BRITISH SHIPPING [CONTINUANCE OF SUBSIDY].

HC Deb 01 February 1937 vol 319 cc1331-77

Considered in Committee under Standing Order No. 69.

[Sir DENNIS HERBERT in the Chair.]

Motion made, and Question proposed, That it is expedient—

1. (a) to extend by twelve months the period in respect of which subsidies are payable under Part I of the British Shipping (Assistance) Act, 1935, as amended by the British Shipping (Continuance of Subsidy) Act, 1936; and
2. (b) to make provision for the payment out of moneys provided by Parliament of such sums, not exceeding in the aggregate two million pounds, as may be necessary to defray the cost of subsidies payable as aforesaid in respect of tramp voyages and parts of tramp voyages carried out in the year nineteen hundred and thirty-seven, and of any expenses incurred in respect of that year by or on behalf of the Board of Trade under the said Part I."—(King's Recommendation signified.)—[Dr. Burgin.]

5.26 p.m.

Dr. Burgin

Hon. Members will already have received Command Paper 5357, which provides the Memorandum. The Financial Resolution provides the necessary authority for carrying into effect the proposals to grant a subsidy to British Shipping for the year 1937, which was announced by the President of the Board of Trade in the House of Commons on 11th November, 1936. The subsidy, which was made available for British tramp shipping for voyages carried out during the year. 1936, expired on 31st December, and if it is to be carried on a new Financial Resolution and fresh legislation will be required. The Government were requested in the autumn of last year to renew the subsidy, and their decision to ask Parliament to do so was communicated on 11th November. The shipowners have been informed that they must make plans on the assumption that the subsidy will come to an end finally at the end of 1937, and that the industry is expected to reorganise itself, so as to ensure the continuance of the co-operation which has been a great feature of the result of the grant of the subsidy. During the last six months of 1936, conditions in the freight market were far better than for many years past. There was a remarkable increase in the rates of freight obtainable for tonnage. The freight index for December, as compared with 1929, which was taken as the index figure of 100, was no less than 127, a higher figure than had been reached in any month during the past eight years. The number of British tramp ships in commission at the end of last year was 76 more than at 1st April, 1935, when unemployment was at its worst, and this employment of another 76 vessels means an increase of 285,000 tons gross of shipping.

But it is only a few months since the industry was passing through a period of more acute difficulty than at any time during the last few years. In the first six months of 1936 the demand for tramp tonnage was far less even than it was in the early months of 1935, when the conditions were considered difficult. The number of charters in the first six months of 1q36 was less by more than one-half than in the first six months of 1935. These difficulties interrupted a slight improvement after a long period of depression and bearing this in mind, it would be optimistic to assume that the improvement in demand in the last six months, will be sustained. In fact, since the turn of the year there has been a set-back, at first in the Plate trade, but subsequently widespread and more pronounced. Rates in some trades are now several shillings below those ruling at the beginning of the month of January.

The fundamental difficulties of the shipping industry arise from the disequilibrium between the amount of tonnage available and the amount of cargo offered. It does not yet appear that this lack of balance has been readjusted. Conditions cannot yet be said to be present for a permanent revival in this industry. Six months of comparatively favourable conditions have been enjoyed, but the industry suffered severe losses, and several years are required to enable it to repair the ravages to its financial structure. The arrears of depreciation in the tramp fleet during the years 1929–1935 amount to more than £10,500,000. This is a matter of vital importance nationally. A large and efficient mercantile marine is essential to the well-being of this country in peace and in war. The importance from the defence point of view of a tramp fleet strong in numbers and well adapted to modern conditions, need not be emphasised. The maintenance of a healthy tramp fleet is impossible unless there is proper provision for depreciation, and in the trading conditions of the depressed years replacement of shipping was impossible. One of the most disconcerting features was the persistent decline in the number of tramp ships. Before Government assistance was given large quantities of tonnage were being sold abroad to foreign owners for trading. The number of foreign-going tramp vessels owned in the United Kingdom fell from 1,046 in October, 1933, to 908 in July, 1936. The latest returns reveal a change. The amount of tonnage sold abroad for trading in 1936 was 200,000 tons gross less than in the year before and less by 340,000 tons than in 1933, which was the worst year. The number of foreign-going tramps owned in the United Kingdom was 924 on 1st January this year, as compared with 908 six months earlier.

The system of co-operation based on the subsidy has made possible a steady improvement in rates of freight, and full advantage has been taken of the spurt in the demand for tonnage. With these increased earnings, and with the subsidy, shipowners have been enabled to meet depreciation in 1935 and 1936 to a greater extent than in the preceding years. The subsidy has been either directly or through profits on voyages used for that purpose. The amount of depreciation provided, even in these circumstances, is less than should be provided in any normal year, and there are still the arrears of previous years to be made up. I want the Committee to appreciate the importance of these statements. The Government can claim that the assistance given to the industry has proved effective. It would be reckless to withdraw support just at the first signs of returning prosperity, when the very slightest setback would have the effect of undoing all the good that has been done during the last two years, and when there is still much lost ground to be recovered. Again I would cite the figures of the arrears of depreciation.

With the stimulus of the subsidy a system of co-operation has been brought about inside the industry itself and minimum freight schemes in the main tramp trades have been set on foot. These schemes protect the shipowner against the collapse of freight rates due to contractions in demand, and enable the British shipowner to compete on equal terms with the foreigner. The value of these minimum freight schemes was brought home forcibly in the first six months of 1936. The demand was less than half the normal, and it is certain that without the schemes, and the severe restrictions imposed by the Tramp Shipping Administrative Committee upon the freedom of owners to offer tonnage in the market, the freight market would have slumped to most disastrous levels. The industry must look to the continued existence and effective working of this machinery to secure the stability of conditions that are essential to its preservation and progress in the next few years. Without the backing of the subsidy the leaders of the industry are convinced that it would be impossible to secure observance of the minimum freight schemes.

Much tramp tonnage here is owned by small companies which have not the resources which enable the larger companies to hold fast at difficult times in order to secure remunerative freights. Co-operation is desirable at all times, whether the market is favourable or not, because impatience or inability to hold tonnage off the market will spoil the prospects of a rise in freights. It is these considerations which have led the Government to agree with the conclusion of the industry that the support of the subsidy is necessary in present circumstances to the continued existence of the machinery of co-operation; but the industry must find other means of ensuring the continuance of co-operation, and no doubt they are doing their best to find measures which will enable the system to be carried on when the subsidy has come to an end.

The Government do not suggest that public money should be paid to the industry in conditions under which the industry can reasonably be expected to do without it. It will be seen, from the Memorandum on the Financial Resolution, that the Government have retained the condition that the amount of the subsidy will be reduced below £2,000,000 if the average level of freights for the year 1937 rises above 92 per cent. of the average level for 1929, no subsidy at all being paid if that level is attained. Having regard to the present conditions in the tramp market, the Government do not propose to make any payments on account until the end of the year. Hitherto, as the Committee knows, payments have been made quarterly. It is not proposed in view of the freight rates prevailing to make any payment at all until the whole period of 12 months has expired and the freights for the whole year can be calculated and the average ascertained. It will then be possible to calculate what amount of subsidy is due, having regard to that average level of freights throughout the year.

Under the same conditions as before owners will, among other things, have to satisfy the Tramp Shipping Administrative Committee that National Maritime Board agreements have been complied with regarding rates of wages, and that the right number of officers have been carried, etc. Wages and conditions of employment of officers and seamen have been improved during 1936. Unemployment among seamen, especially white British seamen, has been very substantially reduced. It is in the interests of the seafaring population that the tramp shipping industry should re-establish itself in a flourishing condition. When the subsidy was first introduced there was some fear that its effect might be detrimental to other sections of shipping such, for instance, as cargo liners. Those fears have proved groundless owing to the working of the conditions which the Government attached to the subsidy. The cargo liner section has benefited from the improvement in the market rates, and from the co-operation with the tramp owners. The value of that co-operation is, I think, generally recognised by shipowners. The premature withdrawal of the subsidy and the consequences which might be expected would mean a worsening of the condition of the cargo liner owner as well as that of the tramp.

Perhaps Members of the Committee will allow me to summarise the Government's position. A large and efficient mercantile marine is, in the view of the Government, necessary for this country for prosperity in peace and for defence in war. Tramp shipping has been gravely weakened financially by the disastrous conditions prevailing since 1929. The assistance given in the last two years has proved effective, first, in arresting decline in the tramp shipping industry, and, secondly, in improving its position. A continuance of satisfactory conditions is essential to enable tramp shipping to establish its position and to replace its tonnage. The present improved conditions depend, in part, on the minimum freight schemes, which themselves are based on the subsidy. If international trade were to decrease, or the present distribution of shipping were altered so as to bring about shorter voyages, or if the world tonnage available increased, the international and national competition of tramp shipping for cargoes available would quickly bring about conditions which would have existed in the early months of 1936 if the minimum freight scheme, based on the subsidy, had not worked satisfactorily. In such circumstances tramp shipping would return to the state in which it was in 1933 and 1934, when the Government felt bound to come to its rescue. The public purse is adequately safeguarded against payment of subsidy in circumstances in which the industry ought to be able to dispense with it. The interests of the seafaring population are bound up with the subsidy, and the cargo liner section benefits from the conditions attached to the subsidy. Having regard to these considerations I confidently ask the Committee to approve the Resolution, and I would only add the hope that shipping conditions during 1937 may make it unnecessary, in fact, to pay the subsidy.

Hon. Members will have obtained from the Vote Office Command Paper 5363, which is the Fourth Report of the Tramp Shipping Administrative Committee. I commend to the notice of the members of the Committee this Fourth Report. It is a mine of information, and is very ably prepared. It shows the position, with all relevant statistics, and is in fact potted history of the present position of tramp shipping in this country. It should be in the hands of everybody prior to the debate on the Bill which will follow the passing of this Resolution, on which it will be based, and the Second Reading of which is to take place on Thursday. It is not necessary to go in detail through the Report, but every word of it is relevant to the discussion we are now having.

5.29 p.m.

Mr. Shinwell

After listening to the speech of the Parliamentary Secretary I have utmost difficulty in appreciating what is the actual position of the shipping industry. He seemed to blow hot and cold. At one moment he declared that the shipping services of the country were in a very satisfactory condition, and almost in the same breath he assured the Committee that it might be necessary to pay this subsidy at the end of 1937. On the other hand, he said that conditions might still further improve and the subsidy could be abandoned. Furthermore, he indicated that although freights were still rising in 1936 a set-back had occurred, and he drew from that consideration the conclusion that it would be reckless to abandon the subsidy. Where are we? Are we in an optimistic or a pessimistic frame of mind about the shipping industry?

