Government's shipbuilding crisis

8,500 jobs were at risk in the Upper Clyde ship yards

By the BBC's Chris West

The 1971 Heath government's uncompromising attitude to one of the decade's major industrial crises is revealed in secret government documents released to the public today.

Confidential Cabinet memoranda spell out what government advisors saw as the futility of keeping afloat the so-called "lame duck" Upper Clyde Shipbuilders consortium, already millions of pounds in debt.

The government's decision to pull the economic plug led to one of the most bruising confrontations between government and industry - the Upper Clyde Shipworkers' occupation of the yard.

With 15,000 jobs at risk, 8,500 in the yards and 6,500 among suppliers, shipworkers decided to stage the work-in, which lasted 14 months.

UCS: The Facts

UCS was a consortium of five yards - John Brown, Charles Connell, Fairfield, Alexander Stephen, and Yarrow

The Labour Government had spent £20 million but the yards were still losing money

Following Labour's defeat in the 1970 election. The Tories began a policy to abandon industry "lame ducks"

By June 1971, debts of £385 million led to a government decision to close it down

In July 1971, with 15,000 jobs at stake, the UCS workers staged a work-in

The workers refused to accept redundancy and decided to fulfil all the outstanding orders on their books.

U-turn

They would get paid by the liquidator out of what resources UCS had left. The aim was to rescue all the threatened jobs and demand the right to work.

But in interviews for UK Confidential, some of the main participants make it clear that the government was unprepared for the vehemence of the response by the shipworkers - a response that ultimately provoked a remarkable U-turn by Edward Heath the following year.

The hard line the government adopted is confirmed in a memorandum to the Cabinet from the Trade Secretary, as the work-in began in July 1971.

A report claims that Upper Clyde Shipbuilders, as set up by the Labour government four years earlier "was doomed from the start".

Whisky

It goes on: "The conclusion must be that any continuation of Upper Clyde Shipbuilders in its present form, would be wholly unjustified and, indeed, could cause serious and more widespread damage - it is important that the lessons of this failure are clear and unambiguous."

Against this uncompromising background, the charismatic Clyde shipworkers leader Jimmy Reid and his colleagues came to Downing Street for a face-to-face meeting with Edward Heath.

The Scottish delegation was famously offered whisky, which legend has it that they turned down, preferring water.

But the former Prime Minister remembers it differently. In an interview, he tells UK Confidential: "They didn't refuse."

We were dealing with intelligent people: there's a commitment to Clydeside, and perhaps we had not fully grasped that.

Lord Eden

It seems, despite the polarity of their viewpoints, there developed a mutual respect. Interviewed by the programme, Jimmy Reid confesses to having "a soft spot" for the Tory Prime Minister, particularly in the light of the policies of his successor, Margaret Thatcher.

The then Industry Minister, Lord Eden, recalls: "We were dealing with intelligent people. There's a commitment to Clydeside, and perhaps we had not fully grasped that. There was a very combative spirit in the area."

The shipworkers' determination aside, other factors weighed heavily on the Cabinet - not least the unemployment figures, edging close to the politically disastrous one million mark.

Then there was the Prime Minister's personal dream - membership of the Common Market. The unending tale of the Upper Clyde would do little to convince future European partners of the UK's industrial stability.

The following year, Jimmy Reid and his men won. The government injected £35 million into the lame duck shipyard. It was a U-turn which would be so memorably derided by Mrs Thatcher, when she brought her brand of Conservatism to British politics.