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Shipbuilding Industry Redundancy Payments (Northern Ireland)

Volume 982: debated on Wednesday 16 April 1980

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

We move now to the two orders on aircraft and shipbuilding. I understand that it would be more to the convenience of the House if they were taken separately.

11.35 pm

I beg to move,

That the draft Shipbuilding (Redundancy Payments Scheme) (Northern Ireland) (Amendment) Order 1980, which was laid before this House on 12th March, be approved.
The redundancy payments scheme for shipbuilding workers to which this order relates derives its authority from the Shipbuilding (Redundancy Payments) Act 1978. One of the provisions of that Act was to place an upper limit of £100 on the previous earnings to be taken into account when calculating the redundancy payments to be made. The effect of the upper limit is that those who earned less than the limit have their benefits calculated on the basis of their actual earnings but those who earned more than the upper limit have their benefits based upon that limit.

In July last, the Government introduced an amending order extending the life of the scheme for two years, to the end of July 1981, and at the same time increased the upper limit to £110. The draft order increases the upper limit still further, to the sum of £120, effective as from 1 February last. This is, therefore, a minor but useful improvement in the existing scheme, bringing it into line with an increase in the upper limit recently made to the general redundancy scheme under the Employment Protection (Consolidation) Act 1978 and has already received approval in another place.

I trust, therefore, that the House will regard the draft order as being uncontroversial and allow the improvement to be made. However, as the order relates solely to Harland and Wolff, perhaps it might be appropriate for me to make a comment on the situation there. This shipyard currently has a work force of 7,100. To date approximately 1,440 Harland and Wolff workers have benefited from the redundancy payments scheme. The total cost has been approximately £3·5 million, the average lump sum payment being about £1,505, which is similar to that for the workers of British Shipbuilders.

Although 470 more workers have been declared redundant, to take effect in April-May, it is not possible to forecast the future effects of the scheme because everything depends upon the future orders that the shipyard is able to obtain. However, I can advise the House that the cost of the changes proposed in the order will be minimal, since few employees in Harland and Wolff have earnings approaching the upper limit.

There are at present six ships in the yard, one of which is to be handed over this week. The last of the remaining five is due for completion by late 1981. Thus, serious shortages of work for steel workers are bound to develop before very long if no new order is speedily obtained. The tragedy is that, despite large capital investment by the Government following a modernisation scheme initiated in 1973, which has made Harland and Wolff one of the most modern and capital-intensive yards in Europe, no new orders have been won by the yard since July 1979.

Part of the problem is that there has been little demand in the world for large ships for the repetitive production of which Harland and Wolff facilities were designed. Also, the capacity to build these large ships cheaply in other parts of the world has increased. Another and most significant contributory factor in Harland and Wolff's current problems is the missing of production targets. In consequence, losses in 1978 were £25·5 million, and the Government committed a further funding of £22 million for 1979–80.

That could not be allowed to drift on indefinitely, so, on 23 July last, my hon. Friend the Under-Secretary of State with responsibility for Harland and Wolff announced that he was undertaking a fundamental review of the current position and prospects of the company, and that is continuing. Meanwhile, the Government have made it clear that funds will be provided to enable the company to pursue its operations until decisions are taken in the light of this review.

The painful truth is that unless Harland and Wolff can satisfy potential customers that it can deliver goods when the customers want them, it will not have any customers. Customers will simply take their money elsewhere. This is a matter entirely for management and workers to resolve for themselves. No amount of Government funding will do it for them. Essentially, Harland and Wolff stands or falls on its own merits in a highly competitive world.

Having said that, the company is actively seeking orders wherever they can be found and the Government are doing everything within their competence to assist. One obvious way is the placing of orders for naval vessels. My hon. Friend the Under-Secretary of State has discussed this with the Minister of State, Ministry of Defence and I can confirm that Harland and Wolff is on the tender list for Royal Fleet auxiliaries and similar vessels. The position now is that Harland and Wolff is on an equal footing with the rest of the British shipbuilding industry for orders for these vessels. The Ministry of Defence has been made fully aware of the facilities available at Harland and Wolff.

