HC Deb 24 July 1963 vol 681 cc1461-7

The following Questions stood upon the Order Paper:

23. Mr. BENCE

To ask the Minister of Transport what further measures he proposes to take to assist the shipbuilding industry.


To ask the Minister of Transport whether a decision has yet been taken on the proposition to replace the "Queen Mary"; and if he will make a statement.

77. Dr. KING

To ask the Minister of Transport what negotiations are proceeding for Government aid towards the building of a new Queen transatlantic liner.


To ask the Minister of Transport whether he will make a statement about the provision of a replacement of the "Queen" liners.

The Minister of Transport (Mr. Ernest Marples)

With permission, I should like to answer Questions Nos. 23, 73, 77 and Question No. 13, which is on the Order Paper for Written Answer, together.

The Cunard Steam-ship Company has proposed that the "Queen Mary" should be replaced by a ship of 58,550 gross tons. The new ship, in addition to operating on the North Atlantic express service, would spend about three months of each year cruising. It would cost about £22 million. The company proposes to put up £4 million of this and has asked the Government to lend the remaining £18 million over twenty-five years with interest at 4 per cent. Cunard's previous proposal, for which the North Atlantic Shipping Act, 1961, provided, was for a 75,000-ton ship to be employed all the time on the North Atlantic express service. That ship would have cost £30 million. Cunard would have found £12 million and the Government £18 million, but at 4½ per cent. and not 4 per cent. The new proposal is, therefore, very different and, in general, a much less satisfactory one from a number of standpoints, including that of the taxpayer.

Nevertheless, the Government have been anxious to consider all reasonable means of bringing a new and modern British ship into this important service, which this country pioneered and developed. We have studied the new proposal closely and with sympathy, but we have felt obliged to decide that it is not acceptable. The company has been so advised.

We appreciate that some of our shipbuilders will hear this news with particular regret. But I am very glad to say that the Shipbuilding Credit Scheme has been going very well and will bring much useful additional employment to our yards. I have already approved the making of firm offers of loans of £13½ million to build approximately 170,000 deadweight tons of shipping. In addition to this, applications for about another £27 million of loans to build about another 500,000 tons are under consideration.

Since it is clear that we shall need more than the £30 million originally allocated, the Government have decided to increase the amount available to a total of £60 million within the terms of the scheme as already announced. This will, I am sure, bring the most welcome relief to our shipbuilding industry. But the House will realise that this relief will only be temporary. Therefore, I am already discussing with the shipbuilders what action they propose to take to secure the industry's long-term future.

Mr. Bence

While recognising the important contribution that this measure will make to the shipbuilding industry, may I ask the right hon. Gentleman whether he is aware that a shipbuilding yard in my constituency, Messrs. John Brown & Co. Ltd., has one 65,000-ton tanker on the stocks at present, and that is all? Is he aware that that firm has invested £4¼ million on new berths, making it the most up-to-date shipyard in Europe?

This is happening in one way or another up and down the Clyde and, since the situation is very serious, will the right hon. Gentleman consider giving some assistance, perhaps in the form of an indirect subsidy—and this has already been suggested—to shipbuiders in order to help them to meet the high prices of British steel and the subsidies which are being given in the United States and on the Continent of Europe?

Mr. Marples

The idea of the Shipbuilding Credit Scheme is to generate further orders from the ship owners, and generate them quickly. That is what it has achieved. Messrs. John Brown & Co. Ltd. can compete for any of these vessels; and if the firm is successful it will have many more ships to build.

Dame Irene Ward

In view of my right hon. Friend's statement, can he say whether he is, in fact, saying that he hopes that a Q.4 will sail the North Atlantic? Would I be right in assuming from my right hon. Friend's remarks that the Cunard Company will be able to take advantage of the increased credit pool? Is my right hon. Friend continuing his conversations with the Cunard Company? In his very delightful reference to what had been done to develop the North Atlantic trade—and since the original "Mauretania" was built on the Tyne—will my right hon. Friend pay an additional tribute to the technical skill of Swan Hunters and Vickers-Armstrong, who developed the first revolutionary new proposal for the North Atlantic route?

Mr. Marples

I hope that my hon. Friend will forgive me if I do not discriminate between the efficiency of the various shipyards in Britain. The future of the service is a matter for the Cunard Company. The Government's decision is that it would not be justifiable to subsidise it to the extent proposed by the Cunard Company in this particular set of proposals.

I do not know whether the Cunard Company proposes to apply for a loan. We must wait and see whether it applies and what sort of loan it may ask for.

Dr. King

Is the Minister aware that while the building of the Q.4 may be a matter of supreme importance to some shipbuilding parts of England, the maintenance of a service like that provided by the "Queen Mary" and "Queen Elizabeth" is of vital importance to Southampton and our passenger transport across the water?

