HC Deb 19 March 1936 vol 310 cc745-69

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the Third time."

10.28 p.m.


On the occasion of the Third Reading of this Bill, the House finds itself confronted with exactly the same circumstances as those prevailing when this Bill was read the Second time. The shortage of world trade and the surplus of world tonnage make it difficult for tramp shipping to make both ends meet. Tramp shipping is an essential part of the British Mercantile Marine, and the British tramp shipping industry must be maintained. There can be little doubt that in the first year of the subsidy tramp shipping has received substantial help and the tendencies for the tramp shipping industry still further to deteriorate have been arrested. It would be the wildest misdescription to pretend that tramp shipping, by reason of the subsidy, has either received a bribe or a generous present. The distribution of the subsidy was made on the basis of a scheme approved by Parliament, designed to assure that it was fairly distributed and effectively directed to secure its object.

Members have in their hands the particulars of the way in which the subsidy has been distributed. They will note many interesting facts from the White Paper containing that information. Let me summarise a few of the conclusions which are to be drawn from the information given in Command Paper 5129. The total amount distributed was £1,989,999 12s. The amount of the subsidy paid to each recipient varies, of course, a great deal. Concerns receiving £50,000 and over were five; more than £30,000 and less than £50,000 were eight; more than £15,000 and less than £30,000 were 16; under £15,000 were 349. Out of the total of 378 recipients, 349 received less than £15,000 each, but received in the aggregate well over £1,000,000. The smaller owners, that is those owning less than 30,000 tons of shipping engaged in tramp trades, of which the majority own only one or two ships, have received more than half of the subsidy in the aggregate, although they own a great deal less than half of the amount of tramp tonnage.

During the passage of this Bill through the House no valid argument against the proposals contained in it has emerged. [HON. MEMBERS: "Oh!"] There has been no valid argument against the Bill. I have heard no arguments at all, valid or not. The Opposition has mainly been concerned with criticising measures taken to ensure the seaworthiness of British ships and the conditions provided for British seamen. These are admittedly matters of the greatest importance, but they are not relevant to the consideration of this Bill, because it aims at the particular issue of keeping the tramp tonnage in existence. The hon. Member for Seaham (Mr. Shinwell) appreciated that position very much, because he pointed out in his speech on 3rd March that the point is whether the tramp shipping industry requires any measure of assistance at all in order to escape from depression. I will take that as the test, and there can be no doubt of the answer. The small improvement in the average freight rates for 1935 was due mainly to circumstances of a temporary character. The movement has ceased and the freight index has fallen and is still falling. The absence of demand for tonnage in the trade from the River Plate has created a serious situation. Had it not been for the fact of the minimum freight scheme, rates would have fallen still lower. There was a decrease in the amount of British tramp tonnage laid up. But I am afraid that that downward tendency has now ceased, and that an increase of laid-up tonnage may be revealed in the next returns.

The claim made by the Government for the subsidy is that, as a result of the conditions laid down for its payment, it effectively and without waste secures the maintenance of British tramp ships in employment without detriment to other classes of British shipping. The continuation of the subsidy is essential in existing conditions of world trade, and it is unthinkable that we should allow the British tramp shipping industry to revert to the impossible condition from which it was rescued during 1935.

10.35 p.m.


I beg to move, to leave out the word "now", and at the end of the Question to add the words "upon this day six months."

When the hon. Member was moving the Second Reading of the original Bill describing the romance and the glory of the sea as it affected people who served in ships, he said that he did not want to become lyrical on the subject. No one could accuse him of trying to be lyrical to-night. He has given us a little homily on how the subsidy is being distributed, but not any reason for it. He has told us that five firms have taken over £50,000 each and certain other firms have had over £30,000 each. He further said that he had heard no argument against the subsidy as such. I hope that to-night I shall be able to adduce one or two arguments which the President of the Board of Trade may take the trouble to answer. One of the first things to which I will call attention is this: I see that the hon. and gallant Member for Barkston Ash (Colonel Ropner) is not in his place to-night. I was going to say that, perhaps, the reason is that with his firm getting a subsidy of £50,000 this year he really did not think he ought to stand forth and declare himself with his hands stuck in the taxpayers' pockets.

The right hon. Gentleman has been kind to his friends. In the north east trade something like 90 out of 374 shipping companies, 24 per cent. of the total, have received between them £565,000 out of the subsidy of £2,000,000, which is 26 per cent. of the total. I imagine that the right hon. Gentleman and the hon. and gallant Member for Barkston Ash are really saying "Parliament is a good thing for a distressed area if shipowners have their being in a distressed area." If a small man in business fails, does he get a subsidy? If an unemployed worker loses his job, does he get a subsidy? [HON. MEMBERS: "Yes."] I expected someone to say that, but I would remind those hon. Members that the gentleman who gets his "dole," as they misdescribe it, in fact finds the whole of the three contributions towards the funds, since without work no profit exists and no taxes can be paid.

The original Act excluded from subsidy all vessels that were not registered under the British flag. That was in January, 1934. The reason was obvious. A note had gone forward to the shipping industry that a Bill was to be introduced. Friends were in office there were friends at court, and the method adopted was by giving publicity some months before the Shipping Subsidy Bill was put forward in this House. A White Paper was published months before the advent of that Bill to warn the shipowners connected with tramp shipping that there was a possibility for them, in conjunction with many other industries, to get their hands into the taxpayers' pockets. That in itself was an inducement to many shipowners with vessels registered under foreign flags, to register them under British flags in order to come within the terms of the subsidy—in fact, for foreign shipowners with directors who are known as "guinea pigs," that is, who hold shares to a nominal amount in order to conform to the terms of the Merchant Shipping Act, to bring their ships under the British registry to gain the advantage of this subsidy.

