Motion made, and Question proposed,
That a sum, not exceeding £2,100,000, be granted to His Majesty to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1940, for the purchase and upkeep of merchant ships as a reserve of shipping against a national emergency, and incidental expenses connected therewith.
§ 10.43 p.m.
§ The President of the Board of Trade (Mr. Oliver Stanley)
I do not think this Vote will require a very lengthy explanation, because the Committee will realise that it is to be followed by a Bill, when all the details in connection with the proposals can be considered at greater length. The situation at the moment is thoroughly unsatisfactory. It is now some weeks since I announced the intentions of the Government for the formation of this reserve of merchant ships. The proposal was one which was welcomed in all quarters of the House. It is true that since the publication of the proposals of the Government in regard to shipbuilding there has been a very large increase in the number of shipbuilding orders placed. We have information at the Board of Trade of orders actually placed or orders proposed amounting to something in the neighbourhood of 1,000,000 tons of shipping; but it is clear that a considerable amount of the effect of that new building will be lost if at the same time as these ships are added to the newer end of our Mercantile Marine a certain number of ships, still useful, are sold from the older end. Therefore, our concern is to see that this new addition of tonnage shall be a net addition, and that the general effect of our proposal shall be a real increase not only in the efficiency but in the tonnage of the Merchant Navy.
During the last few weeks an appeal has been made to shipowners not to sell their ships abroad, and the appeal, with very few exceptions indeed, has been wholeheartedly responded to by them, but at the same time as an appeal was made not to sell their ships abroad the Government have not been in a position to purchase the ships they want. It has created an extremely difficult position in the shipping industry, and it is one which I am sure they would desire to put an end to at the earliest possible moment and enable the scheme to be put into effect as soon as possible. As soon as this Supple- 1537 mentary Estimate is passed it will be possible for the Board of Trade to start negotiations for the purchase of suitable ships and employ them when they so desire. Of course this Vote will have to be confirmed by a Bill, the preparation of which we are pressing on, and we hope to pass the Bill as soon as Parliamentary time allows, setting out the full details which can then be discussed. It may be of some interest to the Committee if I give some idea of the lines on which we propose to work. In the first part of the Bill a legal obligation will be placed on all shipowners to offer their ships to the Board of Trade before they sell them abroad or, in this country, for scrap. In other words, the Government will have an option on the sale of any ship. The type of ship which the Government chiefly desire to purchase is not the passenger ship but the general utility cargo ship of a tonnage ranging between 3,000 and 8,000 tons. There may be exceptional cases where a different variety of ship and a different tonnage may be required.
§ Mr. Stanley
The general idea is to purchase cargo ships only, but it will not be out of our power to purchase passenger liners if we desire; tankers and fishing vessels of course, so far as they are required for war purposes, are carried on the Admiralty Vote.
§ Mr. Henderson Stewart
Then it means that if the owner of a fishing vessel or a steam drifter proposes to dispose of it the Board of Trade is not interested in that kind of vessel?
§ The Deputy-Chairman
I must warn the Committee that this is prospective legislation and that it is really out of order to discuss prospective legislation on a Supplementary Estimate. Hon. Members cannot go beyond the broad principle into details.
§ Mr. Stanley
I gladly bow to your Ruling. We shall have many opportunities of going into the details.
§ Sir Irving Albery
May I ask you as a matter of guidance in discussing this Supplementary Estimate, whether we are entitled to debate the results and effects of this Government action and to suggest 1538 a course of action which would be desirable.
§ Mr. Magnay
May I ask also whether we are to assume that the Bill will be made retrospective as to date, so that it will not be got round by shipowners selling their ships now?
§ The Deputy-Chairman
The question whether the Bill will be retrospective or not is certainly out of order. We cannot discuss the details of the Bill. In regard to the question of the hon. Member for Gravesend (Sir I. Albery), it must be a matter of common sense, but it is very hard to say on this Supplementary Estimate how far hon. Members may or may not go, as the whole procedure is somewhat irregular.
§ Mr. Stanley
If the right hon. Gentleman proposes the postponement of the Debate, I quite admit that this procedure is an unusual one, but the circumstances in which we live are unusual.
§ Mr. Buchanan
Is it not the case that frequently, where there has been a universal desire for a wider discussion, it has been allowed by the Chair?
§ The Deputy-Chairman
The common practice in regard to that is that, if it is desired by the House or the Committee as a whole, the Chair will allow such a general discussion, but if there is objection in any quarter the Chair cannot allow it. The most helpful suggestion that I can make is that the President of the Board of Trade should be allowed to proceed and to deal with the general principle without discussing the details of the Bill, and I hope we shall be able to conform to that without breaking the rules.
Mr. J. J. Davidson
The Paper states that the ships forming the reserve tonnage will be maintained in such a condition that they can be brought into use at short notice in the event of emergency, and provision of £100,000 is included in this Estimate to cover this cost. Are we in order in discussing whether this £100,000 is adequate or inadequate or in asking questions on details with regard to the expenditure?
§ Mr. Stanley
I can now resume my speech with a clear knowledge of exactly what is and what is not in order. I was trying not to go into detail but to give some broad idea of the manner in which this £2,000,000 was to be spent. I stated that it would be an obligation upon every shipowner to offer his ship to the Government, and the Government would have the right of purchase if they so desired. An attempt will be made to reach agreement on price. Failing agreement, there will be a tribunal to whom the matter will be referred for arbitration. There will be, of course, a committee to whom the Board of Trade can refer for advice as to the type of ship to be bought and the proper value, and as to the wisdom of the arrangements to which the hon. Member referred for the maintenance of the ships when bought. It is the intention to maintain them not in a state in which they can put immediately to sea but at short notice—something like two or three weeks—and it may be possible to utilise them either as store ships for Government stores or, if necessary, for training in connection with naval needs. There will be a provision in the Bill that these ships will be brought out only in an emergency, or that if they are brought out before an emergency comes, it will be only with the sanction of the House of Commons. The arrangements for maintenance will be twofold in character. There will be power for the Government themselves to maintain the ships and power also to enable the Government to pay shipowners to maintain them. Finally, if the ships are brought out in an emergency, they will, of course, remain the property of the Government, and the intention is that they shall be operated in an emergency on Government account, under management of the shipowners, to whom fees will be paid. I think that what is in order must depend upon the common sense of hon. Members, and as I feel that the common sense of other Members is greater than mine, I will content myself with that explanation and leave it to hon. Members to ask any questions which, of course, I shall be prepared to answer.
§ 10.56 p.m.
§ Mr. Shinwell
I must protest against such an important matter being brought before the Committee at such a late hour. If it is not irregular, certainly it is highly unsatisfactory. Obviously, this matter 1540 has been present in the right hon. Gentleman's mind for several weeks, if not for several months. He made a statement on the matter on 28th March, but, obviously, it was present in his mind before that time. I cannot understand why he has delayed so long in coming to the Committee for sanction to proceed. Now we are told by the right hon. Gentleman—and I believe this is the most astonishing statement that has been made in the Committee for a long time—that the reason which impelled him to come forward and ask for sanction to proceed is that there are shipowners who persist in selling their ships abroad. I venture to offer some advice to the right hon. Gentleman. Hon. Members will recall that in the course of some questions in the House, I suggested to the right hon. Gentleman that he might adopt, in connection with the sale of British vessels to foreign owners, the principle that has been adopted for a long time in the case of munitions. Before munitions can be exported, a licence must be obtained from the Board of Trade, and that places in the hands of the right hon. Gentleman's Department all the power that he requires. For some unaccountable reason, the right hon. Gentleman refuses to exercise that right. It would not prevent ships being exported if the exportation of British vessels was regarded as desirable. No hon. Member on this side, and certainly no hon. Member opposite, desires to prevent the export of British ships when it is desirable that they should be exported from the point of view of our carrying on our trade.
