House of Commons Hansard Debates for 14 Dec 1988

Miss Nicholson : When hon. Members want another to give way, they normally rise to their feet. Therefore, I shall continue. If the mythical consultant to whom the hon. Gentleman referred went to look at NESL after closure, would he honestly propose such things as the hon. Member for Sunderland, North suggested? Would he honestly say that in a declining shipping market the one thing that we should do for Sunderland is to bring in more shipbuilding? He would not. He would suggest small businesses. He would suggest that the outposts of large and flourishing businesses should be tempted to go there by such things as the Minister has announced--for example, enterprise zones.

Sadly, NESL, which is a fine facility, is not in a niche market. It is in open competition. As my hon. Friend the Member for Tynemouth (Mr. Trotter) said, it competes with shipbuilding yards in countries such as Korea, which pay wages that we would not tolerate. NESL is exposed to open competition in the world market. It has not built the niche that would enable it, in a difficult world market, to pursue its business in such a way as to make it financially viable. The small Appledore shipyard in my constituency, which will soon be known as Appledore Shipbuilders, provides a good opposite to NESL. It has been able to carve out a niche market in dredgers. I am delighted that,

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following ministerial help, John Langham of Langham Industries fully expects to complete all the negotiations next week and effectively to take over the yard at the end of the month. He envisages no problems. Everything is geared up--the management is in place and already there is a firm letter of intent relating to a large aggregate dredger, which will provide work for the yard until July 1990.

Because John Langham has been actively marketing and promoting the yard, he has discussed contracts for two further dredgers to be built following completion of the large dredger, or slotting in with its construction. With orders coming in, it is possible to juggle and to get more work. Mr. Langham aims to re-enter the market for small corvettes, or gunboats, which would provide coastal protection for foreign navies in the far east. The yard built minesweepers for the Royal Navy after the war, but the market faded. Private enterprise will probably bring the yard back into that market. Langham Industries is quietly confident that it can turn the company around. Like NESL--indeed, like all British shipbuilding yards-- Appledore has been a loss-maker. The proper objective is to make it fully profitable. Langham Industries aims to break even within the next 18 months.

What is the difference between a company that is nationalised and run by the Government--perhaps I should say "run down by successive Governments", because Governments are demonstrably bad at running industry--and one that is private? The difference is motivation. The Opposition talk scathingly about "profit making". What is wrong with profit making? Making a profit means that one can look after not only one's family but a large and expanding work force. It means bringing money into areas and making things happen. It means doing what we all want to do--raising the economic level and increasing people's happiness. The key is to get our shipbuilding companies into the hard commercial world in which we must all live. We cannot seek Cuban rainbows or live in Alice Through the Looking Glass worlds. Shipbuilding is still bumping along with the barnacles scraping the bottom. There has been only a marginal improvement. No one knows whether the improvement is sustainable. It is folly to pretend that a marvellous world is around the corner. That chimera has floated further and further away over the many months of the continuing debate on the privatisation of British shipbuilding. There is a long way to go in the shipbuilding market. We must learn to live off what is available.

How does the sale of Appledore, a small but crucial yard, compare with NESL's failure? Private industry saw NESL as unviable, even at a rock- bottom price. It was given subsidies of many millions of pounds a year. The yard lost more than £100 million over three years, with £66 million lost last year alone to keep 2,000 jobs going. Can that be logical and proper?

The loss of those 2,000 jobs is a minor run down compared with the massive run-down under the last Labour Government. Between 1974 and 1979, about 10,000 jobs were lost. Is that not the death sentence--pronounced then and not today--to which the hon. Member for Sunderland, North referred? The hon. Gentleman has now disappeared from the Chamber. Those 2,000 jobs lost are little enough compared with the haemorrhage earlier.

It was a shame that the Labour Government closed the last ship repair yard on the Wear, Greenwell. I understand

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that the area may return to ship repair work, rather than shipbuilding. I am glad that Sunderland's economic base, as in so many depressed areas, is now much sounder than it was under Labour, when large losses were suffered. Perhaps due to the general upturn in the economy under the Conservative Government, it will now be easier to find jobs for those 2,000 people.

