MINISTRY OF SHIPPING.

HC Deb 10 March 1920 vol 126 cc1417-39

Motion made, and Question proposed, That a Supplementary sum, not exceeding £100, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1920, for the Salaries and Expenses of the Ministry of Shipping.

The PARLIAMENTARY SECRETARY to the MINISTRY OF SHIPPING (Colonel Leslie Wilson)

It may probably be for the convenience of the Committee if I very shortly explain the reason why it is necessary for me to come to the House of Commons to ask for a Supplementary Vote for the Ministry of Shipping. As the Committee will see, the sum I am asking for is £100, but of course, the Committee realises that this is a Token Vote, and that the real object of this Estimate is to obtain authority from Parliament to appropriate a further sum of £19,500,000 of receipts in aid of expenditure. In introducing the Estimates for the Ministry of Shipping last May, I guarded myself by saying that the Estimates were extremely difficult to frame at that time, and that they must be largely conjectural, and it was quite impossible for the Ministry, in framing those Estimates, to put into them any sum. With regard to the main reasons why I have to come to the House of Commons and ask for a Supplementary Vote, the principal cause of the excess of the gross expenditure over the original Estimate is the Expense in connection with the enemy tonnage which has been surrendered, under the terms of the Armistice, and allocated to Great Britain to manage. There are some 240 ships, of a total gross tonnage of something over 1,300,000 tons. In the original Estimate it was not possible to make any provision in connection with these vessels, because, at the time when those Estimates were prepared, there was considerable uncertainty as to the arrangements which would be made by the Supreme Council. In asking for this sum, which is for expenses in connection with the running of this enemy tonnage, I think that perhaps it might interest the Committee if I very shortly tell them the arrangements which were in force in connection with this tonnage from the date of the Armistice to the date of the ratification of Peace. Firstly, the late enemy is entitled to claim for hire of these vessels, based on what is known as the Blue Book rate. From such hire is deducted the cost of any repairs necessary at the time of handing over the vessels in order to bring them into proper running condition. The balance is paid, not to the late enemy, but to the Treasury account, where it is credited to the late enemy against the expenditure for which he is liable. In the second place, all the running expenses are paid by the British Government. The freight earned is credited to the Ministry of Shipping Vote, such freight being paid, either by the late enemy, so far as the vessels were used on German marine services, or by the Admiralty, War Office or commercial charterers, according to the service on which the vessels were employed. When the accounts, as between the Allies in respect of the trading of these vessels during the Armistice period are made up, some adjustment will, of course, be necessary, but, from the date of the ratification of Peace onwards, our financial arrangements will be adjusted through the Reparation Fund, and therefore will not affect the Ministry of Shipping Vote. That is the main reason why I have to ask for an additional sum on Supplementary Estimates.

There are also other transactions in which the gross expenditure of the Ministry has exceeded the Estimates under various heads, in consequence of anticipations as to the release of ships under requisition and control not having been realised. That is duo to many causes, one of the principal being the great congestion in the ports, which has very largely reduced the carrying efficiency of the British Mercantile Marine., It is also due to some industrial trouble which occurred last year, which delayed shipbuilding and ship repairing. But the addition to the gross expenditure of the Ministry through these causes is counter- balanced by a corresponding increase in the revenue. The receipts of the Ministry of Shipping have very largely exceeded anticipations. This is due, firstly, to a change which has been constantly advocated by several hon. Members in this House. In the basis Estimates which were made after the Ministry of Shipping Estimates were presented, the cost of the shipping services to the Army, Navy, Munitions and Air Force, is borne on the Army, Navy, Munitions and Air Force Votes. That has involved an addition to the receipts in respect of Government-owned vessels employed in those services. In the second place, the receipts have exceeded Estimates owing to the high prices which have been realised for ships which have been sold, and in the third place, owing to the earnings of ex-enemy vessels, and the unexpected prolongation of trading by Government-owned tonnage in general. On the other side of the ledger must be placed the fact of the disposal of small craft having been handed over to the Disposal Board. The receipts estimated in the original Estimate for these services have consequently gone to the Munitions Vote, and not to the Vote of the Ministry of Shipping. I do not wish to anticipate any statement I shall have to make on the Estimates for the coming year, but I think, in view of this large sum of money which I am asking for from the Appropriations-in-Aid, I ought to state what are the probable receipts for this last year, 1919–20. I should point out that the actual amount estimated for the sale of the ships during this financial year in the original Estimate was £49,000,000, but the largest increase will be owing to the earnings of ships due to the causes which I have stated.

Sir D. MACLEAN

My hon. and gallant Friend has referred to the Estimates to be laid. Are we to understand that these Estimates will be laid in the full sense of the term which we are accustomed to associate with the ordinary Department? I understand that it will be the first time the Ministry of Shipping has laid an Estimate.

Colonel WILSON

The Estimates were laid last year. Full Estimates for the Ministry of Shipping were laid for the first time in May of last year, and they will be laid this year.

Sir D. MACLEAN

I had forgotten.