§ Mr. Stanley
I apologise for interrupting the hon. Member. Before I got up to address the Committee, he requested that I should be as brief as possible. I did not deal with these matters, but naturally, as he is dealing with them, he will expect me to deal with them at length in my reply.
§ Mr. Shinwell
If I have been misunderstood, I offer my apologies to the right hon. Gentleman. Certainly, I conveyed to him my personal desire that we should not have a protracted Debate at this time. Indeed, I would prefer that it should not be debated at all at this time. I think we ought to have this Debate at a time when the Committee is in a mood to discuss an important subject of this kind, and when we can bring to bear on the 1541 intricacies of the subject all the intelligence of which hon. Members are normally possessed. I should say that no hon. Member on this side, at least would object to the principle embodied in the Supplementary Estimate. That principle is that the Government shall enter into the ship-owning business, that they shall purchase ships and, if they care, sell ships. In short, it is proposed to establish, for the first time, a State shipping undertaking, and I certainly take no exception to that innovation. The more of that we have the better we like it. That is a very important principle to be discussed at this late hour. Nevertheless we accept it as an excellent beginning, but there are some things on which we are entitled to information. For example, what is to be the interval between the sanction for which the right hon. Gentleman asks in this Supplementary Estimate and the legislation which we are told is to come in the course of a few weeks?
I am aware that, on account of the congested state of business, the right hon. Gentleman has not been able to produce the legislation. It is not his fault, but in the interval what is to happen? The right hon. Gentleman is seeking power to purchase ships, if so required. Is there to be a tribunal immediately established to determine the kind of vessels to be purchased and the price at which they are to be purchased? The right hon. Gentleman said he did not wish to go into details. These are very essential details, and it seemed to me that the right hon. Gentleman was thinking in terms of what was to happen many weeks hence. Clearly, if ships are to be purchased by the Government we ought to know what machinery has been set up to enable the Government to determine the vessels to be purchased and the prices at which they are to be bought. Apparently, there is no machinery at the moment. I take it that the right hon. Gentleman agrees with that statement. I suggest that this matter has not been too well thought out—at least, so it appears to me. It may be that because of the unpatriotic action of shipowners the right hon. Gentleman has been rushed into this decision.
§ Mr. Stanley
There cannot be any machinery in advance of the power which this Estimate gives, but that does not mean to say that machinery has not been thought out.
§ Mr. Shinwell
I will take the right hon. Gentleman on his own ground. Let us assume that there is no such machinery. For the reasons advanced by the right hon. Gentleman it is proposed to purchase ships at once, under the powers which would be vested in him through the passing of this Supplementary Estimate. Who is to purchase the ships? Is it to be the Board of Trade directly, without the intervention of any expert committee, and without any determination of price?
§ Mr. Stanley
Although I cut my remarks as short as possible in order to meet the convenience of the Committee, I did say that a tribunal would be set up, before whom the question of price could be arbitrated, and I also said that a committee would be set up to decide as to the type of ships to be bought, the proper value of any particular ship, and the proper method to adopt for maintaining the ships.
§ Mr. Shinwell
If tribunals are to be set up for these purposes, that will all take time, and clearly there is no point in asking for sanction to purchase ships immediately.
§ Mr. Shinwell
But that is not the intention of the right hon. Gentleman. Let us dismiss that consideration from our minds and deal with one or two other aspects of the case. The right hon. Gentleman said that there would be an arbitration tribunal to determine the value to be placed upon the tonnage, and that ships would be purchased accordingly, but suppose a shipowner refuses to avail himself of any offer made by the Board of Trade under the determination of the tribunal. What happens? He can sell his ship abroad. [An HON. MEMBER: "No, he cannot."] Of course he can. There is nothing to prevent him selling his ship abroad. The right hon. Gentleman said that under the proposed legislation shipowners may be compelled to go to the Board of Trade and offer their surplus or obsolete tonnage. Hon. Members may depend upon it that if it were surplus, it would be obsolete, otherwise shipowners would not wish to sell it. But if they refuse to accept an offer that is made to them, the right hon. Gentleman has no power to compel them to keep their ships in this country. They may sell 1543 them abroad, and indeed the right hon. Gentleman has no intentionߞI challenge contradiction on this point—of exercising complete power to prevent shipowners selling their ships abroad. What he proposes to do is to offer them this inducement—"A tribunal, a fair price, keep your ships in this country." I suggest that this will be insufficient for his purpose, as he will discover when he comes forward with his legislation.
Now I want to deal with a more practical aspect of the question. Let us assume that the right hon. Gentleman, under the proposal made by the hon. Member for Sowerby (Mr. McCorquodale), of a tribunal set up to-morrow to purchase ships, all very hastily conceived, purchases two or three vessels. What is he to do? Is he to sell them on the market? They are to be used for the purpose of storing goods. That is a very desirable project, but let us remember that no shipowner in this country would ever dream of laying up vessels for a long time if he could prevent it, first, because he would lose money; secondly, because the longer his ship is laid up, the greater the deterioration and the greater the cost of maintenance. I hope the Government do not intend to purchase a large fleet of ships and lay them up merely for the purpose of providing storage accommodation for the Government in respect of goods that may be required in the event of an emergency. If the Government are going into this business, let them do it thoroughly. If they are going to purchase and sell ships, and enter into the shipowning business, as is suggested in this Estimate, let them use the ships for ordinary commercial purposes. I agree that that would be entering into competition with the shipowners, but the Government propose to enter into competition with the shipowners in the purchase and sale of ships, and why they should not proceed in the logical direction which must be obvious to every hon. Member, I cannot understand.
Has the right hon. Gentleman considered, when he has purchased the ships, who is to manage them? Is the management to be vested in the Board of Trade or in an expert body? That applies also to the sale of ships. We are entitled to ask what is to be the nature of that expert body? Is it to be a body of shipowners or a body of interested parties? I have 1544 no objection to the right hon. Gentleman setting up a department exclusively confined to independent persons, but if he is going to put this business under a body of shipowners who are interested parties, it is a pernicious proposal. I hope he contemplates nothing of the kind. There is another point which I will put by way of advice to the right hon. Gentleman, because I am to some extent familiar with this subject. He spoke of general cargo vessels. I do not view that with calm because it seems to me that the type of vessel which the right hon. Gentleman has in mind is a slow-moving vessel. If he is in the market for general cargo vessels, obviously he will be offered vessels which are of some age, certainly not the modern type vessels. These vessels, apart from the deterioration which is natural from age, will be hardly the type of vessel which can be adapted to modern requirements. To expect them to compete with modern ships is asking too much. If the right hon. Gentleman does not expect to use them in a state of competition, surely he is left with the sole alternative of laying them up.
§ Sir Stanley Reed
On a point of Order. Are we discussing the establishment of a State-owned line or are we discussing the purchase of vessels to be placed in reserve against an emergency?
§ The Deputy-Chairman
We are discussing what is set out in the White Paper. The hon. Gentleman is in order.