Ms. Joyce Quin (Gateshead, East) : Surely the hon. Lady accepts that, under the Conservative Government, the losses in shipyards in Tyne and Wear have been far greater than in any other period. The losses under Labour about which she talks simply do not compare with the huge haemorrhage and losses experienced since 1979.

Miss Nicholson : Because of the better economic conditions under the Conservative Government, it will be much easier to find work for those people who are now losing their jobs. The yards suffered much more under Labour, just as pit after pit was closed in Durham under Labour. My right hon. Friend the Prime Minister helped a tremendous amount in trying to find orders for the yards.

The hon. Member for Dagenham (Mr. Gould) described the closure of NESL as a destruction of jobs, major industry and hopes for the future. He was totally wrong. It marks the creation of jobs which will last in industries which are for the future. It marks the creation of small and large industries which will give young people a viable future. It marks the creation of hope, which will help the area much more than continued propping up of an industry which, alas, is past its best. It is not a matter of dogma on privatisation or, as the hon. Member for Dagenham said, putting privatisation dogma before commercial sense and profitability. On the contrary, we are putting commercial sense and profitability before the dogma of

nationalisation.

5.37 pm

Mr. Ted Leadbitter (Hartlepool) : During the past three decades, there has been bloodletting in the shipbuilding industry that cannot be matched in by any other industry in the land. During the 1950s, our shipbuilding industry was the largest in the world. In 1985, we were promised, in a statement by the Minister for Trade, that our 1.25 per cent. share of the world market would be increased. But there has been a dramatic decline in the industry. We do not hear such words today. The labour force has decreased from 85,000 to between 45,000 and 40,000.

The Government have been tricky again. The Opposition demanded a debate on the Sunderland closure, but the motion is about British shipbuilding and the successes of privatisation. It says that some parts of the industry are not viable, and that is the end of that. The motion does not deal specifically with the subject about which we talked last week. I challenge the Minister about the calculation behind the Government's statement. I have made it clear that it was convenient that the Prime Minister had returned from Gdansk in Poland, where there is a shipbuilding yard.

My hon. Friend the Member for Sunderland, North (Mr. Clay) has given us a remarkable account of the to-ings and fro-ings and the misinterpretations, confusions, contradictions and political nepotism. However, if the Prime Minister had intended to keep the Sunderland

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yard open, she would have gone to Poland and said to our Polish friends, "In Britain, we have done what you want here in Gdansk," but the decision was already made. She must have known then that she did not intend to save the Sunderland yard.

The Chancellor of the Duchy of Lancaster has a remarkable reputation for understanding the issues with which he deals, but he is not master in his own house. It is sometimes embarrassing to be a parrot for the man in the other place, the Secretary of State for Trade and Industry. The Chancellor has had an unpleasant task which he did not deserve and I absolve him from responsibility for the decision that has been made.

On the other hand, as the Chancellor of the Duchy of Lancaster is a good Member of the House, he might have felt a little upset. He might have said, "I don't like what's going on here. I'll resign." Last week's statement contained no feeling at all for the kind of Christmas card that has been sent to the Sunderland workers. The hon. Member for Tynemouth (Mr. Trotter) talks glibly, as I have known him talk for many years. He said that he had a chat with the chairman of the Northern Development Company, who apparently said that things were looking buoyant and that jobs were coming up. However, if we start off from a low level of economic activity and there is an upward trend, it is easy to feel buoyant.

I come from a part of the world not far from that of the hon. Member for Tynemouth, but I am an expert on closures. If a shipyard worker, instead of the hon. Gentleman, had gone to see the chairman of the Northern Development Company to ask him about the economy in the northern region and the chairman had replied that things were buoyant, what would the shipyard worker do when he and 2,000 or more of his colleagues lost their jobs?

We have not yet mentioned the multiplier effect. The service and supply industries will also be affected so, in all, about 5,000 jobs will be lost, although, if I am conservative, perhaps I should say 4, 500 jobs will be lost in all. It would not please that shipyard worker for the chairman to talk about buoyancy if his skills, pride, hopes and aspirations for his family are suddenly shattered. In any case, the poor guy can live, even when he is in work, only by obtaining a little credit to help him over Christmas.

