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Harland and Wolff

3.31 pm

The Secretary of State for Northern Ireland (Mr. Tom King) : With permission, Mr Speaker, I wish to make a statement about Harland and Wolff. We announced in May 1988 that we were prepared to consider approaches from those interested in acquiring the yard. Since then a number of possibilities have been pursued. These have recently been narrowed down to two serious contenders, BT Shipping and a management-employee buy-out team led by Mr. John Parker, the current chairman of Harland and Wolff, and supported by Mr. Fred Olsen through two of his leading companies.

I can now advise the House that, having considered the proposals made by these two contenders, I have today approved, on behalf of the Government, heads of agreement for the sale of Harland and Wolff plc to Mr. Parker and his MEBO team, backed by Mr. Olsen.

The management-employee team and the Olsen companies will subscribe for £15 million of share capital to a new company. The company will then acquire the assets and the business undertaking of Harland and Wolff for approximately £6 million, net book value. The Government will advance to the new company £60 million of loan stock, on a repayment basis linked to performance.

Terms have been agreed under which the new owners will complete the single- well oil production system vessel for BP and the auxiliary oiler replenishment vessel for the Ministry of Defence. The Government will provide grant assistance of £38.75 million towards the cost of rationalising the activities of the yard--including new capital expenditure.

Under this agreement, Olsen companies will order three Suezmax tankers of about 150,000 tonnes each. I have agreed to offer intervention aid on them within the limits permitted by the European Community. The initial orders will provide work for the yard until the end of 1992.

The new company will therefore receive from the Government repayable loan stock and grant towards rationalisation of £98.75 million and intervention aid on new merchant orders.

Furthermore, to enable the company to raise performance guarantees necessary for the financing of its operations in its early years, the Olsen companies have agreed to make a recourse commitment for use by the new company to support predelivery ship financing. The Government will match this.

The existing liabilities will remain with the old company and the Government undertakings in respect of these liabilities of Harland and Wolff will not extend to the new company.

Beyond the terms of the heads of agreement, the Government will not provide any other special support to the new company except intervention aid and other grants normally available to other private sector companies in Northern Ireland. In this respect, I plan to repeal my powers in relation to the yard in public ownership contained in the Aircraft and Shipbuilding Industries (Northern Ireland) Order 1979.

The terms of the agreement are subject to contract and also a number of conditions including the approval of the European Commission, with which initial discussions have been held, and the agreement of the Norwegian authorities. Critically also, it depends on achieving the

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support of Harland and Wolff employees. In particular, they will be invited to invest in the new company. To this end, a prospectus will be issued by the new company in the summer. Completion is planned for early September.

In respect of funding, provision was set aside in the Northern Ireland block for support to Harland and Wolff under present arrangements, and I hope to be able to cover the costs of disposal from within the block without any disruption of other Northern Ireland programmes.

I am pleased to make this announcement today which offers the hope of a much brighter future for Harland and Wolff. This famous yard has experienced a steady decline in employment over many years, and the chances of its survival were bleak. This proposed transfer to the private sector under a management and employee buy-out led by the present chairman, Mr. John Parker, and reinforced by the strength and well-established reputation of Mr. Fred Olsen and his companies, offers the chance of a new beginning and comes at a time when there are signs of an improvement in the shipbuilding market.

A lot of us have worked hard to try and make it possible for Harland and Wolff to have this new chance--none more so than Mr. John Parker, who deserves great credit for his unstinting efforts. The challenge now is whether he will get the support to bring it to reality. This is not the end of the challenge. This is just the beginning for all those in Harland and Wolff to show that they can succeed again in the tough and competitive world of shipbuilding. I believe that the management and employees at Harland and Wolff, together with Mr. Olsen and his colleagues, are ready to meet that challenge and we wish them well.

Mr. Jim Marshall (Leicester, South) : First of all, I thank the Secretary of State for making his announcement before Easter and at last putting an end to all the speculation about the future of Harland and Wolff. We all welcome the end of the uncertainty. However, it will come as no surprise to the Secretary of State that we believe that the Government's whole approach to the privatisation of Harland and Wolff has been handled in a particularly clumsy and insensitive manner, which has directly contributed to the low level of morale among the work force and to the loss of highly skilled staff, not just from Harland and Wolff, but from the economy of Northern Ireland as a whole.