§ Mr. Shinwell
The hon. Gentleman cannot have read the White Paper. If he had, he would have observed that what the Government are contemplating is the Purchase as well as the sale of vessels. That seems to me equivalent to State ownership and control. [An HON. MEMBER: "Socialism."] Call it what you like. Socialism by any other name would smell as sweet. I suggest to the right hon. Gentleman, if he is to purchase vessels, that they should be vessels which will be of some use to the Government. I take it that he has food storage in mind—an important thing in an emergency—and a vessel equipped with refrigerating plant would be a useful type to have. If he contemplates buying vessels of the cargo class I suggest that he should consider buying cargo liners, which have ample accommodation and a rather higher speed than the ordinary cargo boat. Finally, I suggest that he should consider 1545 buying vessels of the coasting type. There is a strong case to be made out for a reserve of coasting vessels which could be laid up either in the Highland lochs or in harbours elsewhere, and could be used for the storage of food or other commodities which may be required in an emergency, and also for transporting goods from one part of the country to another. They have ample cargo accommodation, and they are easy to handle and to load and discharge. It would pay the Government to have a reserve of such vessels rather than to spend money in buying ordinary cargo vessels.
I recognise that we cannot debate this matter adequately to-night, and perhaps I have put too many points already, in view of the time at our disposal, and all I want to add is that we do not propose to divide against this Supplementary Estimate. I will give the reasons. First, we recognise this to be an excellent principle. Further, we recognise that we live in an emergency, and that any step which will assist the State to provide the necessary accommodation for storing food and other essential commodities is a very wise step. That being so, we offer no opposition to the Supplementary Estimate, but we shall have a great deal to say by way of criticism, I hope helpful criticism, when the legislation which the right hon. Gentleman contemplates is introduced.
§ 11.18 p.m.
§ Sir Percy Harris
In normal times we should have offered strenuous opposition to the taking of a Vote of this novel character at so late an hour, but we are living under exceptional conditions and realise that time is of the essence of this business, and action is necessary. My only criticism, a very real criticism, is that the Government have had a reasonable amount of warning of the necessity of taking some action. It has been contemplated by the President of the Board of Trade for some time. The right hon. Gentleman excused himself from embarking on a full statement now by saying that legislation would follow and that he did not want to occupy the time of this Committee, but I feel that we might have had a White Paper. Surely there must be a thinking section of the Board of Trade which has worked out in detail how this money is to be spent and how the public purse will be pro- 1546 tected. The right hon. Gentleman has indicated that there is some such scheme and it is unfortunate that a White Paper was not forthcoming.
I hope the Committee are conscious that there is a real danger that the national need may be exploited by interested parties. We have already had one or two examples of that in the sale by some companies of ships merely because a better price was offered abroad. It is true that some form of arbitration is to be provided for them to settle the price, but it is a different thing from arbitrating on the price of a commodity in normal times. If the arbitration prices were fixed on the cost of construction that would be reasonable; if, on the other hand, it is to be fixed on the basis of supply and demand, shipowners will be getting a much better price now that the Government are in the market than otherwise. I suggest that if a tribunal is set up, it be left to operate very much on the same lines as when land is bought for public purposes, namely, that the price must not be inflated because of the abnormal circumstances and because we are in danger from foreign sources.
The point raised by the hon. Member about what would happen to these ships is very practical. It was indicated that they were to be used in the reserve. I have very clear pictures of ships being laid up during the last two years in Dartmouth and other ports, rusting and rotting because they could not be put to use. That would be a very expensive amusement for the State. I agree that if we embarked on this undertaking, something in the form of a Ministry of Shipping would be necessary. I am glad to see present the hon. Member for the City of London (Sir A. Anderson), as he is one of the greatest authorities in the land on shipping.
§ The Deputy-Chairman
The hon. Baronet in going on to the subject of a Ministry of Shipping is getting rather far away from the limits of the discussion.
§ Sir P. Harris
We are committing the House of Commons to an expenditure of £2,000,000, and we have to be sure that that investment is protected. All I was going to say was that everybody knows that the management of shipping is a highly-skilled job. More money has been lost in it by amateurs and inexperienced 1547 people than in any other industry; at the same time, more money has been made in it by experts and people who have the knowledge than in any other industry. We ought to have some assurance before we pass this considerable sum of money that the Government have made up their mind who are to manage these ships. Are they to have agents, competent people, in the City of London? It may be in the mind of the Government to use some other form of management of the property that is in the hands of the State and we should satisfy ourselves that it is to be done by responsible persons. There must be highly-skilled, efficient and proper management.
I assume that in a very short time we shall have the Bill under which this money is to be spent. The right order would, of course, be that the Bill should come first and the Estimate second. I assume that the only justification for reversing the usual order is the question of Parliamentary time, owing to the slowness of the process of passing a Bill through its various stages; but when we are asked to approve this sum we ought to have more detailed guidance as to the Government's policy, and some assurance that the national need will not be exploited, but that ample protection will be provided in the machinery that is to be set up to enable the purchases to take place.
§ 11.26 p.m.
§ Sir Charles Barrie
This Debate must necessarily be very narrow, and I do not wish to enter into too deep a fishing expedition with the President of the Board of Trade, but there are one or two matters to which I should like to refer with regard to shipowners and shipbuilders, and with regard to which, if I put them in a concrete form, my right hon. Friend may possibly be able to answer to-night. In opening the Debate, he said that the present position was rather difficult for shipowners, and that is the case. There is the difficult question whether owners may sell ships abroad or not. I do not claim any extreme degree of patriotism, but I happen to be one of those shipowners who are placed in rather a difficult position. I have been asked to sell one of my ships abroad, and I have refused. I asked the Board of Trade for their guidance, but all that they have?been able to tell me is that they have 1548 no powers, but would rather that I did not sell. Consequently I have held the ship up, laid her up, and done nothing with her. But other owners may not be such sticklers, and the result may be that they may sell their ships abroad, and I may loose by not selling mine. I would much prefer, and my brother shipowners would much prefer, that the President of the Board of Trade should say to us at once: "You may not sell ships abroad," so that we might know exactly where we stand. We are expecting one of these days the Bill which will say exactly what we may do.
This Estimate is for the purpose of setting up a reserve of ships, and the reason for presenting it in this form is, as the President of the Board of Trade has said, that a large amount of tonnage has been ordered. Much of that is provisional, and subject to the shipowners seeing the Bill. In view of the urgency of the matter, I would beg my right hon. Friend to let us have the Bill as quickly as possible, so that not only shipowners but shipbuilders may know where they stand. Otherwise the urgency which the Board of Trade has pled for getting these new vessels will be disregarded, as the shipowners, obviously, will not place orders for ships unless they know what the terms are to be.
With regard to the type of vessels that the Board of Trade are to purchase, that is rather a difficult matter. I understood, when the matter was raised in its initial stages, that the Government were really after tramp tonnage, so that they might have a surplus of tramp vessels to put into operation should they be required for carrying urgent foodstuffs. On the other hand, are we to be prevented from selling other types of vessels abroad? Is the Board of Trade to say: "You may not sell any type of vessel," or is it to be restricted to certain types? That is a question that I would like answered now, so that we may know where we stand. The owners are willing to co-operate in every possible way with the Government on this matter. They are willing to be patriotic and to keep their ships in this country and allow the Board of Trade to purchase them for whatever purpose they like, as long as we know at an early date where we stand. I hope the President of the Board of Trade will be able to tell us when this Bill is coming.
Would it be in order to ask whether this Bill would extend to riverside constituencies such as North Southwark, which has just been won by the Labour candidate?
§ 11.31 p.m.
