CONDUCT OF MINISTRY OF DEFENCE AND SWAN HUNTER SHIPYARD

That this House notes that a year ago the last ship built on the Tyne sailed from the Swan Hunter shipyard and that when the yard went into receivership in May 1993 a claim in excess of ú20 million had been made by Swan Hunter against the Ministry of Defence in respect of work carried out on the A.O.R.2; understands that before receivership a sum of ú8 million had been paid by the Ministry of Defence towards the amount claimed on condition that the payment remained secret; further notes that on 3rd December 1992 Mr Charles Betts, Director General of Surface Ships admitted that the A.O.R.2 contract, as amended, may impose liability on the Ministry of Defence; regrets the refusal by the Government to publicly acknowledge the strength of the legal claim against it and the interim payment of ú8 million; notes that the yard was sold to a non-shipbuilding concern in June 1995 and that within weeks of the yard's sale the Ministry of Defence agreed to pay a further sum of ú20 million in final settlement of the claim; deplores this cover up of information by the Government; believes that full disclosure of the Government's liability would have secured the future of Swan Hunter and retained shipbuilding on Tyneside; and calls on the Secretary of State for Defence as a matter of urgency, to investigate the conduct of his Department in this matter.