SHIPPING AND SHIPBUILDING

HC Deb 13 July 1961 vol 644 cc596-718

4.0 p.m.

Mr. Frederick Willey (Sunderland, North)

It was with some prescience that we opposed the transference of responsibility for shipping and shipbuilding from the Admiralty to the right hon. Gentleman the Minister of Transport. I then said of the right hon. Gentleman that he was a bright boy in dull company. I ought now to apologise to his colleagues, for we have found that he is as unenterprising and as dull as the rest of them. I say by way of excuse that whenever one is confronted with the right hon. Gentleman, one is showered by testimonials. It is only afterwards that one discovers that they are in his own handwriting.

The right hon. Gentleman is certainly not borne down by modesty. He has flitted from Department to Department, claiming the credit, without acknowledgment, for the work of his predecessors. He has come unstuck in this responsibility, because nothing had been done by his predecessors. There was nothing in the pigeon-holes and he had nothing to inherit. That is why nothing has happened, and I had better begin by dealing with what has happened to shipping and shipbuilding while the Conservatives have been in office.

The position of the British merchant shipping fleet has changed radically during the past ten years. Since 1951, the flags of convenience fleets have increased fourfold. I know that there has been some falling off in the last year or two, but that has been more than compensated for by the fact that the Greek fleet has increased fourfold in a few years.

It is a question not only of the size, but of the character of the fleets. To give an illustration, at the end of last year, there were 42 tankers in the world of more than 30,000 tons, only four of them in the British fleet, but 22 in the Liberian fleet. That is the change which has taken place in world shipping, and it is not surprising that last year we had the shock of discovering that we had a £25 million deficit on shipping services, not surprising that since 1952 the net earnings of foreign exchange from shipping have been halved.

In 1951, we were the greatest shipbuilding country in the world. There was nothing very remarkable about that, because we always had been. It is not true now and it has not been true for several years. For several years now we have been outstripped by Japan, and the other country we defeated in the war, West Germany, has been running us neck and neck. In 1951, the British yards were turning out 37 per cent. of the world's new shipping, but since then that figure has been more than halved and last year we turned out only 16 per cent.

Again, it is a question not only of size, but of character. In 1951, 45 per cent. of our new shipping was going for export. Last year, that figure had been reduced to nearly a quarter, only 11 per cent. of our new shipping going for export. We face a position in which world shipbuilding capacity has been trebled in ten years. World capacity is such that the present world fleet, with its excess capacity, could be replaced in ten or twelve years. We all know that average replacement is between twenty and twenty-five years. In other words, the world has twice the required shipbuilding capacity.

I want now to deal with the position which has obtained during the time the right hon. Gentleman has held office. Shipping rates have remained depressed and hanging over world shipping has been excess capacity. There is still the difficulty of 1 million tons of shipping laid up. There has been a slight recovery of freight rates, which we all welcome, but no buoyancy has come back to the freight market. The Minister of Labour told me that 20,000 fewer men are employed in the shipbuilding industry compared with two years ago, but, in spite of that, there is persistent unemployment in all shipbuilding districts.

The order book, which in 1957 stood at 7 million tons, has shrunk to less than 3 million tons. It fell by 1 million tons in the last twelve months and is getting near the danger line. Last year's figures of shipping under construction were 600,000 tons less than two years ago and were 84,000 tons less than the figure for the previous quarter. Preparing was half a million tons less than it was two years ago and 127,000 tons less than in the previous quarter. In the past two years work preparing and under construction, that is, work in hand, has fallen by 1 million tons.

It is not only a question of the amount of the work, but its character. Last year, according to Lloyds' returns, only 11 per cent. of our new shipping went abroad. I know that the figures have improved this year, but we have to wait for the yearly figures. That 11 per cent. has to be compared with the figures of our major competitors. Nearly three-quarters of the new shipping from Germany was for export, 64 per cent. of that built in Sweden was for export, and more than half that from Japan was for export.

We have reached a position which is entirely new for Britain, that we have ceased to be an exporter of new shipping and that for a few years we have in fact been a net importer. The Committee should appreciate that British shipowners are the world's third largest orderers of new shipping.

That is the position which has developed over the past few years. During that time, the excess of new shipping built abroad and bought by British owners has been no less than 319,000 tons more than the new shipping built here for registration abroad. Today, we have about half a million tons for British owners being constructed abroad. I can use the tonnage figures without challenge, because for the first time for decades not a single passenger liner is being placed on any stocks in any British shipyard.

Mr. W. A. Wilkins (Bristol, South)

Does my hon. Friend have any figures of the amount of idle tonnage lying up in the rivers and docks in places like Falmouth and on the Tyne?

Mr. Willey

The percentage of British shipping idle is about the same as the world percentage, and I have said that 1 million tons of world shipping is laid up.

What I have said is confirmed by the reports which have been conveyed to the right hon. Gentleman. The D.S.I.R. Report called attention to the fact that shipbuilding is facing a major and probably prolonged recession. The Report says: … world production during the next five years could fall to as low as a quarter of the present level before it begins to recover. It is against that background that the Report says: There is no indication that the United Kingdom shipbuilding industry has, on balance, any marked technical or economic advantage over its foreign competitors apart from its large home market. The Shipbuilding Advisory Committee's Report, published more recently, says: Total employment of operatives in shipbuilding could, however, fall considerably by the end of this year unless a substantial volume of new orders is received, and we see little grounds for hope that these will be forthcoming. In fact, I think the right hon. Gentleman will agree that hope has receded. So far, we have put on the order books 100,000 tons less than were taken on the order books last year.

Against this background the right hon. Gentleman and the Government have done nothing except to appoint a new Minister, and, no doubt, a number of additional committees. This is my major charge against the Government, that against this deteriorating situation—a responsibility, incidentally, wider than the right hon. Gentleman's because this has continued for years—they have done nothing.

If I might give myself a testimonial, more than five years ago I wrote a pamphlet. I, at any rate, proclaim its authorship. In this pamphlet I forecast with some particularity and accuracy what has happened to British shipping and shipbuilding over the past few years. The important thing about this is that I did not have access to figures which were not generally available. I was able to use only those figures which were published and well known, and anyone else could have examined the figures and done the same. He could not have forecast precisely when it would happen, but he could have forecast what has happened.

The right hon. Gentleman probably knows that the French Government made such a forecast. That is why the position of the French shipbuilding industry and employment in it is much more stable than in this country. Time and again, I have pressed for a high-powered, fact-finding committee. In this, I received some support from hon. Gentlemen opposite. If such a committee had reported, it would have compelled the Government to take action. But, too late, we got the wrong kind of committee. It was doubly wrong when Sir Graham Cunningham resigned. I remind the right hon. Gentleman that when Sir Graham resigned he said that the Advisory Committee believed that the Ministry of Transport really did not understand the shipbuilding industry. That Committee has now reported. The Reports of the D.S.I.R. and of the Advisory Committee have been before the right hon. Gentleman. He still has done nothing. I almost wish that he would stop saying anything, because, although he does not take any action, he does occasionally speak about the problems of these industries.

A few weeks ago the right hon. Gentleman went to the Clyde and said: My time to be serious about the shipping and shipbuilding industries will be when Parliament meets after the Recess. There may be shocks. There may be difficulties. I think it is a politician's duty to face unpopularity when he knows it to be the truth. It may be management—men—or unions who have the difficulties. I intend to interpret my contract in an aggressive way in the near future. I do not know what that means. It was obviously calculated to cause the utmost apprehension in the shipbuilding industry.

We have chosen this subject for debate before the Recess because of the need for urgent action in relation to these two great industries, and to compel the right hon. Gentleman to remove some of the apprehensions to which his speech on the Clyde gave rise.

I will tell the right hon. Gentleman some of the things which he ought to do; some of the things which ought to have been done. I will deal with shipping first. The trouble which affects British shipping is not only the intense competition which is caused by the overhang of excess capacity in the world, but the unfair nature of much of that competition. We have the problem of the flags of convenience fleets, and I agree with my right hon. Friend the Member for Easington (Mr. Shinwell) that probably more serious are the questions of flag discrimination, and subsidies, both concealed and open.

This is not new. We have pressed for this time and again. This is something which calls for legitimate and proper international action. The Americans defend the steps they have taken about flags of convenience—and this is largely an American question—on the ground of defence. We get recognition of this whenever the Prime Minister meets the President, because he then reluctantly reveals that somewhere or other he has mentioned this problem. In his State of the Union Message, President Kennedy admitted that the unity of N.A.T.O. was being weakened by economic rivalry, and, to use his words, partially eroded by national interest. If we are thinking about the resources of N.A.T.O., we should emphasise that among those resources is the British Mercantile Marine, and, for that matter, the Norwegian Mercantile Marine. We ought to endeavour to compel the Government to take action to deal with the problem of flags of convenience, but all we get is an occasional disclosure that this may have been mentioned by the Prime Minister in his discussions, or that the Minister of Defence made an aside about this on a visit to Washington. This is a master on which we ought to take concerted action with some of the other nations affected.

The difficulty of flag discrimination is different. To deal with this we need some tough Government-to-Government bargaining. I think that there is some precedent for this. Some countries have been more or less successful. I can appreciate the difficulties of the Government, because British shipping has been stiff-necked about seeking assistance from the Government, but this is a matter of national interest. The Government should not have hesitated. They should have made the strongest possible representations against this practice which has so adversely affected British shipping. Proposals have been put to the right hon. Gentleman by the General Council of British Shipping. He has told us time and again that he is discussing them, considering them, looking at them, the right way up, and upside down. We want action.

I will put a personal point to the right hon. Gentleman. I know that some shipping interests are strongly urging that the time has come when we ought to seek enabling legislation so that we can show that we are in a position to be quite firm about this if these practices continue to our disadvantage. I can see the disadvantages of seeking such powers, but I think that this suggestion ought now to be seriously considered. The time has come when we ought to say that we are in earnest.

Before I leave shipping, may I mention the separate problem of coastal shipping. We may as well recognise that our coastal fleet is rapidly going to the wall. For years it has lost, on average, a ship almost every week of the year. The Chamber of Shipping has called the attention of the Minister to this, yet he just goes on looking at it from all angles. Something must be done. I can understand the right hon. Gentleman's predicament because it is obvious that in this sphere, if in no other, the Chamber of, Shipping agrees with, and supports, the proposals which have been put forward for some considerable time by the Labour Party. The Chamber of Shipping called for a review of the country's internal transport system". So have we. I hope that the right hon. Gentleman will not consider himself too prejudiced if he should review the system of internal transport to see what part our coastal shipping can properly play within that system.

I turn now to the bridge between shipping and shipbuilding. I want to touch on nuclear propulsion. From some Micawberish phraseology which is wrapped up in the Annual Report of the Atomic Energy Authority, I gather that we have written off this experiment as a failure. Apparently, the Press thinks so, too.

First, I want to know why this information should be conveyed by the Authority and not by the right hon. Gentleman. I will explain in a moment why this is an important question. Time after time hon. Members on both sides of the House have asked the Minister what progress has been made in nuclear propulsion for shipping, and we have not been able to get a sensible reply. What has happened? When I first asked the question, over five years ago, I was told that good progress was being made. That is not borne out five or six years afterwards, when we are told that apparently sufficient progress has not been made.

Incidentally, how much has this cost? We lost £10 million on Avro, £34 million on the Swift, £80 million on the Victor and £105 million on Blue Streak. I do not expect a comparable figure in this case, but we may as well know how much it has cost us. Who will be sacked for this? This is not a rhetorical question. We have reached a stage where we are staggering from disaster to disaster, and failure to failure, because we are being ruled by faceless men with an anonymous irresponsibility.

That is why I ask why the right hon. Gentleman has not been in a position to reply. Who is responsible for a development such as this, which is vital to the national interest? Why should all these things be lost in a morass of indecision and then come out as failures? I understood that this was a field in which we had first-class scientists, equal to those in any other part of the world.

This is a matter of primary national importance. It goes far beyond merchant shipping. The United States is building a nuclear-propelled submarine fleet, and we are given to understand that the Russians are doing the same. This means that the British fleet is rapidly becoming obsolete. I am not disclosing any secrets of what we are doing about nuclear-propelled sub- marines when I say that the Americans have supplied us with the reactor and equipment, but nevertheless we do not seem to have made much progress with it.

I now return to the question of our merchant shipping. The Russians have the "Lenin", in respect of which there is a fine exhibit at Earl's Court. That ship has been in operation for some time now. The Americans have the "Savannah", which is shortly to go on its trials. The Japanese are ahead of us, as the other Parlimentary Secretary admitted in the House some time ago. Russia, America and Japan are all ahead of us and, as far as we know, so are the Dutch. The Italians are, because they have given a two-year development contract to Fiat Ansaldo. France has a land-based project, which is being developed.

Most disturbing of all, however, is the fact that we now acknowledge that we have lost the race with Western Germany, who started much later than we did. The right hon. Gentleman may show pained surprise at this, but it is generally recognised that Germany now is considerably more advanced than we are in this field. I do not have the time to go into the matter in detail, but I hope that the right hon. Gentleman will study not only the way in which this project was tackled in Germany but the care which the Germans took to get the right organisation. They know who is responsible; in fact, people have been sacked in Germany.

There has been conflict between the scientists and those who are more commercially minded, but the organisation has been devised. American "know-how" was brought in and Euratom has agreed to bear 40 per cent. of the development costs. The Germans are now going ahead, and the ship is to be built. The Minister need not feign surprise when I repeat that it is generally recognised that we have lost the race with the Germans.

Our excuse appears to be that the developments that we were making were uneconomic. I would like the cards laid on the table, face upwards. All we know is that some faceless men, in countless committees, sub-committees, conferences and the rest, have eventually come to this conclusion, on undisclosed evidence. A good deal of evidence has been disclosed. It has been published in the United States, in connection with that country's project. I shall summarise it. The United States Maritime Administration says two things. The first is—and I do not know whether this is what the right hon. Gentleman regards as being uneconomic—that this project may take ten years. But it is an important development, and I should have thought that a development of this magnitude ought not to be discouraged by the prospect of its taking ten years.

Secondly, and more important, the Maritime Administration also says that this development has reached the stage where reactor development is less important than the examination of nuclear economics and the operational difficulties and problems of a nuclear-propelled merchant ship. In other words, the Americans have reached the stage where they have to pursue the "Savannah" project, while we have reached the stage of writing-off our project as being beyond our capabilities.

The American Atomic Energy Commission's Report is very detailed. It gives estimated costings. I have not the time to deal with it fully, but I should like to quote one sentence from it, which says: Nuclear energy on longer hauls is approaching a position of economic competitiveness for large, fast vessels. That shows remarkable progress.

Furthermore, the Germans say that, generally, the European authorities believe that a nuclear-propelled ship is feasible. The right hon. Gentleman may be in a position to deny this, but I shall be surprised if he does. Secondly, they say that they are determined on it and will have Euratom support for it, and that the ship should be constructed without delay.

Against this very disturbing and disappointing background I ask the right hon. Gentleman to tackle the essential problem, which is one of organisation. We must reorganise and recast the way in which we tackle these problems, which are absolutely vital to our national greatness. We have not dealt with the organisational problem of getting a team together and making them identifiable, with a defined objective, so that they can operate in this highly competitive field, in which we started with the enormous advantage of having been first in it but now find, in application after application of nuclear energy, that we are being outpaced by other countries. Not only in nuclear propulsion but generally in shipping and shipbuilding this realistic approach must be driven by a sense of urgency.

I go back to the D.S.I.R. Report. The three key points in it concern research, development and management. Since the industry is in a highly competitive position we cannot be content with a situation in which, as the Report reveals, the resources devoted to research are insufficient, and compare unfavourably with any other engineering industry in the country. The Report also reveals that None of The research organisations serving the industry has hitherto included in its programme any major investigations designed to improve or cheapen production methods. Research is vitally important to this industry. The Report also contains some disturbing conclusions about marine propulsion.

These are matters which should have the urgent attention of the right hon. Gentleman. Above all, the question of management is of vital importance. I do not intend to deal with the labour difficulties which have troubled the industry—my hon. Friend is better versed than I am to do that—but standards of management are of cardinal importance. The Parliamentary Secretary has been to some of our shipyards. We have only to think of the archaic conditions obtaining in some of them to know that they would be absolutely intolerable in any other comparable industry.

This, as I say, is an industry which depends on the good will and spirit of its manpower more than most. By way of a footnote, I would say that there are, of course, British yards which compare with those of Sweden. I have some on the Wear.

Dame Irene Ward (Tynemouth)

And the Tyne.

Mr. Willey

And the Tyne, too. But if, generally, our shipyards could compare with Swedish yards in standards of management, we should be much more competent to face the future. However, I am particularly concerned with the responsibilities of the right hon. Gentleman.

This Report is before him. Also before him are specific recommendations affecting him. I may be wrong, but according to my researches the latest position is that he has been "pursuing the studies recommended." I should like him to get hold of them and really tackle them. This is a matter in which we cannot afford to be prejudiced by delay. We shall have to pay for every month of delay. I hope that even today the right hon. Gentleman will tell us something specific about proposals being made, about development contracts.

But it is not only a question of matters raised in the D.I.S.R. Report. There are other broad matters affecting the industry for which, nowadays, there seems to be responsibility. Take standardisation. I could be theoretical about standardisation. I know all the difficulties. Studies are to be pursued. The shipping and shipbuilding industries drew a broad picture to show what could be done. I do not think that there has been sufficient research into the problem of operational costs in shipping; which is a matter where we could lead the way and make our new shipping all the more attractive. This is an assembly industry. We know that the Norwegians set up a central purchasing organisation. That is something which we ought to consider. These are problems which can affect the industry and there are many things which the Government could do to encourage such developments.

Unfortunately, the question of diversification, alternative work, arises suddenly. When we debated this subject a couple of years ago I emphasised to the right hon. Gentleman that if we were to fight redundancy we should consider that here was an industry where there are enormous capital costs. If work shrinks the capital on-costs will affect the competitiveness of the industry. It is important. not only from the point of view of employment but of price, to see that whatever action we can take to get alternative work is taken.

This, again, gives justification for Government intervention and support. I pay tribute to some of the developments which have occurred. There are the Blytheswood caravans, and Samuel White building refrigerators—although I should not have thought that there was a good market for them—and we have William Denny making hovercraft. If there is any redundancy arising before the end of the year it is important that the problems of constructional engineering be tackled.

I am sure that all hon. Members would agree that what we are concerned with above everything else is price. Secondly, we are concerned with terms of payment. The right hon. Gentleman showed his usual sleight-of-hand over this. He claimed credit first for some action taken by the President of the Board of Trade about the Export Credits Guarantee Department and then he created the impression that, with exceptional wisdom, he had anticipated the Report of the Advisory Committee and taken action in good time. That is not so. We welcome the action taken, but it does not meet the industry's difficulties. The industry believes it is insufficient and out of phase.

The right hon. Gentleman knows the problems. In many yards abroad there is a down payment of 30 per cent. and a payment of 70 per cent. over seven years. We have to compete with credit terms of this nature, and similar terms apply to Japanese, French, Dutch, Greek and German yards. I have touched on some of the urgent problems facing both shipping and shipbuilding in very difficult circumstances—

Mr. Paul Williams (Sunderland, South)

I hesitate to interrupt the hon. Gentleman, but is not one difficulty over the question of credits that the Export Credits Guarantee Department cannot give an assurance that will enable a builder to write a particular condition into his tender and, therefore, he has to compete at a disadvantage with the foreigner? This makes the United Kingdom builder stand at a permanent disadvantage, although the credit terms have been improved.

Mr. Willey

I am obliged to the hon. Gentleman. I think that that is part of the explanation of the increased orders placed abroad by British shipowners. As the hon. Gentleman has interrupted me, I will put this to the Minister. We are concerned not only for foreign orders, but also for orders coming to British yards from British shipowners.

I have touched on some of the problems. I have not dealt with the scrap and build problem tentatively raised by the Advisory Committee. It is a very difficult matter which, I think, must have the immediate attention of the Minister. When I made an assay of shipbuilding five years or so ago, I came down on the side of recommending a reorganisation commission or a reorganisation council. I think that it is important—I have emphasised this throughout all that I have said—to try to get the right sort of machinery to deal with the difficulties which are arising.

I have not the time, at any rate at this stage of my speech, to present a blueprint of the form which this organisation could take. I repeat what I wrote at that time: I believe that we must recognise our national responsibility for this vital industry. My concern is to combine that responsibility with the competitive and personal enterprise of which the industry has every reason to be proud. This demands new forms of public aid and controls and goodwill to accept a partnership not designed to stifle enterprise, but based on a deliberate and concerted effort to avoid the tragedies of the past. I believe that that is the position which obtains. If I may say this without offence, I think that the right hon. Gentleman has the vigour but he has not the weight. He has energy, but not the dynamic purpose to tackle this problem. Having said those rather critical things, I would say by way of mitigation that the right hon. Gentleman has many distractions in his Department and many other urgent problems with which to deal. He may not have the opportunity to devote the attention which he ought to the great national problems affecting these two vitally important industries. When we challenged the transference of those responsibilities to the right hon. Gentleman's Department, he said that if he felt he was not getting on with the work, he would go straight to the Prime Minister and he could make a rearrangement. He said: … it will be nothing to be ashamed of if I find that the job is too big a burden."—[OFFICIAL REPORT, 25th Nov., 1959; Vol. 614, c. 509–10.] Nothing would bring more solace to these great industries than to hear that the right hon. Gentleman had recognised the inevitability of that because, by that decision, the Government would be saying that they could not be satisfied with neglect of these two great industries and that before it is absolutely too late, something is to be done.

4.38 p.m.

The Minister of Transport (Mr. Ernest Marples)

We have all listened to the speech of the hon. Member for Sunderland, North (Mr. Willey) with great attention. I found him much more moderate than I had expected, and I propose to answer most of his points. I should like to take them in my own order. I was fortunate enough to read an article yesterday in the Newcastle Journal from which I had a preview of the speech which the hon. Gentleman has made today. That enables me to answer his points in a logical way.

I should like to devote the first part of my speech to shipping, that is to say, to the companies which run the ships for profit, and, after that, I should like to go on to what I think should be the main theme of this debate, shipbuilding, or those companies which actually build the ships. So I begin by concentrating on the points about shipping.

Recent speeches and writings about shipping, as distinct from shipbuilding, tend to give an impression of a rapidly declining shipping industry. We ought to get this into a right perspective. It is quite true that during the last fifty years United Kingdom shipping has been a declining proportion of the rapidly increasing world tonnage. This has been inevitable with the increase in total trade throughout the world and the increasing part played in that trade by new and developing nations.

This is a trend we cannot ignore, but the British merchant fleet is still the largest active fleet in the world. It is more than 3 million gross tons greater than it was immediately before the last war. In many ways it is more efficient. On average, it is faster and younger. The percentage of ships with speeds of 14½ knots and over was 21 per cent. before the war and is now 50 per cent. The percentage of ships under ten years old was 32 per cent. pre-war and is now 54 per cent.

Having said that, I am bound to say that it would be equally wrong of me to suggest that the British shipping industry is not facing, serious and challenging problems. The prosperity of British shipping in the modern world, without any shadow of doubt, depends on close partnership between the Government and the industry. It is the job of the industry to be efficient and competitive. It is the job of the Government to hold the ring so that the industry can operate in conditions of free and fair international competition.

The hon. Member for Sunderland, North said that the General Council of British Shipping, in its recent survey, has given its views on action which it feels the Government should take. Since that survey was completed I have had many valuable personal discussions with the Chairman of the General Council, and officers of my Department and representatives of the General Council have worked hard on the details of its recommendations. I wish to pay tribute to Mr. Keville, the present Chairman of the Council, and to his predecessors for their untiring efforts to further the interests of British shipping. Many of the General Council's recommendations are common ground between us. We do not argue about them, but want to know how best to pursue them. I shall deal with a few of the recommendations.

First, flag discrimination. The hon. Member for Sunderland, North said that this was exercising his mind and that of the right hon Member for Easington (Mr. Shinwell). It is no good saying that the United States of America is the only country in the world which practises flag discrimination. There is a lot more going on and it goes on also within the British Commonwealth.

Mr. John Rankin (Glasgow, Govan)

America is the biggest.

Mr. Marples

It is not the biggest. It has a great influence, but it is not biggest. Nothing grieved me more than when Canada recently placed a discrimination against British ships on the Great Lakes without consultation with Her Majesty's Government—and even without notice being given to the Government. The first I heard of it was when I read about it in the Press. I think that that ought to be said in this House.

The hon. Member for Sunderland, North said that we should have enabling legislation, or that that was what the Council of Shipping had asked for. On the question of flag discrimination, the Government already do everything which the Council recommended except one thing, retaliation. I have asked the Council to let me have any particular case in which it thinks that retaliation would be effective and to our advantage. We are now discussing this with the Council. If we get any cases I shall discuss them with my colleagues; and I do not exclude the possibility of retaliation if, on balance, it would be to our advantage, but, if it is to be to our disadvantage, I do not think it worth indulging in retaliation.

