has ruled that there was a prima facie case for considering hybridity, and in so doing, it seems to me, the Public Bill Office has neatly underlined the point which was at least hinted at by the hon. Member for Caernarvon (Mr. Wigley) on 11th November, when, in respect of the ship repairing provisions, he said:
    "it is important to draw the attention of the House to the grave difficulties that the Bill will face in another place unless the amendment is accepted."—[Official Report, 11th November 1976; Vol. 919, c. 748.]
    In my view, if the Bill gets its Third Reading—again, I take no view on the point raised by my hon. and learned Friend the Member for Wimbledon—and it goes to the House of Lords with Schedule 2 in its present form, a certain sequence of events is likely to follow. I put this before the House merely because I think that one has an obligation to do so, and I am not seeking to engage in controversy about it. I am merely trying to establish what I believe to be the inevitable course of events.

    When the Bill reaches the other place, it will, I believe, automatically be referred by the Table to the Examiners, who will report to the House on whether the Bill is, in their view, hybrid. If the Examiners find the Bill hybrid, they are likely so to report to the House, which may on a motion refer it to the Standing Orders Committee on Private Bills. That Committee will then have to decide whether the Standing Orders for Private Business, which, in the view of the Examiners, ought to apply to the Bill, should so apply.

    Under guidance from the Clerks, it is my belief that the Standing Orders Committee will make its recommendation to the other House, and it is important for this House and for Parliament to realise that that Committee is not a political committee. I cannot imagine that any member of the Treasury Bench would gainsay that.

    In my judgment, a Select Committee is then likely to be appointed by the Committee of Selection, and the Select Committee will sit each day until all petitions are heard. On referral to the Select Committee, a terminal date will be fixed by which petitions must be submitted. After hearing petitions, the Select Committee will make any amendments that it deems necessary and will report to the whole House. The Bill will be recommitted to a Committee of the whole House, and normal procedure will be followed thereafter. That is my belief of what is likely to happen to this piece of legislation when it proceeds to the other place. That will happen automatically and inevitably, flowing directly from the judgment of the Public Bill Office about the prima facie hybridity.

    I hope that all hon. Members will accept that if this process is followed there is no need for a single Tory backwoodsman to lay aside his rural sports. There will be no respite for the partridge, the fox or the pheasant. This will all happen automatically, and to pretend that this is a Commons versus Lords clash is to be totally misleading. The mechanism is already in train as a result of the judgment of the Public Bill Office.

    A number of Labour Members seem to have cast themselves in the role of the reincarnation of the young David Lloyd George in a peers versus people drama. They should be told that that particular play will not be staged this season, and the hon. Member for Feltham and Heston (Mr. Kerr) is not even on the short list for the young David Lloyd George.

    The very circumstance with which we have been confronted over the past few months, particularly since the prima facie ruling on hybridity by the Public Bill Office, was anticipated to some extent by Mr. Asquith in the debates which took place in this House in May 1914. As the Leader of the House was very anxious, when we debated the procedural motion which governed the Second Reading earlier today, to call in aid the late Lord Salisbury, I shall make it equitable by calling in aid Mr. Asquith. He said:
    "What is called the Suggestion stage is not really a stage at all, but it is a power which is reserved to this House by the proviso in the Sub-section, the effect of which I have already stated. The suggestion of Amendments was intended to deal, and to deal only, with exceptional cases. In the first place, there may be cases in which subsequent consideration of the Bill, as originally passed by this House and rejected by the House of Lords, shows some patent mistake or error. Of course it would be absurd that this House should be required to pass over the Veto of the House of Lords, a Bill in which such an error appears, on the face of it, without the opportunity of correcting it."—[Official Report, 12th May 1914; vol. 62, c. 952.]
    The Public Bill Office ruling on hybridity has offered this House a chance of making that correction. It was the judgment of the Leader of the House, supported by his right hon. Friends, that the House should be deprived of that opportunity. We would be foolish to suppose that the story can rest there. I believe that the Leader of the House will bear a fairly heavy responsibility when the full story of the Bill is told. [Interruption.] I heard the word "bribes" mentioned by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), I think—

    I think we would all feel that this debate would be elevated if those who make such accusations from a sedentary position, and in the security of the House, would say who was doing the bribing and who was in receipt of such bribes. Having said this inside the House, they should say it outside as well, as this would lead to a better level of public debate.

    I quote from an editorial in The Times—[Interruption.] I hope that it will be fully accepted by those below the Gangway that, whatever else may be said about the Editor of The Times, he is unlikely to have his judgment suborned by the sort of hospitality that the hon. Member for Perry Barr has in mind.

