§ 7.39 p.m.
§ Mr. HOWARD GRITTENI beg to move,
That this House, while thanking His Majesty's Government for the efforts already made to assist British shipping, is of the opinion that further measures are necessary to protect British shipping against subsidised foreign competition and also urges His Majesty's Government to confer with His Majesty's Governments in the Dominions with a view to united Empire action for the safeguarding of British shipping.I ought at the outset to tell hon. Members who are interested in this subject that there has been a movement to try and induce me not to move this Motion. If I were to withdraw it at the last moment, it would be showing disrespect 496 to this House. I cannot so far ascertain what has actuated this movement, but no valid reason has been advanced except that there has been a vague rumour that the Government are engaging in delicate negotiations and perhaps a Debate to-night might prejudice those negotiations. On the contrary, it would seem to me that the hands of the Government would be strengthened in any negotiations if foreign Powers knew that the House of Commons was strongly in favour of the principles and contentions in this Motion. Again, if there is a likelihood of this Debate prejudicing or embarrassing the Government, the Board of Trade would have sent me a direct communication. They have not done so. In the course of a long political life, though an undistinguished one, I have had many experiences of pressure. On each of those occasions I have withstood the pressure, and so on this occasion I intend to stick to my guns and to move the Motion. I am the snore confirmed in that attitude because this matter is of vital national interest. It is not one which ought to be 497 subservient to any special or isolated interests. The preservation and strengthening of our Mercantile Marine concerns the safety, the well being and the daily life of every man, woman and child in the country. Therefore it is on account of the national and imperial importance of this subject, that I proceed, and I refuse to be put off.In connection with what I have just said, I would ask the Minister in charge, when he replies, specifically to give the House an answer to the following questions: (1) Are there any special negotiations proceeding? (2) If so, whether in those negotiations the Government is insisting on better terms for our Mercantile Marine; and (3) when may we expect the report, or is it going to be hung up as so many others have been hung up and are being hung up to-day? The purpose of the Motion is to bring before the House and to emphasise the grave condition of the merchant shipping of this country and the Empire and to endeavour to impress on the Government the necessity of acting up to their repeated assurances and promises without further procrastination and delay. There can be no doubt about the gravity of the situation. Bad as is the state of our merchant shipping already, it continues to undergo a still further dangerous decline. I do not desire to tax the patience of the House with many figures and statistics, but I must pray in aid a few as evidence in support of my proposition.
When one takes foreign shipping, one finds that since 1914 it has been quadrupled in the United States of America, doubled in Italy, Norway, Greece and Japan, and almost doubled in Sweden, France and Holland. In that period, the pre-War period, we possessed nearly half the tonnage of the whole world; now we possess only 30 per cent. Whereas we have declined, the rest of the world has increased 83 per cent. We have 2,000 fewer cargo vessels and 45,000 fewer seamen. In the last year we have gone down 3,000,000 tons, the rest of the world less than 2,000,000 tons. We have still 4,000,000 tons of shipping laid up in our bays and inlets. The result is that foreign competition has intensified and. the foreign share of United Kingdom trade has risen from 34 per cent. to nearly 42 per cent. Once, 8,500 ships flew the Red Ensign. That flag, I regret to say, is being seen less and less on the 498 oceans of the world. This means not only a loss of direct trade but a loss in the business of banking, insurance and merchanting which, with the shipping service form essential elements in our invisible exports.
Let me take the timber trade of the Baltic—and this is a matter in which my constituency is specially interested. I I find that of the 85 voyages made this year Russian and foreign ships did all; British ships not one. That timber was bought by us, yet we did not carry one ton of it to our shores. If it is objected that the Soviet Government are now chartering more tonnage, it is only in other trades where they cannot help themselves and have to rely on other sources. The fact remains that Russia has chased us out of the trade in the Baltic and in the Black Sea also. Incidentally, the wages paid to Russian seamen are one-tenth of ours. In a two years period—why that period was chosen by the Board of Trade in answer to a question in this House I do not know—it was stated that whereas we bought £51,000,000 worth of goods from Russia she bought from us only £9,000,000 worth. I remember how optimistic certain Ministers were at the time of the Russian Trade Agreement. They prophesied that by means of that Agreement the grievous adverse trade balance would be redressed, and they predicted that British shipping would be put on a better footing than ever before. The present situation is a sad commentary on those prophecies.
As to unemployment, in prosperous times 200,000 men were employed in the Mercantile Marine. Now there are over 32,500 unemployed. Many of these unemployed, far too many, stand on the quaysides helplessly watching foreign goods being unloaded from foreign ships built by foreign subsidies. We have to add to that unemployment the unemployment in the ancillary trades and occupations. With regard to the shipowners, their loss has been enormous. For seven years their capital has been unremunerated, and to that we must also add the loss and depreciation in their ships which have been laid up. Many companies at the present moment are in the hands of the banks; and they are only continuing on the sufferance of the banks. It must be remembered that after the War they relieved the Government of ex-enemy and 499 other tonnage at peak prices in response to a direct appeal. It was no doubt the additions which were thus made to the normal fleets which were a contributory cause of the depression in the industry, whilst at the same time stimulating other countries to build new ships.
May I take, as all other hon. Members do when they have an opportunity, my own constituency. In 1914 in the Hartlepools we had 901,000 gross tonnage; now we have 290,000 tons. In 1914 we had 309 steamers; now we have only 92. At that period there were 41 shipping firms; at the present moment there are only seven, and of these seven survivors some, I believe, have lost half their capital. Hartlepool itself is almost derelict owing to the decline of shipbuilding on which it once existed. We indeed are a very much distressed area. That description, as hon. Members know, applies to most of the North-East coast. Everybody is acquainted with the decay and sufferings of Jarrow. There is grass growing in the shipyards at Jarrow, but I think Hartlepool can beat Jarrow in that respect, because in one shipyard at Hartlepool an apple tree has actually had time to grow. In the near Continental trade there has also been a decline in British shipping. British entrances show a 16 per cent. decrease while foreign entrances show a 23 per cent. increase. In the matter of clearances British shipping shows a 31 per cent. decrease and foreign shipping a 7 per cent. increase.