Colonel WILSON

With regard to the earnings of ships, those have increased, as compared with the sum in the original Estimate, by something like £54,000,000, owing to the causes which I have already stated, namely, the earnings of ex-enemy tonnage and the fact that the release from control or requisition has not been as speedy as was anticipated in the original Estimate. The recoveries from Dominions and Allies are estimated in the original Estimate at £12,000,000, but the probable receipts for this year will be £18,000,000, making a total of surplus receipts over the Estimates of some £61,000,000. I have received a request, and I think it is quite reasonable, that, if possible, in future Estimates for the Ministry of Shipping there shall be included a Profit and Loss Account in connection with the vessels employed in commercial trade. I am in entire sympathy with that request. I can only say this to-night, that we are endeavouring to carry that out, and to present such a commercial balance-sheet to the House in respect of the commercial trading of the ships requisitioned by the Ministry of Shipping. It has not been possible to do it in the past, in the first place, because, during the War, when the Ministry of Shipping practically had under requisition the whole of the British mercantile marine, it was employed practically, if not entirely, on Government services, and it would have been impossible to have estimated in any way what were the commercial freights in order to present a balance-sheet. Secondly, it would have involved the employment of an enormous staff which really was not justifiable under the circumstances. I am supported in that by the Fifth Report of the Select Committee on National Expenditure which carefully went into this question, and said that, in view of the circumstances and of the difficulty in presenting any such commercial account, the course which had been adopted was justified. But it will be done in the forthcoming Estimates. I am only asking for this Token Vote for the reasons I have explained to the Committee, and in order to get the right to appropriate this further sum of £19,500,000 so as to pay the expenses of running the enemy ships, and for certain other purposes.

Mr. HOLMES

I beg to move that the Vote be reduced by £10.

The interesting statement we have heard from the Parliamentary Secretary will only have whetted the appetite of the Committee for more information concerning the enemy ships which are being managed by us. I hope the hon. and gallant Gentleman will tell us how many of these vessels we have.

Colonel WILSON

I said 240.

Mr. HOLMES

I am sorry I did not catch the figure. I understand from the hon. and gallant Gentleman that these 240 vessels are running under Blue Book rates, which presumably means the new directed rates, and, if so, these vessels must be running at a considerable profit, and that profit is being accredited to the enemy account. The Committee will be interested to know the amount of profit that is being made by these 240 vessels. Probably, if one bears in mind what is being done by our own shipowners at the present time, an 8,000 ton vessel will be making from £ 1,500 to £2,000 profit per month. Surely the Committee are entitled to know what the profit is going to amount to, and bow much will be accredited to the enemy account. I want also to ask the Parliamentary Secretary with regard to other requisitioned vessels whether they are all being run on the same rates, or whether some of them are being handed over to the Wool or Wheat Commission at what we may call cost price, which really has the effect of reducing the price of the wool or wheat or whatever it is is purchased by the Government. In particular I would like to ask whether any of the requisitioned vessels have been handed over to the Navy, or are carrying coal for the Navy without any profit at all, and not at the ordinary rates. The effect of that would be, of course, that the Navy would be getting its coal at the expense of the Appropriation-in-Aid which should go to the Ministry of Shipping; in other words, the Navy is not paying fair commercial rates for shipping services.

I want to ask also how the management of the enemy vessels has been arranged for. We understand the various shipowners throughout the country have had these boats handed over to them for the purpose of managing them. Is it not the fact that a number of shipowners took advantage of the scarcity and consequent high value of ships during the War to sell the whole of their fleets to secure their money in cash and to go out of business? Have any of them been given these ships to manage to the disadvantage of shipowners who would like to have had the management of them, and who have kept on their jobs, and have not sold out, but have continued their work in the mercantile marine? With regard to this item for the hire and running of the enemy ships, is it not the fact that the men who are managing the ships are themselves financing them, and finding the money for coal, wages and other running expenses, and at the same time collecting the freights, rendering an account to the Ministry of Shipping? If that is the case, why does the Ministry require any money at all for financing the boats? If they are being run at a profit, and if the managers of the vessels finance them, the Ministry have only to receive the profits at the end of the month.

There is one other point to which I wish to call the attention of the Committee. It is that the appropriation-in-aid includes the purchase money received by the Ministry of Shipping for the sale of standard ships built by the nation. I want to suggest that this is a thoroughly bad financial principle. During the War we built a number of standard ships, and we borrowed the money for building them. Now we sell those ships, and we use the money we receive in respect of them not to pay off the loans we raised in order to build them, but for the purpose of revenue. Supposing a shipping company did that. A shipping company, let us assume, built certain ships and borrowed the money, and a year or two later sold the ships and credited the sum received to its profit and loss account instead of using it to pay off its loan. If any shipping company published a balance sheet like that, the directors and auditors would render themselves liable to gaol. Yet this is the system of finance which the Government adopt. Let me put it in another way. A Select Committee is sitting for the purpose of considering the taxation of War wealth. It is obvious that if the Committee reports in favour of such a thing the profits on the sale of ships during the War will largely come under it. It is not for anyone to say whether the scheme suggested by the Inland Revenue will be recommended by the Select Committee, but I think one can go as far as to say that the Select Committee, the officials of the Inland Revenue, and the Chancellor of the Exchequer will say that the produce of that must be specifically earmarked for the reduction of debt. The same thing applies exactly to the Ministry of Shipping. I could understand the Parliamentary Secretary saying we have made, so much profit on the sale of our shipping, and that particular profit might be taken into revenue. That would be justifiable in a commercial undertaking, but for the whole of the purchase money of these ships to be credited to revenue instead of being specifically earmarked for the repayment of debt is an utterly unsound financial principle.

Colonel WEDGWOOD

I want first of all to enforce the argument used by the hon. Member (Mr. Holmes). We on the Labour Benches are being perpetually charged with being guilty of unsound finance. One of the objections that is always being raised by the Front Bench opposite to a levy upon capital is that the money raised by that levy would not be allocated, as it ought to be, solely to the repayment of debt, and yet here is the Government performing exactly that unsound operation. They are taking money which they know ought to be allocated to the repayment of the debt incurred for building these ships, and they are using it as revenue in order to reduce taxation and to make us believe that we are balancing income and expenditure, when in fact we are doing nothing of the sort. The first thing we have to insist on is to have a clear understanding as to how much of this Appropriation-in-Aid is due to the sale of ships, and how much is due to the receipts under the Liner Requisition scheme. It is monstrous that the Government should lump in one item £19,500,000 and not give the House any information whatever as to how much of that should properly be charged to revenue and how much to writing down capital. The Ministry of Shipping seems to be anxious to conceal facts, but it is their duty to explain the facts, and when we know how much is being camouflaged as revenue, when it is really the sale of Government property, we shall better be able to judge the Budget which is shortly to be introduced. On these Benches we object further to the sale of these Government ships altogether. As the country is at present, we understand, making sub- stantial profits on the running of these ships, we think the sale might be postponed and the Department might continue to run them at a profit, and then the profits will properly be part of the revenue of the country and would be a very welcome help in time of trouble to the taxpayer.