In 1962, my constituency lost a shipyard. I am an expert in industrial closures in a town of 90,000 people, where only about 30, 000 have jobs. In 1962, we lost 5,000 jobs and, in the following 15 years, we lost almost 20,000. I know what it means and I am heartily sick and tired, after 25 years in this place, of listening to the same glib chat with Conservative Members saying, "We'll mend it. We'll put it right. Let's have a task force." What will we do with a task force? We simply bring in civil servants, give them a job and call it a task force.

We are good at cosmetics in this country. What has happened in Sunderland reminds me vividly of what happened all those years ago. It takes a long time to put matters in order when the economy is breached in this way. We have had a post mortem here today. My hon. Friend the Member for Sunderland, North said that there would be a month's breathing space and a kind offer. I thought that, although we had had a post mortem, there would be no need for a requiem mass, but we might as well have a requiem mass. Nothing has come out of the House today apart from a factual account of the position and some

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palliatives from a few Conservative Members who feel good because the Secretary of State has offered £45 million to create new job opportunities. The hon. Member for Tynemouth should know better. We have been shifting regional policies year after year, until many of our people are immune to those palliatives. It is time that politicians did something to find out how people really feel, instead of talking to the chairmen of development corporations, good as they are, and feeling satisfied because the economic indicators are looking a little better. We should put ourselves in the position of a shipyard worker listening to the director of a development company saying that the economy is becoming buoyant. That is not true in this case.

This might have been a useful debate, but, unfortunately, it will achieve nothing. However, I hope that there will be sufficient press coverage to show that the Government have once again done a spot of professional cheating.

5.47 pm

Mr. Phillip Oppenheim (Amber Valley) : Almost everyone must have a great deal of sympathy for the people of Sunderland because of the number of jobs that they will lose. [Interruption.] It is all very well for Opposition Members to sneer at that, but no Conservative Members takes any comfort or pleasure from the fact that jobs will be lost, although we are not so blinkered as to claim that those jobs have been lost as a result of Government actions or policies. Opposition Members have accused us of murdering Sunderland and the yard. In truth, the yard was murdered many years ago. It is worth looking briefly at the history of shipbuilding to put the matter in perspective and to learn some lessons for the future. We began shipbuilding in Britain with many natural advantages--abundant rivers and estuaries, demand from the largest merchant marine in the world, resources of iron and steel and, many years ago, the finest engineering industry in the world.

However, as long ago as the late 19th century, virtually no new shipbuilding capacity was laid in, and by the turn of the century our shipyards had already become unsuitable for the larger steel ships that were being built. By the beginning of the first world war, our yards were already far less modern than those of the United States and Germany. In addition, they were riddled with labour problems. In 1914, at the outbreak of the first world war, there were no fewer than 90 demarcated skills in British yards. In writing about the time, one historian stated :

"The engineers quarrelled with the boilermakers, shipwrights and joiners, brassworkers and tinplate workers ; the boilermakers with the shipwrights, smiths, chippers and drillers ; the shipwrights with the caulkers, boat and barge builders, mast and blockmakers, and joiners and the joiners with the mill-sawyers, patternmakers, cabinet makers, upholsterers and French polishers. On the Tyne there was an average of one major strike per month over questions of demarcation".

That was the position at the turn of the century.

Apart from labour problems, we were falling behind in education and skills. In 1907, Britain had one full-time student of naval architecture per 16,000 tonnes of ship produced. In Germany, there was one per 100 tonnes. It is no surprise that our share of world tonnage shrunk from 60 per cent. in 1913 to just over 30 per cent. by the

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outbreak of world war two. The labour situation had not improved one jot by the outbreak of the second world war. Even Ernest Bevin noted in a letter in 1942

"how difficult and backward the shipbuilding industry has been from a labour point of view Everything that has been done has almost had to be forced upon them."

