HC Deb 04 December 1934 vol 295 cc1540-6

10.43 p.m.

Lieut.-Colonel J. SANDEMAN ALLEN

On Friday last I raised a question as to why the Chancellor of the Exchequer discouraged the proposed purchase of the Red Star Line. The reply is known to the House, but I am sorry that the right hon. Gentleman, in his reply, tried to misrepresent me by pretending that I suggested that the Government were discouraging North Atlantic trade, whereas I made it clear in my question that the Government were merely discouraging the formation of this company. I am very grateful to my right hon. Friend for coming here at, I am told, some inconvenience to himself. I make no apology for raising this matter, because great issues are at stake. I do not consider that the Adjournment Motion gives adequate time to discuss those issues.

Briefly, the Red Star Line, owned in America but sailing under the British flag, has been put up for sale. British enterprise and initiative, in that spirit which made our nation great, decided to remove this foreign competition to British ownership. That was a patriotic and laudable move which I thought should have been praised and not discouraged by the Government. The vessels were to be altered to improve their passenger-carrying capacity, and they were to give a different type of service from that existing at the present moment. The passenger trade in North Atlantic is more expensive than any other passenger trade in the world. The most simple and straightforward example I can give is the first-class fare of £8 a day on the North Atlantic which is cheap, whereas the Orient Line will take anybody first-class to Australia for 30s. a day. Other fares are in proportion. This new project proposed to take passengers by a cheap cabin service at £10 from Liverpool to New York, passengers to find their own food, and it was creating a market which is at present untouched and which, to the best of my knowledge, had not even been contemplated by any of the existing services. It would supplement, and not compete with, present services. The only competition that it would involve would be competition with cruises to the Mediterranean. I put it to my right hon. Friend whether it would not be far better for the people of this country to be able to get into close touch with the English-speaking people in the United States. Many poor people in this country, particularly in the North of England, have relatives in the United States, and would be very willing and glad to avail themselves of such a service, which they would not be able to do in existing circumstances, for at the present time the other lines have no idea of offering a similar service.

There are, however, other and more cogent reasons why this scheme ought to be allowed to fructify. Five ships would have to be altered, giving work to unemployed men in our shipyards; there would be five ships to be manned by British seamen and officers; and there would be the office organisation and shore staff behind them, giving to men who are at present thrown out of work by the merger of the White Star and Cunard companies fresh hope of immediate employment. But all these considerations fade into insignificance in comparison with the great principle involved. All my life I have stood for the benefits of private ownership, private individual activity, and private initiative. The Socialist Opposition cannot really, criticise this scheme, because it is almost nationalisation. It eliminates interior competition. It is not, however, parallel with similar schemes from which the Government have eliminated competition. It is not parallel with the London Passenger Transport Board or the Electricity Scheme, for these are not subject to foreign competition. Could my right hon. Friend control foreign competition? Could he stop any other British fleet—say, the Anchor or the Bibby-Hall—from putting a line into service in competition? As a matter of fact, the Bernstein Line and the Holland-Amerika Line are in active negotiation at the moment, having heard that the Government are going to stop this proposed venture, with a view to taking on the scheme and entering into direct competition, which my right hon. Friend could not control, whereas he can partially control British competition.

The existing White Star-Cunard merger is not nationalisation in the true sense, because, if it were truly nationalisation, my right hon. Friend would be able to dictate in which yard any new ships of the service should be built. By question and answer in this House we have elicited the fact that he cannot in that case influence the building of a new ship in any particular yard, whereas I can tell him, from the promoters of this scheme, that so keen are they on carrying out the venture, and so keen are they that Great Britain should control this new service, that they are willing to undertake not to build any new vessels without first consulting the Government. That shows that the Government would have a certain amount of control in this new venture, sufficient to make it far better than the line going into foreign hands. I warn my right hon. Friend that throughout history Governments in this country have been smashed on the question of private monopolies, and the White Star-Cunard merger is now being treated as a private monopoly. Our fathers and forefathers have smashed private monopolies, and we have an innate and intense dislike and distrust of them. We hope that my right hon. Friend will bear this in mind.

I remember as a boy that, before my father thrashed me, he always said he did it because he loved me, and it is in that spirit that I speak to the Chancellor of the Exchequer and the Government to-day. I do not want to thrash my right hon. Friend, or even to thrash the Government, but merely to beg and implore them to reconsider their decision. I hope my right hon. Friend will take it that I am not attacking the Government seriously, but am criticising them from the point of view of standing up for the inherent rights and liberties of the British people. I hope that the Government will give this their closest consideration, for it would be a means of getting together the masses of two peace-loving people of the world in such close contact that it would make for a much greater amity between this country and the United States.

