Connors, Duncan Philip (2009) The rôle of government in the decline of the British shipbuilding industry, 1945 - 1980. PhD thesis. http://theses.gla.ac.uk/1276/ Copyright and moral rights for this thesis are retained by the author A copy can be downloaded for personal non-commercial research or study, without prior permission or charge This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the Author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the Author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Glasgow Theses Service http://theses.gla.ac.uk/ [email protected] The Rôle of Government In the Decline of the British Shipbuilding Industry, 1945 - 1980 Duncan Philip Connors Submitted for the Degree of Doctorate of Philosophy University of Glasgow Department of Economic & Social History December 2008 © Duncan Philip Connors, 2008. 2 Abstract This thesis studies the interrelationship between government and the shipbuilding industry in the United Kingdom during the so-called ‘Golden Age’ of economic growth between 1945 and 1973. It argues that actions of government in the 1960s and 70s aimed at arresting the decline of shipbuilding as an industry instead acted first as a brake on the industry’s development and second as one of the principal agents of its decline. It does this by demonstrating that the constant government led introspection into the shipbuilding industry between 1960 and 1966 delayed investment decisions by companies that were uncertain about which direction the government would take or whether it would provide funding. This thesis also demonstrates that the Wilson Labour governments’ instruments of modernisation and change, the Shipbuilding Inquiry Committee and the Shipbuilding Industry Board, chose and imposed technical and organisational solutions on the industry that did not reflect the prevailing orthodoxy of shipbuilding in competitor nations such as Japan and Sweden. This fatally damaged the industry during a time of demand for newly constructed vessels; the cheap price of crude oil in the 1960s led to a very high demand for very large crude carriers, supertankers, capable of transporting between one quarter and one half a million tons of crude oil from the Middle East to the industrial nations of North American and Europe. However, as the case studies of the Harland and Wolff and Scott Lithgow companies in this thesis demonstrates, British shipyards were ill equipped and poorly prepared to take advantage of this situation and when finally the shipyards were positioned to take advantage of the situation, the 1973 Yom Kippur War and subsequent OPEC oil embargo took away the demand for supertankers. This was when the British government dealt the now nationalised shipbuilding industry a fatal blow, subsidising supertankers no longer in demand for purchase at a heavily subsidised price by shipping lines that would place the vessels into immediate and long-term storage. In short, this thesis illuminates the complex relationship between government and industry that led to the demise of the British shipbuilding industry. 2 3 Contents ACKNOWLEDGEMENTS 5 CHAPTER ONE 6 Introduction 6 The rôle of government in the decline of British shipbuilding 7 Table 1.1: Annual percentage growth in Gross National Product (GNP) for selected economies, 1950- 1973 (adjusted for inflation and currency fluctuations) 13 Table 1.2: Annual percentage growth in industrial output for selected economies, 1950-1973 14 CHAPTER TWO 53 Introduction 54 The Conservatives and shipbuilding: 1960- 1964 55 Table 2.1: The difference in growth rates between the UK and World shipbuilding output in gross tons, 1947 to 1963 60 Table 2.2: Percentage share of world export market for shipping, 1948 – 1960 60 The election of a Labour government and shipbuilding, 1964 - 1966 62 Table 2.3: Comparative productivity of selected Japanese supertanker constructing shipyards compared to Harland and Wolff and Scott Lithgow in the United Kingdom, 1964 63 Table 2.4: Comparison of export interest rates for selected countries, 1966 72 Table 2.5: The value of orders in UK shipyards in March 1965 (£ millions) 75 The Geddes Report 77 Conclusion 83 CHAPTER THREE 85 Two large Scottish shipyards become one: The creation of Scott Lithgow and the Supertanker, 1966 – 1973 85 Introduction 86 Scotts, Lithgows and the creation of Scott Lithgow, 1966 – 1973 88 Image 3.1: The Physical Proximity of Scotts and Lithgows in Greenock, 1967 90 Diagram 3.1: The Planned Structure of Scott Lithgow’s after 1969 (Percentage Ownership in Para- emphasises) 97 The ‘modernisation’ of Scott Lithgow 1969 - 1973 99 Table 3.1: Scott Lithgow Revenue, Profit and Loss, including vessels built and Gross tonnage, 1967 - 1973. 