Additionally, we feel that the decision that the Government made in the middle of last year to withhold intervention funding and their refusal to permit the existing company to tender for new orders seriously undermine the existing company's position and will make it that much more difficult for the new company to succeed.

Nevertheless, we recognise that, once the Government had made the decision to privatise--I repeat that my party deplores that decision and that we still continue to oppose that policy--they had a difficult choice to make between the rival bids. However, the Secretary of State will recall that, in our debate a few days ago, I made it clear that the official Opposition preferred, and always have preferred, a management-employee buy-out as we believe that it offers the prospect of greater security for the future of the company, especially in the longer term.

I should like to ask the Secretary of State some specific questions. He referred to preliminary discussions with the European Community. In those discussions, did he receive

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any guarantee from the Commission that it would not block the financial arrangements being made for the privatisation?

As regards the short-term viability of the new company, does the Secretary of State recognise that there is a time lag of 18 to 19 weeks between when the orders for steel are made and when they are actually delivered at the yard? I am sure that he does. Therefore, will he, in the particular circumstances of Harland and Wolff, give permission for orders to be made now so that work may begin on the construction of the three Olsen tankers as quickly as possible in September? If permission is withheld until the new company comes into being in September, it will be at least the new year --January 1990--before any new steel work can begin on the Olsen tankers that will form the short-term basis for the viability of the new company. Will the Secretary of State also give permission now for the company to tender for orders before the new company comes into existence in early September? Will he also seek to ensure that all the work force are involved in the discussions surrounding the buy-out, particularly in the light of today's press reports that a minority of the work force are apparently frustrated by the lack of information surrounding the buy-out? I am sure that the Secretary of State will agree that, if the venture is to succeed, it must have the full support of both the management and all the employees. We urge him to use his best endeavours to ensure that all the work force are fully involved in the discussions and the preliminaries leading up to the company.

Finally, may I also pay tribute to Mr. John Parker for his valiant work, both on behalf of the company and its employees to seek to ensure in the past--and I am sure, in the present--the viability of Harland and Wolff. I should also like to extend our thanks to the work force who, over the years, have seen the number of employees decline quite dramatically, but who still feel that there is a future for shipbuilding at Harland and Wolff in Belfast and who will support the new company with enthusiasm.

Mr. King : The hon. Gentleman's opening comments were absolutely incredible. He described as clumsy and insensitive the outcome of something which not many in the House would have dreamt was remotely possible--the successful privatisation of a shipyard which, under the Labour party's policy of nationalisation, was heading straight for closure. The hon. Gentleman can read the book and see that, when the yard went into public ownership it had 10,000 employees, now it has barely 3,000. Not many people would agree that that was a recipe for continued success.

The hon. Gentleman talked about insensitive handling. My hon. Friend the Minister responsible for industry had to take a lot of flak in Northern Ireland, while working extremely hard to guarantee the yard's successful future. Many people did not understand one of his most difficult problems, which was that if new commitments--new orders which might not have fitted the new strategy of the yard's potential owner--were made during the period of negotiation, they could well have frustrated any chance of privatisation.

I hope that the House will speak with one voice. This is a new beginning and a new oportunity for Harland and Wolff. Success is not guaranteed--many problems are still to be faced. There must be consultations with the work force. The hon. Gentleman, who has paid tribute to Mr.

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John Parker, knows that that will be his task and, also, that Mr. Parker has sought to keep people informed of what he is trying to do. It is precisely because he has been able to put together a management-employee buy-out that we are here today, hoping to celebrate the launch of what we believe can be a successful undertaking.

There is as yet no guarantee from the European Community. We have held initial discussions that appear encouraging, but we cannot be certain about that until the final proposals can be put to the Commission. It will need to examine them and see whether they fit in with Community policy. We are hopeful that they will.

Several Hon. Members rose --

Mr. Speaker : Order. I appreciate the importance of this statement, but we shall be dealing with the Water Bill, which is under a guillotine motion, and a ten-minute rule Bill today, so I ask for brief questions.

