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start dual training already have qualifications higher than our present A-levels. It is therefore ridiculous to suggest that the German qualification is downgraded. It is a high-status qualification and one which we should seek to emulate.Mr. Thurnham : The hon. Gentleman's whole diatribe is centred on how much better other countries are than our own. I do not believe that it is all a one-way business. Obviously we can learn from others in the world, but the Engineering Employers Federation states that engineer training in this country is better than in Germany.
Mr. Lloyd : The hon. Gentleman refers to my diatribe, but it is a diatribe of fact. If he will say which of the facts that I stated he considers inaccurate, I shall be happy to debate the matter with him. The hon. Gentleman says that the Engineering Employers Federation states that the training given in Britain is better than that in Germany. I will not enter into an argument about whether British training is better, although I will return to that theme later. It is certain, however, that the Germans are training many more--that a much larger number of young people in Germany are studying for a higher qualification. Even if the hon. Gentleman is right to say British training is better, such small numbers are involved, at such a specialised level, that it is a little dangerous and self-deluding to have the idea that we are competing with the Germans. The hon. Gentleman should view with concern the figures that I gave.
Britain is found lacking in the whole area of industrial training. There has been a large cut, of about 45 per cent., in the money provided by training and enterprise councils since 1988. On previous occasions, I have expressed severe doubts about the quality of training provided by the TEC system. I believe that Conservative Members at least share my view that those who pass through our academic and vocational systems must be of the highest quality. I share the view of the hon. Member for Bolton, North-East (Mr. Thurnham) that Britain should produce the best engineers and technicians in the world. If we are to do that, however, we must begin to establish some basic facts.
One of those facts is that this country does not invest enough in training and education for our young people--both generally, and in manufacturing and engineering specifically. An anti-manufacturing culture has existed here for some years, and the position was not helped by Lord Lawson when he was Chancellor of the Exchequer. As Conservative Members will recall, for many years he told the House that manufacturing was concerned with the smokestack industries ; the future, he said, was in services.
The future can never be in services in that glib sense. Services have an important role, and no one wishes to knock that role ; but it is a matter of statistical fact that, for every 1 per cent. of manufacturing exports that we lose, we would have to increase exports of services by 3 per cent. We still depend very much on manufacturing, but there is real doubt about whether our manufacturing base is large enough to sustain the size of our economy. We must rectify that : we must begin to train, and we must give a commitment that the funds will be there to make the training available. Those funds must come both from central Government and from the private sector. It is instructive to note that when Labour spoke at the last general election of the need for a training levy, it was
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in touch not only with the views of Jacques Delors--who introduced a similar system in France some 20 years ago : that system works, albeit at a much higher level than we propose--but with those of Sir Brian Wolfson, chairman of the national training task force. He recently called on the Cabinet to abandon its philosophy of "voluntarism", and to introduce a compulsory levy on company payrolls to ensure that money was spent on training. Sir Brian's comments echoed some recent remarks by Sir Richard Layard at the Economic and Social Research Council : Sir Richard said that Britain would continue to provide a vast army of "lumpenproletarians" unless the state invested more in training.We need a commitment that the Government have not been prepared to give in the past. Time after time, without that driving force and without a levy, the private sector will regard investment in training as a negotiable cost which can be cut in a period of recession. Earlier this year, the Department of Employment's own survey of training made it clear that the private sector had cut its investment for that reason.
We need to overhaul our attitude to manufacturing and, in particular, to engineering. We need to develop a culture that views manufacturing and engineering as a strong and significant element, and which appreciates that people with an engineering background, such as the hon. Member for Castle Point, have something real to say to the House and the country. We must turn away from the outdated view that accountants and lawyers should run our industry ; we must develop the manufacturing culture, and invest in it. Sadly, however, there are no signs as yet that the Government intend to do that. 12.27 am
The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton) : With the leave of the House, Mr. Deputy Speaker.
I congratulate my hon. Friend the Member for Norwich, North (Mr. Thompson) on his initiative in giving us the opportunity to debate this important subject. I regret that I cannot claim to be an engineer myself, although my father was one ; I am a humble lawyer, and my only connection with the world of nuts and bolts has been the occasional throwing of a spanner into the works over the years. The importance of engineers and engineering in industry is, however, undoubted : many hon. Members have made plain their support for that proposition tonight. Engineers, of course, have a profound effect on the economy, wealth creation and everyday life. Although we are most conscious of their contribution to the engineering industry, they also make a major contribution to all aspects of business life. Their skills and training are necessary ingredients in management and the successful operation of modern companies, stretching well beyond what we recognise as the engineering sector.
The engineering sector is of major importance to the United Kingdom, and the annual sales of the United Kingdom engineering industry are estimated at more than £100 billion, with more than £50 billion-worth of exports in 1991. The engineering industry's output accounts for 42 per cent. of our manufacturers' gross domestic product. The sector employs some 2 million people, and we depend
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on the skills and ingenuity of our engineers, often without even realising it. It is too easy to undervalue their important contribution to almost every walk of life.People with the right blend of skills are vital to our industry, and if our industry is to benefit most from recovery, we must fully develop and train our engineers and technologists. Our engineers need to be of the highest quality. They must be innovative and highly motivated. Our industry must have access to the latest engineering technology and must make the best possible use of it.
