HC Deb 28 March 1939 vol 345 cc1851-60
1. Miss Ward

asked the President of the Board of Trade whether he can now announce the Government's policy regarding shipping and shipbuilding?

3. Mr. David Adams

asked the President of the Board of Trade when he expects to be in a position to make a statement relative to the intentions of the Government as to assistance to British shipping?

14. Mr. Shinwell

asked the President of the Board of Trade whether, before coming to a decision on the nature of the assistance to be afforded British shipping, he will satisfy himself that the internal organisation of the Mercantile Marine is satisfactory; and whether, preceding the construction of more tonnage, he will take steps to prevent a rise in shipbuilding costs?

15. Mr. Garro Jones

asked the President of the Board of Trade when the proposals of the Government to deal with depression in the shipbuilding industry will be announced?

20. Mr. Kirkwood

asked the President of the Board of Trade whether he is yet in a position to announce the Government's proposals for the relief of the British shipbuilding industry; whether, in finally framing these proposals, he will bear in mind the advisability of encouraging owners not to scrap old ships but to lay them up in order to have an ample reserve of tonnage for any emergency; and whether he will take all possible steps to secure that British shipbuilders in future get the orders to build the millions of tons of merchant ships that are now being built abroad?

The President of the Board of Trade (Mr. Oliver Stanley)

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

22. Mr. Mathers (for Mr. Garro Jones)

asked the President of the Board of Trade whether he is satisfied that the claims of Scottish shipbuilding ports, such as Aberdeen, have now been fully and firmly pressed upon the Government in that inquiry of which the result is about to be published?

Mr. Stanley

The Government have taken into account the position in the shipbuilding industry as a whole, including the yards in Scotland, and I would suggest that the hon. Member awaits the statement which I am making later.

Later—

Mr. Stanley

I need not apologise to the House for taking the earliest possible opportunity of informing it of the decisions the Government have reached regarding the shipping and shipbuilding industries. The importance of these industries does not only rest on the contribution they make to the economic resources of the country and the volume of skilled employment which they give; they are also an essential part of our national defences. It is in the light of these considerations that the Government have examined the representations which have been made to them, and I am now able to give an outline of the proposals which the Government will put before Parliament. The details of the proposals will require further discussion with the interests concerned before the necessary legislation can be drafted, but, in present circumstances, it is essential that the industries should know at the earliest possible moment what action the Government are prepared to take. The measures of assistance proposed apply to ships registered in the United Kingdom.

It is proposed to make available a sum of £2,750,000 a year for a period of five years by way of subsidy for tramp shipping including vessels in the deep sea and near trades but not the coasting trade. The subsidy scheme will follow the general lines of that which was in operation under the British Shipping (Assistance) Acts, 1935–37, but with some alterations mainly as the result of adopting a five-year period instead of an annual basis. In each year the amount of subsidy will be subject to an arrangement for determining by reference to the index number of shipping freights whether subsidy should be paid in full or paid at a reduced rate or not paid. Conditions will be attached to the subsidy, similar to those attaching to the previous subsidy, regarding employment of British crews, compliance with National Maritime Board Agreements where applicable, and maintenance of co-operation.

As a condition of making the subsidy available, the Government will expect the industry to do its utmost to promote international measures tending to adjust the supply of tramp tonnage to the demand so as to safeguard the level of freight rates. The industry will also be expected to organise itself so as to satisfy the Government that at the end of the subsidy period it will be in a better position than it now is to maintain itself without Government financal assistance.

It is proposed to appoint an Advisory Committee for an experimental period of two years to examine and advise the Government regarding requests for assistance from liner companies whose services are endangered by foreign competition which derives its strength from Government financial aid or some other similar cause. The decision whether to give assistance or not would rest with the Government. Parliament will be asked to make financial provision to enable the Government to grant financial assistance promptly in cases where the Government decide that such assistance is necessary. As a condition of establishing this Committee, the Government will expect the liner section of the industry so to organise itself as to be in a better position to defend itself without Government financial assistance.

As regards cases in which other parts of the British Commonwealth are concerned, the United Kingdom Government will bear in mind the recommendation adopted by the Imperial Conference in 1937 that where undue assistance is given by a foreign Government to the serious prejudice and danger of British shipping there should be consultation between the Governments of the Commonwealth concerned.

The measures of assistance already referred to might be expected to result in due course in the placing of orders for new ships. But it must be some time before measures of this kind can take effect, and the need for new shipbuilding orders is urgent, as shipbuilding capacity must be maintained. Two further proposals will be made to ensure that ships shall be built forthwith.