Let me touch briefly on the crisis in the Pacific. Two lines were running, one the Union Line from San Francisco to New Zealand, and the other the Canadian-Australian Line running between Australia, Fiji and Vancouver. Although the Americans do not allow us to do any coastal trade between Hawaii and the American coast, we have allowed American ships to do coastal trade between New Zealand, Australia and Fiji. I might remark, in that connection, that this country is the only Power which makes no limitations on foreign traffic or foreign ships. The result is that the Union Line has ceased to function, whilst the other line will soon go the same way unless the Government bestirs itself and co-operates with the Dominions in restricting inter-Imperial trade to Imperial boats. I should like to ask the 500 Government to inform the House whether they have yet received the report of the committee to which this matter was referred, and, if so, what definite action they propose to take, and when.
Another sphere in which British shipping is suffering almost the same fate is in the Indian and Far East trade. Up to 1911 the whole of the trade from Bombay and Calcutta through the Malay Straits to China was in British hands, whereas now 85 per cent. of that trade is in Japanese hands. One would have thought that the Government would have been able to stop that rotting, backed as we were by the resources of the wealth and huge populations in India and the Straits, but, through the gross remissness and neglect for some 15 to 20 years of the Governments, that trade has passed entirely into the hands of Japan.
May I revert for a moment to Russia? Her tonnage since 1927 has risen from 300,000 tons to 1,350,000 tons. Before the Soviet began their piratical enterprises we had scarcely any tonnage laid up at all and our merchant ships were sailing at a profit, but the Soviet started the world depression by breaking the markets in corn, timber, oil, sugar, pelts and other commodities, thus inflicting grave injury on the purchasing power of many firms and companies in this the world and causing ruin to a great country and many thousands of individuals. Now by the process of turning the other cheek also we are allowing them to oust us from the Baltic and the Black Sea.
§ Mr. KIRKWOODTs the hon. Member in a position to give us any idea of the working conditions and wages which are paid to the Russian seamen as compared with British seamen?
§ Mr. GRITTENI have already said that the Russian rate of wages is one-tenth of what we pay our own seamen.
§ Mr. BENJAMIN SMITHWhat about the cost of living?
§ Mr. GRITTENI shall come to that point. Let me give one further example, namely, what has occurred in the Persian Gulf. We lit that Gulf, and bouyed it, and we drove the pirates away, yet the 501 Japanese tonnage has risen from 3,500 tons to 50,000 tons in one year—an astonishing jump. And our Government still sits supine. The difficulties which our shipowners have to face are lower running costs, a lower standard of subsistence, currency depreciation and barriers of all kinds, but it is subsidies which constitute the greatest menace. I have found it difficult to ascertain the exact amount paid by our chief competitors, but no doubt some hon. Member may have the information. As far as my investigations have gone I find that Italy pays £4,500,000, France and Germany pay their subsidies on so much a nautical mile, whether the ship is in cargo or in ballast. The United States of America pays at least £6,000,000 a year in subsidies, and their tonnage has increased over 1,000 per cent. since 1913. A French tramp receives £3 per ton per annum subsidy, an Italian tramp £1 per ton per annum, and an English tramp merely 11s.
Besides direct running subsidies, America subsidises building and repairs; a heavy duty is placed on any repairs executed in foreign ports; and, as is well known, there are subsidies on mail contracts. I remember an instance about two years ago when one small mail-bag carried to Auckland cost the United States £2,800. It was carried in what was appropriately known as the "Golden Coast." I am informed that upwards of £2,000,000,000 has been paid in subsidies by our foreign competitors, and I ask how our shipping industry can possibly stand up to such a vast sum. As to our £2,000,000 subsidy, it has been severely cut into by the restoration of the cuts in wages and by the changes in the manning scale, those two items alone in many cases equalling half the allotted subsidy. If the profits of a voyage are added to the subsidy, they often do not meet the normal depreciation. Then, too, one has to aid the years of loss to the debit account.
It is estimated that a sum of £21,000,000 would be required to compete with the foreign subsidies. The Government, through its spokesman in another place, said that such a sum was out of their power; but questions of money are always relative, and it would be a comparatively small sum relatively to the value of the industry as a whole. Moreover, we would get it back in a variety of ways, such as 502 increased imports, the increase of what is called export penetration, and through other avenues. When we compare our Budgets with those of our competitors, who are driving us off the seas, it is difficult to see why the Treasury should not make a much bolder stand against foreign subsidies. An increased subsidy should, in my opinion, be one of the prior charges on the revenue of this country. I wonder how many millions of pounds are paid in subsidies to other industries in this country? What will be eventually the cost of Defence? Merchant shipping is a Defence interest, and as such ought to be supported in a much more generous spirit than the Government have exhibited.
Another objection I have to the way in which the subsidy has been granted is that the Government say it is going to cease when the freight rates rise to a certain figure. I submit that the rise in freight rates makes no difference to the general position. We would not have a larger share in the carrying trade of the world, there would be no more goods for us to carry, and our share of the carrying trade would remain the same as long as our subsidy remained the same. Moreover, the Act has another unfortunate rider. It implies that the subsidy is to be discontinued in a year's time. That qualification deprives this year's subsidy of much of its value, because our foreign competitors know that they have to hang on to the throat of our industry only for another year. In my opinion it was childish of the Government to divulge that intention to our competitors. They ought not to have been guilty of such fatuity in dealing with competitors.
I suggest that in any trade agreement or treaty revision a proviso should be made that the cargoes intended for Great Britain should be carried in British bottoms, and that to some extent, at any rate, we ought to revert to the old Navigation Acts of 1651 and 1672, which won for us the carrying trade of the world. There should also be a specific provision in any of those treaties or trade agreements for increases in the purchase of our shipping services. As far as I know, there was no such provision in the much-vaunted Scandinavian Agreements or in the Argentine Agreement. We are now told that there is to be a new Argentine Agreement. Will the Government have 503 the sense to get that stipulation inserted in that agreement, especially when it is borne in mind that we buy five times as much from the Argentine as they buy from us, which gives us the whip hand. Some of the worst offenders are those countries with which we have an adverse trade balance. In all such cases we have a commanding position, and with the denouncement of the most-favoured-nation clause, which appears to be utterly antiquated nowadays, we should be free to discriminate. With such a weapon in our hands, I am pretty sure that we should soon be able to force foreigners to lower their subsidies, for it must always be remembered that we are the biggest market in the world for 24 other nations.