    The Editor of The Times said:
    "The Government knew the Bill was hybrid from the beginning this time, but they have still denied the complainants the protection of the customary procedures."
    He also said:
    "The question of principle is that the Government are using their slim and fragile majority in the Commons to bypass established procedures, and with it one of the safeguards for individuals and organizations against arbitrary legislation."
    I do not know by what code they now play rugby football in Ebbw Vale, but the House would be justified in concluding that when an infringement has been detected there the player promptly books the referee and confiscates the whistle. That is about the level at which the Leader of the House conducts himself in protecting what ought to be his prime consideration, namely, the legitimate rights and considerations of minorities.

    Parliament has the obligation to remedy the defect of drafting in the Bill as contained in Schedule 2, and I predict that the refusal of the Treasury Bench to fulfil that obligation will redound, and properly, to the discredit of the Government.

    10.36 p.m.

    I hesitate to intervene at length in this second Third Reading debate on the Bill because I played virtually no part in the debates in the earlier stages. The Minister repeated again this evening the idea that all the workers in the shipbuilding industry are head over heels in love with the Bill and the principle behind it. That must be nailed and refuted before the Bill leaves this House.

    The House will remember the exchanges which took place between the right hon. Member for Sunderland, North (Mr. Willey) and myself last week. I feel that I should now try to get certain points on the record. I have no personal quarrel with the right hon. Member. If I may say so without causing him undue embarrassment, I find him to be a very charming and reasonable individual, and certainly not the nasty, vindictive type with whom I would be particularly anxious to have an argument with.

    I must refer to columns 1087–89 of the Official Report of 1st December. As reported in those columns, I alleged that the shop stewards at Austin and Pickers-gill, whom I had met the previous day, had told me that neither of their Members of Parliament had asked them for their views on the Bill and that they, the shop stewards, were totally opposed to the Bill. The right hon. Member for Sunderland, North twice stated that what I had said was a lie. After I tried to help the right hon. Member by suggesting that what he meant was that I had been told a lie, the right hon. Member specifically said:
    "He says that what he was told may be a lie. I am saying that what he has stated in the House is a lie."
    When pressed by Mr. Deputy Speaker, the right hon. Member withdrew "the word." He said:
    "I shall withdraw the word."—[Official Report, 1st December 1976; Vol. 921, c. 1089.]
    I feel that my honesty was questioned, and I therefore wish to acquaint the House with the content of a letter which has been received by me in the last 24 hours from the shop stewards of Austin and Pickersgill, photostat copies of which I have supplied to the Minister and to the right hon. Member for Sunderland, North.

    With permission, I shall read the letter in full. It states:
    "Dear Mr. C. Smith, Liberal M.P., 3rd December 1976. We the undersigned endorse the statement made in the House of Commons by yourself, which referred to the lack of consultation between Sunderland Labour M.Ps Mr. Fred Willey and Mr. Gordon Bagier, on the important issue of 'Nationalisation of the Shipbuilding Industry'.
    We at the Southwick Shipyard of Austin & Pickersgills, being the representatives of the employees in the Southwick Yard, firmly believe that it is to our advantage if we were not nationalised, based on the information we have at hand.
    The representatives of the employees met our local M.P. Mr. Fred Willey, at 11.15 a.m. this morning Friday 3rd December 1976. Mr. Willey could not give us any valid reason why we should change our opinion."
    That is signed by the following representatives: welders' shop stewards—P. Tweddle, a name I cannot read, and A. K. Downes; shipwright shop stewards—I. Hall and I. Querry; platers' shop stewards—I. Armstrong and C. Paget; drillers' shop steward—J. H. McCabe; caulkers' shop stewards—R. Hutchinson and F. A. Russell.

    It continues:
    "Above signatures are representatives of the Boilermakers Society Outfit and GMWV Shop Stewards."
    At the meeting to which I referred there was present a journalist employed by the newspaper called Echo, of Sunderland. On the front page of that newspaper, dated 30th November, there was a headline which stated
    "'Drop the Bill' plea from A. & P."
    It then states:
    "'Hands off our shipyard.' That was the message to Liberal M.P. Mr Cyril Smith from workers at Sunderland's Austin and Pickersgill today."
    The article continued:
    "Most of the men came out strongly against nationalisation proposals aimed at a State take-over of the privately-owned yard."
    Whatever may or may not be the merits of the Bill, I hope the House will be satisfied that I did not tell a lie. I believe that I have provided ample evidence to prove that I did not do so.