But I am even more interested in the other part of the Vote. The additional running charges of the enemy vessels amount to £19,500,000. As I understood the Parliamentary Secretary, that is the cost to the Government of running the vessels. Then we pay to the enemy account the Blue Book rates for chartering the vessel, that is in addition to the £19,500,000 and the profits go not to the enemy account but to the account of the Shipping Department. Is that so? Does the profit over the Blue Book rate go to the Government or to the enemy?

Colonel WILSON

The enemy is entitled to credit for the hire of the vessel on the basis of the Blue Book rates less the cost of repairs at the time of handing over. The balance is not paid to the late enemy but to the Treasury account where it is credited to the late enemy against the expenditure for which he is liable.

Colonel WEDGWOOD

But who gets the profit over and above the Blue Book rate? I presume the Government is making some profit on the running of the ships. Where does that appear, and why does it not more than cover the cost of running the vessel? I think the hon. and gallant Gentleman said we were making a profit of £58,000,000 a year on running the ships. Where does that appear, and why is it not used as an Appropriation-in-Aid instead of in this account for the sale of Government vessels? The hon. Member (Mr. Holmes) thought the whole of the profits went to the Treasury for setting off against the enemy account, but the Parliamentary Secretary says this profit goes to us. Where is it? Why does it not appear in this account as a per-contra against the cost of running the vessel. We have at present a large fleet belonging to the Government bringing in profits. We are asked to vote £9,500,000 for the cost of running them, and instead of that being balanced by the profits it is balanced partly by the sale of ships and partly by additional rates under the Liner Requisition Scheme, which is not part of the running of the enemy ships. What we really want to have in the case of this Vote is a balance sheet showing the definite profit and loss of the year's working as well as a capital account showing credit and debit as to the capital value of the ships at the beginning and at the end of the year's trading. Then we should be able to judge whether the Ministry of Shipping really deserved this money or not. As it is, it is possible for any sort of juggling to be going on in the Ministry of Shipping. The ships may really have been run at a loss, and the loss may be made good by the sale of ships which certainly ought to appear on the capital account. We are entitled to have further details than we have at present. In the first place, what percentage of this £19,500,000 is for the sale of ships which ought to appear as a reduction of National Debt instead of Revenue, and what part is profit on running the ships to be set off against the £19,500,000 additional cost of running them?

10.0 P.M.

Commander Viscount CURZON

I rise to put a few questions to the Parliamentary Secretary to the Ministry of Shipping I have seen it stated in the daily Press in the last few days that on the Tyne there are a very large number of ships lying idle. Can he say whether these ships are under his Department, and if so can he give the Committee any information as to the cause of a large number of ships lying idle? I should like to ask whether all the enemy ships that were due to us have been handed over, and what is the average size of the ships handed over, if it is possible to give us the figures. He said that certain ships have been handed over to the Disposal Board for disposal, and that they consist of certain small craft. Can he tell us the smallest sized craft and the largest ship which has been handed over to the Disposal Board? In regard to the "River Clyde," can he give the House any information as to its sale? How came it that a ship with its historic associations was put up for sale and was actually sold to an alien firm in an alien country? When you have a credit account for a very large sum and when the expenses of the Department are enormous, it is ridiculous to sell a ship with these great associations to an alien firm for so small a sum. I, in common with a great many others, would far rather have seen that ship sunk in deep water than it should have been handed over to an alien firm. I was interested to hear the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) speaking for Members who sit on those Benches, wanting to see the Ministry of Shipping continued. My recollection of proceedings on Standing Committee C. while the Ministry of Shipping was being discussed was that the continuance of the Ministry of Shipping was very much criticised by Members who sit on those Benches and who generally agree with the hon. and gallant Member.

Colonel WEDGWOOD

I have no control over them.

Sir W. RAEBURN

Perhaps I may be able to give the Committee information on a subject on which so many of them are in considerable ignorance. In the first place, let me deal with the management of the Government vessels that have been handed over. My firm have had the management of several of these ships, and it is not at all a lucrative job. I do not think anyone would have taken over the management of the ships for the more fees that they got out of them. The ship owners of the country took them over because it was considered to be a patriotic thing to manage the ships, even if they got no recompense whatever. A great many of these ships were no acquisition to British shipping, and the Government did a very good thing in getting rid of them at the present time when prices are high. They might certainly have kept them for another 12 months and made fairly good profits out of them for that time, but I think that they would have lost more by holding them than by selling them at present. I do not want to cast any slight on the builders, but many of these ships were built in very exceptional circumstances and in places where they had never built vessels of this size and description before, and we know that many of them caused a great deal of trouble and expense. Therefore, while reasons can be advanced that the ships should have been held, I do think that in the majority of cases it was a good thing for the Government to get rid of them. These vessels are not being treated at the righest rates of pay, and are being used, as far as possible, by the Government on what are called restricted voyages carrying Government cargoes. Take the River Plate. The rate until lately was 62s. 6d. for British vessels carrying cargoes, while the rate in the open market was 200s. I do not know, and will be very glad to hear, the destination of the money that was realised by the sale of these ships. I think that we shall find, when the promised balance sheet is given, that it will show us all these items, both in debits and credits. As regards finance the hon. Member opposite asked what need to ask for all this money now? Do not the managers of all the ships do all the finance and deal with the wages and pay for everything? What does the Government want this money for? He would want to be a strong financial manager to be able to launch into all these expenses and lie out of his money indefinitely. Does the House realise the price of bunker coal at present—£6 in this country and anything up to £10 abroad? Think of getting in, say, 8,000 tons. Whenever we get information that a vessel is on the way—and we generally can tell to a day when it is due—we send a pro forma account to the Government and get payments on account, often up to the full point, but, generally speaking, about 10 per cent. less. Managers render monthly accounts for wages, balances, etc., and get from the Government very punctually each month a very large sum as a payment on account. There is, in present conditions, an enormous advance in prices throughout the world. First, take your disbursals at the port of loading. You have got to make monthly advances to your crews. You have an enormous coal bill. You have the payments to the Panama Canal and the Suez Canal.

