HC Deb 03 July 1934 vol 291 cc1719-28
1. Colonel ROPNER

asked the President of the Board of Trade whether he can now make any statement with regard to the proposals of the Government for the defence of the shipping industry against the competition of subsidised foreign tonnage and the ships of other nations whose running costs are below those of British vessels?


asked the President of the Board of Trade what steps he proposes to take to assist British shipping to meet subsidised foreign competition?


asked the President of the Board of Trade whether he is now in a position to make a statement on the Government's shipping policy?


asked the President of the Board of Trade whether the Government have had an opportunity of considering the information which has been supplied to them by the shipping industry; and, if so, whether they are now in a position to inform this House what policy they propose to protect Empire shipping from the competition of foreign shipping subsidies?


asked the President of the Board of Trade whether he is now in a position to state the policy of His Majesty's Government to deal with subsidised competition in the shipping industry?

The PRESIDENT of the BOARD of TRADE (Mr. Runciman)

With the permission of the House, I will make a statement at the end of Questions.

At the end of Questions


I am glad to be able to make a statement on the position of the British Mercantile Marine, which for some months past has been engaging the anxious attention of the Government and the shipping industry. The fundamental difficulties, not only of British shipping, but of all shipping, at present are the reduction in seaborne trade since 1929 and the striking increase in the mercantile marines of the world since the War. Seaborne trade has fallen in volume since 1929 by one-third and is less than in 1913. On the other hand, merchant shipping has increased by about 50 per cent. since 1914.

The results are seen in the depressed international freight markets and in the balance sheets of shipping companies. Tramp freights stand at about three-quarters of the 1913 figure although run- ning costs are greatly increased. While liner freights, owing to the Conference system, stand at relatively higher figures, many liners are running with empty space. In the result cargoes are being carried on an unremunerative basis with disastrous results to our shipowners. Very few British shipping companies are covering their running expenses and fewer still are able to make the necessary provision for replacing their ships as they become out-of-date. This is not only a shipowner's problem but concerns in particular our officers, engineers and seamen as well as the nation as a whole.

If the state of affairs which I have described were due to fair competition it might be held that the British Mercantile Marine ought to fight its own battles as in the past, without Government aid. But this is not the case. The increase in the mercantile marines of some other countries has been due in large part to the stimulus of subsidies, and that financial help is still being given by many foreign countries. Other countries are free, of course, to adopt what policy they think fit, but from the point of view of the British Mercantile Marine, competition created and maintained by Government subsidy cannot be regarded as fair competition and British shipowners are entitled to seek the help of their Government if they are not able successfully to defend themselves.

The efforts of His Majesty's Government are primarily bent to the increase of international trade. But a revival of world trade may be slow. I cannot detain the House by stating the difficulties inherent in the problem, which have become clear to all who have taken a responsible part in the discussions of the last few months. So far as passenger liners and cargo liners are concerned, they are suffering from the falling off in world trade and from subsidised foreign competition. On the other hand, by means of their Conference arrangements they are able, to a certain extent, to protect themselves although it may be necessary for special measures to be taken by the Government in particular trades. The bulk of the tanker tonnage is in the hands of the big oil trading companies and this class of tonnage has inaugurated art international plan for adjusting the supply to the demand. The position of the coasting and near sea trades raises considerations somewhat different from those applying to oceangoing shipping and no special measures in respect of these trades are proposed at present.

As to the tramps, for reasons outlined in my speech in this House on the 13th December, the Government are not able to grant a subsidy of the kind suggested by the tramp shipowners committee. But the Government are prepared to ask this House to grant for vessels carrying tramp cargoes under tramp conditions a subsidy to be used for defensive purposes and to cost not more than £2,000,000. This subsidy would be aimed at securing the abolition of foreign subsidies and the greater employment of British shipping and of our seafaring classes. Such a defensive subsidy can be given only on condition that the shipowners formulate a scheme satisfactory to the Government. Such a scheme must—

  1. (i) prevent so far as possible the subsidy from being dissipated by the domestic competition of British ships carrying tramp cargoes, and
  2. (ii) ensure that it is effectively directed to securing the greater employment of British tramp shipping at the expense of foreign subsidised shipping.
This entails a real measure of organisation of tramp shipping.