It is no good asking the House for enabling legislation unless I am able to tell the House in which way it will be used. I tried asking the House for enabling legislation before, in the matter of road traffic. I have had some very rough passages with hon. Members opposite who asked, "How will the right hon. Gentleman use it? Has he considered it?" Therefore, I say that it would be wrong for me to ask for enabling legislation unless I am able to illustrate to the House in what particular way I propose to use that enabling legislation.

Mr. John Peyton (Yeovil)

I think that my right hon. Friend will realise that the mere fact that this House was giving him powers, whether he used them or not, would be a very useful lesson for other people to learn. I hope that he has not closed his mind on this subject.

Mr. Marples

The point is that we already have certain powers, which are fairly wide. Until I get the particulars of what the Council of Shipping has in mind, it is not for me to say whether that would come within the embracing powers which we now have, or whether I should need further powers. Therefore, I must get the particular case first. I am sure that that is right.

On United States shipping policies, the General Council recommended that the Government should do all they can to influence American policy against discrimination and subsidies. My predecessor and I have been to America to urge our view on the Administration over the whole field of American shipping policies. The Prime Minister has himself raised the matter with the President of the United States. This action is being vigorously followed up in conjunction with other European maritime countries, as the hon. Member suggested.

Also, in relation to investment allowances, the Chancellor of the Exchequer partially met the Council's recommendation that the allowances should be long term. My right hon. and learned Friend said that in view of the unique position of the shipping industry the allowance is double that given to industry generally. The Chancellor said that he saw no prospect of the investment allowance for British ships being reduced or withdrawn during this Parliament. That is the sort of confirmation to the industry on which it can rely.

On research and development, the General Council recommended that there was much that the Government could do to reduce the disparity between public expenditure on research for shipping and for air transport. I agree with the hon. Member for Sunderland, North that we in this House ought to attach the very greatest weight to research and development for both the shipping and shipbuilding industries. I agree with him that research ought to be more co-ordinated in future than it has been in the past. I do not think that we can have shipbuilding research and shipping research in isolated departments, divorced from each other. More and more we have to get them together.

That is being discussed now with the General Council. I told the Council that we would consider the points it made. We are making our own points—my hon. and gallant Friend the Parliamentary Secretary has had considerable experience in this matter. If any other hon. Member has ideas on this subject I should be grateful if I could have them in detail to consider during our discussions with the General Council. That illustrates the fact that we are trying, with the limited cards we have in our hands, to assist British shipping.

Before turning to shipbuilding, on which I want to concentrate, I wish to mention two further points. The first is the question of ports. The hon. Member did not mention this. I do not blame him, because shipbuilding and shipping is a very wide subject and in such a debate he was bound to miss out some points. It is vital that our ports should be developed and kept to the highest possible pitch of efficiency. I do not believe that they are now in that state. It is for that reason that we appointed Lord Rochdale to hold an inquiry which, we hope, will help shipping in particular by making the turn round in ports much quicker. A ship does not only have to go to sea, but spends much of its time in port. I hope, indeed I am certain, that the Rochdale Committee will produce something quite positive and dynamic on which the Government can act after considering the proposals carefully.

The second point is that of nuclear propulsion. The hon. Member for Sunderland, North said that we have scientists equal to any in the world. That is so, but no one in the world has yet got an economic reactor—neither Russia, nor America nor Germany, which is only using American reactors. They are not economic. During the last year the Atomic Energy Authority made a study of the economics of marine reactor systems. The Report, published a few days ago, said: The work has again emphasised the difficulties of designing and building small power reactors which would be economically competitive with conventional marine power plants. Further work is proceeding. This is the fact which is giving rise to our present difficulties. We must spend our limited resources in the most advantageous manner. We have to decide what that is. I hope—but I cannot promise—to make a statement before we rise for the Recess. I would rather make a decision which is right and slightly late than one which is wrong and made too quickly.

I come now to my main theme, which is shipbuilding.

Mr. Rankin

In view of what the right hon. Gentleman has just said, is he definitely rejecting paragraph 118 of the Report of the Atomic Energy Authority?

Mr. Marples

All that I can say is that a decision has not been made, neither on paragraph 118 nor on all the preceding 117 paragraphs. The Government have not decided, but they will decide as quickly as they can. We are disturbed. What we want to do is to spend our limited resources to the best possible advantage. We want value for money.

I now turn to shipbuilding. There are now about 70 shipyards, as distinct from boat yards and yacht yards, in the United Kingdom. They vary enormously in size, ranging from small yards employing about 100 men to the largest with about 15,000. They produce widely differing products, from super passenger liners to tugs and barges. They vary enormously in efficiency. Some are very efficient and others are not so efficient. Some have spent millions of pounds in modernising—some yards are modernising most effectively—others have not. Some are fiercely competitive at the moment and have full order books; others have not. Some have very good labour relations; others have not. It is not for me to specify which are good and which are bad; but I know which are good and which are bad.

Some yards have first-class managements and others are not so good. I agree that management has to be good. It is no good this Committee or anyone else blaming one side of the industry. This industry hangs together—management and men. Therefore, sweeping generalisations cannot be made, and the criticisms which one often reads about are applicable to some yards, but not to all. I want to make that point, but I should be failing in my duty if I did not analyse two disturbing features which have appeared in the last two or three years, and of which mention was made by the hon. Member for Sunderland, North. Before I come to these two disturbing features, I want to remind the Committee that shipbuilding has enjoyed in the last twenty years the most prosperous time in its history. This fact is often forgotten.

The two disturbing trends are these. The first is exports. During the last two years, 1959 and 1960 taken together, the tonnage of ships launched for export from United Kingdom compares disastrously with that of our European competitors. Here, and later, the figures that I shall quote—and I have been to tremendous pains to get the accurate figures—have regard to merchant ships only.

Germany exports 1.6 million tons of a total output of 2.3 million tons; Sweden, 1 million tons against 1.6 million tons total output; and the United King- dom exports 0.4 million tons, as against 2.7 million tons total output, and one-third of the United Kingdom exports were for Colonial Territories, Bermuda, the Bahamas, and so on. I want to compare the figures of tonnage launched in the two years in three different ways, because this is the basis on which I shall rest my argument.

Compared with the United Kingdom exports, Germany exported four times as much as we did, Sweden two and half times as much. That is the first comparison. The second is that in the two years 1959 and 1960 Germany launched for export more than we built in a single year and Sweden launched for export almost what we built in a single year. In Sweden—and this is where I agree with the hon. Gentleman—wages are probably higher and certainly not lower. The third comparison is: how does the tonnage exported compare with the total production in each country? Germany exports 70 per cent. of total output, Sweden 65 per cent., Holland 40 per cent. and the United Kingdom 15 per cent., so, on exports to other countries, we have not a favourable comparison.

Mr. Percy Collick (Birkenhead) rose—

Mr. Marples

I would rather make my case in my own way. This is the crux of the problem of the shipbuilding industry.

I come to the second disturbing feature, but, first, I want to give a few facts as background. The capacity and normal output of a yard are difficult to measure. A lot depends on the type of ship which the yard is building. But, in broad terms, the maximum capacity of United Kingdom shipbuilders is about 1.6 million gross tons a year, plus work for the Navy. The normal output of merchant ships has been 1.4 million tons in good years. The normal orders of United Kingdom shipowners are about 1 million tons a year.

This leads everybody to this conclusion: if United Kingdom shipbuilders can secure all the orders of United Kingdom shipowners they will build to about 70 per cent. of their normal total output. Our United Kingdom shipbuilders have a unique advantage in this respect—because, quite naturally, it takes quite a lot to force a United Kingdom shipowner to go abroad to order his ship. There are three reasons for that. First, the supervision costs of the construction period are more. Secondly, the owners have very long-standing connections with United Kingdom shipyards. Thirdly, when it comes to launching a ship, it is much better for prestige and nationalistic purposes to launch it at home than to launch it in a foreign yard.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

Would my right hon. Friend not add a fourth reason—that United Kingdom shipowners can obtain credit abroad which they are unlikely to obtain in this country?

Mr. Marples

I promise that I will deal with that question, but I should prefer to deal with it later in my speech.

Consequently, the United Kingdom shipowner would probably be prepared to pay about 5 per cent. more to build in the United Kingdom than to build abroad, because it is to his advantage to do so. The tragedy is that in spite of this advantage our United Kingdom shipowners have found it increasingly necessary to go abroad to foreign firms for them to build their ships.

I will give the tonnage figures launched in foreign yards for shipowners who will register them in the United Kingdom. In 1958, it was 285,000 tons; in 1959, 450,000 tons; and in 1960, 465,000 tons. This makes just under 1¼ million tons in three years. That tonnage is equal to almost 17 of the new Q.3 which we hope will be given to some part of the United Kingdom very shortly.

Mr. Collick rose—

Mr. Marples

I should like to pursue this argument in my own way. It is a difficult argument to put across. This tonnage in the last three years has perhaps cost about £140 million of our foreign currency to buy in yards abroad.

Here, I would emphasise that I am in no sense criticising—

Mr. Collick rose—

Mr. Marples

I prefer not to give way. I hope that the hon. Member will forgive me for not doing so, and that I am not unreasonable in not giving way, but I have a lot to tell the Committee.

Mr. Collick rose—

The Temporary Chairman (Dr. Horace King)

Order. If the Minister does not give way, the hon. Member for Birkenhead (Mr. Collick) must resume his seat.

Mr. Marples

I am grateful, Dr. King. I do not wish to be discourteous to any hon. Member, but this is a difficult theme and interruptions do not make it any easier to get the point over to the Committee.

I should like to emphasise that I am in no sense criticising those of our owners who have built abroad. They must live in a highly competitive international market, and to do this they must be free to buy their ships on terms as good as those of their competitors. To deny them this right and so undermine their competitive position would jeopardise not only the shipowners, but, ultimately, the shipbuilders who rely upon them for the great bulk of their orders.

So far, I have been speaking of launching figures. I recognise—one must be fair—that the launching figures might relate to ships which may have been ordered several years earlier when our own yards were fully stretched. Nevertheless, that trend still continues. Here are the tonnage figures of ships ordered in foreign yards for shipowners who will register them in the United Kingdom: 1958, 225,000 gross tons; 1959, 420,000 gross tons; 1960, 360,000 gross tons. This makes a total of 1 million tons in three years at a cost of perhaps £120 million.

The hon. Member for Sunderland, North rightly said that we are now a net importer. I believe that this is an almost disastrous tendency, because our shipbuilders now have the spare capacity to build those ships but their tenders have been unacceptable, in spite of the fact that our owners are prepared to pay more to build at home than to build abroad.

This is the very first time in our history that orders of this magnitude have gone abroad. I think that the Committee will agree with me that the right thing to do was to find out why this has happened.

Mr. E. Shinwell (Easington)

I will tell the Minister.

Mr. Marples

If the right hon. Gentleman will content himself in patience, I will tell him. In the interests of greater accuracy I would rather tell him.

Mr. Collick rose—

Mr. Marples

I will also tell the hon. Member why.

I asked several shipping owners to give me details of the tenders which they had received, both foreign and British tenders, and also the reasons why they chose to build abroad. I have seen many firms. Many others have written to me. Naturally, the firms do not want their names published and confidential information divulged to their competitors, but, even so, there is some information which I can give to the Committee.

I will quote only four cases—the first four people I saw. In the first case, over 12 tenders were received from British and foreign firms in about equal numbers. There were two points about them. The lowest British price was higher than the highest foreign price; and, secondly, the average British price of all the tenders was at least 20 per cent. higher than that of the average foreign competitor.

In the second case, the owner was building two almost identical ships, one at home and one abroad. The cost in the United Kingdom was higher—substantially higher. The interval between laying the keel and delivery was twice as long in the United Kingdom as abroad.

In the third case, delivery date was the vital thing. The man had established a route with a chartered ship and when the charter of the ship expired he wanted to purchase his own ship. Price and credit terms were secondary considerations. United Kingdom firms would not guarantee delivery date. But foreign competitors did guarantee delivery date. One yard gave two reasons for being able to accept a guaranteed date plus an enforceable penalty clause. The first reason was that the yard had not had a strike for a hundred years. It should be remembered that our shipyards lost more than 350,000 days last year which, in relation to the numbers employed, is more than any other industry. The second reason which the yard gave was that its current labour agreement was for several years and outran the delivery date of the ship. Our labour agreements run for one year only, and that is a disadvantage.

In the fourth case, again, there were two similar ships, one ordered at home and one abroad. Again, the cost in the United Kingdom was higher. Delivery was twenty months at home and ten months abroad.

After these instances—and there were many more which I could quote—it was clear to me that we ought to look at practically all the orders placed abroad during the last two or three years to find out the reasons why they went abroad. This will give us some yardstick to measure the competitiveness of our yards. The Government have, therefore, decided to have an independent inquiry and have appointed Peat, Marwick, Mitcthel1 and Company, chartered accountants, to analyse and summarise the reasons and to report to the Government. The firm will work closely with the General Council of British Shipping, for whose cooperation I am most grateful.

We hope that the report will be ready in September. I then intend, in fairness, to discuss it with the Shipbuilding Conference. The whole aim and object of the exercise is not to denigrate or to apportion blame or to criticise, but to help, and a cool, clinical analysis and diagnosis of the reasons for losing orders surely is the best basis on which remedial action can be taken.

Furthermore, during the Recess my hon. and gallant Friend and I will continue interviewing shipowners. We also propose to inspect continental yards and to look at some of the ships which have been ordered. We propose to spend a great part of our Recess in this way. When this country has to go abroad to order a quarter of its total tonnage it is obvious that we have not been competitive at home. We shall be in a better position to say why when our inquiries are complete.

But during the peregrinations of my hon. and gallant Friend and myself in the shipyards, many reasons have been given to us. Some say that there has not been enough modernisation, others say that management is out of date, others that research and development is insufficient. Some think that 25 unions is an excessive number with which to negotiate and that demarcation and restrictive practices make life intolerable. Others blame a shortage of skilled workers because of the unions' restrictions on apprentices.

Some shipbuilders say that if they have to quote a fixed price for a ship, then the ingredients which go to make up the ship should themselves be fixed. These ingredients include materials and labour. That school of thought claims that if a ship takes two years to build, foreign yards can quote with confidence a fixed price because they have a long-term agreement with the labour, whereas we have not.

Mr. Jack Jones (Rotherham)

What about materials?

Mr. Marples

They can get a fixed price on steel in this country provided that they pay a premium of about 1¼ per cent. or 1.8 per cent. But they sometimes do not get a fixed price in other directions. I am giving the Committee some of the many reasons advanced during our exhaustive tours of the shipyards.

Others blame the high cost of subcontracts, such as castings, and in some cases some shipyards have gone abroad for castings. I must be scrupulously fair about this. I am not seeking to apportion blame. There is a whole series of things which ought to be investigated. As my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said, some shipbuilders want assistance with higher credit. It may be any of these reasons or a combination of them all.

Some people, and my hon. Friend the Member for Sunderland, South (Mr. P. Williams) is one, ask, "What are the Government doing about it?" He has often said that to me. If our prices for ships are higher and our delivery dates longer and more unpredictable than abroad, then we shall not get the orders. That means that the industry will shrink in size because it is not competitive. Political formulae will not help this situation.

The Guardian leader of 7th July this year summed up this political myth in one sentence when dealing with the coal industry. It said: The Coal Industry (mine management as much as miners) also clings to an illusion that political magic can accomplish more than sheer hard work If we add to sheer hard work, skill in management and skill in deploying the labour forces, I think that the Guardian is right. Political magic is not a substitute for the competitiveness of an industry. If an industry cannot produce suitable goods at right prices on an acceptable delivery date, then the writing is on the wall, and subsidies from the taxpayer—

Mr. Austen Albu (Edmonton)

How does the Minister relate that argument to providing a large subsidy for the Cunarder when this is not economic and cannot compete?

Mr. Marples

It is very simple. The subsidy to the Cunard Company was not given to help the shipbuilding industry, which I am now discussing. It was given to help our shipping industry on the express services across the North Atlantic, because everybody else on the express services across the North Atlantic is subsidised. The United States subsidised its capital ship by paying 58 per cent. of its cost. France subsidised its capital ship by paying 20 per cent. of its cost. Therefore, we decided to give a subsidy, not to the shipbuilding industry, but to the shipping company which is competing on this heavily subsidised route. In addition, the United States pays all the running costs if there is a loss. The French do the same. We pay nothing at all. We give a smaller subsidy—not to shipbuilding, but to shipping.

Dame Irene Ward

Will my hon. Friend allow an interruption from this side of the Committee?

Mr. Marples

I am always happy to give way to my hon. Friend.

Dame Irene Ward

I am obliged. Will my right hon. Friend explain now, so that the explanation appears in his speech, what opportunity Peat, Marwick, Mitchell and Co. will have to examine conditions and subsidies—hidden subsidies— Mr. Wiley: And direct subsidies.

Dame Irene Ward

I agree, and direct subsidies—in the foreign yards in which British owners have ordered ships? In all fairness to the British shipbuilding industry, ought not Peat, Marwick, Mitchell and Co. to have access to the books of foreign yards in order to have a proper and accurate comparison between foreign yards and British yards?

Mr. Marples

I agree that we shall get as much information of that nature as possible, but I do not happen to be the Minister who has power over foreign yards to ask them to produce their books.

Dame Irene Ward

Then it is no good inquiring.

Mr. Marples

Yes, it is. It will produce a large number of things. It may show, for example, that foreign yards work two shifts. How can they build a ship in half the time taken by British yards? That is not brought about by Government intervention. It is their own way of organising the industry. If they can build a ship in half the time, they must work two or three shifts, deploying their labour effectively. Therefore, we want to find out as much as we possibly can. It may not be as much as my hon. Friend wants, but nothing ever is in this context. However, it will be as much as we can get. If we give a subsidy from the taxpayers, it will not stop the industry from shrinking. It may postpone that evil day, but it will not stop it.

On 10th July the Guardian quoted the President of the Confederation of Shipbuilding Unions on the demands the unions will be presenting to the employers. The Guardian said: He listed them as a substantial wage increase, a shorter working week, better working conditions and better facilities for the use of labour. A substantial wage increase would mean something in the region of £1 a week. If we get more productivity and so compete with abroad, I am all for high wages. There is no objection to high wages if we get high productivity. I should like to see that. The hon. Member for Rotherham (Mr. Jack Jones) knows my background and whence I came. We always had this thesis: if we got the productivity, we should have high wages.

Mr. Jack Jones

Look at the steel industry—the more they make, the merrier.

Mr. Marples

I quite agree. I do not dissent from that. If in our shipyards we get higher wages, but no increased productivity, I will tell the Committee what will happen. Europe will build more ships and we in this country will build fewer. Europe will employ more men, and we shall employ fewer. As the Guardian leader said yesterday: The task is to convince people that high wages must be earned. I want to make one other point about strikes. I have tried to be reasonably fair and impartial on this very difficult subject. We hear a lot about unofficial strikes organised by shop stewards, but fortunately—I repeat the word "fortunately"—in recent years we have heard much less about official strikes. I am very glad about that. Altogether, the shipyards lost more than 350,000 days last year. As I have said before, in relation to the numbers employed this is more than any other industry. Both employers and employees in our shipyards are now themselves facing an unorganised, unofficial strike of their customers. Strikes of workmen deal a heavy blow, but a strike of customers can bring utter ruin to an industry. Once a customer has gone abroad he rarely comes back again having once changed his source of supply. In three years we have lost 1¼ million tons of shipbuilding, at a cost of £140 million in foreign exchange.

We can squabble about how to divide the cake for as long as we like or, to use the popular expression, until the cows come home, but if we do not get our customers back there will not be any cake. One hundred and forty million pounds can buy a fairly large cake to divide.

We must not forget that both foreign and United Kingdom buyers of ships are absolutely free to spend their money in whichever part of the world gives best value. They are our customers. We have lost some of them and we shall get them back only if we have a change of heart bringing a new dynamic approach to productivity and giving value for money.

It is with great confidence that I assert that we shall have that new approach. It will come about in one of two ways. The first is by our own free will in a methodical and organised way. If it comes about in that way, very little harm will be done. If it does not come about in that way, it will be imposed on us by harsh events, in a disorganised and painful way, because we shall lose all our orders and then a great deal of harm will be done.

At present, we still have a choice, but if the present trend continues we shall not have that choice within our control and events will take over. Then we shall suffer grievously, because we in this country must work with all our skill to sell our goods abroad, otherwise we shall get neither the imports nor the food which we require to live. This is the position and these are the hard facts which both sides of industry must face. It is the future of their industry which is at stake, but the national interest also is involved.

For some time discussions have been proceeding between the two sides of industry about ways and means of improving its efficiency and removing or reducing the obstacles to progress. Time is short and we are losing orders still. If these discussions do not achieve substantial progress in the near future, it is the Government's intention to review the position with both sides of industry. If it proves necessary to call both sides of the industry to these discussions, we shall do so. This will arise only if they cannot solve it themselves, which I hope that they will. If they do not, we shall call them together. We shall succeed in increasing productivity only if everyone has the will to succeed. If any one party does not intend to co-operate, we shall fail. Success—if we get it—means more orders and more employment. Failure means fewer orders and less employment. It is a stark choice, but we must face the facts of life. I assure the Committee that the Government will play their part and face up to the brutal truth, and I hope that the Committee will support them.

5.18 p.m.

Mr. E. Shinwell (Easington)

For many months now we have been eagerly awaiting the opportunity to debate the twin problems of the merchant navy and our shipbuilding industry. At long last the opportunity has arrived. All that we have just heard from the Minister is one long moan about a large section of the British shipbuilding industry. If I were a foreign shipowner seeking encouragement to order one of my ships in a British shipyard, I should immediately be discouraged by the right hon. Gentleman's narrative.

The Minister's speech, unless it is hotly contested—not by hon. Members in this assembly, but by shipbuilding interests in this country—will do more harm to one of our major industries than anything yet attempted by alleged indolent workers in shipyards or incompetent shipbuilders. I am sorry that the right hon. Gentleman thought fit to make a speech of this character. I do not know who inspired the brief. If it was the right hon. Gentleman, he should be ashamed of himself. If it was one of his staff, if I were the Minister I should call for his summary dismissal.

We are not debating this subject on party lines. The Minister has been confronted by my hon. Friend the Member for Sunderland, North (Mr. Willey), and I have not the least doubt that if he has the good fortune to catch the eye of the Chair, the hon. Member for Sunderland, South (Mr. P. Williams) will have something to say. In other words, the right hon. Gentleman is sandwiched between the upper and nether millstones of Sunderland, North and Sunderland, South. This is not a partisan debate, but something that fundamentally concerns not only our merchant navy and our shipbuilding interests but the whole of our industry. These are basic elements in our indutrial economy.

The right hon. Gentleman, in a series of allegations against a large section of the shipbuilding industry, indulged in many omissions. He hardly spoke a word about the subsidies disclosed and in many cases hidden but still familiar to those associated with the European shipbuilding industry. There are the subsidies provided by European Governments: by West Germany, by Sweden, by the Netherlands, and, in particular, by Italy, to enable their shipbuilding industries to compete unfairly with ours.

These are well-known facts. They are contained in the many documents of the Chamber of Shipping and other shipbuilding interests. I thought it was common ground that subsidies were given. I do not here speak of subsidies intended primarily for shipping interests but of those associated with the production of ships, which is a different problem, although, as all these problems do, it interlocks.

Obviously, if a shipyard under the Federal Government of Germany, or in Italy or elsewhere, is in a position to offer a British shipowner credit facilities superior to any that have yet emerged in this country—facilities in the form of subsidies—that is a grossly unfair form of competition, and it will not be dissipated by speeches of the kind we have just heard from the Minister.

We have had all this moan—almost a sneer—about a section of British shipbuilding. My hon. Friend the Member for Sunderland, North might have anticipated the right hon. Gentleman by quoting from the Shipping Gazette that recently the chairman of one Panamanian company, at a dinner in Sunderland after the launching of its newest vessel, told the guests that it was the sixth ship to be built for the companies with which he was associated during the past ten years. All had been launched in the Wear, which reflected the company's confidence in Sunderland-built tonnage.

Here was a foreign shipowner from—is it believable?—Panama, who comes to the Wear to have his ships built—not one ship but six and, with the highest commendation, refers to the quality of Wear shipbuilding. What applies to shipbuilding applies elsewhere. We are building the finest ships in the world—

Mr. Rankin

On the Clyde.

Mr. Shinwell

Never mind where it is, whether it be at Belfast, on the Wear, the Tyne, the Mersey or elsewhere, we are still capable of building the finest ships.

I realise that there are deficiencies—there are deficiencies in every industry in the country. I know that in many industries there is a vested interest in obsolescence. Nevertheless, the quality of British shipbuilding is as good as anything to be found in any shipbuilding country. That is how we should be talking. Of course we should attack deficiencies, and remove them if possible, but do not talk in the hope that by that means we can find a solution of this very vexed problem.

