HC Deb 08 May 1963 vol 677 cc421-2
17. Mr. Awbery

asked the Minister of Transport what finance and credit facilities are afforded to overseas shipowners who order their ships in the United Kingdom; and if he will offer the same facilities to British owners to assist the shipbuilding industry which is now in a difficult situation.

Vice-Admiral Hughes Hallett

Finance for overseas shipowners ordering new ships in this country is arranged between the buyer, the supplier and the financial institutions which provide credit. The Export Credits Guarantee Department helps as appropriate with credit insurance.

The E.C.G.D. protects suppliers from risks which do not generally apply to home orders, and I do not think that these facilities would help British owners to place orders here.

Mr. Awbery

Could not our British shipowners be put on the same basis as everyone else? As 400,000 tons of shipping is now being constructed abroad for British shipowners, are those British shipowners getting a subsidy, or encouragement of any sort, from foreign firms to send their orders abroad?

Vice-Admiral Hughes Hallett

I do not think that is entirely so. The number of British orders going abroad was relatively small during the past twelve months—certainly those from genuine British owners rather than owners whose ships are registered under the British flag. I do not think that one can generalise because, with home orders, so much depends on the credit-worthiness of the buyer. British owners may find that cheaper sources of finance are available. For instance, they can borrow from the bank at 1 per cent. above Bank Rate.

Mr. P. Williams

Will my hon. and gallant Friend agree that a positioin seems to have arisen where, through the operation of the E.C.G.D., finance is provided for foreign owners at a preferential and advantageous rate over that provided for lime owners? This is really a strange and difficult situation to explain to shipowners and shipyard workers, who find it difficult to understand the reasons for providing finance for foreign owners but not for home owners?

Vice-Admiral Hughes Hallett

I am aware of that point, but the purpose of the City scheme and the insurance facilities available is to enable British shipbuilders to capture their share of foreign orders. We are not seeking to lead a credit race—we cannot afford that—but, the foreign ships will be built in any case, and we are helping our own shipyards to secure the orders.