The essay which the Parliamentary Secretary was good enough to read to us did not satisfy my mind, and I doubt whether it will satisfy other hon. Members. It will be interesting to know who prepared that precious document. Was it drafted after consultation with the shipowners, or is it the production of the Tramp Shipping Administrative Committee, or does it represent the considered opinion of the experts in the Mercantile Marine Department of the Board of Trade. We ought to know. Why are we directed to peruse the report of the Administrative Committee? No information has been vouchsafed as regards the disposition of the subsidy in 1936. On that head there is not a single item of information. Before the Committee is asked to vote money out of public funds for private undertakings we ought to be furnished with some information as to the disposal of the amounts voted on previous occasions. That is the very least to which we are entitled. As to the Parliamentary Secretary's views on the state of the shipping industry, I should like to quote from a well known weekly shipping journal, "Fairplay." Recently there was a symposium of views of the condition of the shipping services and several shipowners offered their opinion. One of them said: The sustained improvement in various markets most recently experienced encourages the hope that at long last a definite and permanent improvement from the depths of depression which has lasted for so long may continue. That sounds favourable and is definitely optimistic, and because it is optimistic it would appear that the case for a continuance of the subsidy is not so strong as it was last year or the year before. Then Sir Vernon Thomson, President of the Chamber of Shipping and, by the way, chairman of the Tramp Shipping Administrative Committee expressed this view: In the meantime I lace the future with quiet optimism. What about the set-back in freights? What about the fears that this subsidy may require to be continued? What about the reference to fortifying the minimum scheme by financial assistance provided out of public funds? We are either optimistic about the situation or otherwise. I confess that I do not know where the shipowners stand in this matter, except that I know quite positively that they want as much as they can get out of public funds. The question of a shipping subsidy apart from its merits, if indeed it has any merits, has had the beneficial effect, I admit, of directing attention to the position of our shipping services and to the conditions of seamen of all grades. I make the Parliamentary Secretary this concession. Our supremacy in the mercantile marine has been threatened in the tramp and cargo liner shipping, particularly in the Pacific, but the question of the Pacific is not now under review. Having regard to that situation it is quite proper to give the matter our attention.

I speak not only for myself but for every member of the Labour party when I say that we are as much concerned about the condition of our mercantile marine as any hon. Member opposite. We desire to maintain its efficiency, and, if possible, its supremacy. Much depends on the efficiency and position of the British mercantile marine in relation to our national economy. The conditions under which the men of the merchant service live demand the consideration of this House, but neither the state of the mercantile marine nor the need for improvement in wages and accommodation and the like have anything to do with the granting of a subsidy. That is a positive declaration which I would ask the Parliamentary Secretary and the Government to note. I mean that the wages and conditions of the men in the mercantile marine ought to be established by right; they are entitled, having regard to the risks they undertake, the privations they endure, and the kind of life they lead, divorced from their home for long periods, to the highest possible wages and the best conditions of labour. But that has nothing whatever to do with the granting of a subsidy. The Board of Trade, which is the custodian of our shipping interests, is at the same time the custodian of the men's interests and it should occupy its mind as much with one as with the other. That is a proposition which I hope the Committee will accept. We say that the state of the service and the conditions of the men should be treated on their merits. We ask for both, but we doubt if this is the proper method.

I am ready to concede the fact that the conditions of the men, particularly as regards wage standards, have improved since the granting of the subsidy. I do not dispute that. The Maritime Board decided to restore the cuts, but does that mean that the men are better off than they were before 1929? They are, in fact, in precisely the same position, and a great deal requires to be done for the men in the mercantile marine in wage standards and conditions of labour, in accommodation, in food supplies, and cooking, before the Labour party will be satisfied. We shall raise this issue on every possible occasion. As regards the subsidy, the Parliamentary Secretary will recall that on a previous occasion we had a personal discussion across the Floor of the House on the principle underlying the provision of the subsidy. I then said, and I repeat, that we have no objection in principle to the provision of subsidies. In certain conditions they are desirable. They may afford a breathing space for a depressed industry, and they may be required in order to bolster up a new industry, but there is no longer any justification for a subsidy in this connection, as I propose to demonstrate to the Committee.

What was the original idea behind the granting of financial assistance to tramp shipping? The President of the Board of Trade on previous occasions and the Parliamentary Secretary this afternoon have declared that it was necessary to provide a measure of financial assistance in order to meet the costs of depreciation; that it was impossible for shipowners to replenish their fleets in the depressed situation, and that, therefore, a measure of financial assistance was required. But we are no longer in that situation. Out of public funds we are now providing dividends for shareholders in shipping companies. The Parliamentary Secretary may shake his head, but I can prove it to him. I take it that he does not regard it as desirable that public money should be used to provide dividends for shareholders? If he is prepared to answer that question I am quite willing to sit down. Apparently there is no answer, and, therefore, I take it he agrees that public money should not be devoted to providing dividends for shareholders.

Let us examine the position. There are several companies which received subsidies in 1936. I speculate on that head because we have no positive information. Perhaps just here I had better ask one or two questions. How much of the £2,000,000 voted last year has been spent? We have had no information. Who received the money? How much did each shipping company receive? As we have had no information on these matters I must refer to what happened in the previous year, as we have information regarding 1935. Take some of the companies concerned. There is the Clan Line. I suppose we may mention the Clan Line because it received a subsidy of £17,608 in 1935, no small amount out of £2,000,000. What is the position of that company? A representative of it sits in this House although he is not present at the moment. They had a profit in 1936 of £644,511, and they paid a dividend of 9 per cent., not had going in these depressed times. They placed £250,000 to reserve and £169,750 to depreciation. But they had reserves of £500,000 already, so they were by no means hard up. In short they were not in need of this financial assistance. At any rate these figures demonstrate, not that they were in need of financial assistance but that the company is in an excellent financial position and does not require State assistance. Moreover, this company employs Lascar seamen. It does not even comply with the conditions laid down when previous subsidies were granted. It does not pay the maritime rates of pay, it does not employ, except for four quartermasters, any white seamen among the crews in any of its vessels. What is the case for a subsidy for the Clan Line? There is no case at all.

Dr. Burgin

This is old stuff.

Mr. Shinwell

The Parliamentary Secretary says that this is old stuff, but is that so? Even if it is, there is no reason why we should not revive it.

Dr. Burgin

The hon. Member will not think me discourteous if I interrupt to say that I was merely referring to the fact that he suggested the subsidies ought not to be paid on the older shipping lines, which are in a different financial position from the great majority of the tramp-shipping companies. That argument has been worn threadbare in this House.

Mr. Shinwell

In that case, I suggest to the Parliamentary Secretary that he should answer the argument. I do not mind if it has been worn threadbare, and am sure there are other hon. Members who take the same view. Why should a wealthy shipping company having huge reserves and able to meet its depreciation costs require assistance from the State? That is a simple question. The hon. Gentleman says that the argument has been worn threadbare, but we have had no answer in the past, we have none now and we shall have none in the future. I would go as far as to say that this shipping subsidy is the biggest swindle that was ever perpetrated on the British public, and I will prove that assertion before I sit down. Let me now deal with some of the other companies. There is, first of all, the Houlder Line, having a gross tonnage on eight vessels of 58,000, which goes to show that the vessels are comparatively small. That line had a profit of £137,907 and paid a dividend of 7 per cent. Its reserves are £324,921, and it set £75,000 aside for depreciation purposes. There seems to be nothing wrong with that company. I wonder whether we can have any information as to the amount of subsidy it received in 1936. That line has no need of a subsidy. The Bank Line received a subsidy of £76,780 in 1935. I believe it received more by way of subsidy than any other company; but it had a profit last year of £338,673, although it is true that it paid a dividend of only 3½ per cent. When the profit is compared with the amount of subsidy paid in the previous year, it seems to be altogether out of proportion.

I come now to the cargo liner companies, for apparently it is on those companies that the argument has been worn threadbare. The Tatem Line, having five vessels, made a profit of £82,000 and paid a dividend of To per cent. Its total tonnage is only 25,000, so that the vessels are small. It set aside £16,898 for depreciation which was £3,000 more than the five per cent. depreciation required. The Glasgow United Company, having two vessels, made a profit of £17,000 and paid a dividend of 7½ per cent. The total amount it set aside for depreciation was £7,183, but the book value of its vessels is only £70,000. That is a remarkable thing, and it almost amounts to a mystery. That company had a subsidy of £7,251 in 1935, which was more than the amount set aside for depreciation in the following year. Surely that calls for some explanation, especially when it is remembered that the company paid a dividend of 7½ per cent., a dividend which could not have been paid had it not been for the subsidy which it obtained.

The Maritime Steamship Company, having only one vessel, made a profit of £9,817, which is not bad for one vessel. Let it be remembered that the profit was on voyages and had nothing to do with interest on investments. It is true that it did not pay a dividend, but the total paid-up capital is only £22,500, and, more remarkable still, the book value of its one steamer is £54,000. That is a mystery which requires some explanation. Let me now deal with the Ropner Line, which made a profit of £96,000 last year. I do not know what subsidy it received—perhaps the hon. Member for Barkston Ash (Colonel Ropner) can tell the House—but I know that in the previous year it received £50,504. I congratulate the hon. Member for Barkston Ash; that company has done very well indeed. I will take now the 41 principal cargo companies in the country. In 1936, they made a profit of £1,082,889, the best profit since 1930, and more than the pre-war average. I admit that the profit they made last year was not up to the profits which they made in previous years; for example, in 1927 they made £3,145,000, and in 1928, £4,999,000. It would be interesting to know what they did with those profits. I should have imagined that companies which were in that fortunate position in those years would not require to come cap in hand begging for assistance. The other day, the hon. Member for South Croydon (Mr. H. G. Williams) intervened, when a question was being asked about the feeding of school-children, to ask whether we were going in indulge in universal pauperisation. We have here an example of pauperisation where it is by no means required.

Let me deal for a moment with the reserves of those companies. It is difficult to get the reserves of the whole of them, but if we take 26 cargo liner companies—some of them qualifying for subsidy—the reserves are at present more than £35,000,000. What is the good of pretending that those companies, taking them by and large, require financial assistance? There may be some companies which are in a serious condition, and if they are, and require financial assistance, let it be granted, under proper conditions, but to distribute largesse indiscriminately in this fashion to wealthy companies and those which are far from wealthy is an action which is totally incompatible with the usual policy of the Government in relation to financial consideration.