Since I have already referred to what was said by the chairman of this Panamanian shipping company, perhaps I might also refer to what he said about the shipping side—I will come to the shipbuilding side later. He said: You can go to Japan"— and Japan has been quoted by the Minister—or, if he did not mention it, he spoke of foreign shipbuilding and shipping interests, and Japan is often quoted in that connection: put 30 per cent. down and repay the rest in seven years. It is the same thing in France, Holland, Germany and even in Greece there is a credit organisation for economic development … through which favourable terms are offered.

This chairman went on: I see no reason why the United Kingdom should not offer shipowners the same credit facilities as those available in other countries. What he said is reinforced by a statement appearing in Lloyd's List and Shipping Gazette for March of this year, where reference is made to the same subject in the following terms: Some Continental shipyards are now offering as much as 80 per cent. to 85 per cent. of the capital cost up to eight years, and one specific case of 10 years has been arranged. That at once demonstrates the disadvantageous disparity there is for our own shipbuilders.

The article goes on: So far as the United Kingdom is concerned, one shipyard on the North-Fast Coast can offer 30 per cent. during construction and the balance over five years, while a few other yards will quote 50 per cent. before delivery and the remainder after, all to be paid within five years of the keel-laying. That is one of our difficulties.

I am within the recollection of hon. Members in reminding them that the Minister said, almost with gusto—one could sense the eloquence mounting; here was the great opportunity of displaying his talents in argument—that 240,000 tons or 250,000 tons of British shipping had gone to foreign shipbuilding yards—

Mr. Rankin

The figure was 454,000 tons.

Mr. Shinwell

I understood the right hon. Gentleman to say 240,000 or 250,000 tons.

Mr. Rankin

It was 454,000 tons.

Mr. Shinwell

Perhaps the Minister will correct the figure.

Mr. Marples

Is the right hon. Gentleman talking of launchings and, if so, for which year?

Mr. Shinwell

I am speaking of orders placed in foreign shipyards by British shipowners.

Mr. Marples

These are the exact figures I used. I know that, because I chose them most carefully, after great research. Here are the tonnages launched in foreign yards for shipowners who registered the vessels in the United Kingdom: 1958, 285,000 tons; 1959, 450,000 tons, and 1960, 465,000 tons. Altogether that makes just under a quarter of a million tons in three years. Then I went on, in order to be fair—because those may be ships which were ordered when our own shipyards were fairly full of orders and they had to go abroad—to give the launching figures. Nevertheless, the trend is still continuing, and I gave the tonnage of the ships ordered. I may say that of all the firms which my hon. and gallant Friend and I have seen not one has yet mentioned credit terms.

Mr. Shinwell

No one regrets more than I that British shipowners are placing orders in foreign yards. Naturally, I should prefer the orders to be placed in British yards. But be it noted that, at the same time, foreign shipowners are placing orders in this country, as I indicated just now.

I am not quite sure what the actual figures are for the period mentioned by the right hon. Gentleman. It is very well known that British shipyards have for many years undertaken orders from foreign shipowners. It may well be that there is a decline in the number of orders now coming to this country, but, nevertheless, there are pros and cons in this matter, and it must not be assumed that British shipbuilding has sunk to such a low level in efficiency that foreign shipowners will not place orders in this country. I notice that the right hon. Gentleman agrees.

I now want to come to some aspects of the shipping problem which have not so far been mentioned. After all, we can all indulge in orations about the decline of British shipping and shipbuilding, and the like, and hurl stones at each other's heads, but what is important is that we should venture to propound some constructive solutions. I want to deal with shipping.

The right hon. Gentleman rightly referred to American practices, those abominable practices. After all, we are partners with the United States in N.A.T.O. We boast of it, and so do the Americans. They claim to rely on this country in matters of defence. They are concerned about us in many ways, including our morality and our fine traditions. That is all very well, but when it comes to shipping it is different. Then we are as wide apart as the poles.

It is not only this matter of flags of convenience and of flags of discrimination. There are other defects. First of all, I dismiss flags of convenience. It is a nefarious practice, but I can understand it. Why is it that American shipowners with the support of their Government register their ships in Panama, Liberia and elsewhere? It is because the cost of manning an American ship is far in excess of the cost of manning a British ship or the ship of any other country. The wages of seamen on American ships are almost three times as high as they are in this country.

The wages of able seamen in this country at the present time are round about £50 a month. Then there is some addition because of Sunday work and overtime. I understand that in the United States wages run at about three times that amount. The same applies in the case of officers of various grades. In addition to this, there is the cost of stores, the cost of wages paid to longshoremen, and all the rest. They are far in excess of anything paid in this country. A lot is said and written about strikes and wage demands in this country, but they are nothing to what recently happened in the United States. Let us not talk too much about strikes in this country, because in the past three months there has been one of the most serious strikes in the shipping history of the United States.

As I have said, it is not so much flags of convenience that matter. In any event, all our diplomatic treatment would not solve that problem. The United States has made up its mind. My hon. Friend mentioned defence in this connection, but that is not one of the defence arguments. There is something else. Therefore, I do not worry about flags of convenience. But flags of discrimination, if I may mix my metaphors, are a horse of another colour.

I agree with the right hon. Gentleman that the United States is not the only villain. India indulges in this nefarious practice of discrimination against British ships, and so do other countries.

I am bound to say, although I do not want to disclose any defects in British shipowning, that we are doing a bit of it ourselves occasionally, though nothing like to the same extent as is operating in the United States.

Consider what that means. We are practically excluded unless it suits the purpose of the United States Maritime Authority. We are not allowed to use British bottoms for the purpose of carrying American goods. But something more serious has happened. The Americans have now embarked—and the right hon. Gentleman must be aware of this—on a demand for the disclosure of documents concerned with the liner trade. Will the right hon. Gentleman give his attention to this matter, because he may not have the information and it would be good for him to have it?

As I say, the Americans have now embarked on another adventure, that of demanding the disclosure of documents concerned with the liner trade not only in the United States but wherever the ships ply. They must disclose their documents and say what their mission is. Of course, even our Government, which is very reluctant to stand up to the United States, boggled at that. That was going a bit too far. Obviously, the shipowners are not going to stand for that sort of thing. It is very good that they are standing up to it, but it is the sort of thing that the Americans are trying to do. We in this Committee ought to say what we think about it.

Naturally, we want to co-operate with the Americans, but this sort of thing is happening and someone must say something about it in very strong language. If the Government cannot find words to use to their opposite numbers in the United States there are words in my vocabulary which I have not yet used and which I am prepared to lend to the right hon. Gentleman. The Americans tried it on over the rifle when I was Minister of Defence, but they did not get away with it.

There is something else, and here I venture to put forward two constructive proposals. In 1932 we had the Load-Line Convention which was derived from the old Plimsoll argument of many years ago. Its purpose was the safety and the protection of the lives of crews. What has happened since? We are bound by that Convention and British shipowners adhere rigidly to it, no matter what kind of ship it may be. The load-line must be rigidly maintained.

Do the foreigners adhere to the Convention? In our ports we see some of their ships listing by starboard or port in full view of our people in the docks. There is much more of it in foreign ports. Is it not time, in view of the fact that many of our vessels are now capable of carrying more cargo without circumventing the principle of the Load-Line Convention, to relax a little in this direction? I ask the right hon. Gentleman to take up the matter with the people in his Department and to make inquiries and ascertain the views of shipowners.

New vessels, particularly of the tramp class, are coming along. Some of them are the most up-to-date vessels, capable of some 16 knots an hour. That is pretty good going for vessels of that type. They are capable of carrying another 7,500 tons of cargo without endangering the load-line in any way. That being so, why stick to this Convention?

Now I come to the question of finance. The Minister talked about investment allowances, but I urge him to speak to the shipowners about it. There is one on the benches opposite, but only one, I think. That hon. Member will tell the Minister that investment allowances are all right when one is making a profit but when one is not it is a different matter. When they are making a profit shipowners have the advantage of getting allowances for deferred repairs, something for depreciation and something for capital investment.

I have a suggestion to make. I do not know whether it has been made before, but I will chance my arm, even though my suggestion may be knocked down. If the Government want to help shipowners for the purposes of replacement—which is an important thing that helps the shipbuilding industry, because there are far too many ships that are too old and should be broken up—and if such a scrap policy is to be adopted, some funds will have to be provided because they cannot get the money from the banks. Banks like short-term investments because long-term ones are too speculative for them, and, in any case, after the speech of the Minister they will regard it as even more speculative. I would if I were a bank. They would not get a penny from me.

I make this suggestion. Let us assume that in the future shipowners will make profits. Suppose that in the next few years shipping improves—in spite of the speech of the right hon. Gentleman—and that the volume of international trade increases and there is a general improvement in exports. If that happens—if there is more carrying trade—and if profits are made, let us pay them in advance on the understanding that they use what they get—what they would have got had they made profits—for the purposes of deferred repairs, depreciation, and so on, and plough the cash back into the industry. That would enable them to replace their ships or to maintain them in a decent condition.

There is so much to be said, but I realise that a number of other hon. Members wish to speak. For example, something has to be done about the coastal trade, something on the lines of integrating road, rail and coastal services. The Minister talked about the difficulty of shipbuilding surviving, but the coastal trade will not survive if it is knocked about in the way that the Minister is at present knocking it about.

Road and rail trade is in competition, but cannot we do something to coordinate it and remove this unnecessary competition in order to give the coastal trade a bit of a lift? There has been a vast reduction in the number of ships in the coastal trade, a reduction of from 600 to 500 in recent years, and that number will go down still further if something is not done. I urge the Government to realise that coastal shipping is a vital part of our economy and everything should be done to retain it.

The Minister told hon. Members today that he intends to refer this whole matter of shipbuilding and shipping to a firm of accountants. We must find out, he said, what is wrong with the shipbuilding firms, why they are not working to capacity and why they are not amalgamating the smaller units—although some of the smaller units are more efficient than the larger ones. The Minister wants to know why they are not doing all these things.

The right hon. Gentleman proposes that Peat, Marwick, Mitchell and Company, the accountants, will investigate, inquire and interrogate. At the end of the day they will present a report to the Government and, no doubt, the Government will tell us, "Look here, we cannot do anything with the shipbuilding people. They are going downhill." It would seem that the only people we must not blame are the Government. It appears that we can blame the workers for not producing the goods, for taking time off, for indulging in unofficial strikes and others for refusing to undertake research. As if research will solve the problem!

I have read the D.S.I.R. Report on this subject, which deals with propulsion, and I have no doubt that improvements can be made in this connection, but all the improvements in the world will not overcome the effects of subsidies abroad and American nefarious practices. We must face these facts. Do not let us deceive ourselves.

I thought that my hon. Friend the Member for Sunderland, North made a modest speech, full of figures and statistics and sound, cogent arguments and I thought, as a result, that we would receive a constructive speech from the Minister and that he would tell us that, after his long study of the problem, he had definite proposals to make. We know how often the right hon. Gentleman has said that he was studying the position as presented to him by the Chamber of Shipping, and I thought that today we would receive news of some constructive effort. I thought that I would tell my hon. Friends on the Opposition Front Bench, with what influence I have, not to vote because I know that on the Government side several hon. Members—including the hon. Member for Barkston Ash (Sir L. Ropner), the hon. Member for Yeovil (Mr. Peyton) and the hon. Member for Sunderland, South—agree with my hon. Friends and me about what should be done. I asked myself, What is the use of voting and embarrassing the Government?

Why can we not say to the world that we are proud of our shipping industry and that we are devoted to the mercantile marine and uphold it against all corners, Americans and others, who are doing their damnedest to frustrate our efforts? Instead of doing that we have received a miserable effort from the Minister in which he blamed everyone but himself. My hon. Friends and I will not stand for that, and we shall go on blaming the right hon. Gentleman until someone knocks some sense into his head and until we receive some constructive effort from the Government.

5.48 p.m.

Mr. John Peyton (Yeovil)

I agree with almost everything the right hon. Gentleman the Member for Easington (Mr. Shinwell) has said on the subject of shipping and shipbuilding. With a large part of his speech I go all the way with him, and I share his denunciation of evil American practices. I share his regret that they have never listened to the protests we have made year after year and to our suggestion that it might not always be the height of wisdom to pursue policies which weaken an ally and impoverish your customers. I stigmatise these practices every bit as strongly as does the right hon. Gentleman, for they are sufficiently evil even to make that hardened lady the Statue of Liberty blush.

I am not always the first to come to the defence of Ministers, and, indeed, I have something to say about the Government, but I thought the right hon. Gentleman was less than fair to my right hon. Friend who made it clear that he was not talking about the whole of the shipbuilding industry but only some of it. We must be careful not to ride away from the harsh facts of a very perilous situation, and we should not be over anxious to protect and disguise from ourselves, and from others, the real harsh facts which we face. For my part, I do not always agree with the Minister, but today he made an outspoken and courageous speech.

I recognise that the speech of the Minister may be unpopular and, perhaps, unacceptable, and that a lot of screams and screeches may result from it. But that kind of talk is really necessary today. It was not long ago—about three years ago, I believe, on the Second Reading of the Finance Bill in 1958—that I ventured to remind the House that the then shipping correspondent of the Manchester Guardian had come to the conclusion that there was a real danger that the Red Ensign would be swept off the seas in a decade or so.

I do not believe that that peril is in any way diminished today. We are nearer to the danger and we have wasted time. The figures tell the sombre and warning story. They continue to tell it. It is no contradiction of the normal trend. This is merely a continuing trend which has been going on over the last fifty years. Since 1958, when our share of world tonnage was 17.19 per cent., it has now gone down to 16.28 per cent.

I do not want to deluge the Committee with statistics, but another serious aspect of the matter is reflected by the fact that whereas Norway has 41 per cent. of its tonnage under five years old and Liberia 49 per cent., our percentage is 29. We have a sombre warning from the White Paper on the balance of payments, and we have before us this hard inescapable fact that we have become a substantial importer of ships. The causes are well known to us all. I do not go with the right hon. Member for Easington in dismissing quite so lightly the flags of convenience ships, but that is not a great point of difference between us. I agree that flag discrimination is the cardinal sin, the one which has been popularised and publicised and given respectable status initially by the American fifty-fifty doctrine.

There are other factors which we have got to bear in mind. Imports have risen faster than exports, air transport is eating into the market hitherto enjoyed by shipping, and carrying capacity year after year is reduced by long turn-rounds and unofficial stoppages. The right hon. Member for Easington and a number of other hon. Members on both sides of the Committee have made a continual practice of complaining and drawing attention to the weaknesses and dangers which threaten this industry and, through the industry, the country. We have got nowhere.

I must say that I regret very much that the Americans have turned a completely deaf ear and have shown themselves wholly unsympathetic to the real needs of an ally. They go to almost infinite lengths to prove their utter indifference to one of the things on which this country's dependence is basic, fundamental and cannot be denied. I am almost equally disappointed that during these years, when the writing was on the wall absolutely clearly, we have not had any real coherent and effective action from the Government.

Some three years ago I recollect suggesting that a special committee should be appointed composed of the Departments interested and the leaders of the industry—and when I use the word "industry" I mean both sides of it. I remember being told then that we could not, for some constitutional nicety, have a Cabinet Committee on which other people sat. Let me make my point clear. I am not asking for a Cabinet Committee, but I am asking for a Committee on which Cabinet Ministers are free to sit and I am asking them to sit down with their officials and with leaders of the industry to examine this grave situation.

I do not believe it is right or fair for the Government at this time to say to the industry, as I have heard it said so many times, "You go away, think about your proposals, come and tell us about them and then we will see what we can do". I do not believe that is helpful because, apart from anything else, we must realise that this industry is not one industry but four or five industries with a tremendous conflict of interests which make it almost impossible for it to agree on a set of complicated proposals. It is unreasonable to expect the owner of a tramp steamer to sit down with the owner of a liner and forge a common policy which will suit both equally, because it is not there. Again it is idle to suppose that the interests and problems of refrigeration ships are similar to those of tankers.

I want—and, indeed, I am after only one point this afternoon—a new and comprehensive survey of our transport system. We are a small and highly populated island living on our trade. It is and has been our business to move things and people about in our own country and outside it. I do not think that many forms of investment are likely to provide a quicker or better return than wise investment in transport. Our modern essays into this field have been affairs of spasms, jerks, fits and starts.

Mr. Rankin

Including air transport.

Mr. Peyton

In the sacred name of prestige. the Government faltered into supporting the Cunard liner. I do not believe that such a step, wholly unrelated to the general problems and needs of these two great industries, is really constructive at all. I think it merely shows a degree of faith in expensive ad hoc measures which is quite unwarrantable.

I believe that we desperately need a plan. I do not believe that there is anything shady or dishonourable in having a plan. Indeed, I think it is infinitely silly not to have one.

Mr. Rankin

A wonderful discovery!

Mr. Peyton

I believe there are two reasons for the discredit with which planning is sometimes viewed. First of all, those people who profess to believe in planning and talk so much about it did not have a plan when they were in office, they managed to throw a certain amount of discredit upon what they advocate but did not practise. Secondly, I believe that the attitude of Government Departments is responsible in no small measure. Government Departments far too often present a kind of hedgehog of negatives. A porcupine's tail faces anybody who makes a proposal. This is one of the reasons that I want Government Departments to take part right the way through the discussions. I do not want them to be in the position of merely following the hallowed practice of turning down the plans and proposals of other people.

We must face the fact that air transport and the speed and size of ships will mean that fewer will be needed. The kind of survey which I am advocating would be very general indeed. I do not want it to be limited to considering the Atlantic traffic. I do not want it to be limited to coastal shipping. I do not want it to be confined to docks and harbours. I want a general survey taking within its cognisance the whole of transport, road, rail, sea and air, bringing in the docks and harbours and bringing in our defence requirements. Our defence requirements, too, have a bearing on the matter. There are docks and harbour facilities under the control of the Defence Departments. How are these to be properly used in the national interest? The Defence Departments should not regard civilian use of Government property as necessarily hostile and dangerous.

We need very badly indeed some organisation of really top-qualified men—no one else will do—to look into this whole matter. They should consider the type of ships which we require now and are likely to require in the future. They should consider whether our building yards are adequate, whether the money already spent on modernising those yards has been wisely spent, and what further and different measures of improvement should now be undertaken.

They should consider the whole business of our inland transport, satisfying themselves whether our inland transport system—I do not doubt what the initial answer is—is really adequately ministering to the needs of our immense and highly expensive sea-going operations, operations which, I need not remind the Committee, depend for their efficiency upon time. How much time is wasted and squandered today simply because, with the best will in the world, the goods cannot reach the docks, or, when they arrive there, there is no room to swing a cat?

What of research? This also should come within the purview of the kind of survey I advocate. So should coastal shipping. I can understand Governments coming to the conclusion—a very unpalatable conclusion for many people —that we do not require a coastal shipping industry, but what I do not understand and find quite unacceptable is the drift in which we are now involved as a result of which the coastal shipping industry is being steadily squeezed out of existence. Let there be no doubt about that. But, before it goes, we should observe its passing. We might even, just for a moment, consider whether or not we may be losing a valuable asset, an asset which we could not, having lost it, replace.

There is another apposite matter to be considered. How do we get newcomers into the shipping industry? The shipping industry has a great pioneering tradition. It is an industry which has been founded upon enterprise and the taking of risks. Very often, enterprise and the willingness to take risks are more clearly shown by newcomers who are determined to make a success of what they are doing. I very much hope that consideration will be given to that matter. I believe that it would provide new life to an old industry.

We should consider, also, whether it would be wise to try to concert our policies with other maritime countries. We have an immense amount in common with the Norwegians. We share their tradition and outlook. I cannot but believe that, while preserving the competition which will, naturally, continue, advantages would flow to both of us if only we really tried to establish some reasonable practice between us.

Immensely germane to any such survey is how we are to eliminate, as we must, the restrictive practices and the unofficial strikes which add so much to our costs. How far are we to copy the Americans in just the practices which the right hon. Member for Easington so properly stigmatised? Are these two industries well organised? This, too, is at least a. matter which should come up for consideration in the vastly changed circumstances of today.

I firmly believe—I do not think that there will be much difference of opinion on either side of the Committee about this—old-fashioned postures must go. I do not want to make too much of it, but, quite clearly, the sort of stone-age utterances of Mr. Ted Hill do not help. It is the duty of the Government—the House of Commons has a large part to play here—somehow to persuade everyone, trade unionists and management alike, that they must live with the facts of the 20th century.

We have a great responsibility. We in this Committee, both sides of it, have led people to believe that they are entitled as of right to a high and improving standard of living. There has been no adequate warning of what failure may mean. The Government have a great responsibility here. I mean the whole Government; it would be most unfair to single out my right hon. Friend. We have not adequately warned the country of the dramatic and sombre consequences to the standard of living which people expect if we fail to solve these problems.

I was very struck by a sentence in the leading article in the Daily Mail this morning: Policies are made by populations, not princes". But that does not excuse the Government from warning of the peril. I repeat what was said in the Manchester Guardian three years ago: the real danger is that, within a decade or so, the Red Ensign will be swept from the seas. Let us keep this threat in our minds. For heaven's sake, let us remind ourselves and the country that failure to solve these basic problems of transport will strike hard and deep, and that such a failure will make the speeches of statesmen and the promises of politicians like chaff before the wind, words unable even slightly to influence the drastic and perilous course of events or to avert the inexorable consequences of our being old-fashioned, stuffy, frightened to face the facts, and —let it be said—sometimes rather idle.

6.9 p.m.

Dr. J. Dickson Mabon (Greenock)

In a sense, it is a tribute to Socialist thought that when a Conservative gets worried he immediately proposes otherwise extreme Socialist measures to get out of the difficulty. I confess that I was somewhat astounded at the argument of the hon. Member for Yeovil (Mr. Peyton) that we ought to have a plan, a plan not only for shipbuilding but for shipping and for transport as a whole, coastal shipping, road, rail and air transport—the whole lot, including docks, harbours and wharves. The hon. Gentleman suggested that there should be a comprehensive plan which would be done much better than anything done by the Labour Government between 1945 and 1950. a plan which would have to go through Government Departments in a much better way than the administrators have ever before managed to achieve. It is quite remarkable, and impressive, too, though, frankly, I do not see the relevance of this demand at the present time.

I am quite sick and tired of plans, inquiries, investigations, committees, and all the rest. I think we know enough about this problem to get something done, and that is really the point of this debate. We want to get something done, and that is why I, like the hon. Member for Yeovil, am a little disappointed with the Minister today. I think that we have not had enough action from him. I think that he knows most of the facts, but I do not think that we are getting the return out of him which we deserve. There are perhaps other reasons for that, of which he has not told us. Perhaps the Government are embarrassed by the economic situation, and many schemes which we want to go forward in regard to ship- building have been held up. We may give him the benefit of that doubt, but that does not muzzle those of us who believe that these schemes are urgent and important, from saying so today.

The Minister, in a very interesting interruption in the speech of my right hon. Friend the Member for Easington (Mr. Shinwell)—with whom I have had so many disagreements lately that I would like to say that I agree with his speech 100 per cent. and congratulate him upon it—said that in the Parliamentary Secretary's visits to all the various yards in the country, not a single company had asked anything about credits. Are we to believe this? Are we to believe it in the sense that none of them really wants an improvement in credit facilities? If this is true, it is the most important piece of intelligence we have had about this matter, because it is completely contradictory of anything seen in any of these reports.

For example, here is the Report on Research and Development Requirements of the Shipbuilding and Marine Engineering Industries. This is the Report that was so hastily revised and doctored by the Government, and, indeed, there is an apologia in the opening paragraph in the preface to the Report. It is interesting, because it somewhat contradicts what the Minister said in his interruption. It says: This report on the research and development needs of the shipbuilding and marine engineering industries has been discussed with the Shipbuilding Conference, as representing those industries, and is published with their concurrence. The recommendations have been agreed between the Shipbuilding Conference, the Ministry of Transport and the Department of Scientific and Industrial Research, and the industries' collaboration in their implementation is assured. In other words, this is an agreed document between three diverse bodies.

Mr. Willey

Is my hon. Friend aware that quite a long time ago, the Minister of Transport in fact appointed an accountant, Mr. Burnley, to advise the right hon. Gentleman on the question of credit finance for shipbuilding? We never heard a word about this afterwards.

The Parliamentary Secretary to the Ministry of Transport (Vice-Admiral John Hughes Hallett)

Perhans I had better clear up that point now. What my right hon. Friend said was that shipowners who have so far given us their reasons for placing orders abroad have not mentioned credit as one of them. That is all he said.

Dr. Mabon

May I proceed from that and try to develop the point I want to make. I am grateful to my hon. Friend the Member for Sunderland, North (Mr. Willey) for pointing that out. It leads me to the question about an independent inquiry, but I find that my speech is being anticipated quicker than I can deliver it, which is saying quite a lot.

