HC Deb 05 June 1986 vol 98 cc1333-40

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]

9.17 am
Mr. Christopher Chope (Southampton, Itchen)

I am grateful for the opportunity to raise the problems of the shipbuilding and shiprepair industries in Southampton. These industries currently provide employment for several thousand people, although sadly several thousand jobs have been lost over recent years. They play a vital role in the community. Those who work in these industries in Southampton have served the nation well. I do not wish to set out a long list of achievements, but it is worth remembering how, only about four years ago, all the stops were pulled out by people working in the shiprepair industry in Southampton to prepare the task force for the Falklands.

The successful privatisation last year of Vosper Shiprepairers and Vosper Thornycroft has ensured that the dark days of nationalisation are now in the past. In those days, as fast as Vosper Thornycroft made profits on its warship building, much of it from exports, those profits were creamed off and used to prop up surplus merchant shipbuilding capacity in loss-making yards. Employees in Southampton felt frustrated as their pay was held down by national negotiations. They were victims of drift as British Shipbuilders delayed its difficult decisions and jeopardised the profitable parts of its industry. I despair that the Labour party still believes that the profitable warship yards should be used to sustain the loss-making merchant yards. However, that is what the right hon. and learned Member for Monklands, East (Mr. Smith) said in as recent a debate as that which was held on 21 May last.

The problems of Vosper Thornycroft (UK) Ltd. are the ones to which I should particularly like to refer. I am very pleased that my hon. Friend the Member for Eastleigh (Sir D. Price) is here, because the main works are in his constituency. although it is fair to say that the majority of its employees are my constituents. Since privatisation in November 1985 Vosper Thornycroft has been employing about 1,700 people in Southampton. It is unique among British warship building yards, in that it supports a strong export effort and has consistently obtained about half of its work load from exports. Its exports in the last five years total about £240 million, and its current export work is valued at £90 million. It includes fast strike craft for Kenya and Oman, refits for Indonesia, simulators for Spain and worldwide orders for stabilisers.

Over recent years, however, Vosper Thornycroft's greatest success has been in its development and production of glass reinforced plastic mine counter-measure vessels. About three quarters of the Southampton work force are directly or indirectly engaged on these projects. It has been the lead yard for the Hunter class and has received orders for 11 of the 13 vessels in that class, the last one of which is nearing completion. The productivity achieved has been dramatic. The most recent vessel was built with 55 per cent. of the man hours that the first one required.

In 1982, Vosper Thornycroft was selected to undertake the detailed design of the new GRP single role minehunter, the first of which is now being built. The single role minehunter basic design contract report in 1983 concluded that orders for the next four in the class would be placed in the spring of 1987, to be built sequentially at six month intervals, with two ships per year thereafter. This programme has remained unaltered since then, the expectation being that on the launch of the last of the Hunter class, work on the second of the single role minehunters would start, but rumours are now circulating, which have not been denied, that the Ministry of Defence is thinking of putting back the single role minehunter programme. If that were to happen, it would be catastrophic.

May I spell out to my hon. Friend the Under-Secretary of State the reasons why that would be shortsighted and pound foolish. I ask him to have particular regard to the relatively small savings that could accrue to the Ministry of Defence and to what would be jeopardised by the deferment. A one-year deferment would save the Government £7 million in the first year and £16 million in the second, but it would result in at least 650 additional redundancies and the break-up of experienced, specialist teams of men. Quite apart from the loss of productive efficiency, the Ministry of Defence would incur additional costs over the protracted period of about £9 million. Equally crucial and relevant is the fact that the single role minehunter has outstanding export potential. I welcome the strong emphasis on export potential as a key part of procurement policy that is contained in the latest defence White Paper. The Belgian navy and the Spanish navy are already interested in the single role minehunter, and there is no doubt that many other countries are also interested in it.

The United Kingdom must not throw away its preeminent position. It would be a false economy of the highest order were the single role minehunter programme to be allowed to slip. It is not possible, in my view, to exaggerate the dire consequences for Vosper Thornycroft and its employees were that to happen.

I have taken up a lot of time on the issue of the single role minehunter, because I am far from certain that the Government appreciate how crucial it is. I am sure that my hon. Friend will expect me to refer also to the negotiations over the frigates for Pakistan. I hope that he will be able to emphasise in his reply all the work that the Government have done and are doing to try to secure this contract, which would safeguard existing jobs and generate up to 1,000 more jobs in Southampton. The negotiations with Pakistan seem to have been continuing for years. Indeed, the letter of intent was signed in September 1984.

There is now a strong feeling in Southampton that we would have won a Ministry of Defence frigate order but for the prospects in Pakistan. We do not ask for special favours, merely for fair and open competitive tendering for Ministry of Defence orders. If there is a prospect of losing, or not winning, the Pakistan order because of changes of mind by the Pakistan Government, I urge upon the Government the need to ensure that a frigate-building programme can be maintained in the south of England.

