HC Deb 08 June 1962 vol 661 cc823-57

11.27 a.m.

Mr. James H. Hoy (Edinburgh, Leith)

I wish to raise a question that was raised with the Secretary of State for Scotland a week or two ago about the decision of the Government to allow fishing vessels to be built in foreign, shipyards with the aid of British money. I do not want to overstate the case, but I think this decision, when it became known, caused great disquiet in all sections of the House, and today, despite what has happened in another place, it remains quite inexplicable.

The question has been asked, and perhaps I ought to answer it straight away, as to why this Question was put down to the Secretary of State for Scotland and not to the Minister of Agriculture, Fisheries and Food, or perhaps to the Minister of Transport. The answer is very simple. The other right hon. Gentlemen could not be reached by oral Questions on the Order Paper, and we considered it of such importance that we felt we ought to have at least one Minister who was involved who could answer orally to this House. That was the reason the Question was put down to the Secretary of State for Scotland.

There are two complaints arising from this Question. First, Members on this side of the House, and I am certain many Members opposite, who served on the Committee dealing with the Sea Fish Industry Bill for 5½ months find it very difficult to understand why no Minister was able to say during these long proceedings that the Government intended to make a substantial alteration in the payment of subsidies. There certainly were plenty of opportunities. I remember on one occasion, when my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin) hinted that this might be possible, he was quickly hushed by Members in all quarters of the Committee who made him understand quite clearly that these subsidies could only be paid to vessels built in British shipyards. So it was strange that, after all these months, the Government either had not made a decision or did not want to announce it to the House.

Secondly, when the debate took place in another place only the day before the Government were about to make their announcement, the Minister did not give the noble Lords an opportunity of discussing this matter on the Second Reading of the Bill. It wag not until the following day that the hon. Member for Truro (Mr. G. Wilson) placed on the Order Paper a Question for Written Answer. I have no doubt that the hon. Gentleman did it not quite knowing what it was all about or what answer was likely to come. It was a question put down at the behest of the Minister of Agriculture, Fisheries and Food. There is no doubt in my mind about it, and I am certain that the hon. Gentleman will not deny it. So, on a Friday afternoon, we got this answer to a Question, which was in fact a departure from the practice of the House. I still do not like the reason given by the noble Lord the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, in another place, and that is why I quote him. He said, in reply to a question: If my right hon. Friend was trying some trickery by putting through this administrative arrangement before Parliament had a chance of discussing it, why did he do it three days before the Committee stage of the Bill in your Lordships' House, when here we all are discussing it? The answer to that is that before the noble Lord gave this answer in the House of Lords he had in fact sought to circumscribe the discussion in another place by raising a question of privilege, because he said that this would involve finance and the noble Lords would in fact have to get the sanction of this House. He cannot have the argument both ways. I am bound to tell the right hon. Gentleman that we still feel that it was quite wrong for the Government to make the decision in this way. If a statement had to be made, it ought to have been made orally in the House of Commons, because it was a departure in practice from what had taken place heretofore.

Reasons have been asked for the decision. No Minister has been able to say which fishermen or section of fishermen asked for this change. The noble Lord was challenged in another place to state the reason, and in reply he had to say that he was unable to quote any at all, and that he would try to find out, but so far no decision had been given. The Minister said in reply: But we think that it would be foolish now to fix the conditions for Government assistance in such a way that this country's fishermen could not have the fullest and widest possible choice. That was the first answer given. It is passing strange that this legislation, which has been on the Statute Book for about eighteen years and which has now moved over into its decline, should be the period at which the Minister thinks that this change ought to be made. British shipyards have never been more able than at present to undertake orders. In years gone by, when there was a tremendous rush of shipping orders, difficulties did arise, but that is not the position today. That answer, I say to the right hon. Gentleman, we just do not believe.

The second excuse given by the Minister in another place—and here I come to the answer given by the right hon. Gentleman—was that we have our international agreements. We cannot find out from the right hon. Gentleman under which international agreements this decision was made. Challenged in another place, the Joint Parliamentary Secretary mumbled G.A.T.T. and E.F.T.A. If we take G.A.T.T. first, it has been in existence for a considerable number of years—I cannot remember how many years. Surely G.A.T.T. has not just at this moment decided that the British fishing industry and the Government and the Ministry of Transport have to alter all the rules and laws and an Act of Parliament at this moment. I do not believe that, and I am certain that the House will not do so.

E.F.T.A. has been in existence for two or three years. I should like to know—and I am certain that the House would like to know—why there has been a failure on the part of the Government to answer this question, as to what representations the Government had from G.A.T.T. or E.F.T.A. calling for a change in this Government's policy. When I say "this Government" I mean the British Government, because this affects the British nation as a whole.

Then it was asked in another place, if in fact these were not the reasons, who was responsible for making the decision or asking for the decision. One would have thought that the Minister in another place would have been able to answer this question, but it was not so. In reply, he said: I do not think I can answer that, because I cannot say. That was said by the Joint Parliamentary Secretary. He simply could not say who was responsible for making this decision. At a later stage, when pressed on this question, the Minister without Portfolio, Lord Mills, intervened and said: I think I owe it to the noble Viscount to answer his question. If I understand his question it is: 'Who thought of this? Who was responsible for it?' My only reply is that he will not get an answer to that."—[OFFICIAL REPORT, House of Lords, 5th June, 1962; Vol. 241, c. 495–512.] That may be all right in another place, but it will not do here. I tell the right hon. Gentleman that we shall expect him to tell us who was responsible for it.

The House, I think, has disliked intensely the way in which this whole matter has been handled. The House of Commons cannot approve of a major decision of this kind being announced to it by means of a Written Answer on a Friday. As a consequence of what has happened, the House of Commons, which is responsible for the finances of this country, will not have an opportunity of discussing this change, because in another place their Lordships would not accept the Government's decision. They turned it down despite the most strenuous appeals. If we understand accurately the answer given in another place yesterday by the Leader of that House, he said that the Government proposed to put down an Amendment to amend the Amendment that their Lordships passed. In other words, he is not going to allow their Lordships to do what they have stated. He will use his Government majority to restore the Bill to what it was originally.

I must say to the Secretary of State that I do not consider this to be amusing. How often have hon. Members opposite said that their Lordships in another place deliver very cool and calm judgments? They did so this week, but apparently it did not please the Government. The Government are now to take action to put them back where they were, and, of course, we shall not have an opportunity of discussing it We ought to have put it in the Bill. The right hon. Gentleman, if I may anticipate him, will suggest that this might be done by Order. That is not satisfactory, because it is the Bill which is being amended and put right under which the Orders are being made. On every occasion when we were discussing the Amendment during Committee, the Minister made the excuse, "Please do not push it at the moment because you will have an opportunity of doing this on the Orders under the Bill itself." Now the Bill has gone from us. This decisive change has been made by the Government, and this House will not have an opportunity of discussing the principle of it.