Everybody knew, and certainly the hon. and gallant Member for Barkston Ash knew, that this subsidy was not for a year and that it was going on for another year. The hon. and gallant Member for West Eirkenhead (Colonel Sandeman Allen) postulated the possibility of 10 years for this subsidy. In February, 1935, the hon. and gallant Member for Barkston Ash said: I have no hesitation in saying that I believe it will be found at the end of the year, when the subsidy period is up, that a further grant, in respect of next year, will be necessary. I have never disguised that opinion. So long as other nations continue to subsidise, we shall need to do so."—[OFFICIAL REPORT, 1st February, 1935; col. 712, Vol. 297.] He has never disguised his opinion. His opinion has been given to this House on many subjects connected with shipping. The total reward to his company is a sum in excess of £50,000 out of the pocket s of the British taxpayers, in the last year of subsidy. Having staked his claim for a further year and, on behalf of the shipowners, having staked their claim—they have got a Bill here for its Third Reading—I presume that he is looking forward with an avaricious eye to see whether it is not possible to augment that sum next year. A firm with which the right hon. Gentleman is not unconnected, I refer to the Moor Line, receives £40,000 in subsidy.

I ask the right hon. Gentleman and the hon. and gallant Member for Barkston Ash: Are not they a little ashamed of the fact that they can come here on behalf of their friends in the shipowning industry and take, year after year, millions of money out of the taxpayers' pockets, in respect of and for the profit of shareholders? That was the right hon. Gentleman's term in the Debate on the Committee stage. We have never yet been convinced, neither the right hon. Gentleman nor his hon. Friends have ever convinced this side of the House, of the truth of their statement that other countries are subsidising tramp shipping as such. On no occasion have they given us figures to justify the statement. We know that in the Plate trade the greatest competitors with the British shipowners are the Greeks, and no statement has ever been made that the Greeks are subsidising those ships. Again, under the last Act and under the new, tramp vessels have transferred from foreign flags to British registry. I ask the right hon. Gentleman to tell us how many British companies operating in the eastern Mediterranean, many of which have been the subject of questions in this House, companies which are disreputable, whose ships are disreputable and who have never conformed to the rates applicable by the Maritime Board, will come within the terms of this subsidy? A condition of the subsidy is that Maritime Board conditions shall apply. I want to bring to the attention of the right hon. Gentleman one of several cases in which those conditions are not applied.

I take the case of a firm, Messrs. Everard, Limited, who received the comparatively small sum of £67 16s. I have here the details of an able seaman employed by this firm between August and December, 1935. He worked no less than 277½ hours' overtime, and the firm are refusing to pay a single penny of the money due. It is true that that vessel is employed mostly in the coasting trade, but they have qualified for a small portion of the subsidy. If none of these voyages come within the subsidy, the position appears to be that shipowners are observing the National Maritime Board's conditions on subsidised voyages and taking it out of the seamen on other trips. This particular man has 27 years' service before the mast. Is the Board of Trade taking any steps to see that on subsidised voyages their regulations are being carried out in their entirety? In this same firm a man employed as a cook and ordinary seaman on the motor vessel "Saunter" had to remove his bed to the wheelhouse at night to get rest, because the allotted accommodation was reeking with vermin, and the sanitary authorities at Southampton had to compel the owners to take the necessary action. In another vessel owned by the same firm, the "Actuality," it is alleged that the ship's articles and the Board of Trade Regulations have never been placed in a position where they can be seen by the crew. This same firm sought to deprive this seaman of his unemployment benefit when he finally left their service. They accused him of neglect of duty and insolence, but fortunately his union took the case up, and he was able to get his benefit.

The firm of William Robertson of Glasgow drew £2,185 in subsidy. They do not observe the National Maritime Board's conditions in any respect. They do not insert clauses in the articles, and they make no payment for overtime. J. S. Monks, Limited, of Liverpool, who drew £1,275 in subsidy, insert no clauses in the articles and do not pay overtime, nor is any time given in lieu thereof. These conditions of the Act are being broken already. The firm of John Kelly do not observe the conditions, either by the insertion of clauses in the articles or by paying overtime or giving time off in lieu; and Sir Samuel Kelly, O.B.E., of Belfast, who drew £1,337 10s. in subsidy, is in a like position. Then there is the Lyle Shipping Company, who drew in subsidy £11,193. The steamship "Cape Nelson" recently sailed from Methil with Arabs, while numbers of local unemployed white seamen and firemen were available. The steamship "Cape Sable," a new vessel signing on in Glasgow to-morrow, insisted on Arab firemen being carried, while in Glasgow there are 500 white firemen on the live register. Incidentally, this firm imported the Arab firemen into Glasgow for the purpose of shipping them on board this ship. I believe it was the hon. and gallant Member for Barkston Ash who said, when challenging my right hon. Friend, that it is well-known that Las-cars and Chinese are not carried on board tramp ships. Here is a case in point, where the ship has actually the crew on board. The firm of Henry M. Thomson, of Edinburgh, who drew £10,954 in subsidy, was referred to in the previous Debate in regard to the employment of Chinese firemen. Of course, it is said that every Chinaman who goes aboard a ship was born in Hong Kong, and every Arab was born in Aden. Everyone knows that, as long as they understand helm orders, that is good enough.


Is the hon. Gentleman aware that, before an Arab seaman can obtain employment in a British tramp ship which has to qualify for the subsidy under this Measure he has to produce satisfactory proof of nationality, not only to the satisfaction of the Board of Trade, but also of the seamen's union?