I am trying to point out that all through this the general argument is a contradiction of the assertion about what the shipbuilding firms want. Let me take it a step further, and refer to the Report of the Sub-Committee on Prospects of the Shipbuilding Advisory Committee, and ask the Parliamentary Secretary to turn to page 13. The first recommendation is as follows: We recommend that; (a) the Government should give the industry's need for credits the most sympathetic and urgent consideration. That refers to paragraph 38 of the Sub-Committee's Report, which says: We are aware that the Shipbuilding Conference has been pressing for a long time the need for better credit facilities and that the Ministry of Transport have been investigating the subject. We recommend that the Government should give the industry's needs the most sympathetic and urgent consideration. In other words, we must either believe that the Shipbuilding Conference does not represent those firms which were visited by the Parliamentary Secretary, or, if it does, it means that the firms which are constituent members of the conference have changed their minds; or, if that is not true, the firms made no mention of this matter because they were never asked about it. In other words, if they had thought it apposite to tell the Parliamentary Secretary on these visits, this would have been one of the items on the agenda.

Vice-Admiral Hughes Hallett

I am sorry to interrupt again, but we must get this quite clear. The hon. Gentleman is now talking about shipbuilding firms. The investigation which was conducted into the placing of orders abroad has so far been directed entirely to interviews with shipowners. What my right hon. Friend said was that none of the shipowners we have met which placed orders abroad have done so for credit reasons.

Dr. Mahon

With respect, surely the Minister made this remark, which, I am quite willing to admit, I could have misunderstood. He referred specifically to the hon. and gallant Gentleman himself and he mentioned the firms which he had visited. I follow the peregrinations of the Parliamentary Secretary very intimately, and I know that he visited many yards, and the Minister did say this.

Vice-Admiral Hughes Hallett

I am afraid that the hon. Gentleman has misunderstood me. My right hon. Friend referred to me because we had been together when meeting the shipowners concerned. As to what he calls my peregrinations, they have been no further than the Ministry of Transport in London.

Dr. Mabon

Now that the Parliamentary Secretary has thrice interrupted me, may I invite him to interrupt me again to answer a question, which is not a rhetorical question, which I want to put to him? Is it his experience, having visited these yards, that the firms had impressed upon him, either on his invitation or spontaneously, the great concern about credit facilities, even including the extension recently announced by the Treasury? The other important point made by the hon. Member for Sunderland, South (Mr. P. Williams) about writing it into the agreement is one that has not been fully recognised by the Treasury, or, if it has, perhaps for reasons of its own, it wishes to dodge out of it. Could the hon. and gallant Gentleman tell me whether or not the firms are still standing by the argument put in paragraph 38 of that Report?

Vice-Admiral Hughes Hallett

If I am fortunate enough, Sir Gordon, to catch your eye, later in the debate, I would rather refer to this point then.

Dr. Mabon

Nevertheless, I think that, since I have been interrupted five times, I am entitled to ask the hon. and gallant Gentleman to make the welcome interruption which I want at my own invitation. I come back to this point that one of the things which the Minister can do at the present time is to bring in a substantial credit scheme for the shipbuilding industry in order that it may attract more customers. I know that some of our shipping interests regard this as being somewhat distasteful, but the position in shipbuilding is becoming extremely acute. After all, the Minister did say—and I hope the Parliamentary Secretary will not contradict me on this score—that the Government intend to hold the ring to secure fair international trade.

Mr. Jack Jones

He did say that.

Dr. Mabon

I am much obliged. I prefer not to be so much Paul on the road to Damascus, as was the hon. Member for Yeovil, but to be a realist.

Mr. Peyton

The whole point was in regard to planning, and I hope he will not miss it. One of the reasons why it is thought to be discreditable for the Government, as opposed to an industry or a firm, to have a plan is that when the colleagues of the hon. Gentleman were in power, believing, so they said, in plans, they failed utterly to have one.

Dr. Mabon

I do not accept that at all, but I do not wish the hon. Gentleman, because he is a new convert to Socialism, to believe that I am disdainful of his new faith. I accept the fact that a plan is a good idea, because I am converted to that idea myself, but I do not think that the general plan which he demands at this stage can be regarded as relevant. We know what we ought to do, or what the Government ought to do, and what we want is action. I am asking for action now.

I believe that this country should recognise that we shall not get an international agreement on many of the difficulties facing shipping or on matters concerning flags of discrimination, flags of convenience, and on many other matters concerning shipbuilding unless we are willing to arm ourselves with the weapons which our competitors have. Here I should like to make an analogy between the present position and the position adopted by Mr. Aneurin Bevan at the Labour Party conference at Brighton in 1957. He said, in effect, that if we did not go into the council chamber armed with the bomb, we were able only to preach sermons. That is true of international conferences. If we do not go into them armed with weapons to throw on the table similar to those which all the other countries have, we shall not get far by reading lectures to them. The time has come for us seriously and sombrely to take upon ourselves the weapons which our competitors have.

This is true in shipbuilding. In addition to an independent inquiry such as that which the Minister has proposed, I suggest that we might examine a comparative table of all that Governments in other countries do with regard to their own shipbuilding industries. In other words, let us know which countries do what and then let the Government say whether they are willing to adopt certain practices employed by other Governments. If we are, to quote the Minister's own words, to hold the ring to get fair international trading, it means that when our competitors are unfair, the advantage which they have unfairly seized must be cancelled out by our acting in a similar, or almost similar manner. If that is not what the words "to hold the ring" mean, they are completely meaningless. Unless the Government are willing to assist the shipbuilding industry in a way similar to that in which other nations assist their shipbuilding industry, how can there be fair competition?

The time is quickly slipping by for the Government to take action of this kind. I do not think that we shall lose money by it. It certainly will cost the Treasury something, but, in terms of our gold and dollar reserves, it will pay us back tenfold or perhaps one hundredfold to spend money in this way. The Minister has said nothing about that today—nothing of consequence, anyway. I am most disappointed at this.

Also, I do not see what the Minister is doing to speed up research. How is he stimulating industry to put more money into it? Some harsh things are said even in the agreed Report about the money spent in shipbuilding. Perhaps hon. Members recall the time when The Times shipping correspondent wrote an account of the D.S.I.R. Report as he understood it before it was purged of any so-called offensive remarks about shipbuilding management. The Report caused immense ill-feeling among the employers of the industry, and one of the best informed men in the industry, in the managerial sense anyway, was driven to say that it was a quite ridiculous and, indeed, malicious Report which these economic experts had made against shipbuilding management.

When a man who is in a business like that and who reacts uncharacteristically to such an extreme extent as that by saying such things in relation to a criticism offered by experts who have no monetary or vested interest in making such a criticism, it is high time that the nation knew the facts so that it could judge whether either side has struck a proper balance. That is only right. Instead, the Government have chosen to suppress this Report and not to tell us what the D.S.I.R. Economics Committee found when it went into the position of the industry.

I am willing to believe from what I have been told and from the little scraps of information that I have received that perhaps the Economic Committee acted without full knowledge, but I should have liked to know the reply of the employers in the shipbuilding industry to the points made by the Economic Committee of the D.S.I.R. Then we should have been in a better position to appreciate whether the criticism was valid.

All that aside, the fact is that we are not spending enough money on research. There is not much point in criticising an industry unless one looks at what the Government are doing to help. The hon. Member for Yeovil, who has become a Socialist in a good sense, and I may pause together and wonder why we are spending money in this industry. The reason is that, in these days of what is, in fact, "Conservatocialism", we find that the Treasury pays a large sum for industrial research which ought to be paid out of private funds. However, the money which is being spent on developing nuclear propulsion for the shipbuilding industry has ended in our getting precisely nowhere—at least, that is what I gather from what the Minister said, although I appreciate that he intends to make an announcement before the Recess. It is a pity that he was not in a position to say something more today in view of what the Atomic Energy Authority said earlier this week in its Report. This is a matter which is causing many of us great concern.

In the constituency of the Secretary of State for Scotland, just along the road from me, there is a yard which will soon be modernised—this is long overdue; it should have been modernised years ago —in which there is a plaque to the "Comet" of 1812. The local histories of development of the yards, of our output and of how the area of Port Glasgow and Greenock has developed as a community show that from 1812 our fortunes soared because we were first in building that kind of ship.

It is comparable to say that, if we are to have the same good fortune once again, and a repeat of the first Industrial Revolution in shipbuilding, we must be the first nation to get into the water a nuclear-propelled ship which will run economically. That is a matter of extreme urgency. I think that we all agree about that. Although we have heard nothing specific from the Minister today about it, it seems that the Atomic Energy Authority has said that this is not possible at the moment and that we are unable to choose which nuclear reactor system will work. Although the Russians and Americans have chosen theirs and other nations are beginning to make their choice, too, we are wobbling over whether we should proceed with any further investigations into a reactor system or not. I am strongly in favour of the Government immediately putting aside £4 million, not necessarily to build a ship but at least to get a reactor system going. This should be done quickly.

I do not know how long hon. Members have been talking about this, but it seems an incredible number of Questions ago that we raised the matter of nuclear propulsion. Two years ago there was a Motion on the Order Paper calling on the Government to build two experimental ships at once. Suppose that we took out a pin to choose a reactor system out of nine or eighteen different ones—never mind the experts, because they seem to be marginally uncertain about many things in this case—and launched two or three ships at a cost of £10 million, would this £10 million be completely wasted? I say that it would not. When we think of the immense fortunes of the nation which are at stake, the money which might be lost in this kind of research would be tiny compared with what we would lose if we did not do it.

Mr P. Williams

Would the hon. Gentleman agree that it would be better to spend the money in the way that he suggests than on the Cunarder?

Dr. Mahan

Not at all. We are a wealthy country, although I must admit that our wealth is fast depreciating through the economic catastrophes overwhelming us, which, in turn, are largely aggravated by the Government. I agree that we might not be as well off as we should be, but we have enough money to do many of these things. The Cunarder is an excellent conception. I have no doubt that the hon. Member for Sunderland, South and many critics of the Cunarder will have to eat their words. I hope that the hon. Gentleman is in the House when I point out that he was terribly wrong. It is interesting to reflect that in 1934, when similar debates were held on the "Queen Mary" the same arguments were trotted out.

When I heard one of the speeches on Second Reading about white elephants, the scarlet woman and all the rest, I thought that we were hearing a good midnight-oil speech. In fact, it was all said in 1934, when we were told that the ship would be too big, that it would never pay its way, that it would be a disaster in war, and so on. All that was profoundly untrue. All the criticism that the hon. Member has made will be found to be equally untrue in twenty years' time. That apart, however, we should have an immediate decision by the Minister to spend this money on research for a reactor. I hope that the right hon. Gentleman will regard this as a most important point.

In his opening speech, my hon. Friend the Member for Sunderland, North gave a splendid and balanced appreciation of the position. The difficulty in making well-balanced speeches in the House of Commons, however, is that the Government rarely listen to them. One has to be almost extravagant in criticism before the Government are shaken into activity. My hon. Friend referred to one of his contributions a number of years ago when he called for more public aids and controls in relation to this industry. Whether hon. Members opposite like it or not, that is what is being done. What is more, it is likely that we will do more of it.

Therefore, I see no reason why the Minister should not logically go forward with the programme which is lying open for him to follow. He does not need any more evidence or facts. They are all before him. What we want now is action. While I welcome the Minister's decision to try to settle at least five of the recommendations in the Report by bringing both sides of the industry together and trying to remove some of the difficulties within the industry, nevertheless the Minister is not doing enough and for that reason I hope that we shall divide against him tonight.

6.32 p.m.

Colonel Sir Leonard Ropner (Barkston Ash)

In many constituencies, shipbuilding is an important industry, but there is none at all in which a proportionately large number of constituents are directly interested in shipping. There are, however, other aspects of this peculiarity. There is probably no hon. Member of this Committee from whose constituency no seafarer has been recruited, and, as has been pointed out on a number of occasions this afternoon, the shipbuilding industry is vitally dependent upon shipping.

There is the further factor that in war and in peace, shipping is of supreme importance, in war to make its contribution, as it has done so magnificently in two world wars, to the war effort, and in peactime to make its contribution to the economy of the whole nation.

This debate is intended to cover the two industries of shipping and shipbuilding. It may be appropriate if to a large extent I confine my remarks to shipping and leave other hon. Members, on both sides, who represent shipbuilding constituencies to deal with shipbuilding.

I would say, in passing, however, that the recent, much-publicised statement that this country is now a net importer of ships should not lead to the assumption that there is a valid reason for indiscriminate condemnation of shipbuilders. There are a large number of modern and highly efficient shipyards around out coasts and on our rivers. The pity is that their work is so often bedevilled by inter-union disputes and wildcat strikes. I wonder when the men employed in those industries will begin to appreciate the harm that they are doing to the industry, from which, at present and in the future, they hope to earn their livelihood.

In considering shipping, the first fact which should be appreciated and remembered is that while for many years the total tonnage of the British Mercantile Marine has stood at about 20 million tons, the total world tonnage has more than doubled since 1939 and has increased by 30 million tons since 1950.

Of all the ships sailing the oceans and seas of the world, one in two flew the Red Ensign in 1910. In 1939, one in four was British. Today, only one in six of the world's ships flies our flag. Why has the British Mercantile Marine not grown at least as fast as, or in proportion to, the volume of seaborne cargo which moves about the world? What has gone wrong, what is still going wrong, and what can anybody do about it? During my remarks, I shall try to provide an answer to at least some of these questions.

As mast hon. Members know, there are four main sections of the shipping industry: the liners, the tramps, the tankers and the coasters. I do not want this evening to say much about the liners. They enjoy management of the highest order. The liner companies are enterprising. Only in the last few months, we have seen their fleets augmented by a number of magnificent ships. At the same time, the conference system, which ensures high-class and regular services between so many ports of the Commonwealth and many other parts of the world, together with the very size of their fleets, gives participating companies a monopoly of the seaborne passenger trade and of many classes of merchandise.

On occasions, the companies—or, at least, the conferences—are big enough and strong enough successfully to resist the nefarious pranks of foreign Governments of which we have heard so much this afternoon. Even in times of extreme depression, they are able to put up their rates. Even so, many, if not all, liner companies are threatened by the same adverse factors which face, but face much more severely, our tramps and our independent tankers.

The difficulties which face tramp shipping and tankers are not precisely the same in both cases, but I think that their difficulties are common enough for me to be able to discuss them together. For reasons which I shall come to, the tramp and the tanker sections are seeking help from the Government, as my right hon. Friend the Minister of Transport knows very well. It is, I suggest, for that reason, if no other, that it is essential for the Government and for hon. Members to make searching inquiries to ascertain whether our fleets are efficient or not. They are.

In support of that assertion it may interest the Committee to know that the average age of the ships of our tramp fleet is less than eight years. It is an astonishingly young fleet. The Committee may also like to know that the proportion of United Kingdom ships tied up today for want of employment is considerably lower than is the case with foreign ships flying flags of convenience.

If the Government are to assist merchant shipping, there is an additional reason for establishing the fact that our fleets are efficient. There are, I think on both sides of the Committee, hon. Members who are, in general, opposed to the giving of financial assistance, whether by subsidy or by special taxation relief, to any industry run by private enterprise. I believe that they think, and I know that some of them have said, that if an industry cannot survive it should be allowed to go under and employers and employed should get on with something else.

If an industry was inefficient, or showed a lack of enterprise, or made a miscalculation of a grave nature, that would be sound reasoning, but if an industry is efficient and particularly if it is of national importance, and if, at the same time, it is being killed by the action of foreign Governments, I submit that there is at least a prima facie case for the Government to take action. Certainly, as things are, the tramp and tanker sections of the British merchant navy have not only a right but, I think, the duty to seek advice and assistance from the Government and from all hon. Members. Not very much of either has so far come from the Government.

In the survey of British shipping, which was published at the end of last year by the General Council of British Shipping, attention was focused on the main factors affecting the competitive position of British shipowners, but outside their control. The last four words "but outside their control" are very important. Even if many hon. Members know what these adverse factors are, I should like to remind them of their severity and to describe them once again.

The first adverse factor is the flag discrimination practised on an increasing scale by more and more foreign Governments. The term "flag discrimination" comprises a wide range of acts and pressures exercised by Governments and designed to direct cargoes to ships which fly their own flags. Bilateral trade agreements, export licences, import licences, exchange control, discriminatory customs, direct legislative control—all these devices are used to divert cargo to their own ships.

More difficult to identify, but just as effective, and, therefore, just as dangerous to British owners are the direct and indirect pressures brought to bear by Governments to ensure that cargoes go into the ships flying their own flags. I ask: what can shipowners do about it? What can shipowners do to stop or even inhibit the growth of practices of this sort? The answer is nothing at all. It is the Government who must act.

The second adverse factor is the resort by foreign owners to flags of convenience. This has been mentioned before in the debate. It may surprise hon. Members to know that the total tonnage sailing under flags of convenience today is not very far short of the total tonnage of the British Mercantile Marine. Before the war, the figure was considerably lower than 1 million tons. Today, the figure is in excess of 15 million tons, of which about 40 per cent. is owned by American interests. Here is a point on which I differ from what was said from the benches opposite. The reason why foreign owners register their ships under the flags of Bermuda, Costa Rica, Honduras, Liberia, Panama, and other countries is that if they do so they pay virtually no taxation at all.

It is, of course, true that when shipping is depressed and there are no profits the tax-free advantage is not so great. But some day things will get better with shipping. Some day rates will go up instead of down, but then it will be that large sums will be drained away by taxation from the profits earned by British shipowners while huge sums will be acquired and amassed by foreign shipowners flying flags of convenience. These huge sums will be used to build more ships. They will be used to tide them through other periods of depression, and they will always be used to assail their less fortunate British competitors.

Mr. Jack Jones

May I ask the hon. and gallant Member, who has an intimate knowledge of and close association with the industry, show many British-owned ships fly foreign flags of convenience?

Sir L. Ropner

None. I was asked that question last time we had a shipping debate.

Mr. Jones

It is a fair question.

Sir L. Ropner

I will ask again the same question that I asked a few minutes ago. What can British shipowners do about this? What can they do to stop or inhibit the growth of the practice of foreigners of adopting flags of convenience? The answer is the same. The answer is that they can do nothing about it and that it is the Government who must act.

The third adverse factor militating against the British Mercantile Marine is the extent to which foreign Governments provide direct subsidies both for the construction and the operation of their ships. Here again, let me ask the same question. What can the British shipowners do to stop that practice? Once again, the answer is that they can do nothing, and, once again, it must be pointed out that it is only the Government who can take action, which, we hope, may be effective.

The word "subsidy" is sometimes considered to have a rather unpleasant ring about it. Shipowners are an independent-minded bunch of people. They are adverse—traditionally from seeking Government aid, particularly, perhaps, in the form of a subsidy. But because it is certain that even if dealt with at the highest level—as it must be—it will still take the Government years, perhaps many years, to restore free and fair competitive trading for British shipping, it may well be necessary, as a temporary and quick form of assistance, to do again what was done in 1935, grant a subsidy to any section of shipping which is being, or is in danger of being, overwhelmed, swept from the seas, for reasons which entail no discredit whatever to British owners or the crews who sail in their ships.

I come now to the fourth section of British shipping—the coasters. Not wholly, but to a large extent, the responsibility for the rapid decline and the present parlous condition of the coastwise trade is directly attributable to the policy, or lack of policy, pursued by successive Governments here at home. Our domestic transport system has three components—road, rail and coastwise shipping. Much attention and a great amount of public money are being devoted to the development of our road system, to the advantage of long-distance road haulage. But for coasting traffic, being mainly concerned with the carrying of bulk commodities over long distances, the railways are the main competitors.

How can coasters compete with the British Transport Commission when the Government, either gaily or reluctantly —I know not—are prepared to hand out £130 million in one year to make good the deficit of the Commission during that year? I wonder how much of this huge subsidy is attributable to the fact that the railways quote uneconomic rates when they are in competition with coastwise shipping?

I have pointed out that, in respect of liners, tramps and tankers, it is foreign Governments which are making life impossible for our shipping. But in the case of coasters it is the Government of the United Kingdom who are conniving at and, indeed, assisting in, the murder of this important section of the Mercantile Marine.

In conclusion, I want to say that it is not the world wide depression in shipping which is at the root of the anxieties for the future of British shipping. Our ships, our crews and our managements are at least as good as any in the world. The fear is rather that, in bad times and in good times, our shipping must continue to compete in a market in which to fly the Red Ensign is so great a handicap and disadvantage. As I have tried to point out, shin-owners themselves can do very little about it. It is for the Government to act, and I hope that they will act quickly.

6.56 p.m.

Mr. Jack Jones (Rotherham)

We have heard a series of varied speeches, all of which point to the things which beset us through the lack of business in the shipping industry. We have heard the story of the flags of convenience and the subsidised building of ships abroad, of the lines of demarcation and of the evil men who build the ships, but who will not work. I myself may be assumed to have no right to speak in this debate. My constituency does not build ships, but without it, and other like it, no ship would be built.

We make the steel which goes to the shipbuilding industry, and I am gravely concerned about the fact that the shipbuilders are not calling upon my industry to supply them with the steel which they used to get. The facts were published in the Press today. This year, the country has produced 1½ per cent. less steel to the end of June than in the same period of last year. In June, we produced 28,000 tons less than in June last year. That is not a lot of steel, but it will be a lot if the figure keeps going down every month by that amount.

I want to try to find out, if possible, the reasons why we are not building the ships which we used to build. During the war I was privileged to represent our war workers and spent some time seeing ships being built, including Liberty ships. I was glad to hear tribute paid in the debate to the skill of the men who build our ships. We can, and do, build the finest ships in the world. We have the finest craftsmen and the finest material, but I would be a hypocrite to suggest that everything is perfect in the industry.

We have been told about the most modern shipyards. But do those shipyards quote prices which could be obtained by the less modern yards? That sort of thing often happens with the price quotations through taking account of the poorer competitive ability of the least efficient yards. Whether that happens I do not know from personal contact. I do not own a yard, but I have reason to believe that that sort of thing is going on. I have reason to believe that the consortium of shipbuilders quotes prices which are of advantage to itself.

Flags of convenience have been a bugbear for a long time and I was happy to hear the hon. and gallant Member for Barkston Ash (Sir L. Ropner) say that no British shipowner owns a ship flying a flag of convenience. That is something new, and I am glad to hear it. We know that at one time such ships were in the possession of British owners. I shall not quote names.

I have been to Germany more than forty times since the war. I have seen the Hamburg yards as much as any other hon. Member has done. I have watched the Germans and the Swedes at work. Let us face the facts. They can certainly build ships in Germany. They are so busy that one yard takes one half of a ship, another yard takes the other half, and they eventually bring the two halves together and join them up. It sounds fantastic, but it happens to be true. When a ship is launched, the Germans do not so much cheer the launching of the ship as the fact that the stocks are clear and ready for another ship to be built. They get on with the job.

I happen to be a member of a union which has a general secretary who took part in the discussions on the line of demarcation inquiry, and from him I have obtained an intimate knowledge of some of the ridiculous things that happen. Patterns change and times change. Plastics, veneers, thin woods, thinner steel, fabrication, and all sorts of other new things are now used in shipyards, and, as there are changes in design and patterns and methods, so there are bound to be disputes about who is to do the job. But I am perfectly ready to admit that there are some ridiculous things which cause delay and strikes. However, most of the trade union boys do not agree with that sort of thing.

One hon. Member spoke of the Stone Age tactics of Ted Hill, but he should have said what some of Ted Hill's colleagues had said about him. It is unfair to criticise the utterances of one misguided man and not to give the story of the views of the first-class leaders of first-class trade unions, without whom this country would not get very far. I agree that people who glibly talk about unofficial strikes in these times, indeed, at any time, even a time of boom, are just fools. A man who encourages people to bring about unnecessary strikes is just an idiot, but at the same time, as a trade unionist, I must say that one sometimes has to deal with misguided employers and the few diehards who are still left, when it is occasionally necessary officially to declare a withdrawal of labour.

Mr. Charles Loughlin (Gloucestershire, West)

I appreciate my hon. Friend's approach to the problem of strikes, both official and unofficial. However, I know that he does not want to give the wrong impression. Would he not agree that to some extent official and unofficial strikes can be caused by bad management as well as by the workmen?

Mr. Jones

I have just said that. Those were my last words. I said that there were sometimes diehard employers. But I do not believe that a strike should be called at the instigation of one man. It should go through orthodox, constitutional, trade union channels and be decided by the executive of the union and officially declared, if it is necessary. That is how trade unionism should work —and I have been a trade unionist as long as anybody in the Committee. I have said before that in my pocket I have a trade union membership card showing fifty-one years' membership, a membership ever since I left school, which is a long time ago, and I think that that is something of a record.

I do not agree that in these times unofficial strikes, brought about by the action of people not immediately concerned with the issue, but using it to force a strike to deal with something which occurred to their disatisfaction earlier, are in the best interests of the country.

At this time, if never before, the country deserves a combination of effort by employers and employees such as it has never known before. We are beset by tremendous competition, not only in shipbuilding, but in the motor car and in every other industry, and it is imperative that trade unions should conduct themselves properly, as does the union of my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin), which has an admirable record, and my own. It is a question of which of the two is the better. My own has a record which is second to none in the steel industry for settling disputes around the table.