Dr. Burgin

Before the hon. Member passes from that part of his speech, if he has any evidence of any tramp-steamer company that has not made losses on trading during the last few years, I should be glad to have it, as I know of none.

Mr. Shinwell

I invite the Parliamentary Secretary to give his attention to an article in "Fairplay" on 14th January, where he will see some information as to the working of some liner and cargo liner companies in 1936. I would ask him to look at the column which deals with profits on voyages, and I think it will confirm what I am saying. It deals with facts, and does not theorise and romance. Let us get at the real mystery underlying this matter. The President of the Board of Trade and the Parliamentary Secretary have argued that the case for a subsidy rests upon the need for depreciation. I agree that there is something in that, and I do not dispute that contention. We wish to maintain the supremacy of the mercantile fleet. It may be necessary to build and to replenish, and if the money cannot be found in private circles, it may be necessary to provide it from the State coffers. But there is a very remarkable thing about this question of depreciation. In a previous speech on this matter, the President of the Board of Trade declared that 5 per cent. was necessary to meet the costs of depreciation, assuming the average life of a vessel to be 20 years. If vessels lived only for 20 years, that would be all right, but many of them live much longer. Is that longer life taken into account?

I have extracted some very interesting material on that subject from Lloyd's Register. Obviously, I cannot quote all the companies, but the general statement is that there are many vessels, amounting to hundreds, in the mercantile marine that are over 20 years old, and I presume that the depreciation costs have been met. Another point to be remembered is that after the depreciation costs have been met, the vessels are frequently sold to foreign or British owners. Perhaps a vessel of 4,000 or 5,000 gross tonnage might sell for £4,000 or £5,000. It might fetch a reasonable price for breaking-up purposes. I ask the Parliamentary Secretary whether the amount obtained when the vessel is sold for breaking-up purposes after it has lived a normal life—or even more than a normal life—or the amount received when it is sold to other owners, is taken into account when the Board of Trade consider this question of depreciation? I find that there are several companies in that position, and I think we are entitled to some information.

It is not sufficient merely to condemn the Government and this subsidy. Something has to be done to put the British mercantile marine in a sound position. Have the Government any other plans apart from a subsidy? The Parliamentary Secretary has said that the subsidy may have to be abandoned at the end of 1937 and that the shipowners have been told that they must make plans. In the event of their refusing to make plans or being unable to do so, will the subsidy go on? We are entitled to some information on that matter. Moreover, the subsidy is not to be provided except in quarterly allocations. That is a new arrangement.

Dr. Burgin

It is just the opposite. Instead, as hitherto, of being paid quarterly, no payment is to be made until the end of the year.

Mr. Shinwell

I am obliged to the hon. Gentleman. His interruption fortifies my contention. No payment is to be made until the end of the year, and then all the circumstances will be taken into account. However, that does not meet my point. What is to be done to deal with the depressed situation? The boom will pass and the slump will inevitably follow; what is to be the position of the mercantile marine? I submit with certainty that my denunciation, in the circumstances, is justified by this deepening mystery. At the same time, we are entitled to submit a case for reconstruction and reorganisation. There appears to be no reorganisation in the mercantile marine at the present time. Apart from the minimum freight arrangement, where is the reorganisation? Perhaps the hon. Gentleman will tell us that. I know of no other reorganisation which is now taking place.

Colonel Ropner

Will the hon. Gentleman say what sort of reorganisation he has in mind?

Mr. Shinwell

I am coming to that. I am by no means an expert in reorganisation in the shipping industry, but I shall venture, in a moment, to offer a suggestion. The first thing we want to know, however, is whether the Government have any plan. Hand-to-mouth methods will not do and what is here proposed is a hand-to-mouth method. I suggest, to begin with, that there should be an inquiry into the whole situation, into the position of the mercantile marine, into the question of whether or not there is need for reorganisation and rationalisation, into the operation of the subsidy scheme, and in particular into the question of depreciation and replacement in the fleet. That inquiry ought to be conducted by independent inquirers, not necessarily by the Board of Trade, although under its supervision or at its request, and certainly not by the shipowners. They might properly be asked to tender evidence, but they ought not to conduct the inquiry. We ought to have some information, as a result of such an inquiry, on the question of reserves and also as to whether there are undisclosed reserves. That is the first condition in relation to the grant of financial assistance. The fact ought to be placed before us and all the cards exposed. I think that is only fair. The public have a right to know the facts before one penny out of State funds is granted, irrespective of the arguments of hon. Members in this House.

Moreover, we have to consider the fact that a new situation has arisen. One of the difficulties that beset the tramp-shipping companies is the fact that much of their trade has been taken over by cargo liner companies and liner companies. That situation cannot be remedied by subsidy, unless it is intended that for all time the tramp-shipping industry is to be carried on the back of the State. It would be much better to take over the industry and nationalise it, or put it into the hands of a public utility concern. In any event, as time goes on, more and more of the tramp trade will be lost. In the old days, when tramps went about all over the ocean, picking up cargoes here and there they sometimes sailed thousands of miles in ballast, and they sometimes made profits and sometimes made losses. Now, it is all different. Cargoes can be picked up in particular ports regularly. They are known to be there. Arrangements are made between shipping companies and traders and cargoes are taken to be unloaded at specific ports. Tramp shipping cannot overcome that difficulty of the competition of the liner and cargo liner companies, by any measure of financial assistance. That consideration should be taken into account in any inquiry which may be held, and, whether there is an inquiry or not, it is a matter to which attention ought to be given.

A further point is that there ought to be an independent representative on the Administrative Committee. That has been suggested before and the suggestion has been rejected by the Government. Why should there not be a seamen's representative on the Administrative Committee? We were told that one of the conditions of the grant of the subsidy —although it was not specifically mentioned in any document—was that seamen's conditions would be safeguarded. In that case, the proper thing to do is to put a seamen's representative on the committee concerned and I ask the Parliamentary Secretary to take a note of that request. I have no desire to prolong the Debate. We are opposing this Resolution, not because we desire to do anything inimical to the mercantile marine, but because we believe that a subsidy is no longer required. Moreover, we are not satisfied with the administration of the subsidy. We are convinced that the shipowners are holding back something. Last but by no means last—and this is the real substance of our case against the subsidy— we believe the time has arrived when some other scheme, more substantial, more permanent and more likely to assist the industry, should be introduced by the Government. I repeat that we are not opposed to subsidies in principle if cer- tain conditions are respected, but a subsidy of this kind is not going to do the tramp-shipping industry any good, it is not going to do the mercantile marine any good and therefore we oppose the Resolution.

6.23 p.m.

Colonel Ropner

The hon. Gentleman is a master of special pleading, and although I do not propose to follow him along some of the paths he has attempted to lead me, I hope to be able, in the course of my remarks, to show him that, in general, the financial position of the shipping industry, particularly the tramp section of that industry, has justified a grant from State funds. Those who have noted the present and the past opposition of hon. and right hon. Gentlemen opposite to the subsidy must have been disappointed if they expected the hon. Gentleman who has just spoken to make any sort of concrete proposal or suggestion as to what ought to take the place of the subsidy. He suggested an inquiry. I assure him, and I think he already knows it to be true, that the Board of Trade conducted a minute and meticulously careful inquiry into the conditions of the tramp shipping industry before a subsidy was granted.

The hon. Gentleman suggested that there was competition between tramp shipping and cargo liners and that cargo liners were eating into the tramp shipping trade. But tramp ship owners have never asked for Government assistance to protect them from their colleagues who run cargo liners. I have never supported the industry's claim to a subsidy on the ground that tramp shipping was losing money or was passing through a difficult time. What I have always maintained and still maintain is that the Government must assist British shipping if foreign shipping is being helped. It is no concern of the Government whether shipowners are enjoying good times or suffering bad times. What they ought to concern themselves with, is whether, compared with foreign owners, British owners are doing well or ill. If the British mercantile marine were dwindling, solely because trade was bad, I, for one, would have no complaint. What I do complain of is that the industry is dwindling because of unfair foreign competition. It is for that reason that I have on past occasions supported, as I support to-day, the Government's proposals to grant a subsidy to the industry.

It is well that we should realise early in this Debate that if the present level of freights is maintained the shipping industry will not receive a single penny of the £2,000,000 covered by this Resolution. The Parliamentary Secretary said he considered that it would be disastrous to withdraw the subsidy under present conditions. But that is exactly what is going to happen in the course of the next year. It is a condition of the subsidy that its receipt is entirely dependent on the level of rates of freight and I repeat that with rates at the present level, no subsidy will in fact be paid.

There was one other observation of the Parliamentary Secretary to which I would draw attention. He said that the cooperation achieved during the last two years had enabled British owners to compete on equal terms with foreign owners. With all due respect, I submit that that co-operation has done nothing of the sort. What has enabled us to compete on equal terms with the foreigner has been the fact that British shipowners have received the subsidy but schemes of freight cooperation, covering some of the important markets of the world, have in fact assisted foreign owners every bit as much as they have assisted British owners.

Mr. Benjamin Smith

And very often more.

Colonel Ropner

No. Referring again to the speech of the hon. Gentleman opposite, surely it is time that he and his party learned that capital and labour are partners in industry and that both deserve an appropriate reward. Hon. and right hon. Gentlemen opposite are often so over-anxious to support their doubtful claim to represent Labour, that they become oblivious of, or even hostile to, the legitimate demands of capital. I am not saying anything new when I remark that labour is of little service without capital and that capital is useless without labour.

I am constrained to make those remarks because of the unreasonable and prejudiced observations to which we have just listened. The subsidy, as I hope to show, has brought very considerable advantages to that section of labour which is employed by the British Mercantile Marine. I ask hon. Members opposite, is all help for ever to be denied to the capital which is invested in that industry? Do hon. and right hon. Members opposite wish to see obsolete ships replaced, do they desire more employment in the shipping industry, do they believe that new capital can be attracted to this important industry unless there is at least a prospect of some return on that capital? They must wish for more employment and a larger mercantile marine, but if capital invested in that industry remains entirely unrewarded or, what would be even more deplorable, if capital were to be lost, then I submit that under any economic system the British Mercantile Marine will gradually but quite certainly disappear.

Perhaps the hon. Gentlemen opposite are really rather more enlightened than the impression given by their speeches would indicate, and perhaps they would be ready grudgingly to admit that capital might under certain circumstances deserve a certain return. Perhaps it is only that they consider that capital invested in the tramp section of the shipping industry has received too high a return during the last few years. If that is the position, let me help to disabuse their minds of that belief. The year 1929 has become the standard year in the shipping industry. The onset of the slump was hastened towards the end of that year, and levels of the rates of freight and so on are referred to that year. I should like to give the House a few facts and figures which I hope will illustrate that capital employed in the shipping industry has not been over-rewarded during the last seven years. I am going to speak about two companies. Both of those companies are under the same management. I believe that, combined, they represent the largest tramp shipping concern in the country, and if hon. Gentlemen oposite are going to accuse me of quoting figures that have reference to certain selected companies, I can assure them that the financial position of these companies is on the whole a great deal better than the general average. The capital of the two companies together comes to £1,750,000.