While the "Queen Mary" is at present on her way to becoming obsolescent, would it not be a tragedy if we were to lose the kind of service which is provided by the "Queens"? While the proposals made by the Cunard Company may be unacceptable in their present form to the Government, can the Minister assure the House that his mind is not closed to the possibility of building a Q.4, both from the point of view of the employment it will provide to the shipbuilding industry and the important service it can provide for passenger transport across the Atlantic?

Mr. Marples

I must make it quite clear that I realise the importance of this service, which this country started, has run and has received great credit throughout the world for so doing. At the same time, the present proposal from the Cunard Company—and we must be quite firm about this—is not satisfactory. If the company produces another proposal I would be quite prepared to look at it, whatever it might be.

Mr. P. Williams

I welcome the extension of this scheme from £30 million to £60 million. Will my right hon. Friend confirm that the Cunard Company could apply for credit facilities under this scheme? Will he also make it clear that this will mean the introduction of legislation at an early date and can he confirm when the first actual order will be placed in a shipyard, since this is a matter of considerable urgency?

Mr. Marples

An order can be placed and we have already sent out agreements to various proposals. Thus an order can be placed. That does not necessarily mean that actual shipbuilding will start at once, because the preparation of the plans are of supreme importance, as they are in other forms of building. It is essential, in shipbuilding, that a great deal of time should be spent on the actual detailed drawing before building starts; but there is no reason why it should not start quickly.

The Cunard Company can apply, and is at liberty, like any other ship owner, to be treated on the same basis.

Regarding the powers to lend money, I hope to introduce a Bill as soon as I can. Until such a Bill is passed, the authority for the service will rest on the Appropriation Act.

Mr. Strauss

Does the Minister recall the Conservative Party's manifesto at the time of the last General Election, in which it was categorically stated that the Conservatives …intend to support the replacement of the Queen liners and does he consider that his action in this matter—his decision on this and previous occasions—is in conformity with that pledge? Does he remember a speech of his hon. Friend the Member for Newcastle - upon - Tyne, East (Mr, Montgomery), who said that he owed his victory at the election to that pledge given by the Conservative Party? Has the Minister any comment to make on this aspect of the affair?

Mr. Marples

Yes, Sir. This Government passed the North Atlantic Shipping Act, 1961, and honoured that pledge. It was only because the Cunard Company decided that the terms for which it had asked were no longer acceptable—although they were what it had asked for and the company was given statutory power to have them—that the terms were not accepted; but we kept the pledge.

Sir L. Ropner

Can the additional amount to become available under the credit scheme be made available before legislation?

Mr. Marples

Yes, Sir.

Mr. Steele

Question No. 23 refers to the shipbuilding industry generally. Has the Minister's attention been drawn to this morning's report that the firm of Denny, of Dumbarton, is going into liquidation? As this firm has already spent over £2 million on modernisation and considerable sums on the Hovercraft, has the right hon. Gentleman anything to say about that? If not, will he agree to meet the convenor of the Dunbartonshire County Council and myself to discuss this important matter?

Mr. Marples

I will certainly arrange for any discussion to take place over the particular problem of a particular firm. I realise that this has been a great blow to Messrs. Denny, but I must point out that the last sentence of my statement was drafted very carefully. I am already discussing with the shipbuilders what action they propose in order to secure the industry's future. I saw the Shipbuilding Conference this morning and, with its members, am doing my best to see if we can take care of the distant future, as distinct from the immediate future.

Sir J. Vaughan-Morgan

Is my right hon. Friend aware that he will receive the congratulations of many on having implemented the original manifesto, and on having considerably improved on the terms of what was, in any case, a foolish idea, by his present proposals?

Mr. Marples

I hope that these pro-proposals are acceptable to the House. I was quite certain that when we announced this scheme we would get shipbuilding orders brought forward. That is what we want—quick orders. That has already happened with the applications we have had—so much so that we want more money. That has been done fairly quickly, and I hope that the House appreciates that.

Mr. Shinwell

It would be foolish not to welcome the Government's proposals, even if they are belated. If he can come forward, after consultation with the Cunard Company, with a modified scheme, we would welcome the building of another "Queen" liner, I want the right hon. Gentleman to understand that as coming from those who know something about shipping and the shipbuilding industry. Would he care to spread the net wider, if the Government have the financial facilities available? Is he aware that some British lines, particularly those operating betwen the United Kingdom and the River Plate, are likely to close down because of financial and trade difficulties? Will he take into account submissions made to him on the subject by certain shipping lines?

Mr. Marples

I have already seen the lines that go between here and South America, particularly the west coast of South America, and I will see what I can possibly do for them.

If the Cunard Company comes forward with a proposal that is substantially better than this one, it will certainly be considered.

Several Hon. Members rose

Mr. Speaker

Order. We cannot go on with this now.