The issue of whether tenders are fairly assessed is crucial. In the United States, unsuccessful tenderers are invited to what is effectively a debriefing to be told the terms of the successful bid and why their bids were not successful. In that way, justice can be seen to be done. Many people in Southampton do not believe that justice was seen to be done when the previous frigate orders were placed, and I should be grateful if my hon. Friend could assure me that the lowest bidder for the next frigate orders will win the contract.

Similar principles apply to shiprepair in Southampton, which is dominated by two firms—Thew Engineering and the newly privatised Vosper Shiprepairers. I expect that both firms will be bidding for the refit of the Royal Yacht Britannia, and I seek an assurance that price and quality will be the sole criteria used for the award of that contract.

During the past few months there has been a sad development in Southampton with the demise of Vosper Hovermarine, which has been in the hands of a receiver and is still the subject of an attempted rescue package, perhaps involving an American company. But that company, which only three years ago employed 500 people, now employs only 20. It operates in the forefront of technology with its surface effect ships. It was almost wholly oriented towards exports and won the Queen's award for export achievement in 1984. It has not received much assistance from the Government. I merely mention that to draw attention to the contrast with the way in which Government money has been forthcoming for other activities in the shipbuilding world.

Sotonians are not given to hyperbole or exaggeration. They are easy-going and even-tempered and make loyal and efficient employees. That is why so many of them have been attracted to work in Wapping. All they ask is that they be treated fairly. Above all, they must not be forgotten. At a time when shipbuilding problems in the north have been the focus of attention, I hope that raising these vital issues concerning Southampton will give the Government a bit of balance in their approach to the issues and help them to realise that Southampton has also suffered from the problems of shiprepair and shipbuilding. It must not be forgotten. I know that my hon. Friend the Member for Eastleigh wishes to speak, so although it is only 9.28am, I shall sit down.

Mr. Nigel Spearing (Newham, South)

On a point of order, Mr. Speaker. Am I right in thiking that if this debate continues after 9.30 am, all the business set down for Friday, including the debate on the motion of my hon. Friend the Member for Linlithgow (Mr. Dalyell), will not take place? An odd 18 minutes or so may prevent Friday's business, which is of interest to House and the public, from being debated.

Mr. Dennis Skinner (Bolsover)

Further to that point of order, Mr. Speaker. It is only a small point, but the first debate on referring the Channel Tunnel Bill to a Select Committee began just after 10 pm and continued until about 4.30 am. That is a long time to discuss whether there should be nine or 11 hon. Members on the Select Committee. For the first time, as far as I can recall, a Government Whip did not move the closure on a Government measure. If a Government Whip had been prepared to move the closure, it would undoubtedly have been accepted by the Chair. That means that the filibuster — to use a loose term — or the long debate was organised not just by Tory Back Benchers but by the Government.

Several Hon. Members


Mr. Speaker

Mr. Franks.

Mr. Cecil Franks (Barrow and Furness)

Further to that point of order, Mr. Speaker. Like the hon. Member for Linlithgow (Mr. Dalyell), I, too, have an interest in the business projected for Friday. But, unlike the hon. Member for Bolsover (Mr. Skinner), I was present during those four or five hours of debate to which he referred, and I accept the sincerity of those Kent Members who argued their case. I hope that the hon. Member for Linlithgow will also accept that that was so.

Mr. Andrew F. Bennett (Denton and Reddish)

Further to that point of order, Mr. Speaker. My hon. Friend the Member for Newham, South (Mr. Spearing) raised the original point of order over the loss of Friday's business. I think you will recall that on your appointment to the Chair, you made it clear that you felt you had a responsibility to look after the rights of Back Benchers. As Friday's business was won on the private Members' motions Ballot, will you be considering what steps to take to ensure that time is found for Back Benchers to exercise the rights conferred on them by the House? Whether those rights were denied them by deliberate Government manoeuvre or merely by Conservative Back-Bench manoeuvre, there would seem to be considerable duty on the House to find another occasion for my hon. Friend the Member for Linlithgow (Mr. Dalyell) to move his motion.

Mr. Speaker

I confirm to the hon. Member for Newham, South (Mr. Spearing) that at 9.31 we are still discussing Thursday's business, and therefore Friday's business cannot proceed.

It is perfectly true, as I have made plain, that an hon. Member who has won a place in the ballot has a right to move his motion, provided that it is in order. In this case it was in order, and the hon. Member concerned would have had every right to move it. The House will recognise that throughout these proceedings it has been the concern of the Chair to ensure that speeches are in order. Although some of the debates may have been rather long, they were in order, and I have no jurisdiction to go beyond that.