§ Mr. Maxton
I do not see that North Southwark should disturb any of them very much. It was to be expected, and I am sure it will be followed by many others. But if the Government go on bringing in Measures of this description, to hand out largesse to their friends, it will become too obvious, and they will lose seats where they do not expect to. The other parties do not propose to divide against this, and I do not either, but I view it with the greatest suspicion. I do not know whether my hon. Friend above the Gangway was committing himself about the Second Reading, because if the right hon. Gentleman's speech is to be taken as a forecast, I think it will prove too raw a deal for my hon. Friend the Member for Seaham (Mr. Shinwell) to agree to. As I understand it, the suggestion is that the Board of Trade should buy any ships that the shipowners want to get rid of, and that we should then pay them a fee for looking after them. [Interruption.] I gathered that the State was to buy and own the ships, and that the reason for the urgency was that the shipowners were anxious to sell them abroad. I wonder how many of the shipowners the hon. Member for Southampton (Sir C. Barrie) can speak for. I am sure there is, at least, a minority for whom he does not speak. The reason for the urgency of this is that some of them want to sell their ships abroad—in some cases, to countries to which the Board of Trade does not wish them to sell—and suggestions, and even pressure, have been necessary to restrain them. So, obviously, there are some for whom the hon. Member is not in a position to speak.
It seems to me that the Measure is unnecessary, in view of the conscription Bill which has occupied our time in the last few days. We have been on a Timetable. It is explained that there is no time to take at a reasonable hour this subject we are now discussing, but this could have been included in the Military Training Bill, and finished by to-morrow night. There is a Clause in that Bill to speed up the purchase of land. There is 1550 a Clause which the Minister of Labour described in the widest possible terms, which empowers the Ministry, by Order in Council, to do anything consequential which is, in their opinion, necessary. Suppose you needed a cargo ship to carry food from Canada for fellows in military training camps; that is consequential. It seems to me to be preposterous that, after spending the best part of a week discussing how to take men for National Service at 1s. Or 1s. 6d. a day, we should now have to bribe shipowners to let us have the ships they are not wanting any more—the throw-aways, the cast-outs, the has-beens. I do not propose to oppose the Supplementary Estimate because, like the hon. Member for Seaham (Mr. Shinwell), I am ready to support any straightforward proposal to nationalise the Mercantile Marine, but it must be a Mercantile Marine which will be a credit to us and not consist of the cast-off boats of private shipowners of this country which are then to be hired back to them, and we are to pay them a fee for their services in running them. I am not going to stand for that sort of thing. I, with other hon. Members, will let the Supplementary Estimate go to-night, but I will scrutinise the Bill with meticulous and scrupulous care when it is produced. If the President of the Board of Trade will be advised by me, he will examine this new idea with very great care to see that his great Department is not prostituted to purposes which are below its really high purpose.
§ 11.37 P.m.
§ Colonel Ropner
After the speech which we have just heard from the hon. Member for Bridgeton (Mr. Maxton), I feel compelled to remind the Committee that what we are really considering this evening is the expenditure of the sum of £2,100,000 to enable the Government to buy at a fair price British ships which would otherwise be scrapped, or perhaps sold to foreigners. Let me tell the hon. Member that this is in no sense a proposal to assist the shipping industry.
§ Colonel Ropner
It is to meet arguments of that sort that I rise to speak. The hon. Gentleman may be interested to know that a scheme of which these proposals may be said to form a part was strongly opposed by an overwhelming 1551 majority of shipowners at a meeting not many weeks ago. The reasons for that opposition are not relevant to this Debate, but perhaps I may be allowed to say that, as soon as the Government made it known that, in the opinion of the Government, it was in the national interest that a reserve of tonnage should be acquired, all opposition to the proposal by the shipping industry ceased immediately. I can assure the Committee that the industry is now prepared, and is only too ready, to try and make this scheme work smoothly and make, as far as possible, a contribution towards the safety of the nation.
Before approving this expenditure I should have thought that the Committee would have wanted to know why the Government have suddenly formed the opinion that it is necessary to provide this reserve of tonnage. I am not conversant with any private conversations there may have been between the President of the Board of Trade and the hon. Gentleman who spoke for the Opposition or with any arrangement with regard to the length of their speeches, but I should have liked to have heard from the Board of Trade why it is so suddenly necessary to acquire a reserve of tonnage. I do not think I shall be out of order or shall be delaying the Committee unduly if I point out a few reasons why the building up of a reserve of tonnage, owned by the Government, has recently become necessary. For years the British Mercantile Marine has been left defenceless against foreign competition of an entirely unfair nature. The industry has had to compete with foreign owners, behind whom have been ranged the full resources of their national exchequers. There have been, and there still are, wholesale subsidies.
§ Mr. Benjamin Smith
On a point of Order. I do not know whether it is your intention, Sir Dennis, to allow a Debate ranging over a justification of the shipowners' attitude, as suggested by the hon. and gallant Member. It seems to me that the discussion is tending to go outside the White Paper. If you are going to permit the hon. and gallant Member to enter into a justification of the shipowners' conduct, we shall not object, provided we have the same latitude on the other side.
§ The Chairman
If the Debate went off the main lines of the question before the 1552 Committee and turned to a discussion of the position of shipowners, it would be irrelevant. I have listened carefully to the hon. and gallant Member, and he is in order in discussing what is the reason for the Government's proposal for he purchase of tonnage.
§ Colonel Ropner
I was attempting briefly to show why the action of the Government is necessary. I did not mention any view held by shipowners. I was saying that there have been for many years and there still are large subsidies, both direct and indirect, paid to foreign ships, that other nations practise flag discrimination and trade reservation and this, combined with lower running costs, has made it impossible for British owners to maintain their fleets, while the merchant navies of many nations have increased enormously. The number of British cargo vessels is now perilously low, and I submit that this is the chief reason why the Government are now compelled to buy ships which would otherwise be scrapped or sold to foreigners. At the same time I submit that this danger, and it is a very real danger to the nation, should never have been allowed to arise. Except during one short period, and then on an entirely inadequate scale—a period which was finally terminated, for no good reason—this Government and preceding Governments have done next to nothing to help the shipping industry.
§ Mr. Stanley
On a point of Order. I want to know whether I shall be in order in discussing the whole course of Government policy towards shipping, not only the policy of this Government but of previous Governments, and to defend it against the attack of the hon. and gallant Member?
§ The Chairman
Of course, if arguments in the nature of an attack on the Government or on anyone else are permitted, I must permit a reply. The hon. and gallant Member is going into matters which may not seem strictly relevant, but it is rather difficult to draw the line. I think he is entitled to say what he has been saying, as to how he thinks this estimate has become necessary.
§ Colonel Ropner
The debate has ranged rather widely, and I am not doing very much to enlarge its scope. What I am saying is that this Government and also previous Governments have done very 1553 little to help owners, officers or seamen, to beat off the enemy in the savage economic war which has been raging on the high seas for a period of about 20 years. I had not intended, although I admit I am now tempted, to remind the President of the Board of Trade that one of his illustrious predecessors, who is still a member of the Government, actually encouraged a reduction of the British Mercantile Marine not many years ago by compelling owners to scrap two ships before they could qualify for Government assistance in the building of one. I said at that time, and I still believe it to be true, that no proposal could have been more shortsighted, although I must confess that there was a substantial section of shipowners who were then in favour of the scheme. "Scrap and build" was always a defeatist policy, and I hope it has gone for ever. I welcomed the announcement of the President of the Board of Trade that he had adopted as his policy not "scrap and build" but "build and lay-up," and it is to carry out that policy that we are considering this Estimate this evening. I suggest, however, that the right hon. Gentleman might be even a little more ambitious than to suggest "build and lay-up" as a suitable programme. Why not build and employ? There should be no need for the Government to have to save good ships by adopting the expedient of buying them with public money. But, most unhappily for those engaged in the industry, and most unfortunately for the safety of this nation, British shipping is still working at a very grave disadvantage compared with its foreign competitors, and in these circumstances the Government are compelled to buy ships which British owners, against their will in many instances, would be forced either to scrap or to sell to foreigners who are in a better position to make old ships pay.