Such a subsidy would be given for one year only, and within that period be subject to withdrawal if the circumstances which led to its introduction were altered. It would also be a condition that the shipowners, through their international organisations and in any other ways open to them, press upon the shipowners in other maritime countries the framing of proposals tending to adjust the supply of tonnage in the world to the demand, and thus to raise freight rates once more to a remunerative level.

The Government on their part in the light of the policy which I have just announced will continue their efforts to secure international consideration of means to place shipping generally on an economic footing. We intend to communicate with foreign countries to ascertain their views on the possibility of international measures to facilitate the abolition or reduction of subsidies and the formulating of schemes for laying up or scrapping superfluous tonnage or both. Our view is that the task of preparing the ground for, and of formulating such schemes must in the first instance fall upon the shipowners of the chief maritime countries.

I need not add that, in considering these problems, it is essential to have the co-operation of the Dominions and India. We must bear in mind not only the position of tramp shipping, but the position in some of the great liner trades, especially those between different parts of the Empire, which are menaced by subsidised foreign competition. We are therefore informing the Dominions and India of the position as we see it, and seeking their views as to possible lines of action.

The Government have been impressed by the improvements which have been made in the form and propulsion of cargo ships in recent years. We have therefore been prepared to place at the disposal of the shipping industry financial help on favourable terms for scrapping older British cargo tonnage and providing a smaller quantity of up-to-date cargo tonnage, either by the construction of new vessels or the modernisation of existing vessels. Our object was to ensure, first, a reduction in the amount of surplus ships which at present flood the market and depress freight rates whenever these show a tendency to improve, and secondly, to maintain the high standard of efficiency which on the whole has characterised our cargo fleets in the past. There has never been any intention of compelling any shipowner to take advantage of the scheme if he did not wish to do so. Nevertheless it has not been favourably received by shipowners. The Government remain of opinion that useful help could be given in the direction of rebuilding or modernising our cargo fleets and are still prepared to co-operate with the shipowners in this matter.

Various suggestions have been put forward for the assistance of British shipping by the reservation of inter-Imperial trades, the preferential treatment of British ships or cargoes carried in British ships in Empire ports, differential duties against foreign ships which have the benefit of Government subsidies, and the like. These are all measures which have their own dangers, but they may have to be considered if the proposals which I have outlined do not succeed in lessening the menace to the British Mercantile Marine.

Lastly, I should refer to the need for greater efforts by the industry itself to improve its position. I have emphasised the importance of securing international arrangements which would lessen the present surplus of tonnage competing for the reduced quantity of cargoes available. In addition, with the assistance of importers and shippers more can be done to secure a greater use of British vessels. Efforts must also be made to prevent the forcing down of freight rates by the domestic competition of British ships and to present, by fuller co-operation between British shipowners, a stronger front to foreign competition.


Can the right hon. Gentleman tell us when there will be an opportunity to discuss this matter. I understand that it entails legislation. Therefore, it will not be possible to discuss it upon Supply. Will he say how soon the legislation that will give the opportunity for discussion will be brought forward?


The discussion of one aspect of these proposals can, of course, be taken on a Supply day, but, as the House knows, we cannot deal with legislative proposals on that occasion. I am afraid that I cannot answer the question any further.


May I ask the right hon. Gentleman if he can give the House any fuller information about the scrapping and replacement scheme which has been offered to the shipping industry?


No; I have made a very long statement this afternoon, and I fear I cannot add to it, but, if it will meet the convenience of the House, I am prepared to circulate as a Paper the proposals which have been under discussion.


May I press on the Lord President of the Council the great desirability of the House being given an early opportunity of discussing the extremely important matters mentioned by the President of the Board of Trade, which apparently involve an immediate financial commitment to which the House has not given its sanction?

The LORD PRESIDENT of the COUNCIL (Mr. Baldwin)

I see no prospect of allocating a day before we rise specifically for the discussion of the statement which we have just heard. It will be possible, as the President of the Board of Trade said, to cover a great deal of the ground on a Supply day, but I would remind the right hon. Gentleman that these are only proposals which have to be discussed with the shipping trade itself. There can be no possibility of legislation, if there should be legislation, until the autumn, and indeed little can be said until the negotiations which must take place have taken place. I think perhaps the best thing would be to discuss as far as we can the matter on a Supply day, and that, I believe, would cover most of the ground; but I warn the right hon. Gentleman that at the present moment the grant of an extra day might well throw us a week later than we hope to adjourn.


