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banner Tuesday, 1 January, 2002, 11:34 GMT
Transcripts: Lord Eden - The Minister for Industry
Lord Eden
Lord Eden's portfolio covered the shipbuilding industry
Lord Eden was the Minister for Industry in Sir Edward Heath's government and had a substantial portfolio of responsibilities which included the shipbuilding industry.

Documents released under the 30-year rule reveal more information about the Prime Minister, Edward Heath's U-turn over the decision to close Upper Clyde Shipbuilders .

BBC Television's UK Confidential programme spoke to him about the crisis and government strategy at the time.

Here are the edited highlights of that interview.

So when Heath came into power in 1970, what was the policy of government towards industry, above all towards what we might call ailing industry later called "lame ducks?"

The main thrust of the policy was to encourage businesses generally to stand on their own feet.

Lord Eden

The main thrust of the policy was to encourage businesses generally to stand on their own feet, not to have the expectation of being bailed out by public finance.

They were going to be encouraged to take whatever remedial action was necessary and essential in fact in order to stand up to and take on the reality of international competition.

And so really what was the situation? Weren't these businesses actually doing quite well? Did they really have to face up to the reality? Weren't they already facing up to reality?

I don't think we can generalise about industry. I think one has to be fairly specific and there were in some areas quite clearly businesses which were not moving fast enough or recognising sufficiently clearly the nature of the threat being posed to them by competition.

After all Japan, for example was one of the countries which was becoming increasingly aggressive industrially and one had to understand how it was that they were achieving their success in the international marketplace.

In some of the companies in Great Britain, not all but some, industry had certainly been I think too conditioned by the attitude of the preceding Labour government.

And in what sense had they been conditioned? What was the nature of this conditioning?

Well there was a lot of money being pumped in whenever there was a problem.

And your government wanted to put a stop to that?

That's right.

The important thing, was to stop bailing out and to encourage business itself to take the decisions and to put in operation the action that was necessary to make them competitive and to put them in line for the future.

So what was the government's reaction when Upper Clyde Shipbuilders announced to the government that it was effectively insolvent?

Well it was insolvent, it was insolvent when it was started. It should never have been put together in the first place.
The Clyde shipyard
Upper Clyde Shipbuilders was described as an industry "lame duck"

When whatever it was - 1967 or 1968, I can't remember exactly when it was - but whenever it was when Tony Benn, who was then the minister responsible, cobbled the thing together, they were all loss-making yards and to go on making ships in the Upper Clyde didn't seem to make an enormous success.

But the point about that particular grouping of the Upper Clyde Shipbuilders was that they were making ships at a loss.

Every ship they made was at a loss and who was going to bail them out? Ha-ha! The British taxpayer. Why, we said? Why should that happen? We must sort this thing out.

So what was your reaction then to the announcement of a work-in, I mean really rather surprising for the time?

Well I think it was surprising because we were dealing with intelligent people and the shop stewards were not ignorant.

They knew very well what the state of the international market was but there was a determination to fight and what was particularly depressing about - I suppose one has to recognise in the reality of politics - was that Tony Benn and his colleagues in the Labour opposition as they by then had become, who equally knew the truth of the situation very well indeed, aided and abetted the work-in with the labour unions so it was a very, very difficult time and the degree of militancy and intransigence I think certainly took us by surprise.

Nobody expected that sort of in-depth reaction.

Why do you think the likes of Jimmy Reid and his colleagues didn't buy your argument? What they publicly said a lot of times is they felt your government had a long-term plan to drive down the shipyards, to effectively force them into liquidation. What was your reaction to that?

The difficulty we had quite frankly was that the yards were running down. They were running down everywhere, all over, all over this country and we recognised that we had to reduce the amount of shipbuilding areas whilst at the same time improving the competence and capability of that which was left.

But I never understood why they were prepared to go as far as they actually did but I think that after a while you know there's a commitment and there's a commitment to Clydeside, and we had perhaps not fully grasped that. There was a very combative spirit in that area.

We didn't properly judge the extent to which they were prepared to go to the barricades.

Lord Eden
So at that time in those early 1970s people like Jimmy Reid really - although you don't want to say it - did have quite a great influence and power?

Well they did have if they were prepared to go beyond what was considered to be reasonable in a free open and democratic country.

And we always presumed - and this was our weakness if you like - that appealing on good, sound grounds for moderate attitudes in exchange for support and some degree of financial input would win consent.

But we didn't properly judge the extent to which they were prepared to go to the barricades.

Lord Eden
UK Confidential's interview with Lord Eden
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