§ Colonel Ropner
I had better explain that on another occasion, but I should have thought that the best thing to do with ships which are built, or are going to be built, is to enable them to ply for trade on the high seas and not to be tied up in the harbours and rivers of this country. That is what I mean by "build and employ." To prohibit the 1554 sale of ships to foreigners would require legislation and for that reason it would be out of order to discuss it this evening. I will only say that the sale of an old ship at a good price to a foreigner has very often been the salvation of a British shipping company.
§ The Chairman
The hon. and gallant Member has recognised what is out of order, and I hope he will not go out of order.
§ Colonel Ropner
If I suggested legislation to prohibit the sale of British ships abroad it would be out of order, but I am now saying that the sales abroad which have occurred have in many instances been a godsend to British shipping companies. In ordinary times the industry would always oppose any restriction on a free market in ships, but if the Government are convinced that in the present emergency it is wrong that ships should be sold abroad then the Government ought to stop it by law. Shipowners are neither better nor worse than any other section of the community. Some of them may not be British themselves but, fortunately for this country, they sail their ships under the Red Ensign, all are running businesses and have to account to their shareholders. There is something wrong somewhere when it is necessary for the President of the Board of Trade to rebuke them publicly for doing something which could be stopped in a few days if the Government thought it worth while to do so. I for one will utter no word of condemnation against any shipping company which, driven into a state of semi-bankruptcy by the unfair foreign competition, buys a new, even if precarious, lease of life by selling a ship at a good price to a foreign buyer. The fault, if fault there is, lies with the Government, and with previous Governments, for in the first place allowing a position to arise where a foreign owner can make a ship pay at a time when a British owner is not able to do so, with the consequence that in the world market in which owners deal there is a reasonable chance of selling a ship abroad when no offer can be obtained in the home market. In the second place, if it is wrong to sell a ship to a foreigner the Government should shoulder the responsibility and prohibit it and in that case not one word of complaint will come from the industry.
1555 Although this expenditure is of no value to the industry, and though the object of the expenditure is to deal with a situation which should never have been allowed to arise, any fair proposal aimed at the security of the nation will receive the whole-hearted support of the shipping industry no less than any other section of the community, and I feel that in saying that I am speaking not only for shipowners but for the officers and seamen who find employment in this great industry.
§ 11.53 p.m.
§ Mr. Benjamin Smith
I imagine that we are precluded from anticipating the legislation which is to follow this Estimate, but the discussion has ranged over a fairly wide field. It is undoubtedly an unorthodox procedure first of all to give the Government £2,100,000 to purchase ships. What type of ship, and what are you going to do with them? The last speaker suggested buying them for scrapping. That is not a reserve of tonnage. I want to know what the Government's intention is. Are they going to buy really for a reserve of tonnage? If they get this reserve of tonnage, what are they going to do with it while waiting for the period of apprehension when they are to utilise it? Would not the Government be far better advised if they were considering the present standard of the shipping of this country as compared with the shipping of other countries? Ought they not to be considering a position in which over 50 per cent. of the ships of this country, especially in the tramp class, are not capable of doing 12 knots an hour, whereas in Japan, Italy, the United States and Germany, subsidies are being paid for reconditioning old ships with new engines so as to increase the speed up to as much as 18 knots an hour? In those countries all new tonnage is based on a minimum speed, and there is an increased subsidy for every knot in excess of that minimum speed.
Does not the right hon. Gentleman realise that a 10,000-ton boat doing 16 knots an hour would do more in the course of a year, and would be more or less immune from submarine attack, since submarines can attack only at 10 knots under water and from 14 to 15 knots above water? Would not the Government be better advised to set the shipbuilding yards of this country to work 1556 building a type of ship that could compete with the shipping of the world, instead of allowing our whole merchant shipping fleet to become obsolete? It may interest hon. Members to know that more than one-half of our total tonnage of cargo carriers is in ships that can do only 12 knots, and that only 10 per cent. of our tonnage can do 16 knots. In the Imperial Shipping Report, we are told that Japan is rapidly taking our Australian and Indian trade by virtue of the fact that she is subsidising fast cargo steamers which can do up to as much as 18 and 19 knots. Do the Government intend to take over the derelict tanker tonnage? In America they are reconditioning nearly all their tankers so that they will do not less than 14 knots, whereas at this moment only one-fifth of our tanker tonnage can do 12 knots. This is an important point at a time when we are talking about relieving the shipowners of worn-out ships that would be mere targets for submarines in the event of war. I submit that the Board of Trade and the Government would be better advised to think on the lines of increasing the speed and tonnage of the vessels, so that we could really do away with the old convoy system once and for all.
The Government intend to purchase old ships. What do they intend to do with them when they have purchased them? In the White Paper, it is stated that the Government will have power also to sell the ships. To whom will they sell them? Do they intend to sell them abroad, or to sell them back to the shipowners from whom they bought them? If so, they will sell them back at a much lower price than that at which they bought them. The whole viewpoint of the Government in this matter is wrong. I think I am right in saying that all the tonnage that is being laid down in anticipation of the Government's proposals to assist in the building of ships is fixed at about 12 knots an hour. When the ships are off the stocks and on the seas, they will already be obsolete in comparison with the faster ships of other countries. The Government ought to be seriously considering this problem. It is no use the shipowners coming here and saying that the Government will not help them, when the shipowners themselves, merely on grounds of economy, build ships which have a slow speed. I want the Government to consider the question of speed, to which I 1557 shall revert in much more detail when the question of the subsidy comes before us.
In the long run the policy of the Government is bound to leave us with a fleet that is out-of-date and derelict. The shipowners of this country, it is fair to assume, could supply us with all the ships we want in the next two or three years. The Government contemplate a period of five years in their proposed subsidy Bill for loaning money to shipowners. If that is the period in view, I say that in five years the Government or the shipowners could renew the whole fleet; that would make this country an effective competitor, and it would be an effective protection in the event of war. What is the objection to it? The shipowner will not run a fast ship because it costs more to run than a slow ship. If he will pay the price for a faster ship it is not necessary for him in normal times to run it at its maximum speed. He can economise by running it at a lower speed. If the Government are serious about facing the menace of a possible war, and if that is the object of getting this tonnage, I suggest that their policy will merely offer effective targets for enemy submarines. They will be far better employed in applying their minds to the question of faster ships so as to effect a quicker turn-round and more voyages per ship, so that by the mere factor of speed they will eliminate offering ships as a target to enemy submarines.
§ 12.2 a.m.
§ Sir Alan Anderson
It appears to me that the discussion has ranged far beyond the Supplementary Estimate. We have heard many suggestions which will take a long time to carry out. We have heard some discussion about the economic position of shipowners and what this and previous Governments have not done for them and should have done. The hon. Member for Rotherhithe (Mr. Benjamin Smith) has spoken about the importance of speed, the possibility of reconstructing existing ships, and the economy to be derived from running ships capable of a fast speed at a slow speed. I beg him to study the question in a little detail. He will find that to run a fast ship economically you must cut down and trim the lines so that the ship will pass through the water without undue disturbance without loss of carrying power. 1558 What he suggests is not possible. If you want to get economy you must design the ship to run at a certain speed. A fast ship is economical at a fast speed and a slow ship at a slow speed. Our ships have been designed for economical business. The ships of Japan have been designed at about three or four knots faster than the trade will take. What is their purpose?; It is not ordinary trade.