The would-be ship buyer is not so much worried about the price as about the date of delivery. After all, problems of price can be overcome through the banks and the various associations and finance corporations, and so on. Anybody who buys a motor car, or a lorry, or is even replacing an article in his home, wants to be sure that he will get the new article on the date required. I have reason to believe that it is the difficulty with dates of delivery which has caused so much concern to overseas would-be buyers of British ships.

I am the last to advocate buying anything anywhere other than Britain if it can be got here, but from my contact with people in the shipbuilding industry I have reason to believe that one of the biggest questions has been the date of delivery. It needs only a couple of days' unofficial strike and an official stoppage of work to throw the whole timetable out of synchronisation.

Nothing is worse than a small strike which can lead to bigger and more serious consequences. At the end of the day, there is always the need to get round the table and hammer out the cause of the trouble, and after a strike, with all the trouble and suffering of the wives and the children and the delaying of dates of delivery, the parties still have to get round the table and negotiate about what has caused the row.

We have the best steel in the world and we have the finest fabricators. We are told that we have the finest shipyards in the world. I am not so certain. From what has happened over the last ten or fifteen years, I believe that some yards have not been modernised as they should have been.

During the war, the shipyards were bursting to the seams with work which was necessary because of the war, and no doubt many shipyard owners satisfied themselves that what was sufficient unto the day for the needs of the war would be good enough in the post-war period.

That has proved to be not so in some cases. There is also the fear of not getting orders. We know that in Japan skilled workmen get very low rates of pay, but that is not the case in Germany or Sweden. Some of the shipyard workers in Sweden earn relatively more than many of their British counterparts earn. They have a better standard of living. It is not what one gets, but what one gets with what one earns which matters when comparing standards of living. Nevertheless, the Japanese, too, are great competitors.

The Germans are working hard. The German does not turn a screw on a thread any faster than a British shipyard worker does, but he probably turns two or three more in the day. He is steady and consistent. The Germans have a different approach to the boss and their attitude to work is rather different.

Many of my colleagues will not like this, but one can only speak as one finds. I think that in a period of full employment, in a period of "You have never had it so good"—and never owed so much for the things we have, for there is £397 million on H.P. kicking around somewhere—because of the boom period after the war, some of our people have become a little self-satisfied with our industries.

We are beginning to find out that that will not do. What my hon. Friend the Member for Sunderland, North (Mr. Willey) said proved that we have a great job on our hands. Like my hon. Friend the Member for Greenock (Dr. Dickson Mabon), I believe that we have all the evidence we need. We are setting up committee after committee. We will soon have so many committees in this country that there will be nobody at work.

The day has come when as a nation we have to face the fact that if we are to survive, we have to gird up ourselves to the job of competing with our competitors. I understand that Germany, for instance, gives subsidies to its shipbuilders so that they can build ships more cheaply than we can.

I see no harm in the Government—be it a Socialist or Tory Government—ascertaining what that means in terms of real value, and being prepared to do something similar to preserve our business for our own shipbuilders. After all, it is not the shipbuilders who get the benefit of completing the job. They may make a profit on the difference between the cost of the raw materials and the sale of the finished article, but in the long run the beneficiaries are those who would otherwise be walking the streets looking for work.

If the Government were to do something on those lines, they would go some way towards preventing unemployment. In 1926 and in the 1930s I walked the streets for sometimes as much as seven months in the year, and I know what I am talking about. I would have much preferred a job to receiving dole money. I would much rather have done some constructive work in the interests of the nation, such as road making, dealing with coast erosion, building reservoirs or working on the railways, etc.

The time for talking is coming to an end. We are all in this together. We on this side of the Committee hope that we shall form the Government after the next General Election. If we sit back and allow this problem to drift, the logical result will be that when we form the Government we will have a far worse job to tackle. It is, therefore, our duty to do everything possible to help the Government, who, unfortunately, from a politic' point of view, happen to be the wrong Government. Nevertheless, it is our duty as trade unionists and as citizens to do what we can to help.

I hope that as a result of this debate there will be some clearer thinking, some getting together of the more able brains among the trade unions, shipowners, shipping magnates and the Government to work out a remedy for what is a very parlous state of affairs.

7.12 p.m.

Mr. Paul Williams (Sunderland, South)

At this stage of the debate it is almost impossible to add anything new. However, I go along completely with the opening remarks of the hon. Member for Rotherham (Mr. Jack Jones) when he showed by implication that the prosperity or otherwise of British shipping, and thereby the British shipbuilding industry as well, feeds its way back into practically every home in the land. These twin industries are of vital and significant importance, not just to the rivers, to the coastal ports, to the seaside towns or to a few limited areas. Any decline in these industries strikes at the root of our survival, and that is why this debate is of such fundamental importance. I agreed with the hon. Gentleman when he implied that we were becoming too complacent about these two industries and about our national role; that we were "going soft", and in doing so were preparing our downfall.

Earlier speakers have referred to the United Kingdom tonnage as a proportion of the world's total fleet. My hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner) made a comparison by showing that in 1910 approximately 50 per cent. of the world's tonnage was British; by 1938 it was down to 26 per cent.; by 1951 it had fallen to 21 per cent.; and gradually but steadily and remorselessly the percentage had declined through the years until last year the figure was 16.3 per cent. No amount of evasion can alter these sorry and regrettable facts. It is no good merely saying, "Oh, but our total gross tonnage has remained about the same, 19 million or 20 million tons."

The Minister of Transport wrote to me on 9th March this year, and used these words: I do not think that the relative size of the U.K. fleet, in comparison with the world total, is particularly significant. What matters much more is its absolute size. Frankly, I could not disagree with the Minister more. These proportions are significant.

My hon. and gallant Friend the Member for Barkston Ash asked why our fleet has not grown in equal proportion and in equal measure with the increase in world tonnage? It is because our fleet has suffered serious disadvantages, which I intend to mention.

To again follow through the point made by the hon. Member for Rotherham, our fleet and its earnings is significant in our standard of living in this sense, that what we earn in invisible earnings from our shipping makes a contribution to our currency reserves, thereby securing our national survival and independence. One mentions but three figures. The invisible earnings from shipping in 1952 were £221 million. In 1958 they were £135 million. In 1959 they were down to £100 million. I gather that the estimate for 1960 is about £114 million, which figure, I also gather, is slightly suspect. But, whether it is £100 million or £114 million, it is a significant drop from the figure for 1952. This is bound to have some great and substantial influence on our currency reserves and thereby on our national standard of living. I think, therefore, that the Committee will agree that shipping is a vital element in our national economy, an element which we will ignore or allow to drift at our very peril. The Government have a responsibility to secure that shipping, and thus our survival.

What is this responsibility in its broadest terms? It is to see that the British merchant fleet can compete fairly with the ships of other nations. What are the problems facing the British merchant fleet? I think that every hon. Member who has spoken has mentioned what I believe to be the two major external influences and problems—flag discrimination, and the use of flags of convenience.

How does one treat these matters? Almost every hon. Member who has spoken has made an attack on the United States for its policies and practice in this matter. I echo completely those attacks, but I do not think that they went far enough. I do not think that it is enough merely to attack the Americans for promoting their own legitimate interests. Let us recognise that these are legitimate American interests which they are promoting, and let us also recognise that they are deliberately promoting them. Pious resolutions and hot air in this Chamber will not alter American philosophy on this matter, and we are stupid if we think that they will.

The Financial Times of 14th April this year said: The shipping industry greeted with considerable pleasure yesterday Mr. Macmillan's announcement in Parliament that he had left with President Kennedy a detailed memorandum on the harmful effects of U.S. protectionist shipping policies … I am sure that this was received with great attention. The value of the Prime Minister's announcement is that President Kennedy … has been given personally a considered case against U.S. shipping policy in its present form and its effect upon the maritime industries of America's N.A.T.O. allies. It was a very interesting news item. I am sure that the Prime Minister is to be congratulated on having got a document together and having left it on the President's desk, where it may still be residing for all I know.

The Times also put this very effectively in its leading article on 6th January. It said: Effective agreement would depend on the degree of importance which Britain and Europe were prepared to place on shipping within their total economy, and the extent to which they could impress this importance on the United States. America holds the key. That is true. Of course America holds the key, but it is not good enough for us to spotlight this problem and then leave it there. This is not just a simple economic matter. This is a large-scale political matter on which political sanctions must be brought to bear against the American Government if we are to stand any chance at all of persuading them to change their policies.

Our merchant marine is as vital to our economy and defence as are American bases overseas to the American way of life, as they see it. This being so, surely we should bring sanctions to bear on American economic policy by saying to them, "If you insist on promoting your shipping interests in this way and damaging our economy and national defence we will promote policies which will conflict with your aims in other fields. We will reconsider the whole policy of American bases, and perhaps discriminate in other ways against them". Unless we talk in this way to the Americans we shall never get them to change their ways. It is not good enough merely to pose the problem; we must take action and sanctions against their behaviour if we are to make them change these malpractices.

British owners are also confronted with the problem of subsidies provided by foreign Governments to foreign owners. How are we to deal with this problem? Do we again pass pious resolutions, or merely spotlight the problem and leave it there? Or do we try, by international agreement, to get some change of practice? Perhaps that itself is a pious hope. But if the Government say that they cannot obtain international agreement, what else are they going to do? If they cannot obtain such an agreement, the responsibility rests fairly upon the Government to do something else.

Although not as great as that of flag discrimination, the problem of flags of convenience is a serious one. Like my hon. and gallant Friend the Member for Barkston Ash, I ask myself why people use flags of convenience. They do so to avoid taxation in their home countries. That is quite a reasonable operation, from their point of view. But if that is the reason, and if British shipowners are not going to take advantage of these flags of convenience—and I hope that they will not—we may be forced into the position of discriminating in favour of our British owners in our tax structure.

When my right hon. Friend the Member for Monmouth (Mr. Thorneycroft) was Chancellor of the Exchequer a few years ago he referred to the special position of British shipping. It is in a special position, but it is not enough merely to say that it is. We must take action. We welcome the action taken in this year's Budget, in confirming the investment allowance for the lifetime of this Parliament, but that does not go nearly far enough to remove the unnecessary burden which is being carried by the British shipping industry.

I hope that the Parliamentary Secretary can clear up what appears to me to be a slight muddle of fact in relation to the Canadian situation. Earlier today the Minister referred, rather slightingly, to the Canadian view of things. According to The Times of 7th July there appears to be some conflict between the Canadian Government's views on the facts of the situation and the views of the Minister of Transport. I am talking about the controversy over the Great Lakes shipping and the St. Lawrence Seaway. The Canadian Government appear to be under the impression that they have had some discussions with the United Kingdom High Commissioner's Office in Ottawa. If I understood my right hon. Friend correctly a week or so ago, and again today, however, no such discussions have taken place. Are there any communications between the Minister of Transport and the United Kingdom High Commissioner's Office in Ottawa?

Vice-Admiral Hughes Hallett

We were aware that discussions had taken place at an official level about a possible review of Canadian shipping law, but we had no information that it was going to take this drastic form until we heard the public announcement.

Mr. Williams

I am grateful to my hon. and gallant Friend for that reply. If there was a warning that there might be some review of Canadian shipping law, surely some positive action should have been taken by us to find out the Canadian Government's line of thought.

Apparently there were these conversations, and I should have thought that everyone who is interested in shipping would have known for the last few years that the Canadians had been considering restricting traffic on their lakes and in the St. Lawrence Seaway, and that something of this nature was bound to happen. It seems surprising that we were caught flatfooted in the event.

I turn now to the problems connected with the building side of these twin industries. First, there is the shortage of orders, arising from the general shipping position and world trade. The problem appears to relate to the question whether or not we are competitive today. I agree with the right hon. Member for Easington (Mr. Shinwell) that it would he quite wrong to create the impression that our shipbuilding industry is antiquated, decrepit and in decline. Nothing could be further from the truth.

As the right hon. Gentleman said, there are certain firms—as is the case in every industry—who are not quite as progressive as they might be and who have not adopted the sound reinvestment policies that they might have done, but to pick out the black sheep of any industry and try to pretend that they are typical of that industry is a form of death wish which none of us should have. The British shipbuilding industry has prospered and survived remarkably well, bearing in mind the problems that affected it and confronted it at the end of the war.

At that time it took deliberately—and rightly, in my opinion—the decision to pile on with building ships as quickly as possible in order to meet the needs of this nation and the world. In doing so it missed the opportunity to re-equip from scratch, which the Germans and Japanese were able to take. We are now seeing the disadvantage of our earlier action. My view is that, on balance, we took the right decision after the war when we went on building the ships, but that decision has now complicated the position in terms of re-equipment.

It is reasonable to say that British yards have largely been modernised, are largely efficient and, in fact, are largely competitive—or would be, if things were equal. Why, then, are British owners going abroad for their ships? What are the comparisons of price as between British and foreign yards? If foreign yards are providing the finished product much cheaper, is this because of subsidies? In this respect the Minister's inquiries will be short of the facts. He needs to know the conditions obtaining in foreign yards. From what he has said today, I do not think that he will get that knowledge. As the hon. Member for Sunderland, North (Mr. Willey) said, one of the major problems of the shipbuilding industry is that it is an assembly industry, and it has to carry the additions of cost which come from the supplying industries behind it, including the steel industry. Owing to the multiplicity of unions involved both in the supplying and the assembly industries our problems are very much greater than they are abroad.

There is probably less control over costs in this country than there is abroad. I am not sure that the Government always help in these matters. I am not sure that the increased oil tax in this year's Budget will be a tremendous incentive to controlling the cost of steel supplied to the shipbuilding industry or any other industry.

I now move on to the question of labour relations. It is very easy to make an attack in the House on the internal disputes in the industry. Many of these disputes are trivial, short-lived and irrelevant—the sort of disputes which could and should be settled easily, as the hon. Member for Rotherham said. The tragedy of the situation is that each trivial, petty issue adds up, and builds up a climate of opinion about British shipbuilding in general. We have now reached the situation in which if a foreign owner has two identical tenders, one from a British builder and one from a foreign builder, he will probably come down on the side of the foreigner, because if he gives the order to the British firm he is not sure that his ship will be delivered on time. He is not sure that the price will be as quoted. This is a consequential effect of a great deal of petty disputes being over-publicised.

Having said that, I must also say that it is nevertheless true that there is an unhappy record in general in this industry, the blame for which must, I believe, attach equally to management and trade unions. If there are internal disputes, it is partly the fault of the management and we must apportion the blame as fairly as we can. Surely it is not enough for the Government to be for ever holding the ring on this as on other matters. This has gone on too long, to the point where the industry is discredited and in disrepute. I should have thought that we had passed the time when the Government should have played a more forcible part in bringing the two sides of the industry together to get agreement.

One of the things which I hear frequently, as do all hon. Members, about the shipbuilding industry, worldwide and domestic, is that there are too many yards and too much capacity; the implication being that there should be "rationalisation"—I think that is the phrase—amalgamation and even that certain capacity should be taken out of existence. It may be that this would be a sound thing on an international scale, but our duty is to defend British shipbuilding and not to aim to take British shipbuilding capacity out of existence. It is the inefficient, uneconomic foreign yards sustained by subsidies which should be taken out of productive capacity, for ours is the real, substantial element in the rebuilding capacity of the world, the permanent element.

There are those who talk about a scrap-and-build policy which is also mentioned in the cascade of Reports which we have had from various Committees. What is the view of the Government about scrap and build? They should begin to have a view about it. We should be a little wary of putting too much faith in a scrap-and-build programme. There is a tendency in a scrap-and-build programme to end with a smaller fleet. It tends to be an argument for sitting on a declining asset rather than promoting the size of the national fleet. If the Government are considering this matter, and if they come to the conclusion that a scrap-and-build programme is reasonable, I hope that it will not be on a one-for-one or a one-for-two basis but rather an attempt to increase the size of the national fleet.

As the Committee well knows, there is no easy remedy for this problem and it affects both shipping and shipbuilding. It seems to me, however, that there is a case for the greater coordination of Government policy in creating conditions in which British shipping and shipbuilding may survive and expand. We should stop "knocking" builders quite as much as has been done by some people, both inside and outside Parliament. We should restore faith in the role which the merchant fleet should be playing. If we can get the sort of philosophy that a merchant fleet is an essential ingredient in our standard of living and a thing to be promoted, we shall begin to face the problems of these two industries. I trust that, instead of referring things to Committees, the Government will, as a number of hon. Members have said, accept that the facts are known and that on those facts they must act.

7.34 p.m.

Mr. John Rankin (Glasgow, Govan)

I always follow the hon. Member for Sunderland, South (Mr. P. Williams) with interest, because he speaks with moderation and with a great knowledge of these industries. Generally his approach is good. If I understood him correctly, he has the idea of limitation in some form for this industry on the productive side.

Mr. P. Williams indicated dissent.

Mr. Rankin

I may put it this way, that he visualises a definite size, so that there may be a shape and a plan for shipping and shipbuilding which at present is lacking?

Mr. Williams

I regret having to interrupt the hon. Gentleman so early in his speech. In fact, the words I used were to help the industries to survive and expand—"and expand" is significant.

Mr. Rankin

I realise the difficulty of interpreting across the Floor of the Chamber.

I hold the view that within the idea of expanding the industry there must, as has already been said, be a plan which involves the idea of limitation in some way or other. It seems to me that the party opposite has a big problem to face. A difficult dilemma is presented in this debate. I have heard harsher language from them today than I have heard for a very long time. We are being asked to face hard facts. Dramatic words are being used. Words of the strongest possible criticism are being applied to the Tory Government. So far they have been condemned by every Tory speaker in this debate.

This is rather an arresting change. It is all taking place against the background of a nation which has never had it so good. It is very difficult to reconcile that philosophy with the language which has been employed today by hon. Members opposite. There is a complete contradiction, and I hope that the Minister will be able to skate his way through this new presentation of the situation as it applies to these industries as well as to industry generally. I trust that he may be able to skate his way through and that the old "chloroform" attitude that we have never had it so good will be forgotten.

I was interested in what the Minister had to say. The right hon. Gentleman stated that he wanted to see production improved and increased. He went on to say that he had no objection to high wages but he wanted them tied to productivity. One inferred that high wages would not materialise if increased productivity did not result. But the interesting thing is that on average over the last ten years there has been no great increase in productivity yet while people have objected to wages being increased there has been no objection during that time to increases in profits.

Evidently it was all right for the profits in the industry to increase even though productivity was not increasing but all wrong for wages to increase when, they told us, productivity was not increasing. That is the sort of view which causes trouble within the industry. If workmen see that profits are increasing in the industry in which they are engaged, naturally they demand a share. Their way of getting their share is through increased wages. If the Minister is to link the right to an increase in wages with productivity and to say nothing at all about the profits, he is helping to pave the way to further trouble within the industry.

The right hon. Gentleman went on to say one or two other things. I do not want to follow them at the moment, because I thought that on the whole his speech was a reasonable attempt to face the difficulties which now present themselves to us in this industry. Over quite a number of years we on this side of the Committee have been trying to get the Government to realise what is happening in shipbuilding. The hon. Member for Sunderland, South has certainly joined in requests to the Government to provide time to discuss the health of the industry. One or two other hon. Members opposite have helped him, but on the whole there has been little activity and little interest among hon. Members on the other side of the Committee.

Mr. P. Williams indicated dissent.

Mr. Rankin

If the hon. Member objects, I shall say that, so far as it has been expressed, it seemed to us who have been pressing the need for some form of Government attention to the industry over a number of years that the response from hon. Members opposite was not quite so adequate as it ought to have been. However, even though it is late, we welcome it. We hope it will manifest itself later tonight if there is a Division. If the reply of the Government is not satisfactory, we on this side propose to divide the Committee. That will give hon. Members a chance to show where exactly they stand on the question of the future of the shipbuilding and shipping industries.

I listened to the hon. and gallant Member for Barkston Ash (Sir L. Ropner) with interest. He speaks with moderation and knowledge, but he faces a situation in which in effect he launches his ships into a dangerous and difficult world where there are evil practices and bad men doing bad things. He agrees that most of the things being done are legitimate and recognised practices of the capitalist system. The basic trouble is that the shipowner finds it difficult to live in that type of world, and for a basic reason. Drake his in his hammock and a thousand mile away. There are no Drakes, and that is one of the drawbacks which handicap shippers in the world in which they now have to live. So they come sailing back to the Government and ask, "What can you do to help us? We are in terrible difficulty. It is a harsh world. We cannot get along without help now. Are you ready to help us?" That, basically, is the reason for the request they are making. Obviously, if we are to help there must be a price for the help. It is questionable whether we should allow these gentlemen ever to get out into these waters, unless someone is there to look after them; because of their confession that they can no longer look after themselves.

I have quoted reams and reams of statistics about the state of this industry. I do not propose to repeat that tonight. As the hon. Member for Sunderland, South said, we have now reached a stage in the debate when from that point of view all has been said that can well be said. There is one point, however, which has not so far been made. It occurred to me because of the reference by the hon. Member to the fall in our invisible exports. It was a drastic fall. If one turns to visible exports, one finds that in 1951 we exported £53 million worth of ships and boats. Last year we exported £52 million worth. Ten years later we are exporting £1 million less.

We are exporting that £52 million worth when the £ stands at 13s. The £ of 1951 is worth 13s. today. If we had kept up the exports of 1951 to the level of the value of the £, then our exports today in ships and boats would be nearly £80 million. The gap between those two figures, the figure that was and the figure that should have been, represents the failure of the Tory Government. In my view, that is the most dramatic way of presenting the problem we are talking about tonight.

The speech of the right hon. Gentleman today was quite a good speech, but it was a good speech about a bad cause. We have to realise that he was not making that speech at the beginning of a new Tory Government. He was not even making it in the middle of their period of power, but after they have been in power for ten solid years with a quite unchallenged and unchallengeable majority. He was telling us today that after those ten years in power the Tories have failed completely to do one part of their job. He told us—and I welcome what he said—that they are going to do better.

Will he tell us, or shall we be told before we leave this Chamber tonight, that that promise to do better will be sustained despite whatever the Chancellor decides is to be done in respect of economic recession? I am told today in the Press that the Chancellor is proposing very restrictive—

Mr. Jack Jones

Practices.

Mr. Rankin

I shall not say that about the Chancellor. I dignify them by calling them proposals. Are they to crib and cabin what the right hon. Gentleman proposes to do for shipping? He went to Glasgow on 16th June, which is not so long ago. While I realise that he was attending a dinner, and that will not be held against him, I think that the dinner came after his remarks and not before. Nevertheless, his well-known caution still controlled all that he had to say.

The Minister said that there were shocks on the way for the shipyards. It was in big headlines in the columns of the Glasgow Herald. He said that the remedy might be unpopular. I do not know who is going to decide that. The Minister also introduced that into his speech earlier today. He said that when he had diagnosed the reasons of the price, delivery date and credit facilities—that is the reason for the setback in shipbuilding—it would then be possible to prescribe some remedy, but the remedy could be unpopular. I do not think that even today he indicated in what way the remedy might be unpopular. He did not go so far as to do that, but he suggested he had a remedy, and I hope that if there is a remedy in the mind of the Government we shall hear something about it before we separate tonight.

The right hon. Gentleman then went on to say quite definitely three things. The three recommendations to which he referred were those contained in the Report of the Shipbuilding Advisory Committee. First, he referred to State backing for long-term credit customers. He has been pressed about that today from his own side. I am pressing him again. Are we to hear anything further about it? It is a recommendation of the Sub-Committee on Shipbuilding, it is a recommendation of the General Council of the British Council of Shipping, and it would seem that the Minister is favouring it. Despite what the Chancellor may be thinking is the right hon. Gentleman still going ahead with the idea of long-term credits for customers?

Then, again, he came back to the policy which some of us have referred to on various occasions—a subsidy for the scrapping of ships, or a scrap and build scheme, and, finally, to considering placing more naval orders. These are recommendations which have come from powerful sources. They have caught the Minister's fancy because he says that on all three recommendations he is going to act. Does that sentence mean that he will carry out all three recommendations? I hope that he will have something to say about this before we part tonight, because while I agree that they are temporary reliefs for the most part, nevertheless at this present moment in the industry they are absolutely essential if the future of this industry is to be preserved.

I come to the question of nuclear propulsion. It has been raised already. Reference has been made to what is happening in America and to the exchanges that we have had in the House of Commons. On the 14th June, if I followed the right hon. Gentleman's answers correctly on that occasion, I concluded—I hope correctly—that the idea of a nuclear-propelled merchant ship is not abandoned. If the Report of the Atomic Energy Authority is correct, and the paragraph to which I already referred is correct, the Atomic Energy Authority has not abandoned the idea and the necessary research for that purpose. I hope that this is correct, because while a good deal has been said about the "Savannah", the American nuclear ship, it should be noted that the public hearing in regard to that ship has just been concluded and the Hearing Examiner said: There is reasonable assurance that this ship as now designed and constructed may under well prepared operating procedures be safely fuelled and operated for test and demonstration purposes and for initial sea trials. That is the verdict of the hearing examiner at a public inquiry on the feasibility and safety of this ship.