The message must go wider than our engineering industry, however. If our engineers are to play their full part in underpinning long-term growth, our financial institutions need to understand engineering and make good use of their talents. We must examine and learn from the best engineering practice around the world. Unless all sectors of industry and commerce use engineering skills to the full, our potential for wealth creation will suffer and our bright ideas will be left on the shelf or, worse still, will be exploited by others.
If we are to strengthen our productive performance, we need to break out of the damaging and outdated thinking about practical work. For too long, our culture has undermined practical work--even in the case of a discipline as vital and intellectually demanding as engineering. The solution to that problem lies in a partnership between education, the engineering professional institutions, employers and Government.
Stepping outside my departmental responsibilities to an area which is immensely important to trade and wealth creation, the training of our engineers must start as early as possible and it must continue, through full-time education and training, in a lifetime's process of learning. I mention first the initiatives that the Government have taken in schools, where the development begins. By 1995, all pupils aged 16--girls as well as boys--will have followed the national curriculum throughout their secondary education. They will thus all have studied technology. Similarly, all those who reach 16 in 1994 will have studied science. Gone are the bad old days when pupils could drop such subjects by their own choice or perhaps at parental whim. That remarkable change should boost the long-term take-up of engineering as a subject and a career.
We are always seeking ways to improve, however. The Department of Education is currently undertaking a review of technology, and that should improve further the preparation for continuing studies in engineering and other disciplines. In addition, the technology schools initiative encourages schools to provide specialised supplementary courses with vocational relevance. Such courses are designed to allow pupils with particular aptitude for technology to build on the subjects covered in the national curriculum. The role of vocational qualifications has not been neglected. In the past, there has been great confusion about the types and levels of vocational qualifications. It has been a veritable jungle. We are cutting through that jungle with a new system of national vocational qualifications. The NVQs fit into a comprehensive framework. They are based on national standards, which define the skills, knowledge and understanding that employers need, and the employers are closely involved in
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their development. The options for gaining NVQs are varied : they can be obtained at school, in sixth form and further education colleges and by study at work. NVQs are made up of units which can be added together and which allow individuals to become qualified at their own pace.Many NVQs are already available in science and technology subjects--for example, power station operation, pharmaceutical processing and aircraft maintenance. The Government strongly support the national education and training targets, which include critical goals for NVQs both for those in education and for those in work. For example, one aim is that 50 per cent. of young people should reach NVQ level 3 by the year 2000. That work is crucial to the United Kingdom's ability to compete with the best in the world.
For 16 to 19-year-olds, there remains the traditional route into university by means of A-levels. We have also introduced the general national vocational qualification, which should provide a further route into universities, whether of the old or of the new variety. We want universities to encourage the use of GNVQs as an entry method. That will provide greater opportunities for students to obtain a broader, vocationally relevant qualification. GNVQs will provide some general direction to students' career paths, which may well be in technology, but will not close off paths prematurely.
The further education sector also received a boost in the half billion pound increase in education funding announced in the autumn statement. That extra support will increase dramatically--by about 250,000--the number of students in further education. We expect within two years to have more than 1 million people studying in further education. That will provide many more young people with the technical skills that industry needs. It will also help to lift us to the top of the international league table for 16 to 19- year-olds staying on in education over the next three years.
In higher education we have already acted to ensure that there is no shortage of engineering places. There have been two specific initiatives-- the engineering technology programme and the manufacturing systems engineering initiative. The latter initiative, for example, has brought together traditional engineering knowledge and skills with the use of management systems. It has been a success, and courses have been enrolled above their targets. That initiative has been carefully evaluated and a report will be available shortly. Industry and commerce need senior people who have engineering knowledge and experience--people who look wider than the figures on the balance sheet, people who will look beyond the short term, and people who understand the processes of product design and manufacture. Engineers have the potential to climb the ladder to the top of companies. They understand the technology and its capabilities, but engineers need to be able to participate in all business activities, including management, and our university degree courses must offer that integrated style of education. Some universities already do so ; others must follow.
Although the number of student places has been increased, the demand has not been so high as we would have liked. However, it is pleasing to note that applications to 1992 engineering and technology degree courses were up on those for 1991. We must all work to ensure that that demand continues to grow.
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Universities must play a part in attracting and retaining young people. Science and technology education must be made an attractive option. We already have some of the most outstanding science and engineering courses in the world, but all our universities must seek to attain that same high standard if they are to attract the best students in the numbers that industry needs. It is not for the Government, of course, to tell young people which courses to take. The Government have a role, but schools, teachers, career advisers, parents and society generally all have their parts to play. Engineering must be seen as a worthwhile career option which leads to stimulating and rewarding job opportunities. In the United Kingdom, that requires a culture change. In Germany and Japan, the engineer is highly valued, and we must do the same if the United Kingdom is to prosper.There is, of course, a key role for employers to show that engineering and technology skills lead to rewarding and satisfying careers for young men and women. They must transmit the right signals about engineers to the whole of society. Unfortunately, recent evidence suggests that the manufacturing sector still has a poor image among final year undergraduate engineers, and the most commercially minded of them intend to leave engineering. That clearly brings into question that sector's ability to recruit the high-calibre engineers whom it needs.