That matter, however, is far beyond the question before us now. This is merely an emergency Measure, a short view. If the Government appointed me to be the sole director of the fortunes of Great Britain, which heaven forfend, I would not allow ships to be sold out of Britain, but I would not allow them to be scrapped. I would put my hand on ships and hold them up in cold storage until peace was assured to the world. Let us hope that before autumn is over we shall feel much happier; then the Government will be able to say they do not want these ships and they can sell them. It may be asked how they would sell them. They would sell them in the way in which they would be sold now. These old ships are serviceable in time of war, but they have ceased to be economic. That is why they are being sold. They cannot be run economically under the British flag. If the Government do not intervene, these ships might be sold abroad where they would be run cheaper for a time, or they would be broken up. In our present position, that would be according to my view, an impossible situation. I think in the national interest we ought to keep all the ships we have. An hon. Member spoke about shipowners and management. The whole of the management consists of having a few people going round the ships with oil cans to see that they do not rust too much and are ready for use when they are wanted. It is, I submit, unnecessary to range over the whole ambit of shipping policy on this Estimate. We are now discussing merely a short-range proposal to stop ships being scrapped or sold in a time of emergency.
§ 12.6 a.m.
§ Miss Wilkinson
While we all respect the great knowledge of these matters possessed by the hon. Member for the City of London (Sir A. Anderson) we can hardly agree that the way to meet this situation is by buying obsolete ships at a 1559 time of rising prices, knowing that when the tubs, comes to sell back some of these old tubs, the shipowners would be able to get them at market prices. In the Debates on shipping questions in this Parliament, hon. Members on this side have warned the Government repeatedly that this would happen. We are now faced with a string of Measures to deal with a situation which we warned the Government would arise and the delay in bringing forward even this proposal now has been commented on by every hon. Member who has spoken from the Minister's own side. The sum of £2,100,000 which is suggested here is ludicrous in comparison with what has happened during the past year. Roughly speaking, from January, 1938, until the present time has been a period of great seriousness in international affairs, and yet during that period, 210 ships representing 539,000 tons have been sold abroad. Finally, the thing has become such a scandal, that the Government, after being peppered with questions by the Opposition, has brought along this Estimate of £2,000,000—having allowed that perfectly enormous wastage of tonnage to take place. We cannot help but point out to the Government that nothing has been said to-night which does not bear out our view that the whole policy of the shipping industry has been such as to bring this country into very serious danger, in view of its reliance on seaborne food.
During the time the Minister has been in office, he has seen the number of berths cut down, so that not only are our shipbuilding centres reduced, but even places that were formerly available in existing yards have been done away with. In spite of this rationalisation which was supposed to increase our shipping resources and cause lower prices, what is the position to-day? The Government now justify this proposal on the ground that our shipping is dangerously short. The whole policy of rationalisation and of National Shipping Securities, Limited, has been proved to be a highly dangerous policy. We have now, apparently, to buy ships at rising prices and as my hon. Friend the Member for Rotherhithe (Mr. Benjamin Smith) has pointed out, the Government are proposing to buy what must be obsolete or at least obsolescent shipping. The Minister himself said, in reply to a Question, that if that were not so the ships 1560 would not be sold. Therefore, it is now proposed that we should lay up these obsolete ships in our harbours.
The Government, in the time of the last Prime Minister, said they were going to rearm. If they had then looked upon our shipping as part of their rearmament policy, the situation might have been far different. I am sorry to bring in King Charles's head, but it is relevant to refer to the fact that the Government allowed a great shipyard like the Jarrow shipyard to be rationalised out of existence. The amount which the Government propose to spend now would have kept one or two of these very big, up-to-date shipyards which have been allowed to go, at least on a maintenance basis, and thus preserved some of the skilled men of whom there is, on the Government's own admission, a dangerous shortage now. But the Government refused to take any action on the ground that it was not their job to interfere with industry; they left it all to private interests. Now things have become so bad that they have had to rush in with panic legislation and here we find shipowners and shipbuilders on the Government side blaming the Government, as the hon. and gallant Member for Barkston Ash (Colonel Ropner) did, for their lack of prevision.
There is one important point which will have to be considered. That is the problem not only of what is to be done with the ships but of what is to be the effect of their removal. When I interrupted the hon. and gallant Member for Barkston Ash what I meant to ask was, who was going to do the employing? The question of what is to be paid for these ships and who is to fix the price, has already been raised, but there are other points on which we should have more information. Are we, for instance, to offer higher prices than those offered by foreign purchasers? These are all things we want to know. We have extracted from the Minister the fact that we are not to use these ships in any way except as storage. If we remove £2,000,000 worth of tonnage from the market, at a time when there is a greater demand for shipping than there has been, shall we say, in the last five years, what will be the result? There is no doubt about the demand for ships. Germany is paying higher prices for ships and obviously the Government have had to interfere in order to prevent ships being sold abroad and 1561 over half a million tons have been sold abroad. There is a demand for ships, and if the Government take £2,000,000 worth of tonnage out of the market, then, as has been pointed out by the hon. Member for South-West Bethnal Green (Sir P. Harris), in the normal course of events, the mere fact that the Government are in the market will tend to cause prices to rise and we shall obviously have to increase the subsidy, and that, in turn, will make it hard for the Government to add to its ships.
I point this out as part of the difficulty into which the Government are getting, because they have not looked ahead and have allowed this so-called rationalisation of the shipping industry to take place and a situation like the present one to develop. They are now to go into the market at a time of rising prices and as a result of taking ships out of the market, prices will rise still higher. The Government have got themselves into a vicious circle. If they had taken the situation in hand, in time and planned ahead, they would now have up to date ships available at rock-bottom prices. We have no idea and nothing has been said to give us any indication of what will happen as a result of the purchase of the vessels or the use to which they will be put. Are they to be handed back to the private shipowner to operate, and if so what will be the arrangement? We remember to what heights freights rose in the last War. I will give two examples. The freight for coal to Port Said was 7s. 9d. per ton in 1913, and during the War it rose to 80s., and grain freights rose from 12s. 6d. to 145s. Those are instances of the tremendous profits made. They were denounced by the Prime Minister of the day, who was a member of the party opposite; and there was a high official of the Admiralty who said that the Shipping Committee, when they had to fix freights, did not deal too cruelly with their own industry. We have no desire to prevent the Government from getting a fleet of ships, but we want to stop any shipping ramp such as we had in the last War.
§ The Chairman
The hon. Lady is now getting beyond the scope of this Estimate. She is dealing with what may have to be dealt with later.
§ Miss Wilkinson
We hope that it is not only later that this aspect of the matter 1562 will be considered, but that the question will be taken into account now.
§ Mr. Stanley
I do not know how other hon. Members will be affected, but do I understand, Sir Dennis, that I shall not be allowed to reply to the question which the hon. Lady has put, which seems to me to be rather pertinent, whereas I am allowed to reply to the questions about the Government's shipping policy over the last five or six years?
§ The Chairman
If accusations are made against any interest I must necessarily allow an opportunity of reply, but what I was objecting to in the hon. Lady's speech was her request for details of how these ships are to be managed in certain events in the future. That is hardly a matter which comes under this particular Estimate. It is difficult to draw the line even when it is a question of past action by the Government, but the question of what the Government are going to do in the future really does go beyond the bounds of what is permissible.
§ Sir P. Harris
Ought we to sanction the expenditure of £2,000,000 unless we know how it is to be spent? Is it not the business of the Committee to look into it?