Mr. Benjamin Smith

Which are the two companies?

Colonel Ropner

They are the two companies which I manage.

Mr. Smith

Will the hon. and gallant Gentleman name them?

Colonel Ropner

They are the Ropner Shipping Company and the Pool Shipping Company. The capital of those two companies is about £1,750,000. The dividends over the last seven years have averaged just under 1 per cent. If I omit the year 1930, in which year there was a certain carry-over from the better year of 1929, the level of dividends over the last six years is under one-half per cent., and the grand total for both companies for the seven years is about £130,000, and that is about one-eighth of £1,000,000. I have reduced the figure to a fraction of £1,000,000 because when I deal, as I am now going to, with what has been the reward of labour during that period, I shall be forced to speak in terms of millions. Direct wages paid during this period have been almost exactly £1,000,000. More than 2,000,000 tons of coal have been bought, at a price of nearly £2,000,000, and about three-quarters of that 2,000,000 tons of coal have been shipped in ports in the United Kingdom. Hon. Members will appreciate that even where bunkers are taken at foreign ports they are very often British coal. More than two-thirds of £1,000,000 has been spent in repairs and in modernising, nearly £1,000,000 has been spent on new tonnage, and there have, of course, been large payments in addition to provide the necessary victualling, paying loading and discharging expenses in innumerable ports, trimming, stores, and so on. I feel certain, in view of those figures, that even hon. Gentlemen opposite will agree with me that in the case of those two companies very much larger sums have gone to reward labour than have gone to reward capital during the last seven years.

Mr. Shinwell

I wonder if the hon. and gallant Member will tell us what are the reserves of those companies.

Colonel Ropner

I would be perfectly willing to give the hon. Member the exact details as regards reserves, but I am not presenting a balance sheet to the Committee. Without going into too great detail, I am showing what expenditure has been made by these companies. I am not quite certain why the hon. Gentleman opposite wants to get at the figures of reserves. I am trying to show that, whatever may be the financial position of the companies, a certain reward over a period of years has gone to the shareholders and a certain reward over a period of years has, either directly or indirectly, gone to labour.

Mr. Shinwell

I gather that the hon. and gallant Member's argument is this: Whether the companies are wealthy or not, and whether their position is financially strong or not, the Government should come to their assistance. Is that the hon. and gallant Member's case?

Colonel Ropner

The hon. Member is leading me into an argument which I hope to pursue next Thursday, if I am sufficiently fortunate to catch Mr. Speaker's eye. But briefly, with proper regard to what is happening in other nations, that certainly would be my argument. What I am trying to show for the moment is that over a period of seven years labour has received large sums, whereas the capital invested in the industry has received very little. I have told the Committee that I have quoted the case of two companies which are in an extremely strong position, but if the general average over the whole industry is taken, it will be seen that, far from the industry having made large profits since 1929, in point of fact depreciation has not been covered. The depreciation in the case of 214 companies amounted to some £18,000,000, and only £8,000,000 has been paid from all sources—subsidies and profits on voyages—and there has consequently been a direct loss in capital of some £10,000,000.

Mr. Shinwell

Why does the hon. and gallant Member insist on taking 1929 as his starting point? Why will he not take 1928, when, in accordance with "Fair Play," the profits of the principal cargo boat companies were £4,994,000?

Colonel Ropner

I am ready to admit —in fact, I do not count it as an admission—that 1928 was a better year than 1929 and that 1929 was a better year than 1930. I am taking 1929 as my standard year, because, as I have said, that has become the reference year of the shipping industry. No doubt, if I went back to the war period, I could show large profits in shipping, but if I went further back, to the beginning of the century, equally I could show very large losses. There must be some datum line, and 1929 has now been recognised for some years as the convenient datum line. If the hon. Member wishes me to refer my figures to some other date, I am quite ready to do so. It will not mitigate the fact that over the last seven years serious losses have been made by the shipping industry.

Mr. Benjamin Smith

If over the years in question the companies which the hon. and gallant Gentleman represents have dissipated their reserves outside the industry, they have no right to call upon the nation to reimburse them for any loss which they have made, having so dissipated their reserves.

Colonel Ropner

I do not know what dissipating reserves outside the industry means.

Mr. Smith

Giving bonus shares, for instance.

Colonel Ropner

If that is the allegation, I can deny it. There is no question of giving bonus shares. There is no question of any such thing having been done. That remark illustrates, of course, the danger of the special pleading of the hon. Member for Seaham (Mr. Shinwell). It is very easy to point to one company and say, "This company, owing to efficiency, good fortune, or foresight, is in a prosperous position and therefore should not get a subsidy, while some other company, which has been foolish or, shall I say, has dissipated profits by issuing bonus shares and is to-day on the verge of bankruptcy, is in a bad position and therefore should get a subsidy." I am certain that if the hon. Gentleman will look a little further into this question of the distribution of the subsidy, he will be forced to the conclusion that you have to take a view of the industry as a whole. You must not reward inefficiency by giving subsidies and penalise efficiency by withholding them. You must make up your mind—Is this British industry having a fair deal to-day? Yes, or no? If it is not having a fair deal—and I submit that shipping is not, in the face of unfair foreign competition—you must find some method of distributing the subsidy that will be fair to all.

Mr. George Griffiths

Is that the principle applied under the means test? If a man has saved £10, do you say, "We will not take you on the average"? No. You say to the chap who has saved £10 that you will wipe him out.

Colonel Ropner

I am not dealing with the means test, although I am quite prepared to do so on some future occasion. During the last two years there has been a disastrous loss of capital in the tramp section of the shipping industry. There has been a considerable loss of employment, and the British Mercantile Marine has shrunk by something more than 3,000,000 gross tons. I hope the Government and hon. Members opposite will notice this fact, that the size of our merchant navy is still shrinking. Hon. Members opposite had better revise their ideas with regard to the financial position of the industry if they desire to see employment and wages maintained at even their present level.

The subsidy, which has been opposed on more than one occasion by the Opposition, has not only enabled insignificant dividends to be paid in exceptional cases, but it has, if I may quote a speech of my own last year, "saved the British Mercantile Marine from its rapid approach towards disintegration." I should like the hon. Member for Seaham, who has just described the subsidy as the biggest swindle ever perpetrated in modern times, to ascertain what those whom he claims to represent think of the subsidy. The National Union of Seamen described 1936 as a "wonderful year of achievement." They also said that "even the most pessimistic cannot say that we have had anything but a year of wonderful achievements" — wonderful achievements in spite of the opposition of hon. Gentlemen opposite.

Let me give hon. Members an outline of what the subsidy has enabled the shipping industry to do for those whom it employs. In the case of officers it has raised the rates of pay to such a height that they now stand above the 1929 level. A new manning agreement has been arrived at. A restoration of the 1932 cuts in the wages of crews has been achieved, new agreements for the regulation of hours of duty have been made, and a new dock manning scale has been agreed, meaning on a ship of about 9,000 tons two additional deck hands. The question of crew accommodation is receiving to-day far more attention than it has ever received before, not because of any allegations which have been made in previous years by hon. Gentlemen opposite, but because, for the first time for many years, shipowners have had slightly larger sums to devote to these questions and have been able to incur items of expenditure which they could not previously afford.

Mr. Shinwell

This is rather important as showing the shipowner's point of view. Do we understand that seamen's and officers' wages are being assisted out of Government funds and that if it had not been for the subsidy the cuts would not have been restored? Does the hon. and gallant Member say the same in regard to conditions of labour, hours, accommodation, and so on? Are we to understand that it requires State financial assistance before the seamen are to get a fair deal?

Colonel Ropner

I am not quite sure what the hon. Gentleman calls a fair deal. I am stating that the position of the industry two years ago was such that owners could not afford to pay more than a certain rate of wages. The Government gave a subsidy and the level of freights attained a certain standard. With the subsidy, and, with freights at their then level, owners were able to draw up a new agreement with the officers and seamen and to increase the wages to both. I am not going to try to divide up what goes into an industry and say, "This particular £5 note must be regarded as subsidy, and that particular £5 note must be regarded as profit." All I can say is that the position of the industry with the subsidy was such that shipowners were able to do something for seamen that they would not have been able to do without the subsidy, which was opposed by hon. Gentlemen opposite. I can go further and give a figure which will illustrate even more clearly how the subsidy has helped the crews. Irrespective of profit or loss one-third of the subsidy is now being immediately passed on in the form of additional and higher wages.

I have not dealt with the future of British shipping. Many problems still remain. The subsidy has been administered in such a way that the moment it stops, whether it be in good times or bad, the British Merchant Navy will be in a worse position than ever before to meet foreign competition. Great chunks are still day by day being carved out of trades in which this nation once had almost a monoply by foreign State-aided competitors. The subsidy has not, as it might had done, brought any permanent benefits to British shipping. Meanwhile, let us note for future reference that hon. Members opposite are again opposing a Resolution similar to two other Resolutions brought before the House in previous years, the result of which has been to bring at least a temporary betterment in the conditions of employment of men whom they pretend to represent. Although we have been brought no permanent help by the subsidy, we have at least been given temporary assistance from which all engaged in the industry have benefited during the past two years.

6.53 p.m.

Mr. Ede

It was my misfortune last year to follow the hon. and gallant Member for Barkston Ash (Colonel Ropner), and I ventured then on a prophecy: If there was one thing which impressed me more than another in the speech of the hon. and gallant Member for Barkston Ash it was his certainty that this was only the second occasion on which he was supporting a subsidy and that the last occasion would be a great many years hence if he had his way. I saw no indication that he had any suggestion to offer which meant finality in this matter. The right of the shipowners to put their hands into the public pocket having once been secured, it is evident that it will be a long time before they agree to give up that right. I am bound to say that if I were only as sure of the winner of the Derby this year as I am of the hon. and gallant Member being here next year to repeat the same statements, I should not be worrying about my financial position at the end of the year.

Colonel Ropner

History is repeating itself in other respects. Would the hon. Member read the reply which I made to him last year?