Mr. Peter Robinson (Belfast, East) : Will the Secretary of State accept that many of us have misgivings about privatisation, particularly in the shipbuilding industry, but that we have long recognised that this was not a matter of privatisation or public ownership--it was a matter of survival? In that context, not only those who live in east Belfast and work in the shipyard but the whole community in Northern Ireland will welcome the fact that the period of uncertainty has been brought to an end.

Will the right hon. Gentleman take it from me that a large section of the work force feel that they do not know enough about the detail of the management-employee buy-out, and that it is now essential that the details are made clear to them and the proposal is sold to them? Will he help Mr. Parker to sell the proposal to the work force and tell us whether he is satisfied that the dowry that has been handed to Harland and Wolff is large enough to capitalise the firm in the early stages of its growth?

Is the right hon. Gentleman satisfied that there will be easy and immediate access to MOD orders and to intervention funding, not just for the three ships for which orders have already been received, but for further orders? I join in the Secretary of State's tribute to Mr. Parker, and I pay tribute, too, to the management team and the work force in Harland and Wolff, who have acted responsibly during the protracted period of negotiation.

Mr. King : I certainly recognise that this has been a period of acute worry for the work force and all involved in Harland and Wolff. One would have hoped that the period could have been shorter, but I think I am correct in saying that it is only seven weeks since Mr. Olsen showed his interest in being involved. If the House understands the complexity of heads of agreement and all the other matters that have to be covered, it will agree that that is a remarkable tribute to my officials who have worked on the agreement--officials do not always receive praise in this House. I hope that the hon. Member for Belfast, East (Mr. Robinson) will recognise the work that they have done together with the management of Harland and Wolff under Mr. Parker's leadership, and that he will recognise the contribution of Mr. Fred Olsen and of Mr. John Wallace and his colleagues in the Olsen group of companies in bringing this to an effective conclusion.

The hon. Member chooses not to distinguish between privatisation and nationalisation, and says that he does not want to argue about them--he is interested in survival.

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Under nationalisation and public ownership the yard was headed in one direction--extinction. Its hope of survival and expansion stems from the fact that it now has the possibility of private sector involvement. The personal commitment of management and employees is hugely important, but so is the personal commitment of a well-respected outside shipbuilder.

Mr. James Molyneaux (Lagan Valley) : Is the Secretary of State aware that there will be general satisfaction at this promising outcome? Does he agree that the commitment of Mr. Parker and the management and work force is a welcome development, and that the involvement of an industrialist of the international standing of Mr. Olsen will bring great confidence and a boost to industry throughout Northern Ireland?

All three political parties representing Northern Ireland wish to express appreciation of the personal efforts of the Secretary of State and of the painstaking trouble he took at all stages of the delicate negotiations. I include in that appreciation the Parliamentary Under-Secretary of State, the hon. Member for Gosport (Mr. Viggers).

It would be only right for me to say that I hope that the task of the Secretary of State was made a little easier by the joint approach of the three political parties which represent Northern Ireland in this House. It would be churlish if I were to omit the part played by SDLP colleagues in those meetings and negotiations. Will the Secretary of State convey our appreciation of the central role played by the Prime Minister and assure her that we, the elected representatives, will fully honour the understandings that were reached when we met her on 23 February--I choose my words carefully--and will do all in our power to assist the management and the work force to make a success of the commitment into which they have now entered?

Mr. King : I am very grateful to the right hon. Gentleman. I appreciate his kind words about whatever part I have been able to play and particularly his kind words about the Under-Secretary of State, my hon. Friend the Member for Gosport (Mr. Viggers), who has had to take a lot of flak over this, as the right hon. Gentleman is aware, but has stuck to his guns. I congratulate my hon. Friend on that.

I also appreciate the right hon. Gentleman's comments about the discussions that we were able to have, and those with my right hon. Friend the Prime Minister. There is no doubt that coming together in that way was helpful. I hope that the lessons can be learned of the value of co-operation in areas where there is value in such co-operation. Northern Ireland speaking with one voice was a much more encouraging sign than some of the noises that we hear from time to time.

The important word which the right hon. Gentleman used was "promising". That is right, because this is not a signed, completed contract. This is the beginning of the challenge in which we all have a part to play ; I include the hon. Member for Belfast, East in that, although I did not acknowledge that in my comments to him. We all have a part to play and I hope that we can ensure that this promising start reaches a successful conclusion.