107 Scott Lithgow in 1973 109 CHAPTER FOUR 112 The long drawn out demise: Scott Lithgow and the first oil crisis, 1973-1980 112 Introduction 113 The Angelicoussis cancellations, 1973 - 1976 115 The Cancellation by Maritime Fruit Carriers, 1973 – 1980 123 Conclusion, Scott Lithgow and the State 1966 - 1980 135 Table 4.1: Scott Lithgow, Profit and Loss, Vessels Built and Gross tonnage, 1970 - 1980. 138 CHAPTER FIVE 139 The historical context of the relationship between the Harland and Wolff Shipyard, Belfast and Government in Northern Ireland and Scotland, focusing upon developments under the chairmanship of John Mallabar between 1966 and 1970. 139 Introduction: Protestant Hegemony in Northern Ireland and Shipbuilding 1921 to 1975 140 Harland and Wolff under John Mallabar, 1966 - 1970 142 Table 5.1: Harland and Wolff Profit and Loss, 1960 to 1966 143 Table 5.2: Harland and Wolff : Output, Revenue, Profit and Loss, 1966 to 1970 152 3 4 Conclusion, Harland and Wolff in 1970 154 CHAPTER SIX 157 Deciding upon which future path to follow: the developing crisis at the Harland and Wolff shipyard, Belfast at the start of the conflict in Northern Ireland, 1970 – 1971 157 The continuing failure of Harland and Wolff, 1970 - 1971 158 Harland and Wolff for Sale, the bidding war of 1970 to 1971 160 Table 6.1: Proposals for the take-over of Harland & Wolff, 1971 171 Conclusion: a brighter future for Harland and Wolff? 181 CHAPTER SEVEN 183 The end of Stormont and the effect of successive governments’ policy on a private company: The nationalisation of the Harland and Wolff Ltd, Belfast, 1973 - 1975 183 Direct Rule in Northern Ireland and Changing Governments in the UK, Harland and Wolff 1972 – 1979 184 P200: The continued development of Harland and Wolff, 1972-1974 185 Image 7.1: The layout of Harland and Wolff, 1973 186 The nationalisation of Harland and Wolff, 1974 - 1975 192 Conclusion, Harland and Wolff 1966-1979 201 Table 7.1: Harland and Wolff, Profit and Loss, Vessels Built and Gross tonnage, 1960 - 1980. 202 CHAPTER EIGHT 207 Conclusion 207 The relationship between government and shipbuilders as a cause of the industry’s decline 208 The last few words 225 BIBLIOGRAPHY 228 Primary Sources 229 Archives 229 The National Archives 229 Public Record Officer Northern Ireland 232 Glasgow University Archive Services 233 Publications 235 Newspapers 235 Magazines and Trade Journals 236 Official Publications 239 Legislation and Court Cases 241 Websites 242 Secondary Literature 243 4 5 Acknowledgements The first person that must be acknowledged is a former high school teacher of mine, Mr. Philips, who gave me my first lesson in History twenty-three years ago. It was inspiring and at the end of the class I decided that I wanted to be a historian and asked how do I go about it? He said ‘do a PhD, young man’ and I said okay, let’s do that! Thank you, Mr. Philips. The most important person behind all the effort that has gone into this work over the past five years is my wife, Smita Bhat. A PhD is hard enough on a partner without them having to cope with a disabled husband, a career of her own and a young, fun but tiring, son. She deserves not only an acknowledgement of her role in this thesis, but also an acknowledgement that it is now my turn to provide the support for her future goals and achievements. I would also like to thank Dr Duncan M Ross and Prof Neil Rollings for their (extreme) patience, assistance and guidance throughout the course of writing this thesis, particularly for providing support for the problems caused by my injury and the ever present dyslexia. I’d also like to acknowledge the support of the academic staff and my fellow postgraduates in the Department of Economic & Social History and the School of History at the University of Glasgow for providing a stimulating environment in which to work. One person that must be mentioned above all else is Dr. Niall MacKenzie, who has provided constant support over the years and without him, I would not have been able to put this thesis together. I would like to acknowledge the support provided for my research by the Economic & Social Research Council, award number: PTA-030-2003-00080. 5 6 Chapter One Introduction 6 7 The rôle of government in the decline of British shipbuilding The history of the British shipbuilding industry is relevant to the wider debates concerning the decline of the United Kingdom’s industrial base in the second half of the twentieth century. From being the largest constructor of merchant vessels in the latter half of the 1940s; by 1964 Britain had been surpassed by Japan as the nation with the largest