Even under the threat of Hitler, the Amalgamated Engineering Union and the Boilermakers Society refused to allow men of the National Union of Railwaymen--the electricians trade union similarly prevented non-union electricians--to work in yards to remedy skill shortages. There were numerous inter-union demarcation strikes during the second world war, but union attitudes alone were not to be blamed. There was a legacy of bitterness, poor management and poor education, and these factors were also partly to blame.

Attitudes that were ingrained over many years made investment in the yards harder to secure, and the shipbuilding industry has suffered ever since from a lack of investment. It is one of the many factors that allowed far eastern competition to overtake us in the 1950s. Even during the second world war, the Germans were using 20-tonne cranes, whereas in our yards the norm was a 3 to 5 tonner. When one-man pneumatic riveting was introduced in the early 1940s, the unions insisted on a riveter's mate being put by every riveter. The mate just stood and watched the job being done.

Since the breathing space after the war, when every other country's shipbuilding industry was flat on its back, there has been further, continual and sorry decline. By 1954, German ship exports had passed the United Kingdom total. A year later, the Japanese had overtaken us. In the 1980s, conditions are harder than ever before. Even the Japanese, with all their efficiency, management, fine education and natural advantages, are now beginning to lay men off and to close yards. The huge Mitsubishi yards at Nagasaki are now only partially operational. Even the South Koreans, with their advantages of cheap labour and discipline, have severe problems in the shipbuilding industry.

The answer to the problem is not to keep pouring money into an industry which, sadly, was overtaken many decades ago. We cannot make a living on past glory. The more money that we put into declining and unprofitable industries, the more jobs we cause to be lost elsewhere in our economy. There is no future in that.

It is nonsense for Opposition spokesmen to talk of the Government's lack of concern about the nation's indutrial base. It is worth reminding them that, when the Labour Government were in office, shipyards were closed and many jobs were lost in the shipyards and ship repair yards. Indeed, during that period our manufacturing output shrunk, whereas under the present Government manufacturing output has risen. It has done so extremely rapidly since the trough of world recession in 1981.

If we are to have an industrial policy, we must examine what the Japanese have done, so that we understand why they have succeeded. Over the past 50 years, the Japanese have had a consistent policy of allowing old and relatively low-tech, labour-intensive, low added-value industries to decline. They have not attempted to subsidise them. Instead they have invested in productive capacity in newer and higher added-value industries. They have left the older and more labour-intensive industries to countries that are best able to cope with them, such as South Korea and China.

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That is what we must do. We must not keep old and dying industries alive, however painful it might be to do otherwise. We must concentrate our investment on newer, less labour- intensive and higher value-added industries. That is what we must do to help the people of Sunderland. It may have been the short-term political option to keep the yards open. It may have appeared kind, and it would have been the easier decision to make. I believe, however, that it would have been a disastrous decision in the long term for the region and for the national economy.

5.56 pm

Mr. Chris Mullin (Sunderland, South) : I share the widespread view that the decision to close the yards was made some months ago, and that since then nothing has been allowed to get in its way. I believe that it was taken before the Minister took office. I recall an article that appeared in The Guardian during March--I think that it was the front page lead--that quoted apparently well-informed sources as saying categorically that the Government proposed to wind up British Shipbuilders.

I join my hon. Friend the Member for Sunderland, North (Mr. Clay) in paying tribute to those who have participated in the campaign over the past eight months to keep the yards open, especially the people of Sunderland. They have been supported by the Sunderland borough council, people of all political opinions and the work force. The shop stewards and others have led a magnificent campaign. I pay tribute to my hon. Friend the Member for Sunderland, North, who has been outstanding. His speech reflected his inspirational leadership on this issue.

When the Minister replies, I hope that he will respond seriously to the proposal of my hon. Friend the Member for Sunderland, North that at least one part of North East Shipbuilders Ltd. should be saved. I understand that the Cubans are returning next week and one must admire the persistence and generosity of their approach. After all the rebuffs, they are still interested in placing orders with NESL, or what remains of it. I hope that the Minister will assure us that any proposals that the Cubans have to make will be taken much more seriously than the ones that have so far been put before the Government.