Most of all, we need a commitment from companies to increase job quality for young engineers and provide early opportunities for them to take responsibility. I understand the constraints, particularly in a recession, but there is also the need for employers to provide and maintain competitive pay and to give it full publicity as a factor in image building. There is evidence that more employers are recognising that. The pay of new graduate engineers has risen over the past few years, but that remains an important element in increasing the professional status and the social standing of engineers. Knowledge and skills are at a premium in today's economies. In the United Kingdom, we have made large investments in the scientific and technological research and skills in our universities. The research and skills are first rate and acknowledged as such by the world's science and engineering communities. They are a national asset which should be developed and used. There is a clear need for a constructive partnership between our educational institutions and industry and commerce. That partnership should be a two-way street. Industry can make enormous gains by exploiting the technology and expertise that our research has produced. At the same time, British industry and commerce must play their part in assisting our higher education institutions to become as industry-oriented as possible. The Department of Trade and Industry supports a number of schemes which serve to foster links between the academic world and industry at different levels. Those schemes include Link, which encourages collaborative research, equipment schemes which help colleges to re-equip their laboratories with up-to-date technology, and expansion of the Shell technology enterprise programme which places second- year undergraduates in companies for eight weeks. A number of our schemes encourage the exchange of people--they are the best vehicles for transferring technology--so that companies can exploit the wealth of knowledge and technology in our science and engineering base.
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I will give one example to demonstrate that point. The highly successful teaching company scheme is widely recognised as an effective vehicle for providing bright young graduates with practical industry-oriented training. It does that by placing them in companies, of which more than 60 per cent. are small and medium-sized enterprises, to perform strategic technology projects. They work under the supervision of industrialists and academics. The teaching company scheme also serves to transfer technology from our universities into industry and begins the process of establishing long-lasting links between companies and higher education institutions. The teaching companies scheme is sponsored jointly by the DTI and the Science and Engineering Research Council, along with a number of other participants. It has a budget of about £14 million this year with more than 450 live programmes.We should note the important contribution of the engineering profession. More than 40 professional institutions represent professional engineers of different disciplines. I am delighted to say that my right hon. Friends the President of the Board of Trade and the Minister for Industry will meet the presidents of four of those institutions in January. My right hon. Friends are looking forward to hearing, at first hand, their views on some of the central issues for engineering. I also know that the Royal Academy of Engineering works hard to promote engineering and to raise its status. It was highly appropriate that the President of the Board of Trade spoke at the recent dinner celebrating the academy's change of name. He warmly congratulated it on being granted permission to show its royal patronage in its title. That is surely a sign that our culture is beginning to value its engineers.
It has long been recognised that fragmentation does not serve the profession well. The barriers between the engineering disciplines, as practised in industry, are beginning to break down. A more unified approach to the engineering profession would therefore seem sensible. It is for that reason that I warmly welcome the recent initiative by Sir John Fairclough in conjunction with the Council of Presidents. They are considering how the profession could be organised so as to focus more sharply on the big issues that it faces. The DTI is providing half the cost of a secondee to assist in the work and I look forward eagerly to the results of their consultations and discussions when they appear next year.
In that context, we should not forget the work of the Engineering Council. One of its objectives is
"to promote the status and practice of engineering with a view to improving competitiveness."
The Government supported its establishment with initial pump priming of almost £3 million in three years as grant in aid. The council has a range of continuing activities. It maintains and develops the register of 290,000 chartered engineers, incorporated engineers and engineering technicians. It operates through education and training initiatives to ensure that industry's needs are met. It also runs schemes, seminars and conferences to promote the career image of the profession.
The DTI has provided specific financial assistance for some of that important work--for example, the neighbourhood engineers scheme. That scheme aims to secure closer links between practising engineers and secondary schools, to assist with project work in the curriculum and to foster the understanding of the role of
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engineers by schoolchildren, their parents and teachers. It currently involves more than 7,500 engineers in nearly 2,000 schools.It is also important to note one other initiative that the Engineering Council runs--Women Into Science and Engineering, which was launched in 1984. The intention is to help--
In accordance with Mr. Speaker's ruling --[ Official Report, 31 January 1983 ; Vol. 36, c. 19]-- the debate was concluded.
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Cammell Laird Shipbuilders
12.42 am
Ms. Angela Eagle (Wallasey) : The future of Cammell Laird has been in the news recently because of the announcement two weeks ago by its current owners, Vickers Shipbuilders and Engineering Ltd., that it had effectively given up the ghost. It said that it would no longer seek orders once the current order book runs out in June next year. The Cammell Laird yard, which is an important and historic yard in my part of the world, the Wirral, will finally close its doors after 160 years. That time has been marked by the yard's and its employees' record of vital service and achievement in the interests of the country.
