BRITISH SHIPS (CONSTRUCTION, GERMANY). (Hansard, 11 June 1936)

§ Colonel ROPNER
The matter which I desire to raise, very briefly at this late hour, was first brought to my notice by a shipbuilding firm of Selby, which complained some months ago that orders were being placed for trawlers by British firms in Germany. They were naturally extremely perturbed at what they thought was a growing practice, and asked me to take whatever action I thought advisable or necessary to bring the matter to the attention of the Government and, in particular, the President of the Board of Trade. I wrote to the President of the Board of Trade, and he replied that his attention had been drawn to this matter in the previous year, that it had been very carefully examined by the Board of Trade, and that the position was that he feared that he had no power whatsoever to intervene. I had regretfully to pass that information on to my constituents.
528 I was not a little surprised, therefore, when, in a recent shipping Debate which dealth with entirely other aspects of shipping problems, the President of the Board of Trade appeared to go out of his way to blame industrialists in this country for placing orders in Germany. In spite of the advice which he had given to me that the Government themselves were powerless to intervene, he undoubtedly gave the impression to the House during that Debate that blame could be placed on the shoulders, first, of ship-owners, and, secondly, of other industrialists, for placing orders for trawlers in Germany. During that Debate I pointed out that orders were not being placed by ship-owners and, secondly, I asked the President of the Board of Trade to give his considered opinion as to whether it was possible for industrialists to take action to circumvent the German currency restrictions, which the Government itself had admitted that it was powerless to do. I have not time to go through all the stages of the somewhat prolonged controversy which I had with the President of the Board of Trade, but I want to remind the House of two questions which I have asked in recent days. Both were put down in an attempt to elicit the true facts, and to ascertain whether business firms were really to blame, and, if so, which those firms were, or whether this is a case where only the Government can stop orders being placed in Germany. In reply to both questions, one on 19th May and the other on 26th May, the President of the Board of Trade told me that, in fact, those orders were being placed with Germany to release frozen credits and I think, speaking from memory, again stated that the Government were powerless to intervene. In point of fact, those replies were contradictory to an answer which I received to a supplementary question on 19th May, when the President of the Board of Trade said: Payment for United Kingdom goods sold to Germany is available in sterling under the Anglo-German Payments Agreement, 1934."—[OFFICIAL REPORT, 19th May, 1936; col. 978, Vol. 312.] I am not, neither is the Parliamentary Secretary, nor any other Member of this House, concerned as to whether the President of the Board of Trade actually contradicted himself or not. What we are concerned with is, why orders are 529 being placed in Germany. In order to elicit the truth and to assure myself that, either industrialists should be taking action which they are not taking, or that it is the Government's responsibility, and in that case to ask the Government to take the necessary action, I have framed certain questions to which I hope the Parliamentary Secretary will reply with his usual courtesy and ability. First of all, are any orders being needlessly placed abroad? If the answer to that question is yes, will the Government give us the names of those firms who are acting in that unpatriotic manner, and will they give us an assurance that they will do all in their power to persuade firms to place orders in the United Kingdom? If the answer is no, if orders are being placed in Germany because of currency restrictions over which industrialists have no control, are those currency restrictions of such a nature that private individuals and firms may reasonably be expected to get over them? In other words, what did the President of the Board of Trade mean when he said we should use our ingenuity to surmount these difficulties? If there are currency restrictions which private firms could be expected to break through, will the Government advise those firms as to how it should be done? But, if it is a case for Government action, will the Government say what it proposes to do in the matter? I have cut my speech shorter than I meant to do. I Was so afraid that I should not leave sufficient time for the Parliamentary Secretary to reply, that I have missed out a great deal of what I wanted to say. Perhaps I have not made myself sufficiently clear to the Parliamentary Secretary, but I repeat that I am sure that what he and every Member of the House wants is that ships should be built in England and that these orders should not go to Germany.

§ Mr. MATHERS
Why England? Can we not build them in Scotland?

§ Colonel ROPNER
I beg the hon. Member's pardon. I mean the United Kingdom. If industrialists are placing these orders abroad needlessly let us have full publicity of the names of the firms. If it is a question of Government action, let the Parliamentary Secretary say whether the Government can take any action, or let 530 him admit, if it be true, that the Government cannot take any action. I submit that it is unfair to do what the President of the Board of Trade actually did, namely, cast blame upon industrial firms when the responsibility in fact, in my view, lies with the Government.