That satisfactory proof to the Board of Trade is "I was born in Aden, I was born in Hong Kong, I understand helm orders." Then we have the Clan Line steamers, £17,608 subsidy, one of the largest employers of Chinese seamen and firemen. These firms are not conforming to the National Maritime Board's conditions. May I call attention to one or two of the companies benefiting by this subsidy, which goes to rich and poor companies alike? There is the Bank Line, paid up capital £574,829, value of the fleet £3,500,000. This company has received the largest share of the subsidy, £76,780 1s. 3d. Their financial record has been referred to in previous Debates. Over 14 years the average dividend of this company has been 11 per cent., or a total of 154 per cent. In that time they have issued capital bonuses amounting to 373¾ per cent. Part of that dividend was on this watered capital, and the actual cash return was much greater. Some of the dividends were tax free, and throughout the period the preference dividends have been paid regularly. There is £1,350,000 in the general reserve, and the depreciation y ear by year has equalled 7 per cent., and not 5 per cent. as stated by the right hon. Gentleman. In all, this firm hat; 51 ships, and the amount of subsidy this year to the company is equal to 14 per cent. of their capital—surely not a very grave condition for a company to be in to qualify for the subsidy.

The Nitrate Producers Steamship Company, Limited, have seven vessels, £156,200 paid-up capital, and the amount of subsidy received is £19,933, or 12 per cent. of their capital. Their record over the last 14 years shows that dividends have amounted to 125 per cent., or an average each year of 9 per cent. The investment has been completely refunded plus 25 per cent. The capital reserve is £446,000, and the valuation of the fleet, less depreciation, is £281,000. The Monarch Steamship Company have four vessels, subsidy £10,635. In 14 years the total dividend has been 131 per cent., or an average of 9¼. Their investment has been completely refunded in that period, plus 31 per cent. Three-fifths of the capital was issued in the form of bonus shares, so that the actual return on cash invested would be made than double the figures already given. The depreciation and reserve are £222,000, and the book value of the ships £160,000. The subsidy represents 2 per cent. on the capital, but 5 per cent. on the actual cash invested.

I come to the Ropner Shipping Company, and I give the hon. and gallant Member and his company the credit that they have a dark and mysterious way of keeping their accounts. Nobody can find out the real methods of this company. They have a share capital written down from £1,350,000 to £822,000, and the valuation of the fleet is £733,000. Their quota of the subsidy is equal to over 6 per cent. of their capital in one year and over 8 per cent. of the value of their total fleet—not 5 per cent. depreciation as stated by the President of the Board of Trade.

When we come to depreciation, I should like to call attention to a statement issued by the Seamen's Union. The right hon. Gentleman stated that on a. 5 per cent. basis £1,200,000 was, necessary to go to reserve for depreciation in the tramp section of the shipping industry, yet on a search of the Shipowners', Shipbuilders' and Marine Engineers' Directory, the number of ships found in a brief survey was 150 over 20 years of age. The first company had 11 ships and the years' service put together exceeded the 20 years per ship by no less than 117 years. The second company had 112 ships, whose aggregate service exceeded the life given by the right hon. Gentleman by 114 years, and the third company 78 ships, whose aggregate exceeded the life of 20 years by 148 years. The fifth company has 59 ships. Their aggregate is 169 years above the 20 years' life given. In the sixth company there are 14 over 20 years of age and the aggregate number of years in excess of 20 was 199 years, a grand total of 859 years in excess of the 20 years life given by the right hon. Gentleman.

If the money that is given to the tramp shipping industry under the Bill is, as the right hon. Gentleman stated, to assist the companies in maintaing their fleets, when the 20 years have expired what happens with the scrap price of the vessel when it is sold? Surely that comes into the account. Surely it is the excessive years of life of the ships that makes it possible for many companies to put aside sums which create hidden reserves which we cannot discover. When the Committee stage was on we had the Manning Committee's Report. If ever the President of the Board of Trade was condemned for inaction with regard to the manning scales, going back as far as 1909, he was condemned by that committee. On the Third Reading we are getting the Steering Gear Committee's Report, which is another condemnation of the right hon. Gentleman and his Department. Again, his own committee of experts have condemned him out of hand in that report. I wonder what we shall hear when the report on accommodation for seamen comes along and whether we shall have from the right hon. Gentleman a statement that it is to be a condition of the receipt of the subsidy, that the steering gear shall be altered, that the manning scales shall be operated in full and that proper accommodation shall be provided for British seamen on these ships. When we look at the people who are distributing this subsidy, again we get the hon. and gallant Member for Barkston Ash. He sits on the main administrative committee for the dis- tribution of the subsidy. Then upon the sub-committees, in the Australian trade we see a Mr. J. R. Ropner—I do not know whether he is a brother or any relative of the hon. and gallant Member—in the south-eastern Pacific trade, we find the hon. and gallant Member for Barkston Ash himself, and in the Russian and Far Eastern trade we find a relative of the right hon. Gentleman himself, namely, Mr. Philip Runciman, no doubt looking after the interests of the family and of tramp shipping in general.

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

I hope so.