Mr. HOLMES

Is it not a fact that when a ship is on time charter the hire is paid a month in advance at the beginning of the month?

Sir W. RAEBURN

In the case of all vessels which my firm has managed for the Government they have not been on a time charter They have been carrying Government cargoes of wheat, sugar, timber and coal, and I have never known a single instance in the case of my firm of vessels being on a time charter. There is an enormous output for which the Government must come to the House and ask for an advance. The whole of this policy of Government control has been in the interests of the country. We had a discussion in the House a few nights ago, and I am sorry to say that some hon. Members on the other side seemed to regard the shipowner with suspicion. They seemed to think that there was something very suspicious indeed in a shipowner advocating continuance of the control, that there must be some ulterior motive, and that the shipowner must be making more money under control. I frankly state that if we were free of control we could very greatly increase our profits. The reason for continuing the control is that we realise that on commodities like wheat and sugar and such things it would not do to have freights soaring to the heights to which they might soar if control were entirely removed. The Government have kept the control at a minimum scale. The rates of freight from America have fallen below the restriction, so that the Government can let restriction go entirely. While this shipping problem is a very complicated question, speaking as a shipowner whose vessels have been conscribed almost throughout the War, I say that of all the Departments of the Government which can take credit for what they have done I think the shipping control is the first. When we get the balance sheet of this great concern and see the results of what it has done through all these momentous years, it will be surprising if it has not traded at a profit. Is there any other Department which has the same record to show? This discussion has provided an opportunity that I have long desired, in that it has enabled me to inform the House on some points on which I am sure they were wanting knowledge. I believe, speaking from some knowledge, that a slump in shipping is not very far off. Some hon. Members have said that we are suffering from a scarcity of shipping. We are not. There is more shipping in the world now than when the War commenced—I think some 2,000,000 tons. It is enough for all the nation's wants if we can only clear the congestion on the railways. I would repeat that I think the Controller would have made a very great mistake if, for the sake of making some extra profit in the present year, he had kept the steamers which have been referred to, many of them built in Canada and America, instead of doing what any private owner would have done, namely, getting rid of them at the enormous price which we have been able to obtain.

Sir D. MACLEAN

I am sure the Committee is full of sympathetic commisera- tion for my hon. Friend in the picture he has drawn of the woes of the shipowner.

Sir W. RAEBURN

I did not say anything about the shipowner's woes.

Sir D. MACLEAN

I do not for one moment dispute the patriotism of the very important industrial class to which the hon. Gentleman belongs, but I want to make plain to the Members of the Committee who have just come in what the object of the reduction was. The object was to draw the attention of the Committee to the unsound finance which is apparently favoured in this Department as in others. Yesterday we had the question of the Ministry of Agriculture where a total sum of £809,800 was reduced to £10 by bringing in the sales of tractors and implements of machinery, that is capital expenditure set out as revenue. Here we have another example in the Ministry of Shipping, which I must freely and gladly acknowledge was one of the best managed of the Government Departments during the War. My hon. Friend (Mr. Holmes) who spoke on this subject cannot be accused of ignorance of the question of the difference between capital and revenue, and how capital realisation should be dealt with. The idea of applying capital realisation in your balance sheet to cover expenditure would be objectionable in a private firm, but it is still more objectionable in the case of a Government Department. This is the way in which the real expenditure of the nation is being hidden.

Colonel WEDGWOOD

Like Whittaker Wright.

Sir D. MACLEAN

You will never really get to the bottom of what things cost in this way. Obviously capital realisation should go against your borrowing and let the revenue and expenses stand on their own feet, and then we should know the real difference. As a protest which we wish once again to make against this system, which is a cloak adopted by every Department to cover up extravagance, I shall vote for the reduction.

Lieut.-Commander KENWORTHY

I am sorry to appear in any way as a critic of the hon. and Gallant Gentleman who speaks for the Government because he makes most charming speeches in intro- ducing the Estimates. I do not understand part of them, but I am quite sure that is not his fault. I wish to draw attention to the sale of brand new ships to foreigners and ships built during the War with superior accommodation and very well built. In the autumn of last year, speaking from memory, I was told in a reply to a question that 112 of these ships owned by the Government had been sold to foreign nations. The hon. and gallant Gentleman will correct me if the number is wrong. Yesterday the hon. Member from the West Toxteth (Mr. Houston) asked about the steamship "War Charger," of 5,700 tons gross, built in 1918, and sold to a Greek buyer. This means that this ship will be run with a crew of Levantines at prices, owing to cheap labour and everything being skimped, that we cannot possibly compete with. It is going to be run by Greek shipowners in the Levant, and it is going to cut out our ships from the trade. Not only is national wealth being sold in a most reckless manner, but it is being sold to our direct competitors, who compete with us unfairly by sweating labour and running their ships on the cheap, and here we have many hundreds of English sea captains and seamen out of work in all our ports who cannot get ships, and are leaving the sea in consequence. I think it is lamentable.