§ Mr. LOGAN
When the hon. and gallant Gentleman raised this question before I intervened with a supplementary question, I thought that he was one of the guilty parties, but I am very pleased to hear of the attitude he has adopted to-night. If the Parliamentary Secretary is going to give names, let us know whether any of these British firms have received the subsidy.

§ Mr. ELLIS SMITH
I have received a letter written by a man who is in the same position as thousands of others in connection with this matter. He states that the firm by which he was employed quoted for a number of trawlers. The firm made the lowest estimate of any of the shipbuilding firms in this country, and yet they did not obtain the order, which was given out by Unilevers, who are having 15 boats built in Germany. According to the "Daily Telegraph" at present there are 44 boats being built in Germany for British firms in order to enable them to carry fruit to Britain. This is only one part of a very big problem connected with the financial relationship between Britain and Germany for which the Government are responsible.

§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin)
It is through no fault of mine that this matter has come up at a late hour of the night, and that the Debate has had to be telescoped into a few minutes. I can assure hon. Members that there is unanimity in desiring that any vessel required for United Kingdom purposes should, if possible, be built in the United Kingdom. I think I shall have the assent of the House when I say that if a vessel is not wanted for the United Kingdom purposes by a United Kingdom owner it would be better if it were not built at all. It is the fact that a not inconsiderable amouit of tonnage has been ordered by British industrial concerns from 531 German yards, and I should have thought the President of the Board of Trade would have commanded universal agreement by his statement in the recent Debate that it was unfortunate that some large industrial concerns on their shipbuilding side should give the impression that they could be satisfied in Germany but not here. I should have thought that everyone would agree with the President of the Board of Trade in his observations. The hon. and gallant Member for Barkston Ash said that he was not concerned or interested in whether the President of the Board of Trade had or had not given a contradictory answer. As my right hon. Friend's deputy I am most interested and I say that there is no shadow of contradiction in the attitude of my right hon. Friend in this matter. But I agree that at the moment the House is interested in another problem. There are currency restrictions in Germany. There are limits to what British industrialists can or cannot remove from Germany in the form of currency. There are regulations made by the German Government as to what British industrialists may do with deposits, or profits, or other forms of property in Germany. There is nothing in any regulations in Germany or in any agreement with Germany which compels any British industrialist anywhere to order a ship in Germany. Let us have that quite clear. When the hon. and gallant Member asks whether British industrialists are ordering ships in Germany, the answer is, "Yes," quite definitely, but it is a matter of great regret that these industrial concerns on their shipbuilding side should have thought that the best use they could make of funds or balances due to them in Germany was to place orders in German yards. It is regrettable on many grounds. The hon. Member for Stoke (Mr. E. Smith) hinted at some dark mysterious financial connection between Great 532 Britain and Germany—moonshine of the first order. That is no contribution to the question we are discussing. Let us keep to currency restrictions. There is an Anglo-German Agreement, Command Paper 2746, and under that agreement certain things are permitted and certain things are not. The hon. and gallant Member for Barkston Ash (Colonel Ropner) has asked whether there is any method by which the British Government can prevent British nationals placing orders for a ship to be built in German yards. The answer is "No." There is no step which the British Government can take to prevent British shipowners ordering vessels, if they so desire, in German yards.
The hon. and gallant Gentleman asked me to define what the President of the Board of Trade meant when he said that industrialists should exercise ingenuity. One of the things the President had in mind was that if there are commodities other than fully-built ships which are of value, why not have part of the balances which are due to you in a commodity other than a ship. The importation into this country of a ready-made ship from a foreign country does a double harm. It hits one of our basic industries where we are particularly wanting work if a ship is wanted, and if the ship is built as a means of extracting sterling from Germany when a ship is not wanted, it does great harm to shipowners as well as shipbuilders. On all grounds the President of the Board of Trade was right in expressing his regret that industrial concerns thought fit to adopt this practice. I share that regret and I am sure the House shares it. I know of no method under existing law by which it can be prevented.