On many occasions in recent years we have received honeyed assurances and plausible promises from Ministers. I have a list of them, and it is of considerable length. I will not bore the House by reading it. There are many from various Ministers, and I do not know how many from my right hon. Friend the President of the Board of Trade. Also in the Gracious Speech from the Throne, there was an assurance that His Majesty's Government are giving grave consideration to the question of maintaining an adequate Mercantile Marine. I sometimes wish that that grave consideration would mature into some kind of action. The ruminations of Ministers often remind me of the ruminations of Lessing's owl. The road of the Government to maritime disaster is like the road to another region—it is paved with good intentions. So far the only result has been an inadequate subsidy hedged about and qualified by restrictions and limitations. The mountain has laboured and has brought forth, I will not say the ridiculous mouse of Horace, but an under-sized and presumably short-lived infant, instead of robust quintuplets.
I must not be misunderstood as implying that we have no gratitude for what the Government have done. We frankly acknowledge that the effects of the subsidy have been very beneficial, but that reflection makes us reflect further—on how much more benefit we should have from a larger subsidy. The Motion is an example of a definition of gratitude. It is inspired with a lively sense 504 of favours yet to come. I certainly trust that the Government will give their attention to this subject. We are also grateful to the right hon. Gentleman the President of the Board of Trade for his change of attitude. Aforetime he was of the straitest sect of the Free Traders, but he is gradually, perhaps rather hesitatingly and tentatively, but still advancing towards "a larger ether and a diviner air." No doubt, in relaxing his former principles, he agrees with Dr. Johnson's dictum that consistency is the bugbear of small minds. I have no doubt that if the right hon. Gentleman the Member for Epping (Mr. Churchill) were present he would agree with that sentiment.
In conclusion, I would like to repeat that an adequate Mercantile Marine is indispensable to us in peace and still more indispensable in war. Everybody knows that if it had not been for the services and the gallant deeds performed by merchant seamen we would have lost the War. If our statesmen would only resolutely tackle this problem I maintain that they would be doing a far greater service to their country and the Empire than by indulging in profitless palavers at Geneva or futile conferences at other Continental resorts. This is a vital matter. A state of emergency exists. I therefore most earnestly ask Ministers to procrastinate and postpone no longer, but to exhibit a more energetic and a more lively executive sense.
§ 8.14 p.m.
§ Mr. STOREYI beg to second the Motion.
My first task, as the representative of an important tramp shipbuilding centre, must be to thank the Government for the British Shipping (Assistance) Act. Although natural impatience may have caused us to criticise the Government's delay in taking action, although we may feel that the use of British materials in ships built with State assistance should be compulsory, we have to admit that that Act has been a very great success, for not only has it enabled tramp owners to reorganise their industry and to equip themselves with modern and up-to-date vessels, but it has been the means of placing a large number of shipyard workers in employment. I do not intend to deal in any great detail with the need for united Empire action, for I realise 505 that that is very largely a problem for Dominion Governments. I only submit that the matter is vital, and that in the interests of this country and the Empire urgent action is a necessity. Our heritage of the sea, particularly in the Pacific, is at stake and the Government as the moral head of the British Commonwealth of Nations ought to give a lead, and not wait for Dominion action. My main purpose is to call the attention of the House to he position of the coastal tramps. By such, I mean small vessels other than coastal liners and those large colliers which ply between the North-East coast and the Thames. These latter classes, by the nature of their work and, let it be said, by their own efficiency, have no real problem of foreign competition to face.
With the small tramps it is another matter. They have a serious problem of foreign competition, and it is a problem which is not fully realised by the country because the Board of Trade figures tend to minimise it. Those figures suggest that the foreign share of the British coasting trade is only between 1 per cent. and 2 per cent. I feel that with regard to the small tramp vessels that figure is misleading. Not only do the Board of Trade figures include the coastal liners and the large colliers which, as I have said, have no problem of foreign competition to meet, but every vessel calling at British ports, even if it only discharges one ton of cargo is entered for the full net tonnage at every port. It is easy to see that, with such methods of compilation, the Board of Trade figures give an entirely wrong impression. Four years ago the British Coasting and Near Trade Shipowners' Association prepared some figures which the Board of Trade accepted. Those figures showed that on certain parts of the coast the incidence of foreign competition for the smaller tramps was over 13 per cent. The Board of Trade figures show that since 1932 foreign competition in the coasting trade has more than doubled. Therefore, I think there is good ground for the statement that, as far as the smaller vessels are concerned, foreign competition now far exceeds even 13 per cent.
I would suggest to the Board that they should compile these figures in a manner which would give more reliable information and enable us to judge the facts fairly. If they did so I am sure that the 506 urgent need for steps to rehabilitate this section of the shipping industry would be so clear that delay would be no longer possible. The problem of the coastal tramp is not only one of subsidy. In fact, Holland our principal competitor, gives no direct subsidy at all, but I believe there are grounds for thinking that she gives assistance in the building of modern vessels. The troubles of the coastal tramp are largely those of manning and wages, and—most important of all, I think—modern vessels. British vessels have to pay the National Maritime Board scale and though there is no manning scale, the unions, not without the concurrence of the owners, do set a scale which is higher than that of our foreign competitors. On the other hand, the small Dutch vessel is very often a family concern or is run with a very small crew, one of whom is probably a lad who works for his food and accommodation.