I am sorry I could not understand the point about the Blue Book rates and the German ships. As far as I can gather, under the Peace Terms we take over these German ships and we pay Blue Book rates for them. We deduct from that the cost of repairs and running expenses, and anything that is over we take. I take it that that is the arrangement, but the point is that £19,500,000 is wanted for running these ships, and it seems to me that it wants a little more explanation. Freights are very high, these ships are being managed by very patriotic shipowners for love of their country—and I am sure they are doing it very efficiently—and I cannot understand why these ships are not making a large profit and why the Government should ask for this large sum.

Commander BELLAIRS

I think the four hon. and right hon. Members who have spoken from those Benches made a very large assumption in assuming that the bulk of the £19,500,000 comes from the sale of ships. Probably a very small sum comes from that source and very large sums are paid over to the Treasury for the reduction of debt. But anyhow, if it were done, although it would be unsound finance to balance revenue by such a means, it is a very old means in the procedure of Governments. The Navy has done it for years and years by the sale of old ships, and really it is very much the same method when we use our death duties for revenue purposes.

Sir W. MITCHELL-THOMSON

I should like to say a word on the question of accounting. I am in complete agreement as a general principle with the views which have been enunciated by several hon. Members, and I think a clear distinction ought to be drawn between capital and revenue; but where I think the right hon. Gentleman the Member for Peebles (Sir D. Maclean) has gone wrong is this, that I think this would be a perfectly proper entry in these accounts. If hon. Members will take the trouble to refer to the main Estimates they would see that under Sub-head K is an item which is expressly headed "Purchase and building of vessels." On the one side of the Estimates you have the item, "Purchase and Building of Vessels," and, therefore, I submit that it is perfectly proper on the other side of the account to bring in as Appropriations-in-Aid the amount received from the sale of ships. As a matter of strict accountancy, I think it is important that we should do what we can to keep the Government strictly up to the mark in these matters, but where there is a proper explanation as to the accountancy, I think it ought to be given to the Committee.

Colonel WILSON

I have been asked a very large number of questions, and I will endeavour to answer them; but if I deal with other questions than those which affect the main question, on which a reduction of this Vote is moved, I am sure my hon. Friends will understand me. My hon. and gallant Friend the Member for Hull (Lieut.-Commander Kenworthy) asked me about the sale of ships to foreigners. As a matter of fact, there have been a large number of sales to foreigners of ships built to Government account. The number of those built in the United Kingdome is 104, and the number built abroad 101. But these sales have been mainly in liquidation of obligations to our Allies under definite commitments which the Government had entered into for services rendered during the War, and I can assure my hon. and gallant Friend that no one is more anxious than I am to see that no ships are sold abroad more than is absolutely essential, or necessary, or advisable in the national interest, because I realise just as well as he does that the effect of a ship being sold abroad, especially if in commission in these waters, means throwing out of work a certain number of officers and men of the Mercantile Marino. Two cases will illustrate my point. The hon. Member for West Toxteth (Mr. Houston) put a question the other day on the subject of the sale of the "War Charger" to Greeks, and asked why the "War Charger" had been sold to Greeks, and permission had been refused for the sale of a ship called the "Clan Lamont." That was a question very difficult to settle, but I assure the Committee that every one of these questions as regards the transfer of ships to a foreign flag receives the personal consideration of the Shipping Controller, and in this particular case of the "War Charger," the ship, which had been built in Vancouver, cost a great deal more than ships built in this country. Speaking from memory, she actually cost £320,000. For reasons, which perhaps shipowners can explain better than I can, it was impossible to get anything like that sum for it in this country, even within £100,000 of it. In fact, one British owner would not give the Ministry of Shipping that amount. We received an offer of £350,000 for this ship, and, in view of the fact that we could not get anything like the amount she cost from British owners, we felt we should not be justified, having due regard to the state of the Treasury and the taxpayer, in doing otherwise. Then we come to the case of the "Clan Lamont." This was a case where a British firm wanted to transfer her to a foreign flag, and again we took into consideration all these questions, and it was thought most inadvisable, as my right hon. Friend has always thought, to transfer unless it was really in the interests of the, nation, as it was not in this particular case.

In reply to the question put by the Noble Lord the Member for Battersea, one felt in respect of the ship in question —the River Clyde—proper sentiment, and if it had been possible to have brought this ship back to England it would have been done, but the cost was really prohibitive. It was only a shell-riddled hull, and there were no engines. She had been brought back to Malta, but it would have been quite impossible to bring her through the Bay of Biscay without the expenditure of a very large sum of money in order, at any rate, to make her seaworthy. The cost of towage alone would have run to something between £20,000 and £30,000. [An HON. MEMBER: "Why not have left her at Malta?"] That was considered, but we thought we were hardly justified in not, after all, selling her for the very considerable sum of money we got. My Noble Friend also alluded to the question of the number of ships in the Tyne. I do not know whether I shall be quite in order in dealing with the condition of the ports under a Supplementary Estimate, but one question I should like to just touch upon—there are a large number of ships in the Tyne. Only 12 per cent. are British. The Minister of Shipping is doing everything in his power to reduce the congestion at the ports. He has sent a very-large number of ships from the Tyne in ballast to foreign countries to get cargoes of raw material for the industries of this country.