When we consider what the future of that yard might be, we appreciate its central achievements. It has led the way in shipbuilding, and was a byword for innovation. In its time, the Cammell Laird yard has been at the forefront of shipbuilding techniques--it was on the cusp of their evolution. It was at the forefront of the switch from wooden ships to iron ones, from sails to steam, from riveting to welding. It is also noticeable that its history has been marked by a regular mix of merchant and military shipbuilding. Its exclusive concentration on military building may have led to its current difficulties, to which I shall refer later. When it was founded in 1824, the shipyard was based in my constituency, but in 1858 it moved to its current site in the constituency of my hon. Friend the Member for Birkenhead (Mr. Field).
Mr. Frank Field (Birkenhead) : I think that I am right in saying that my hon. Friend's constituency did not exist then.
Ms. Eagle : I always believe in progress. I am happy that that progress was made, because it is probably why I am here today. In the second world war, the yard built 106 fighting ships--one for every 20 days of the war. Such service must not be thrown away lightly. At its peak, the work force totalled 12,000, but 1992 was the first year this century when it fell below 2,000. Indeed, the only other time when the work force dropped below 2,000 was in 1931, at the height of the great depression. The next few months will be vital to the yard.
In 1977, the shipyard was nationalised as part of British Shipbuilders and the decision was made to concentrate more on military contracts. That concentration may have caused its present difficulties. Its magnificent covered construction yard, which is still one of the finest in the world, was built the year after. When the yard was denationalised in 1985, it was bought for only £1, and the value placed on it by VSEL still rankles in the local area. There were two problems with the settlement. The first was that, as it was designated exclusively as a warship yard, it did not have access to the intervention fund. Although some may disagree about its current predicament, no one would argue that that lack of access has been a major problem. Secondly, because of its designation as a warship yard, it has been badly affected by the unforeseen but welcome developments summed up in "Options for Change" in the post-cold-war world.
It can be argued that VSEL had a fundamental conflict of interest when it took over the yard, because, naturally,
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it wanted to preserve its yard at Barrow, and it has always been suspected that it had a vested interest in not exerting itself too much to save shipbuilding on the Mersey. That is still a problem. I believe that the closure announcement gives the yard a window of opportunity to get away from that deadly embrace and to try to make its future elsewhere. The closure announcement was a pretty stark example of the company giving up the ghost and signalling to all that it would no longer try to get work after next June.In a debate only last week, I spoke in detail about the economic effects of the closure on the local area. I described them as devastating, which they are. During the 1980s, the Wirral area lost 15 per cent. of its manufacturing employment. One of the greatest declines in the standard industrial classifications during that era was the 22 per cent. decline in the shipbuilding, engineering and vehicle sector, and that had a bad effect on the yard.
The closure would not only lead directly to the loss of 1,000 jobs ; the local council estimates that it would lead indirectly to a further loss of up to 6,000 jobs, threatening 600 local suppliers. Lairds had always supported the local area and bought its materials locally. It is estimated that the closure could withdraw up to £30 million in spending power from the local economy, and could lead overnight to a 2 per cent. increase in the local unemployment rate. In my constituency of Wallasey, the unemployment rates are well above the national average--18 per cent. male unemployment and 7 per cent. female unemployment, making an overall rate of about 14 per cent. We must also realise that the loss of full-time jobs for men, which are either not replaced or are replaced by low-paid part-time work which usually goes to women, has a profound effect on the social fabric of the area. We must take account of that.
It has been estimated that the closure of the yard will cost the public purse £111.1 million in the first year. Moreover, the costs would continue. To support that level of unemployment, there would be more social security payments, lost production and capacity, and lost tax revenues. I repeat that the economic effects of the closure do not bear thinking about. It would be the economics of the madhouse to proceed with it. We must look for a way round it, and do what we can to save that vital local manufacturing and employment base. The way in which the closure was arranged is interesting, and may reveal some of the other motives for VSEL's behaviour. We must note that VSEL's most recent six-month profits have increased by more than £3.5 million this year compared with those for 1991. That makes one wonder exactly what is going on in the firm.
The company envisages the destruction of the yard and its shipbuilding facilities within two years. With the help of outside consultants St. Quintin, it has produced a plan for the future--a plan in which I am afraid I have little confidence. It not only suggests the destruction of the Lairds yard within two years, but says that, after the yard closes next June, there will be minimum security. To suggest that such a facility need not be guarded properly makes a mockery of the idea that the option for the yard to reopen within two years is being retained. In such a dockland area, lack of security would quickly lead to a flourishing black market and the illegal destruction and
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vandalism of the remaining facilities. The idea of minimum security is an important clue to the real motives behind VSEL's plans. VSEL plans to destroy the production shops immediately. As the St. Quintin report says, that would be done to reduce the rateable liability. That could be good for VSEL--but what is good for VSEL is not necessarily good for the local community, or for the country. I believe that the company is planning to asset-strip the yard, and at the same time to destroy a potential competitor. VSEL does not want the yard to pass out of its hands and to be able to bid against it for scarce work. We must take account of VSEL's possible vested interest in the matter and prevent it from fulfilling its plan. The St. Quintin's report says that the future for the site is not for it to continue to build ships, which is what it is clearly good at, and which is what its facilities and its work force can do ; but that there should be an effort once more to develop office blocks, light industry and retail on the site, with some housing. Yet the property market in the area is appalling. The St. Quintin's report admits :"A £100 million redevelopment of the waterfront on the Wirral including a mix of industrial, commercial and leisure facilities, has been postponed indefinitely. It is proving difficult to find tenants for new or existing developments."