    As I have said, the right hon. Member for Sunderland, North is not normally an individual with whom I should seek a quarrel, but as the previous exchange is on the record I was anxious to get this correspondence on the record.

    In fact, there is a second shipyard at Sunderland. Although I do not make the same allegation in respect of that yard, I understand that the shop stewards there also are unhappy about the Bill. They have telephoned me during the week to ask me to go to see them to discuss the matter. Until I have seen them I am not alleging that they have the same view, except to say that there is clearly some unhappiness about the situation. I do not allege that they are opposed to the Bill because, frankly, I do not know, having obtained the information through a third party.

    I hope that the letter I have read and the evidence I have been able to produce—I have provided the right hon. Member for Sunderland, North and the Minister with copies—prove conclusively that there is at least one shipyard where the workers are opposed to the Bill.

    10.45 p.m.

    I bear the hon. Member for Rochdale (Mr. Smith) no ill will and I am sure that, with the best will in the world, he visited my constituency to soap the stairs for me. I have been in the rough-and-tumble of political life long enough to avoid falling down even well-greased stairs.

    The hon. Gentleman came to Sunderland as Liberal Party spokesman on social affairs. We, with our usual generosity and hospitality, honoured him with a civic reception. Let me correct that statement. We would have honoured the hon. Gentleman with a reception, if he had turned up. But he did not do so. He snubbed the mayor, and instead of being at the town hall—

    If the right hon. Gentleman had told me that he intended to mention this matter, I would have produced—and will produce tomorrow—a letter from the Mayor of Sunderland accepting my explanation for non-arrival at the town hall, saying that he accepted my apologies.

    The hon. Gentleman intervened at a point in my speech when I was about to cite in aid a headline in the Sunderland Echo:

    "Humble Cyril apologises to a Furious Mayor."
    Therefore, I was not the only person who was made furious by his visit. It was not only the mayor and I who complained. The management of Austin and Pickersgill has also complained. The management has not emulated Bristol Channel, but it has publicly, persistently and stridently spoken out against nationalisation. I do not complain, although I have had complaints from the men in the yards of statements made by the management at ceremonies in the yards supposed to be non-political.

    The hon. Member for Rochdale arrived at the yard with a Liberal shop steward from another yard and with somebody who was assumed to be the hon. Gentleman's personal assistant.

    It was later discovered that the man in question was a journalist. The management had not invited the Press, and when management representatives held discussions with the hon. Gentleman they understood that those discussions were confidential. When the management discovered this, it immediately and effectively made a complaint.

    I myself felt that the hon. Gentleman added to his discourtesies by waiting until the end of the Second Reading debate to intervene, when he knew that it was difficult to reply, and he did so without giving me the slightest intimation that he intended to raise this matter affecting my constituents. What he told the House was that he had met all of the shop stewards at Austin and Pickersgill, that they told him that neither of their Members of Parliament had ever asked them for their views on the Bill and that they were totally opposed to the Bill.

    I have no wish to cast any personal reflection on the hon. Member for Rochdale, but he was wrongly informed. The letter to which he referred appeared in the northern Press on Saturday. I claim that neither the hon. Gentleman nor the journalist with whom he worked sought to become properly informed. Following an intervention in the House last week, the hon. Member said he would confirm the matter in writing, and, as we know, there was a round-robin letter at the yard.

    The hon. Member told the House that he met 30 shop stewards. Of course, I accept what he said. Last Friday I met the same group, but I made it plain that I was not having consultations. I said that I called only to inquire what was going on and whether they wanted a meeting with my hon. Friend and myself. They said that they did, and I assured them that I would put their request through the trade union usual channels.

    In fact we discussed many matters, but we did not discuss nationalisation. [Hon. Members: "Why not?"] Because that was to be discussed later. I act according to the usual procedures immediately, but the trade unions were not informed of the hon. Member's visit to the yard.

    As for the hon. Gentleman's letter, it was signed by 18 persons from five trades and from two trade unions. This accounts for 10 of those signatures. If he vouches that the others are stewards, I accept it. The hon. Gentleman made his final score 18, not 30, but that difference is of no undue significance. I have been informed by the district secretaries as the hon. Member and his journalist would also have been informed—that there are more than 100 shop stewards at Austin and Pickersgill.

    This, then is the relevant portion. I do not want to push my luck, and I am content. Support for the hon. Gentleman roughly corresponds with the Liberal vote in the town. I am in enough trouble already and I do not wish to imply that the signatories are Liberals. Clearly, the hon. Gentleman cannot claim to have met all the shop stewards at Austin and Pickersgill.