Mr. Kenneth Warren (Hastings and Rye) : I am delighted that my right hon. Friend the Secretary of State

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has endorsed the goodwill and trust of the Select Committee on Trade and Industry which reported to the House on Harland and Wolff, and also endorsed the confidence of the work force. I trust that the work force will respond, because it exhibits a very high degree of technical quality. While we wish Mr. John Parker and his team and Mr. Olsen every success, will my right hon. Friend assure us that the Government will, without hesitation, make it clear to the Commission in Brussels that we expect its endorsement for the venture without delay? Harland and Wolff has the biggest and best shipyard in western Europe and we must ensure that it is maintained as a national and European asset.

Mr. King : I am grateful to my hon. Friend. Having sat before him and answered his questions, I am well aware of his interest in this matter. I am also grateful for the interest shown by the Select Committee on Trade and Industry. There was nothing between us about the fact that the Harland and Wolff shipyard is a major asset. The yard is important ; It is on a larger scale than other yards in western Europe in general and its work force has considerable technical skills. The arrangement that I have announced today, if carried forward successfully, offers the possibility for those facilities to be put to the best possible use. I am grateful for my hon. Friend's comments. I assure him that I have tried to ensure that the right messages have been lodged in Brussels and we will carry that forward as soon as we can.

Mr. Paddy Ashdown (Yeovil) : Whatever the delays and ideological road blocks created by the Government before an easier and earlier solution, the Secretary of State has made a very happy announcement today. I congratulate him on choosing the management-employee buy-out and on the work that he and his colleagues have done. He was right to pick out John Parker, whose commitment to Northern Ireland and to Harland and Wolff is very much a part of the deal. He was also right to pick out Mr. Fred Olsen, whose commitment to the deal will be observed from outside with some interest. Do they not both comprise a vote of confidence in the staff, and especially the work force? I believe that the Secretary of State said that the support of the work force was "critical". Does he mean that it will be conducted on the basis of a vote, or does he mean that the commitment of the work force's money to the proposal in some proportion or another will be an essential part of the deal? If the latter, I ask the Secretary of State to bear in mind especially that the special circumstances of Northern Ireland, and the uncertainty which has hung over Harland and Wolff, may well mean that many members of the work force, for reasons that he will understand, will not feel able to commit in large amounts what in essence will be their redundancy packages. I hope that that will not cause the deal to founder.

Mr. King : The heads of agreement that we reached today relate to a management-employee buy-out, which was planned by Mr. Parker and discussed by the management and employees of Harland and Wolff as a way of saving the yard and giving it the best possible chance for the future. When speaking of the support of the employees, that is very much what I have in mind.

The right hon. Gentleman rightly picked up on the terms of the agreement, paraphrased though they were,

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and he referred to the word "critical"--but my use of that word goes wider. Harland and Wolff has an opportunity that it will not achieve under its present methods of operation. If the yard is to succeed, there must be changes, recognition of the need for new methods and new approaches, and new commercial vigilance and determination. That is also what I meant by the support of the work force being critical. Mr. Parker can give the lead, but it is critically important that people are prepared to back him.

I am grateful for the right hon. Gentleman's support, and for the general support of hon. Members in all parts of the House for Mr. Parker and his colleagues. The Government will back them too, and I hope that all those in Harland and Wolff, who may have been used to a rather different working situation and atmosphere under public ownership, will realise that there is a new situation, and one in which they have their part to play.

Mr. James Kilfedder (North Down) : Will the Secretary of State convey the thanks of the people whom I represent to the Prime Minister for her helpful and influential intervention, and for her approval of the finance enabling the deal to go ahead? Will the Secretary of State tell the House which factors made him decide to opt for the management-employee deal as opposed to the Eddie Pollock deal, and how much less it would have cost the taxpayer if the Pollock deal had been approved?