I do not know what St. Quintin's was paid for producing the report. I think that it is money for old rope. I could probably have done a better job on the back of an envelope. The report then goes on to suggest that the derelict site and the destroyed site of the shipbuilding yard could be used to build a new retail park and extra houses. There is lack of credibility in the plan. It is nonsense. The local community, in welcome co-operation not only with all Wirral Members of Parliament, but with local political leaders, with the shop stewards and with the Confederation of Shipbuilding and Engineering Unions, have got together since the announcement and have come up with a plan for which there is all-party support. The principle behind the plan is that shipbuilding must be preserved on Merseyside. I shall explain in a moment why I think that the plan is viable.
We want the yard to be returned to the local community for the £1 that VSEL paid for it when it took over in 1985. It has essentially given up trying to provide a secure future for the yard. There is all-party support on the Wirral and on Merseyside for the idea that the yard has a viable future. We want to be given the right to try to search out that future to safeguard our skills in our work force and to help the country to preserve valuable engineering skills which have served it so well in the past. We also want VSEL to provide an endowment fund to help us to get the development under way. I should like the Minister's response on the next point. We want the Government to help us to get the yard back. The Government still have a golden share, with which they might be able to put some pressure on to VSEL. Even more importantly, the Government are effectively VSEL's sole customer. I should like a pledge from the Government, tonight if possible, that they will support us in our chosen route. We want to vest the ownership of the yard in a local community trust which would be accountable via the local authority, perhaps involving the Merseyside development corporation and other bodies, so that we could try to assure the yard's future. I also want some idea from the Government of what would be the possibility of ending the yard's warship yard
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status if, for example, it pledged not to go for defence contracts. As I shall explain, there are new market opportunities that VSEL has failed to exploit because of the warship yard status which has prevented it from having access to intervention funding and from bidding for other work.The view in the international shipping market is that the prospects for recovery are excellent. The British Chamber of Shipping recently said that the average age of the British merchant fleet has now lengthened to 13 years. That exceeds the world average of 10 years. Clearly, there is a lot of potential refit work which will become available in the next few years. Three quarters of the world's tanker fleet is now more than 10 years old. The normal life span of those huge vessels is commonly thought to be about 20 years. Lairds missed out on building them originally when it went down the defence line and built Polaris. Perhaps the company should now have the opportunity to refit some of that work.
We have also seen a rise in the world merchant fleet capacity over the past four years of quite startling proportions. That capacity has risen by 10 million tonnes a year every year since 1988, according to Lloyd's Register of Shipping. It is thought likely that those trends will continue, and that foreign shipbuilders see a very buoyant market ahead of them for the next few years--so much so, that Japanese and South Korean yards are now building speculatively, seeing what they can sell on the market once they have built it. We believe that there are good growth possibilities.
If we consider what is happening on the Mersey, we see signs of a potentially useful and viable future for the yard. Merchant and refitting business is coming on stream in the world market to which the Cammell Laird yard could have access if its warship status was removed. In addition, a new freeport has been opened. The St. Quintin report had the gall to say :
"Work has recently been completed to the new Freeport to the south of the docks which will increase the amount of shipping in Birkenhead."
The report states that it will certainly increase the amount of shipping on the Mersey. However, it does not attempt to analyse the possible beneficial effects of that for a company with three dry docks and the best refitting and repair facilities in the world. Instead, the report comes up with a mad, crackpot idea for retail development.
If there are more ships on the Mersey as a result of the success of the freeport, that provides Cammell Laird with another market opportunity that it would be in a good position to exploit. Moreover, there continue to be offshore opportunities through the oil and gas developments in Liverpool and Morecambe bay, and in connection with the Hamilton oil development at Point of Ayr. If there is a beneficial result from the public inquiry due early next year on that development, it is highly likely that Cammell Laird would be in an excellent position to bid for that work, which would help to secure its future.
We have world-class facilities ; some of the best shipbuilding facilities in the world ; the best history of quality and activity of any shipyard ; and a world-class work force. Cammell Laird deserves a proper chance with an owner committed to its survival, not one that is playing market games.
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1.2 amMr. Frank Field (Birkenhead) : While it gives me no pleasure to participate in the debate as we are debating what VSEL intends to do--to destroy Cammell Laird, if it get its way--it nevertheless gives me pleasure to follow my hon. Friend the Member for Wallasey (Ms. Eagle). When I was elected in 1979, I became part of a team of Wirral Members who supported Cammell Laird and other local interests. We did that across parties. As a result of the election of my hon. Friend the Member for Wallasey, there are now five Members of Parliament who have a key interest in the yard, as my hon. Friend's predecessor is a Minister in another place and takes a proper interest from there. In the first part of my speech I want to comment on the background to the lobbying that Wirral Members have carried out successfully in the past for Cammell Laird. I do that not for the sake of drawing attention to us, but because it is now noticeable that VSEL has no friends in the House who will defend its actions. It is important that VSEL should take note of what Wirral Members have done for Cammell Laird and VSEL, and of how determined we are to ensure that the company does not get away with destroying what my hon. Friend the Member for Wallasey has described as a most important asset for Merseyside and a valuable asset for the country.