Mr. Ede

The hon. and gallant Member said: I am sure the hon. Member does not wish to misrepresent me. This is not the time to make alternative suggestions. I am prepared, on the right occasion, to make suggestions which I sincerely hope will lead to a termination of the subsidy, but that is not what we are discussing this afternoon."—[OFFICIAL REPORT, 11th February, 1936; cols. 804–5, Vol. 308.] We never are discussing the termination of the subsidy according to the hon. and gallant Gentleman. It is jam yesterday and jam to-morrow, and he gets his jam to-day, which is rather better than Lewis Carroll's version of the story. If the hon. and gallant Member supplied a condemnation of the whole system of subsidy, it was in his closing remark. Is it not quite clear that while we go on temporarily doing something for the industry, which he himself says does nothing towards placing it in a permanently sound position, we shall neglect the greater issues which are at the bottom of the trouble of this industry? Throughout the world we hear people who regard themselves as leaders of thought saying that what is wrong with the world is the system of subsidies, quotas, tariffs and everything that is put in the way of international trade, and that until we can get rid of them there will not be any health in the international economic situation. They say it everywhere. The hon. and gallant Gentleman who is in charge of overseas trade announced that the situation was so severe now in this country that, unless the foreigner looked out, we would have to put on some extra tariffs so as to prevent further goods being brought into the country by the ships that our seamen want to man. That was not quite how he put it, but that was what he meant.

The feeling on this side of the House is that these subsidies merely put off temporarily a serious dealing with a situation that everyone admits requires to be dealt with. No one could have dealt with it better five or six years ago than the hon. Gentleman who represents the Board of Trade this afternoon. Anything that we say now falls far short of the lucid and convincing exposition he was then able to give of the desirability of unhampered and untrammelled international trade. I could not follow the answer of the hon. and gallant Gentleman to my hon. Friend the Member for Seaham (Mr. Shinwell), when he asked him about the relation of this subsidy to wages. I gathered that the hon. and gallant Gentleman said that without the subsidy wages would not have been improved because they could not have been. He said, I think, that one-third of the subsidy had gone to the people employed in the industry, in the restoration of cuts and not really in improving the conditions and bringing them up to the pre-crisis level.

Colonel Ropner

The level of wages is better now than it was in 1929.

Mr. Ede

But with regard to the men in lower ranks than officers, I gathered that it was merely a restoration of the pre-crisis condition. From my conver- sation with officers, I am bound to say that they do not regard the present scale as one that represents any excessive generosity on the part of the owners. The hon. and gallant Gentleman left us to guess where the other two-thirds of the subsidy had gone. Although he did not hold a very high view of our intelligence in the course of his remarks, I want him to feel that we are capable of realising that the other two-thirds must have gone to the companies. Either in profits or in some other way, the other two-thirds has been a direct benefit to the companies. The hon. and gallant Member dealt in the earlier part of his remarks with the appropriate reward of each section of industry—of capital and labour. Are we to assume that, although, perhaps, in his view, only with regard to the industry in which he is interested, out of any given sum one-third should go to labour and two-thirds to capital?

Colonel Ropner

I do not know if the hon. Gentleman really expects an answer to a question of that sort, but of course the obvious answer is No.

Mr. Ede

I cannot see why the hon. and gallant Member should have spent such a time in demonstrating how truly great this subsidy was from the point of view of the people engaged in the industry, the wage earning and salary earning section of the industry. Surely the hon. and gallant Member's speech only proves this: that the two particular companies in which he is interested and for which he spoke this afternoon are in this matter not unlike the remaining companies and bodies of employers and industrialists who have benefited by the subsidies given by this House in recent years. They are merely daughters of the horse leech; the more they get the more they want. He himself admits—and this is the final condemnation of the subsidy—that the period gained by the subsidy has not been used in an attempt to secure a permanent sound basis for this industry. That is the only basis on which I would be prepared to grant a subsidy. In the course of the economic difficulties with which the whole world has been faced it may be advisable to pay subsidies, for the State to come to the assistance of some hard-pressed industry; but surely only on the basis that while the subsidy is being paid some effort will be made to find a permanent solution for the difficulties.

My complaint is not that the Government have paid a subsidy. That might be justified. But an indiscriminate subsidy never can be justified all the while you maintain a means test with regard to people who happen to be out of work through no fault of their own. I cannot see the logic and justice in an indiscriminate subsidy while a very strict means test is imposed on people who have to obtain State relief for individual necessities. There should be some discrimination in the way the subsidy is given all the while you maintain the means test, and it should be used as a means of insisting that the industry shall be reorganised on a basis which will mean its better use in the future. Because I have no indication of that I am bound to follow the lead so ably given by the hon. Member for Seaham (Mr. Shinwell) this afternoon. I trust that if this subsidy is to be renewed there will be an earnest effort on the part of the Government to restore international trade, which will help the shipping industry far more than any subsidy, and that the industry will be placed, with regard to conditions of labour 'and its internal organisation, on a basis which can be defended.

7.4 p.m.

Sir John Withers

There is a very good old proverb which says that the cobbler should stick to his last, and it is most unusual, almost unseemly, for a university Member to address the House on shipping matters. But I have been greatly interested in this subject purely as an amateur. I have no connection, directly or indirectly, with any shipping company, or anything of that sort, either by investment or management or in any other way, so that I speak as a member of the public. I have been greatly interested by the White Paper, which I have read with very much pleasure. It is full of figures and intricate matters and you cannot master it in a morning. It came out this morning, and it is very difficult indeed to get to the bottom of it. But there are a considerable number of things which struck me as being extremely satisfactory, and also suggestive. The first matter which struck me was the question of employment. It seems perfectly clear that while unemployment among masters and officers has been reduced there is now practically no unem- ployment in this country among British white seamen. By the end of 1936 there was a shortage of trained engineers and seamen which threatened to become acute. That is a very great advance surely. It is remarkable also how the volume of laid-up tonnage has fallen. On 1st April, 1935, laid-up tonnage was 126 vessels, or 396,000 gross tons, but on 31st December, 1936, that had fallen to only 10 vessels, or 31,000 gross tons. Surely that is very important. After allowing for scrapping vessels, sales to foreigners and other factors, the net increase in employment on 31st December, 1936, was 76 vessels, or 285,000 gross tons, a fact which is reflected in the improved employment of British officers and men. There is improvement in the hours of duty. The distinct 1936 achievement of the National Maritime Board, as far as crew ratings are concerned, has been the conclusion of agreements regulating the hours of duty at sea on foreign-going vessels. There was also an increased manning scale.

Mr. Benjamin Smith

Does not that rather postulate that prior to this ships were unsafely manned?

Sir J. Withers

Very likely. All I can say is that I am pointing out an improvement. I do not know what the position was before, but admittedly there is an improvement now, which, after all, is the great thing. I hope that this subsidy will be continued at present, and I am very pleased that it should be continued on the lines taken by the Government. It is not to be paid at all until the end of 1937 and then only on certain conditions which show that it is required. That does away with a great deal of the criticism which has been levelled against this matter. I was always brought up as and still am at heart a Free Trader. I am entirely in favour of what has been said by hon. Members that the only way we can recover our trade supremacy is by Free Trade among all nations. I hate subsidies and tariffs, but if ever there was one which is justified it is this one. I hope that it will be so successful that it will be discontinued. I sympathise entirely with the hon. Member for Sea-ham (Mr. Shinwell), who opposed this Resolution, in the fact that if this subsidy is going to be in any way continued there ought to be an in- dependent inquiry. That I am strongly in favour of. It might be appointed by the Board of Trade, but it should include a working seaman for the purpose of ascertaining the conditions under which crews live. Under these conditions and with these criticisms I support the Resolution.

7.10 p.m.

Sir Percy Harris

I do not think that the hon. Gentleman, who represents me so ably, need apologise for intervening in this Debate. On the contrary, it would be a bad thing if discussions on subsidies in particular should be confined to interested persons. It is our responsibility, especially as Members of this Committee, to scrutinise all financial provisions most carefully. That is the primary duty of this House. When it goes into Committee, when the Mace is taken off the table, the House should go carefully into all matters of money and see that it is properly spent. The difficulty with subsidies is that, once started, they are difficult to stop. The whole case for the subsidy was built up by the President of the Board of Trade, who has been very usefully employed in America. I hope that his journey there will not be wasted. The whole case for the subsidy during the last two years has been the world depression, the low rates of freights, the difficulty of replacing tonnage, and, lastly, the difficulty of many of our boats keeping on the water. Owing to new circumstances, quite beyond the subsidy, the industry is now in a comparatively sound condition. Whatever the causes, freight levels have risen, cargoes are far more plentiful, there is a great demand for shipping, and, as the hon. Gentleman quite rightly pointed out, there has even been a shortage of men in certain sections of shipping.

Does not this seem to be the occasion to drop the subsidy completely? It is true that there are guarantees that a subsidy will not be payable if a certain level of freights is reached, but would it not be wiser to drop this Bill and if some catastrophe arises which disturbs the freight market the President of the Board of Trade can come down to the Committee and build up a case for a revival of the subsidy? It is quite clear that in this year 1937, on the basis of the facts and figures available, this industry should now be on a sound economic basis and should not require the assistance of the State. For that reason I do not feel justified in voting for this Resolution. The House of Commons should only be committed to this artificial method of running industry under very exceptional circumstances. These exceptional circumstances do not exist in 1937, and therefore we are not justified in approving the principle of the subsidy. As the hon. Member for Cambridge University (Sir J. Withers) quite rightly pointed out, the real, the only final hope of shipping being in a prosperous condition is the revival of world trade.

There are signs of a possible better spirit. A start was made at Geneva when the Prime Minister of France, M. Blum, made an appeal to the world to drop subsidies, quotas and other artificial barriers to trade. A response has been made from almost every country. What is going on in America to-day, the conferences, the relations between Canada and United States, all point in that direction. In the newspapers this morning it is stated that the Prime Minister of Sweden has expressed a desire to cooperate with other countries in coming to an understanding. Then is not this the wrong time for the Government to come forward with a proposal which asks the Committee to agree to the principle of subsidies? Is not this a time when we should hold over these proposals in the hope that in this new year there will be a new spirit in international trade? I think it is unfortunate that while the President of the Board of Trade is travel-brig home from America, I hope with some good proposals in his pocket, perhaps an agreement for better relations between this country and America not only as regards trade but as regards shipping, we should be asked to accept the principle of subsidy.

Sir J. Withers

Is it not really better and less trouble to make a provision to carry on the subsidy and to be able to slop it if required than to have to go through all the paraphernalia of introducing a new Bill and carrying it through the House of Commons?