Just as the right hon. Gentleman hopes that his relatives outside are looking after those interests, so they are hoping that he inside is looking after their's and their hope is not the hope deferred that maketh the heart sick. Their hopes are realised by receiving 26 per cent. of the total subsidy to shipping companies on the north-east coast alone. If it is right for the shipowners to administer this subsidy, is it not equally right that the unemployed should administer their benefit? Is it not equally right that the public assistance committees should be run by the unemployed who have exhausted their benefit? If it is wrong for those people to do that, then it is equally wrong for the right hon. Gentleman to allow the shipowners to distribute between themselves this sum which has been drawn from the British taxpayer. In the last discussion the right hon. Gentleman said that he had no intention of entering into a debate with the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) but, he said: As to the purely practical point of what becomes of the money, it is a matter of indifference to those in these companies Whether the money is devoted entirely to renewals or used in the payment of a moderato dividend."—[OFFICIAL REPORT, 3rd March, 1936; col. 1353, Vol. 309.] Does he still say that? If he does, where is his case that the money is going into the pockets of the shipowners for the purpose of maintaining the efficiency of the tramp fleet on the high seas? Of course, it is going to profit. Everybody knows that and the real reason for this is because other industries have been getting subsidies. The Liverpool Shipowners Society and the Parliamentary Committee of the Shipping Federation bath attribute the so-called parlous condition of the tramp shipping industry to the policy of the Government, the policy of economic nationalism, the policy of shutting out trade. Here we have the Parliamentary Secretary who has on many occasions waxed lyrical in the lecture room telling us of the glories of Free Trade. Sitting beside him is the right hon. Gentleman, who, if he has not waxed lyrical or eloquent in the lecture room, has been one of the keenest critics of Conservative Governments of the past, yet to-day he is here supporting that policy of economic nationalism and destroying an industry which it has taken many decades to build up. As my right hon. Friend beside me reminds me, it is a case of a couple of gamekeepers turned poachers. We therefore say that the Act which this Bill seeks to depose has never operated as it was the intention of the Government it should operate, that National Maritime Board conditions have not been observed, and that no action has been taken by the right hon. Gentleman to see that they have been met. With regard to the general conditions, we claim that it is unnecessary to continue this subsidy, and we on this side of the House shall vote against it.

11.7 p.m.

Captain A. EVANS

There seems to be no little difference of opinion within the ranks of the Socialist party on the question whether a subsidy is good or bad, and I do not think any hon. Member of this House who listened to the speech of the right hon. Member for Wakefield (Mr. Greenwood) or indeed of his hon. Friend the Member for Seaham (Mr. Shinwell) gathered that impression either on the Financial Resolution or on the Second Reading of the Bill. I think I am within the memory of the House when I say that the right hon. Member for Wakefield went out of his way to tell the House and the country that as far as his party were concerned they were not opposed to subsidies, but in certain circumstances they welcomed them and gave them their support.

In the energetic attack which the hon. Member for Rotherhithe (Mr. Benjamin Smith) has launched against the Government to-night, he has singled out, as most of his friends generally do, my hon. and gallant Friend the Member for Barkston Ash (Colonel Ropner), who seems to be a particularly sympathetic target for their arguments on the shipping industry. I think I am correct in stating that as far as the Ropner Shipping Company is concerned, it has not paid any dividends for the last seven years, while, to listen to the hon. Member for Rotherhithe, one would gather the impression that it was living on dividends derived from subsidies voted by this House a id drawn from the taxpayers' pockets. It is not for me to deal with that aspect of the case to-night. I think that case has been answered conclusively, not only by the hon. and gallant Gentleman himself, but in detail by my right hon. Friend the President of the Board of Trade and his hon. Friend the Parliamentary Secretary. In the first part of the speech of the hon. Member, if I followed him correctly, he invited the House to believe that this subsidy was only given to the prosperous and big companies, and that the small man—


I said that both the rich and the poor receive the subsidy, but that no discrimination was made and that the wealthy ones were getting away with the boodle.

Captain EVANS

I am very glad to hear from my hon. Friend that such conditions obtain within the ranks of the tramp shipping section of the shipping industry to-day. Coming as I do from the city of Cardiff, I was not aware that there were any wealthy tramp shipping companies Left, and I am indeed glad to hear that from my hon. Friend. I rise particularly to deal with an aspect of this situation which was dealt with by the hon. Member for Seaham (Mr. Shinwell) on the Second Reading. In my opinion, and in the opinion of many of my hon. Friends, he launched an unjustifiable attack not only on the port of Cardiff but in particular on Cardiff shipowners. He invited the House to believe that the question of health, so far as it affected the mercantile marine, and in particular ships which were registered in the port of Cardiff, was worse not only than in any other country in the world but, indeed, worse in Cardiff than in any other port in the United Kingdom. In support of his argument he quoted from a report of the medical officer of health appointed by the Cardiff Corporation.

It is unfortunate, if he was anxious to give a fair and impartial review of this situation, that he did not quote from other parts of that report, where it pointed out that in the city of Cardiff and the port of Cardiff there were more Arab seamen employed by the shipping industry and shipping interests than in any other port in the United Kingdom—a fact which obviously largely accounts for the rate of tuberculosis within these particular sections of the industry. The hon. Gentleman, I regret, is not in his place. I inquired previously if he would be here. It is a matter of regret that he did not draw the attention of the House to page 57 of the report from which he quoted, because if he had done so on this page of the report of the Public Health Department of the City and Port of Cardiff in 1934, these words appear: It is well known that the death rate from tuberculosis among seamen, especially Arabs, is high, and the proportion of Arabs residing at Cardiff is exceptionally high. I think it is admitted that there are no conclusive statistics regarding the health of the British mercantile marine, but no doubt many hon. Members above the Gangway will remember that in 1932 a very careful inquiry into the health of the mercantile marine was undertaken by the London School of Hygiene and Tropical Medicine, at the joint request of my right hon. Friend the President of the Board of Trade and his colleague, the Minister of Health. In September of that year they issued a report under the title of Statistics Relating to Mortality in the Mercantile Marine. That report is obtainable at His Majesty's Stationery Office. If the hon. Member for Seaham, before making these charges on the Floor of the House, had taken the trouble to refresh his memory by referring to the report from which I am quoting now he would have found, on page 58, the joint conclusions of that committee of inquiry, wherein it is stated that, apart from drowning and injury, service in the mercantile marine is no more dangerous to life and health than are many of the occupations ashore frequently regarded as healthful. We find too, that the health of the Mercantile Marine does not compare unfavourably with that of the Royal Navy, despite the fact that candidates for the latter are subject to the most careful form of selection on health and constitutional grounds.


We are now on the Third Reading, and it is very difficult to find any passage in the Bill to which this is relative.