It has been said that Cuba is a Communist country. I do not know what that has to do with the matter. I should like to know the terms of the order from the Chinese that was received at Govan for the COSCO ships, such as the length of credit and the interest rates. It would be interesting to match the terms of that order with what may be offered in reponse to a Cuban order.

The upturn in shipping has been referred to with various degrees of scepticism by Ministers over a long period. We need look no further than today's Lloyd's List, a newspaper which must be taken to know something about the shipbuilding industry. The first sentence of the leading article reads :

"With new building prices hardening and secondhand prices for most types of ship escalating appreciably, there is real confidence that the ship, at long last, is set to acquire something of a scarcity value which it has not enjoyed for 15 years."

Those at Lloyd's List probably know a great deal more than those at the Department of Trade and Industry about the future of the industry.

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I would not like the House, including Ministers, to be under the illusion that indignation at what has been done to Sunderland is confined merely to the Government's political opponents. Last week, after the ministerial announcement that NESL would be closed, the leader of the Conservative group on Sunderland borough council said :

"They have done at a stroke what the Germans for six years tried to do. It is industrial sabotage."

He added :

"I think the decision was taken nine months ago by Lord Young." I should also like to quote from the Sunderland Echo, the owners of which gave £2,500 to the Conservative party last year and, therefore, must be considered to be reasonably impartial on this issue. The Sunderland Echo described the Minister's statement last week as

"misguided, short-sighted and cruel A self-inflicted and disabling wound to a maritime country which has deliberately enfeebled a strategic industry."

I do not know whether the owners of the Sunderland Echo will make a donation to the Conservative party next year, but I pay tribute to their support for the campaign to save the shipyard.

I want the Minister also to understand the reason for the great anger that the decision has generated. The anger is not irrational, contrived or founded solely on the basis of emotion. The shipyard workers of Sunderland are not daft. They know as well as anyone that if there is no work, yards will have to close. However, as has already been made clear, there was and there is work. Reference has been made repeatedly to the Cuban order, which is worth around £110 million. I acknowledge again the extraordinary patience of the Cubans, who must be, as I am, bewildered by the fact that, in a world where shipyards are crying out for orders, they cannot find anyone to take their very large order seriously. That order is one of the largest on offer anywhere in the world.

The past eight months have been wasted looking for an owner for North East Shipbuilders. That time should have been spent looking for orders. Orders are available, and other western European yards have obtained them. Last April, a large order for a passenger ship worth $150 million was placed at a West German yard. In July and August, orders for tankers and chemical carriers were placed with Spanish yards and, recently, a large order was placed for Soviet cargo ships. I checked with the Department of Education and Science this afternoon and I understand that the Department has invited tenders for an Antarctic survey ship. Why could not that ship be built in Sunderland? That order is within the gift of the Government. Hon. Members have already compared this privatisation with others. It has become normal for the victim of privatisation to be fattened up through various price increases, as we have seen with electricity, water and other major privatisations. At no stage in their programme of privatisation did the Government choose a moment to put an industry on the market when its fortunes were at the absolute lowest point. However, that happened with North-East Shipbuilders. Lloyd's List remarked on an alternative only last week : "The United Kingdom Government could at least have admitted that the shipbuilding industry was looking rather better in the medium term and financed the Cuban order to tide the yard over until rather more commercial orders came along.

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It could have given the yard another couple of years in the public sector, with the knowledge that the security this would provide could have encouraged work, for assuredly no owner"--

this is surely the key point--

"is going to place an order in a yard which is under threat of immediate closure."

The background against which this disaster has been inflicted on Sunderland is that our merchant fleet is being allowed to disappear in the face of repeated warnings from every responsible source, including the Select Committees on Defence and on Transport, within the past year. The United Kingdom fleet in 1980 contained 1,275 ships or 42.3 million tonnes and, by 1986, the latest year for which I have seen figures, the fleet was down to 545 ships or 11.2 million tonnes. The percentage of world tonnage under the British flag in 1980 was 6.4 per cent. It is now down to 1.8 per cent. Half the fleet that sailed to the Falklands now sails under foreign flags. The Select Committee on Transport stated that our ships are older and more in need of replacement than those of our chief rivals.