Sir P. Harris

I am surprised that an orthodox economist such as my hon. Friend should preach such very bad doctrines. One thing the Committee has to do is to keep a tight hold over the purse strings. We have no right to commit Parliament to a subsidy unless an over- whelming case can be made out for it. I really do not think we are justified in placing this serious commitment on a hard-pressed Exchequer. It would be wiser to wait until a real occasion for it arises.

7.18 p.m.

Mr. Maclay

The hon. Member for South-West Bethnal Green (Sir P. Harris) put forward a peculiar argument. He suggested that conditions pointed to everything being set fair for the industry in 1937 and that we should do away with the subsidy at once. We are only in the first days of February, and tramp shipping is a most precarious industry in which we may get three months up and six months down, and although credit must be given to the work of the committee administering the subsidy, one of the main reasons for the present temporary improvement in the tramp shipping industry is that the dictators of the world are frightened of the position of affairs owing to harvest failures in Europe, and there is a sudden pouring in of grain from all quarters of the world. That is the basis of the present improvement. If the hon. Member opposite had his way he would have the dictators stop there, and there would be a finish to this temporary improvement in the tramp shipping.

I listened with interest to the speech of the hon. Member for Seaham (Mr. Shinwell), and I am glad that two other Members have spoken who are not ship owners, because I think it is a doubtful policy for hon. Members interested in a trade to be standing up and talking about it, as it is bound to be prejudicial. I take no exception whatever to the remarks of the hon. Member for Seaham, because in many respects they were pertinent, and they were of a very different type from the remarks which have been previously addressed to the Government and from the point of view of the Opposition I think that there was considerable weight behind them. I would sum up the hon. Member's argument as a plea for an inquiry into the whole position if money is to be handed out and that there should be a means test, so that money shall not go to firms already in a good position, but only to those which actually require it. I am not prepared to stand up here to refute that argument. I think the Government can make out a case for the principle of a means test, although, incidentally, the Opposition want to do away with the means test, but that case would not necessarily apply to industry on the larger scale. I would point out to the Opposition that we have not really had any further suggestion from them. I gather from their last few election programmes, that they would nationalise the industry. In that case they might raise wages and improve conditions, but in the long run they would be facing exactly the same troubles as have faced the private owner and might lose as much cash as the private owner has. I take it that they have no suggestion apart from that to offer, and I will come back to that.

I wish to make an appeal to the Opposition, from a different point of view to allow this Resolution to go through to-night, but before coming to that I think it would be ungracious if the opportunity were not taken to pay a slight tribute, which I have no doubt the Government will endorse, to those members of the shipping industry who have, during the last year, given so much of their time to work on the various committees in the effort to try to improve the conditions of the industry. It is all voluntary work, and it has been excessively hard work, but they must feel that the results have justified their efforts. I have always said that if we did not want to see the British tramp fleet diminished we must give a subsidy of some sort, because it is to the individual advantage of the stronger owners to see their weaker opponents retire. The Government, in their wisdom, thought a subsidy was necessary because they did not want to see the total tonnage of tramp shipping diminish. I should like to address a remark on that point to the Parliamentary Secretary, because it is bound to arise relative to the question of what the tramp tonnage of this country should be. In peace time we cannot divorce the amount of our tramp tonnage from the actual amount of world trade, but there is an idea that we should have a subsidy to bring British tramp shipping up to a certain level and hold it there, irrespective of world trade, for the sake of national defence.

If we are to keep our tramp tonnage artificially high, especially in view of cargo liner competition, we must go on giving it artificial stimulus by subsidy or other means, but I feel that the Government ought rather to take the view that it is not so much a question of the actual tonnage of British ships from the aspect of national defence, although that may be important, as of ability, if war comes, to replace losses by building quickly. That is a matter for the Imperial Defence Committee, but it is pertinent to this subsidy. During the last War this country carried not only for Britain but for all the Allies. Possibly the same need might not arise in future, because other nations are taking care that they shall not be short of tonnage, and I think the Government, rather than concentrate on the actual size of the merchant fleet, should devote themselves to preparing a scheme for replacing losses quickly if war should come. Tramp tonnage is more vulnerable to-day than it has ever been. Vessels with a speed of 10 to 11 knots are still being built, although the speed of aeroplanes and of submarines has vastly increased since the last War.

I come to the last part of what I have to say. Taking freights at their present levels I think most of us would he against the subsidy, but it is to be remembered that it is a subsidy on a sliding scale and that at the present level of freights there can be no subsidy. The main reason why I ask the Opposition to allow this Resolution to be passed is that it will assist to maintain the measure of co-operation and organisation which has been set up in the industry. I can see an hon. Member opposite raising his eyebrows, and no doubt he is thinking, "Why is that not possible without a subsidy?" That is a natural question. I say the industry needs a breathing space. It will be said that we have had subsidy for two years, but in the last six months the tramp shipping industry has been caught unawares: I do not think it was ever expected that freight rates would recover as they have done. I have given some reasons to account for that rise; the failure of harvests has created much demand for shipping.

If we ended the subsidy now it would produce chaos. One of the good things about the subsidy has been that it has given the industry a lead towards organisation. At the moment there are conflicting opinions in the industry. Some say, "If the subsidy finishes, let us go on with organisation voluntarily"; others say, "Let us have no schemes at all," and there are those, a pretty strong section, who say, "Let us have an enabling Bill passed through the House of Commons, without any subsidy, which will force co-operation." That is the present position among owners—a complete confusion of thought as to what is best for the future. If we maintain the present subsidy provisions there will be what I may call a semi-voluntary period. Owners will see that there is not much chance of drawing subsidy this year, if freights remain fairly high, but the various administrative and co-operating committees will continue to function. Owners will begin to formulate schemes of their own, and in the future there may be a very good chance of the industry not costing the taxpayer a penny. On the other hand, as I have said, if the Bill does not pass, the position may result in complete confusion.

The President of the Board of Trade told us in November, I think, that we should have to lay our plans on the basis of the subsidy ending in 1937. The end of 1937 would give us the breathing space required, and I should think the subsidy could be continued without cost to the nation. My last remark must be concerned with the necessity for organisation and co-operation. It was essential to stop what was becoming suicidal competition among British tramp owners. If we allow this organisation to be carried on, I hope on a voluntary basis, it will establish an organised industry ready to cooperate with the foreigner in some cases and in other cases to fight him. I am convinced that those industries of Britain which have to compete in international trade in future will not be able to do it as little, individual units. I do not say you will have to go to the full Socialist programme; I do not think you will, but industries will have to organise themselves so as to be able to co-operate with the Government. You had Japan just now moving vast quantities of grain from Australia up to Japan, but not a single British ship is used. Germany moves quantities of things from Manchuria to Germany, but again no British ship is used. There is question of the movement of timber from Russia, and here little, individual units of shipowners in this country can never do that; they will have to be organised. Conditions of employment and many other things can be much better handled by organised companies than by individual units.

The whole matter makes one think—it would not be in order to go into this—that the question of a Minister of Marine will have to be considered. The Board of Trade have too much to do at the moment to be able to give a fair deal to British shipping, and to give it all the detailed attention it should receive. I have tried to show that co-operation is essential, and that by trying to let this Resolution go through, and the Bill afterwards, we shall help the industry to reorganise, with a very good chance of not costing the Exchequer a single halfpenny. I am glad to be able to support at least one Bill which does that.

7.33 p.m.

Mr. David Adams

The hon. Member for Seaham (Mr. Shinwell) made it quite clear that we on this side do not oppose subsidies as such; and that if there were circumstances which justified a subsidy in any particular industry, we as a party would be in favour of the same. I think, therefore, we are entitled to examine, in the light of any personal experience we may have, whether these subsidies to the maximum extent of £6,000,000, which will terminate this year, have had any results which might justify us in taking a lenient view of the situation, and in supporting such a subsidy. My personal desire, as far as the shipbuilding industry was concerned, was to see a lessening of the unemployment which was so very prevalent, particularly upon the north-east Coast; the port of Tyne is one of the leading tramp tonnage centres in the United Kingdom. Since the subsidy began, whether or not due to that, we have had this felicitous result that the monthly returns given by the River Tyne Commission of tonnage laid up, indicate that at last we have reached the stage, as was announced at the last meeting of the Commission, in which there is no tonnage laid up except for repairs, or which is of a scrap quality, which will ultimately, when arrangements have been made with bankers and other interests, be scrapped. That clearly indicates that, for one reason or another, the result which I personally desired to see has been achieved.

We are also a great shipbuilding centre. Shipbuilding in the port of Tyne, on the. Wear and the North-East Coast is one of our stable industries, and people rely upon it for employment. I know that the anxiety of the shipbuilding employés for a revival of their industry is no less great than that of the unemployed miners and others in industries which have been stricken in the declension of the general trade of the country. I am assured—one is entitled to take the assurance of persons who do know—that quite a considerable number of new ships have been laid down as a result of the increased sense of security which industry presently enjoys. The question of a subsidy being used for the purpose of paying dividends, ought to receive consideration at the hands of the Committee. Whether or not a means test ought to be applied, would be a matter for careful consideration. It is important to remember that some of the larger undertakings which have undoubtedly had substantial benefits from the subsidy are precisely those which are able in bad times to lay up a proportion of their fleets, and while so laying up their fleets are able to sustain the laid-up vessels without trouble or difficulty. But when the subsidy came along, I had the privilege of examining some of the voyage accounts worked out in detail. I saw that some of these larger companies—I suppose lesser companies also—perhaps had three voyages in succession outward and inward which showed a loss, but that the amount of the subsidy just enabled those particular vessels to be worked without actual loss. When one has personal experience of that character, it is not with any sense of disloyalty to one's colleagues that one puts that information before the Committee.

With regard to freights, 1929 was a year in which, under normal conditions of trade, shipowners were able to make reasonable profits—certainly not excessive profits—and the requisite improvements in their tonnage in the way of maintenance and replacements of their fleets. But I will assert that prior to the introduction of a subsidy, several friends of mine in the shipping world were unable to undertake proper voyage repairs, and I am not at all astonished that the offences brought to the attention of the House—it is lamentable to have to say this—were due to the risks taken, which should never have been taken, because of the depressed condition of the industry. When the Government are prepared to grant a subsidy, it certainly should not be granted except under conditions in which those employed in the industry have the highest possible conditions of labour, so far as the industry is concerned. I go further, and say it would be equitable and just that wherever public moneys are voted by this House there should be a measure of public control. I would look to that measure of public control as being the precursor and forerunner of public ownership. In Germany and Japan, wherever Government money is advanced there is a strong measure of Government control, and Government representatives are placed upon the boards of such concerns.