Captain EVANS

I am very anxious on all occasions to keep within your Ruling. I would not have attempted to deal with this aspect of the particular case had I been fortunate to catch your eye on the Second Reading. Unfortunately, I was not so favoured, but in view of what you say I will not pursue that point, but will leave it until a more favourable occasion. I will return, in that case, to some of the arguments submitted to the House by the hon. Gentleman the Member for Rotherhithe who referred to the question of steering gear. It is a pity that he did not realise at the time of his speech that the question of steering gear is at this very moment under the consideration of a special committee.


The report has already been issued.

Captain EVANS

The hon. Gentleman is a little previous. I am quite aware of the fact that the committee has already issued a report, but I am sure that he would not desire my right hon. Friend, charged with the responsibility with which he is charged, to take action in this matter until he had had an opportunity of carefully considering the report. My right hon. Friend is, I understand, engaged in that consideration, and I am sure that at the earliest opportunity he will inform the hon. Gentleman of the result of his conclusions. If one could infer anything at all from the speech of the hon. Member for Rotherhithe, it would be that, as a result of the subsidy granted by this House, the tramp section of the shipping industry was now in a flourishing condition. What are the facts of the case? They are far from those to be drawn from the arguments of the hon. Gentleman. It is true to say that, even after one year's operation of the subsidy, the freights obtaining in the tramp shipping section of the industry to-day are no less than 50 per cent. below those of the pre-war level.


In spite of the Government's record?

Captain EVANS

If the Socialist party had their way to-day, owing to the uneconomic and unfair competition coming from foreign countries, there would be no tramp shipping of British origin left on the seas of the world. I am not certain whether that is the real object of the hon. Member, or whether he is indulging in that very delightful pastime of opposing any legislation proposed by His Majesty's Government. I naturally share his view that the duty of an Opposition is to oppose, but while opposing, surely, it is not only in the interests of those whom they represent in this House, but in the interests of the country as a whole, that they should oppose with fairness, and tell the House of Commons the real condition of affairs irrespective of any political capital they hope to make out of it by putting forward illogical and partial arguments from that Box.


Last night we were discussing the conduct of the Government at Geneva on hours and wages. I presume the hon. and gallant Member did not hear that Debate, but whatever conditions of labour obtain abroad the Government are largely responsible because of its international policy.

Captain EVANS

I did not hear the whole of the Debate, but I gathered that it was unfair in the interests of the workers of this country to reduce the hours of work if that reduction entailed a reduction of wages. This is an important point; it is a question of dividends versus operating costs. It is true that operating costs have increased largely owing to the restoration of wage cuts to coal trimmers, stokers, and officers and men. The restoration of these cuts was in no way grudged by those who had to restore them, but it is unfair to say that it will not necessitate an increase in operating costs on the part of those who run the tramp shipping industry of this country. It is also well to remember that by conveying wheat at unprofitable rates, shipowners have contributed largely to the lower price of bread which is enjoyed by the community at large. In other ways the tramp shipping industry have been rendering great services to this country, which the Labour party have no right to despise. I want to appeal to the coalowners to co-operate with His Majesty's Government in its endeavours to place the tramp shipping industry once again on a sound economic basis, when subsidies would not be necessary. I hope that the coalowners, and particularly the coalowners of South Wales, will see to it that a fair proportion of British ships will be employed to carry pit wood from France and Portugal to Welsh ports. Unfortunately, a very large amount of foreign bottoms and foreign tonnage is employed in this trade to-day, and for the life of me I do not understand why that should be. I think also that this is a unique opportunity for my right hon. Friend, in concluding any trade agreements with foreign countries, to see that, when it is a question of essential raw material coming to this country, a fair proportion of that raw material shall be carried in British tramp ships rather than in foreign ships. Unfortunately, we see this condition of affairs obtaining in no little degree in the vicinity of Russia. At the moment it is true to say that the position of trade, as far as Russia is concerned, is most detrimental not only to shipping interests in this country, but to my right hon. Friend the Chancellor of the Exchequer, who is concerned—



Captain EVANS

I do not wish to annoy you, Sir, or the House, and I place myself unreservedly in your hands, because I am sure you will realise that, while this may appear a matter of little importance to hon. Gentlemen on my right, it is a question of vital importance to the city of Cardiff, which I have the honour to represent in this House. It is a fact that under the present trading agreements and the present—


On the Third Reading of the Bill the hon. Member must keep to the subject matter of the Bill.

Captain EVANS

On that point of Order, Sir, am I not correct in submitting to you and to the House that when a question of a subsidy is involved and the taxpayers' money is being directed into a certain channel, I should put forward arguments to the effect that the industry which is receiving that subsidy should enjoy certain trade relations under the auspices of an agreement arrived at between the President of the Board of Trade, which, in my modest opinion, are operating unfairly against that particular section of the industry?


The hon. Member would be perfectly in order either on the Committee stage of the Resolution or on the Second Reading. I do not think the question arises now.

Captain EVANS

Whether it arises or whether it does not, may I conclude by saying that I hope that whenever an opportunity does arise an hon. Member, whether he comes from above or below the Gangway, will draw attention to this particular case? May I also say that I hope most sincerely that my right hon. Friend the President of the Board of Trade, in replying to the arguments of the hon. Member for Rotherhithe, will take the opportunity of assuring the House that, as far as the tramp section of the shipping industry is concerned, they will have no reason at all to feel apprehensive with regard to Russian trade?

11.30 p.m.


The speech made by the hon. Member on the Front bench opposite was full of criticism of individuals who are supposed in some curious and tortuous way to have been laying their hands on public money to which they were not entitled. That, I think, was the main burden of his story. To begin with, let me point out that both the hon. Gentleman and his party are committed to the principle of subsidy, and that when recently we had the pleasure of hearing the hon. Member for Seaham (Mr. Shinwell) on this subject, he stated that the party to which he belonged was not opposed to subsidy in principle, but that what they objected to was the way in which it was distributed.


