My involvement with shipbuilding began during the nationalisation process, and my next acquaintance with the industry occurred in 1979, when as Parliamentary under Secretary of State I was responsible for merchant shipbuilding. For a brief spell I was number two to the Industry Minister, Keith Joseph, with responsibility for shipbuilding among other matters until October 1981. I then left to become Secretary of State for Employment and returned to shipbuilding again between 1983 and 1985 as Secretary of State for Trade and Industry.

I was struck by the extremely poor industrial relations, the widespread restrictive practices, and the short-term thinking on both sides of the management and workforce and unions. I had very little sympathy for some of the management who struck me as continuing to behave as if though they were the proprietors of great shipyards in the nineteenth century when we dominated the shipbuilding world. In fact, they were essentially state employees, and should have regarded themselves as being alongside their workforce. They still sat in their oak-panelled boardrooms with the pictures of ships that had been built in the last century. They still enjoyed their lunches in the traditional style. They, then, somehow expected the workforce would not react adversely. I think there was extraordinary managerial incompetence. It was scarcely surprising that the unions were as badly led as they were. That, of course, did not apply to all the yards. There were some yards where there was really quite a high level of investment, where labour relations were much better, and where management was vastly superior. A number of those were naval yards. Even there our lack of competitiveness was growing as can be seen by our progressive failure to sell warships in the export markets. There were some which were not bad, and by British standards, pretty good.

In general, the weaknesses outweighed the strengths of the industry. International competition was unfair, but our industry was in such a parlous state that it was not subsidy by overseas builders that was the problem. The problem was the sheer efficiency of the yards in Japan, and more recently, Korea. As against European yards there was a very clear problem of protectionism, most notably by the French and Germans, who would not allow orders to go to British yards, or indeed to other nations.