Mr. Bennett

Further to that point of order, Mr. Speaker. I accept that there can be no criticism of the debates that took place. But if a manoeuvre results in the small number of days that are set aside for private Benchers' motions being reduced, there would seem to be some duty on the Chair at least to try to influence events so that an alternative date may be found for the debate on those motions.

Mr. Speaker

But I do not have that authority. The House itself decides how many days should be set aside for Back-Bench motions and Back-Bench time generally. It is not a matter for the Chair.

Several Hon. Members


Mr. Speaker

Mr. Bennett.

Mr. Bennett

As the House has passed a resolution that a certain number of days should be set aside for private Members' Bills and motions, does not the Chair have some responsibility to ensure that it is carried out?

Mr. Speaker

Unfortunately, the Chair has no responsibility for that. I say again that my main concern is always to ensure that fairness is maintained in the Chamber and that, in particular, the rights and interests of Back Benchers are protected. Sadly, I have no authority to do what the hon. Gentleman wishes me to do.

9.34 am
Sir David Price (Eastleigh)

Hon. Members have been raising points of order about the rights of Back Benchers, but my poor old hon. Friend the Member for Southampton, Itchen (Mr. Chope) has now lost some of the time allotted to him for his half hour Adjournment debate. But with his permission. and that of the House, I shall reinforce what my hon. Friend the Member for Itchen has said. As he pointed out, the main shipyard in the Southampton area is in my constituency.

I shall stress in particular the points that my hon. Friend made about the importance of the single role mine hunter. We require assurances from the Ministry of Defence about the ordering programme for it. I remind my hon. Friend the Minister that the basic design contract report on the single role mine hunter, which came out in 1983, concluded that after the order for the lead ship—the first of class—had been started orders for 02–05 would be placed in the spring of 1987, and that thereafter ships would be required at the rate of two a year. It is vital that that programme should be maintained. If it is not maintained, my hon. Friend the Member for Itchen has pointed out some of the penalties that we would pay not only in employment but in maintaining the integrity of our design teams.

The order for the single role mine hunter differs from many other naval orders in that it involves new technology in which Vosper Thornycroft leads, I hesitate to say the world, but certainly Europe. From an export point of view, it is essential that it should be enabled to maintain the programme's momentum. It is not a queston of there being competing tenders. I understand that the Ministry of Defence is quite satisfied about the ability and integrity of the ships that Vosper Thornycroft builds, but the problems stems from cash flow problems within the Ministry.

Whatever else is "phased back"—I think that that is the phrase used in the Ministry of Defence—I ask that it should not be the single role mine hunter programme. At this late—or is it early—hour, that is the only point that I wish to make in reinforcing the admirable arguments deployed by my hon. Friend the Member for Itchen.

9.36 am
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher)

I congratulate my hon. Friend the Member for Southampton, Itchen (Mr. Chope) on his tenacity in staying with us for so long in order to defend the interest of his constituents, particularly those who work directly or indirectly in the shipbuilding, shiprepair and, indeed, boat building industry. We have shared debates on this sort of topic several times, and he will know that we have have discovered through the economists that about 80 per cent. of the United Kingdom's manufacturing output can be defined as internationally tradeable whereas only about 18 per cent. of service sector activity is so tradeable.

Therefore, any debate that tackles the question of the maintenance of a strong manufacturing base is to be welcome, as that is at the heart of Britain's economic performance and the quality of life of our people. My hon. Friend will know that Britain's share of the world's traded manufactures fell from 14 per cent. in 1964 to about 8 per cent. in 1979. The CBI has told us that each 1 per cent. represents a loss of about 250,000 jobs. Thus, the framework against which my hon. Friend has sought this debate on behalf of Southampton's work force is very important. I know that my hon. Friend also holds very strong views on the matter.

I shall, of course, deal with the single role mine hunter, but I begin by saying that the refit of Brittania is under consideration. As my hon. Friend will expect me to say, it is, however, a matter for my right hon. Friend the Secretary of State for Defence. But, as my hon. Friend the Member for Eastleigh (Sir D. Price) reminded me, I shall draw it, among other things, to the attention of my right hon. Friend.

Understandably, my hon. Friend the Member for Itchen began the major part of his speech with a resume of the position at Vosper Thornycroft. It is the largest of the Southampton shipbuilders and one of Britain's premier warship yards. It employs more than 2,700 people in Southampton and Portsmouth. Vosper Thornycroft in many ways exemplifies the attributes that are the strength of Southampton.

The company has been in Southampton since the beginning of the century, when John I. Thornycroft and Co. Ltd. of Chiswick moved to the city. Thornycrofts merged with Vosper and Co. Ltd. of Portsmouth in 1966. Since then, Vosper Thornycroft's main yard has been Woolston in Southampton, where it can build conventional steel hull ships up to 8,000 tonnes, such as frigates, and glass reinforced plastic vessels such as the ultra modern mine counter measures vessels and the single role mine hunters. The order for the first of class single role mine hunter was placed only last year.