The important aspect at this stage is that this development is proceeding in America and that it will enable America to gain a marine experience which will place her far ahead of this country in spite of the fact that the possibility of a similar development now lies at our door. It is possible also that Germany and Italy will follow a similar scheme to America's. If the right hon. Gentleman is to wait on effective development, following upon effective research by the Atomic Energy Authority, then this country will be in a very serious position.

I wonder whether he has tried to frame a programme of development or whether, a programme of research and development is being framed within his office. For instance, the first step about which we should be thinking concerns basic research on a suitable reactor system. Is that being done? Where is it being done? What stage has it reached? Does the right hon. Gentleman realise that to carry out such research requires at least five years' planning? That is the first step. The next step is the building and testing of a land prototype. Has any thought been given to that and is any research department concerned with it?

I do not want to disturb the right hon. Gentleman unduly. I assume that he is listening to me. But that second step involves at least seven years' work. The third step is the alterations which will be found to be necessary before a ship of this type can be built. Alterations will be made. That could easily take three years.

When we have passed through those three stages we have the fourth stage of building the ship, which will not be done in less than four years. If we add all those figures we find that the total time consumed will be nineteen years. By that time we shall be out of the race altogether—if that is the plan which is being followed; and if that plan is not followed, what does the Minister propose to do? I expect that he knows—we all know—that the first nuclear propulsion ship cannot be economic. We know that it will be a costly affair. But the experience acquired in building that ship is essential to the future of this nation on the sea, because in the long run the operating costs of a ship operated by nuclear propulsion will be reduced by from 80 to 90 per cent. in relation to present costs. If we cannot enter that new world which is dawning before our eyes, we shall be hopelessly out of the race in which we complain that we are already being handicapped.

Next, there is the question of the design of a ship of this kind, which is entirely new and revolutionary. That, too, must be taken into consideration. We cannot shut ourselves altogether away from that aspect of the problem. If we are to compete with the new jet aircraft we must have ships on the sea with similar qualities. The design of the new vessels in the air should to some extent be matched by the design of the new vessels on the sea.

That is the prospect for shipbuilding and ships which will lift us out of the old rut and give us something new to which we can look forward. Shall we pass through the period of development as I have suggested or shall we buy our experience from America? It may well be said that to carry out the development ourselves is too slow and that we cannot afford the time. Can we afford the money to buy the experience from America and to adapt it to our needs? There is another, crude way; we could pinch it. In view of the fact that our security arrangements are being brought up to date it may be that this idea is germinating at some level—the idea that we need not pay for it but might he able to get it in some other way. I am certain that such thoughts are not in the Minister's mind.

Is he thinking of buying this experience? Clearly, we must do something. The future of shipbuilding is at stake, as is the future of shipping. It is not only at stake in the old methods of development. It is at stake in the new type of ship to which we look forward. I hope that the Government will face up to that duty more effectively than in the past months they have faced up to their old one.

8.5 p.m.

Mr. Ian MacArthur (Perth and East Perthshire)

Unlike the hon. Member for Glasgow, Govan (Mr. Rankin), I do not represent a shipbuilding constituency, and I therefore rise with some diffidence to take part in the debate. I have a harbour at Perth, and some of my constituents produce small boats, and both the harbour and the boats deserve to be better known. But that is the limit of Perth's marine associations.

My interest arises from a love of ships and a realisation of the importance of shipbuilding to our economy and particularly, may I add, to the economy of Scotland. It is well known that Scotland is too heavily dependent on too few of the old basic industries, particularly shipbuilding and mining, which, in Scotland, account for a larger proportion of the total industry than in the United Kingdom. Indeed, I see that these two groups have a combined weight which is 50 per cent. greater in the Scottish than in the United Kingdom index of industrial production. A decline in shipbuilding has a particularly severe effect on the Scottish economy.

It is well known that the enormous expansion in world shipbuilding capacity which followed the last war produced new competition for British yards, but the demand for shipping was such that the long-term threat of competition was somewhat obscured by the flow of new orders. The far-sighted people who pointed to the coming blast of competition were often regarded as pessimists, and I remember their warnings going largely unheeded as each good year was succeeded by a better year. The prudent yards ploughed back their profits in modernisation schemes to strengthen their resistance to the competition ahead. The less prudent yards kept to the old ways and are reaping the harvest of their neglect.

The demand for ships has fallen steeply in the last few years, and world shipbuilding capacity is far greater than the replacement needs. We have a declining share of the market. The latest figures show how severe is the problem in Scotland. In the three years, 1958–60, the new orders obtained by Scottish yards equalled only one-third of the tonnage completed in those years. The total orders on hand at the end of 1960 represented less than two years' work. In the first quarter of 1961 the new orders were less than in the first quarter of last year, and some Scottish yards have no new tonnage under construction today. This is the dismal picture presented on pages 14 and 47 of the Report on Industry and Employment in Scotland, which was published a few days ago. It seems unavoidable that unemployment in Scottish shipyards will rise even further this year and so bring greater hardship to the areas already hard hit.

Against this background it is clear that some yards will have somehow to increase their efficiency, although I cannot see how any yard that has not already changed its methods and outlook can hope to pull ahead so late in the race. I am personally much more concerned about the position of efficient yards—the yards which have done their job and have ploughed millions of pounds back in re-equipment and modernisation, but which, despite this great effort, now seem unable to match foreign competition in the fight for new orders.

It is easy to plead for Government help, for subsidies, or for a temporary or artificial stimulus. There may, indeed, be a case for special action. I accept that. But it is better, in the end, to discover the basic reasons for our competitive weakness and try to put these right. I welcome the statement by my right hon. Friend, at the beginning of the debate, about the study to be held shortly. Even if this does little more than discover the well-known, which some part of it obviously will do, at least it will be helpful.

As I understand, the quality of our ships is not in dispute. It is still at least as good as ships built anywhere else in the world. Apart from quality, there are four other factors which seem to me to influence our competitive standing. These are delivery dates, prices, credit and salesmanship. Salesmanship has not previously been mentioned today. Because of the shortage of time I want to discuss only two of these factors, namely, prices and credit, which are the most pressing of the four factors.

My information is that there appears to be a wide variation in the prices quoted by British shipyards, with the best prices not far removed from those of foreign competitors. However, competition is so strong that even a very small difference in price today, unlike some years ago, can make all the difference in the world between getting an order and losing it. For example, I am told that even an extra £20,000 on a ship costing £1 million can spell the difference between success and failure. Fine estimating is, therefore, of supreme importance. I have heard of cases—indeed, I have seen the estimates—where the estimate tenderer made no allowance for depreciation or profit. These may be exceptional cases, but they occur. They illustrate the anxiety of the efficient yards to keep their berths full and their labour force intact.

It is clear that any pressure tending to increase costs is doubly dangerous at this time. It is often said that restrictive practices by unions have offset some of the economic advantages of modernisation, but I have not found evidence in my inquiries that the effect of these practices is as serious as that. Some practices certainly exist which have no place in today's conditions. For example, I find it hard to understand why it is necessary today to have a welder, a tack-welder and a helper to do a job which could be perfectly well carried out by a welder and a helper. There are other examples which, like this one, may be small individually but which, in the aggregate, must have an effect on cost.

There is also a need for a greater flexibility of labour and a less rigid definition of the jobs which a man is allowed to do. This applies particularly to the final stages of the shipbuilding process. I admire the skill of welders and platers, but I sometimes think that they might learn something about sensible co-operation from workers in agriculture. However, this is simply one of the many cost problems which must be sorted out by the industry itself—by the management and the unions.

By far the greatest cost problem facing the industry in Scotland is perhaps not fully appreciated south of the Border. It is a problem which could have a real influence on the whole future of Scottish shipbuilding. This is the matter of revaluation for rating purposes, over which the industry has no control. The revaluation notices this year came as a great shock. Many of the increases were nothing less than fantastic. The rateable values of shipbuilding and ship-repairing firms on the Clyde jumped this year by amounts varying from 120 per cent. to 900 per cent., with an average increase of 360 per cent. One of the extreme examples, a yard which I visited, had a rateable value last year of £3,000. The rateable value this year is £30,000.

If the present derating of 50 per cent. is abolished, as expected, in 1963, the value will then jump to £60,000—a twenty-fold increase. The rates actually paid will probably go up by less than this, because one effect of revaluation is, or should be, to reduce the rate poundage. A calculation has been made which shows that, if the present local rate for this yard, which I agree is an extreme example, of 23s. 3d. were to be reduced to 15s. 2d., which is a very optimistic estimate in view of figures announced elsewhere in Scotland, the rates actually paid would rise from under £4,000 last year to over £45,000 in 1963.

In fact, it is unlikely that the rate poundage will be reduced by anything like this amount, and the increase in rates paid will, therefore, rise by even more than this eleven-fold calculation. Incidentally, these figures take no account of the increased valuation of the suppliers and sub-contractors associated with the yard.

A test appeal case is to be heard in October, and perhaps this may lead to some easement of the problem. If the position remains unchanged, or only a little changed, the effect of the rate increases will be to add a considerable extra cost to the running of the Clydeside yards, and thus to their tenders for new orders. In shipyards working to full capacity with 100 per cent. output, the increased cost per ship would vary from £20,000 to £70,000, according to the type of vessel. Where yards have empty berths, the cost per ship would be even greater. Further, these figures take no account of the higher rates that will be paid by suppliers and sub-contractors.

Revaluation on this scale could be a mortal blow to some Scottish yards. Orders already under construction are being built to a fine price which allows no margin for additional costs of this size. Moreover, when the burden of these new rates is added to estimates for new orders our ships will be priced right out of the market. I have stated the problem as I see it. I only hope that one result of the coming appeals will be that the burden will be lessened.

Mr. Cyril Bence (Dunbartonshire, East)

Does the hon. Gentleman agree that it looks as if most of our shipyards will be using only 50 or 60 per cent. of their capacity in the next two or three years? Therefore, this burden of rates will be spread upon only half the yard's potential.

Mr. MacArthur

I am obliged to the hon. Gentleman for making that point. This brings up the whole question of the method of assessment of a shipyard, which is the subject I now move on to.

The method of assessment is supposed to have some relation to the theoretical lettable value of a shipyard, but it would be interesting to know whether a shipyard could be let today. I very much doubt whether any tenant could be found anywhere for any shipyard. Further, there is surely an anomaly in the method of assessment. Normally, tools of trade are not assessed for rating purposes. For example, I understand that no rates are paid on the cranes or other equipment of a building contractor, because they are moveable, while a shipyard pays rates on cranes that are fixed, but not on those that move. Presumably, that is because the fixed cranes are regarded as part of the structure.

That produces absurdities, as in the case of an overhead moving crane under cover. The crane itself is not rateable because it moves. The rails on which it travels are rateable, because they do not move. Rates are also payable on the structure into which the rails are fixed—a heavy burden, because the structure has to be strong and substantial in order to carry the rateable rails which carry the non-rateable crane. Clearly, this operates with particular severity on the efficient, modernised yards that are now faced with enormous increase of rates because of the new equipment and structures they have installed.

Hon. Members may remember that my hon. and gallant Friend the Member for South Angus (Sir J. Duncan), in a recent Question, suggested that rates should not be paid on empty berths in shipyards, and I hope that will be considered—

Dr. Dickson Mabon rose—

Mr. MacArthur

Perhaps the hon. Gentleman will allow me just to finish this part of my remarks, after which I will gladly give way to him.

It seems to be reasonable that this should be done. I understand that in assessing hotels with a seasonal trade an allowance is made for the fact that for some part of the year some rooms are empty, and a lower figure is arrived at accordingly. There might be some difficulty about doing this for shipyards, because I understand that although the rateable value has a relationship to the theoretical lettable value of the yard, the figure is arrived at on a contractor's basis. There is, however, no reason for an allowance not being made for what I believe are called "voids"; empty rooms in hotels and, as I suggest, empty berths in a yard. I believe that the hon. Member for Greenock (Dr. Dickson Mabon) wished to intervene?

Dr. Dickson Mabon

I agree very much with what the hon. Gentleman says, but I wondered whether he could be tempted to say whether he favoured a partial derating for shipbuilding or preferred to see direct Treasury aid given to the industry. There is a very big and important difference between transferring a burden of this kind to the nation and transferring it to local ratepayers.

Mr. MacArthur

I know that the hon. Gentleman will understand me when I say that I do not want to go into all the detail, but I believe that there is a strong case for a review of the whole of the rating assessments of the yards—and for very good reasons. Rates are something over which the industry has no control. These new valuations have come upon it from the sky, just when the industry is least able to take on any extra costs at all. I am sure that the whole question of charging rates on equipment which represents tools of trade and nothing else should be reviewed.

The second pressing question is that of credit facilities. The recent statement by my right hon. Friend the President of the Board of Trade was certainly widely welcomed by shipbuilders, but we may still be at a disadvantage compared with other countries, and the credit available can be decisive in getting or losing an order. There is not only the question of the credit available but the knowledge that it will be available; speed is essential in this respect.

Shipbuilding is in a special position, and perhaps my hon. and gallant Friend the Parliamentary Secretary can tell us whether a continuing study is being made, or is to be made, of the credit facilities offered by other countries. For example, what credit facilities are available in Germany? Is the report true that new long-term low-interest credits have been introduced in Germany since the revaluation of the mark?

I must repeat that the internal problems of the industry must be a matter for management and unions. If they have the will to succeed in these difficult times, they will surely overcome their problems; but if the efficient shipyards are to succeed there must be a national responsibility to ensure that as far as possible external matters, such as revaluation and credit facilities, do not cripple the industry and remove its competitive strength.

One point that I believe has not been mentioned is our docking and wharfage facilities. With some notable exceptions, I believe that our docks have not kept pace with the development of our ships. Our small and able force of pilots perform extraordinary feats of skill when handling immense ships in congested waters, and I am sure that hon. Members would agree that it would be right from time to time to pay a tribute to these men.

If our general handling facilities are less efficient, less streamlined than those of the rebuilt Continental docks such as those at Rotterdam and Hamburg, we run the danger of losing transit trade, at least; and if we lost transit trade we lose with it some part of the ship-repairing work that is of such importance to the whole shipbuilding industry.

8.25 p.m.

Mr. Percy Collick (Birkenhead)

The Committee has had more or less all the important facts of the shipping and shipbuilding industries laid clearly before it today, and my hon. Friend the Member for Sunderland, North (Mr. Willey) did the Committee a very great service indeed in stating those facts so clearly and precisely. The most disturbing part of the whole of this debate has been the Minister's reply.

I have the honour to represent Birkenhead, which is known throughout the world for the quality of the ships it builds. It is not long since hon. Members had an opportunity of going to Southampton and looking over the "Windsor Castle", which was built in Birkenhead. Many other hon. Members have, at some time or other, gone over the "Ark Royal", which was built in Birkenhead. Among the shipbuilding fraternity all over the world, Birkenhead has a reputation for building some of the finest of this country's ships.

Unfortunately, as the hon. Member for Sunderland, South (Mr. P. Williams) said, these much more important facts are too little known to the public at large. People are, perhaps, more aware of Birkenhead because there happens to be an industrial dispute in its shipyards. That gets the headlines and obscures all the solid work and accomplishment that Birkenhead's shipyards have given to the nation in war and in peace, and I join with the hon. Member in deploring the rather one-sided publicity.

I shall not weary the House by repeating the facts of the industry. I want only to underline one point made by the hon. Member for Sunderland, South. A week today the House will be considering the country's economic plight—and "plight" is the right word. This great shipping industry which has played such a remarkable part in our economy both in war and peace, used to be a very great contributor to our balance of payments because of its earnings and its share of our invisible exports. It has drifted down to about the lowest figure that I remember, and is running at about £100 million a year. This plight of the shipping and shipbuilding industry that we have been talking about today is not something which has come upon us overnight. It has been developing for a fairly long time, and there are Members in this House who have been persistently challenging the Government about what they were to do about it.

I think that most of us assembled here today were hoping to hear that at long last this Government had bestirred themselves and were going to do something about it, instead of which, we had—and here I join with my right hon. Friend the Member for Easington (Mr. Shinwell)—one of the most pathetic speeches we have ever had even from the Minister of Transport. What did the right hon. Gentleman do? He distinguished himself by refusing to allow my hon. Friend the Member for Sunderland, North and myself to intervene. It was such a feeble effort that he dared not allow us to intervene. I intended to ask the right hon. Gentleman a very simple question. When the Minister recited to the House the unfortunate record of the number of ships being built by British shipowners in foreign shipyards, I was about to pose to him this very simple question. What did the Government intend to do about that? That is the question that I repeat now, and I invite the Parliamentary Secretary, who, unfortunately, is not here at the moment, to answer it when he replies to the debate.

The Government's answer, if I can give it instead of the Minister, is "Next to nothing". That is what the Government are proposing to do about it. The facts are clear, given by the Minister himself, and no one could have painted a more dismal picture. I agree again with my right hon. Friend the Member for Easington that it was not much of an advertisement of the great British shipbuilding industry. I can imagine that the headlines tomorrow will be focussed upon this, and will give a completely distorted picture.

I take my own constituency, which is well known to the Minister, because he represents the next division to mine in the House. The Birkenhead shipyard is one of the most modernly equipped in this country. Enormous sums are being spent in Birkenhead in modernising that shipyard, and I doubt whether there is one in Britain to equal it. The very fact that it is so modernised and that such modern methods of production have been introduced inevitably gives rise to some of the demarcation questions which arise. Of course, everybody regrets them. I regret that there should be demarcation disputes, but anybody who knew Birkenhead in the pre-war era, with 40 per cent. of its workers unemployed, realises that this is the background to it. Because these craftsmen see unemployment developing in the shipbuilding industry they are more concerned than they otherwise might be to protect their craft rights.

Hon. Members may decry it. Many of them have never worked in a shipyard and have not got quite the workmen's angle on it. Maybe we deprecate what the workmen are doing. We can regret it, but at least let us understand the background to it, which is, basically, the fear of growing unemployment in the shipyard towns, which is familiar to everybody who has spoken in the debate.

Mr. P. Williams

Of course, anyone who knows anything about shipyard towns, and the North-East is similar to Birkenhead, knows of this deep uncertainty and fear, but, surely, the hon. Gentleman would agree that nothing could bring about unemployment quicker than to carry on these demarcation disputes to a point where they crucify the industry. This is the thing which some of us, I think probably on both sides of the Committee, are terrified of happening because we are afraid that the men in the yards will work themselves out of jobs by these practices.

Mr. Collick

I do not disagree with a single thing that the hon. Member has said. I have, in fact, I think, almost said as much myself. It is deplorable that these disputes happen and that there is not a quick settlement. I wish that when they do happen there could be much quicker settlements than there are. I have had my say about that in the right places, and I do not want to repeat it now.

I should like the Committee to understand the other point of view which is so rarely heard. I do not mind what is done in getting managements and organised trade union people together to try to deal with the problem. I have expressed the view again and again that the concern of everybody ought to be to do everything he can to get the maximum shipbuilding orders here. That is common sense.

I now come to the Minister's part in this. As I say, this issue has been raised again and again in the House of Commons. We expected the Government to do something about it. Do not they consider it their business to look after the shipping interests of this country? Do not they regard it as their business to have a policy to deal with them? Or have we reached the state in Conservative philosophy of freedom for all, as hon. Members opposite call it, where everything is allowed to go on without guidance or policy? That is what I imagine we shall be talking about in this Chamber next Thursday. Surely the Minister, even in a Government like this, ought to have a policy to deal with the problems of the shipping industry.

Reference has been made today to flags of convenience. This is A B C to those of us who are concerned about shipping interests. As everyone knows, the United States has been one of the bugbears in this issue. We have appealed to the Government to try to do something positive with the American Government and to deal with the problem. We have done this, not during the last few weeks but for a number of years. Nothing positive has happened, unless it is that the Prime Minister had a memorandum calling attention to the position of British shipping drawn up in his Department which, when he paid one of his periodical visits to the President of the United States, he handed to him.

As far as any of us in this Chamber knows, the American President has done precisely nothing about it. I wish to have the Minister's attention because I do not want to do him an injustice. Nothing has happened about the memorandum which the Prime Minister laid before the President of the United States. I should have thought that the sequel to that would have been that the Government would have taken a positive line—I do not need to use the vocabulary which my right hon. Friend the Member for Easington suggested to the Government—and have done something with the American Government to bring matters to a more positive conclusion. [Interruption.] I do not know whether we have had a reply to the memorandum. How are we to know? All that I know is that nothing positive has happened.

Mr. Loughlin

We do not know whether the President of the United States has even read it.

Mr. Collick

That may be.

The Government did one thing for which we give them credit, if credit is necessary. It happened years ago, before the right hon. Gentleman was Minister. They increased the depreciation allowances on new ships to 20 per cent. I say this with some reservation, but there is another view about this. We give a 20 per cent. depreciation allowance to shipowners who build new ships. This is fairly considerable. The ordinary rate of depreciation is 10 per cent.

Mr. Marbles

It is normally 20 per cent. investment allowance and 40 per cent. for shipping.

Mr. Collick

I am dealing with investment allowances of 20 per cent. Rightly or wrongly, certain quarters ask whether we should continue to give 20 per cent. investment allowances on British ships built in foreign yards.

Mr. Marples

It is 40 per cent., not 20 per cent. It is important to note that the rate is double the amount that the hon. Member has in mind.

Mr. Collick

Of course, it is tremendously important. My point is whether we should pay the extra depreciation allowances on ships built for British shipowners in foreign ports. There is a view in the shipbuilding areas that when British shipowners have their ships built abroad, there is a case or reducing this depreciation allowance and allowing the normal rates to run. I do not know whether the Government have considered this matter. I know that it was put to the Chancellor of the Exchequer long before his Budget. We ought to have a statement from the Government about it, because one of the reasons why these depreciation allowances were increased was to help the British shipbuilding industry. Therefore, at a time when the orders for our yards are lower—in the first five months of the year we were down by 100,000 gross tons—is there not something to be said for at least reviewing the matter? As far as I know, the Government have not done that.

We had an extraordinary announcement today. The Minister gave us a speech which seemed to me to be unbalanced. He gave a completely distorted view of the British shipbuilding industry. Nobody reading his speech would imagine that we have the modern sort of yards that we have. Certainly, the right hon. Gentleman's speech was no great advertisement for British shipbuilding. Apart from the increase in the depreciation allowances, the Government have done nothing.

I can well imagine what happens. The Minister knows that this debate is coming on. He has had pressure from the hon. Lady the Member for Tyne-mouth (Dame Irene Ward) and all the other shipping interests to do something. So he goes into conclave with his permanent staff and he says, "We have to meet the House of Commons today. We will be called over the coals about our failure to do anything. We must do something about this." What happens?

Mr. Willey

A further committee.

Mr. Collick

It is not even a committee; it is an accountant. The permanent staff reply to the Minister, "We suggest that when you get up in the House, you say that you are appointing an accountant who will investigate the accounts of the shipbuilding firms and discover the weaknesses." What contribution will that be to our shipping problem? Certainly there might be point in it if the British shipyards were being investigated in comparison with the economics of the German yards or the Swedish yards, where the Swedish worker is paid far more than the shipyard worker in England.

An accountant is to be appointed to look into the figures of shipbuilding costs. This is the great contribution to British shipbuilding by a Conservative Minister of Transport whose party has been in office for ten solid years. That is apart from one thing which I must not forget and for which we must give the Government credit. They appointed a Parliamentary Secretary to look after shipping. I remember that when the transfer of function took place and shipping responsibilities were transferred from the Admiralty to the Minister of Transport the right hon. Gentleman told us that the number of staff dealing with shipping was very small—about twelve—and that he was quite capable of handling the matter.

Mr. Shinwell

Shipbuilding.

Mr. Marples

Shipping always has been with the Minister of Transport, or at any rate for a very long time. It was shipbuilding that was moved from the Admiralty. I thought that the hon. Member appeared to be most grateful to his right hon. Friend the Member for Easington (Mr. Shinwell) who stood on one side to correct him.

Mr. Collick

I always allow the Minister to interrupt me, but he is more than reluctant to allow me to interrupt him. The point which the right hon. Gentleman was making at that time was that he was quite capable of handling a small staff.

What have we got now? The Prime Minister said to his colleagues, "Shipping is coming in for quite a lot of criticism in the House of Commons. We must do something about this. I will appoint a Parliamentary Secretary." I pay the compliment to the hon. and gallant Gentleman of saying quite frankly that we have a very distinguished Parliamentary Secretary. I feel sorry for him nevertheless, because I imagine that he still has a small staff. When the hon. and gallant Gentleman replies to the debate I should like him to tell the Committee what his powers are and what he can do. He can, of course, come to look at our shipyards in Birkenhead and we shall welcome him. I am only sorry that his visit was postponed.

What can the hon. and gallant Gentleman do and what is his policy? I shall be most interested to hear what policy he will follow. Or is his appointment merely a sop to Parliament to make it appear that the Government are really doing something?

This may be a little extravagant, but I think that it ought to be said. It would have been more to the credit of the Minister of Transport to have told the Committee today quite frankly and honestly, "We have been in office for ten years. We very much regret that the position of our shipping and shipbuilding industry is worse than it has ever been in post-war days. We are very sorry, but the Committee must make the best of it."