The Government, as announced last November, have obtained EEC approval for a fund of up to£25 million for subsidies on new orders over a two-year period from July 1979. The conditions applying to the use of this fund will be the same as those for the intervention fund for Great Britain. Hence, once again this Government assistance is wholly dependent upon Harland and Wolff securing new orders which will attract these subsidies.

My hon. Friend the Minister of State, Department of Industry will, when introducing the next order, speak of the general world prospects and the demand for new ships. I shall, therefore, leave that broader aspect to him. However, whatever he says will be relevant to the position of Harland and Wolff in seeking to secure for itself part of that demand. Within that context, the future of Harland and Wolff will depend upon the review to which I have already referred, and that, in turn, will depend upon the confidence that the company can instil in potential customers.

Naturally, when the review is concluded the House will be given an opportunity to discuss its findings fully. Meanwhile, adequate provision has to be made for those who may, during the present period of difficulty, find themselves redundant. I therefore trust that the House will agree to implement the modest improvement proposed in the redundancy payment scheme, and I accordingly commend the order to the House.

11.44 pm

There are two distinct features in the Minister's remarks. The first is the future of Harland and Wolff. That depends generally upon shipbuilding prospects in the United Kingdom. The second is the detail of the scheme.

It is no exaggeration to say that we are debating Harland and Wolff's future and continued existence. When the issue was introduced in another place, a rather more optimistic view was taken of world shipping. The general consensus of a BBC broadcast that I heard this week was that there is an increase in world shipping orders. However, that is the world position. Unless it works its way into the United Kingdom shipbuilding industry generally, and especially into the Northern Ireland sector, any upturn in the market may come far too late to save the yard, because the work force will be dispersed. The Government have recognised that once a work force has been dispersed it is not so easily brought together again.

The Minister referred to the review that was taking place. I remind the hon. Gentleman that when we debated the appropriations for Northern Ireland on 13 March 1980 the Under-Secretary of State for Northern Ireland parried many questions with the information that the Government
"are still in the course of preparing the thorough review that we undertook to complete by the end of the month."—[Official Report, 13 March 1980; Vol. 980, col. 1717.]
It is now 16 April and there is no sign of the report. When we are talking of missed production targets, that criticism can be levelled as much at the Government as at the Harland and Wolff work force. I know that the Under-Secretary of State referred to the illness of an official, but that is not a sufficient excuse. I am not making merely an academic point. A number of decisions depend on the completion of the thorough review. One of the decisions is the future funding of the yard. The management cannot possibly make sen- sible decisions until it knows what view the Government take about the yard's long-term future. That is something that we need to know as quickly as possible. We also need to know when the review will be published. When may we now expect it? It has been so long delayed. Will it be published before the end of the month, before the end of the summer, or when?

With the passage of time, emloyment prospects are bleaker. The further redundancy of which the Minister spoke is but the first schedule for the year. I remind the hon. Gentleman that I said during the course of the Northern Ireland (Appropriation) debate that in week 38, in September, all steel work in the yard will have been exhausted. I asked the Government on that occasion, a month ago, for permission for the Harland and Wolff management to go ahead with the ordering of the steel so that if orders were obtained there would be no hiatus between the running out of the previous steel work and the commencement of new work. No answer was forthcoming on that occasion, and inevitably there will be further redundancy in September unless the Government make a decision pretty quickly.

The second way in which the position has changed since we debated it a month ago is that the Government have already announced a further cut of £62 million in public expenditure in their industrial support. They say that £40 million of that is for subsidised electricity for industrial use. However, the £22 million is not so easily explicable. Where will that cut fall? Is it to mean that the Government are to be less able and less willing to support Harland and Wolff in future than in the past? We need more specific answers than were given a month ago.

I, too, have had a reply from the Ministry of Defence about the Royal Fleet auxiliaries. If we assume that Harland and Wolff is on the tendering list, how many auxiliaries will be built or serviced for the Royal Navy during the coming year? When may Harland and Wolff expect a decision on whether it has a share of that? That is crucial. It is comforting to know that it is being given an opportunity to tender, but if it does not know whether it has won that tender the opportunity will be of little consolation to the management.

