Declassified files: No future for British shipbuilding, said Ken Clarke in 1988

Kenneth Clarke (left) pictured canvassing with future Tory leader William Hague in 1989
Kenneth Clarke (left) pictured canvassing with future Tory leader William Hague in 1989

As famous British shipyards struggled to survive even with massive Government subsidies, a senior minister privately warned that “there is no long-term future in shipbuilding”.

Files declassified at the Public Record Office in Belfast under the 20 Year Rule show that Ken Clarke, then the chancellor of the Duchy of Lancaster with responsibility for inner city areas, made the warning in early 1988 and made clear that Belfast’s Harland & Wolff (H&W) shipyard could not be exempted from the pain felt by shipyards elsewhere in the UK.

In a secret May 6 1988 paper to the prime minister, Mr Clarke spoke bluntly about the industry’s future prospects.

At that point, British Shipbuilding (BS) was being subsidised at 28% of the cost of each ship, something which Mr Clarke described as “an absurd basis on which to conduct a business”.

He said that the situation at H&W – which had been nationalised years earlier – was “essentially the same as for the BS yards”.

And far more public money ultimately went into each ship, he said, because in practice even with the 28% subsidy each project made a huge loss and then had to be bailed out by taxpayers.

“I think there is a strong case for applying the same approach to Harlands as I am recommending for the BS yards, namely announcing an end to IF [Intervention Fund] support.

“Without such an announcement, the task of managing the BS yards will be made significantly more difficult.”

He added: “I believe we all know that there is no long-term future in shipbuilding.

“I do not think future generations of workers at Sunderland and elsewhere would thank us for not giving them the opportunities that, to take the similar example of the steel industry a few years ago, now exist at places like Corby and Consett.”

The file also contains a March 20, 1988 paper from senior Stormont civil servant George Quigley to David Fell which was given the unusual clarification of ‘Secret and Immediate’.

Relating a conversation with the Treasury, it said: “They regard shipbuilding as, at best, a ‘negative added value’ industry and the sooner we are out of it the better.”

H&W’s last ship was launched in 2003. The company is now much smaller, but focuses on other areas of major engineering, including wind turbines.