TUC Conference: Grants to competitors 'threaten oil rig makers'

UNION leaders yesterday warned that the British industry which makes offshore oil rigs is threatened with extinction because of subsidies to foreign competitors, writes Barrie Clement.

More than 5,000 jobs in fabrication companies will disappear unless the grants are matched or stopped, according to Jimmy Airlie, of the Amalgamated Engineering and Electrical Union. An emergency meeting of the union at the TUC in Blackpool received proof that a recent order had been lost to Italy because of a pounds 147m subsidy towards the production cost of pounds 173m.

Mr Airlie is seeking an urgent meeting with Michael Heseltine, President of the Board of Trade, and Karel Van Miert of the European Commission.

The British oil rig industry has traditionally secured about 80 per cent of the North Sea oil-related work, but foreign subsidies have led to a steep decline in jobs. This has been exacerbated by a lack of investment which means companies can manufacture fixed rigs, but not the floating exploration and production facilities increasingly required.

Britain will secure a diminishing proportion of the pounds 2bn contracts over the next five years because of a lack of dry-dock facilities required to build the 'floaters', the union says.

Mr Airlie said that Mr Heseltine should intervene to halt subsidies or provide them for British companies.

'Sooner or later the Government has got to realise that they will have no manufacturing industry left.'