The Minister placed great stress on the ability of Harland and Wolff's management to obtain orders. I understand that an order for a bulk carrier was being discussed with the British Steel Corporation. There was a question of bridging the finance between the amount that the BSC was prepared to pay and the production costs of Harland and Wolff. A month ago I asked whether the Government were prepared to contemplate bridging that gap. I received no reply. The fall-back position was that a thorough review was in progress. Have the Government reached a decision, or will that order disappear for want of one?

Can the go-ahead now be given for ordering the steel, so that steel workers will not have to be dispersed when unemployment hits them in week 38? The Minister will acknowledge that once a highly trained work force had been dispersed it was not easy to get them together again and to resume production. May we have the go-ahead or some indication that Harland and Wolff will be allowed to order the necessary steel?

The electrical department is highly skilled and essential to the functioning of the yard. A number of small contracts are needed if that department is to be kept together. Are the Government able to announce that contracts are being placed with the yard? I wish to ask some specific questions and I hope that I shall receive specific answers and not bland generalities. The noble Lord in another place was unwarrantably complacent about the prospects and basis for the order. The Minister spoke about the improvement as if it were a concession to the work force. If a man earns more than £120 a week, his redundancy payment will be calculated not on his earnings but on the maximum of £120 a week. The man who earns that sum will find no improvement.

The noble Lord's justification was based on two grounds. The first is that few people in the yard would be affected. The Minister reiterated that point. How many people will be affected? Secondly, however few are affected, an injustice will remain unless the sums are updated to compensate for inflation, or the general movement in wages. In two years, from 1978, the sum has been increased from £100 to £120. That does not compensate for the average rise in wages. Surely, those who used to be outside the scheme will come into the scheme, because their wages have increased at a greater rate.

I am not prepared to say that the scheme should be opposed. However, the Minister should not pretend that it represents a great concession to the work-people. However it is dressed up, it limits the ability of the higher earnings group to receive proper compensation for redundancy. We want to know whether the Minister is determined to minimise the redundancies that we all fear are coming.

11.55 pm

Like many other Northern Ireland Members, I look forward to the day when business such as this can be transacted in a Northern Ireland Parliament, perhaps at an earlier hour or in the afternoon.

The opportunity to speak about redundancies in the shipbuilding industry must be grasped, but we seem to be treading the same ground time and again. Until we receive the report of the review that the Minister referred to, we cannot have as worthwhile a debate as would otherwise be possible.

We should concentrate on the prospect of more redundancies. The Minister will know of the merchants of gloom in Northern Ireland, some of whom predict the closure of the Harland and Wolff yard, and those who are more optimistic but who still talk about another 1,200 redundancies in the near future. Can the Minister give us any indication of the likely number of redundancies in the coming months?

The hon. Member for Pontypridd (Mr. John) referred to the steel work. That is a matter of great concern to shipyard workers and, no doubt, the shipyard management. I reiterate what the hon. Gentleman said and I urge the Minister to give us an answer. We have raised the matter before and we are still waiting for an answer.

Many of us welcome the recent orders for the engine works in Harland and Wolff, but we know that they are only providing a breathing space for that section. The foundry is in the most delicate position. Can the Minister assure us that neither he nor the management at Harland and Wolff envisage the yard without a foundry?

I return to the subject of naval work, which has almost become a hobby-horse of mine. Like the hon. Member for Pontypridd, I have received correspondence from the Under-Secretary assuring me, as if it were some great achievement, that Harland and Wolff was being permitted to tender for supply ships and similar work. What has the Northern Ireland Office achieved in terms of orders for naval contracts? Can the Minister give us an optimistic outlook for the prospects for naval work for Harland and Wolff?

I am particularly interested in the prospects for work on warships. The Secretary of State for Defence said, in a written answer, that Harland and Wolff was not suited for such work, but that is contrary to the messages that I have received from men and management at Harland and Wolff who believe that the yard could easily be made suitable for that work if we had the continuity of work that we hope we could expect. Is the Minister prepared to consider that aspect? He obviously views with concern the future of Harland and Wolff.