May I ask that, until the matter is discussed in the House, there will be no financial commitment in regard to the scrapping of ships on which the shipowners may act, until the sanction of Parliament has been obtained?


In view of the fact that the statement of the President of the Board of Trade is, as it were, an offer to the shipping industry which has not yet been discussed or approved by this House, will not the President of the Board of Trade or the Lord President make arrangements on a Supply day to put down an agreed Motion that Supply shall cease at 7.30 so that thereafter we can discuss these matters? That would enable the whole matter to be discussed together and not in two portions, which would obviously be inconvenient.


I will certainly consider that, and I think it may be the best way out of it. There are already a large number of Supply days in the last two or three weeks of the Session, and there may well be a general agreement of the House to sacrifice the major part of a Supply day for this purpose. If the hon. and learned Gentleman will put his request through the usual channels, I will consider it.

Colonel ROPNER

In view of the fact that the majority of shipowners are de- finitely opposed to the scrapping programme, may we have an assurance that no action will be taken before there has been further consideration with representative owners?


I have a question to put to the right hon. Gentleman as to whether no steps can be taken in this matter until after the Autumn Session and money is made available. Is nothing to be done in the interval?


The statement I made this afternoon is a statement made on behalf of the Government, for which the Government take responsibility. It is essential that a statement of that nature should be made, so that the shipping interests may examine it and see what they can do to co-operate.


My right hon. Friend has not answered the rest of the question.


May I ask whether a means test is to be applied to the people who receive this public assistance? [HON. MEMBERS: "Oh!"] Have the Government before coming to this decision taken into consideration the salaries received by the directors of some of these companies and the extra sources of income that they have?


I am sorry to say that there is no doubt about the exhaustion of the funds of the shipping industry. The object the Government have in view is to increase the means of those who formerly used to be employed in British ships and British shipyards.


May I ask whether it is proposed to extend the subsidy to laid-up shipping: and, with regard to shipping generally, whether it is to be on an annual basis or on a voyage basis?


Those are details which I think might be reserved till later.


Will the right hon. Gentleman answer the question put twice by the right hon. Member for Darwen (Sir H. Samuel) and myself as to whether no public money will be available for shipping and shipbuilding purposes until after the Autumn Recess?


I think my hon. Friend need not be anxious about that. No money can be made available until the Bill is passed.


The point is a perfectly simple one. The danger that we want to guard against is that the House, later in the year, may be faced with a fait accompli, that a definite offer will have been made to shipowners on the scrap and build plan and may have been accepted by some of them, and that commitments may have been entered into and work begun before Parliament has given any sanction to the general scheme.


I can assure my right hon. Friend that, wherever legislative authority is necessary, it will be obtained before action is taken.


As this is the most important pronouncement by a Minister of the Crown on shipping since the repeal of the Navigation Acts 80 years ago, are we to understand from the President of the Board of Trade that the shipping industry will have a full opportunity of considering these proposals in detail before he introduces any legislative Measure to implement the policy? [HON. MEMBERS: "Yes!"] I did not understand that he gave that undertaking when asked for it.


There is no necessity to give any undertaking. We have been in the closest conference with shipping organisations for some time, and that position will continue.


May I ask whether it is the intention of His Majesty's Government, in consultation with India and the Dominions, to ask those Governments to make any contribution at all towards any subsidy granted by the home Government?

13. Brigadier-General NATION

asked the President of the Board of Trade whether a decision has yet been reached in regard to the request by the shipping industry that relief should be given in respect of the fees charged for certain services rendered by the mercantile marine department of the Board of Trade to the shipping industry?


Yes, Sir. The Government have decided to introduce in due course legislation to repeal Section 18 of the Economy (Miscellaneous Provisions) Act, 1926, under which the receipts from statutory fees for services to the shipping industry are required over a period to cover approximately one-half of the aggregate cost of the relative services. The existing statutory maximum fees will remain, but the present surcharge of 16⅔ per cent. on basic fees will be removed.