8.50 p.m.

Mr. John Howard (Southampton, Test)

I should like to concentrate on the shipping industry. It has been generally agreed today that although we are the possessors of the largest merchant fleet, of about 19 million tons, it is dwindling in relation to world tonnage and that our problem is to discover ways and means of arresting that decline.

Three problems have been put forward as worthy of attention—flag discrimination, flags of convenience and building subsidies. We have, also the benefit of the report of the General Council of British Shipping, which not only focussed attention on these problems, but made some positive suggestions about how the Government in particular might collaborate with the industry in combating them. I hope that my hon. and gallant Friend the Parliamentary Secretary, when he replies to the debate, will say something about collaboration which is to take place between the industry and the Government.

I refer to flags of convenience first, because this is a problem which the Government can tackle through fiscal measures. So far, the only recommendation of the Council of Shipping which has been implemented is the assurance given by the Chancellor of the Exchequer, in the Budget, to the effect that investment allowances for shipping would be continued during the lifetime of this Parliament. The Council of Shipping put forward a number of suggestions for fiscal assistance, and my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner), myself and other of my hon. Friends tabled new Clauses to the Finance Bill in the hope that some of these suggestions might meet with the approval of the Chancellor of the Exchequer.

In particular, we suggested that encouragement should be given to British shipowners to acquire unexpired time charters, and that appropriate tax relief should be given for the purchase of these time charters, so as to extend the number of ships under the British flag. If we recall past statements by Chancellors of the Exchequer, we find that the present Minister of Aviation referred to the unique position of shipping and went on to say that it deserved special attention. His words were repeated by Lord Amory.

The fundamental point in relation to taxation which does not seem to be appreciated is that shipping has a particular problem. It is the lifetime of a ship which measures its earning capacity, not merely individual years. Therefore, our taxation system should take account of the booms and slumps in shipping and the need to apply profits, whenever they may be earned during the lifetime of the ship, in writing off the cost of the ship.

The position is ludicrous when one considers that if, during the first half of the life time of the ship, it earns substantial profits, and during the second half proceeds to lose an amount equivalent to those profits, tax is paid on profits earned in the profitable part of its life but no relief is given for the losses in the second unprofitable part, thus ending up with a deficit equivalent to the taxation paid.

Some reference has been made to the increase in the Greek fleet. This is not accounted for wholly by building in Greek shipyards for Greek shipowners. It is mainly accounted for by the fact that taxation relief by the Greek Government has induced Greek shipowners, who hitherto operated under flags of convenience, to transfer back to the Greek flag.

One recommendation which the Council of Shipping put forward was that British shipowners should themselves enjoy the benefit of flags of convenience in Bermuda if the Government could not take any other measures to cope with the problems created by flags of convenience. I think that so far, few, if any, British shipowners have taken advantage of the very limited right to establish new companies in Bermuda. However, this may be something which should be considered if the Government cannot think of better means of assisting the shipping industry with this problem.

Flag discrimination and subsidies are both forms of nationalism. Pressure is exerted by Governments to direct cargoes to ships of their national flag, regardless of any commercial considerations. In the Report of the General Council of Shipping there was an impressive list of various forms of discrimination which the Council had examined. I will not weary the Committee by reading it, but I point out that there is a wide variety of types of discrimination.

There can be discrimination by the use of import licences to ensure that cargoes are carried into a country by ships of that country's national flag. Within the Commonwealth, India is a classic example of that type of discrimination. There can be currency and exchange discrimination. Customs and harbour dues may be rigged to the benefit of the national flag, and there are any number of legislative controls, such as are operated by the United Arab Republic, and also through the United States cargo preference legislation, by which 50 per cent. of America's shipments of aid to foreign countries have to go in ships under the American flag. That has now been extended from aid to trade, and also covers agricultural surpluses.

The area of free competition is continually contracting through forms of competition for which efficiency alone is no match. The new entrants into world shipping, many of the new and emerging countries, who feel it is necessary to have a merchant fleet as a matter of prestige, are started by discriminatory practices and subsidies, and each new merchant ship which operates in those conditions progressively restricts the cross-trades upon which the whole economic working of the shipping industry depends. Ultimately, the real cost of world freights must rise if these practices continue. Dry cargo vessels will run perhaps one leg of a trip only with freight and the result will be a virtual doubling of world freight rates.

The question is what Her Majesty's Government can do to combat these forms of nationalism. A good deal has already been said about co-operating with the United States of America, or taking same form of action against the United States, and I will not elaborate on that theme now. But it strikes me as extremely strange that, when new countries in the under-developed areas are building their fleets, we should participate in loans and grants to them. The loans and development grants are not necessarily directly for the shipping, but there is not the slightest doubt that, if money is made available for other purposes, it releases funds for building up those fleets, which are then supported by discriminatory matters.

Again, I quote India as an example. Not only has its shipping a favourable rate of interest for shipbuilding—I think 3 per cent.—but recently this country has undertaken to lend India another £50 million during the period ending 31st March, 1963, and we have earlier signed loan agreements for £40 million.

Does the Ministry make representations when loans of this sort are contemplated? Does my right hon. Friend the Minister of Transport indicate to his colleagues that loans of this sort are most unwelcome to the shipping industry unless strings are attached to them and the loans made dependent upon the receiving countries abandoning this type of discriminatory practice, and is the help given to countries in underdeveloped zones made dependent upon their using the normal world shipping tonnage available to them and not building fleets of their own at enormous expense and with enormous running costs? I hope that my hon. and gallant Friend the Parliamentary Secretary will be able to make a point of saying something about these loans and grants.

The Temporary Chairman (Dr. Horace King)

Mr. Albu.

Mr. Stanley R. McMaster (Belfast, East)

On a point of order, Dr. King. As you have called the hon. Member for Edmonton (Mr. Albu), who is today speaking from the Front Bench opposite, does it mean that the debate is coming to an end? You will have noticed that not one hon. Member from a Northern Ireland constituency has been called to speak during this debate. In my constituency, there is more unemployment in the shipbuilding industry—in Messrs. Harland and Wolff—than in any other part of the United Kingdom. May I ask whether the hon. Gentleman will allow a little time so that someone can put the point of view of Northern Ireland?

The Temporary Chairman

Much as I sympathise with the hon. Member's point of view and the battle that he is fighting for his constituency, the point raised by him is not a point of order. Mr. Albu.

9.1 p.m.

Mr. Austen Albu (Edmonton)

Perhaps the hon. Gentleman can get his colleagues to do something for the problems of Northern Ireland, which they have neglected for too long.

I do not think that this debate can have given pleasure to any hon. Member. There can be no joy in a discussion of the type that we have had today. Shipping and shipbuilding have played a major part in the mythology of our industrial history. There is not one of us, especially those who have worked on ships or in the shipbuilding industry, who does not take pleasure and pride in their history.

We had an interesting statement from the Minister about the condition of these industries, but it was followed by what seemed to many of us to be an extraordinary lecture consisting mainly of criticisms of the workers in the industry, and the only proposal which the Minister made for action was, as my hon. Friends pointed out, another inquiry.

When we come to consider these problems, we are bound to have in our minds a serious conflict about the degree to which we ought to voice the widespread doubts about, and criticisms of, the shipbuilding and to some extent the shipping industry.

The Minister pointed out, as did my hon. Friend the Member for Sunderland, North (Mr. Willey), that in 1960, for the first time, this country had a deficit of £25 million in its balance of payments on shipping services, and that the net earnings of foreign exchange by the carriage of goods and passengers in British ships had fallen by more than half since 1952. Incidentally, in replying to a Question earlier this Session the Minister said that only 35 per cent. of the oil imported into this country was carried in ships under the British flag. That seems to have some implications for our fuel policy.

The debate has turned largely on the actions of foreign Governments. The United States of America have come in for a great deal of criticism, but, facing as they have in the last year their own balance of payments problem, there is not much chance of them changing their habits.

The hon. Member for Southampton, Test (Mr. J. Howard) criticised some developing countries, including India, but they, too, have their balance of payments problems, and I think we must accept that they will endeavour to build up their national fleets if not for nationalistic reasons, certainly for balance of payments ones. Even the fully developed Commonwealth countries are behaving in the same way. I agre with my hon. Friend the Member for Greenock (Dr. Dickson Mabon) that we are not likely to see much change in the habits of other countries in regard to their mercantile fleets.

The Government must face the fact that this industry is not likely again to be the subject of the impersonal decisions of the market. The Government must therefore take a decision and say what size of merchant fleet we should have. It must then take appropriate action to maintain that fleet and not expect it to be maintained by the normal methods of free competition.

Not for the first time in shipping debates the Government have been severely knocked about. They have been criticised by hon. Members on both sides of the House for not doing enough in the international field. For instance, they are not doing enough to assist owners who find themselves negotiating tariff rates in tariff conferences in which other Governments—sometimes of the Commonwealth—play a very important part. I have heard of a very pernicious type of action by these countries. In some of these tariff conferences Commonwealth Governments have used their influence to push down outward rates on goods from their countries and to push up inward rates on goods coming into their countries, very often from this country, thereby providing a hidden subsidy for their exports and a hidden tariff on imports from Britain.

I add my support to those who believe that the time has come for the Government to introduce enabling legislation which will show other countries that if we wish to take action to counteract what they are doing in the way of flag discrimination, and so forth, we are in a position to do so. The very step of introducing such legislation would have some effect. There is one minor thing which the Government could do to help British shipping, namely, to improve the statistics concerning it. I am told that ours are very inferior to those of other countries especially Sweden, in regard to the different types of shipping.

But the owners must not rely only upon the Government; they have to face a new and changing situation, and we must ask whether they are doing all they can to meet it. Too much is heard about the conservatism of the British shipping industry, and especially about the design of its cargo ships. Hon. Members may have seen an interesting article recently in Lloyd's List, which made serious criticisms of the cargo-handling methods of British ships. It referred to the primitive methods of lifting goods on to ships and removing goods from the holds. I was recently in Singapore, where the harbour is being developed with modern handling methods. While there I asked members of the harbour board in what order they place the ships of various nations from the point of view of handling. I will not give the order, but it was not flattering to British ships.

When I spoke recently to some young ships' officers I am afraid that I found similar criticisms. One of them told me, of British ships, "If you want to get a hitch you have to go all round the deckhouse". The Parliamentary Secretary will be able to correct my terminology, if necessary. This quesiton of handling goods and of deck layout needs more consideration. In fact, as the Minister admitted, the whole question of sea transport must be considered as a continuous process, from the factory, through the docks, to the customer, and the design of ships is tied up with the equipment at the ports, much of which is out of date. This is a matter in respect of which the Minister could help; where operational research on the problems of handling at the ports and handling on the ships, tied up together, could make a contribution. I ask the Parliamentary Secretary whether this is within the province of the Rochdale Committee, and when we can expect its report.

The shipbuilders often blame the owners for their own conservatism. As we have already seen, however, there are very unpleasant signs that owners are beginning to place orders overseas, largely because some believe that the shipbuilding industry is not modernising itself fast enough. There are some very well-known exceptions—some very good modern yards, with modern equipment, using modern methods and having good labour relations. And the rivers, in particular, vary a great deal in their respective labour relations. But in general, I am afraid, it is believed that the methods in British shipyards and the standard of management in British shipyards is poor compared with the new industries built up in other countries since the war. This is at least one reason for the loss of our place as the leading shipbuilding nation of the world.

Last year, although there was a decline in the world tonnage of ships delivered, Japan increased her delivery of ships by 44, which corresponds to an increase of 73,000 tons. The Netherlands figure increased by 9 ships, which is the equivalent of 66,000 tons. In this country the number of ships delivered went down by 24, the equivalent of 150,000 tons. As has been said, in 1960 we were a net importer of 18 ships, the equivalent of 317,000 tons.

It has often been said by hon. Members on both sides of the Committee, and it has recently been said by the industry, that we build the more difficult ships and the more valuable types. I am much in favour of our industries turning out products with a high conversion ratio. But the truth is that that statement is not correct. It is not true that other countries build tankers and we build only the complicated ships. We are the largest tanker-producing country in the world. At present, 45 per cent. of the ships built in British yards are tankers compared with 41 per cent. for the whole world and 39 per cent. in Japan. Passenger ships are an insignificant part of the total. As has been said, for the first time for thirty years, there is no passenger ship on the stocks in this country. Last year cargo ships were 71 per cent. of the vessels delivered in the world and of these the Japanese produced the most. It may be that last year we had a small net export surplus by value, but I doubt whether that is still the case or whether it will still continue. We shall be a net importer on value if the present trend continues.

The defects of the industry have been partially exposed by the Reports of the D.S.I.R. and the Shipbuilding Advisory Committee. Both reports were compromises. They were not objective reports but were agreed with the industry. I wish to say to some hon. Members, including some of my hon. Friends, who have criticised the Reports that the D.S.I.R. Report was not just an economic report. The D.S.I.R. had the assistance not only of its own technical staff but of outside assessors, naval architects and marine engineers, and so the report—not the report which was published, but the original report—was a fair and objective study of the industry.

The main scapegoat of the industry for many years has been the restrictive acts of the unions. I do not think that any hon. Member on this side of the Committee would deny that there are demarcation problems. I, for one, would not do so. I once nearly caused a strike on the Tyne when I was asked to drill some holes in an office for the foreman when I did not happen to be a driller. But that is rather a long time ago, and the Tyne has a good reputation in this respect.

I believe that the workers in the industry would have greater security were they prepared to accept more flexibility in their jobs as, for instance, in Sweden—[HON. MEMBERS: "Hear, hear."]—where very high wages are paid and the average worker probably does about three different jobs. In the very advanced shipbuilding firm of Cockums they have a good apprentice training school which they use for retraining their workers in new techniques.

Having said that, I wish also to say to hon. Members opposite who have been cheering me that this is not a new problem and that it has to be considered in the whole context of the economic and social climate of the country. I suggest to the Minister that he might care to read The Times leading article today where he will find some of the cases for bad industrial relations in this country. This problem was referred to by the Webbs in their "History of Trade Unionism." The problem goes back to the days of the building of wooden ships, when there was a distinction between the shipwrights and the carpenters according to the size of the timber which they handled.

Why is it, therefore, that during this period the employers have never taken the initiative and done anything about it? For instance, they could have called together the unions and discussed with them well in advance what technical changes were likely to take place in the industry and suggested ways and means of handling them. They might surely have said to the workers, "We realise that these great changes are going to take place. Some of the jobs for which you were apprenticed and with which you have acquired great skill and great pride as well as employment security are going to disappear or to change. We realise that you will want your cut out of these changes and you are entitled to get it, but let us sit round a table and do something about it."

The truth is that in this industry the attitudes of the management are generally antiquated. What loyalty can be expected in an industry which takes so little interest in the welfare of the workers and tries to treat them as it would have done fifty years ago? On the other hand, the real answer may be that the managements in the industry did not foresee the technical developments taking place. That is not surprising, for the number of highly qualified staff in the industry is quite insufficient. In particular, there are very few graduates employed in the industry, especially when compared with the number of graduates in yards of our overseas competitors.

The agreed D.S.I.R. Report was very misleading in this respect. In referring to qualified staff, it quoted from the White Paper published by the Ministry of Labour and referred to them as "graduates or equivalent". The majority of these qualified scientists and engineers are not graduates or anything like the equivalent of graduates, but are members of the Institution of Marine Engineers and their only qualification was that which they acquired when they obtained their Ministry of Transport sea-going ticket which is hardly a qualification for research and development in the industry.

It is estimated that there are perhaps 70 or 80 graduates in the whole industry, half of whom are employed by the Yarrow-Admiralty Research Department. The methods of recruitment and training in the industry are still in the George Stephenson age, which did us extremely well in the last century but is very much out-of-date today with all the new scientific and technical advances coming out of the laboratories and now that we have had seventeen years of the operation of the 1944 Education Act. The whole system of recruitment and training from the shop floor with the expectation of qualifying as a research and design engineer is out-of-date.

Unfortunately, there are other misleading figures in the report, because research and development expenditure has been calculated from the figures given for scientific and technical manpower. As a result, the amount spent on research and development in the industry has been grossly exaggerated. I ask the Parliamentary Secretary what is to be done about the recommendations of the Department of Scientific and Industrial Research, and particularly about Recommendation 4, which concerns production techniques. Many people believe that it is not so much investment which is needed but the application of production and planning techniques. There are very interesting ideas in this connection about the use of computers.

Mr. P. Williams

Before the hon. Member moves from the question of scientific and graduate manpower, can he explain to the Committee exactly where these figures come from, because there is considerable doubt about the figures given by the D.S.I.R. in its Report?

Mr. Albu

The figures on scientific and engineering manpower are taken from the reports of the Ministry of Labour and the Scientific Manpower Committee of the Advisory Committee on Scientific Policy and have been obtained by social survey methods which are quite reliable.

The weakest part of the industry is in marine engineering. This is extremely important, because a third of the cost of a ship is in machinery and the original report contained drastic criticisms, I regret to say, of British propulsive machinery. The manufacturing units are too small for economic manufacture and to support the necessary research. I ask the Parliamentary Secretary to say something in particular about research into steam turbines, which at present is supposed to be conducted by the Parsons Pametrada organisation which is descended from the old licensing arrangements. This organisation receives a Government grant from D.S.I.R., but it is not a genuine research organisation. It deals more with designs, although it takes no responsibility for quality. Nevertheless, most shipbuilding firms belong to it and have to pay a levy every time they put in turbines, whether they use the designs or not.

Before the war, the American Navy broke away from Parsons licensing arrangements and got its turbines designed and made by the electrical industry in the United States, because they produced a far larger volume of horse power per year and did much more research and development. The result was that at the end of the war I am told that American ships steamed all round our own.

The most advanced ship recently built, the liner "Canberra", was equipped not by a marine engineering firm but by an electrical firm, and a large part of the machinery was built after consultation with the technical staff of the Yarrow-Admiralty Research Department. I suggest that we might consider abolishing Pametrada or combining it with Y.—A.R.D. to try to build up a first-class and thoroughly scientific unit for research into steam turbine propulsion.

On diesels, it is really a tragedy that in our industrial history there is only one British design. Every other diesel is made under licence. Even this firm, unfortunately, has fallen miles behind in the building of large diesels. It is not as if we are unable to design these engines because, at the lower end of the scale, the smaller diesels are very good indeed and we are making a lot of money by their export. But in the marine diesels we fall very far behind indeed. If we are to put ourselves ahead, the Government will have to take some action in developing a proper marine diesel research organisation.

I take no pleasure in making these criticisms, but I believe that the situation is far too serious for the sort of complacency that we have heard in some of the speeches today. This is not the only industry of which one could make the same criticisms. The same could be said of many of the industries in which we were once world leaders and which formed part of our very industrial history in earlier times when these activities were started. One can say exactly the same about our railways, our machine tools and other branches of the mechanical engineering industries. Some economists say that the best thing would be to let these industries go and give our attention and encouragement to the new and advancing scientific industries. But it is impossible for a country as dependent as ours on the carriage of goods across the seas to adopt that attitude towards these industries. We could not allow these industries to decline further.

I am confident that we have the scientific and the engineering skills to make the shipbuilding industry again a world leader, but I no longer believe that this will take place without positive Government action. I do not mean just by protection, as some hon. Members have suggested, or by unconditional subsidy. I mean by direct intervention to raise the standard of design and the standard of management. One of the D.S.I.R. recommendations that could be used for this purpose was the use of development contracts.

I must point out, as I pointed out in Committee on the North Atlantic Shipping Bill, how useful the money to be spent on the Cunard ship would have been if it had been spent in the building of three ships of advanced design. The Government could have used their purchasing power on that occasion to ensure the thorough modernisation of one or two of the more backward yards and to try to improve the standard of research and development. I think that the industry is in such a state that it will not recover without far more Government action. I do not think that we can expect the workers in the industry to feel the confidence which will enable them to respond to the appeals made from both sides of the Committee unless they feel certain that they have the highest technical and managerial leadership in the industry. But they also want leadership from the Government and at the moment they are not getting it.

9.25 p.m.

The Parliamentary Secretary to the Ministry of Transport (Vice-Admiral John Hughes Hallett)

May I say at once, on behalf of my right hon. Friend and myself, that we have found this a most useful and helpful debate, notwithstanding some of the criticisms. From some points of view I confess frankly that we might have preferred to wait until the autumn, because then we shall be better placed to forecast trends in the shipping and, more particularly, shipbuilding industries.

Nevertheless, we have had a number of very interesting suggestions. I listened with particular attention to the weighty intervention of my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner) about the position of the tramp shipping industry. I assure those who have made suggestions, as one who has never hesitated to make use of other people's ideas, that they will all be most carefully and sympathetically studied. If I do not reply to all the points I hope that I shall be acquitted of discourtesy, for I think that it would take too long if I attempted to range over the entire ground covered by the debate.

I shall follow my right hon. Friend's example and, first, say a word about ship- ping, but before doing so I should like to say something about the relationship between the shipping and shipbuilding industries and their joint position in our economy. The Government are often accused, and have been accused during the debate, of indifference and of a failure to appreciate the special importance of the two industries. I utterly repudiate this charge. We fully recognise that in an island whose standard of living depends upon trade, these two industries have an importance which cannot be measured merely in terms of the number of men they employ or, indeed, by their total turnover as a percentage of the gross national product.

We also recognise that the industries are mutually dependent. British shipbuilders cannot prosper unless British shipping flourishes, any more than any other industry can prosper without a strong home market. Conversely, I think that British shipowners would very soon be in jeopardy if they were forced to depend to any large extent upon foreign shipbuilders. Moreover, whenever a British shipowner is driven out of trade or whenever British shipbuilders lose a contract to a foreign yard, our balance of payments immediately suffers. I think that the significance of the huge sums quoted by my right hon. Friend which have been and are being spent upon imported ships will not have been lost on the Committee.

From the trend of the debate I think that it will be agreed—I certainly agree—that perhaps the greatest single problem which faces British shipping is that of flag discrimination. It was referred to by a large number of speakers in the debate. The hon. Member for Sunderland, North (Mr. Willey) referred to it. My hon. Friend the Member for Sunderland, South (Mr. P. Williams) did so in even more forceful language and even suggested political sanctions against the United States. It was referred to by my hon. Friend the Member for Southampton, Test (Mr. J. Howard), although I am sure that he will not expect me to reply to his rather searching questions about what goes on between one Government Department and another.

But I want to say a word about retaliation. It is very easy to say that we ought to equip ourselves with wider powers—wider, that is to say, even than those which we already possess under the 1853 Act. But before we threaten another nation with retaliation we have to be clear precisely what action we have in mind. I am not saying that we necessarily need disclose our intentions—far from it—but the Government must have made up their mind what form of retaliation is practicable and whether, on a long view and taking all the related factors into consideration, it is likely to profit us.

I therefore repeat what my right hon. Friend said. If we suffer from discrimination which would justify retaliation, and if we can find ways and means of retaliating which would be both lawful and effective in this widest sense, we should be willing to consider them. The whole difficulty is that we so often have as a country much more to lose than we have to gain. In other words, our merchant fleet is still so large and we still carry so much of the world's trade that discrimination is hard for us to tackle.

My hon. and gallant Friend the Member for Barkston Ash and my hon. Friend the Member for Yeovil (Mr. Peyton) and the hon. Member for Sunderland, North all referred to the plight of coastal shipping. One or two hon. Members suggested that we should set up some sort of inquiry into it. I assure the Committee that the Government are well aware of the facts. We are well aware of the difficulties facing coastal shipping and also the claim of those in the industry for better protection against subsidised competition from the railways.

I can only say that my right hon. Friend is not yet ready to state his views on this matter. They will be reflected in due course in the new legislation which will be needed in connection with the railways. They can be debated then. Meanwhile, it is my right hon. Friend's intention to discuss this matter further with the General Council of Shipping.

The hon. Member for Greenock (Dr. Dickson Mabon) spoke a good deal about the problem of credit. We regard the problem of credit as affecting the whole industry as a problem for shipping rather than for shipbuilding. At the same time, it is perfectly true that it has become common for British shipowners to ask shipbuilders for special credit facilities. There is a sharp distinction to be drawn between the availability of credit as such and the supply of credit at artificially low rates of interest. The latter is a form of subsidy to which both the industry on the whole and the Government are opposed, except in very exceptional circumstances, such as the replacement of the "Queen Mary."

Nevertheless, the mere supply of credit at normal rates presents difficulty on occasions. That is particularly true in the case of loans for periods of between five and fifteen years. As for foreign orders, the new E.C.G.D. arrangements are proving a satisfactory solution, at any rate for orders worth £1 million or more.

The problem as it affects British shipowners is one of the questions which has been under discussion with the General Council of British Shipping for some weeks. It is still under active discussion. I assure the Committee that it is by no means such a simple problem as might appear at first sight.

Mr. Willey

Has Mr. Burney yet reported to the Minister? He is the accountant who the right hon. Gentleman appointed to advise him on the subject of credit.

Vice-Admiral Hughes Hallett

Mr. Burney is available to act as a consultant and is acting in that capacity.