The starting point is the Department of Trade and Industry. I welcome the Under-Secretary of State for Corporate Affairs as I know that his attitude is now different from that held by the DTI in the early days of the Thatcher Government. At that time hon. Members were faced with a real fear that the unspoken agenda of the Department of Trade and Industry was to close our yard and other yards on the basis that there were too many shipyards in the United Kingdom. I pick up the story when we were attempting to secure vital frigate orders for the yard. I know that all the Wirral Members, as proper lobbyists, listened to what was said in the yard and in the House. We tried to find out how the contracts were fixed against us. It occurred to us late one night when a Labour Member came out of one of the House bars, got me against the wall, thumped me with a big, fat finger and said that our tender had won both frigates. The crucial information that that gave us was that we knew, from our trips into Cammell Laird, that we would have to submit two tenders for both boats. The Department of Trade and Industry had ensured that we would submit figures which could in no way compete with the figures from Swan Hunter.
I hope that the Secretary of State for Wales will not mind my drawing attention to his position. I gave him that piece of information, and he relayed it to the then Secretary of State for Defence, now President of the Board of Trade, the right hon. Member for Henley (Mr. Heseltine). One of the myths in our area is that the right hon. Gentleman is a friend of Merseyside and Cammell Laird because he gave us special treatment over the order for the frigates. He is indeed a friend of Merseyside, but not because he gave us special treatment that night. His friendship was in ensuring that the information that the yard supplied to him about our tender, as opposed to tenders, would be part of the discussion at the Cabinet table. As a result of that intervention, we gained a crucial order.
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The next important part of our lobbying activities related to privatisation. If it had been left to Vickers Shipbuilding and Engineering Ltd., the yard would have been won by Trafalgar House. As Wirral Members, our job was to ask the then Minister at the Department of Trade and Industry, Sir Peter Morrison, each day whether the Department had a view about the favoured candidate for privatisation. Would it be the in-house VSEL bid or Trafalgar House? Every day, Peter Morrison was asked that question. However, one Thursday evening at the 7 o'clock vote, he was not anxious to talk to Wirral Members, and we realised that a decision had been made. He told us that the decision had been made. It was against VSEL, and favoured Trafalgar House buying the yard.The Wirral Members then worked to ensure that the decision was overturned when the Economic Sub-Committee of the Cabinet met the next morning. The decision was overturned. I believe that Mr. Tebbit and Mrs. Thatcher, as they then were, were the only two people who supported the original proposal from the DTI.
This is a crucial juncture of our story, because Wirral Members were fearful about their long-term future with VSEL. We believed that we had a short-term future with VSEL, whereas there would be no future whatever with Trafalgar House. Therefore, it was important for the VSEL consortium to win, although that posed a danger to us in the long term.
Since that day, the Wirral Members have sought a way of obtaining a peaceful and honourable divorce from VSEL. Late in the day, as my hon. Friend the Member for Wallasey said, VSEL has offered that opportunity by announcing just before Christmas in rather grand style that 900 men and women were to be made redundant. Some will be made redundant before Christmas and some after. It is important to register that they are not just any men and women, although it would be important if they were : those men and women are the work force of Cammell Laird who at one stage had to fight their way through the rent-a-mob which was brought in to prevent them from reclaiming their yard.
We are therefore talking about people who are not only highly skilled but unbelievably brave, not merely in talking but in their actions in ensuring that the yard should survive. I hope that the Minister will therefore register that it is not in the Government's interest to stand idly by and let VSEL butcher the labour force in a way in which it was not butchered when the rent-a-mob was put outside the yard to destroy it.
When we are thinking about VSEL's role and the role that Wirral Members may have to play in the next six months if we do not get the separation that we require, it is also important to consider the record of Cammell Laird under VSEL's ownership. There are two parts to it. First, it must be registered that we were successful in bidding for an order for three conventional submarines. Secondly, it is also important to register that almost no yard other than Cammell Laird or VSEL could have undertaken the work. So we were not up against much competition. From that order, our attempts to win frigate orders have been thwarted by VSEL.
