(DEFENCE AND EXTERNAL AFFAIRS SUB-COMMITTEE)
11 February, 1975.] Mr. A. P. HOCKADAY, C.B., C.M.G.,
[Continued.
Rear Admiral A. S. MORTON, Mr. T. CULLEN, Mr. D. M. EVANS, Mr. G. C. B. DODDS, Mr. A. R. M. JAFFRAY, Mr. J. D. BRYARS and Mr. T. C. G. JAMES, C.M.G.
202. The cost?—I cannot give you the cost, I am afraid.
203. Could we have a note on costs because presumably there will be two elements, will there not? There will be in some cases redundancy pay, there must presumably also be estimates of the length of time in some parts of the country where people will be unem- ployed, therefore there will be unemploy- ment benefit to be added. Now there is this factor of commercial yards that will be forced, in some cases perhaps, into bankruptcy because the work has been taken away from them?—It is very small, it is only 10,000 altogether over the five year period. It is not very large. 10,000 people over five years is not very much, you can do that fairly easily.
Chairman.
204. You might cut down on employ- ment of people in areas where it is very essential they are employed. It does seem to me, with a reduced number of ships, there might have been a case for closing one of the naval dockyards. Was this considered?(Mr. Jaffray.) Yes, Sir, but the reductions in the amount of warship refitting work would not have added up to anything like the capacity. of any one of the yards. So far as the effect on employment in civil yards is concerned, our paper does say that of course we will look into individual cases and the effect on particular firms in particular areas.
205. Could you be little more ex- plicit? You say it would not anything like add up to the capacity of a yard?
-Each of the home dockyards' capa- city is infinitely greater than the reduc- tion that will come about in the refitting load as a result of the Defence Review.
Mr. Finsberg.] We would like a note on this to see exactly what capacity is involved apart from figures on unem- ployment and costs in commercial yards.
Mr. Roper.
206. Each of the yards was being used fully to capacity therefore spare capacity will exist in all the yards as a result of reductions in demand from the Defence Review, but that does not amount to one yard? -No. If one thinks in terms of taking in work from contract which is
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done more expensively by contract than it is in the dockyards, then one is left with a continuing broad balance between the total expected load and the total capacity of the dockyards.
Chairman.
207. You said just now it is more ex- pensive in commercial dockyards. When we have been to the naval dockyards we have been slightly confused as to the method of accounting, it has not been done by people with civilian qualifica- tions, except one man at Portsmouth who qualified as a chartered accountant in his own time. I am told the way you keep accounts is totally different from what is done in civilian life?I am no expert on dockyard accounting! If one takes work into the dockyards one is absorbing more fully the overheads of one's existing facilities, and one is not paying an element of profit to civilian firms. In that sense it is certainly cheaper for us, if we can, to bring the work into the dockyards the more fully to absorb capacity.
Mr. Roper.
208. Could I just pursue two points? It was suggested earlier that a loss of 10,000 jobs was not particularly serious over 10 years because to some extent this would be natural wastage therefore there would not be redundancies. But, of course, it does mean in those areas there are 10,000 less jobs available for school leavers coming on to the labour market? It is sometimes misleading to assume that natural wastage solves all one's prob- lems? -(Mr. Dodds.) I did not mean to be callous about it, I only thought it was rather less than some people thought it might be at one time.
209. The question as to the number which might not be 10,000 but might be somewhat greater if cuts of £1,000 m. are to be introduced-are the figures in this section?· -We calculate it is about 100,000. But the sort of calculation we have to make gets a bit speculative. We cannot go to firms at the moment and ask them what their estimates are because we cannot talk about the whole of this, or we could not. We have to do it in a very complicated way by tak- ing the output per man on an estimated basis and dividing it into the total cost.