The mercantile marine ought to be in this House a matter of prime importance. In peace time it is essential for the maintenance of our food supplies, and in a thousand other directions it is as important to maintain the highways of the seas as to maintain other highways through these islands. For that reason, the mercantile marine ought to be maintained in some form or other by Government control or Government intervention in times of peace; and this is very much more important in war time or when war is possible. The quality of the mercantile marine ought, therefore, in the normal way, to be maintained in a state of high efficiency. With regard to quantity, during the last few years there has been a continual dwindling in tramp tonnage, and one hon. Member mentioned that there are no less than 3,000,000 dead weight tons less than a year or two ago under the British flag. That is a situation to which the Government must pay the closest attention, otherwise certain cardinal interests of the State will be jeopardised.

It ought to be normal and without controversy that the Minister should agree at once that upon all committees in which Labour is interested Labour should be represented. What possible justification can we have in not having it represented? Labour is represented on certain boards, and well represented on the National Maritime Board. Every shipowner in the country will say that it has been of great advantage to have this co-operation and good will; and the fact of calling in expert know- ledge from the workman's point of view has proved beneficial to the industry itself.

It is entirely reprehensible that shipowners or other industrialists can come to this House and plead their own case for State money. I am a member of a municipality in the North of England. The rules enacted by this House lay down that any person who has a financial interest in any contract which comes before that council shall be prohibited from speaking and voting, and actually from sitting in the committee or council in which such matters are under review. If that is good for municipalities, it ought to be equally good for this House. In 1923, when I was first in this House, we should have looked with astonishment at any Member representing any particular industry who advocated State grants for his particular industry. We have changed since that time. Our standards of morality have depreciated; it is time that the House, in defence of its own probity, should pass such a Resolution as would once and for all prevent those who are directly financially interested in any concern from advocating the advance of State money temporarily or permanently to the same.

7.45 p.m.

Mr. Maxwell Fyfe

There are only one or two very short points on which I shall claim the indulgence of the Committee. It was said by the hon. Baronet the Member for Berwick-on-Tweed (Sir H. Seely) that it seemed an unfortunate time at which to ask for the renewal of a subsidy when certain statements had been made which seemed to be the precursors of freer conditions of international trade. I should like to inform the hon. Baronet that, so far as Liverpool is concerned, in September, when we who represent that city were much oppressed, and depressed, by the condition of the shipping industry—the hon. Baronet may know that in Liverpool alone there were over 37,000 unemployed in the shipping and allied industries, a matter which was very much in our minds when the pronouncement referred to by the hon. Baronet came out—we and those who advise us on shipping matters decided that we would not at the moment go any further into the question of assistance for the liner part of the industry, and would put on one side the plans we had formed in order to get the further assistance which we thought we could justly claim. That was in September. It is now February of the next year, and, in spite of the optimism that the hon. Baronet has shown, I cannot see any break in the clouds which would justify any further cessation of our action. I myself would infinitely prefer it, and I am sure that those in Liverpool who are affected by the doldrums of the industry would infinitely prefer it, if we could put ourselves in the position of being able to set these provisions in action when we required them, rather than that we should strip ourselves of the ability to do so.

The hon. Baronet went further, and said that the financial position of the industry at the present time did not justify the suggestion of a subsidy. I know it may seem rather difficult at first sight to see the full implication of the figures that have been given, but there is no doubt that, if a 5 per cent. depreciation is reasonable—and few people have questioned that as a figure—the figure given earlier by the Parliamentary Secretary was correct, and a depreciation of over £18,000,000 ought to have been provided for in the last six years. Of that, as the Parliamentary Secretary says, only £8,000,000 has been provided. Whence came that £8,000,000? My hon. Friends know that about a quarter of it, at least £1,500,000, came from the 1930 figures, that is to say, from earnings in the period before the slump; and, of the balance of some £6,500,000, the bulk, or at any rate half, was provided out of income obtained from investments and property of the companies, and not from trading. Only £3,000,000, or one-sixth of the depreciation which any wise man would insist on in order to replace his fleets, has been earned during that period of six years, with the assistance of the subsidy. I find it difficult to conceive of a situation in which it could be more justified.

The hon. Member for South Shields (Mr. Ede) questioned the distribution of the amount between the different sides of the industry. I do not want to prolong our consideration of this matter, but I am sure the Committee will bear with me if I say that not only has the National Union of Seamen claimed the last year as a wonderful year of achievement, but the section of the industry to which the hon. Member referred, namely, the officers who are represented on the National Maritime Board, said that the improvement in the officers' conditions was one of the finest achievements of the board, and would give satisfaction to the officers and encourage them to continue. In all the troubles of the industry during the last 15 years, and some of us are very familiar with these troubles, there has never been a year when such general satisfaction was expressed with the negotiations that have taken place. That is the view expressed from the Labour side of the industry, and, when it coincides with the existence of the subsidy, we surely have something with which we can justly be satisfied. The passage at the foot of page 5 of the White Paper issued to-day brings us back to the original ideas with which the subsidy was granted, namely: A. minimising domestic competition; B. improving freight rates and conditions; C. promoting as against foreign subsidised competition the fullest possible employment of British tramp shipping and of British officers and seamen. Have these intentions been justified? As regards the minimising of domestic competition, apart from the question of minimum freights we have the position in the River Plate trade. There was an accumulation of tonnage on the River Plate, and the restrictions which were successfully enacted prevented further tonnage being sent out to add to those accumulations. That is an example of the minimising of domestic competition which has been successfully carried out. As regards the improvement of freight rates, I have not heard any hon. Member opposite protest against the fact that, while the River Plate rates were 12s. before the subsidy, they have now gone up to 25s. in the rate issued on Friday; and, to a lesser extent, on the St. Lawrence voyages and on the Australian voyages the freights have been improved. I have already dealt with the question of the promotion of employment, and I ask the Committee to say that, bearing in mind the intentions with which we set out in bringing this subsidy into operation, it has been successful in bringing about these achievements, and that we ought to continue it without hesitation for another term.

7.56 p.m.

Major Neven-Spence

I hold no brief for shipping companies or their shareholders, but I claim to hold a brief for a very large number of officers and men employed in the industry. One of the counties that I represent sends a higher pro- portion of its men to the Mercantile Marine than any other county in Great Britain and I have had ample means of knowing what this shipping subsidy has meant to the officers and men in doing away with unemployment. I had a letter the other day, not in connection with this Resolution, in which it was pointed out to me that in the case of one parish in Shetland, with a total population of 500 men, women and children, 20 men were serving at sea in command of merchant ships, and practically all the rest of the young adult males were at sea. At the time of the slump many hundreds of Shetlanders were thrown out of work. They lay at Grangemouth, Bo'ness, Leith and other ports till all their money was gone, and then, one by one, they went back to Shetland to live on their relatives. That went on for several years until this subsidy was started. Then, as soon as the first ships began to get to sea under the subsidy, men began to get work again.

Hon. Members may argue as to whether or not the wages are adequate, but this subsidy has meant jobs, wages, and work for these men, roofs over their families, and bread and butter; and I think the House will say that it would be wrong to interfere with the subsidy unless overwhelming evidence were produced that the shipping industry could stand on its own feet. No such evidence has been produced, and I defy hon. Members to produce it. If and when evidence could be produced that the industry could stand on its own feet, I should not support the subsidy, but, until that day arrives, I shall support this subsidy in the interests of the employment of the officers and men of the Mercantile Marine.

7.58 p.m.

Dr. Burgin

One or two questions have been addressed to me during the course of the Debate, to which, perhaps, it will be convenient that I should reply. The hon. Member for Seaham (Mr. Shinwell) asked for particulars of the subsidy for the year 1936. Of course, when the payments for the last quarter of 1936 have been paid, the usual White Paper will be laid giving the names of the various shipping companies that have participated in the subsidy. The fourth quarter's payments have not yet been made, but I may tell the Committee that in the first quarter £273,072 was paid out, in the second quarter £427,832, and in the third quarter £462,279, making a total of £1,163,183 for the three quarters. As soon as the fourth quarter's payments have been made, so that we know what has been paid to each separate shipowner during the year, the usual practice will be followed of issuing a White Paper.

Some comment has been made as to whether the payments ought not to be given to poor companies, and not to companies that have the best reserves. The Committee, however, will not need to be reminded that the legislation under which we have been proceeding hitherto provides for the payment of subsidies in respect of vessels running particular voyages under particular conditions, and does not discriminate as to the owner of the vessel and the state of his balance sheet; and it is on that basis that the Committee is being asked for a Financial Resolution to provide funds for the administration of a Bill which will continue the same principle for a further period.

Some reference was made to sales of vessels abroad, and I think the Committee should know that one of the most gratifying results of the change which has been made as the result of Government assistance to the tramp shipping industry has been the decline in the number of vessels sold abroad, whether for breaking up or for trading. I will give the figures for two years only. In the year 1934, 489,000 tons gross were sold, of which about 200,000 were for breaking up and about 300,000 for trading. The total for 1936 was 422,000 tons, namely, 143,000 for breaking up and 279,000 presumed for trading. That is a very considerable improvement.

Something was said about the age of the British merchant fleet. As a result of the scrap and build scheme which was part of the subsidy policy, 50 new vessels were added to our fleet, and the proportion of vessels on the United Kingdom register over 25 years old is now less than in any other important maritime country; 38 per cent. of the shipping of the world less than five years old is British-owned—a percentage 3½ times as high as that in any other maritime country. The argument in favour of continuing the subsidy is that, if you are pushing a rock uphill and come in sight of the top of the hill, you do not leave go and let the rock roll down again.

Mr. Shinwell

The hon. Gentleman has dealt with the question of the age of vessels of the mercantile marine but has not dealt with the point that I raised, namely, whether, when vessels over the age of 20 years were sold for trading or for breaking-up purposes, the amounts received were taken into account.

Dr. Burgin

I was not attempting to deal with the hon. Gentleman's point. I was telling the Committee that one argument in favour of the subsidy was that the age of the fleet had been lessened and that we now hold a very large percentage of modernised tonnage. I have not followed the hon. Gentleman in any of his ramifications into the financial side of the matter, because the whole of his observations were premature. He must await the White Paper at the conclusion of the year's working of the subsidy to see how it has operated. He will find a vast mine of information relating to 251 shipping companies set out in the Command Paper that has been issued to-day.

Mr. Shinwell

Do I understand that I, in common with others on this side, must wait for 12 months before making up our minds whether the subsidy was justified because not until then shall we have the whole of the financial provisions before us?