All this means something not only to the fishing industry but to the shipbuilding industry in this country, and it is really difficult to understand why the Government wanted to make this change at this time. There are a considerable number of small shipyards throughout the length and breadth of this country, not only on the northeast coast of Scotland but in many ports in England as well—and this would apply to all of them—which are finding it very difficult at the present time to maintain their order books. Indeed, we have had a telegram quite recently, this last couple of days, due to another dispute, but pointing out that a number of small shipyards in Scotland have gone bankrupt and out of existence. One would have thought in these circumstances, and if the Government had been paying attention to the matter, and in view of the lack of employment in Scotland, that this might have been considered one way to give added assistance; instead of which the Government have taken the opposite rôle, and they have said, "We are still prepared to give money, but we do not mind if you build in foreign shipyards."

This seems to me to be terribly wrong at this time. I cannot find one good reason for the action which the Government have taken. I could not find in another place and I certainly have not found in this House a single Member on either side who supported the decision of the Government. I say to the right hon. Gentleman—and I have attempted to be brief because of the time—that we shall expect a better answer than we have had so far, and if he persists in this action we shall still reserve the right to take what action may be necessary.

11.41 a.m.

Mr. Geoffrey Wilson (Truro)

I am grateful for the opportunity to take part in this debate because, as the hon. Member for Edinburgh, Leith (Mr. Hoy) has pointed out, this matter arises out of a Question which was asked by me. I do not disguise the fact that I was asked to put down the Question. It seemed to me a very good Question, which was a necessary and proper one for me to ask, because, although hon. Members, and even some of my hon. Friends on this side of the House, may consider the Cornish fishing interests to be quite insignificant compared with those of Scotland, or of those farther north in England, they are substantial interests to us in Cornwall. Indeed, I have one of the major Cornish fishing villages, Mevagissey, in my own division, as well as a number of boat building yards, and fishing is a matter of great interest to me. Moreover, this question impinges on the matter of transport in which, as hon. Members will know, I take a great interest.

It seemed to me, too, that the Answer was quite a reasonable one. The hon. Member for Leith can put his mind at rest: I support the Government in the action they are taking. It is no good his saying that nobody is supporting it. It is most important to us at this present time that we should keep our inter national obligations. Whether or not we go into the Common Market we are getting more closely tied up, particularly in transport, with the Continent, and one of our great complaints is about hidden subsidies, particularly in foreign ship yards. If we do exactly the same thing ourselves, that knocks the bottom out of our case and makes it quite impossible for us to make complaints about what is happening in other countries. If a subsidy which is clearly intended to aid fishermen is in fact to be used to subsidise shipping—and that was the substance of the hon. Member's remarks——

Mr. Hoy

No. It is quite wrong. There is a great difference between a hidden subsidy which we suspect is being paid, and the subsidies which are paid in Britain, and which are paid under an Act of Parliament which everybody can see and understand. They are quite different things.

Mr. Wilson

Yes, but if we purport to give a subsidy to aid fishermen and in fact defend it on the ground that if we remove it that is going to cause hardship to shipyards, that really comes to very much the same thing.

Mr. Hoy

No. It is not.

Mr. Hector Hughes (Aberdeen, North)

Does not the hon. Member for Truro (Mr. G. Wilson) realise that there is the greatest difference in the world between what are actually hidden subsidies given by foreign Governments to foreign shipyards and those subsidies which, as my hon. Friend the Member for Edinburgh, Leith (Mr. Hoy) has just pointed out, are given under an Act of Parliament?

Mr. Wilson

Well, the hon. and learned Gentleman can put it that way if he likes, but I want to put it in much wider terms. There are all sorts of Government actions going on at present on the Continent—not hidden, perhaps, in the sense which the hon. and learned Gentleman is meaning, but which indirectly subsidise various forms of activities, and it is those sorts of subsidies that we ought to try and stop. This grant has operated in a similar way, and it seems to me that those hon. Members who are objecting to the Answer to my Question are really making rather heavy weather of their objection, because there is an important and substantial qualification, which came at the end of that Answer which was given to me: Any applicants for grants and loans who propose to have vessels built abroad will be required to provide evidence that British yards have been given an equal chance to compete."—[OFFICIAL REPORT, 18th May, 1962; Vol. 659, c. 158.] The effect on the smaller yards will be very small, if any, because for British fishermen to seek tenders from three or four different yards at home and abroad, one in Germany, say, would be very complicated and unlikely to happen, and so this will not make any difference to the small yards. As for bigger yards, as we all know at the present time some build specialised vessels. We all know of the publicity given to the "Lord Nelson", a vessel built abroad. I do not see why our fishing industry should not get the benefit of the grant which is intended to help fishermen if they want specialised vessels built somewhere else. The grants are to help fishermen, not shipyards, and if the shipyards are in trouble, and we know they are, some other steps must be taken to help them—direct steps, and not indirect steps taken over the backs of the fishermen.

11.48 a.m.

Mr. Hector Hughes (Aberdeen, North)

I am sure that the House will be surprised at the astonishing speech to which we have just listened, a speech which was wrong in its facts, unsound in its reasoning, and false in its conclusions. I have no doubt that, whatever actuated the hon. Gentleman the Member for Truro (Mr. G. Wilson) in making such an unsound and ridiculous speech, the House will not be persuaded by it.

In view of the shortness of time which is allowed—we have only about one hour to discuss this—and as I know there are many speakers, I have decided not to make what would be a speech, but a catalogue of what are my objections to this Government proposal to give grants and loans to foreign shipyards. The catalogue is based upon the merits, or, actually, the demerits, of this very wrong proposal.

I object to the proposal because it is uneconomic. When Britain needs the money, it is a proposal to give money to foreigners. Secondly, it will damage the British shipyards when they are in dire need of more work and more employment for not only the owners of the shipyards but the workers in the shipyards. Thirdly, It will help foreigners to compete unfairly with British shipyards. Fourthly, it will drive out of business many British shipyards. Fifthly, it will drive into unemployment the workers in those shipyards, and it will cause, as has been indicated in letters to me from the owners of the shipyards as well as from workers in the shipyards, disastrous—that was the word they used—unemployment. Sixthly, it is shockingly unpatriotic, and it is throwing British money away, giving it to foreigners, when Her Majesty's Treasury comes to this House so frequently and says, "Britain needs money."

Seventhly, this proposal was initiated without consulting the industry and in crass ignorance of the facts. The owners of the shipyards as well as the workers concerned have held meetings, some open-air meetings, to protest against the fact that the Government did not consult them with a view to ascertaining the facts before coming to this conclusion. The Government are putting the cart before the horse in coming to a conclusion without having found out the facts upon which to base their conclusion. The plan has been the subject of protest meetings in the country, in the trade union councils, in the chambers of commerce and at the relevant docks.