To give more confidence to the shipowner it is proposed to provide funds from which owners of tramps and cargo liners (other than refrigerated or passenger vessels) ordered in the next few months from United Kingdom shipbuilders would receive a grant of an appropriate amount in each of the next five years, with the exception of any year in which earnings were such as to make a grant unnecessary. The amount to be used for these grants would not exceed £500,000 a year during the five-year period. The scheme for this purpose will require to be carefully worked out, particularly as regards the amount and basis of the annual payments, and the method of relating the payment, if any, that should be made in any year to conditions in that year. In this connection, I should add that the Government have received assurances from the shipbuilding, marine engineering and iron and steel industries that they will not raise prices by reason of the increased placing of shipbuilding orders which I hope will result from the Government's schemes of assistance, and that they will co-operate fully in adjusting prices to the lowest possible level.

The Government propose also to ask Parliament to make available a sum of £10,000,000 for loans to shipowners over a period of two years on favourable terms for the purpose of building in Great Britain tramps and cargo liners (other than refrigerated vessels and passenger vessels), including tramps and cargo liners intended for the coasting trade. The loans would be made on financial terms similar to those under the "Scrap and Build" Scheme which was authorised by the British Shipping (Assistance) Act, 1935, but no condition as to scrapping old vessels will be attached to them. As under that scheme, an Advisory Committee will be established to examine applications for loans, and the Board of Trade will have to be satisfied in each case that the grant of a loan will promote the general interests of British shipping.

In order to encourage owners to place orders now it will be proposed in the legislation authorising these two schemes that any vessels ordered after to-day's date will not be debarred from consideration for assistance under the schemes, provided that they are of the kinds covered by the schemes.

While the Government have reached the conclusion that in present circumstances and as a temporary measure financial assistance under the schemes outlined above is necessary in order to ensure the provision of new ships for our merchant fleet and increased work for our shipyards, they will require the shipping and shipbuilding industries to consider together the possibility of devising means for securing in the future the more regular ordering of new tonnage.

The Government have decided that they are unable to provide financial assistance for the coasting trade other than participation so far as coasting tramps and cargo liners are concerned in the loans at favourable rates of interest to be provided from the £10,000,000, which the House is to be asked to make available for new building. Steps are being taken, however, to encourage municipal or other public authorities, etc., to ensure that British tonnage is used for their coastwise shipments. Apart from this the representations of the coasting trade regarding railway and road competition and regarding the importance of effective co-ordination between the railways, road hauliers, canals and coasting shipping will receive the Government's careful and sympathetic consideration. The Government do not propose any general measures of assistance for tankers.

In addition to the financial assistance outlined above the Government will continue to take all possible steps to promote the interests of British shipping in connection with trade negotiations and other discussions with foreign Governments.

Finally, the Government have decided that the present situation calls for a further exceptional measure to increase the amount of tonnage under the British flag. They accordingly propose to ask Parliament to make a sum of £2,000,000 available for the purchase of suitable vessels on the United Kingdom register which, though still capable of service, would otherwise be sold to foreign owners or for breaking-up. Vessels so purchased would not be brought out for trading except in an emergency, but would be maintained in condition so that they could be brought out for use when required.

It will be a condition of the assistance to be made available for tramps and cargo liners that the owners of such vessels shall offer to the Government any vessels they may propose to scrap or to sell to foreign buyers. The details of the scheme, particularly regarding arrangements for purchase and sale of the vessels and for their maintenance, are under discussion with the shipping industry.

The legislation necessary to give effect to these various proposals will be introduced as soon as possible.

Mr. Shinwell

May I ask whether the organisation of the shipping industry to which the right hon. Gentleman has alluded in his reply is to precede the grant of financial assistance, or whether financial assistance will be granted to the industry unconditionally? Also, whether as regards the coasting trade, for which there is to be no financial assistance, he proposes to make any restriction on the foreign coasting trade which is unfairly competing with the coasting trade of this country; and, also, whether as regards the laid-up vessels, for which a £2,000,000 grant is provided, he will say who will be responsible for the maintenance and the upkeep of the vessels?

Mr. Stanley

As regards the first question, obviously the grant of this assistance is urgent, whereas proposals for the reorganisation of the shipping industry will take considerable time. Therefore, the legislation will be introduced as early as possible, and the discussions with regard to the possibility of reorganisation will, I hope, begin at an early moment. As regards the coasting shipping, they deliberately did not put forward any suggestion for an alteration with regard to foreign ships. With regard to laid-up tonnage, the responsibility for the maintenance of that reserve will fall on the Government.

Sir Percy Harris

Will it be made quite clear that none of this subsidy will be used to increase dividends but will be entirely used for strengthening the shipping services?