We thought that the review would have been completed by now. Perhaps an opportunity could be given, in the Northern Ireland Committee or some other suitable place, for Northern Ireland Members to discuss the review as soon as possible. Many of us, particularly myself, representing the constituency, view with great concern the economic effect on the whole of Northern Ireland. Harland and Wolff represents probably the most important industry in Northern Ireland. I trust that the Government will reflect that importance when they make known the details of the review and that we shall all have an opportunity to discuss them in detail.

12 midnight

Hon. Members from Northern Ireland must welcome and support the order, but they cannot do it with any great enthusiasm or joy, because implicit in what we are doing is the fact that there will be substantially fewer jobs in the Northern Ireland shipbuilding industry next year than there are now.

After what the Minister told us tonight, the prophets of doom in Northern Ireland are more likely to be correct than any of the optimists. During the past year 1,400 jobs have been lost in the industry, and to judge from what we have been told the immediate prospects are bleak.

How much of that job loss was due to European Economic Community policy? A little over a year ago the Minister's predecessor fought very hard against the dictates of Brussels to avoid reducing the work force on condition that an order was given to the yard. There may well be good reasons why work forces should occasionally be reduced, but I do not believe that one of them should be the insistence of the EEC.

The Minister said that other subsidies might well be available to the yard. Will they be conditional on further reductions? Will those subsidies simply be sops to enable us, over a slightly longer term, to run the yard to oblivion? I hope that the Minister will tell us the implications of that aid.

I can understand why the hon. Member for Belfast, East (Mr. Robinson) believes it, but it is no longer true that Harland and Wolff is one of the major industries in Northern Ireland—not of the nature that he described.

I doubt whether it is the most important. There are the textile industry, agriculture and many more industries. I should say that at present the aircraft industry was more important than Harland and Wolff.

When one looks at the nature of Harland and Wolff, one must ask "When does it become non-viable?" It certainly is not viable when it has only a few hundred people working there. Is it almost non-viable now? Can it be said that it can support the design staff and the technical services staff required to keep it in existence and to enable it truly to compete for further orders?

The political, social and industrial implications for Northern Ireland of closure are not what they were 20, 10 or five years ago. If Harland and Wolff closed down tomorrow and put 7,000 people in the dole queue, it would be a disaster for the Province, but it would not be earthshaking to the extent that it would have been only a few years ago.

On the basis of what the Minister said, I think that there is a cold wind blowing through the gantries tonight. If steel work is ended by the thirty-eighth week of this year, and there is nothing to bridge the gap, we must be witnessing the final rundown of the yard. We should be foolish to allow the work force or anyone else in Northern Ireland to think differently. There is no way in which one can see past that unless there is bridging work available. We wonder when the stage of non-viability will be reached.

Of course, as the Minister said, the yard cannot be kept in existence without orders. Those orders must be completed within the terms of the contracts. We must all admit that it is highly regrettable that Harland and Wolff has not been able to meet delivery dates on its present orders. I did not miss the point in what that senior executive of British Rail told the firm a few weeks ago when he was at a launching ceremony for one of his vessels.

There is no point in being proud of the quality of ships that we build in Belfast if we deliver them six, nine or 12 months late. Shipbuilders who drive Japanese cars, perhaps for the best of reasons, cannot complain if ship owners in the remainder of Great Britain buy Japanese ships, possibly for the same reasons.

I pay tribute to the Secretary of State and the Minister responsible for Harland and Wolff in the previous Government. They made an effort to get work and money for the yard. They did everything that they could to keep it in existence. What has the present Secretary of State done, and what do his colleagues see as their role? Do they believe that they have no role to play in merchant shipping?

Orders from the Royal Navy could be forthcoming. I am told that three warships are due for replacement. Is it too much to ask that one of those orders should go to Belfast? We hear that perhaps there is not the capacity in other yards in Great Britain to handle those orders as speedily as required.

If we are moving towards a crisis in a matter of months, it is important for the Government to adopt the attitude of the previous Government. We may merely be once again holding out the begging bowl, but the Government should accept their responsibility if it is possible to bridge the gap until Harland and Wolff is perhaps able to benefit from an improvement in the world market. I hope that the Secretary of State will fight tooth and nail to get us our share of any available orders from the Royal Navy.