10.51 p.m.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

My hon. and gallant Friend has expressed his criticism in forcible, not to say violent terms, for he described the Government as possibly receiving a thrashing, which is generally associated with violent action. Nevertheless, I wish to put before the House a somewhat different aspect of the proposal to which he has referred than he has given. I would remind the House that when the proposal was made in February of this year to finance the building of the "Queen Mary," in announcing the proposal of the Government to the House I specifically stated that the real purpose in the mind of the Government, the primary purpose in taking the rather unusual step they did then, was to rationalise British shipping in the North Atlantic, and see it put in a position where it could meet foreign competition with the greatest possible efficiency. I pointed out at that time that there had been for a long time serious rivalry between two great firms, and that as a result both firms were continually losing money. There could Le very little doubt that unless some means could be found of reaching some arrangement between them, both of these firms would drift into great difficulties. We found in the taking up of the building of this great ship an opportunity to bring about fresh negotiations between the White Star and the Cunard, with the result, as Members are aware, that fusion was effected and the new line started, and the ship is now being completed. A good many hon. Members have taken a great interest in this subject, and have been very anxious to see orders placed for a second great ship in the hope of giving further employment, and I am sure that everybody desires to see a companion ship to the "Queen Mary," and many other ships built besides.

That being the case, before this merger has settled down, before it has had time to effect the economies that I have no doubt will ensue in consequence of the merger, it is suddenly faced with the prospect of a new form of competition, not from foreign sources, but British sources. There are limits to the influence that Governments can bring to bear in these matters, but the interests that were concerned with this proposal to buy these ships have approached the Treasury in an informal manner and desired to know their attitude. In an equally informal manner they have been informed that it was not, in the opinion of the Treasury, in the national interest that this proposal should be carried through. What was the proposal? It was to buy at a very low price three ships—or five ships, two of which were to be broken up—which were of foreign ownership but sailing under the British flag, which had been somewhat irregularly employed in the North Atlantic trade, and start a new line with these three ships. But that was not to be the end of it. It was an essential part of this operation, as it was represented to me, that new ships were to be built which were described as being of the type of the well-known "Britannic" and "Georgic" but superior to them and to be run at rates considerably less than conference rates. It is very easy to say it would be an advantage to passengers to be able to travel by luxurious and comfortable ships at rates a good deal lower than those charged by the present companies in the Atlantic shipping trade, but it will be recognised that the Atlantic shipping trade is not at present so profitable as to justify the hope that a new concern can build new ships and run them at a profit charging a great deal less than is charged at present.

The proposition, then, is to start a new form of competition before the new merger is able, so to speak, to get on its feet, and I really could not think that, in view of the approval given by the House to the rationalisation of the Atlantic shipping trade, a trade in which there is already undoubtedly considerable redundant tonnage, it would be in accordance with the wishes of the House that I should facilitate the setting up of a new competition which could only have the effect of injuring this merger which was so recently started under the auspices of the Government, and which indeed might jeopardise the building of the second ship, to which hon. Members have so much looked forward. My hon. and gallant Friend puts a different proposition to me to-night. He says that those for whom he is speaking are willing to give certain undertakings. I think it would be imprudent of me to give an answer on the spur of the moment to a new proposition of that kind of which I have not heard anything until a few moments ago.


had not either.


I am not criticising my hon. and gallant Friend, I am only explaining why I do not think it would be wise for me to give an answer on the spur of the moment. Prima facie I do not very much like the idea of asking the Government to take the responsibility of saying whether or not a new ship should be built by people with whom the Government have no concern whatever and who are, therefore, in an entirely different position from the Cunard and White Star line, with whom we have a special arrangement in consequence of the financial facilities that were afforded. At the same time, if my hon. and gallant Friend likes to ask his friends to put in writing the proposition that they wish to make to me, I will certainly give it my best consideration.


I wonder whether the right hon. Gentleman could let us know what is the nature of the hindrance that the Government can place in the way? I take it it was not merely a question whether the necessary foreign exchange could be made available. Is there any other power that the Government could exercise?


I told the hon. Member that the views of the Treasury were sought and were given. No doubt, the transaction would require the transference of a certain amount of funds from this country to another, and in that sense the Treasury would have power to prevent it.

10.59 p.m.


I do not think we can allow the right hon. Gentleman's statement to pass without some comment. When we had a discussion some time ago upon the question of principle whether we should or should not approve of the loan in respect of the construction of the "Queen Mary," we advanced a considerable amount of argument against the proposition. It was finally decided, and we cannot now reopen it. But the hon. and gallant Gentleman pointed out that it was virtually to treat a monopoly under the control of the Cunard-White Star line organisation and, naturally, the Government do not wish to do anything to prejudice the prospects of that merger. That I can quite understand. I do not understand how it is going to be effected. I gathered from the hon. and gallant Member, as I learnt this morning, that these people who are interested in this new project are in a position—

It being Eleven of the Clock, the Motion for the Adjournment of the House lapsed, without Question put.