We can see that the British coastal tramp is seriously handicapped in its competition with foreign coastal tramps. Yet I think the main trouble probably is that the foreigners, particularly the Dutch, have small modern and more efficient vessels. During the past six years Holland has increased her tonnage of motor vessels of under 1,000 tons by no less than 66 per cent. We have only increased ours by 46 per cent., and we now have only 266 such vessels, while Holland has no less than 528. Dutch vessels of such size are designed for short trading. Some, indeed, may run between Continental ports and some few more may trade between near Continental ports and British ports, but it is undoubtedly the fact that the greater number of these vessels are particularly designed and built for the British coastal trade. As I mentioned yesterday at Question Time, it was stated by a Board of Trade official in a recent case in the courts that no fewer than 62 of these Dutch vessels are centred on Hull and engaged purely in the British coasting trade. I think there is no doubt that, as Holland continues to build at a faster rate than us, their vessels will continue to replace the small British coastal tramps in the British coasting trade.
What are the remedies which we can apply to meet this situation? I believe that the coastal tramp section of the industry would say that the only method is the reservation of the British coasting trade to British ships, but it would be 507 idle to deny that that is not the view of the whole industry, and that such a remedy is open to serious objection. What other remedies, then, are possible? First, I think, we might consider the extension of the British Shipping Assistance Act or at any rate Part II of that Act, to the coastal tramps so as to enable our coastal tramp owners to benefit from the "scrap and build" policy and to equip themselves with modern, efficient vessels to overtake the lead which Holland has established. Secondly, I should like the board to consider the suggestion of Sir Alfred Read that we should adopt some system of licensing, similar to that which is used to prevent redundant road transport. Let those who want to take advantage of cut foreign rates, seek the sanction of a tribunal, in the form of a licence and let that tribunal consider the grant of such licences in the light of our internal transport requirements and in the light of our national needs. Thirdly, I should like to see it made compulsory that any materials for public works should be carried in British ships. It should also be made a condition of State aid to any industry that the coastal transport of its materials or any goods produced by it should also be in British ships. That I submit, would not be unfair because a State-assisted industry is under a moral obligation not to hurt any other industry.
There are other remedies which have been and could be proposed by those who are concerned in the industry, but I think that those which I have indicated would afford some ground for assisting this sorely tried section of the shipping industry. The main thing which is necessary is action. Our coastal tramps are essential to the country in any time of national emergency, not only as transports, but as auxiliaries to aid the Royal Navy in the defence of our shores. Their numbers now are inadequate to meet that double call, and they will be more inadequate if we allow the Dutch and other nations to supersede us at the rate at which they are superseding us at present.
We must, therefore, I submit, give the coastal tramp a more permanent place in our national transport system, and that, I think, is not unreasonable, for after all the Government are assisting railway transport, they are assisting road transport, and they are assisting air transport 508 with subsidies and with credit facilities. Why should they have left out this vital link of the coastal tramp in our national transport system, particularly at a time when our seamen need the employment which foreigners are taking from them and when our shipyard workers could well do with the work of rehabilitating this section of the industry? For these reasons, I ask the House to accept the Motion moved by my hon. Friend, and I ask the Board of Trade and the Government to take action to help the shipping industry.
§ 8.28 p.m.
§ Mr. BENJAMIN SMITHI beg to move, in line 1, to leave out from "House," to the end of the Question, and to add instead thereof:
recognises the necessity for measures to rehabilitate British shipping and to enable it to cope with foreign competition, provided such measures do not result in swelling private profits at the public expense, urges His Majesty's Government to ratify the 1936 International Labour Conventions for seamen relating to hours of work and manning in order to encourage the establishment of uniform conditions and diminish the present unfair competition, and is of opinion that it is urgently necessary to regulate British coastwise shipping on a basis similar to that prevailing with respect to other forms of national transport.Nothing that I could say to-night could add to the condemnation of the Government that has been afforded by the Mover and Seconder of the Motion. The Mover was at some pains to tell us that every effort had been made to induce him to withdraw the Motion before the House. Why, I wonder? The hon. Member speaks feelingly, for his constituency is in the Baltic trade, but why is it that efforts have been made to get him to withdraw the Motion? Does the Minister know anything of it? Is he in any way responsible for asking, in the light of the Government's promise in the King's Speech to consider the question of British shipping, that this Motion should be withdrawn?
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin)The hon. Member who introduced the Motion was at pains to point out that he acquitted the Board of Trade entirely of any suggestion that they had brought pressure to bear upon him to withdraw his motion. I welcome it.
§ Mr. SMITHThat being so, I presume that the hon. Member, in acquitting one 509 party, may know the others. Why does he not tell the House who is responsible and who it is that is bringing pressure to bear upon him to keep from the House a discussion that at least more people connected with the industry are very keen about? Who was it that was responsible for his withdrawing that part of the Motion affecting the coastal trade?
§ Mr. GRITTENThe Chamber of Shipping.
§ Mr. SMITHThe Chamber of Shipping certainly was not responsible for the hon. Member for Sunderland (Mr. Storey), because he has spoken on it, even though it has been withdrawn. I take it, therefore, that I shall be in order, since the Motion itself says that the Mover wishes to call the attention of the House to British shipping, which means all British shipping, in mentioning the coastal trade, despite the withdrawal of part of the Motion by the hon. Member for the Hartlepools.(Mr. Gritten). It was interesting to hear the Mover of the Motion, whose heart bleeds for shipping, tell us about our great heritage of the sea and tell us that at one time 200,000 men were employed in this industry and that at this moment there are 35,000 unemployed. Yet we have the President of the Board of Trade and the Parliamentary Secretary telling us, at Question Time in this House, that it is practically impossible to get British seamen for foreign-going ships.
§ Mr. GRITTENThat is wrong.
§ Mr. SMITHI want the hon. Member to keep on saying that, and if other hon. Members say it too we may perhaps move the Government at last, and especially the President of the Board of Trade. The hon. Member asked the Government what special negotiations are proceeding at this moment, and he seemed to assume that there are some. He talked about "these delicate negotiations." Perhaps the Parliamentary Secretary will tell us what they are. Like the hon. Member for the Hartlepools, I am thirsting for knowledge, and I hope it will be of an order that for once my side of the House can join with the other side in carrying it forward. The hon. Member asked, too, whether the Government are insisting on better terms for the merchant marine. That is an all-embracing 510 term. Are seamen included? Do you include the "black squad," in fact, the whole of the people that go to make up the service, not the ownership of the mercantile marine? "Hope deferred maketh the heart sick," and the hon. Member asked, thirdly, Will the findings be held up? He has not very much faith in this Government, evidently.