12.6 am

I should like to follow two points that have been made. The hon. Member for Belfast, East (Mr. Robinson) stated that it was not a great deal of comfort to him to hear that Harland and Wolff was being considered for a Ministry of Defence contract, and I share his lack of elation. He may be a little more comforted to know that between 1971 and 1977 14 Ministry of Defence contracts were placed, and Harland and Wolff was not even invited to tender. At least, the yard is now being asked to involve itself. However, I accept the hon. Gentleman's point. We should be thinking not merely in terms of including Harland and Wolff but virtually of guaranteeing a contract, as my hon. Friend the Member for Armagh (Mr. McCusker) inferred.

If the situation is as bad as outlined by the official Opposition spokesman, clearly it is incumbent on the Government to pull out every stop to safeguard as many jobs as possible in the short term. We do not ask for copper-bottomed guarantees for ever and a day.

In the Statutory Instruments Committee that dealt with the redundancy order in 1978, and of which I was a member, I tried to make the point that the work force at Harland and Wolff had to play its part. A degree of realism was necessary. A glimmer of realism appeared to be developing among the work force in that and the following year, but I confess that I agree with my hon. Friend that that realism has not been sustained in the way that many of us hoped. The work force has to accept, as we have to accept, that there are consequences if the work rate is not sustained. So we would have to accept that the redundancy order is very necessary, unfortunate as it is.

There is not much point tonight in rehearsing the reasons for the decline in the productivity rate. It is an unfortunate reality, but there it is. I should like to offer one observation. It has been made again and again in this House when we have debated Northern Ireland shipbuilding. I refer to the fact that middle management was not pruned early enough. Even as late as six months ago, some of the workers at Harland and Wolff told me that some effort must be made to prune the middle management. But no effort was made, and that is possibly a very real contributory factor to the unfortunate position in which we find ourselves this evening.

The main point of the order is to ensure that the redundancy payments somehow keep pace with inflation. That is, of course, a very important consideration. Whether they keep pace with inflation is open to argument. I accept the point made by the spokesman for the official Opposition that it is well nigh impossible to get the younger men back into the industry. Obviously, they will not want to run the risk of being employed in an industry the future of which is not at all certain, but unless we try to keep some of the younger men in the industry there will be no future at all, even should there be a recovery in the shipbuilding industry in Northern Ireland and, indeed, in Great Britain.

For that reason I should like to know what kind of numbers of younger emloyees are being made redundant. The scheme is obviously very complicated. That was made clear in Committee by the Minister who introduced the scheme in 1978 and by the then Opposition spokesman. There is no doubt that if a very large number of older workers are made redundant the amount of money paid will be so large that there must, at the other end of the scale, be a very large number of younger workers made redundant in order to balance the total amount of money available for the order.

If at Harland and Wolff a very large number of older men are made redundant and in order to balance the books, as it were, a very large number of younger employees are made redundant, it will be very unfortunate. Has the Minister any ideas how we can keep some of the younger but nevertheless highly trained men in the industry, should there be a rejuvenation of the shipbuilding industry in the Province?

I associate myself with the comments made by my hon. Friend the Member for Armagh, when he paid tribute to the sterling work of the right hon. Member for Mansfield (Mr. Concannon)—a man who, during his time in office, attended assiduously to his duties and tried to keep the yard on the map as far as was humanly possible.

12.15 am

Northern Ireland representatives will not be satisfied with the atmosphere in which the debate is taking place. In the absence of the review body's findings, the debate is taking place in a vacuum. We are not aware of the Government's attitude. I am not happy about the comments made from the Dispatch Box by a succession of Tory Ministers. That is the general feeling among those employed in the Belfast shipyard.

I add my voice to the comments made by other Northern Ireland Members. I wish to ask the Minister some pointed questions. We have heard that Harland and Wolff has been afforded the facility, by great condescension, to tender for Ministry of Defence work. That is not enough. Has the Secretary of State for Northern Ireland argued in the Cabinet that some of the defence work should be given to Northern Ireland? Has he pleaded with the Secretary of State for Defence that some of the defence contracts should go to Northern Ireland because of the shipyard's financial position and because of the disastrous effect on Belfast if the shipyard closed?