Many foreign shipyards have hidden subsidies, something which British shipyards do not have. I have a letter from a distinguished firm of shipbuilders in Aberdeen, Messrs. John Lewis and Sons, Ltd., putting that forward as a first point of objection to this proposal. The letter says: Many foreign countries give hidden subsidies to their shipbuilders and I consider that if we are quoting against yards in these countries the competition is unfair. There is another point which I invite the hon. Member for Truro and the Minister to consider, namely, that vessels built in foreign shipyards are often not up to British classification requirements, a point which Mr. Lewis makes in his letter when he says: Any vessels that I have seen that have been built abroad recently for British owners do not appear to have met the same classification requirements as vessels built in this country and also these vessels do not appear to be up to full Ministry of Transport requirements. Only yesterday I received a telegram from the north-cast of Scotland dealing with certain unfounded allegations which had been made against British shipyards by some people who support the Government proposal. It says: The Fishing Boat Builders Association members at a special meeting held today considered that the recent statement in the Press of gross overcharging by North-East boat builders attributed to the Buckie branch of the Scottish Inshore White Fish Producers' Association is utterly false. The facts are that on the east coast of Scotland 35 boat building yards have taken part in fishing boat building under the grant and loan scheme. Of that total 11 yards have gone bankrupt and five have closed down leaving only 19 yards now operating under difficult conditions and keen competition. Fishing Boat Builders Association members are prepared to have their accounts examined by an independent firm of accountants in order to remove all suspicion of members overcharging their fishermen customers. That is from the association in Aberdeen.

In those circumstances, it is nothing less than an industrial and economic crime by the Government to attempt to give British money to foreign ship yards for the purchase of ships in competition with British shipyards and British ships. I ask the Minister to reconsider this atrocious proposal and to alter it.

11.55 a.m.

Lady Tweedsmuir (Aberdeen, South)

I have tried very hard to appreciate the Government's case for this proposal, but I remain totally unconvinced. I do not intend to deal with the method of presentation, adequately covered by the hon. Member for Edinburgh, Leith (Mr. Hoy), but to discuss the merits of the case. I think it perfectly true that the Secretary of State for Scotland is not the Minister primarily responsible. I think that it is the Minister of Agriculture and the President of the Board of Trade, because two reasons have been put forward on behalf of the Government for this decision—first, that it would help the fishermen, and secondly, that it is due to our obligations under the General Agreement on Tariffs and Trade.

I cannot understand how the Minister of Transport could acquiesce in this decision when the shipbuilding industry is in such acute difficulties, unless it was that as soon as the grants and loans scheme was extended to the deep-water trawlers, he was overborne by the Treasury, which thought that this might be a way of getting cheaper ships, thus reducing the amount of the grants and loans.

There has been no understanding of the depth of feeling aroused throughout the country, which is primarily a maritime nation. Our case can be summed up in a nutshell—we believe in freedom of choice for our boat builders to build all over the world if they so wish, but we do not believe that as a maritime nation we should positively encourage our owners to build abroad.

The first reason given is that this will help fishermen. It is clear that no one has asked the Government to make this proposal. I have had letters and telegrams not only from my constituency, but throughout the north-east of Scotland, protesting against the decision. The only branch of inshore producers which has appeared to favour it has been the Buckie Branch of the Scottish Inshore White Fish Producers. The hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) has, strangely, received exactly the same telegram as I received, and which I will therefore not read out again, from the Fishing Boat Builders Association, refuting these allegations of overcharging. There can be no better demonstration of the view that the allegations are mistaken than the fact that these men say that they are prepared to have their accounts examined.

It is perfectly true that cheaper ships can be bought abroad, in Japan, for example. But to come nearer home, the Norwegians have made a speciality of a certain type of ship and a certain type of equipment, and we know that the Dutch and Germans also specialise. We do not object to our fishermen going abroad, if they so wish, to get special equipment, but we do object if they do so with the British taxpayers' money.

My hon. Friend the Member for Truro (Mr. G. Wilson) mentioned the "Lord Nelson", but I remind him that our yards are perfectly capable of building specialist ships. The "Tunella" has just been built in my constituency. The only saving point about the Government's proposal, if it has any, comes in the last part of the Written Answer given to my hon. Friend the Member for Truro, in which it is said: Any applicants for grants and loans who propose to have vessels built abroad will be required to provide evidence that British yards have been given an equal chance to compete."—[OFFICIAL REPORT, 18th May, 1962; Vol. 659, c. 158.] "An equal chance to compete" is the operative phrase. I am glad that the representatives of the Shipbuilding Conference and the Minister of Transport have agreed to set up a committee to discuss exactly the question of an equal chance to compete. It is, however, clear from the fact that this has only just been done that the matter was never thought out beforehand. I should like to know how it is thought that anybody will ever arrive at a real assessment of what is an equal chance to compete in view of all kinds of hidden subsidies, including tax turnovers and long credit arrangements, which do not appertain in this country.

Mr. G. Wilson

How does my hon. Friend get round G.A.T.T. and E.F.T.A? If we break our international agreements, how can we complain about anybody else having hidden subsidies and all the rest?

Lady Tweedsmuir

Had my hon. Friend waited, I was immediately about to say, "I now turn to the next question, that of the G.A.T.T. obligations." I have tried to divide my remarks into two points, one concerning help to the fishermen and the other the G.A.T.T. obligations, to which I now come.

We have, I understand, not only been members of G.A.T.T. for very many years, but we have been in breach of our obligations by not, apparently, allowing these subsidies to be payable irrespective of where the vessels are built. Why could we not do this before? The answer which has always been given is that we have been in balance of payments difficulties. The present is hardly the time to say that we are no longer in balance of payments difficulties. We have just come out of the pay pause to a policy of income restraint, and we still have a considerable number of credit restrictions upon the life of the country.

It is also said, for example, that organisations such as B.O.A.C. are allowed to buy aeroplanes abroad and that they receive Government money. I well remember, however, as all hon. Members will remember, when, after the unfortunate withdrawals of the Comet, and B.O.A.C. wished to buy American Boeings, what a fight there was with the Treasury to get the dollars to do so. Very soon, B.O.A.C. will be about to buy V.C.10s. I am certain that if by chance B.O.A.C. wishes to continue to buy Boeings, which have been well tried, it would have the greatest difficulty in getting the currency to do so, because, naturally, the Government wish to support the British aircraft industry. My point is that if they support one industry, why should they not support our shipbuilding industry also?

Therefore, one must ask why we have chosen this particular moment to live up to our obligations under G.A.T.T., and at a time when, as I understood, the G.A.T.T. agreements were in suspension for six months at the end of last year. That was the time when the Sea Fish Industry Bill was first presented to the House of Commons. Had the Government had any idea that they wished to alter their obligations, that would have been the moment to do it.

Quite apart from that, I suspect that this has been done as a kind of trading arrangement for some other obligation. We are told, for instance, that the Italian Government have now withdrawn the arrangements whereby Italian farmers could be helped with grant only for Italian tractors and that they now able to buy tractors from this country. Why should the shipbuilding industry be sold down the river for the car building industry? We are not bound always to remove all our obligations under G.A.T.T. There is an arrangement whereby any country can ask for a waiver for a certain industry so that it may have special provisions for reasons which are necessary to the country concerned.

In a maritime country such as ours, the shipbuilding industry deserves those special provisions, and we should have asked for a waiver in G.A.T.T. for it. We have spent two days discussing the Common Market. During that time, we have heard of the tough negotiations being conducted by the Government on behalf of many of our own and Commonwealth industries. In G.A.T.T., also, we ought to be equally tough.