The hon. Member for Edmonton (Mr. Albu) raised a rather different matter in connection with the shipping industry. He referred to the lack of marine engineer officers. This was mentioned particularly in the Survey of British Shipping, and is, as I think hon. Members know, a matter that has been under discussion between ship owners and successive Governments for a great many years now.

The present regulations originated, I think, almost exactly a hundred years ago, and were conceived, in the first place, in the interests of safety, and of no other interest at all. Broadly speaking, the present regulations require that at any rate most vessels should carry two certificated engineer officers, and they go on to prescribe the training and qualifications needed to gain the certificate.

In recent years, these regulations have come under increasing strain mainly, though not entirely, on account of wastage; that is to say, through young engineer officers giving up the sea and returning to the land. This has resulted in a disturbingly high number of vessels having to be granted special dispensation to sail short of such certificated officers, and I have even heard of one or two cases of ships being held up altogether from sailing because of a lack of engineer officers.

The original basic requirement for a certificated marine engineer was that he should be a craftsman. In recent times, though, alternative training schemes have been introduced in the hope of reducing the shortages, and these have laid rather less emphasis on skill of hand. At present, new courses are being planned at our technical colleges to widen this field of recruitment, and suitable equipped workshops are being planned in which practical training can be given so as to get out of the difficulty of finding these young men apprenticeship jobs in the shipyards.

On a longer view, this problem is being carefully re-examined in consultation with the Shipping Federation and in the light of the very different conditions that prevail today. Here, I agree with the hon. Gentleman, After all, in 1861 there was no wireless telegraphy, and ships' main engines could and did break down at sea, and could be, and often were, repaired at sea. Today, major breakdowns of the main machinery are uncommon and, when they do occur, it is generally rather unlikely that they can be repaired at sea, no matter who is on board. On the other hand, it is possible to call for help by wireless.

What we are doing, therefore, is to address ourselves to two basic questions, First, what are the qualifications and the training required of an officer to fit him for the charge of the engine room in a modern ship? Secondly, what, in modern conditions, ought to be the Government's responsibility in all this? Until we have reached a measure of agreement on these basic questions, it is difficult to decide what long-term reforms are needed—

Mr. J. Howard

Can my hon. and gallant Friend say whether consideration is also being given to the training of deck officers? Certain proposals have been put forward by the Royal Society of Arts, and I wondered whether he has given consideration to that.

Vice-Admiral Hughes Hallett

If my hon. Friend asks me, I can say at once that the answer is "No". I would not commit myself "off the cuff" to saying that there have been no consultations with the Ministry, but, in any case, that is nothing like so urgent a problem for the industry as is the lack of engineering officers, which is one of our major current problems.

One matter that naturally disturbs the modern British shipowner is the high and rising cost of labour. That applies to both the cost of crews, which can now amount to as much as 40 per cent. of the total operating costs of a ship, and to the cost of dock labour which has made cargo handling so extremely expensive. This has led us to conclude that one road to greater efficiency in shipping is the same road as that followed by other industries, namely, to secure by technical means greater productivity from the labour employed; in other words, by means of automatic controls to reduce the watch keeping element of a ship's crew and improve cargo handling and cargo stowing to speed up the turn round. Here, I entirely agree with a point made by the hon. Member for Edmonton. These, of course, are matters for research and development, and this is the particular bridge by which I intend now to cross over to the shipbuilding industry.

I noted, also, the observation made by the hon. Member for Edmonton about the need for co-ordination between those who design and plan our docks, on the one hand, and the research organisations and the shipbuilding industry as a whole, on the other. We will see that this point is drawn to the attention of the Rochdale Committee, although I doubt whether it would overlook it in any case.

To come back to the question of research and development as a whole, the D.S.I.R. Report is still fresh in our minds and it has been referred to by a large number of hon. Members. I can assure them at once, and this also touches on a point made by the hon. Member for Edmonton, that the research organisation in relation to marine engineering is under particular inquiry at this moment between the D.S.I.R., the industry and the Ministry.

The hon. Gentleman also asked about Pametrada, and that, of course, is a very vital factor in these discussions. The question naturally arises whether the basis on which Pametrada operates can be broadened and strengthened, and whether it will be possible or not to bring diesel research within its scope. I can assure hon. Members that the shipbuilding industry is well aware of the fact that the heavy electrical engineering industry got well ahead some years ago in turbine design and development.

I noticed, in going round the shipyards that there is quite an appreciable number of vessels built in our yards which are being engined by the electrical engineering industry rather than the marine engineering industry, but, having said that, it is only fair to say that it is to some extent a two-way traffic, because Yarrows now build boilers up to, I think I am right in saying, 700,000 h.p., and, as hon. Members will understand, they are not intended for use in vessels, but are intended for shore generating stations.

There was one point which did not come out in the D.S.I.R. Report to which we attach importance. In the British Shipbuilding Research Association, the industry has an effective organition under very able direction. Incidentally, in answer to the hon. Gentleman, it undertakes research in the production methods and techniques, but, oddly enough, problems such as the ones to which I referred earlier—automatic controls in ships and cargo handling devices, and so on—are outside its scope. They are regarded as shipowners' problems, and I say quite frankly that we cannot help questioning whether such a distinction between research on behalf of operators, on the one hand, and on behalf of the designers and builders, on the other, is realistic.

We therefore very much hope that the two industries will now jointly evolve some wider research organisation which can handle these problems as a whole. At the same time, it would be wrong to overlook the fact that the study of these particular matters by individual owners and by individual builders is going forward all the time, very actively in some cases, and no one would wish to stop that. Nevertheless, the fact remains that one of the surest ways of getting both the shipping and shipbuilding industries to flourish once again would be if Britain could build and operate ships markedly in advance of those of the rest of the world.

I turn to the state of the shipbuilding industry. My right hon. Friend has already explained, by means of arresting statistics which I am sure disturbed the Committee, why we are so deeply concerned with the present position. Nevertheless, I gladly confirm what has already been asserted by a number of hon. Members, such as the right hon. Member for Easington, the hon. Member for Rotherham (Mr. Jack Jones) and my hon. Friend the Member for Sunderland, South, namely, that the vessels built in our best yards are still of the highest quality, unsurpassed by those built by other nations. Similarly, the method of building, or, perhaps I should say, of assembling, vessels in our most up-to-date yards is as good as it is anywhere else.

The question therefore arises: why is it that some of the best British yards are losing contracts to our foreign rivals? As my right hon. Friend pointed out, this is a question which cannot be answered with any assurance until we have completed the thorough and careful examination which has been in progress for the last three months. It is very easy to point to possible causes, and a good deal of the debate has been taken up in doing that. All that I can and wish to do is to refer to three of the more obvious factors which have been mentioned without making the slightest attempt to assess their relative importance. I do not think that we know enough to do that at present.

First, it is widely said that there is too much unfair denigration of our shipyards. The right hon. Member for Easington complained that the speech of my right hon. Friend came under that heading. But even greater harm can be done by undue complacency—[H0N. MEMBERS: "We have had ten years of it."]—much greater harm. I am sure that the right hon. Gentleman is familiar with what happened when the false prophets in the Old Testament were listened to when they said, "Go out and prosper". We wish to avoid that mistake. However, I agree that it does a great disservice to the industry to exaggerate the effect of labour disputes or to pretend that, because some of our shipyards are old-fashioned, the entire industry is dying on its feet. As several hon. Members have said and as I gladly confirm, nothing could be further from the truth.

It is often asserted—this was a point made by the right hon. Member for Easington and by my hon. Friend the Member for Sunderland, South—that some of the low tenders by foreign yards are uneconomic—that is, they are offers to build at a loss. I would not dispute that for a moment, but it would be very rash to assume that such undercutting is necessarily rendered possible by direct Government subsidy, whether open or concealed. It is true and is a well-known fact that one or two countries—France is an example—openly pay a subsidy to their shipbuilders. We hope that they will soon desist. Certainly, France is under pressure from her friends in the Six to drop her subsidy. It is true that some of our most formidable rivals can obtain credit at lower interest rates.

In addition, we must recognise that some of the new continental yards which build on the most modern lines with very little regard to the likely demand are now fighting for their survival, just as our industry is fighting for its survival. Continental shipbuilders, like our own, are prepared if necessary, and for a time, to build at a loss in order to keep their labour force employed and their yard in business in the hope of better times to come. That is something about which we can hardly complain. On the other hand, if it should transpire that the resources whereby this is being done are the result of direct Government aid, a part of some permanent Government policy, that would be a different matter.

I can only tell the Committee that there is much less evidence to show that this is happening than some of the speeches made by hon. Members suggest. To discriminate in the granting of investment allowance, as was suggested by the hon. Member for Birkenhead (Mr. Collick) would not only put our shipowners at a great disadvantage as my right hon. Friend pointed out, but would also get us into trouble because it would be in contravention of various agreements such as G.A.T.T.

Mr. P. Williams

Will Peat, Marwick, Mitchell and Co. establish any of these facts?

Vice-Admiral Hughes Hallett

They will certainly establish as much as they can. Had my hon. Friend listened to my right hon. Friend's speech with any care, he would have noticed that there is a next stage of the inquiry—the consultations with the Shipbuilders' Conference. It is that stage when, I hope, we shall be able to get down to some of these things.

Mr. Loughlin

Jobs for the accountants.

Mr. P. Williams

It is the facts about the foreign yards which we need to know.

Vice-Admiral Hughes Hallett

I cannot prolong the subject, because I have other things to say. I point out in passing, however, that once we have accurate information about the difference between the tenders and by analysing the way the money goes in any particular ship, it will be possible to arrive at a fairly firm conclusion as to whether an undercutting tender could possibly have been done by ordinary methods.

Mr. Shinwell

If the hon. and gallant Gentleman is saying that there is doubt whether foreign shipbuilders are given subsidies, either in the form of credits or in some other fashion, to enable them to get the tenders, how does he link that with the case put by his right hon. Friend, in connection with the North Atlantic Shipping Bill, that the reason for the proposed subsidy contained in that Bill was the information in the right hon. Gentleman's possession about subsidies abroad?

Vice-Admiral Hughes Hallett

My right hon. Friend said exactly the opposite. That was what the right hon. Gentleman said in his speech. What I am saying is that there is much less evidence of this than has been suggested by the right hon. Gentleman.

My third point concerns shipyard labour, about which a great deal has been said. I repeat and underline what was said by my right hon. Friend. No one, on either side, doubts that strikes cause great harm and cannot be too strongly condemned. Yet it is fair to say that we have many shipyards where the labour relations are good and where there have been no strikes, apart from the national strike in 1957.

Indeed, the effect of industrial disputes in the shipbuilding industry is, perhaps, less than the effect of excessively narrow demarcation, extreme rigidity and certain restrictive practices such as reluctance to use new machines, a dislike of working shifts where this is advantageous, and so on. I am grateful to feel that in this point of view we have the support of the hon. Member for Edmonton and also the support of the hon. Member for Rotherham, from the benches opposite.

Shipbuilding is peculiar from the labour point of view inasmuch as the balance between the trades constantly shifts while a vessel is being built. It has been said that at least three ships would have to be built in any one yard with their dates of laying down perfectly phased if continuous employment was to be given to all the trades. Superimposed upon this is the further change in the balance of trades which comes about as a result of technical development.

It therefore follows that in no productive industry is there greater need for flexibility and yet, in practice, there is no productive industry facing world competition in which the demarcation is narrower or more rigid. Whereas the labour in our Continental competitors is organised in two unions, our shipbuilders have to compete with 25 unions, one of which is sub-divided into six different skills. The result of all this is that the problem which confronts our shipyard management is immeasurably more complex than that which confronts their competitors.

Labour itself has a great deal to gain by reform, because, quite apart from the growing crisis which now confronts the industry, even in good times one of the consequences of excessive demarcation is that it leads to casual labour, Men have to drift from one yard to another as the demand for their skill fluctuates. Decasualisation is impossible under present conditions. The only road to it is by way of greater flexibility. We therefore earnestly hope that action will be taken within the industry to improve this matter, and may be taken soon—if possible without Government intervention.

Hon. Members ask what are the future prospects of the industry. I can only say that all past experience shows how rash it would be to prophesy. There have been occasions in the past when the outlook seemed hopeless and yet within twelve months some change in the world situation transformed the position. But I should be misleading the Committee if I did not say that with the present huge excess in world building capacity the outlook for the shipbuilding industry today is more sombre than at times of previous recessions.

We are sure of one thing, and that is that the future of both industries lies chiefly in the hands of those who serve them and the extent to which any Government can help industries which by their nature are world industries faced with world competition is marginal. I have great confidence that the industries will meet the challenge which confronts them. I have recently visited shipyards and have been impressed by the determination of managements to become and remain competitive and the realisation of the men working in the yards of the difficulties and the challenge that they are up against.

Fortunately for the country, many of those who go in for shipping and shipbuilding at whatever level do so as much for traditional reasons as for anything else. To those whose families have built our ships and sailed them for generation after generation there are rewards not to be measured in terms of money alone.

Mr. Rankin rose—

Vice-Admiral Hughes Hallett

There is no other field in which industrial endeavour and so much pride of achievement can play a greater part. This is one reason why I feel confident that these industries will come through to better times provided, and only provided, that those who serve in them can be made to realise the extent and urgency of the danger that confronts them. Shipbuilding, in particular, must fight for its survival and the important thing is that those who serve the industry should realise the nature of the dangers that face it.

Mr. Wiley

I beg to move, That Item Class IX, Vote I, Ministry of Transport, be reduced by £5.

Question put:—

The Committee divided: Ayes 132, Noes 220.

Division No. 250.]	AYES	19.58 p.m.
Abse, Leo	Herbison, Miss Margaret	Parker, John
Albu, Austen	Hilton, A. V.	Parkin, B. T.
Bacon, Miss Alice	Holman, Percy	Pavitt, Laurence
Bence, Cyril	Houghton, Douglas	Plummer, Sir Leslie
Blyton, William	Hoy, James H.	Prentice, R. E.
Boardman, H.	Hughes, Emrys (S. Ayrshire)	Pursey, Cmdr. Harry
Bowden, Herbert W. (Leics. S.W.)	Hughes, Hector (Aberdeen, N.)	Randall, Harry
Bowles, Frank	Hynd, H. (Accrington)	Rankin, John
Boyden James	Hynd, John (Attercliffe)	Reid, William
Brockway, A. Fenner	Janner, Sir Barnett	Reynolds, G. W.
Brown, Alan (Tottenham)	Jay, Rt. Hon. Douglas	Rhodes, H.
Brown, Ht. Hon. George (Belper)	Jeger, George	Robertson, John (Paisley)
Butler, Herbert (Hackney, C.)	Johnson, Carol (Lewisham, S.)	Ross, William
Callaghan, James	Jones, Dan (Burnley)	Royle, Charles (Salford, West)
Castle, Mrs. Barbara	Jones, Jack (Rotherham)	Shinwell, Rt. Hon. E.
Chapman, Donald	Kenyon, Clifford	Silverman, Sydney (Nelson)
Cliffe, Michael	Key, Rt. Hon. C. W.	Skeffington, Arthur
Collick, Percy	Lawson, George	Small, William
Corbet, Mrs. Freda	Lee, Miss Jennie (Cannock)	Snow, Julian
Crostand, Anthony	Lever, Harold (Cheetham)	Sorensen, R. W.
Cullen, Mrs. Alice	Lewis, Arthur (West Ham, N.)	Steele, Thomas
Davies, S. O. (Merthyr)	Loughlin, Charles	Stewart, Michael (Fulham)
Deer, George	Mabon, Dr. J. Dickson	Stonehouse, John
Diamond, John	MacColl, James	Strachey, Rt. Hon. John
Dodds, Norman	Mclnnes, James	Stross,Dr.Barnett(Stoke-on-Trent,C.)
Driberg, Tom	McKay, John (Wallsend)	Swain, Thomas
Ede, Rt. Hon. C.	Mackie, John (Enfield, East)	Swingler, Stephen
EdWards, Walter (Stepney)	MacPherson, Malcolm (Stirling)	Taylor, John (West Lothian)
Evans, Albert	Mallalieu,J.P.W.(Huddersfield,E.)	Thomson, G. M. (Dundee, E.)
Fitch, Alan	Manuel, A. C.	Thornton, Ernest
Fletcher, Eric	Marquand, Rt. Hon. H. A.
Foot, Michael (Ebbw Vale)	Marsh, Richard	Warbey, William
Forman, J. C.	Mayhew, Christopher	Weitzman, David
Fraser, Thomas (Hamilton)	Mendelson, J. J.	wells, William (walsall, N.)
Gaitskell, Rt. Hon. Hugh	Mitchison, G. R.	Wigg, George
Gordon Walker, Rt- Hon. P. C.	Moody, A. S.	Wilcock, Group Capt. C. A. B.
Gourlay, Harry	Morris, John	Wilkins, W. A.
Grey, Charles	Moyle, Arthur	Willey, Frederick
Griffiths, W. (Exchange)	Noel-Baker, Francis (Swindon)	Williams, W. R. (Openshaw)
Hall, Rt. Hn. Glenvil (Colne Valley)	Noel-Baker, Rt. Hn. Philip (Derby, S.)	Williams, W. T. (Warrington)
Hamilton, William (west Fife)	Oliver, G. H.	Willis, E. C. (Edinburgh, E.)
Hannan, William	Oram, A. E.	Wilson, Rt. Hon. Harold (Huyton)
Hart, Mrs. Judith	Owen, Will	Yates, Victor (Ladywood)
Hayman, F. H.	Padley, W. E.
Henderson,Rt.Hn.Arthur(RwlyRegis)	Panned, Charles (Leeds, w.)	TELLERS FOR THE AYES:
		M r. Redhead and Mr. Cronin.
NOES
Agnew, Sir Peter	Bullus, Wing Commander Eric	Doughty, Charles
Allan, Robert (Paddington, S.)	Burden, F. A.	Drayson, G- B.
Allason, James	Butcher, Sir Herbert	Duncan, Sir James
Ashton, Sir Hubert	Campbell, Sir David (Belfast, S.)	Eccles, Rt. Hon. Sir David
Atkins, Humphrey	Campbell, Cordon (Moray & Nairn)	Eden, John
Barber, Anthony	Carr, Compton (Barons Court)	Elliot, Capt. Walter (Carshalton)
Barlow, Sir John	Carr, Robert (Mitcham)	Errington, Sir Eric
Batsford, Brian	Cary, Sir Robert	Farr, John
Baxter, sir Beverley (Southgate)	Channon, H. P. G-	Fisher, Nigel
Beamish, Col. Sir Tufton	Chataway, Christopher	Fraser, Hn. Hugh (Stafford & Stone)
Bell, Ronald	Clark, Henry (Antrim, N.)	Fraser, Ian (Plymouth, Sutton)
Bennett, F. M. (Torquay)	Clark, William (Nottingham, S.)	Freeth, Denzil
Berkeley, Humphry	Clarke, Brig. Terence (Portsmth, W.)	Gardner, Edward
Bidgood, John c.	Cleaver, Leonard	George, J. C. (Pollok)
Biggs-Davison, John	Cole, Norman	Gibson-Watt, David
Bingham, R. M.	Cooper, A. E.	Glyn, Sir Richard (Dorset, N.)
Birch, Rt. Hon. Nigel	Cordie, John	Goodhart, Philip
Bishop, F. P.	Corfield, F. V.	Grant, Rt. Hon. William
Black, Sir Cyril	Costain, A. P.	Grant-Ferris, Wg Cdr. R.
Bowen, Roderic (Cardigan)	Courtney, Cdr. Anthony	Green, Alan
Box, Donald	Craddock, Sir Beresford	Grimston, Sir Robert
Boyd-Carpenter, Rt. Hon, John	Critchley, Julian	Grosvenor, Lt.-Col. R. G.
Boyle, Sir Edward	Cunningham, Knox	Gurden, Harold
Braine, Bernard	Curran, Charles	Hamilton, Michael (Wellingborough)
Brewis, John	Currie, G. B. H.	Hare, Rt. Hon. John
Brooke, Rt- Hon. Henry	Dance, James	Harris, Frederic (Croydon, N.W.)
Browne, Percy (Torrington)	d'Avigdor-Goldsmid, Sir Henry	Harrison, Brian (Maldon)
Bryan, Paul	Deedes, W. F.	Harrison, Col. Sir Harwood (Eye)
Buck, Antony	Donaldson, Cmdr. C. E. M.	Harvey, John (Walthamstow, E.)
Hastings, Stephen	McMaster, Stanley R.	Sharples, Richard
Hay, John	Macmillan, Rt.Hn. Harold(Bromley)	Shaw, M.
Heald. Rt. Hon. Sir Lionel	Macpherson, Niall (Dumfries)	Shepherd, William
Hendry, Forbes	Maddan, Martin	Skeet, T. H. H.
Hicks Beach, Maj. W.	Maitland, Sir John	Smith, Dudley (Br'ntf'rd & Chiswick)
Hiley, Joseph	Markham, Major Sir Frank	Smithers, Peter
Hill, Dr. Rt. Hon. Charles (Luton)	Marlowe, Anthony	Smyth, Brig. Sir John (Norwood)
Hill, J. E. B. (S. Norfolk)	Marples, Rt. Hon. Ernest	Speir, Rupert
Hirst, Geoffrey	Marshal), Douglas	Stanley, Hon. Richard
Hobson, John	Mathew, Robert (Honiton)	Steward, Harold (Stockport, S.)
Holland, Philip	Maudling, Rt. Hon. Reginald	Storey, Sir Samuel
Hope, Rt. Hon. Lord John	Maxwell-Hyslop, R. J.	Sumner, Donald (Orpington)
Hopkins, Alan	Mills, Stratton	Talbot, John E.
Hornby, R. P.	Montgomery, Fergus	Tapsell, Peter
Hornsby-Smith, Rt. Hon. Patricia	More, Jasper (Ludlow)	Taylor, Sir Charles (Eastbourne)
Howard, Hon. G. R. (St. Ives)	Morgan, William	Taylor, Edwin (Bolton, E.)
Howard, John (Southampton, Test)	Nicholson, Sir Godfrey	Teeling, William
Hughes Hallett, Vice-Admiral John	Noble, Michael	Thatcher, Mrs. Margaret
Hughes-Young, Michael	Oakshott, Sir Hendrie	Thomas, Leslie (Canterbury)
Hulbert, Sir Norman	Orr, Capt. L. P. S.	Thompson, Richard (Croydon, S.)
Hurd, Sir Anthony	Orr-Ewing, C. Ian	Turner, Colin
Hutchison, Michael Clark	Osborne, Sir Cyril (Louth)	Turton, Rt. Hon. R. H.
Iremonger, T. L.	Page, John (Harrow, West)	Tweedsmuir, Lady
Jackson, John	Page, Graham (Crosby)	Vane, W. M. F.
James, David	Pannell, Norman (Kirkdate)	Vaughan-Morgan, Rt. Hon. Sir John
Jenkins, Robert (Dulwich)	Pearson, Frank (Clitheroe)	Vickers, Miss Joan
Jennings, J. C.	Peel, John	Vosper, Rt. Hon. Dennis
Johnson, Dr. Donald (Carlisle)	Percival, Ian	Wakefield, Edward (Derbyshire, W.)
Johnson, Eric (Blackley)	Pickthorn, Sir Kenneth	Walker, Peter
Johnson Smith, Geoffrey	Pike, Miss Mervyn	Walker-Smith, Rt. Hon. Sir Derek
Joseph, Sir Keith	Pilkington, Sir Richard	Wall, Patrick
Kerans, Cdr J. S.	Pott, Percivall	Watkinson, Rt. Hon. Harold
Kerr, Sir Hamilton	Price, David (Eastleigh)	Wells, John (Maidstone)
Kershaw, Anthony	Prior, J. M. L.	Whitelaw, William
Kirk, Peter	Pym, Francis	Williams, Dudley (Exeter)
Kitson, Timothy	Quennell, Miss J. M.	Wise, A. R.
Leburn, Gilmour	Rawlinson, Peter	Wolrige-Gordon, Patrick
Legge-Bourke, Sir Harry	Redmayne, Rt. Hon. Martin	Woodhouse, C. M.
Lewis, Kenneth (Rutland)	Rees, Hugh	Woodnutt, Mark
Linstead, Sir Hugh	Rees-Davies, W. R.	Woollam, John
Litchfield, Capt- John	Renton, David	Worsley, Marcus
Lloyd, Rt.Hn. Geoffrey(Sut'nC'dfield)	Ridley, Hon. Nicholas
Lloyd, Rt. Hon. Selwyn (Wirral)	Ridsdale, Julian	TELLERS FOR THE NOES:
Longden, Gilbert	Robinson, Sir Roland (Blackpool, S.)	Mr. Finlay and
Loveys, Walter H.	Roots, William	Mr. Chichester-Clark
Lucas-Tooth, Sir Hugh	Scott-Hopkins, James

Original Question again proposed.

Mr. R. P. Hornby (Tonbridge)rose—

It being after Ten o'clock The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress; to sit again Tomorrow.