That has been the burden of my story this evening.


Let us see how it is distributed, because the hon. Gentleman was mistaken in his interpretation of the machinery by which it is distributed. He said that my hon. and gallant Friend the Member for Barkston Ash (Colonel Ropner) was either himself or through his family in some way connected with the distribution of this subsidy. That is absolutely untrue.


He is a member of the Tramp Shipping Administrative Committee and also of one of the sub-committees dealing with the St. Lawrence trade.


The hon. Member is wrong in thinking that it is the Administrative Committee which advises in the distribution of the subsidy. The Advisory Committee does that, and there is no member of the Ropner family on that Committee at all. I need not trouble the House with the full list of those who sit in that Committee.


I have here a report to the President of the Board of Trade on the work of the Tramp Shipping Administrative Committee, and the hon. and gallant Member for Barkston Ash (Colonel Ropner) appears on that Committee. There is also Mr. Philip Runciman.


But where the hon. Member is mistaken is in thinking that that is the Committee which distributes the subsidy. It is not. The Committee which does that is provided for in Section 1 (3) of the Act of last year. The hon. Member is absolutely inaccurate in thinking that the Administrative Committee distributes the subsidy. To add colour to his speech he said that Mr. Philip Runciman is on some of these freight committees. A freight committee does not distribute the subsidy but seeks by organisation to maintain minimum freights, which benefit not only tramp shipping, but cargo liners, ships of and foreign mercantile marines which are working in agreement with ours—


Arising out of the Tramp Shipping Act.


Certainly, but that is the organisation of minimum freights—


As a condition of getting public money, the shipowners have agreed to minimum freights, nationally and internationally, and these people sit on these committees to make it possible for them to get the subsidy by that method.


Will the hon. Member really believe that there is some honesty, even among business men? The object of the freight committees is to devise means by which minimum freights shall be maintained, and in doing that they are benefiting tramp shipping and all other sections of shipping and the seafaring community. I come to another criticism I have to make of the hon. Gentleman's remarks. From beginning to end there was never a word of recognition of the fact that if the tramp shipping fleets were not kept together the people who would first suffer are their crews. It would not be a question then as to the terms under which they would be employed, for they would not be employed at all.


Yes, they suffered. There were 40,000 idle for years.


That is true, and the shipping subsidy has wiped out that surplus, so that in many ports there is now an actual shortage of seamen. Special counts taken by the Ministry of Labour show the number of wholly unemployed seamen over 18 years of age in January, 1934, January, 1935, and December, 1935, to have been 39,100, 37,585 and 34,159. There is also a report from the Mercantile Marine Department. The Chief Superintendents were asked to furnish a report on unemployment, and they indicate that there is a shortage of experienced A.Bs at Victoria Docks, Southampton, Plymouth, Falmouth, Newcastle, Middlesbrough and Barry. There is a shortage of ordinary seamen at Glasgow, Leith, Newcastle, Sunderland, Middlesbrough, Hull and in South Wales, and of firemen at Poplar, Victoria Docks and Barry. On the subject of employment I prefer the official account, of which I have given a summary, to the distorted version of the situation given by the hon. Member. We can claim that by this scheme we have conferred greater benefits on the mercantile marine as a whole.

Let the House consider what would have been the state of this country if we had not maintained the mercantile marine. We are more dependent on sea traffic than any people in the world. It is only by maintaining that sea traffic that we can keep our foreign trade and provide ourselves with cheap raw material and cheap food. The employment of our people in the mercantile marine also gives a stimulus to our shipbuilding and ship repairing industries, and the activities of our docks and harbours, and all these things are bound up with the prosperity of tramp shipping. If tramp shipping goes they all go, and the unemployment which would accrue would fall as a burden, first of all, on those who would be employed in these ships.


Let the taxpayers pay.


If the hon. Member is in favour of that principle I cannot understand why he should have made the speech he made to-night.

Let me, in conclusion, make one reference to a matter which is not directly concerned with the subsidy but which has been mentioned in the debate, and that is the report of the Steering Gear Committee. That report has only just been received, and it is riot a final report and some of the essential executive parts of it cannot be carried out at the moment. Paragraph 35 of the report says with reference to prescribing the precise dimensions to be adopted for various rudder requirements that that is not within their province, and that they have asked the Mercantile Marine Department of the Board of Trade to confer with the classification societies to advise on this matter, and that is being done. They also state that they have asked for specifications to be drawn up for various fittings, and so on, and for a table to be drawn up showing the maximum permissible amount of wear on different parts. In due course they will make a supplementary report on those matters. I submit that in a matter of such importance and technical quality, on which the lives of the men and the safety of the ships depend, changes in the steering gear, particularly in the older ships, should be made only with the advice of technicians behind us. We should not try experiments at the expense of those who go down to the sea in ships [Interruption]. The hon. Member has no justification for mentioning the "Blairgowrie". I deprecate that attempt to introduce prejudice.


There can be no prejudice when the inquiry has resulted in a report that the steering gear of those four vessels was the cause of the trouble. Tie committee was set up arising out of that inquiry and it has condemned the President of the Board of Trade.


The hon. Member is much more interested in condemnation of the right hon. Gentleman than he is in the efficiency of these things. Let me say, in conclusion, that, despite these criticisms, the subsidy has undoubtedly saved the British tramp shipping industry from collapse and therein has conferred national benefit. It has prevented the abnormal transference of large blocks of British tonnage to foreign flags. It has increased the employment of British ships and British crews, and as long as it does that, it is justified.

11.41 p.m.