Is the Secretary of State satisfied with the discussions that he has had with the trade unions and management at Harland and Wolff about production dates? Is he satisfied that some improvement has taken place? Have any undertakings been given that if defence contracts are gained the work force will do everything possible to co-operate with management to ensure that production targets are met?

It is not good enough to say that Harland and Wolff has been allowed to tender for defence contracts. Has the Secretary of State for Northern Ireland impressed upon his Cabinet colleagues the necessity of directing work to the shipyard in Belfast?

12.18 am

With the leave of the House, I shall try to answer some of the varied and detailed points. I hope that right hon. and hon. Members will forgive me if I do not answer them all, because until a short time ago I was not aware that I was to speak in the debate. I thought that the two orders would be taken together. The issues that are not dealt with now will be the subject of correspondence.

A number of hon. Members said that £120 was not sufficient to meet the rate of inflation. The hon. Member for Pontypridd (Mr. John) said that we should relate the £120 to the top earnings in the shipyard so as not to disadvantage people. The average earnings at Harland and Wolff are estimated to be between £80 and £90 a week—well short of £120.

The Department of Manpower Services estimates that of the 1,440 former Harland and Wolff workers who have been declared redundant, and who have received redundancy payments, fewer than one dozen were on the upper limit. We are talking of a minute position in terms of the upper limit. The reason for the upper limit is not so much because of the level of average wages at Harland and Wolff but because it follows automatically the general redundancy scheme applicable to the United Kingdom as a whole, which posited £120 as the upper limit. It was felt only right that Northern Ireland should be dealt with on a parity basis. That is why £120 applies to Harland and Wolff, although strictly on the average earnings it is not relevant. I hope that that answers the questions and the misgivings of some hon Members.

Another question raised by a number of hon. Members concerned the review. It is regretted that the Government are not yet in a position to come to the House with a decision on its outcome. As the hon. Member for Pontypridd said —and he is well informed on these matters—a key official in the Department of Commerce has been ill for some time, and the review was very much dependent upon his work. It is for that reason that we have not been in a position to come forward with the outcome of the review at as early a date as we would have wished. It is a matter of such serious consequence that I hope right hon. and hon. Members will not expect us to rush our conclusions.

Reference was made to publishing the report. I do not think that that will be possible. After all, a review of this sort will contain a great deal of information that is commercially confidential. It would be inappropriate to make that information public. Certainly, any decisions that will be taken on the review and the report to Ministers will be brought to the House for debate. I hope that hon. Members will be content to leave the matter there.

The Minister's remarks do not answer my question when we may expect the review to be completed. We can hardly be called impatient if, after eight months of waiting for the review, we ask when it is likely to be available to the Government and when they will announce their conclusions.

I would like to give the hon. Gentleman a date, and I have an expectation. However, all that I feel I can say from the Dispatch Box at this moment, because of the vicissitudes of life, is that it will be as soon as possible. I say that in good faith, and I ask the hon Member to accept that. No doubt when speaking from the Dispatch Box in the past he has been in a similar position and realised the problems that arise.

The Minister's answer of "as soon as possible" is, I appreciate, as much as he can tell us now, but I wonder whether he will at least inform the House about the health of this key official. Has he returned to work and started where he left off? Can the Minister tell us whether someone else has taken over the work? Will he at least give us an idea whether any progress is being made?

The Government are intending not to publish the review but only to tell us of decisions taken on it. It is not possible for them to do a little more than that? Surely there will be some conclusions that will not endanger the secrets of Harland and Wolff or any other industry. I hope that the Minister will give us more facts than merely the bald decisions.

We shall, of course, seek to be as helpful to the House as we possibly can, given the restraint that must be upon us in matters of commercial confidentiality. The key official will, I understand, be absent for a little while longer.

I can tell the House that "as soon as possible" means "soon."