    I return to the letter of which the hon. Gentleman has kindly given me a copy. It is written with the caution of a Queen's Counsel and not the usual shipyard phraseology with which I am familiar. The hon. Gentleman quoted fully from the letter, which was not fully quoted in the Press. The letter states that they:
    "firmly believe it is to our advantage if we were not nationalised based on the information that we have at hand".
    That is a cagey expression of belief. It has an important qualification, particularly as it appears that the main complaint is about a lack of information at hand.

    That is the position, and I should have thought that we would do better to await a more definitive expression of opinion, when the 18 have had an opportunity of discussing this matter further with my hon. Friend the Member for Sunderland, South (Mr. Bagier) and myself. However, certainly on these facts, which the hon. Member for Rochdale has not disclosed but which were available to him, the hon. Member cannot claim that all of the shop stewards at Austin and Pickersgill are totally opposed to the Bill.

    Now let us deal with the allegation of lack of consultation. I put it as an allegation because the hon. Member puts it to the House.

    Does the right hon. Gentleman accept that there is such a thing as a shop stewards' committee at Austin and Pickersgill and that the people I met and the signatures on the letter are members of that committee?

    I do not accept that the hon. Gentleman met the shop stewards' committee. The hon. Gentleman has no right to say that in the House. He did not meet the unions. He did not get in touch with the unions. He did not have the decency to do that when he was claiming that he had the support of all of their shop stewards.

    On a point of order, Mr. Deputy Speaker. This is a Third Reading debate about a crucially important issue. All that we are being treated to is a wrangle between two hon. Members. I cannot see what it has to do with the Third Reading of the Bill.

    The Chair is hopeful that the explanations which are being given on both sides of the House in respect to this particular incident will very shortly come to a close.

    I will deal with the lack of consulation in the context of this Third Reading. When the Labour Party manifesto in 1974 proposed the nationalisation of shipbuilding, in spite of the fact that nationalisation was demanded by the shipbuilding unions there was a good deal of opposition from Austin and Pickersgill. It is not a matter that I have kept secret. If the hon. Member for Rochdale goes to the Library, for instance, and reads the book that I wrote about Parliament which was published late in 1974, he will see this fully set out.

    In the February 1974 General Election a good number of shop stewards at Austin and Pickersgill opopsed nationalisation. My hon. Friend the Member for Sunderland, South and I intervened over their heads and addressed meetings of the workers at the yards. The main arguments—again I warn my hon. Friend the Minister of State—were about decentralisation and participation. Again I warn my hon. Friend that these are real issues now. They are real issues because under the present yard agreements the workers at Austin and Pickersgill are far and away the highest paid workers in the industry. [Interruption.] As the hon. Member for Rochdale is jeering let me say that Liberal trade unionists are dissociating themselves from him.

    I put myself at some personal risk because I said that we would get nationalisation without an expressed provision for decentralisation and participation only over my dead body. That is something that I have repeated in Standing Committee.

    At the October General Election, my hon. Friend the Member for Sunderland, South and I had the full support of the stewards. We held meetings in the yards. This was a major issue in the town. For what it was worth, there seems to have been a general acceptance of nationalisation. My hon. Friend and I both increased our majorities substantially at those elections. Therefore, if there is any evidence, there is certainly no evi- dence indicating that there had been a boycott at Austin and Pickersgill Ltd. or, as the hon. Member for Rochdale claimed, that 90 per cent, of the workers at the yard were against nationalisation.

    The right hon. Gentleman said that my hon. Friend the Member for Rochdale (Mr. Smith) had been repudiated by the Liberal trade unionists. He did not specify what he meant.

    I said that they dissociated themselves from what the hon. Gentleman had said.

    The right hon. Gentleman must not say things like that to the House unless he has evidence. The Association of Liberal Trade Unionists has fully supported the line taken by my party throughout the proceedings on the Bill.

    It was only because I was provoked by the hon. Member for Berwick-upon-Tweed (Mr. Beith) that I revealed that I have been so informed. It was not a point that I wished to make against the hon. Member for Rochdale.

    During the passage of the Bill, in Standing Committee and in discussions with the Government, I have continually pressed for decentralisation and participation. At the same time, my hon. Friend and I have been in constant touch with the unions at all levels in our constituencies. This has been greatly intensified, because we have had issues such as the Greenwell yard and threats to shipbuilding orders. Until the hon. Gentleman's intervention there were no representations against nationalisation at district, branch or any other level. Indeed, as late as Saturday last, when my hon. Friend the Member for Sunderland, South and my hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) and I had a meeting with the shipbuilding shop stewards, a meeting which wa