The hon. Member wrote me a letter telling me that he was omitting a portion of the Motion, and he has given the House at least some idea as to why he had to withdraw that portion, because interests were at work asking for that section to be withdrawn. He mentioned subsidies and said that since the War £2,000,000,000 had been given in subsidies to foreign shipping, but I have never yet been able to find out in this House what Governments have given these subsidies. The only thing that I have been able to find out is that Italy in 1931 paid a sum of 223,000,000 lire and in 1932 70,000,000 lire for a subsidy for freight vessels, having regard to age, tonnage, and length of voyage. I can find no figures for a later date than that. With regard to America, under the Jones-White Acts subsidies for shipbuilding for mixed passenger and cargo vessels of given speed, a subsidy may be granted to tramp vessels. That is for shipbuilding, but the Americans themselves are paying upwards of one-third more wages, with larger crews and better accommodation in all their ships, and that sets off any subsidy that can possibly interfere with the rates on British ships.
Then there is the French subsidy, which is given only to passenger liners. In Britain £2,000,000 has already been allocated for tramp shipping and £10,000,000 under the scrap-and-build scheme. I have been given to understand that that has been a beneficial thing for the hon. Member for Sunderland. Perhaps the Minister will tell us how many ships have been built under that scheme and the total cost. The House may then be in possession of knowledge as to how far the scrap-and-build Act has benefited British shipping. Many figures can be adduced in regard to tonnage. The hon. Member for the Hartlepools told us that tonnage had fallen by one-third since 1913. The fact is that at this moment the tonnage of Great Britain for all sections is about 14,000,000; Italy, 2,500,000; the United 511 States, 8,000,000; and France, 2,242,000. These are the only four countries that I have been able to discover which have in some way or another subsidised some portion of their shipping industry.
§ Mr. GRITTENWhat about Japan?
§ Mr. SMITHI cannot give any figures for Japan, but if the hon. Member had them he would have not made the wild statement that since the War £2,000,000,000 has gone in subsidies to foreign ships. What are the facts? I prefer to listen to the man who owns ships. This is a statement by Mr. G. A. Workman, who is a director of the City Line, and he calls it "A good time coming for shipowners." On 17th October he expressed himself as definitely optimistic about the future. In his opinion, unless something unforeseen occurs, this country is due to
come through a period of prosperity such as we have not had for many years.At the same time he warned his hearers that export, and not home trade, was the life blood of the liner companies, and that it was incumbent on them to foster it. Then we get Mr. F. A. Southern, managing director of the Hall Line. Speaking at a luncheon on board the company's new ship—I do not know whether it was built under the scrap-and-build policy—he said that trade was improving and that, in his opinion, the prospects were never better than they were to-day. Mr. Stanley Hinde, the managing director of the Dene Ship Management Company, at the launching of another new vessel, expressed the hope that the co-operation enforced by the tramp shipping subsidy would continue. It apparently took the subsidy to teach shipowners that if they wanted to get a reasonable return for their services they had better organise themselves along proper lines and not cut each other's throats as they had done and as competition sets out to foster all the time. When trade is bad, primarily as the result of the Government which they support, we have a policy of embargoes, quotas and tariffs which has forced upon this country an economic nationalism, and that in turn has operated detrimentally to British shipping.Yet Mr. Hinde says that he hopes—I presume with the possibility of the subsidy after this year gradually fading out 512 —that this little remnant of the subsidy will at least be kept going and minimum rates continued. He said that a contributory cause for the heavy trading losses in the past had been "reckless individualism." That must be hurtful to the Parliamentary Secretary to the Board of Trade. When he was on this side of the House he was the man who stood most for individualism. On leaving the ship of Liberalism and going to the other side, and after jettisoning almost every bit of cargo that they had, he and has worthy chief crept along with a keepsake in their breast pockets—individualism and cheap labour. That is the old Liberal doctrine of laissez faire—buy your labour in the cheapest market and, so far as shipping is concerned, sell your services in the dearest market. Mr. Hinde went on to say that if by mutual agreement they could adjust the supply of tonnage to the demand,
there would be a real possibility of avoiding a repetition of the shipping depression.Then we have our old friend the Clan Line. They issued a circular dated 22nd October to their shareholders, in which they said:The directors have decided to recommend that £150,000 of the general reserve be capitalised and applied in paying up in full 150,000 of the unissued shares.They are doing very badly, are they not?It is proposed that these be distributed as a capital bonus in fully paid ordinary shares on the register at the close of business on the 22nd October, 1930, in the proportion of one new share for every three ordinary shares then held.
§ Mr. GRITTENThe hon. Member has been quoting great companies which are wealthy concerns. What about the small owners?
§ Mr. SMITHThe hon. Member must remember that his Motion talks of British shipping. It does not talk about small British shipping. I am answering the case for British shipping, and I will give the hon. Member enough companies that have paid dividends for the last 14 years to cater for the majority of the foreign-going ships of Great Britain. There has been a great rise in the value of the pound ordinary shares of the Clan Line. From September, 1935, to September, 1936, they had risen from £4 to £8. Since September they have risen to no less 513 than £10 10s. That does not look as if the shipping business is a bad business for the ship owners. Taking the hon. Member's own constituency, I have here a return of the West Hartlepool Steam Navigation Company. The statement says that the wisdom of the directors in inconsistently refusing, since the War, to invest the company's funds in new vessels is reflected in the report and accounts. These show: profit, after providing for classification repairs, £65,125, as against £41,319 last year; depreciation, £10,000, as against £4,970 last year; dividend on preferred ordinary shares, 20 per cent., as against 15 per cent., after paying preference dividends. That is one of the Hartlepool companies. The dividend on the deferred ordinary shares was 20 per cent., as against 7½ per cent., and there was a carry-over of £23,089, as against £20,964 a year ago. They are not doing very badly.
§ Mr. GRITTENWhat about the five small companies which are reduced to one ship and two ships?