I have tried to put reasoned arguments on the merits of the case. I do not believe that the Government have appreciated that there are much deeper causes of concern about their proposal. By their proposal, they have touched something that is very real to the people of an island race. They have touched a knowledge and an instinct that something which is vital to our survival, both in war and in peace, needs to be defended. Therefore, I ask them to con- sider this debate with thought and with care and to have the nerve to reverse this decision before it is too late.

12.6 p.m.

Mr. George Jeger (Goole)

My hon. Friend the Member for Edinburgh, Leith (Mr. Hoy) has deployed the arguments from this side of the House ably and comprehensively and I am sure that the Secretary of State for Scotland, who has been given the unpleasant task of replying on behalf of the Government, must be relying to a great extent not upon the logic of his argument, because there cannot be any, but upon the charm and pleasant manner with which he usually answers for the Government. I have a feeling that that is why he has been given the job of replying, because it is not a matter with which he has been very much connected.

The villain of the piece is the Minister of Agriculture, Fisheries and Food, because it was he who took the rather peculiar, inept step of getting a sponsored Question, as has been admitted this morning, put down for Written Answer on a Friday, so that in an almost secret and surreptitious manner he might give a reply, which has given rise to this debate and has caused the further Questions which have led to it.

It may not be appreciated that the normal day for the Minister of Agriculture, Fisheries and Food to answer Questions orally is a Monday. Why on earth did he take the step of getting a Written Question put down on the preceding Friday? Was it to avoid being asked supplementary questions on the Monday? What was the urgency that caused the Question to be put on a Friday, when supplementary questions could not be asked, rather than on the following Monday, when we could have questioned the Minister and he could have justified his decision?

What was the extreme urgency in view of the fact that for the preceding five and a half months we had been discussing the Sea Fish Industry Bill either on the Floor of the House or in Committee upstairs? Only last December, a mere six months ago, we were discussing in Committee upstairs the question of subsidies for trawlers. We dealt with the matter exhaustively and we went in great detail into the question of whether there should be subsidies for second-hand trawlers and equipment. We were given assurances by the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food that there would be no subsidies for secondhand trawlers. Not a word was said about foreign trawlers, even though there was ample opportunity to do so.

During those debates, which are now recorded in a massive volume, we could have been told that it was the Government's intention that the subsidy should apply also to foreign trawlers as well as to trawlers built in this country. Not one of us who were members of the Committee had the faintest suspicion that this provision would be extended in that way.

It is an interesting fact that when the Minister chose one of his colleagues to put down the Question on the Friday, he chose an hon. Member who was not even a member of the Standing Committee and who had not been present at any of the sittings of the Committee during the five and a half months when we were discussing the industry. The Minister had to go to somebody who did not know the first thing about it. With all due respect to the hon. Member, while he has put up a gallant defence of his Government and of the Minister, he has shown that he does not realise the situation and the state of the industry.

One of the facts which has been brought out is that the Minister is of opinion that by giving subsidies to trawlers built in foreign yards, he is allowing British shipyards to compete. It seems a strange logic that, in order to enable British shipyards to compete with their foreign competitors, one gives subsidies to the foreign competitors. That is hardly the way to stimulate the industry in Britain.

Mr. G. Wilson

Nobody has yet answered my point. If we do not keep our own international obligations, how can we insist that other people keep theirs? The great complaint about the foreign yards is that they do not keep their international obligations.

Mr. Jeger

The hon. Gentleman must have a discussion with his noble Friend the Member for Aberdeen, South (Lady Tweedsmuir), who has given an effective reply to his argument. I am sorry that he did not listen to it. He would have learnt quite a lot if he had.

Our complaint against the Government is, first, about the way in which the decision was announced to the House in this inept and rather stupid way. Subsequent answers to Questions showed that there were no prior consultations or discussions with the shipping interests concerned, which, after all, are the main parties interested, or with the fishing interests. The fishermen have not applied for any grants or loans for fishing vessels or engines built in foreign shipyards. The Minister of Agriculture told me that in answer to a Question on 4th June. Nobody in the fishing industry has asked for such a subsidy for a foreign-built trawler or for equipment. The shipbuilding interests certainly have not asked for it. We have had answers to that effect from the Minister of Transport and from the Minister of Agriculture.

This is all very strange. Before our discussions on the Sea Fish Industry Bill, when we were discussing the question of subsidies for trawlers, how many trawlers should be built and how many should be scrapped, an arrangement was finally reached that two old ones should be scrapped for one new one built. We had pages and pages of correspondence, pledges, letters and agreements between the fishing industry, the shipbuilding industry and the Ministry of Agriculture dealing with these questions. How could there have been so much correspondence and agreement before us during the passage of the Bill yet no agreement about such a major change as the one now envisaged?

The shipbuilders were not consulted beforehand. We have been told that. In other words, the man in Whitehall knows best. This has been a gibe levelled against us on this side of the House for many years, but now we find that the Ministry of Agriculture and the Ministry of Transport are ready to decide, without consultation with the British shipbuilding industry, exactly how the subsidies should be applied. They have brought a storm of protest on their heads from every section of the industry throughout the country.

As a result, the Minister of Transport, after this decision had been arrived at, has had to bow his head to the storm. He has had to meet representatives of the builders of fishing vessels and he has agreed to set up a sub-committee to inquire into the various aspects of the industry and to submit a report. Are the Government resting on their oars and waiting for the sub-committee to come to a decision and submit a report? No. Yesterday, in another place, a Government spokesman said that they had decided to proceed with their proposals despite an adverse vote against them earlier in the week, and despite the fact that there is a sub-committee set up to investigate the whole matter. This is contempt not only of the House of Commons in the way the matter was introduced, but contempt of another place and contempt of the shipbuilding industry which has made such strong representations to the Government and forced them to come together with them in consultation even at this stage.

The reply given by the Parliamentary Secretary to the Ministry of Transport yesterday to the noble Lady and to myself was that the Minister and the industry had agreed to carry out certain detailed studies jointly. What is the purpose of those studies? Will the outcome be consigned to the waste-paper basket? Action is being taken before the studies are completed and a report submitted. The studies will be absolutely useless.

The Government have behaved in scandalous fashion in this business. They have been castigated in another place far more strongly than they have been here, but this does not mean that we do not feel strongly about the way in which the decision was announced to the House and about the decision itself.

Goole is a shipbuilding town which over 1,000 people have to leave every day to search for work outside. The shipbuilding yards of Goole and Thorne a little distance away, also in my constituency, are living from order to order, almost from hand to mouth. What is to be the future of those yards if there is to be a continuance of unfair competition from foreign shipyards? We specialise in Goole in the building of trawlers and, if I may say so, we build them very well. Our trawlers have a world-wide reputation. But what will be the future of our yards if this decision is put into effect and foreign shipyards can indulge in unfair competition against our own? It will add to unemployment in Goole, Thorne, Beverley, Selby, Aberdeen and the other places where trawlers are built. The problems of the shipbuilding districts will be increased.

From the point of view of the Treasury, not only will there be a payment of subsidy to foreign shipyards for the building of trawlers which could well be built here but, in addition, there will be additional unemployment benefit payments to our own unemployed workers. There will be subsidies for trawlers built abroad and doles for our own men in the shipyards at home. Has this been taken into account in the reckoning?