§ The Chairman
It is exactly for that reason that I thought the hon. Lady was getting beyond the bounds of order. It was not a question of how the money is to be spent, but of what was going to be done with whatever was bought after it had been bought.
§ Miss Wilkinson
Speaking as a practical shopper I think it is important to know not only what you are going to buy but what you are going to do with it after you have bought it.
§ The Chairman
Many things are very important which cannot be discussed on a Supplementary Estimate.
§ Miss Wilkinson
I bow to your Ruling, of course, but I hope that the Minister will bear the point in mind and if he can "wangle" a reply which is within the bounds of order, I shall be glad. I close on this one point. We are concerned to see that this country is not landed into the vortex of a shipping ramp such as we had in the last war. The "Shipping World," in dealing with the whole of this problem, says: 1563The root of the matter is whether shipowners can get relief without such a measure of control as will interfere with the management of the industry.I was pointing out what that management had led to. While we agree with the action of the Government in bringing forward this scheme we wish it had been a more considered scheme in which they had looked to the future instead of asking for money to buy up the relics of the past.
§ 12.20 a.m.
Mr. David Adams
Although I am in favour of a reserve tonnage of merchant ships, I must confess that I am entirely at a loss about the reasons why the Government are pursuing the course suggested, unless the Government have satisfied themselves that there will be such defensive armaments as will enable them to keep that tonnage on the high seas for carrying foodstuffs, and if the tonnage is not of an obsolete character. Everyone knows that during the last War we were in difficulties with our merchant vessels. In the main they were very slow.
The question is whether we are to purchase obsolete tonnage. If we do, it will be sunk immediately it gets outside our ports. Ought some other policy to be pursued?
§ The Chairman
On that point the hon. Member is all right, but I must ask him not to go into details in regard to the ships.
It is obvious that if the country is to be protected, we must have merchant ships during the emergency and that we shall require protection for that tonnage, or else such a vast tonnage as has been indicated and as will survive submarines and kindred methods of offence. The Government are acting without much consideration in this matter if they propose to purchase the relatively obsolete tonnage which is offered to them by British shipowners. I do not blame 1564 any shipowner for desiring to sell his ships at any time at a margin of profit. A shipbuilder is willing to build ships for the foreigner provided that he obtains his price, and naturally the shipowner dispenses with obsolete tonnage which may be unsuitable, or become unsuitable, for his trade, although it may be suitable for other trades worked by foreign owners.
If the Government are determined to protect the quality of the tonnage there is no need for them to purchase this obsolete tonnage. That which is of a certain age must be cut up. In that way they would raise the standard of the tonnage. The older tonnage must be scrapped. The only advantage that I can see in the proposals of the Government is that a certain amount of protection would be accorded to shipowners against the adverse competition of countries where the standards are very low. The fact-finding committee of the Shipping Federation reported that in Latvia, Estonia, Finland, Greece and Belgium, rates were lower than the British, manning standards much lower, insurance rates lower, and wage standards much lower than those agreed between the owners and the men in this country. If we keep our obsolete tonnage from falling into the hands of those nations we shall be saved from very adverse competition.
The proposal is for the setting up once and for all of a reserve of tonnage for a war emergency and to spend £2,000,000 upon it. I hope that the Government will not content themselves merely with purchasing a portion of the tonnage which owners may offer to them but will give orders, on Tyneside preferably, for vessels of the fastest speed and the greatest carrying capacity, and for cargo liners, in order that in the event of a sudden war emergency we shall be in a position to protect our food supplies. Otherwise the mere purchase of ships that are offered up to the sum of £2,000,000 will leave us just as helpless as we were in the last War in respect of our carrying trade.
§ 12.27 a.m.
I have a very great deal to say which I believe may be in order, and the longer I have listened to the Debate the more I feel I can say; but I shall try to exercise a little self-control and to make briefly one or two observations. I am glad that the President of 1565 the Board of Trade has brought forward this Supplementary Estimate because, as a representative of the ordinary man in the street, I believe that the public need reassurance as to the policy of the Government in regard to the building up of reserve tonnage in the interests of National Defence. I think. The public need reassurance also as to the Government's action to prevent ships being sold abroad against the national interest. I am certain that the large body of shipowners are in agreement with the general principle which lies behind the introduction of this Supplementary Estimate.
I should like the President of the Board of Trade to state when he replies whether he can give a definite date when the major legislation is likely to be introduced. It must be two months since he outlined the policy of the Government in relation to shipping, and this is the first part of the programme. I confess to being a little confused as to whether it is possible under the major Measure to set up a tribunal to arbitrate in questions of dispute. I gather that the legal obligation which is to be imposed on shipowners to offer their ships first of all for purchase to the Board of Trade will not become operative until the introduction of the major Bill, but it is most important.
Most of the questions which have been raised to-night depend upon when the major Bill is to be introduced. I hope that the President of the Board of Trade will be able to tell us definitely. I do not believe that the Committee objects to being kept up very late if, as a result, it can achieve something beneficial to the national interest. I believe that that would be the view of the country as a whole. I do not think the President of the Board of Trade need hesitate because he would have to ask the Committee to sit late. If we can have the Bill soon, well and good; if not, may I remind him that I did withdraw the Motion for my Bill from the Order Paper yesterday at the request of the Board of Trade? I should be very pleased to introduce it and I have already put my Motion back again. I should be very glad to ask the House to give me an opportunity of bringing in my Bill for prohibiting tonnage being sold abroad without the consent of the Board of Trade.
That is all I wish to say, and I hope the President of the Board of Trade will give us some indication as to the date 1566 on which we may have a discussion on this very important matter—important not only to hon. Members of this House but vitally important to the interests of the country as a whole.
§ 12.31 a.m.
§ Mr. Stanley
During the course of this discussion we have ranged over a great number of topics, including the question of the formation of a reserve of merchant tonnage which is the object of this Estimate. I apologise if—owing to my desire to be brief and also, I am afraid, misunderstanding the Ruling of your predecessor, in the Chair, Sir Dennis, I feared I could not explain the details—" I have left hon. Members in some doubt as to the way in which this scheme is going to be operated. I will try to answer some of the questions that have been put to me in the course of the Debate. A number of interesting topics have been raised—the action of the Government over the past few years; whether they have done enough for shipping; whether the fact that shipping almost alone of industries in that period has been the object of a Government subsidy was not really a measure of the Government's assistance to industry—all these matters I should naturally be only too glad to argue at an appropriate time.
One of the questions which have been raised is as to whether we ought to have faster ships. That, I think, is a matter which really cannot be discussed to-night because it is not one on which we can be dogmatic. It is very largely a question of expert opinion. On the one hand, it is quite clear that with faster ships you have quicker voyages and quicker turn-arounds; on the other hand the expenses of running faster ships is greater, and you have to balance one factor against another to arrive at what is an economic speed for the cargo-carrying boat in all the circumstances.
I will, if I may, confine myself to the more limited point raised by the Estimate; it is a simple one. The hon. Lady the Member for Jarrow (Miss Wilkinson) has quoted figures for the amount of tonnage sold during the last few months as if those figures were exceptional and showed that there was some sudden demand by foreign nations to buy our ships.
§ Miss Wilkinson
I did not suggest that the figures were exceptional; I suggested that the times were exceptional.