The problem is wider than just the future of British shipbuilders or North East Shipbuilders. The problem is that the Government have no maritime policy. We are an island nation, dependent for our survival on trade, but we cannot own or build our own ships. Surely it is not beyond the wit of Government to devise a policy, even at this late stage, to salvage what remains of our capacity. I want to quote, not from an Opposition Member, but from a former Conservative Member, Sir Edward du Cann. Two years ago, in a debate on the future of the shipbuilding industry he said--

The Parliamentary Under-Secretary of State for Industry (Mr. Robert Atkins) : We have heard it before

Mr. Mullin : Yes, I know that the Minister has heard it before, but it is rather apposite. Sir Edward du Cann was right. He said : "During my time in the House I have watched the decline of many manufacturing industries and the extinction of others--motorcycles, television, radio, optical instruments, motor cars and so on. Too many have declined and too many have gone. We choose fancy words to describe the process--and rationalisation is one. To me, it has been a history of industrial disaster Future generations will never forgive us if we do not say that this process of attrition in British manufacturing industry has gone far enough. It is time to cry halt."--[ Official Report, 21 May 1986 ; Vol. 898, c. 422.] That is what Sir Edward du Cann said about shipbuilding two years ago. How right he was.

In his aid package announced last week for Sunderland, the Minister offered £45 million over 10 years or so. That money would have been better spent subsidising a new order. That would have cost less and preserved, or created, more jobs. I also invite the Minister to compare the £45 million on offer with the £155 million that has been taken away from Sunderland over the past decade in lost rate support grant. That is equivalent to virtually the total budget of Sunderland for one year. That is not a source of amusement, although the Minister may find it so.

This is a disaster for Sunderland, because it takes place in a town that already has some of the highest unemployment in the country. In Sunderland, there are whole streets where virtually no one is working and where a generation of children are growing up who may never work. Some of those made redundant last week have been made redundant three or four times, working their way down the river as each enterprise folds beneath them.

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The Minister has before him the last of many positive proposals from my hon. Friend the Member for Sunderland, North. What will the Minister do about it? Will he take that proposal a lot more seriously than the others that we have heard about tonight? I hope that the Minister will rise to the occasion.

6.8 pm

Mr. James Cran (Beverley) : Today's debate has an air of inevitability about it. I was the Confederation of British Industry's northern director in 1979. I was based in Newcastle upon Tyne, and I knew Sunderland extremely well. I was also familiar with the shipyards that we have been discussing this afternoon. I remember members of the work force, the management, people living in Sunderland and in Newcastle and Jarrow asking me, in view of the level of public funds going to shipbuilding support, how long their companies and jobs could survive. There was a level of understanding at the time of the problems facing shipbuilding. It is therefore by no manner or means a new phenomen and no hon. Member could say that the Government had not, with a vengeance, supported the industry. Indeed, some of us believe that the Government have persisted for too long in supporting the industry.

The chairman of British Shipbuilders appeared before the Trade and Industry Select Committee--of which I am a member--in June 1988, and more or less said that, just because the Koreans had lost £2.3 billion in building ships and grabbed a 17 per cent. share of the world market, perforce this country and every other country should follow suit. I thought that an extraordinary argument at the time, and the more that I have thought about it, the more ludicrous it has become. For each country to outdo other countries in providing even larger subsidies and making even larger losses is a bankrupt policy. It is a fool's paradise to suggest that losses within an industrial company or organisation guarantee jobs at the end of the day. They do not. That was understood by the people of the north-east in 1979, and I suspect that it is understood there today.

When the chairman of British Shipbuilders appeared before the Select Committee, I was intrigued by the question whether British Shipbuilders could ever become profitable. One would have thought that the answer would be that it could do so. Other hon. Members have already said that seaborne trade is at a 10-year high and that the second-hand ship market has virtually disappeared, which indubitably gives opportunities to British Shipbuilders. However, the chairman's answer was :

"I believe five or six years down the line we could almost get to break- even or break-even itself subject to the market improving." In effect, he was saying that we would have to wait until 1994 for the organisation to break even.