The right hon. Gentleman has attempted that which is often attempted by an advocate with a hopeless case; he has tried to score a few cheap and shallow points at the expense of his opponent. One that he has demonstrated beyond the possibility of doubt is the complete and abyssmal failure of Capitalism. [Laughter.] Hon. Members laugh. They will find it a little difficult to support an argument in favour of the competitive system of private ownership, when that argument has to be supported by wholesale subsidies from the State. The two things are not really consistent. Those who believe that a virile industry can be built up through competition between individuals which is thereby going to serve the community as a whole, because that competition will produce the best, cannot at the same time claim the right, when that competition has ruined the industry, to come to the State for subsidies to support the industry. Those two arguments, unfortunately for hon. and right hon. Gentlemen, are self-contradictory.

Here we have the President of the Board of Trade, a distinguished Member of a National Government which is supporting the system of private enterprise, coming to the House and saying that unless the State steps in with a subsidy this industry will disappear and that is a stronger condemnation of the present system than any that could be given from these benches. It is the demonstration by the arch-priest himself that his own religion has ceased to apply. This State subsidy is being distributed in a way which I should have thought could not have met with either applause or approval from any Member of this House. Those who are suffering from the means test in this country will be better judges of whether the distribution of this subsidy is proper or not, than Members of this House, some of whom are interested in the proceeds of the subsidy itself. We have had a list given of a number of companies, who are as prosperous as any capitalist company could hope to be, and who are drawing large sums of money from this subsidy. It is no possible justification for the right hon. Gentleman or for anybody else to get up and say "Other companies are badly off and require the subsidy." Suppose they are. What is the justification for paying subsidies such as are being paid to the Bank Line, after the details which have been given by my hon. Friend the Member for Rotherhithe (Mr. Benjamin Smith) of the history of that company for the last 16 years? Is there a Member of this House who can get up and justify the payment out of State funds of that sum to that company, when, at the same time, this House is saying that for numberless social requirements money cannot be forthcoming?

It is all very well for the right hon. Gentleman to say that this is going to save the seaman in his job. Do the Bank Line want money to save their seamen in their jobs? The answer is "No." Then what right has the right hon. Gentleman or this House to pay out these sums to it? If a means test is applied as to whether people should receive money from the State or not, why not apply it to the Bank Line and its shareholders? It is curious that these very logical arguments which are used by Vile National Government when it is a question of the treatment of the workers of this country do not seem to apply when it is a question of the treatment of the capitalists of this country. And then hon. and right hon. Gentlemen have the audacity to accuse this party of stirring up the class struggle. If ever there has been class legislation put forward, this is class legislation—legislation to assist the right hon. Gentleman and members of his shipowning class, because, if they were allowed to suffer the logical consequences of the system in which they believe, they would go into bankruptcy, their ships would be sold at low prices to people who would re-start the companies, and, on the basis of the low prices they paid for the ships, would then be able to make profits within the capitalist system.

It is an unfortunate and uncomfortable state of affairs for the right hon. Gentleman and those who believe in the same thing that whole industries should be forced into bankruptcy by the system they support, and so he, having the power, comes to this House and uses the majority he has behind him in order to produce those doles for industry which

are the logical result a his own policy and action. It is being said by the right hon. Gentleman that we in principle agree with subsidies. We have no objection to subsidies if those bodies to which they are paid are State owned and State-controlled bodies; but we have every objection to the payment of State subsidies to private persons, without any test whatsoever as to whether they require those subsidies or not.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 158; Noes, 89.