This is one of the most stupid and inept proposals we have had from this Government—and we have had a great many. I am sure that the Secretary of State, who has been given the duty to reply, must be reflecting on the fact that not a Conservative Member of this Conservative Government has been given the unpleasant task, but a National Liberal has been called in to rescue the Government and attempt to give an answer on their behalf for the stupid action which they have perpetrated. I hope that the right hon. Gentleman's answer will be that the Government will hold their horses until the sub-committee which has been set up makes its report. We shall then be able to discuss the matter fully and frankly. If a case is made out, I am quite sure that the right hon. Gentleman will have the House behind him. Up to now, he has the House against him, and he had better realise it.

12.18 p.m.

Mr. John Wells (Maidstone)

I am very glad to see so many Ministers of different Departments on the Front Bench this morning. This shows that the Government are paying proper attention to the importance and seriousness of the matter. I am glad to be able to follow the only other English Member—I apologise to my hon. Friend from Cornwall, the hon. Member for Truro (Mr. G. Wilson)—taking part in the debate because I regard this matter as of great importance to every small English port, just as it is of importance to the great fishing ports of Scotland.

It has been said time and again that these grants and loans were originally intended to help fishermen. This was put very well by my noble Friend the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food in another place earlier this week. But the fact remains that, for many years—I make no apology for repeating what I said in the House two years ago—the fishing industry of this country and the boat building industry of this country have been an integrated unit. The boat building industry has been supported by Government payments of one sort or another from the time of Mr. Pepys onwards. In the past, the Admiralty has put out great sums of money which have enabled the boat building industry in this class of vessel to thrive and survive, but since the last war the Admiralty has not been spending money to the same extent, It is for this reason that the white fish subsidy has been very much welcomed by the boat building industry.

In our debate on 20th July, 1960, I asked the Minister then on the Front Bench what assurances we could have, now that we had gone into the E.F.T.A., that support would still remain for the boat building industry in this way. I believe that the Government, by taking this step, have made it possible to pay subsidies to foreign yards, but I do not believe that any will ever be paid. I have great confidence in that. My reason for saying so is quite simple. I look forward with confidence to this specification, which I understand is brewing up in the Ministry of Transport, or wherever specifications brew, and I am sure that the White Fish Authority will demand a really high-quality vessel built without unfair competition.

The hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) made the very good point that British yards are building vessels to a high quality, whereas many yards abroad do not comply with that standard. I am confident that if we have a tight specification and if vessels built with this subsidy must conform to that specification, they will have to be built in British yards. Therefore, I see this whole operation this morning, not as a storm in a teacup, but as a probing exercise to make sure that our Government will really ensure that the British fleet is maintained at the quality to which we are accustomed.

My hon. Friend the Member for Aberdeen, South (Lady Tweedsmuir) asked why we have chosen this time to live up to our E.F.T.A. and G.A.T.T obligations. Surely the answer is fairly simple. The subsidy is now being renewed. This is the time when it is being thought of again. There has been a rethinking on the whole matter It is, therefore, suitable at this time that, if the change is ever to be made, it should be made now.

The presentational point as to why this should happen on a Friday has been made. I accept that criticism. But I believe that there are great difficulties when three or four Departments are trying to negotiate together and are trying to inform outside bodies of developments. The Board of Trade is deeply involved in this matter. The Ministry of Transport is also involved. The day-to-day responsibility for it is with my right hon. Friend the Minister of Agriculture, Fisheries and Food. In addition, of course, we have the benefit of the wide knowledge of the Secretary of State for Scotland. So many Departments are involved that, when the decision had been taken, surely it was the duty of the Department immediately concerned to endeavour to make it known as quickly as possible. When a Department makes a decision, this House, and particularly hon. Members opposite who are interested in these matters, is the first to complain if an announcement is not made at the earliest opportunity.

Mr. Jeger

I do not think the hon. Gentleman can be aware that the Second Reading of the Sea Fish Industry Bill took place in the House of Lords on a Thursday and that the Answer to the Question which has led to this debate was made on the Friday. Therefore, notice of that Question must have been given to the Table prior to the Friday. Why could not the information in the Answer have been made known during the Second Reading debate in the other place on the Thursday?

Mr. Wells

I do not wish to get bogged down on the question of presentation. However, I am sure that the House welcomes the fact that the announcement was made early.

I wish to revert briefly to the specification and to unfair competition, because this is all-important to us. Shipyards overseas are operating at a very much lower wage rate. I understand that in Holland the wage rate is the equivalent of 4s., in Italy the equivalent of 3s. 2d., and in Spain it is as low as 2s. 6d. I am aware that there are certain charges in addition, and that that is merely the strict wage rate, but these figures are very low compared with the figure of 6s. 6d. in this country. I hope that when the question of unfair competition is taken into account this matter will be considered. There is also the fact that in Holland there are no demarcations of any sort and that frequently agricultural workers work in the smaller boatyards.

What is perhaps even more important is that in this country our shipbuilding regulations are very strict. I make no apology about this; I think that that is a very good thing. However, this is not so in the smaller yards of some European countries. I believe that we must ensure that, when boats are built by foreign yards in competition with our own yards, they are built on comparable terms.

It may be wondered whether we are making a great fuss about nothing. The hon. Member for Edinburgh, Leith (Mr. Hoy) opposite referred to the telegram which various hon. Members have received. The House may wish to know how many yards are involved in this matter. I am given to understand that 43 members of the Ship and Boat Builders' National Federation are fishing boat builders and that ten members of the Shipbuilding Conference are fishing boat builders. In May, 1961, there were 3,100 and in May, 1962, only 1,600 employees in fishing boat building. If this trend continues, it is estimated that in six months' time, unless the subsidy is renewed, there will be as few as 250 employees in fishing boat building.

If this were to happen, it would be absolutely disastrous, because the fishing boat builders and the fishermen are an integrated whole. It is essential to the fishermen that a boat builder is at hand. I am sure that this applies in the North-East just as much as it applies in the smaller ports of the South. Fishermen must have boat builders to hand to do their repairs. Therefore, if they are to survive and if the numbers of employees are to be kept up at a realistic and safe level, I hope that the Government will so arrange this specification that we can be sure that the subsidy, although theoretically payable for foreign-built boats, will in fact never go abroad.

12.27 p.m.

Sir John Gilmour (Fife, East)

The assessment of this matter seems to me to lie between building boats more cheaply for fishermen and our international obligations. If we go only to places where boats can be built cheaply, this has its dangers, because my right hon. Friend might be forced to put his fishery protection vessels out to tender abroad. I suppose that possibly the Admiralty would be forced to do the same.

We should consider this matter against the background of the fact that the fishing industry is going through a very difficult time. Fishing limits are changing, and there is the possibility of our going into the Common Market and all the dangers and difficulties which that means to the fishing industry as a whole and the implications which it may have on the boat-building industry.