We know from the information that we have had from Cammell Laird that the bid that we have put together to win the orders from the Government would have to go up to Barrow. Barrow would put the VSEL levy on to our tender. My hon. Friend the Member for Wallasey called it the "deadly embrace". The effect of the embrace was that
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we could not win those orders. I have been as puzzled as other Wirral Members about why VSEL adopted that approach and what its long-term strategy was for its own future.I have made those comments because it is important to register the efforts and lengths to which Wirral Members have gone to secure the future of Cammell Laird. When VSEL comes to weigh up its future it should think carefully whether it wishes to make public enemies of the four Wirral Members and the former Minister who sits in the Lords, as well as the Members of Parliament from surrounding constituencies from the other end of the Wirral or the other side of the river. It will not be a nice time for VSEL, particularly as it appears that it has reached the point of throwing in the towel in relation not only to Cammell Laird but possibly to its own future. It is possible that VSEL is waiting for some sugar daddy to come along in the form of a takeover bid to give it the diversification that it failed to acquire. If that is VSEL's strategy, it is important for it to have a quiet time while it conducts those negotiations. Wirral Members of Parliament, privately in our lobbying or publicly at every opportunity that we have in the House, will draw attention to the behaviour of VSEL. This is the third opportunity that we have been granted publicly to debate VSEL's conduct since the announcement 10 days ago, and it is merely a foretaste of what will occur after Christmas.
My other point is whether the decision is in the interest of VSEL. If it is in VSEL's interest, is it in the country's interest? If it is not in the country's interest, should not the Government say that that is the unacceptable face of VSEL and that they do not intend to allow it to continue with its proposed line of action? The Secretary of State for Wales will be aware that at several of our meetings with VSEL we have said that we believe that there has always been a conflict of interests between what it sees as its need for survival at Barrow and our needs for survival at Cammell Laird. Had there been a number of Barrow seats rather than one, and had we represented them, we would have taken a different position, but we do not represent Barrow or VSEL--we have another task. We do not accuse VSEL of behaving immorally : it has made a calculated decision about its best interests. Our duty is to question whether that is in the best interests of Cammell Laird and of the manufacturing base. My hon. Friend the Member for Wallasey has already said that we want to pose some questions for the Government. I know perfectly well that they will meet our demands in so far as they can. From 14 years of lobbying, I also know that issuing checklists is not always the most successful way to get the Government to move. As Wirral Members, we all know that, shortly after Christmas, our job will be to present a future for Cammell Laird that is attractive to the Government and will make them realise that our proposals for our single yard are interesting to them, as they begin a new phase of developing policies to abate the rising tide of unemployment and to protect the manufacturing base. The more successful we can be in setting Laird's interests in the national scene, the more successful we shall be in protecting its interests and its future.
I end on the note on which I have ended every debate on the subject since the atrocious announcement by VSEL a short time ago that it intended to butcher the brave men and women who work at Cammell Laird. We shall not let its decision pass without one God-almighty fight. Indeed,
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if need be, by the end of our campaign we shall have so moved the debate that VSEL will decide that it is in its interests to have a quiet life from the four Wirral Members of Parliament, and our additional member in the Lords, and from surrounding Members in the Wirral, Cheshire and Liverpool, who have given us active support. 1.17 amMr. Robert N. Wareing (Liverpool, West Derby) : I congratulate my hon. Friend the Member for Wallasey (Ms. Eagle) on her choice of subject, because it is certainly vital to the people of the Wirral and to the Merseyside economy.
I am pleased to hear that my hon. Friend the Member for Birkenhead (Mr. Field) has been able to co-operate with Members across the party divide, but he has been lucky in the Wirral's choice of Tory Members of Parliament, because there is not a single out-and-out Thatcherite among them. Baroness Chalker and the Secretary of State for Wales do not come into that category, even though they were willing to be dragged along for a time. They have a chance to change people's attitude to the Tory Government, and although people on Merseyside will not necessarily vote for them, they may change the atmosphere nevertheless.
My hon. Friend the Member for Birkenhead mentioned the friendliness to Merseyside shown by the President of the Board of Trade. Suspicions against the Tory Government on Merseyside are very old, because people recall that, in 1981, after visiting Toxteth, the President, who was then Secretary of State for the Environment with responsibility for Merseyside, prepared a report called"It Took a Riot". It was prepared after someone in Toxteth told him that it had taken a riot to get him there.
In Locket's restaurant, just along the way, the noble Lord Howe, then the Chancellor of the Exchequer, worked against the right hon. Member for Henley and managed to get the Government to oppose any real efforts for Merseyside. Indeed, Lord Howe has been quoted as saying that to put money into Merseyside was to throw good money after bad. I hope that that is not the attitude of present Cabinet Members.
The closure of the Cammell Laird shipbuilding yard would amount to an economic and social catastrophe in an area--the Wirral--where one in eight people are now out of a job. The problem extends beyond the Wirral, because some of my constituents work or have worked in Cammell Laird, and all of us who were brought up on Merseyside remember from our earliest childhood looking across the River Mersey from Liverpool, and those cranes were part of the scene. I see that the Minister for Transport in London well remembers that. We do not want an end to that image, which testifies to the industrial skill and activity of the people of Merseyside.
The yard has modern facilities. I believe that it has the largest dry dock in Britain, which can contain the largest of vessels. Indeed, the largest passenger liner to be built in this country since the second world war, the Windsor Castle, was constructed at Cammell Laird.