The Minister should perhaps have quit while he was ahead. We were more reassured by "as soon as possible" than we are by his clarification of what that means. His is a Department of State, and it is not good enough that the illness of one civil servant, however eminent or experienced, should hold up indefinitely a report that bears on the livelihoods of 5,000 men, thus making the situation more worrying for them and making the viability of Harland and Wolff weaker with the passage of time. Unless quick decisions are made, however sincere the Government may be in their desire to help Harland and Wolff, they will be less able to do so because the commercial position will have deteriorated.

We must maintain a sense of proportion about this. In this review we are considering the future of Harland and Wolff. That is not a matter that can in any sense be dealt with lightly. It must be dealt with carefully and seriously, and if time is required to reach a proper decision time must be given.

The assurance that the House and the work force at Harland and Wolff have is that the Government are fully committed to keeping the company funded fully so that it can stay in operation until decisions under the review have been made. Therefore, the time lag does not adversely prejudice anyone because the financing is being maintained. Although the hon. Member for Pontypridd has had his fun over the problems that arise for the Government and the Department in carrying out searching inquiries of this kind, we are dealing with the matter seriously and properly. In due course—and that "due course" will be soon, very soon, I believe—the House will have the opportunity of dealing with the whole matter.

I was asked about the position on warships. That is quite a different matter from the question of the auxilliary vessels, to which I was referring. There are problems here. Harland and Wolff has not built a warship since 1969. An entirely new generation of warship has come along. It is believed by the Ministry of Defence that the specialised knowledge for building this new kind of warship does not exist in Harland and Wolff. Therefore, orders for warships as such cannot be expected to be given to Harland and Wolff.

The hon. Member for Belfast, West (Mr. Fitt) asked two specific questions about other naval vessels. He asked whether my right hon. Friend the Secretary of State had raised the matter with his colleagues in the Cabinet and with what result. I must tell him frankly that I do not know. I am not privy to what takes place in the Cabinet. I know that the matter is one of great concern to my right hon. Friend, and he is most anxious that naval orders should be obtained for Harland and Wolff. I know that he has charged my hon. Friend the Under-Secretary to deal with the Ministry of Defence on this matter. In my opening speech I indicated that my noble Friend had seen Lord Strathcona, Minister of State, Ministry of Defence, and had made clear the facilities that were available at Harland and Wolff and had made sure that Harland and Wolff would be in the running. I cannot give a copper-bottomed guarantee on a matter of that sort, but it is being pursued vigorously.

I raised the matter of warships. Whilst I accept that technological advance in these matters must accelerate over a 10-year period, I find it difficult to believe that a shipyard with the history, skill and tradition of Harland and Wolff—which has frequently been in the vanguard of technological innovation—is incapable of building a warship. I know that the Minister cannot go into detail tonight, but is there any way in which he can convince me and the work force in Harland and Wolff that what he is saying is correct?

I cannot enter into a technical discussion on matters of this sort. However, I can indicate that with regard to this technology Harland and Wolff is 11 years out of date, and 11 years are centuries in terms of the development of highly sophisticated weapons of war—as are modern warships. I recommend that the hon. Gentleman pursues his inquiries elsewhere. He will find that there is a great deal of force in my point.

I was asked about production dates in Harland and Wolff whether it is possible for them to be improved and whether I have had discussions with the trade unionists and the management there. Again, that is not a matter for my Department or a matter for which I have responsibility, but I have had casual meetings with management and trade unionists and I have told them a story. I should like to repeat that story.

Within my constituency there is a gentleman who is a member of a Greek shipping firm. A month or two ago he told me that he was having ships built in Japan, that he was having trouble over quality control, and that he was having to send people to Japan to ensure that the ships were properly built. I asked him what was wrong with Harland and Wolff. I suggested that he should come to Northern Ireland, where he would get a good ship built. I asked him why he did not place his order there. He said that he knew all about Harland and Wolff and that the ships that it produced were virtually the best in the world but that his problem was that Harland and Wolff did not deliver on time. He said that if he ordered a ship he would be investing millions of pounds in that ship and that that money had to start working immediately. He said that if he asked for a ship to be completed on a certain date it would be because he had contracted the space on that ship under a series of contracts and that if he missed the starting date he stood to lose a great deal of money. He said that he could not take that risk and that he could not give his business to a shipyard that might put him in that position.