I have been asked about the vessels handed over to the Disposals Board. Those we have handed over to that Board for sale include tugs, launches, barges, yachts, etc. Speaking broadly, the dividing line is about 300 tons gross register. Then as to enemy ships due to us, those allocated to us under the Armistice conditions have been handed over, and we have been using them. There are a certain number yet under repair, and building, and for other reasons, which have not been handed over to the Associated Powers, but the Reparation Commission is now sitting in London and dealing with this matter of allocation. I need hardly go into the questions put by the hon. Member for North-East Derbyshire, as my hon. Friend, the Member for Dumbarton, has already said a word or two upon that subject. But I should like to point out that, in selecting managers for ex-enemy ships, great care has been taken to place them in the hands of old-established and responsible shipowners. They have been distributed throughout the Kingdom as fairly as possible. They have not been given, as a rule, to people who have not any steamers of their own, unless their ships have been lost owing to enemy action. In one or two cases—but only one or two—they have been given to managers who are not in possession of other steamers at the present time, but these are men who rendered us signal service during the War. On the question of the remuneration of these managers, I think there is a complete misapprehension on the part of hon. Members who have spoken. That remuneration is not so high as to encourage anybody to take these ships over for the amount of money they are going to get out of it. My hon. Friend will see from the circular which we issued with regard to the management of the ships that the remuneration is not large, considering all the charges which shipowners have to bear. I would also point out that the running expenses are debited to the Vote in gross and the gross amounts are credited through the Appropriations-in-Aid. My hon. Friend then dealt with the main question which is before the Committee at the present time. Perhaps that was not clear enough in the statement that I made, but there is no intention whatever of concealing any facts as suggested by my hon. and gallant Friend, the Member for Newcastle-under-Lyme (Colonel Wedgwood). I quite agree that it would be a very bad principle if what has been suggested by my hon. Friend, the Member for Derbyshire, were being done in this Estimate; and I can assure him that nothing of the sort is being done. I am afraid that there may be a little misunderstanding, due perhaps to the form of the Estimates themselves. The description of the Appropriations-in-Aid in the footnote is a general description and does not mean to imply that the proceeds from the sale of ships is to be brought in to reduce the additional sum of £19,500,000. The additional gross expenditure for which authority is asked is £19,500,000. Of this sum about £12,000,000 may be taken to represent the running expenses and repairs of ex-enemy ships. My hon. Friend says that we have made a profit of £54,000,000. That is the total receipts from all the ex-enemy ships and other ships under requisition. Against that has to be put the running expenses for which I am asking this sum of £19,500,000.

Colonel WEDGWOOD

Has anything else to be put against it?

Colonel WILSON

I was coming to that. Of this, £12,000,000 may be taken as running expenses and repairs of ex-enemy ships. Between £1,000,000 and £2,000,000 spent upon repairs is chargeable against the enemy, and in any case the expenditure has enhanced the value of the ships and will be recovered in the price realised for the ships. After all, the taking of the sale proceeds in aid of revenue is a Treasury matter, but there is nothing whatever in this Vote and there never has been in any Vote of the Ministry of Shipping by which we have taken capital and shown it as income. But it will be seen that we are asking to take out of the Appropriations in Aid £19,500,000, whereas our receipts, as I said in my original speech, will come to at least £54,000,000 more than was anticipated. So there is no question of our using our capital instead of using our revenue.

Colonel WEDGWOOD

But does not all the gross profit go to revenue as well as the sale of ships?

Colonel WILSON

No, any excess is paid to the Treasury. It is shown as revenue and must not be taken as money for capital expenditure in any account. I ought to explain, in regard to this note, that there should have been against "appropriation in aid" "receipts from ex-enemy ships and additional receipts under the liner requisition scheme," which would have made it considerably more plain.

Mr. HOLMES

Does not the money received during the year ending 5th April, 1920, for the sale of ships, go into the national revenue for the year as against the national expenditure?

Colonel WILSON

I cannot say what the Treasury will do. It will not go into the Ministry of Shipping Estimates as revenue as against expenditure, but it is quite impossible to anticipate what the Chancellor of the Exchequer is going to say. That is entirely a Treasury matter. There will probably go into the 1920 Estimates the expenditure on shipbuilding in the same year, which it would be quite fair to set off against the capital sum taken from the proceeds of the sale of the ex-enemy ships.

Mr. HOLMES

I quite agree, but the amount from the sale of ships is going to be enormously more than the amount of the building of ships during the present year.

Colonel WILSON

I agree, but the remainder of that money will not be used as appropriation.

Mr. HOLMES

As national revenue?

Colonel WILSON

It will be paid over to the Treasury and will be shown. No money will be shown as national revenue. I think I may say that there is no intention of using any capital as income. That, I believe, is the point, and if that is so I trust the hon. Gentleman will see fit not to press his Amendment.

Colonel WEDGWOOD

Can we be told how much of this £19,500,000 is due to sales, and how much is due to income?

Colonel WILSON

Nothing of the £19,500,000 is due to sales. This £19,500,000 is entirely appropriation in aid, as I explained, from the receipts which we received for the running of the ex-enemy ships.

Colonel WEDGWOOD

It says here: "additional receipts from the sale of ships, and other things," and totals £19,500,000. How much of that is from the sale of ships and how much from other sources?

Colonel WILSON

I have tried to explain that nothing is due from the sale of ships. As I pointed out just now, there should have been added to this appropriation in aid "from receipts of running of ex-enemy ships and additional receipts under the Liner Requisition Scheme."

Mr. HOLMES

I am sorry I cannot respond to the appeal of my hon. and gallant Friend to withdraw my Amendment. The whole point, as far as I am concerned, is this: The country, during the War years, borrowed money for the purpose of building ships. Now we are selling the ships and, instead of using the proceeds to pay off the loans raised during the War period, we are putting them into the national revenue as against the ordinary national expenditure of the present year. Nothing in what the hon. and gallant Gentleman has said has denied that. I admit that this probably is not a point for him, but I ventured to give him notice of this, and to tell him I thought it was a point, not for him, but for the Financial Secretary to the Treasury. As, however, the Financial Secretary to the Treasury

is not here, we have not had the opportunity of hearing his views on the matter.