§ Mr. SMITHI can only say again to the hon. Member that his Motion speaks of "British Shipping," and if he can choose the worst, what is the matter with my choosing the best? A year ago, in addition to the dividends referred to, special dividends of 6.46 per cent. and 21.46 per cent. were distributed on the preferred ordinary and deferred ordinary shares in respect of taxation adjustments. The financial position of this company is an exceptionally strong one, there being over £1,400,000 in cash and realisable securities, and—note this—the company own four steamers. They are getting it from somewhere. The subsidy they took last year, despite these figures, was £9,856 13s.
Let us try another one. Here is a series of cargo liner and tramp companies. I refer again to the Clan Line. Its paid up capital is £1,900,000; reserves, £482,500; the book value of the fleet, £2,347,615. There are 43 vessels of a gross tonnage of 263,000 tons. The amount of profit was £169,750, or 8.93 per cent. Not so bad. [Interruption.] Have I to say to the Parliamentary Secretary as well that the Motion speaks of—
§ Dr. BURGINCertainly not. I was asking the hon. Member a question.
§ Dr. BURGINI was asking whether he was suggesting that the Clan Line vessels were tramps.
§ Dr. BURGINThen they are not eligible for subsidy.
§ Mr. SMITHThe Clan Line took in subsidy £17,608 19s. How did they get it if they are not tramps? I say they run both cargo liners and tramps, and that in spite of the figures I have quoted they collected from the public purse no less than £17,608 19s. Then there is the Elder Dempster Line. I do not want to go through all the balance sheet figures, though I have them, unless the House wishes me to. [How. MOWERS: "Go on."] They have a capital of £2,500,000; there is a reserve fund of £189,000; the book value of the fleet is £2,614,000. They have 40 vessels of 215,485 tons gross. There was a profit of £125,000, and the dividend was 5 per cent. Are their ships tramps or cargo liners? I notice that they took—these unconsidered trifles which these big companies think worth picking up—the very small sum of £1,247 10s. out of the public purse. The Ellerman Lines, another seeker after unconsidered trifles, took £1,215 7s., but only paid a dividend of 3.47 per cent. The case of the Ellerman Lines is rather interesting, because according to their balance sheet at December, 1935, the dividends on the preference and preferred ordinary shares amounted to £75,650 and after providing for these dividends the balance in the profit and loss account to be carried forward was increased by £67,969 15s. 11d. to £1,843,862 12s. 8d. The profit and loss account shows a net profit for the year, after providing for depreciation, of £143,619, balance undivided in respect of previous years £1,775,892 16s. 9d., less dividends paid £75,650. So those companies—oh, the hon. Member for the Hartlepools has gone away.
I can give the House particulars of quite a number of companies. The British and Burmese Company have paid only 4.85 per cent. dividend. The Hogarth Shipping Company took £46,487 2s. from subsidy, put aside £83,000 for depreciation, and paid a dividend of 5 per cent. This is 515 not so bad for companies that are going derelict. Then we have the Monarch Line, which took no less than £10,635 of subsidy and paid a dividend of 7 per cent. The Nitrate Producers Company took nearly £20,000 of subsidy and paid a dividend of 6¼ per cent. Then we have the well-known. Tatem Steam Navigation Company, which paid 10 per cent. dividend and took £12,990 out of the public purse. It does appear to me, taking only a few of the figures which I could produce to the House, that shipping is not in a very bad way at this moment, and if the prosperity which has been round the corner for so many years is now on the corner, as we have been told so often from the Treasury Bench, there is no case for demanding an extension of subsidies to British shipping.
The whole difficulty with British shipping and the reason for the increase of foreign tonnage lies in the economic nationalism put into practice by this Government. You cannot shut out other people's goods and expect at the same time that they will buy your goods; and having shut them out you cannot expect that they will use your shipping to the detriment of their own. Therefore, I hold this Government absolutely blameworthy for any difficulties that British shipping is going through. Authorities such as the Liverpool Chamber of Shipping and the Chamber of Shipping itself are for ever telling us that if only we could get back to the policy of international trading the troubles of the shipping industry would be over. Take one case. I believe the President of the Board of Trade is rather proud of the fact that in the case of Argentina he reduced the imports of meat by 35 per cent., but that means 35 per cent. less shipping tonnage. The same thing is happening in every case where quota restrictions are introduced.
I want to ask the Gvernment one question. Perhaps the Minister will tell me I am a little early, but I would rather be early than late. What is to be the attitude of the Government to the International Convention on hours of labour which was carried at Geneva in October of this year? There were eight motions there. The record of the British Government is not a good one so far as that convention is concerned. We are told that subsidies and bad labour conditions and such like are one of the prime reasons 516 for the present parlous condition of our shipping industry. In my Amendment I say that one of the means of improving its position is by getting an international agreement on hours of labour and conditions of service. At Geneva the British Government voted for items 1, 5 and 8, out of those eight. Item No. 1 for which they voted was a recommendation for protecting seamen's welfare in port. Item No. 5 was a draft convention concerning sick insurance for seamen. They did not go very far there, because seamen are already under National Health Insurance in this country. They voted for item 8, which was a draft convention for fixing the minimum age of children for employment at sea. I wish they had done it 40 years ago; I should never have been an ordinary seaman on a billy-boy ketch at 15s. a month. However, better 45 years late than not at all. They voted for the-requirement of professional capacity for masters and officers on board merchant shipping. It is a bit peculiar. If the "Queen Mary" were a cargo ship, big as she is, and carried no passengers, it is possible for an uncertificated master to take that ship to sea, but if she were a 25-ton trawler, it would be impossible for him to take that ship unless he were certificated. Perhaps the hon. Gentleman will look into that matter. The British Government voted against it. That is my point. When opportunities are presenting themselves for international efficiency, with standards rather better, the British Government stand against those things; yet when the Government are challenged on the Floor of this House, all they want, they say, is efficiency and high standards of efficiency and service—with low standards of wages, I regret to say.