Hon. Members have referred to telegrams showing the reduction in the number of yards in Scotland engaged in fishing boat building. My hon. Friend the Member for Maidstone (Mr. J. Wells) gave the numbers of those employed through the Shipbuilding Conference and the Ship and Boat Builders' National Federation. Last week I asked the Secretary of State for Scotland a Question from which it was apparent that in the four years from 1957 to 1960 76 boats over 40 ft. in length were built in Scottish yards. Last year this figure was down to 55. This year, 14 have been built and 16 are building. With those already given, these figures show what a falling off in boat building there has been in this country. I am sure that the maintenance of these yards is essential to our defence and to the welfare of the fishing industry if we are to have adequate repair facilities without repair work having to go overseas. When it comes to our international obligations, it seems to me that the reason why this change has been made is that we have introduced a new Act of Parliament. It is by that that we may be in breach of our G.A.T.T. obligations.

Yesterday, when we were discussing the Common Market, my right hon. Friend the Minister of Agriculture, Fisheries and Food was not able to state exactly what grants would be permissible if we were to go into the Common Market. Various suggestions have been made as to what help other nations give to their yards. For these reasons, the boat builders welcome the joint consultations with the Ministry of Transport. There is no doubt that foreigners do get assistance, and I have here a journal which I obtained from the Library of the House of Commons—the Fishing News International—for April, quoting the building of trawlers in France, in which it says, in dealing with the price of these vessels: The price has been obtained only by calculating in advance on the basis of production in a series of 10 by the fact that aid granted by the French Ministry of Merchant Marine is larger for stern trawlers than for standard vessels. That is obvious proof that various other Continental nations are assisting their boat-building industries.

It is against this background and the changing scene in the fishing industry, together with the fact that we may be going into the Common Market, that I want to urge the Government to reconsider before it is too late the methods which they are using for giving grant aid to the building of fishing vessels for the British fishing industry. Surely, there is a real danger that if grants are made to foreign yards and there is a further decline in the work carried out in this country—we know that in Scotland the number of yards has gone down from 35 to 19—and if these 19 yards are further reduced, it will have a disastrous effect in this country, because fishermen will eventually be at the mercy of whatever price foreign boat-builders seek to charge them. For that reason, knowing the difficulties, I urge the Government to reconsider the measures which will fit into the Common Market programme, if we go into it, in regard to the grants and aid given to our fishing industry.

12.32 p.m.

The Secretary of State for Scotland (Mr. John Maclay)

What has worried me more than anything else throughout the whole of this debate has been the implication in every single speech that has been made that British yards are not capable of competing with foreign yards.

Mr. Hoy


Mr. Maclay

I am afraid it has. I understand the anxiety which has been expressed by hon. Members, who have put their case firmly, clearly and moderately, considering the strength of feeling which I know they have about this matter, but I think—and I say this deliberately—that the whole debate so far has been based on the assumption that British yards will not be able to get orders in competition with foreigners. That I sincerely hope is untrue. My own view is that the industry is extremely efficient, and I shall have something more to say about that shortly. That has been the assumption behind the speeches that have been made.

I will try to deal with all the points raised in a reasonably orderly manner, because I think that it would be helpful to all hon. Members if I try to give a fairly coherent reply to the general substance of the criticisms to which the Government have been subjected in the debate. If in the course of making that reply tidily, I miss some of the points which hon. Members have made, I shall try to catch up with them, if hon. Members will be good enough to ask me.

To get the order of things clear, I will go back to the origin of the whole operation. It was in answer to a Question in the House that the decision was made clear that grants and loans to British fishermen for the purchase of new boats and engines, which have hitherto been limited to boats and engines built in the United Kingdom, would be available also for boats and engines built abroad. This announcement was followed by a series of Questions to myself and other Ministers on various aspects of the decision, and it is out of the reply I gave to one of these Questions that this debate has arisen.

The hem. Member for Goole (Mir. Jeger) was speculating in a very interesting way on why I appear at this Box. Let me make it quite clear. I am part of the collective system of Government, and I accept full responsibility for all the actions of the Government which I support. It is just as appropriate Chat I should be here as it is for any other Minister who may be concerned. Therefore, the other more tempting reasons are irrelevant.

It was an Answer to one of these Questions which occasioned this Adjournment debate. By normal procedure, I do not see how it could be for someone other than myself or one of my junior Ministers to reply. Since that Question was asked, an interesting event took place in another place, and yesterday, the Government's intentions in relation to it were made quite clear. The hon. Member for Edinburgh, Laith (Mr. Hoy) touched on this matter in his opening speech. He and other hon. Members referred to occurrences in another place. I will try to make quite clear what the position is.

In the past, this question of the subsidy and the details of the subsidy has not appeared in Bills or Acts, and they were not intended to appear in those Acts. The simple truth is, as I will explain, that they have to appear in Schemes made under Orders, and that the parent Bill, which is now being debated in another place is, in this respect, enabling legislation. There is really no reason at all why these matters should be published in the Bill. The Government are only seeking to restore the position which existed when the Bill went to another place.

The general theme running throughout this debate has been on four main points—the merits of the decision, the method and timing of the announcement, the possible effect on boat-builders in this country, and the question of our international obligations. I should like to deal first with the method and timing of the announcement, and I must give a little of the background and a certain amount of history to make it clear.

Grants and loans of this kind were first given after the war under the Herring Industry Act. 1944, and the In- shore Fishing Industry Act, 1945, for herring and inshore white fish vessels. They were extended to near and middle water trawlers, that is, boats up to 140 ft, by the White Fish and Herring Industries Act, 1953.

None of these Acts said anything about limiting grants and loans to British-built vessels or engines. Throughout all the history of assistance of this kind, this restriction has been included not in the enabling legislation but in administrative arrangements under the Acts or, in the case of grants under the 1953 Act, in statutory schemes which have been approved by affirmative Resolution of both Houses of Parliament. What we have done in this case has been to follow exactly the same procedure in the Bill which has been before this House earlier this Session and which is now in another place. The Bill provides for the continuance of grants after 1963 when the present statutory powers expire, and enables them to be extended to distant water trawlers over 140 ft. and specialised transport and processing vessels, and I know that the House very much welcomes these provisions. These new provisions substantially extend the provisions for this type of assistance. Like its predecessors, the Bill lays down no conditions whatever as to where the vessels or engines may be built.

Mr. Hector Hughes

The Secretary of State is addressing himself to the point that under the earlier Acts the procedure was exactly the same as that which is now proposed in the present Bill, but does he agree that in none of these Acts were there proposals to give grants and loans to foreign shipyards?

Mr. Maclay

The hon. and learned Gentleman has not taken the point of what I was saying. He is going on to the substance of the argument, and I was making it quite clear that on no occasion in the past were these provisions in any Act. There was no reason why they should be; they are a matter for Schemes and Orders.

Mr. Hoy

Let us get this absolutely clear. The right hon. Gentleman knows that in the days when there was a rush for orders, permission was refused for trawlers to be built in foreign ports.

Mr. Maclay

I do not know the point to which the hon. Gentleman refers, but clearly there have been occasions in the past, and not so very long ago, when the balance of payments was definitely an issue, and the availability of finance for purchases from industry overseas. These conditions have changed, and the conditions of 15, 10 or even five years do not necessarily apply today.