Mr. Stanley

The hon. Member can be assured that it will be used for the strengthening of our shipping services.

Mr. Storey

As representing a constituency in which there are 1,000 unemployed shipyard workers, may I ask the right hon. Gentleman whether steps will be taken to ensure that orders for ships to be built by Government assistance will be placed in those yards which do not benefit from naval construction?

Mr. Stanley

The object of the proposal is to stimulate the normal demand for shipping, and the hon. Member can be assured that his point will be taken into consideration.

Mr. Kirkwood

While thanking the President for his reply, may I ask him if he will reply to the latter part of my question in which I point out that 7,000,000 tons of shipping is being built abroad? What action are the Government going to take with regard to this 7,000,000 tons?

Mr. Stanley

Of course any ship-owner who now orders shipping abroad will not get any advantage from the financial proposals I am now proposing in order to assist shipbuilding.

Mr. Kirkwood

Are the Government going to take any action to see whether it is possible to bring back some of this 7,000,000 tons of shipping now being built abroad, so that the ships may be built in this country?

Mr. Stanley

There is no question of bringing back to this country ships which are in the middle of being built abroad.

Miss Ward

While thanking the right hon. Gentleman for his statement, may I ask whether in the proposals to be brought before Parliament the ship-repairing industry will be borne in mind? In his statement he referred only to shipping and shipbuilding; and ship-repairing is an integral part of the industry?

Mr. Stanley

I do not think the hon. Lady will expect a reply now, but I will bear the point in mind.

Mr. Mathers

Among the interests still to be consulted, does the right hon. Gentleman include the trade unions? May I also ask whether he will be laying down conditions that any vessels built under the subsidy must not subsequently be transferred from the British flag, as so many vessels have been in recent times?

Mr. Stanley

As regards the first supplementary question, I have, as a matter of fact, been in consultation with the representatives of the Seamen's Union and I have assurred them that I shall be only too glad of their assistance in working out the details of the scheme. As regards the second point, the hon. Member will realise that under the new provisions it will be necessary for any ship-owner owning a ship in the classes referred to, whether they receive assistance or not, if they wish to sell a ship off the United Kingdom register, to offer it to the Government first.

Captain Arthur Evans

Arising out of that part of the statement dealing with the subsidy for cargo liners and liners trading between this country and the Dominions, may I enquire whether the Dominion Governments are to be asked to make a contribution towards the subsidy? With regard to that part of the statement relating to the subsidy for shipbuilding, will there be any clause containing provisions which will give encouragement to ship-owners to order coal-burning or dual fuel-burning vessels as against oil-burning vessels?

Mr. Stanley

With regard to the first question, the hon. Gentleman will realise that as far as liners are concerned it will be necessary for each specific case to be made out to this committee in respect of each individual service which is threatened by subsidised competition, and it will be for the Government, of course, when that case is made out, to consider whether it is an appropriate case in which they could ask a Dominion Government to assist them. With regard to the second question, about coal-burning, it has been brought to my notice and it will be one of the subjects that I shall discuss during the negotiations with regard to the details of the scheme.

Viscountess Astor

Will it be made widely known that the conditions in these new ships are to be much better than those in the old? Is my right hon. Friend aware that one of the reasons why there is a shortage of merchant seamen is because of the appalling conditions in the old ships? Will he make it very well known that the conditions in the new ships will be much better, as that would have a tremendous effect on recruitment?

Mr. Stanley

The Noble Lady is quite right. Any new ships built under the scheme will have to conform to the new requirements, which will be a great advance on anything previously done.

Mr. A. Edwards

Is it proposed to remove the restrictions imposed by Shipbuilding Securities, Limited, and is the right hon. Gentleman aware that Middlesbrough, which used to be an important shipbuilding centre, has had every shipyard closed down through these restrictions?

Mr. Stanley

That is quite a different question. I am confident that these proposals will lead to a large number of orders being placed, but I cannot hope that they will lead to orders of such magnitude that the existing yards will not be able to build the ships.

Mr. Dingle Foot

Is it not already clear that "Where the carcase is, there will the eagles be"?

Mr. Stanley

The hon. Members who ask me questions on this subject are representing their constituencies with the same sincerity that the hon. Member felt when he asked me a question about the India Agreement earlier this afternoon.

Mr. Gallacher

I want to know whether the Minister in working out the details of the scheme will provide Members of this House with the names of supporters on the Government benches who are going to benefit?

Mr. Leach

Will any obligation be placed on the recipients of the subsidy with regard to wages and conditions?

Mr. Stanley

The subsidy will be paid only if the National Maritime Board conditions are observed.