Mr. King : I am grateful to the hon. Gentleman for giving me the opportunity to explain that, in the final analysis, we had before us two strong contenders. I appreciate very much the interest of Mr. Eddie Pollock and his team and the care they took in making their proposals. My final judgment was that, on balance, on the evidence available to me, and because certain aspects of BT Shipping's proposals were not as clear and as final as I would have wished, that the accepted proposal offered the best prospects for the yard's continuing and enhanced success in the future. One of the factors that also influenced me was the need, as has been mentioned already, to reach a decision as early as possible. I could not afford to wait longer for further clarification of proposals that might not have been successful. I regarded the MEBO-Olsen proposal as a serious proposal, and as the one that I should recommend.

Rev. Martin Smyth (Belfast, South) : With other right hon. and hon. Members representing Belfast constituencies, I welcome the statement. As I said on a previous occasion in the House, that is good news not only for Belfast and Northern Ireland but for the whole United Kingdom economy, because it will have a knock-on effect. Will the Secretary of State use his influence with the Secretary of State for Defence to ensure that the shipyard will not be limited only to merchant shipping contracts but can tender for defence contracts as well?

I join others in calling upon the work force at Harland's to do what it has in the past. When others said that things could not be done, it did them. It built both the Titanic, which somebody else sunk, and the Sea Quest, which some people conveniently forget about. When Japanese firms said that ship could not be built, Harland's built it. The company has now been given a new opportunity, which I welcome.

Mr. King : If I was looking for an illustration of what Harland and Wolff can do when asked, it would be its

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support in meeting the urgent requirements for the Falklands campaign, which is an even more recent example than that mentioned by the hon. Gentleman. As to Ministry of Defence orders--I apologise for not answering this question when it was put earlier by the hon. Member for Belfast, East--it is our intention that the yard will be able to tender for them. I am not sure how many orders there are around at the moment, but it is certainly our intention that the yard will be able to do that.

Sir Giles Shaw (Pudsey) : Will my right hon. Friend accept my congratulations to him and to the Under-Secretary of State on finding an imaginative solution which eluded many of his predecessors, including me? What did he mean by the liabilities that remain in the old company? Was he referring to the accumulated debt in capital and interest? If so, how will that be dealt with under the terms of the competition policy of the European Commission?

Mr. King : I am grateful for my hon. Friend's gracious comments. The sentence he will have noticed, which points out the difference and shows why it was possible to make the announcement today, states that there is expected to be an improvement in the shipbuilding industry. That has led to greater confidence and made it possible to consider proceeding in this way, and it accounts for the considerable private sector interest in the company.

Mr. Bob Clay (Sunderland, North) : Why are the Government closing other yards, then?

Mr. King : My hon. Friend is correct that the accumulated debts will remain and are likely to have to be written off. There are also certain rather smaller ship financing liabilities connected with orders for previous ships for which the old company, retains responsibility.

Mr. Doug Hoyle (Warrington, North) : Will the Secretary of State note that, while we would have preferred the company to have remained in public ownership, we welcome his Easter present to the people of Northern Ireland in bringing the uncertainty to an end so soon after the report of the Select Committee on Trade and Industry? Will he clarify his announcement a little further? Will the company be able to accept new orders and tender for Ministry orders from now on, without waiting for the new company to be brought into existence? Finally, I do not want to end on a sour note, but does the Secretary of State envisage that the labour force will remain stable until the new company is established and that there will be no further redundancies?

Mr. King : On the last point, some redundancies have been announced and it is likely that they will need to go ahead, but it will then be a matter for Mr. Parker, who will be able to advise further how he sees the situation developing. The hon. Gentleman spoke about the company taking new orders. That is a complicated matter. I said that I hoped that the transitional period would be completed by September. During that time, a prospectus will be prepared and details will be put before the work force to establish whether the various details can be tied down into a final contract.

The complexity of, and one of the difficulties in negotiating, those heads of agreement is deciding what to do about existing contracts and who takes liability for what in regard to the SWOPS and the AOR being built at

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the moment. There will need to be further discussions about other orders. Under the proposals, the first orders likely to be in the yard will be the three orders which are part of a commitment to Mr. Olsen for three Suezmax tankers.

