HC Deb 25 June 1963 vol 679 cc1112-5
11. Mr. Millan

asked the Chancellor of the Exchequer if he will make a statement on the policy of Her Majesty's Government on the use of sterling by British firms for the purchase of ships to be built in foreign shipyards.

Mr. Maudling

Sterling may be used freely for this purpose, as for all current transactions.

Mr. Millan

While I appreciate that there are difficulties, would the Chancellor look at this matter again in view of the very serious position in British shipyards at present?

Mr. Maudling

No, Sir. I think it would be contrary to all our international obligations to start reimposing quotas to protect particular industries and, in the absence of a quota, we are bound by Article VIII of the International Monetary Fund not to employ exchange control.

12. Dr. King

asked the Chancellor of the Exchequer if he will take action to prevent British Petroleum, in which the Government are a major shareholder, from carrying out its proposed policy of placing orders for new tankers abroad.

17. Mr. Millan

asked the Chancellor of the Exchequer whether he was consulted by British Petroleum, in which Her Majesty's Government are a major shareholder, before the company took their recently announced decision to invite foreign shipyards to tender for the building of tankers.

18. Mr. Hannan

asked the Chancellor of the Exchequer what action he is taking to reverse the decision taken by British Petroleum, in which the Government are a major shareholder, to ask Swedish shipyards to tender for the building of tankers.

19. Mr. Ross

asked the Chancellor of the Exchequer what representations he has received regarding the decision of British Petroleum, in which Her Majesty's Government are a major shareholder, to invite tenders from Swedish shipyards for the building of tankers; and what replies he sent.

20. Mr. Small

asked the Chancellor of the Exchequer whether he will investigate the decision of British Petroleum to invite tenders for tankers from foreign shipyards, as a preliminary to action by Her Majesty's Government as a major share holder.

Mr. Maudling

I understand that the British Petroleum Company recently sought tenders for six product carriers from United Kingdom shipyards. As a result it has placed an order for two with a United Kingdom shipyard, while at the same time inviting competitive quotations for four product carriers from Swedish shipyards. I understand that the company has not yet decided where to place these further contracts. I have received no representations on this matter, nor would I expect to be consulted by the company about it, since this is a commercial matter, and the policy of successive Governments has been not to interfere in the commercial management of the company.

Dr. King

Is not the Chancellor aware that this is more than a commercial matter? While the commercial directors of British Petroleum may wish to pursue a policy of buying cheap and selling dear, even if it hurts Britain, surely the Government have a duty as a major shareholder to protect the interests of British shipbuilders at a time when the shipbuilding industry is in such a critical condition, especially when many foreign competitors are being indirectly subsidised?

Mr. Maudling

I do not agree with that. I think the B.P. Company has done a great service to this country over the years under the present arrangements. It has been extremely good in placing orders with British shipyards and has made it clear that it wants to place orders with British shipyards. But if the margin of price between what is charged here and what is charged abroad is too great, ultimately it will be very difficult for the company, as an international competitive company, to order in this country.

Mr. Millan

Have not the Government a special responsibility since they are a major shareholder in British Petroleum? Will the Chancellor look into the matter and, if the margin between the Swedish and British prices is very narrow, will he see that these ships are built in Britain and not abroad?

Mr. Maudling

No, Sir. As I say, successive Governments have not interfered as a matter of clear established policy in the commercial management of this company, but even if they did so I should be strongly against using an artificial quota in this instance. On the question of margins, the managing director of the company made it clear that if there were competitive prices the company would prefer to buy British and would disregard any marginal difference in price.

Mr. Hannan

Can the Chancellor confirm or deny that wages in Sweden are higher than they are in Britain and, therefore, he will have to look elsewhere rather than laying the charge of high prices against the cost of wages? Will he look into the question and exercise an interest not only in the commercial aspect but also in the social aspect and use the influence of the Government to retain these orders here?

Mr. Maudling

I believe it is true that Swedish wages tend to be higher than British. This is a very good reason why the British industry should be put on its mettle to quote competitively against. Sweden.

Mr. Ross

While I agree with the Chancellor that hitherto there has been no interference, does he not think that this is now a matter of such importance that there must be interference and guidance given to the company (a) in relation to these orders and (b) in relation to the importance this has in regard to other tanker production? He will appreciate that 62 per cent. of our present production is in tankers. Will he consult the Minister of Transport to see what he is doing about improvements in the industry?

Mr. Maudling

If I were to give guidance to the company, and I could not—[Hon. Members: "Why not?"]—because of the long-standing arrangements about commercial considerations—it would be to do precisely what the company is doing.

Mr. Small

While recognising the international character of this company, surely it is the Chancellor's function to do all he can to assist in alleviating the hardship in shipyards in Britain?

Mr. Maudling

The British shipbuilding industry will survive only if it is efficient. It seems only right that B.P. should ask for competitive tenders from a country where wages are higher than in Britain.

Mr. Costain

Is my right hon. Friend aware that British Petroleum has done a great deal to develop British industries through refineries? Is it fair to expect it to pay an uneconomic price for ships against the world markets?

Mr. Maudling

I think that a very important consideration.

Mr. Callaghan

Is it not refreshing to hear that wages are higher in Sweden than in this country, and that therefore the usual scapegoat of the trade unions cannot be used in this matter? Is there not a responsibility on the Government to look at the management of some of these shipyard firms to see where the responsibility lies for these higher prices and not to compel B.P. to accept high prices and so prop up inefficiency in the industry?

Mr. Maudling

I think this is a case where competition should be very effective.