On the question of holidays with pay, they voted against the following three items. They voted against professional capacity being necessary for masters and Officers on board merchant ships; against a draft convention concerning the liability of the shipowners in case of sickness, injury or death of seamen, and against a draft convention concerning hours of work on board ships and manning. The hon. Member for Sunderland has put forward a solution for the coastal trade, where no manning conditions apply, as hon. Members may know, under 200 tons, which is a small vessel. His claim was that there ought to be 517 regulations as to the manning of coastwise shipping. Why do the Government tike this attitude? Why do they go to the country saying that they believe in giving the highest wages and the best conditions for all workers, and yet, when opportunity presents itself, they are the first on almost every occasion to vote against any improvement in the lot of British seamen? In this case it would be world seamen. For instance, since 1920—
Vice-Admiral TAYLORWould the hon. Gentleman allow me to ask him a question with regard to wages? Would he tell the House whether any nation, other than the United States, pays as high wages as we do to our seamen, and whether, in the case of the United States, it is not a fact that the ratio it 130 to 100 in this country, for wages
§ Mr. SMITHThe hon. and gallant Gentleman likes to have a go at me. I have told him twice before that there was a time when he could do so, but not now. Those days have gone.
§ Mr. SMITHI am going to answer the hon. and gallant Gentleman's question. The whole of the Scandinavian countries pay wages equal in a month to British wages. In America, they pay one-third higher wages than in Great Britain. I have already used that figure as a set-off against any subsidy which they give to shipbuilding. I was saying that since 1920 efforts had been made to secure an international regulation of hours and wages. I ask the Government whether it is their intention now to accept the Geneva Convention, which in every case was carried by overwhelming majorities. It would be an act of decency on the part of the Government to say to the world—because this is a world movement so far as shipping is concerned—that, on reflection, they believe that it would be a factor in diminishing international competition, and that it would be wise for them to join with four other countries in implementing this Convention. At least there would be something to the credit of this Government.
With regard to coastal shipping, the hon. Member for Sunderland suggested that it would be a good thing— 518 [Interruption.] The hon. Member did so, with reservations. He said that it might not be the best, but the first thing that he mentioned, so far as the coastal trade was concerned, was the reservation of the shipping.
§ Mr. STOREYI did not say anything of the sort. I said that the coastal section. of the industry would probably ask for reservation for themselves, but I made it clear that in my opinion there were many objections to it.
§ Mr. SMITHThe coastal trade have said something entirely different about that, have they not? I have a document here from which I will quote later on, when I am replying to the hon. Gentleman. What is the real trouble in the coastal trade at the moment? The coastal people themselves say that the maximum increase in foreign export trade is 2.1 per cent. That is not a Board of Trade figure but is from the Coastal Development Council. They say that in 1929 it was 5 per cent., that it grew until 1935 to 1 per cent., and that in 1936 it had risen to 2.1 per cent., or a total tonnage increase of 150,171 tons. That was the total tonnages, arrivals and departures, engaged in the carrying of cargo between the United Kingdom and Northern Ireland, during the past seven years.
How does that work out? Holland has made 171 calls. That is a country which is rather bothering the coastal shipping trade of this country, and I think rightly so. The ships are not only efficient, but there is no manning scale there. I know of instances where the skipper and his wife, and the mate and his wife and a boy, walk in and compete with people who have a manning scale. A ship of the same capacity was refused to be allowed to go to sea by a representative of the Board of Trade, because she was under-manned. I have instances, which I will willingly give to the hon. Member, if he likes. Other countries made as much as 56 calls, or as few as one. The significant question is, are they, in fact, genuinely competing with coastwise trade in this country? We know that in two months there were 291 calls of cargo-carrying foreign ships at ports in this country, and that 262 of them either arrived or departed in ballast. If that is a fact, it represents a more or less one-way traffic, and that 519 2 per cent. becomes 1 per cent. The incidence of foreign competition in coastwise traffic is therefore not as large as the hon. Member would wish us to believe. I join with him in wanting to eliminate that competition, and I believe that one of the means of doing that would be to adopt a manning scale and a licensing system. I believe that that is one way out. Nobody, I think, has asserted that the coastal trade is in any way subsidised. I do not know whether it is included in the figure of £2,000,000,000 which was given by the hon. Member for the Hartlepools; but let it be said at once that the coastal trade themselves say that they know of no instance in which foreign Governments are subsidising coastal shipping in competition with our own, and the President of the Board of Trade, when questioned in this House, said that he had no knowledge that the Dutch vessels were being in any way subsidised.
I have had occasion to call attention to the firm of Messrs. Everard. In a previous debate I held them to strict accountability in regard to their treatment of a man, but let me nevertheless say this on behalf of that firm, that, while I condemned them for one action, I praise them for another, for, if every coastal shipping company was run on identical conditions, and if all the fleets were as up to date as that of the Everard Company, there would not be much trouble in the coastal trade with competition from foreign people. That is my view, and I am glad to be able to make that statement.
What do we on this side of the House suggest? We suggest that there are very admirable principles which the Government could follow if they are really interested in putting the coastal trade on anything like a basis. The coastal trade of this country is complementary with railways and road transport, and equally is in competition with railways and road transport. This Government and previous Governments, in their wisdom, Let up a statutory board to deal with wages and hours on the whole of the railways of this country, and the decisions of that board carry the force of law once they are agreed to. On the top of that, they set up the Railway Rates Tribunal, which goes into questions of freight rates and so on. In the Road Traffic Act, 1930, 520 fair wages regulations were introduced—only for drivers, I regret to say—in the case of passenger vehicles, and maximum hours were fixed. Further, in the Road and Rail Traffic Act, 1933, it was laid down that every commercial goods vehicle on the road should be a licensed vehicle. The licences were divided into three classes, "A," "B" and "C," "A" being the licence-holder who carries other peoples goods; "B," the licence-holder who carries, sometimes his own goods, and sometimes other people's goods; and by far the largest proportion, the "C" licence-holders are those who carry only their own goods. In working out fair wages and maximum hours, standards have been fixed for "A" and "B" licences, and the present Government have set up a tribunal, under the Ministry of Labour, which is going into the question of incorporating, not only hours, but wages, for the "C" licence-holders. I suggest that the President of the Board of Trade might look into these Acts and see whether it is not possible to introduce some such system for the coastal trade of this country.