Mr. Robin Maxwell-Hyslop (Tiverton) : May I congratulate my right hon. Friend on an achievement which meets the wishes of the employees as they stressed to us when we took evidence there that it was their wish that the management buy-out in league with them should succeed? He may also be interested to learn that, when the Select Committee on Trade and Industry was over in Brussels recently, we stressed the need for a quick decision should this happy situation arise and we were certainly led to believe that they were well aware of the desirability of the quickest possible response to the application for approval from Her Majesty's Government.

Mr. King : I know the interest that my hon. Friend has taken in the matter, and I am grateful to him for lending his powerful voice to the pressures which others are trying to apply to the Commission in the hope that we may receive an early response. I hope that he felt that the responses he received were not discouraging. I thank my hon. Friend for what he said about that achievement. Two or three years ago, not many people would have had much hope that Harland and Wolff could conceivably be privatised, yet under nationalisation it could never have had the direct personal involvement and commitment of a major figure within the shipbuilding and shipping industry who can contribute his resources and connections, which, as Mr. John Parker would be the first to say, bring a major additional strength to the new consortium.

Mr. Ken Maginnis (Fermanagh and South Tyrone) : Will the Secretary of State accept that, while we are all delighted with the decision that he has announced, much work needs to be done especially in Belfast, by the Northern Ireland Office--his team of Ministers and himself--in the wake of this decision? Will he acknowledge that the uncertainty that the Government have displayed--I do not wish to enter into recriminations--over almost the past year had led to a drop of morale in the yard and instability on the streets of Belfast? In the new spirit we have seen today, will the right hon. Gentleman pursue his decision to its ultimate conclusion as quickly as possible, reassuring not only those in the yard but those who live in Belfast about the Government's intention to create new stability in Northern Ireland? I encourage him to speak to his right hon. Friend the Secretary of State for Defence to ensure that, as soon as possible, the opportunity is accorded to Harland and Wolff to bid for a Ministry of Defence order.

Mr. King : I reject completely the allegation and suggestion of uncertainty. We have been determined to achieve the privatisation of Harland and Wolff--a project that many would have thought quite impossible and without which the yard would have been condemned to certain closure. We have succeeded, but it has not been easy and there have been many problems along the way. Unfortunately, they arose against a background of great

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and intrusive interest in publicity, reporting and comments made by individuals from different sides, which made the task all the more difficult.

We must recognise how difficult that task was. It looks as though it has been successfully accomplished. I am glad that, far from showing uncertainty, we stuck resolutely to the path on which we had embarked, which we believe has been brought to a successful conclusion.

Several Hon. Members rose --

Mr. Speaker : Order. I have called all hon. Members who are directly involved in the statement. I recognise that other hon. Members have an interest, but I ask for brief questions.

Mr. Ian Gow (Eastbourne) : Is my right hon. Friend aware that the tribute he paid to Mr. John Parker and those who work at Harland and Wolff is well deserved? Is he further aware that the confidence that he expressed in them is shared by all Conservative Members? As my right hon. Friend is a party to the heads of agreement, will he do his utmost to convert them into an actual agreement at the earliest possible date?

Mr. King : I know that my hon. Friend's tribute to Mr. Parker and his team and to Mr. Olsen and his colleagues will be much appreciated, and is well deserved. I assure my hon. Friend that I wish this further stage to be brought to a successful conclusion at the earliest possible opportunity so that we can advance, and the question of the yard taking further orders from other sources can be considered. People understand that, if we can carry this proposal through, the intended direction for the yard must become a possibility, given the assets it has. I give an unqualified yes to my hon. Friend's question.

Mr. Bob Clay (Sunderland, North) : I welcome the potential salvation of any shipyard and believe that the skill, ingenuity and determination of Mr. John Parker, far more than the policies of the Government, may save Harland and Wolff. Before the Secretary of State made the statement, did he have discussions with his ministerial colleagues in the Department of Trade and Industry about how he would square the level of support, state aid and writing-off of debt for Harland and Wolff with the pathetic conditions made available to North East Shipbuilders Ltd. before it closed? Will the right hon. Gentleman explain why he is so optimistic that the proposal will be accepted by the European Commission, when we were continually told by the Department of Trade and Industry that much more modest proposals for shipbuilders in Sunderland and other shipbuilders' subsidiaries on the mainland would not be acceptable to it?