Division No. 109.] AYES. [11.50 p.m.
Acland-Troyte, Lt.-Col. G. J. Evans, D. O. (Cardigan) Munro, P.
Agnew, Lieut.-Comdr. P. G. Everard, W. L. Nicolson, Hon. H. G.
Albery, I. J. Fildes, Sir H. Orr-Ewing, I. L
Anderson Sir A. Garrett (C. of Ldn) Findlay, Sir E. Palmer, G. E. H.
Apsley, Lord Fleming, E. L. Peake, O.
Aske, Sir R. W. Fox, Sir G. W. G. Penny, Sir G.
Astor, Hon. W. W. (Fulham, E.) Furness, S. N. Percy, Rt. Hon. Lord E.
Balfour, Capt. H. H. (Isle of Thanet) Fyfe, D. P. M. Perkins, W R. D.
Beaumont, Hon. R. E. B. (Portsm'h) Glyn, Major Sir R. G. C. Peters, Dr. S. J.
Bernays, R. H. Goodman, Col. A. W. Petherick, M.
Bossom, A. C. Graham, Captain A. C. (Wirral) Pickthorn, K. W. M.
Boulton, W. W. Greene, W. P. C. (Worcester) Ponsonby, Col. C. E.
Bowyer, Capt. Sir G. E. W. Gretton, Col. Rt. Hon. J. Procter, Major H. A.
Boyce, H. Leslie Grimston, R. V. Radford, F. A.
Briscoe, Capt. R. G. Gritten, W. G. Howard Ramsay, Captain A. H. M.
Browne, A. C. (Belfast, W.) Guest, Maj. Hon. O.(C'mb'rw'll, N.W.) Rathbone, J. R. (Bodmin)
Bull, B. B. Guy, J. C. M. Reed, A. C. (Exeter)
Burghley, Lord Hanbury, Sir C. Reid, W. Allan (Derby)
Burgin, Dr. E. L. Hannah, I. C. Remer, J. R.
Caine, G. R. Hall. Hannon, Sir P. J. H. Rickards, G. W. (Skipton)
Campbell, Sir E. T. Herbert, Major J. A. (Monmouth) Ross Taylor, W. (Woodbridge)
Cartland, J. R. H. Hills, Major Rt. Hon. J. W. (Ripon) Runciman, Rt. Hon. W.
Carver, Major W. H. Holmes, J. S. Russell, S. H. M. (Darwen)
Cary, R. A. Hope, Captain Hon. A. O. J. Salmon, Sir I.
Cazalet, Capt. V. A. (Chippenham) Hopkinson, A. Salt, E. W.
Channon, H. Horsbrugh, Florence Sanderson, Sir F. B.
Chapman, A. (Rutherglen) Hudson, Capt. A. U. M. (Hack., N.) Sassoon, Rt. Hon. Sir P.
Clydesdale, Marquess of Jackson, Sir H. Smith, Sir R. W. (Aberdeen)
Cook, T. R. A. M. (Norfolk N.) James, Wing-Commander A. W. Southby, Comdr. A. R. J.
Craddock, Sir R. H. Joel, D. J. B. Spears, Brig.-Gen. E. L.
Croft, Brig.-Gen. Sir H. Page Jones, L. (Swansea, W.) Spens, W. P.
Crooke, J. S. Keeling, E. H. Stanley, Rt. Hon. Lord (Fylde)
Croom-Johnson, R. P. Kerr, Colonel C. I. (Montrose) Stanley, Rt. Hon. Oliver (W'm'l'd)
Cross, R. H. Lamb, Sir J. Q. Storey, S.
Crossley, A. C. Latham, Sir P. Strauss, H. G. (Norwich)
Crowder, J. F. E. Law, R. K. (Hull, S.W.) Sutcliffe, H.
Davidson, Rt. Hon. Sir J. C. C. Leckie, J. A. Taylor, Vice-Adm. E. A. (Padd., S.)
Davies, C. (Montgomery) Leech, Dr. J. W. Thomas, J. P. L. (Hereford)
Davies, Major G. F. (Yeovil) Llewellin Lieut.-Col. J. J. Thomson, Sir J. D. W.
De la Bère, R. Loftus, P. C. Titchfield, Marquess of
Dixon, Capt. Rt. Hon. H. Mabane, W. (Huddersfield) Wakefield, W. W.
Donner, P. W. M'Connell, Sir J. Ward, Lieut-Col, Sir A. L. (Hull)
Dorman-Smith, Major R. H. McCorquodale, M. S. Ward, Irene (Wallsend)
Duckworth, G. A. V. (Salop) Macdonald, Capt. P. (Isle of Wight) Waterhouse, Captain C.
Dugdale, Major T. L. McKie, J. H. Wells, S. R.
Duggan, H. J. Magnay, T. Wickham, Lt.-Col. E. T. R.
Duncan, J. A. L. Margesson, Capt. Rt. Hon. H. D. R. Windsor-Clive, Lieut.-Colonel G.
Dunglass, Lord Maxwell, S. A. Womersley, Sir W. J.
Dunne, P. R. R. Mayhew, Lt.-Col. J. Young, A. S. L. (Partick)
Eckersley, P. T. Mellor, Sir J. S. P. (Tamworth)
Elliot, Rt. Hon. W. E. Mills, Major J. D. (New Forest) TELLERS FOR THE AYES.—
Elliston, G. S. Mitchell, H. (Brentford and Chiswick) Sir James Blindell and Mr. James Stuart.
Errington, E. Morgan, R. H.
Evans, Capt. A. (Cardiff, S.) Morris-Jones, Dr. J. H.
Acland, Rt. Hon. Sir F. Dyke Ammon, C. G. Benson, G.
Adams, D. M. (Popler, S.) Attlee, Rt. Hon. C. R. Brown, C. (Mansfield)
Adamson W. M. Banfield, J. W. Burke, W. A.
Alexander, Rt. Hon. A. V. (H'lsbr.) Barnes, A. J. Cape, T.
Chater, D. Holland, A. Robinson, W. A. (St. Helens)
Cluse, W. S. Jagger, J. Rowson, G.
Cove, W. G. Jenkins, A. (pontypool) Salter, Dr. A.
Cripps, Hon. Sir Stafford Jones, A. C. (Shipley) Seely, Sir H. M.
Daggar, G. Kelly, W. T. Sexton, T. M.
Day, H. Lansbury, Rt. Hon. G. Simpson, F. B.
Dobbie, W. Lathan, G. Smith, Ben (Rotherhithe)
Dunn, E. (Rother Valley) Lawson, J. J. Smith, E. (Stoke)
Ede, J. C. Leach, W. Smith, T. (Normanton)
Edwards, A. (Middlesbrough E.) Lee, F. Sorensen, R. W.
Edwards, Sir C. (Bedwellty) Leslie, J. R. Stewart, W. J. (H-ght'n-le-Sp'ng)
Fletcher, Lt.-Comdr. R. T. H. Logan, D. G. Strauss, G. R. (Lambeth, N.)
Foot, D. M. McEntee, V. La T. Taylor, R. J. (Morpeth)
Frankel, D. McGhee, H. G. Thurtle, E.
Gallacher, W. Maclean, N. Tinker, J. J.
Gardner, B. W. Markiew, E. Viant, S. P.
George, Major G. Lloyd (Pembroke) Messer, F. Walker, J.
George, Megan Lloyd (Anglesey) Milner, Major J. Watson, W. McL.
Greenwood, Rt. Hon. A. Oliver, G. H. Williams, E. J. (Ogmore)
Grenfell, D. R. Paling, W. Williams, T. (Don Valley)
Griffith, F. Kingsley (M'ddl'sbro, W.) Pethick-Lawrence, F. W. Wilson, C. H. (Attercliffe)
Griffiths, G. A. (Hemsworth) Potts, J. Windsor, W. (Hull, C.)
Hall, J. H. (Whitechapel) Pritt, D. N. Woods, G. S. (Finsbury)
Harris, Sir P. A. Quibell, J. D.
Henderson, A. (Kingswinford) Riley, B. TELLERS FOR THE NOES.—
Henderson, J. (Ardwick) Ritson, J. Mr. Whiteley and Mr. Mathers.
Henderson, T. (Tradeston) Roberts, W. (Cumberland, N.)

Bill read the Third time, and passed.