§ Mr. Stanley
Of course, the Committee will realise that the sale of ships to foreign owners for the purpose of scrapping has gone on over many years, that the amount which is sold year by year varies very little, and that the proceeds of these sales form a very important factor in the financing of new building; so that by merely quoting the number of ships which have been sold abroad we are not really giving a true picture unless we are able to estimate the amount of the proceeds of these sales which have gone into the building of new ships in place of the old ones which have been sold. Really, the only point we have to discuss on this Estimate is whether we are wise in present conditions, instead of permitting the sale of these old ships—in which there is nothing wrong and which has contributed a good deal to the economic strength of the industry—whether we are wise to permit that to go on as in ordinary times, or whether in these exceptional circumstances we ought to say that these ships should first be offered to the Government, so that if the Government have any use for them, they should be able to purchase them?
I think it is the general view of hon. Members that if the Government have a use for these ships they should, in present circumstances, have an option to buy them and I have been asked what is the reason for the formation of this reserve of shipping. I think it is plain that in the circumstances of the state of emergency in which we live to-day, ships which normally we would not bother about—ships which have three or four years more life, and which because of our standards of wages and conditions, the expenses of running, and so on, can no longer be operated on an economic footing, and ships which in ordinary times would be of no use to the nation at all—that such ships may in certain circumstances still be of great value. I feel, therefore, that it is right that in this emergency the State should purchase ships of that type to form a war reserve. It is probably quite true that the ships that will be offered will naturally not be the newest and most modern ships, but will be ships which are obsolescent and have a few years of life left. Hon. Members will, however, realize that if the ships which are offered are not of the best class, the prices that will be paid will be appropriate to the class of ship offered. There 1568 will be no question at all of paying high prices for these types of ships. Some hon. Members have asked whether the tribunal which is to be set up will ensure this. Certainly the Government will not take over any of these ships except at a fair market value, and we will take steps not to allow that market price to be inflated.
§ Mr. A. V. Alexander
May I ask whether it is intended that the tribunal should function, contracts be made and the money paid over, and the decision of the tribunal registered before the Royal Assent is given to the Act?
§ Mr. Benjamin Smith
After the tribunal has been set up, in the event of a ship not being purchased because the price is too high, will the owners then have the right to sell it abroad?
§ Mr. Stanley
That is a matter which can be dealt with when the Bill is discussed. The whole object of the introduction of this Supplementary Estimate, as has already been explained, is that it will now enable me to enter into negotiations for the purchase of these ships; it will enable me to conclude the purchase and enable the money for the purchase to be paid out of the Civil Contingencies Fund, pending the passage of the legislation. That is set out in the note, and it will enable the tribunal to function.
§ Mr. Stanley
It will not require statutory authority. It cannot, of course, until the Bill passes, be compulsory negotiation, but I shall set up the tribunal to which both sides can go to arbitration, if there is disagreement as to price. Of course, when the Bill has passed, that tribunal will assume a compulsory character and prices will have to be accepted. The hon. Member for Jarrow and several other hon. Members have asked questions as to what will be the duties of the ships after they are purchased. I am afraid that in my opening statement I gave to some hon. Members a wrong picture, because some of them have spoken as if we are buying the ships solely to act as storehouses or training ships. What I said, or rather what I meant to say, was that it might be possible to use some of them pending an emergency for storing Government stores or for training. But their purpose is that if an emergency should occur we should 1569 be able to bring them out and employ them to bring immediate supplies to this country. We shall, for that purpose, have to arrange to lay them up and maintain them at a fairly high standard of efficiency.
§ Mr. Benjamin Smith
In the event of the Government using these ships, or calling them into use, will the Government operate them in competition with other shipowners or will they ask shipowners to operate them on behalf of the Government?
§ Mr. Stanley
I am dealing now with what happens in time of peace. In time of peace they will not be operated but will be laid up and will be maintained at a standard of readiness, so that if an emergency should come they can be rapidly put into operation. If an emergency should come and the time arrive for them to be taken out of the reserve, they can be used and, although it is not laid down, the probable intention would be to use them in the same way that the Government operated ships in the last War when they were taken over as prize ships. That is, they were operated by the shipowners on the Government's account. The hon. Lady referred to enormous rises in freights—
§ Mr. Stanley
That is a different point. These were prize ships which belonged to the Government. The Government did not operate them themselves. They employed owners to operate them at a fee. In other words they took all profits of voyages and paid the shipowners a fee for their use. It is probably on that basis that we should operate these ships in time of an emergency.
Is it not the case that what we had was controlled shipping? Almost every owner had a number of ships taken by the Government and handled on Government account at low freights?
§ Mr. Stanley
I hope I am not being misleading, but I understand that during the Great War a certain number of ships were taken by the Government and belonged to them and were operated in this way by the shipowners on Government account. There were other questions put, 1570 but as most hon. Members who put them have left the House—
§ Mr. Alexander
We would like an answer. I do not propose to ask the questions all over again, but if you are going to have some delay before the Bill comes in we ought to know what you say in reply to the Debate.
§ Mr. Stanley
I thought the right hon. Gentleman had a specific point to make. The hon. Member for Jarrow expressed the hope that the Bill will be introduced at an early date. I certainly hope so, and I will press it forward as far as possible, but I am sure the Committee will realise that in what we are dealing with here a reserve of tonnage is only one section of an extremely complicated Bill dealing with tramp subsidies, loans, building, and also the setting up of a liner defence committee, and under the extreme pressure under which Parliamentary draftsmen are working some delay is inevitable. I can assure the Committee that I will press forward with the introduction of the Bill to make it available at the earliest possible moment, when we shall have a full opportunity of discussing it in detail. I hope the Committee will be prepared to accept the principle embodied in this Estimate and enable me to begin negotiations for the purchase of these ships.
§ 12.46 a.m.
§ Mr. Alexander
I want to enter a complete caveat at this procedure. It really is not easy to put across the House of Commons that we are going to have all these commitments entered into and over £2,000,000 asked for while the Government devises machinery of a detailed character. We are not permitted to discuss it under the rules of the House. We may get the Bill later on and we can discuss it and even pass Amendments, but it will be operative in respect to a whole lot of transactions already entered into. Sir Dennis, that is really, if I may quote the words of your predecessor, very nearly irregular, or sailing close to the irregular and is putting the Committee into a very difficult position when they want to help 1571 in the case of an emergency. They are in another difficulty in that they are not able really to discuss the proper protection of the public with regard to the expenditure from the public purse. I regret that very much indeed. There is only one other thing. The right hon. Gentleman said I was interested in the problem of storage. I personally feel a very strong doubt as to the policy advocated not) merely from one side, but from many sides of the Committee, of having a quantity of old tonnage specially seconded for the purpose.
§ Mr. Stanley
I am afraid there is a misapprehension. There is no question of specially seconding. The purpose of the ships is for them to be brought out in an emergency. It may be possible to use some of them incidentally while they are laid up for storing and thus save the Government money in that way.
§ Mr. Alexander
I beg the President to consider two points of view. First, if you are going to use these ships at all, especially as refrigerators, you will be faced with a great difficulty unless you have, somewhere near the place of lying out and tying up, adequate cold storage to take the place of the ship. That is really the basis of a policy of supplying storing places for foodstuffs that require cold storage. I hope we shall hear more as to how the policy of buying direct by the Government is going to be interlinked with the power by contract of the Government to take certain ships from the industry if the Government mean to do so as soon as war breaks out. Already they are committed to taking a large percentage of tonnage in current use in the Mercantile Marine.
§ Mr. Alexander
This is a matter dealing with reserve tonnage for emergency purposes and all tonnage to be taken by the Government is in a sense reserve tonnage and this is adding to it. It is very necessary, when we come to that point in future, that we should keep the best tonnage we can get for what is the most essential part, and that is the feeding of your people. I would like to hear more about that when the subject comes to the House the next time.