I gather that the President of the Board of Trade and his Parliamentary Secretary are against reservation as a whole, although we have nine countries, France, Greece, Portugal, Russia, Spain, Turkey, Japan, the United States arid Argentina, which have already reserved that trade. Then we have Holland, Norway, Sweden, Latvia, Germany, Belgium, Finland, Estonia and Denmark, which are the principal foreign countries competing with the British coastal trade. If the Government would look into this question, I think they would find a solution, without tariffs, for the difficulty in the coastal trade, if they have a desire to do so. There is another method. The Government might say that no vessel of any tonnage upwards—not of 200 tons or over, but any tonnage upwards—shall use the ports of Great Britain unless it conforms to a British manning scale. If that were done, no ship which failed to conform to that scale would be able to get into competition with British shipping in this country. These are two suggestions which I offer to the Government.
I am sorry if I have taken up too much of the time of the House. I have plenty more that I could say, but I take it that others will wish to take part in the Debate. We on this side of the House 521 thank the hon. Members for the Hartle-pools and Sunderland for braving the Government in bringing forward their Motion. It has given us an opportunity of tabling an Amendment in which we suggest that British foreign-going shipping is not in a bad way taken generally, and that there is no case generally for a subsidy. Subsidies go to the rich and the poor alike; the means test is only applied to working people. Those with dividends of 20 and 30 per cent. get their hands into the public purse with as much ability as, and with more success generally than, the smaller shipowners. If the Government would say they would adopt the International Convention for seamen, and if they would look into the question of manning for the coastal trade, we on this side of the House believe that a solution of the difficulties could be found.
§ 9.14 p.m.
§ Mr. ERRINGTONIt is a very happy thing that the House has had an opportunity of discussing this very important subject. So far as I am concerned, I think it ranks in importance with the discussions that we had on the Special Areas and in regard to the location of industry. The importance of the shipping industry, particularly for the part of the world that I represent, namely Mersey-side, is tremendous. It is admitted that that particular area is suffering from prolonged unemployment, due in a large measure to the condition of the shipping industry. There is no question at all that the contraction of the import trade has hit the shipping industry very badly. I do not think that is fairly described by the hon. Member for Rotherhithe (Mr. Benjamin Smith) as being due to the action of our Government. I should much prefer to say it is due to a very large number of causes over which no Government has control. I suppose a very large number of people hope that, as a result of the currency agreements, we may get very great expansion in the export trade, but meantime in the area that I am talking about there is a position which requires Government assistance. The taxpayer, whose money it is, is under the tramp shipping subsidy scheme very adequately guarded. In fact the carrying on of certain shipping firms on Merseyside has only been possible owing to that subsidy. The basic year 1929, which is taken, was 522 a year which did not bring any undue prosperity to the shipping industry on Merseyside. For the first six months of 1935 the level of freights was only 72 per cent. of the basic year. It is true that the corresponding period for 1936 was 82 per cent., but the first reduction comes only when the average freight level is 93 per cent. of the 1929 standard. The 1929 standard is not a high standard to take. There has been continuous and extensive unemployment for a long period before and in 1929.
The position on Merseyside is that the docks are not working to full capacity, there are numbers of unemployed seamen, there are many officers who are unable to get work, and there are certificated officers who have to go as ordinary seamen. The conditions of the seamen and of the officers have been improved, but I suppose everyone desires that they should be further improved, and particularly does that apply to the officers. The colossal figures of profits that the hon. Member for Rotherhithe talked about are not likely to have been earned on Merseyside. The Third Report of the Tramp Shipping Administrative Committee says:
As a consequence of this policy there is now little unemployment in this country amongst British white seamen.
§ Mr. BENJAMIN SMITHWhat policy? It is not the policy of subsidy, but the policy of fixing minimum rates, I take it. It has nothing to do with the subsidy.
§ Mr. ERRINGTONI submit that this is a general statement which applies to every type of seamen. That, however, is not the case, at any rate so far as Merseyside is concerned. It may well be that there are cases where there is a shortage, but that certainly does not apply to the Liverpool docks. I think the Government ought to consider how they can help in this matter. One realises the objections to subsidies, but to a limited extent, at any rate, Government action has caused some of the difficulties that we are suffering from. One does not blame the Government for that, because it was essential that something should be done, but, bearing it in mind, we are entitled to ask them to give an opportunity to the people who desire work and to the firms that desire a greater trade.
523 But I think there is an even more important aspect of this matter, and that is the question of Defence. As I understand it, a great deal of consideration is being paid in these days to the importance of adequately providing for the case of an emergency that would arise in the event of war. I commend to the notice of the Government the importance of the West coast ports. If the next war is in the air, the probability is that the West coast ports will be more easily used than those on the East and, if that be so, it is important to see that they are kept as busily occupied as possible. The importance of man power is very great indeed. You will appreciate that when the emergency comes and the men, be it for engineering or for shipping, are not available. Some of us take the view that the Road and Rail Traffic Act operates largely, in practice, in favour of the railway companies. It may well be that, if there is a war, we shall require a great deal of assistance from road transport. Shall we have the skilled drivers available for this purpose? I doubt it, and I doubt whether, if the shipping industry is allowed to face the full blast of foreign 524 competition, we shall have enough efficient seamen.
We are finding on Merseyside that, with the natural enterprise of the Lancastrian, he is going into other types of business. We are getting other industries coming there as much as possible and people getting out of the shipping industry as far as they are able to do so. That may be a most serious thing for the country at large, particularly in the event of war. I suggest that the careful consideration that has been promised in the Gracious Speech should be given not only to the tramp shipping subsidy, which to my own knowledge has done wonderful things in the way of employment and getting ships back to work, but also to the other branches, the coastwise trade and the cargo liner, in order that we may get a strong and virile mercantile marine which will be available for the service of the country when it is required.
§ Notice taken, that 40 Members were not present; House counted, and 40 Members not being present—
§ The House was adjourned at Twenty-eight Minutes after Nine o'Clock till To-morrow.