Vosper Thornycroft can claim 20 years service to 30 navies. By any yardstick, that is an impressive record. Part of the company's strength has lain in its ability to adapt and to create designs to suit the individual prefrences of overseas customers. Consequently, more than half of its turnover comes from exports of ships and from its products and support services divisions. While Vosper Thornycroft is indeed a shipbuilder, it is much more. In a way typical of Southampton, it has branched out into associated businesses, such as the design and manufacture of hydraulic power equipment, the supply of support services such as training, technical handbooks, maintenance and spares, and the design and manufacture of high technology electronic control equipment for the marine and energy industries. Those products include training simulators, distribution systems, surveillance systems and machinery controls.

Vosper Thornycroft has an impressive past, and, I am sure, an exciting future, but I am aware that, in its main line of business — warship building — it faces critical order problems which rightly worry my hon. Friends. As my hon. Friend the Member for Itchen said, the company is also greatly affected by changes in defence expenditure. Major delays in orders for further single role mine hunters could have a serious impact on its ability to maintain its advanced GRP capability. I say that in the knowledge that the company's only competitor in that area has already had to mothball its similar facility. That presents a pointed and timely example.

I congratulate my hon. Friend on seeking this moment to speak about the maintenance of a strategic capability in the United Kingdom industry which his constituents understandably want to be maintained. The order for frigates for Pakistan has been the subject of prolonged discussions. Throughout, the Government have given Vosper Thornycroft all possible support. My hon. Friend will appreciate my reluctance to say anything that may prejudice the negotiations, but I can assure him that we are continuing in the hope of securing the contract.

Although Vosper Thornycroft is a company in a so-called traditional sector, it is operating at the forefront of technology. It is no wonder that British Shipbuilders had keen competition when it put the company on the market last year. I am sure that the whole House will wish the winning management buy-out team, led by the managing director, Mr. Peter Usher, every success in the future, especially in the immediate future, bearing in mind the state of current orders.

Vosper Ship repairers Ltd. is part of the equation of capability in Southampton. I should like to take this opportunity to commend the courage, enterprise and determination that fuelled the Vosper Thornycroft management. It is shared by others in Southampton, including others in the troubled shipbuilding and shiprepair industries. Vosper Shiprepairers was also bought from British Shipbuilders last year by its top management. This time last year, there was a strong possibility that Vosper Shiprepairers would have to be closed, but its top management—Mr. John Collins and Mr. Colin Johnson—had confidence in their ability to win orders once freed from the shackles of state ownership. After a difficult start, their confidence is being shown to be well founded, as Vosper Shiprepairers has already secured several major orders, most notably the National Environmental Research Council's scientific research vessel and the ship, previously HMS Hydra, which is being refurbished for the Indonesian navy. Those orders have reversed its recent fortunes, and I am sure that the House will join me in wishing Vosper Shiprepairers every success in the future.

I recognise that there are special difficulties faced by Vosper Hovermarine which, with its parent company, Vosper plc, has recently been put into receivership. I was naturally very sorry to learn of the problems facing this marine and engineering group.

As my hon. Friend knows, significant Government support has been given to the hovercraft activities since 1980, when the hovercraft company was acquired by Vosper plc, and previously. In the mid-1970s the National Research Development Corporation assisted in funancing the development of the company's series of sidewall hovercraft, known as a surface effect ship. More recently, in 1984, the British Technology Group, as successors to the NRDC, agreed to convert into equity in Vosper plc, the £2.2 million of debt owed to it by Vosper Hovermarine in order to help the company's financial position.

In addition, my Department has funded two phases of development of the current 700 series — a sidewall hovercraft of about 600 tonnes designed to operate in high wind conditions. Assistance for a further phase of development was about to be considered when the receivers were appointed.

It has been asked whether more could have been done to save the group from receivership. Although my hon. Friends have not raised the matter, it is a source of prolonged agony for commentators in the area, so I should like to deal with it. The decision to appoint the receivers was a matter for the group's bankers. It appears that neither the bankers nor the shareholders felt able to give the further financial support that would have been necessary to keep the group in business. As ever, this was a commercial decision and, in the circumstances, there was nothing that my Department could do. I suspect that the legislative framework for the type of operation that has been suggested does not exist.

Although the appointment of the receivers will have come as a major disappointment to all involved with the group, I hope that it will prove possible for the receivers to find someone to come forward and acquire the whole hovercraft operation or, at least, the very advanced technology that has been developed. My officials have been in close touch with the directors and with the receivers, and I know that every effort has been made to inform those who may be interested—

The Question having been proposed after Ten o'clock on Thursday evening, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at thirteen minutes to Ten o'clock am on Friday 6 June 1986.