What my right hon. Friend said was that we had now decided that in Schemes for grants which will be laid before Parliament after the Bill becomes law, there will be no requirement that vessels or engines should be built in the United Kingdom. Similary, there will be no requirement in the administrative arrangements for loans after the Bill has been passed. I do not understand or accept the criticism of the way in which the Government announced their decision. There is certainly no foundation for any charge, as has been hinted in the debate today or put more strongly in another place, that there was a deliberate concealment of the facts for any reason. We concealed nothing. In fact, we need not have said anything at all about it until the schemes came before the House. As it was, having reached our decision, we thought it right to announce it as soon as we could.

There was never any question of presenting the House, the shipbuilding industry or the fishing industry with a fait accompli which there would be no opportunity of challenging or debating, and I really cannot agree that the Government have acted in any way improperly in this matter. My hon. Friend the Member for Truro (Mr. G. Wilson) made it clear how he came into the issue. Of course, it is always arguable how best an announcement of this kind should be made to the House. I have all the details of the timing with me along with the days on which my right hon. Friend the Minister of Agriculture could have been reached at Question Time. As I say, it is a question of judgment as to whether the statement should or should not have been made.

I do not wish to take up the time of the House and I will not go into this matter in great detail, although I agree that it could be argued whether it was the ideal way of doing it. However, I emphasise again that there was no possible intention, and that there could not have been such an intention in any form, of concealment. How could there have been when these Orders are bound to be debated in both Houses in the form of affirmative Resolutions? For that reason the charge of concealment is unfounded and, to be frank, I resent it.

Mr. Jeger

Can the Secretary of State explain why the details were not given at the time of the Second Reading debate in another place—the day before they were announced in the House of Commons?

Mr. Maclay

I should say that, technically speaking, that is not relevant to the Bill itself. It is a matter that must be dealt with on its own merits in relation to the Orders, when they are made.

I now deal with the merits of the decision; that is, the reasons why we reached our conclusions. We had throughout two considerations in mind, first, the interests of the fishermen and, secondly, our international obligations. I will deal with our international obligations first because it is out of a reply to a Question on this subject put by the hon. Member for Leith that this debate arises. The simple answer is that Schemes to enable fishermen to buy vessels and engines which are so operated as to favour ships and engines built in the United Kingdom over those built in other G.A.T.T. countries were in conflict with Article 3 of G.A.T.T. If the hon. Member for Leith wishes me to deal with that Article I will certainly do so, but I think that he is well aware of its provisions.

Mr. Hoy

Can the right hon. Gentleman explain why it has taken him so long to make up his mind on this issue and why, in any case, he could not apply for a waiver?

Mr. Maclay

I see the relevance of that question, but I also believe that the hon. Member for Leith agrees with what I said about it being in conflict with Article 3 of G.A.T.T. We could not go on indefinitely pressing other nations to honour the full obligations of G.A.T.T. when we were in full and open breach of it ourselves. Hon. Gentlemen opposite must be as careful about this as the Government have been because, after all, G.A.T.T. was signed by them. The objectives of it were subscribed to by them and they must understand that we could not go on in the way we had.

As well as G.A.T.T. there are certain other provisions of similar effect in the E.F.T.A. Convention. However, regarding G.A.T.T., we have had occasion to challenge, and successfully, certain arrangements in other countries which were prejudicial to our exports and closely resembled our present arrangements for fishing vessels.

It is true that, as yet, there has been no formal complaint against us under either the G.A.T.T. or the E.F.T.A. Convention in regard to this matter. Nevertheless, there have been inquiries which indicate that our practice has not gone unobserved. If we are to continue to safeguard our major exporting industries—and we are, after all, a nation which lives by exports—we must keep our own house in order. I feel sure that our shipbuilders would recognise the importance of preserving our freedom to challenge discriminatory practices by other countries.

Hon. Members will appreciate that the provisions of the Sea Fish Industry Bill, which permit grants and loans to be given to distant water and other specialised vessels, are new. It must also be remembered that new Orders and Schemes have to be made and that the time had come when we had to get our house in order. The hon. Member for Leith wants to know why this was not done some years ago or why it is being done now. I hope that he has realised the weight of what I have said. The new Orders must be made with new legislation coming in. We have been in breach of G.A.T.T. for a good many years and we could not continue indefinitely to be so. As I have said, new types of vessels will be coming in for grants and loans and this has been done to meet new circumstances that have arisen.

On the subject of the interests of the fishing industry and the question of consultation both with fishermen and boat builders, it is important to get the position clear with regard to the object of giving grants and loans. It was to help our fishermen. Undoubtedly the assist- ance given has also helped the boat builders—I will refer to them later—for it has certainly increased their business, although the help it has given them was incidental to the main object of helping our fishermen.

As I have said, we are by the Sea Fish Industry Bill extending grants and loans to distant water trawlers—boats over 140 feet in length—for the first time. One of our objects is to help the owners of these boats to break with tradition and equip themselves with new types of vessels, such as freezer-trawlers, which are larger and more expensive than the conventional distant water trawler.

The fishing industry is facing a time of great change and considerable difficulty and it is our aim that the trawling industry should become viable within 10 years. It is most important that those in the industry should equip themselves with ships that are most likely to enable them to become self-supporting and to adapt themselves to the new practices and techniques which that entails. In the meantime, we propose to give help on a limited scale for the building of conventional trawlers, and we are helping the industry through the White Fish Authority to build experimental trawlers of new types to discover what new kind of vessel will be best suited to meet the new conditions facing the industry. Thereafter, as indicated in the White Paper last August, we shall consider in the light of the experienced gained the extent of further assistance.

That means that we must have the widest range of possibilities: but there is no question of going the other way and encouraging owners to build abroad. What we are aiming at is complete freedom of choice which, from the point of view of the fishing industry, I am sure is right. I would make it clear that there was no consultation with the fishing industry, for the simple reason that we did not see how their interests could be prejudiced by the decision, and we still do not see this. The hon. Member for Leith said that the fishermen objected to grants and loans being made available for foreign-built vessels. There is more than one point of view about this inside the fishing industry and we have the telegrams and letters to which hon. Members have referred. But even if other fishermen do not agree and object to grants and loans being available for foreign-built ships, no one will be compelled to buy a foreign vessel. Anyone who wishes to continue to place orders with British yards will be free to do so, and my guess is that the great majority will continue to do so.

Regarding consultation with the shipbuilding industry, that was fully dealt with at a meeting my right hon. Friend the Minister of Transport had with the shipbuilders and which has been referred to in the Press. I need not delay the House by going into the details of this, but I would quote from a report which appeared in the Scotsman on 5th June, 1962. It says that a deputation of the Shipbuilding Conference of the Ship and Boat Builders National Confederation called on the Minister of Transport to protest. Their comments afterwards ranged from "fairly satisfactory" to "a very good meeting indeed". There is a further comment: As one member of the deputation put it later 'All we want is a fair crack of the whip and not to be put at a disadvantage by foreigners'. I shall shortly deal with that in detail, but, lest there is any misunderstanding about consultation with the shipbuilding industry, I want to make it clear that this matter was dealt with in the meeting with the Minister.