Can the Secretary of State explain why, as he has already said today that possibly the greatest reason why Harland and Wolff may survive is that there is now an upturn in the shipbuilding market, his colleagues at the Department of Trade and Industry have been denying that for a long time and have been closing other shipyards? How can the Secretary of State square all this within one Government?

Mr. King : Of course, other Departments are aware of my proposals today. I understand the hon. Gentleman's disappointment about the problems at North East Shipbuilders Limited and we all share that. It was not possible to find a viable future in any of the offers put

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forward. I am sure that the hon. Gentleman is not in the business of seeking to denigrate other yards and employees. The Harland and Wolff yard has assets that NESL, sadly, does not have. Harland and Wolff has the capacity to build the size of ship that NESL cannot build. Harland and Wolff will have the involvement of an outside investor who is well respected within the shipbuilding and shipping industry. I am not sure whether such an investor was available to NESL.

The test that we had to apply was whether the proposal offered a viable prospect for the future of the yard and for the enduring future of shipbuilding. My right hon. Friend the Chancellor of the Duchy of Lancaster had to speak at the Dispatch Box about NESL. Sadly, the Government were not able to see such a long-term, viable future in the proposals put before them then. The proposals I have announced today have such viability.

Mr. Peter Thurnham (Bolton, North-East) : Will my right hon. Friend accept that the only criticism of this excellent decision is that it was not possible to make it many years ago? Even the designer Socialists in the Opposition seem to recognise that people now want the spirit of enterprise, not the old, decayed decadence and dogma of clause 4, which some Opposition Members still seem to want?

Mr. King : I am grateful to my hon. Friend for his comments. He is right. The involvement of Mr. Olsen and his colleagues, together with the contribution of Mr. Parker and the commitment and enthusiasm of the people working at Harland and Wolff, are a combination that could be an exciting prospect.

Mr. Nicholas Brown (Newcastle upon Tyne, East) : The Secretary of State seems confident that Harland and Wolff will be able to compete for Ministry of Defence work. At the time of the AOR1 contract, the Prime Minister and the Secretary of State for Defence gave the House clear assurances about that order and about public subsidy. Can the Secretary of State tell us today that there will still be no element of public subsidy for the AOR1 order, that the vessel is still being built to cost and that it will arrive on time? Can he tell us that that is the basis on which he expects Harland and Wolff to be able to compete for Ministry of Defence work and that the Government have not reneged on the promises given to the House three years ago?

Mr. King : I am surprised that the hon. Gentleman makes that comment as he speaks for a constituency that has been entrusted with the AOR 2, precisely because the undertakings that I gave from the Dispatch Box have been honoured. His comment was pretty churlish and snide.

Mr. Henry Bellingham (Norfolk, North-West) : I also want to congratulate my right hon. Friend and my hon. Friend the Under-Secretary of State for Northern Ireland, the Member for Gosport (Mr. Viggers), on their imagination and skill in putting together the deal. However, can my right hon. Friend say whether there will be any preferential scheme for lower- paid employees to be able to buy shares? It is imperative that as many as possible are brought in as shareholders and owners of the new company.

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Mr. King : I would rather that this matter was put before the employees by Mr. John Parker. He has constructed his proposals and has discussed with senior management, management and employees his ideas for the way in which they could contribute. I would rather leave that to him.

Dr. Norman A. Godman (Greenock and Port Glasgow) : The importance of this yard extends far beyond the Province, and the announcement made this afternoon could have an important bearing on my constituency with regard to the Norwegian connection and the orders for the three new tankers to be built with shipbuilding intervention fund money. May I remind the Secretary of State that when the Norwegian firm Kvaerner Industries acquired Govan shipyard, part of the deal was that it would place orders for new engines with Clark Kincaid of Greenock? Surely the Secretary of State should be advising the new owners of the Ulster yard that shipbuilding intervention fund money must be used to acquire purchases from suppliers within the United Kingdom? He and all hon. Members will surely forgive me when I say that orders for the engines for the three new vessels should be placed with a Scottish firm--namely, Clark Kincaid.