Question put, "That a sum, not exceeding £90, be granted for the said Service."

The Committee divided: Ayes, 51; Noes, 223.

Division No. 39.]	AYES.	[10.47 p.m.
Adamson, Rt. Hon. William	Guest, J. (York, W. R., Hemsworth)	Robertson, John
Bowerman, Rt. Hon. Charles W.	Hartshorn, Vernon	Rose, Frank H.
Brace, Rt. Hon. William	Hayday, Arthur	Royce, William Stapleton
Briant, Frank	Hayward, Major Evan	Sexton, James
Bromfield, William	Hirst, G. H.	Shaw, Thomas (Preston)
Brown, James (Ayr and Bute)	Holmes, J. Stanley	Short, Alfred (Wednesbury)
Cairns, John	Kenworthy, Lieut.-Commander J. M.	Sitch, Charles H.
Cape, Thomas	Lunn, William	Smith, W. R. (Wellingborough)
Carter, W. (Nottingham, Mansfield)	Maclean, Neil (Glasgow, Govan)	Thorne, W. (West Ham, Plaistow)
Davies, A. (Lancaster, Clitheroe)	Maclean, Rt. Hn. Sir D. (Midlothian)	Tootill, Robert
Devlin, Joseph	Morgan, Major D. Watts	Wedgwood, Colonel J. C.
Donnelly, P.	Murray, Dr. D. (Inverness & Ross)	Williams, Aneurin (Durham, Consett)
Edwards, C. (Monmouth, Bedwellty)	Newbould, Alfred Ernest	Wilson, Rt. Hon. J. W. (Stourbridge)
Entwistle, Major C F.	Onions, Alfred	Wilson, W. Tyson (Westhoughton)
Finney, Samuel	Parkinson, John Allen (Wigan)	Wood, Major M. M. (Aberdeen, C.)
Graham, D. M. (Lanark, Hamilton)	Redmond, Captain William Archer
Griffiths, T. (Monmouth, Pontypool)	Richardson, R. (Houghton-le-Spring)	TELLERS FOR THE AYES.—
Grundy, T. W.	Roberts, Frederick O. (W. Bromwich)	Mr. G. Thorne and Mr. Hogge.
NOES.
Agg-Gardner, Sir James Tynte	Davidson, Major-General Sir J. H.	Hohler, Gerald Fitzroy
Ainsworth, Captain Charles	Davies, Major D. (Montgomery)	Hood, Joseph
Archer-Shee, Lieut.-Colonel Martin	Davies, Sir David Sanders (Denbigh)	Hope, H. (Stirling & Cl'ckm'nn'n. W.)
Armitage, Robert	Davies, Thomas (Cirencester)	Hopkins, John W. W.
Atkey, A. R.	Davies, Sir William H. (Bristol, S.)	Hopkinson, A. (Lancaster, Mossley)
Baird, John Lawrence	Dewhurst, Lieut.-Commander Harry	Hunter, General Sir A. (Lancaster)
Baldwin, Stanley	Dockrell, Sir Maurice	Hurd, Percy A.
Balfour, George (Hampstead)	Doyle, N. Grattan	Inskip, Thomas Walker H.
Barker, Major Robert H.	Duncannon, Viscount	Jackson, Lieut.-Colonel Hon. F. S.
Barlow, Sir Montague	Edgar, Clifford B	James, Lieut.-Colonel Hon. Cuthbert
Barnett, Major R. W.	Edwards, C. (Monmouth, Bedwellty)	Jephcott, A. R.
Barnston, Major Harry	Edwards, John H. (Glam., Neath)	Jodrell, Neville Paul
Barton, Sir William (Oldham)	Elliot, Capt. Walter E. (Lanark)	Jones, G. W. H. (Stoke Newington)
Bell, Lieut.-Col. W. C. H. (Devizes)	Eyres-Monsell, Commander B. M.	Jones, Henry Haydn (Merioneth)
Bellairs, Commander Carlyon W.	Falcon, Captain Michael	Jones, J. T. (Carmarthen, Llanelly)
Benn, Com. Ian H. (Greenwich)	Farqubarson, Major A. C.	Kellaway, Frederick George
Bennett, Thomas Jewell	Fell, Sir Arthur	Kenyon, Barnet
Betterton, Henry B.	Fisher, Rt. Hon. Herbert A. L.	Kidd, James
Bigland, Alfred	FitzRoy, Captain Hon. E. A.	King, Commander Henry Douglas
Boles, Lieut.-Colonel D. F.	Flannery, Sir James Fortescue	Lane-Fox, G. R.
Borwick, Major G. O.	Foreman, Henry	Law, Alfred J. (Rochdale)
Bowyer, Captain G. E. W.	Forestier-Walker, L.	Law, Rt. Hon. A. B. (Glasgow, C.)
Boyd-Carpenter, Major A.	Forrest, Walter	Lewis, Rt. Hon. J. H. (Univ., Wales)
Breese, Major Charles E.	Foxcroft, Captain Charles Talbot	Lewis, T. A. (Glam., Pontypridd)
Bridgeman, William Clive	France, Gerald Ashburner	Lister, Sir R. Ashton
Brittain, Sir Harry	Fremantle, Lieut.-Colonel Francis E.	Lloyd, George Butler
Britton, G. B.	Galbraith, Samuel	Locker, Lampson, G. (Wood Green)
Brown, Captain D. C.	Gardiner, James	Lort-Williams, J.
Bruton, Sir James	Gibbs, Colonel George Abraham	M' Donald, Dr. Bouverie F. P.