Dr. Burgin

I hope the hon. Gentleman will not understand anything of the kind, because nothing of the sort could possibly be based on the observations that I made. He was making a number of comments on the habit of voting Government money without inquiring precisely where it had gone under a previous Vote. In the first place, a great deal of information which has neither been absorbed nor communicated to the Committee is set out in the report of the Advisory Committee which has been issued to-day. There is ample information as to payments to 251 principal shipping companies, with precisely the money paid, the number of companies, the number of tramp vessels, tonnage, the amount of capital provided for depreciation and dividends—a very large part of the hon. Gentleman's speech. But he went on to ask, What about the subsidy for 1936? I tell him that the subsidy for 1936 has not yet been completely disbursed; consequently I am unable to tell him to whom it has gone because I have not that information. He asks me, in the calculation of depreciation reserves and so on, is the sale of a vessel taken into account? The answer is that every relevant consideration is taken into account.

Mr. Shinwell

By whom?

Dr Burgin

By those who are responsible for the administration of the subsidy.

Mr. Shinwell

What I want to know is this: In relation to the cost of depreciation, and the amount that must inevitably be set aside to meet depreciation, does the Board of Trade, in considering the amount of subsidy required, take into account the amount fetched when the vessels are sold after 20 years' life when all the cost of depreciation ought to have been met?

Dr. Burgin

The subsidy that has been voted in the two years that have passed has been fixed by the House at

£2,000,000, upon a review of the whole of the facts relating to the industry. The proposal that the Government lays before the Committee to-day is that a similar amount be treated as the maximum—that the conditions of the payment of subsidy be the same—and they produce a White Paper showing that the subsidy in the past has provided the very stimulus it was intended to provide, and has brought about in the industry changes that are admitted to be very far-reaching indeed, and it asks the Committee to sanction £2,000,000 being set aside for the industry.

Question put.

The Committee divided: Ayes, 161; Noes, 80.

Division No. 59.]	AYES.	[8.6 p.m.
Agnew, Lieut.-Comdr. P. G.	Ellis, Sir G.	Munro, P.
Albery, Sir Irving	Errington, E.	Neven-Spence, Major B. H. H.
Allen, Lt.-Col. J. Sandeman (B'kn'hd)	Evans, Capt. A. (Cardiff, S.)	O'Connor, Sir Terence J.
Aske, Sir R. W.	Fox, Sir G, W. G.	Orr-Ewing, I. L.
Assheton, R.	Fremantle, Sir F. E.	Percy, Rt. Hon. Lord E.
Atholl, Duchess of	Furness, S. N.	Petherick, M.
Balfour, Capt. H. H. (Isle of Thanet)	Fyfe, D. P. M.	Pilkington, R.
Barclay-Harvey, Sir C. M.	Ganzoni, Sir J.	Prooter, Major H. A.
Beamish, Rear-Admiral T. P. H.	Gower, Sir R. V.	Raikes, H. V. A. M.
Beaumont, Hon. R. E, B. (Portsm'h)	Graham, Captain A. C. (Wirral)	Ramsbotham, H.
Birchall, Sir J. D.	Gridley, Sir A. B.	Rathbone, J. R. (Bodmin)
Bossom, A. C.	Grimston, R. V.	Rayner, Major R. H.
Boulton, W. W.	Gritten, W. G. Howard	Reed, A. C. (Exeter)
Bowater, Col. Sir T. Vansittart	Hannah, I. C.	Reid, Sir D. D. (Down)
Bower, Comdr. R. T.	Hannon, Sir P. J. H.	Reid, W. Allan (Derby)
Bowyer, Capt. Sir G. E. W.	Heilgers, Captain F. F. A.	Remer, J. R.
Bracken, B.	Heneage, Lieut.-Colonel A. P.	Rickards, G. W. (Skipton)
Braithwaite, Major A. N.	Herbert, Major J. A. (Monmouth)	Ross Taylor, W. (Woodbridge)
Briscoe, Capt. R. G.	Hills, Major Rt. Hon. J. W. (Ripon)	Salmon, Sir I.
Brocklebank, C. E. R.	Hope, Captain Hon. A. O. J.	Salt, E. W.
Brown, Col. D. C. (Hexham)	Hopkinson, A.	Sanderson, Sir F. B.
Brown, Brig.-Gen. H. C. (Newbury)	Horsbrugh, Florence	Selley, H. R.
Bull, B. B.	Hudson, Capt. A. U. M. (Hack., N.)	Shaw, Major P. S. (Wavertree)
Burgin, Dr. E. L.	Hudson, R. S. (Southport)	Shaw, Captain W. T. (Forfar)
Campbell, Sir E. T.	Hunter, T.	Simmonds, O. E.
Cartland, J. R. H.	Keeling, E. H.	Smiles, Lieut.-Colonel Sir W. D.
Cazalet, Thelma (Islington, E.)	Kerr, Colonel C. I. (Montrose)	Smith, Sir R. W. (Aberdeen)
Chapman, A. (Rutherglen)	Kerr, H. W. (Oldham)	Somervell. Sir D. B. (Crewe)
Clarke, Lt.-Col. R. S. (E. Grinstead)	Keyes, Admiral of the Fleet Sir R.	Somerville, A. A. (Windsor)
Clarry, Sir Reginald	Kimball, L.	Southby, Commander A. R. J.
Clydesdale, Marquess of	Lamb, Sir J. Q.	Spears, Brigadier-General E. L.
Colville, Lt.-Col. Rt. Hon. D. J.	Law, R. K. (Hull, S.W.)	Stanley, Rt. Hon. Oliver (W'm'l'd)
Cooke, J. D. (Hammersmith, S.)	Leighton, Major B. E. P.	Storey, S.
Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)	Lewis, O.	Strauss, E. A. (Southwark, N.)
Cooper, Rt. Hn. T. M. (E'nburgh, W.)	Little, Sir E. Graham-	Strauss, H. G. (Norwich)
Courtauld, Major J. S.	Llewellin, Lieut.-Col. J. J.	Strickland, Captain W. F.
Courthope, Col. Sir G. L.	Loftus, P. C.	Stuart, Hon. J. (Moray and Nairn)
Craven-Ellis, W.	Lovat-Fraser, J. A.	Sueter, Rear-Admiral Sir M. F.
Crooke, J. S.	MacAndrew, Colonel Sir C. G.	Taylor, C. S. (Eastbourne)
Croom-Johnson, R. P.	McCorquodale, M. S.	Train, Sir J.
Davies, C. (Montgomery)	Macdonald, Capt. P. (Isle of Wight)	Tree, A. R. L. F.
Davies, Major Sir G. F. (Yeovil)	McEwen, Capt. J. H. F.	Wallace, Capt. Rt. Hon. Euan
Davison, Sir W. H.	McKie, J. H.	Ward, Lieut.-Col. Sir A. L. (Hull)
Dawson, Sir P.	Maclay, Hon. J. P.	Wedderburn, H. J. S.
Denman, Hon. R. D.	Macquisten, F. A.	Williams, C. (Torquay)
Denville, Alfred	Makins, Brig.-Gen. E.	Williams, H. G. (Croydon, S.)
Dorman-Smith, Major R. H.	Margesson, Capt. Rt. Hon. H. D. R.	Windsor-Clive, Lieut.-Colonel G.
Dower, Capt. A. V. G.	Markham, S. F.	Wise, A. R.
Duckworth, G. A. V. (Salop)	Mayhew, Lt.-Col. J.	Withers, Sir J. J.
Duckworth, W. R. (Moss Side)	Mellor, Sir J. S. P. (Tamworth)	Womersley, Sir W. J.
Dugdale, Major T. L.	Morris, J. P. (Salford, N.)	Wood, Rt. Hon. Sir Kingsley
Duggan, H. J.	Morris-Jones, Dr. J. H.	Young, A. S. L. (Partick)
Duncan, J. A. L.	Morrison, G. A. (Scottish Univ's.)
Eastwood, J. F.	Morrison, Rt. Hon. W. S. (Cirenoester)	TELLERS FOR THE AYES.—
Elliot, Rt. Hon. W. E.	Muirhead, Lt.-Col. A. J.	Sir George Penny and Mr. Cross.
NOES.
Acland, Rt. Hon. Sir F. Dyke	Henderson, T. (Tradeston)	Roberts, W. (Cumberland, N.)
Adams, D. M. (Poplar, S.)	Hills, A. (Pontefract)	Sanders, W. S.
Adamson, W. M.	Hopkin, D.	Seely, Sir H. M.
Alexander, Rt. Hon. A. V. (H'lsbr.)	Jagger, J.	Sexton, T. M.
Ammon, C. G.	Jones, A. C. (Shipley)	Shinwell, E.
Anderson, F. (Whitehaven)	Jones, H. Haydn (Merioneth)	Short, A.
Attlee, Rt. Hon. C. R.	Jones, Morgan (Caerphilly)	Sinclair, Rt. Hon. Sir A. (C'thn's)
Barnes, A. J.	Kelly, W. T.	Smith, Ben (Rotherhithe)
Batey, J.	Leach, W.	Smith, E. (Stoke)
Bevan, A.	Leslie, J. R.	Stewart, W. J. (H'ght'n-le-Sp'ng)
Broad, F. A.	Logan, D. G.	Strauss, G. R. (Lambeth, N.)
Bromfield, W.	Macdonald, G. (Ince)	Taylor, R. J. (Morpeth)
Brooke, W.	McGhee, H. G.	Thorne, W.
Burke, W. A.	Maclean, N.	Thurtle, E.
Charleton, H. C.	Marshall, F.	Tinker, J. J.
Chater, D.	Milner, Major J.	Viant, S. P.
Cluse, W. S.	Montague, F.	Walkden, A. G.
Ede, J. C.	Morrison, Rt. Hon. H. (Hackney, S.)	Walker, J.
Edwards, Sir C. (Bedwellty)	Noel-Baker, P. J.	Watkins, F. C.
Fletcher, Lt.-Comdr. R. T. H.	Oliver, G. H.	Watson, W. McL.
Gardner, B. W.	Owen, Major G.	Welsh, J. C.
Gibson, R. (Greenock)	Parker, J.	Whiteley, W.
Green, W. H. (Deptford)	Pethick-Lawrence, F. W.	Woods, G. S. (Finsbury)
Griffith, F. Kingsley (M'ddl'sbro, W.)	Potts, J.	Young, Sir R. (Newton)
Griffiths, G. A. (Hemsworth)	Price, M. P.
Griffiths, J. (Llanelly)	Pritt, D. N.	TELLERS FOR THE NOES.—
Groves, T. E.	Richards, R. (Wrexham)	Mr. John and Mr. Mathers.
Harris, Sir P. A.	Ridley, G.

Question put, and agreed to.

Resolution to be reported To-morrow.