I remind the House that this would coincide with demand being at its highest, since demand is rising. Therefore, if the organisation can break even only when demand is at its highest, the fact that it is a cyclical industry makes it difficult to imagine what will happen after 1994 if demand turned down. It is absurd to ask the taxpayer to continue to bear that sort of burden--£2 billion since 1979. I strongly believe that that £2 billion could have been infinitely more wisely spent, not only for the benefit of the people of Sunderland, but for people in other areas.

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My constituency is home to a shipbuilding firm, Dunstons of Hessle, which has never received a penny piece of public funds. Yet it is supposed to operate in world markets, it is supposed to win orders, it is supposed to pay weekly salaries to its work force. I can say with some pride that that is exactly what it is doing, and British Shipbuilders should have done the same.

Mr. John Redwood (Wokingham) : Does my hon. Friend agree that on many occasions during the past 12 years the shipbuilding industry has forecast an improvement in demand and a reduction in losses, but that often those forecasts have not come true? Should we give any more credence to the current forecast of those two events happening?

Mr. Cran : I could not agree more with my hon. Friend, because that is exactly what has happened in that cyclical industry. Indeed, when upturns did occur, the then management of British Shipbuilders could not take advantage of them because its overheads were far higher than those of most of its competitors. I concede that the current chairman is attempting to deal with that position but, alas, it may be too late. I see that you are looking at me, Madam Deputy Speaker, and I wonder whether you want--

Madam Deputy Speaker (Miss Betty Boothroyd) : Order. I am listening to what the hon. Gentleman has to say.

Mr. Cran : I am delighted to hear that, Madam Deputy Speaker. British shipbuilding, in contradistinction to British Shipbuilders, certainly has a future. The United Kingdom should take a certain amount of pride--I certainly do--in the fact that we are in the lead in the restructuring of shipbuilding-- [Laughter.] Opposition Members may laugh, but the chairman of British Shipbuilders told the Select Committee :

"The Koreans have recognised they bought a 17 per cent. world market share by selling below cost and they have now turned their attention to other industries they are not interested in subsidising shipbuilding to the extent they have in the past." The penny has at long last dropped in Korea, just as it has dropped in this country. The resources that we pour into British Shipbuilders could be far better spent in rejuvenating the economies of the regions. I am not prepared to take any lessons from Opposition Members about the need for vibrant regional economies in the United Kingdom. I have operated in the regions all my life and there was not one that I did not wish to leave in better condition than I found it. I am sure that that would be true of every hon. Member. It is instructive to study the figures for economic growth in the regions, because almost every index shows that the northern regions are doing rather better than the southern regions. There is no reason why that should not continue in the north-east, just as it is in Yorkshire and Humberside.

I realise that Opposition Members do not want to hear literate and economic truths, so they will not welcome my next remarks. The Government are taking three steps that will help the economy of the northern region. First, the Chancellor of the Duchy announced a £43 million package

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last week, and I pay tribute to him for that. I have taken the trouble to speak to my contacts in the north-east because I did not think it right to speak from hearsay.

In contradistinction to what has been said by some Opposition Members, that package is very much welcomed in the north-east. It recognises the fact that the Government were not prepared to pull the rug from under the north- east and not offer some hope of future economic growth. The Government should be applauded for that. [Interruption.] I have been here throughout the debate, and Opposition Members must listen to what I have to say.

Secondly, I did not hear any Opposition Member mention the Northern Development Company, the body that encourages inward investment. It now receives greater resources than almost any other such body in the English regions. It certainly receives more Government money than my region of Yorkshire and Humberside. I make no complaint about that, because it merits that support in present circumstances. That company is respected by all the other inward investment bodies for its level of success.

The third matter that the Opposition clearly do no want to hear, but will, relates to the Tyne and Wear development corporation. I do not hear much from them on that subject. I wonder how many other hon. Members took the trouble to consult a document that it has produced called, "Forward to 1991". Clearly, not many.

