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Volume 84: debated on Tuesday 22 October 1985

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asked the Secretary of State for Defence what are the current estimated savings by his Department for 1985–86 as a result of privatisation schemes.

No private capital has been introduced this year into any organisation which is the responsibility of my Department. The royal ordnance factories were established as a public limited company at the beginning of this year. When private capital is introduced, I am confident that the current trend towards increased efficiency will be strengthened.

While I welcome the plans to move defence establishments to the north, what total savings can be expected from using private contractors?

Regarding my hon. Friend's first point, we are studying that matter. We intend to see whether there can be some deployment of establishment and offices. No central estimate is available of the savings from commercial management and contractorisation, but I have asked that such a central estimate should be prepared, and I intend to make it available to the House. The present position is that 100 different functions have been contracted out, and 1,000 contracts for support services are being let annually. I intend at the earliest opportunity to make available to the House our estimate of the savings that have resulted from that.

If the Minister cannot tell us anything about the savings from his privatisation experiments, will he tell us something about the costs? Will he be making a statement about the overrun in costs and the deficiencies associated with the private sector refits of Redpole, Otter and Euryalus? Will he explain to the House why public sector money is being used to advertise the privatisation of the royal dockyards before the Minister has any parliamentary authority to go ahead with those schemes?

I did not say that we could not tell the House anything about the savings from commercial management. Of course figures are available. For example, the Department is saving about £12 million a year from contracts that have been let for cleaning in MOD establishments. I said that I intended that a global figure for savings from contractualisation should be made available to the House. HMS Redpole was put out for refit in East Anglia. It has gone into Rosyth for post-refit work and I very much regret that the labour force there is blacking the ship. Instead of blacking ships, it should be demonstrating its efficiency.

Does my hon. Friend agree that the least pleasant side of contractorisation and privatisation studies is the uncertainty that surrounds an otherwise loyal and stable work force? Can he help the Sunday school teachers in my constituency by telling us whether he intends to contractorise or privatise the shepherds on the Portland ranges?

In the seven weeks in which I have been in the Department I have not yet turned my mind to the shepherds, but I shall certainly give them the most careful consideration. There is always uncertainty when measures to improve efficiency are taken. That is inevitable, but we must pursue those measures.

Will the Minister withdraw the slur that he cast on the work force at Rosyth when he said that it should demonstrate its efficiency? The workers have done that over a very long period, to the benefit of the local economy and the Royal Navy. The real question is why the Government do not drop their privatisation plans, which will only further damage the prospects of the Royal Navy and of Rosyth.

I do not think that I cast any slur on anyone. My remarks were simple common sense. When work comes to Rosyth, what good does it do the men themselves or the reputation of Rosyth if a ship is blacked? The men ought to be demonstrating that if even if there is greater competition, they can compete efficiently.

Has the Minister had an opportunity to read the report produced by Dyfed county council on the likely effects of contractorisation on the Cardigan bay range? Does he agree with the estimate of job losses in that report?

I have not had a chance to study that report, but I shall do so and I shall be in touch with the hon. Gentleman.