The Government have made no real effort to ensure that there is a move towards defence diversification following the end of the cold war. I agree with my hon. Friend the Member for Wallasey that Cammell Laird's
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present commitment as a defence contractor is preventing European Community fifth directive aid from being steered in the yard's direction. That dependence on warship development should end. My hon. Friend referred to the development of Morecambe bay and Liverpool bay for offshore gas or oil in the future. The yard has constructed offshore rigs and platforms, and those skills would be used in its future development.The idea that this country should let shipbuilding continue to decline must be pushed aside. It is interesting to note that, at the beginning of this century, when Cammell Laird was at its height, 50 per cent. of the ships produced in the world were produced in Great Britain. By 1950, that figure had declined to 40 per cent., and by 1989, Britain was producing less than 1 per cent. of the world tonnage in shipping.
It might be argued that other countries, particularly Japan, coming on to the scene was inevitable. Despite the fact that their shipbuilding yards were totally devastated by the war, West Germany and Sweden made considerable gains as a result of Britain's continual impoverishment.
The Government have much to answer for. The British merchant fleet has declined by 75 per cent. since 1979. We had 1,614 vessels in 1975, but by 1988 that figure had dropped to 482 vessels, which resulted in the loss of many jobs. Many of my constituents have a knowledge of seafaring that goes back many decades. Between 1976 and 1990, the number of seafarers from this country declined from 58,000 to 18,000.
It was an outrage that, when the Atlantic Conveyor was lost during the Falkland war, that great patriot, the present Prime Minister's predecessor, did not turn to the shipbuilding yards of Britain such as Cammell Laird. She turned to the shipbuilding yards of South Korea, which has been able to make its way in the world because of its low wage costs. However, that is not the complete reason for Britain's decline ; United Kingdom wage rates are currently 40 per cent. lower than those in Japan, but we still see a continual decline in shipbuilding.
In 1989, world shipbuilding orders increased by 26 per cent. In 1990, they increased by 12 per cent., but during that period, orders for vessels being produced in this country declined by 7.6 per cent. Britain now stands not No. 1 in the world of shipbuilding, but in 13th place--near the relegation zone.
There is a demand for vessels, and it will increase. Concern for environmental protection means that more and more countries will want ships that take into account problems such as pollution. The United States' desire to ban single-bottomed tankers, which are prone to leak, has created a demand for double-bottomed tankers. Britain should be taking its share of that market.
It is no use the Government saying, "We cannot interfere." The first time that I went to see a Minister--who happened to be the present Chancellor of the Exchequer--when Schweppes in the Walton constituency faced closure, his response was that the Government did not act against the commercial judgement of individual firms. I hope that the Government will intervene positively to assist Cammell Laird to change its status from that of a world warship yard to one that can provide for the civil market on a grand scale.
Cammell Laird is in a perfect location. It is situated on what is still one of the major rivers of the United Kingdom, and has good motorway links with the A41--a good road--the Mersey tunnel and the M53 motorway. If
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the Government show a commitment to Cammell Laird and lift confidence on the Mersey, Merseyside could become the gateway of the European Community for Atlantic trade.There is much work that can be done, and I hope that Government will consider the matter carefully. Merseyside survived the Luftwaffe, but it is having great difficulty surviving 14 years of Tory Governments who have no commitment to manufacturing industry. The Government have destroyed this country's manufacturing base. Part of the export base of that manufacturing industry is shipbuilding. I hope that the Government will take this opportunity to do something to save Cammell Laird, to save jobs, to lift the confidence of Merseyside and to save themselves from the considerable social costs of the unemployment that will follow if they do nothing.
1.29 am
Mr. Andrew Miller (Ellesmere Port and Neston) : The sacrifices referred to in the debate on engineering just now are only too apparent in Merseyside. During the 16 years that I have been in the area, major industries have disappeared off the face of the earth. It could be said that many of them were the old smokestack industries of days gone by, but more recently there have been redundancies in industries involving highly skilled workers serving the needs of a modern society.
Merseyside has suffered enormous losses in the service sector, too. Not so many years ago, the Bank of England had a major regional headquarters in the town, established there because of the shipping trade of days gone by. When I first went to Merseyside, it was commonplace to see the remnants of the old shipping trade--insurers, bankers and carriers meeting the manufacturers to arrange the transport of goods across the Atlantic. That is all past now, but, as my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) said, Merseyside can regain its pre-eminence in the shipping industry and become an important gateway to the Atlantic for Britain and its European partners.
In an earlier debate, I referred to the knock-on effects of redundancy. My hon. Friend the Member for Wallasey (Ms. Eagle) estimates that 5,000 or 6,000 jobs would be affected by these redundancies. I believe that to be a realistic estimate. These redundancies must be seen against the background of major redundancies throughout the Wirral already. The problems elsewhere in Merseyside notwithstanding, the Wirral has suffered extremely badly in recent years.
I do not believe that our major competitors would allow this to happen in their countries. Last year, I attended a meeting--my hon. Friend the Member for Birkenhead (Mr. Field) was on the platform--at which workers, local authority representatives, residents and local politicians came together to hear VSEL give a commitment to the yard. Many of us thought the firm's commitment somewhat shallow at the time. There was a debate about the potential exploitation of intervention funds if the yard were to give up its exclusive building of warships. VSEL made all sorts of promises to look into such possibilities, but the audience found the company's statements shallow--they were greeted with some disbelief.
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