That document is extremely bullish about the future of the north-east, particularly Sunderland. I have three encouraging quotations to give the House. The first states :

"We discovered that the area already has a sound economic base"-- the corporation says that, not me or the Government--

"with a skilled and adaptable workforce."

Those are exactly the ingredients that will produce the sort of economic success that the north-east and Sunderland in particular need.

Secondly, the document states :

"it became clear to us that people do have confidence in the area."

It appears that inward investors have confidence in that region, but Opposition Members have shown precious little confidence and they should be thoroughly ashamed. If I were to speak about my region I would speak with pride and confidence.

I realise that Opposition Members are growing impatient, but the third quote states :

"The result of our appraisal is a far more positive picture than we'd expected. And while clearly there are problem areas these are on a limited scale."

There is an inevitability about the debate, but no inevitability that Sunderland need decline in any way, shape or form. If in 10 years' time the figures for any index of economic development in Sunderland are not better than in the past 10 years, I shall regard that as a failure. I do not expect it to happen.

6.21 pm

Mr. A. J. Beith (Berwick-upon-Tweed) : We have had some offensive and patronising comments from Conservative Members. They are patronising towards the north-east, local authorities, trade unions and those who have been involved in the creation of the Northern Development Company. They are patronising to the shipbuilding industry, which has had to face all the turmoil of change and was busily re-equipping itself when this blow hit it, to those in all parties and sections of the

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community who have campaigned for Sunderland and its shipyard, and to the hon. Member for Sunderland, North (Mr. Clay) who made such an effective case. I had hoped to see him become a capitalist entrepreneur. That would have had a nice political irony to it. I genuinely wished him success in his bid. The fact that he was prepared to undertake that venture showed that everybody on all sides of the political spectrum set aside their general political views to see what could be done for Sunderland shipyards--everybody, that is, except the Government, who could have set aside some of their political preconceptions.

My great anxiety is that the whole affair has been bungled. It is a sign of Government bungling that there could still be the prospect of realistic progress with the Cuban order, given the possibility of substantial container work alongside shipbuilding work, which would have made use of the Pallion yard in Sunderland as well as shipbuilding yards. When Conservative Members talk about the sums that would have been involved--I presume they are thinking of the intervention fund help for that order-- they seem to forget the Government's readiness to offer a substantially larger amount to Mr. Tikkoo for an order to go to the Harland and Wolff yard in Belfast, and in the end that did not work out. We did not hear the same complaints from them then.

We are entitled to ask what is happening on the ferries order. How is it that ferries could be sold to Mr. Johansen, as we believe they have, when that deal could not be completed in preceding months and when no Government action could deal with Mr. Johansen's default? Why do the Government not, at least for the next two years, secure a future for the sites? Given the strategic importance of shipbuilding, it seems absurd for these sites to fall into complete disrepair just when it is recognised that there could be a significant upturn in shipbuilding. Yesterday I listened to Conservative Members explaining that there were strategic reasons for intervening in the market. They were talking about nuclear power. But all of a sudden those arguments are of no consequence because we are talking about merchant shipping and shipbuilding. Today, strategic reasons cannot be allowed to interfere with the operation of the market, according to them. What has the Minister said to the European Community about the Sunderland yard? Has he taken action to ensure that we do not permanently lose the right to build ships and have intervention funding in Sunderland? As he well knows, that could be the effect. We are entitled to know what he has said to the European Community. The Minister talks about the success of privatising the rest of British Shipbuilders, but there will not be unbridled enthusiasm in all parts of Sunderland or Dundee at the acceptance of the managing director's bid for Marine Design Consultants. One can only hope that that bid will be successful, but it is viewed with apprehension by many who work for the enterprise in Sunderland and by those engaged in Dundee.

The recovery package which the Government have offered will not be enough, even when set beside the splendid self-help efforts in which the Sunderland people are engaged, including the Wearside opportunity initiative. My right hon. and hon. Friends and I have warmly welcomed Nissan to the Sunderland area and believe that it has been a beneficial enterprise for British industry in general because of the example that it can set British industry. But it would take three Nissans and a

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