Mr. King : I can understand the hon. Gentleman putting in a bid on the part of his constituents, but he knows very well that Clark Kincaid and Govan shipyard were part of British Shipbuilders, and the arrangement was part of British Shipbuilders' understanding over the transfer of Govan to Kvaerner. Obviously, the continuance and possible expansion of Harland and Wolff, if it is successful in the future, is good news not just in Northern Ireland but in other parts of the United Kingdom. It must be very good news for British Steel if the corporation is competitive, because three Suezmax tankers will take a lot of steel. If the yard had not continued to operate, that steel would not have been bought. That is part of the spin-off effect of the proposals. I am sure that Mr. John Parker and his colleagues will view sympathetically any competitive offers from firms in the hon. Gentleman's constituency, as we would all like as much as possible to be procured in the United Kingdom.

Mr. Dave Nellist (Coventry, South-East) : What guarantees of job security up to and beyond 1992 did the Government get from Mr. Parker, given the Secretary of State's initial remarks about further rationalisation costs? What exactly does that rationalisation entail? Secondly, given about half a billion pounds, worth of debt cancellation and the subsidies announced by the Secretary of State today, why do not the Government put money into Harland and Wolff to allow the company to flourish and prosper in public ownership, instead of putting money in to allow private shareholders such as Mr. Olsen to reap the benefits?

Mr. King : The hon. Gentleman's economic brilliance seems to have deserted him for once. If there are accumulated debts, there is no money to put in ; that money has already been lost over the years. It is a question not of putting new money in but of writing off money that has already been lost.

Column 1101

British Nationality (Honorary Citizenship)

4.16 pm

Mr. David Amess (Basildon) : I beg to move,

That leave be given to bring in a Bill to provide for the award of honorary British Nationality to any individual for outstanding humanitarian services in Hungary during the period July 1944 to January 1945.

At the outset, let me say that the intention of the Bill is that honorary British citizenship should be awarded to Raoul Wallenberg. Early-day motion 234 encapsulates the spirit of the Bill, and I am grateful to those hon. Members on both sides of the House who have signed it, thus showing their support for the measure.

I wish to record my thanks to those who have assisted me in preparing the Bill. They include United States Congressmen Ted Weiss and Tom Lantos, Mrs. Rachel Haspel of the Raoul Wallenberg Committee of the United States, the Jubilee Campaign, Miss Louise Smith and Mr. Paul Lennon.

I shall first address the work of Raoul Wallenberg in Budapest in those incredible closing months of world war 2 ; then I shall explain why I think that honorary British citizenship should be awarded. More than 100,000 men, women and children undoubtedly owe their lives to Raoul Wallenberg. Although the great majority of them were Jewish, the record shows that Catholics in Budapest were also persecuted and that Wallenberg protected them. Raoul, who has rightly been called "the righteous gentile" did not stop to inquire about religion ; he saved all he could, regardless of faith.

When Wallenberg arrived in Budapest on 9 July 1944, newly appointed to the Swedish legation, he immediately went into action. He arrived dressed in a windbreaker, carrying a rucksack, a sleeping bag and a revolver. The latter, he said, was merely to give him courage ; he never used it. He immediately began to issue certificates for the Jewish people who already had visas for Sweden. He invented, on the spot, a procedure that was subsequently the saviour of thousands of people--the Schutpass or protective passport. That consisted of an official-looking document with the Swedish colours, the Swedish coat of arms and the ambassador's signature--all the formality necessary to impress the Germans.

Wallenberg negotiated with the Germans for permission to distribute 5,000 of those passports. Instead he printed and distributed thousands more than the original limit. He rented houses, protected them under the flag of Sweden, and sheltered as many persons as he could. Those houses held about 20,000 people. Wallenberg encouraged other embassies to follow that example, bringing the number rescued in that way to 50,000 people.

Wallenberg was untiring and relentless in his efforts, repeatedly risking his own life. The Germans made several attempts to kill him. He knew the danger, but he would not withdraw. He had authority, diplomatic status and undaunted courage, and he intimidated the Nazis by his mere appearance.

Almost daily, Wallenberg went to the railway stations in Budapest where Jewish people were on their way to Auschwitz in cattle cars with the doors nailed shut. He commanded the doors to be opened as he looked for people with Swedish passports. He would take people who had a driver's licence, a library card, a receipt or any piece of paper written in Hungarian, which the Nazis could not

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