Buchanan, Lieut.-Colonel A. L. H.	Gilmour, Lieut.-Colonel John	McLaren, Hon. H. D. (Leicester)
Buckley, Lieut.-Colonel A.	Goff, Sir R. Park	Macmaster, Donald
Bull, Rt. Hon. Sir William James	Green, Albert (Derby)	M'Micking, Major Gilbert
Burn, Col. C. R. (Devon, Torquay)	Green, Joseph F. (Leicester, W.)	Macnamara, Rt. Hon. Dr. T. J.
Butcher, Sir John George	Greene, Lieut.-Col. W. (Hackney, N)	Macpherson, Rt. Hon. James I.
Campbell, J. D. G.	Gregory, Holman	Macquisten, F. A.
Campion, Lieut.-Colonel W. R.	Greig, Colonel James William	Malone, Major P. B. (Tottenham, S.)
Carr, W. Theodore	Griggs, Sir Peter	Marks, Sir George Croydon
Casey, T. W.	Gritten, W. G. Howard	Moreing, Captain Algernon H.
Cayzer, Major Herbert Robin	Guest, Capt. Rt. Hon. Frederick E.	Morris, Richard
Chadwick, R. Burton	Guest, Major O. (Leic, Loughboro')	Morrison, Hugh
Clay, Lieut.-Colonel H. H. Spender	Guinness, Lieut.-Col. Hon. W. E.	Morrison Bell, Major A. E.
Coats, Sir Stuart	Hailwood, Augustine	Mosley, Oswald
Cockerill, Brigadier-General G. K.	Hall, Lieut.-Col, Sir F. (Dulwich)	Munro, Rt. Hon. Robert
Colvin, Brig.-General Richard Beale	Hamilton, Major C. G. C.	Murchison, C. K.
Coote, Colin Reith (Isle of Ely)	Harris, Sir Henry Percy	Murray, Hon. Gideon (St. Rollox)
Cope, Major Wm.	Hennessy, Major J. R. G.	Murray, Major William (Dumfries)
Cory, Sir C. J. (Cornwall, St. Ives)	Henry, Denis S. (Londonderry, S.)	Neal, Arthur
Courthope, Major George L.	Herbert, Hon. A. (Somerset, Yeovil)	Newman, Colonel J. R. P. (Finchley)
Cralk, Rt. Hon. Sir Henry	Hilder, Lieut.-Colonel Frank	Newman, Sir R. H. S. D. L. (Exeter)
Croft, Brigadier-General Henry Page	Hills, Major John Waller	Nicholson, Reginald (Doncaster)
Curzon, Commander viscount	Hinds, John	Norris, Colonel Sir Henry G.
Oman, Charles William C.	Shortt, Rt. Hon. E. (N'castle-on-T.)	Warren, Lieut.-Col. Sir Alfred H.
Ormsby-Gore, Captain Hon. W.	Simm, M. T.	Weston, Colonel John W.
Palmer, Major Godfrey Mark	Smith, Harold (Warrington)	White, Lieut.-Col. G. D. (Southport)
Peel, Lieut.-Col. R. F. (Woodbridge)	Sprat, Colonel Sir Alexander	Whitla, Sir William
Peel, Col. Hn. S. (Uxbridge, Mddx.)	Stanier, Captain Sir Beville	Wigan, Brig.-Gen. John Tyson
Pickering, Lieut.-Colonel Emil W.	Stanley, Lieut.-Colonel Hon. G. F.	Williams, Lt.-Com. C. (Tavistock)
Pollock, Sir Ernest M.	Steel, Major S. Strang	Williams, Col. Sir R. (Dorset, W.)
Pulley, Charles Thornton	Stephenson, colonel H. K.	Willoughby, Lieut.-Col. Hon. Claud
Purchase, H. G.	Stewart, Gershom	Wilson, Colonel Leslie O. (Reading)
Raeburn, Sir William H.	Sturrock, J. Leng	Wilson, Lt.-Col. Sir M. (Bethnal Gn.)
Ramsden, G. T.	Sugden, W. H.	Wilson, Lieut.-Col. M. J. (Richmond)
Raw, Lieutenant-Colonel N.	Surtees, Brigadier-General H. C.	Wilson-Fox, Henry
Richardson, Sir Albion (Camberwell)	Sykes, Sir Charles (Huddersfield)	Wood, Hon. Edward F. L. (Ripon)
Richardson, Alexander (Gravesend)	Talbot, G. A. (Hemel Hempstead)	Wood, Sir H. K. (Woolwich, West)
Robinson, S. (Brecon and Radnor)	Taylor, J.	Wood, Sir J. (Stalybridge & Hyde)
Robinson, Sir T. (Lanes., Stretford)	Terrell, Captain R. (Oxford, Henley)	Worsfold, Dr. T. Cato
Rodger, A. K.	Thomson, F. C. (Aberdeen, South)	Worthington-Evans, Rt. Hon. Sir L.
Rogers, Sir Hallewell	Thomson, Sir W. Mitchell- (Maryhill)	Yeo, Sir Alfred William
Roundell, Colonel R. F.	Townley, Maximilian G.	Young, Sir Frederick W. (Swindon)
Royden, Sir Thomas	Turton, E. R.	Younger, Sir George
Rutherford, Sir W. W. (Edge Hill)	Waddington, R.
Samuel, Samuel (W'dsworth, Putney)	Wallace, J.	TELLERS FOR THE NOES.—
Seager, Sir William	Walters, Sir John Tudor	Lord E. Talbot and Mr. Dudley Ward.
Seddon, J. A.	Walton, J. (York, W. R., Don Valley)
Shaw, William T. (Forfar)	Ward, Col. L. (Kingston-upon-Hull)

Original Question put, and agreed to.