Mr. Jeger

But that would be after the decision had been made and not before. What was described as satisfactory was the decision later arrived at to carry out certain detailed studies jointly.

Mr. Maclay

If there had been any hard feelings about lack of consultation, it seems that they were completely resolved at that meeting.

I want to make it clear that my right hon. Friends and I have agreed that British yards must be given the opportunity to tender under equal conditions. My right hon. Friend the Minister of Transport has had the meeting with the shipbuilders to which I have referred, and has decided to set up a working party in consultation with the shipbuilders. I think that the hon. Member for Goole had that working party wrong. It is quite clear what its purpose is. It is to look at the arrangements for giving United Kingdom yards an equal chance of competing in a case where an owner wishes to place an order abroad. It is not a working party to consider the whole issue. There is no question of its reporting to anybody. It will be a working party which can meet when it needs to, under the chairmanship, I imagine, of one of the Parliamentary Secretaries to the Ministry of Transport.

I want to tell the House—this deals very much with the points made by my hon. Friend the Member for Maidstone (Mr. J. Wells) which I have noted with great care—that my right hon. Friend has made it clear that where an applicant for grant or loan wishes to take a foreign tender, his intention is that the procedure should be along the following lines. The White Fish Authority will obtain from the applicant a broad outline of his requirements. With the help of the technical staff of the White Fish Authority, as complete a specification as possible will be prepared. I hope that meets the point which my hon. Friend raised. The same specification will be issued to each yard to make certain that when final tenders are received they may be assessed on a common basis. Lastly, the applicant will be required to obtain tenders from a sufficient number of United Kingdom yards, normally not less than three, to ensure that a genuine opportunity is being given to the United Kingdom industry to compete. These are the arrangements which I understand from my right hon. Friend were accepted at the shipbuilding meeting that he had, and the arrangements that this working party will help to make into a working possibility. Similar arrangements will be worked out with the Herring Industry Board.

There is no reason—I say this with conviction—why, with this kind of protection against so-called unfair competition, this change should prove disastrous to efficient British builders. My right hon. Friend the Minister of Transport is satisfied that so long as competitive tendering is insisted upon and as long as care is taken to ensure that the tender is based on identical specifications, the great majority of the orders will continue to be placed in this country.

It is true that at one time my right hon. Friend was anxious about the ability of British builders to compete with certain foreign yards, but he has asked me to say that great change is taking place. For example, during the first quarter of the present year orders placed abroad by British shipowners dwindled to a trickle and very nearly half of the total orders which our shipbuilders booked were export orders. That is not the picture of an uncompetitive industry.

I have more evidence about this in more direct relation to fishing boats. I said earlier that the grants hitherto have not been available for distant water trawlers; there were no grants, and, therefore, no restrictive conditions applied to them. Trawler owners had, therefore, no special inducement to prefer British to foreign yards. But in the last ten years they have built 72 new trawlers, only seven of which have been built in foreign yards, and most of the seven were ordered some years ago when our own yards had much fuller order books and could offer only long delivery dates.

The Scottish yards—my hon. Friend the Member for Aberdeen, South (Lady Tweedsmuir) referred to the yards in Aberdeen—facing the full force of competition from abroad, have gained orders for, for instance, the great factory ships, the "Fairtrys," owned by a firm in the constituency of the hon. Member for Leith, and the new freezer-trawler "Junella", which has not yet started fishing and is in Aberdeen. If they can do this without any adventitious aids, I see no reason to fear for their future.

There are, of course, the smaller yards to worry about. I sympathise with the anxiety expressed about them because they have a difficult job. It may be that a considerable process of modernisation must go on in them, but I do not believe that the effect will be serious. Fishermen have a great many local links with boat building yards in their home district, and there are a great many reasons why they should prefer ships built there rather than abroad. We do not think it right to limit their choice. It may be that a few orders will go abroad. It may be that some owners will want to experiment with new ships and new construction of ships. But is that altogether a bad thing for the fishing industry? Do we not want to be certain that we have the right kind of ship in this very difficult time? I do not think that enough will go abroad seriously to prejudice our boat building industry.

Dr. Alan Glyn (Clapham)

I am grateful for what my right hon. Friend has said about orders abroad. Obviously, if the type of ship can be produced only in a foreign yard, the contract should go there. If the contract price is lower in a foreign shipyard, will the contract automatically go to that foreign shipyard, or will other circumstances be taken into consideration?

Mr. Maclay

I do not want to give an answer off the cuff. It is a technical question which could arise in so many different forms that I might give a misleading answer. If my hon. Friend studies what I have said he will see that every step will be taken to make sure that our yards are protected against unfair competition.

Foreign subsidies are not nearly so prevalent as is so often supposed. My right hon. Friend the Minister of Transport assures me that that is so, and he has been studying the matter very closely. Even where subsidies are openly paid, as in France—that is the most obvious case of open subsidies—it is not an open-ended percentage subsidy automatically collected on any order which is booked. It is a subsidy for manufacture and is paid only to certain yards and only in relation to certain orders which the French Government believe it to be in the interests of the nation to secure. It seems a little unlikely that European countries would be mad keen deliberately to subsidise fishing boats of ours which will be fishing against their own boats.

I can most certainly assure the House that we can and will ensure that our grants will not be used in such a way that the competitive position of British yards will be prejudiced by competition from yards abroad which can be shown to be in receipt of a material element of subsidy. I want the House to realise that this is an assurance which we can give quite deliberately and categorically, and I think it should meet the fears expressed by my hon. Friends who have dealt with this matter so cogently.

I have a final point to make—[Interruption.] In view of the time, I would point out that we started half an hour late.

Mr. George Thomas (Cardiff, West)

The debate has lasted for forty minutes.

Mr. Maclay

There was a large number of speeches ahead of mine. I think I am finishing almost on time. I have about two minutes left.

I want to deal, finally, with foreign wage rates. I will not go into detail. It should be clear that labour costs——

Mr. Hoy

Perhaps the right hon. Gentleman could deal with that subject subsequently.

Mr. Maclay

I will write to my hon. Friend about this. I do not want to take up the time of the House. I am sorry if I have taken a little longer than I should have done, but there has been a great deal of publicity about this matter. Hon. Members opposite have been using every opportunity to attack the Government savagely about it. I think I have made it clear that they have had no justification for that.

Mr. Hoy

The right hon. Gentleman is unfair.

Mr. Maclay

I do not think I am. There has been a great deal of attack on the Government over this decision. I felt that I must make it clear that we believe that our decisions have been right.

Mr. Hoy

One thing that has become clear in this debate is that no request was ever made from the fishermen, from G.A.T.T. or from E.F.T.A. for the decision which the Government have taken. I have not heard a single hon. Member complain about the efficiency of the British shipbuilding industry. We feel that under fair competition we can meet anything from anywhere. The right hon. Gentleman should not have lodged that accusation against our industry. If this had not been an Adjournment debate, I should, in view of the reply which we have received, have given notice that owing to the unsatisfactory nature of the reply I wished to raise the matter on the adjournment.