I have told trade unionists that story, and they say that it is the fault of the management which does not organise the work load properly. I have talked to the management, who say that if there were not so many restrictive practices the matter could be sorted out. It is for management, unions and the work force to sort out the matter so that they satisfy their customers, and so that the customers are willing to place orders.

It is like going into a restaurant. Does one go to the restaurant where the waiter immediately takes the order, ensures that there is no long wait between courses, ensures that the plates are hot and that the food is warm, and where one is seen out with a smile—or does one go to the restaurant where one is kept waiting for hours, where no one cares a damn whether one is there and where there is a long wait between courses? Which restaurant would one dine at again? Shipbuilding is not very different. It is not for me to tell Harland and Wolff how to run its business, but the customers are telling it how to run its business, and that is the beginning and the end of the matter.

As I have said, the Government are giving financial support. We gave certain financial support last year and some the year before. The modernisation programme, which has virtually made Harland and Wolff the best shipyard in Europe, was started in 1973, and, although hon. Members are inclined to criticise Tory Ministers about their attitude towards the shipyard, I should remind them that 1973 was the year of a Tory Administration which started that work in Harland and Wolff. Millions of pounds have been invested in making that a good, modern, capital-intensive shipyard. The opportunities should be seized by those working there to show the world that they can build ships and deliver them on time.

We on the Official Unionist Bench will assist the hon. Gentleman in trying to persuade Harland and Wolff to display a little more streamlining and cohesion. Perhaps I can illustrate the problem by saying that before Easter, with the knowledge that this debate was to take place this evening, we made determined efforts to meet the representatives of the unions involved. For some unknown reason, at any rate to us, they insisted that we meet next Friday, two days after this debate's delivery date.

All of us must try to persuade both management and the work force that their future depends upon their efforts. It is essentially that, and no more than that.

I do not know how I stand for time and whether there is an opportunity to deal with the remaining questions—[Interruption.] I did not hear that.

I think that hon. Members said that the hon. Gentleman would be getting time if he kept on speaking.

The hon. Member for Pontypridd asked about the British Steel bulk carrier. I am advised that no decision has yet been made about that. Discussions are still taking place involving Harland and Wolff, the British Steel Corporation and the Government about the financing arrangements.

As to the ordering of a speculative ship, my hon. Friend the Under-Secretary has already considered that question and has come to the view that the Government would prefer the company to build for a particular customer. The speculative building of a ship would be a heavy drain on public expenditure because of the total cost of materials, wages and overheads, which would have to be borne by the company, without any assurance that there would be a market for the ship which it built.

The hon. Member for Armagh (Mr. McCusker) asked about the EEC. I am not aware that any EEC decisions have resulted in the present problems of Harland and Wolff. There are EEC regulations concerning subsidies and credit for shipyards in order to ensure that the shipyards throughout Europe are kept in a relatively competitive position, one against the other, and to ensure that there is no unfairness through over-subsidy by one Government as against another. To that extent, the £25 million intervention fund that I mentioned is subject to EEC regulations. That is money that will be paid to shipbuilders on orders secured by them to make up the difference in price. If they find that they cannot sell as cheaply as they would like, the subsidy becomes available for the purpose of bringing down the price to that which the customer is prepared to pay. That is an alternative to the soft credit arrangements that some other EEC countries are at present operating. All in all, our arrangements are as good as those that exist anywhere in the Community.

I believe that discussions are taking place within the Community concerning the whole problem of the European shipbuilding industry. We must wait to see what further aid is likely to come from that direction. No details have yet been given.

I think that I have covered the questions of which I have made a note. Many are not directly related to the increase from the £110 upper limit to £120. Notwithstanding that some of my replies may be regarded as not wholly satisfactory, I hope that hon. Members will not allow that to stand in the way of giving the order their approval.

Question put and agreed to.


That the draft Shipbuilding (Redundancy Payments Scheme) (Northern Ireland) (Amendment) Order 1980, which was laid before this House on 12 March, be approved.