§ Order for Second Reading read.
§ 4.2 p.m.
§ The Minister of Transport (Mr. Ernest Marples)
I beg to move, That the Bill be now read a Second time.
In my statement of 8th July, I announced the Government's intention to introduce the Bill. I was grateful for the remarks then made by the right hon. Member for Vauxhall (Mr. Strauss) and also for the support subsequently given by the Chamber of Shipping and the Shippers' Council.
The object of the Bill is set out in the Long Title. It is tosecure Her Majesty's jurisdiction against encroachment by certain foreign requirements".It is essentially a Measure relating to international jurisdiction. The legal issues are extremely complicated. It has, therefore, been arranged that my right hon. and learned Friend the Attorney-General will reply to the debate.
As the House knows, it is the actions of the American Government that have obliged us to introduce the Bill, although it deals with encroachment by any foreign Government. Difficulties now face us as a result of the enforcement of United States shipping legislation and we are of the opinion that this enforcement encroaches upon our jurisdiction. Perhaps the clearest example concerns dual rate contracts. The United States Federal Maritime Commission claims the right to dictate to traders and shipowners in this country the form of contracts between them. The Commission claims this right regardless of who owns the goods being shipped, who owns the ships and where the contract is negotiated.
Thus, if a British manufacturer makes a contract on British soil with a British shipowner to take goods to the United States of America, the Federal Maritime Commission claims the right to lay down the terms of that contract. Another example is where the Americans have called for the production of documents and information located outside the United States.
1216 The Bill has two principal functions. Clause 1 deals with the first and it relates only to shipping. It operates in three stages. The first stage is when the Minister of Transport considers that measures taken by any foreign country concerning contracts for the carriage of goods or passengers by sea constitute an infringement of our jurisdiction. The Minister is then empowered to make an order applying Clause 1 to those measures.
The second stage is as follows. If the Minister has by order specified a certain measure, any shipowner in the United Kingdom who is required to do something or prohibited from doing something by that measure must—this is mandatory—notify the Minister. The reason for that is that it would be difficult otherwise for the Minister to get the necessary information.
The third stage is that the Minister may then by direction prohibit the person or persons concerned from complying with the requirement or prohibition. The reason for this will be that he considers such a direction necessary to maintain United Kingdom jurisdiction.
§ Clause 2 deals with foreign demands for commercial documents and information. This is not limited to shipping and it will apply generally. The Clause covers the case in which a person is required to produce commercial information compiled from documents, as well as the case in which a person is required to produce an existing document.
§ Before the Minister can give a direction under Clause 2, three conditions have to be satisfied. First, it must appear to the Minister that someone in the United Kingdom has been asked, or may be asked, to supply document or information to a foreign court or other authority. Secondly, the documents must be outside the territorial jurisdiction of the country asking for them. Thirdly, it must appear to the Minister that the requirement constitutes an infringement of United Kingdom jurisdiction. The powers conferred are purely permissive. Clause 3 relates to penalties and enforcement, because a Bill of this kind must have teeth if it is to be effective.
§ So much for what the Bill will do. I may say at once that it is with a great 1217 deal of reluctance that we are introducing it. We have, however, really no option. Three years ago, the Americans passed legislation about international shipping without—let us face it—regard to the fact that there are two ends to any piece of international trade. As the administration of this legislation comes into effect, the Federal Maritime Commission, which is the unfortunate body which has the task of operating it, is increasingly interfering with the affairs of other countries. Instead of acting as an agency of one country amongst others, it is acting as if the United States had the right to regulate the affairs of the world as a whole.
Moreover, this regulation is being done not according to some generally accepted principle, but quite avowedly in the interests of the commerce of the United States of America. Some hon. Members may find it difficult to believe that this is so, but the provisions which attempt to secure
the public interest of the United States
or to prevent shipping operations
to the detriment of the commerce of the United States
appear in Sections 14(b), 15, 18(b)(5) and elsewhere in the United States Shipping Act, 1916.
§ The Americans are reasonable people, and they and we are accustomed to speak to each other frankly. We have been trying, not altogether without success, to deal with the situation by discussion and negotiation. However, we have now reached the stage where, unless we take rather more formal action than we have done before, there is a risk of our position being eroded by default.
§ Mr. Paul Williams (Sunderland, South)
My right hon. Friend has said that the Americans are reasonable people and, in general, that is true. Certain pieces of information have, however, been given before the Congressional hearings on this matter which lead one to think that that is not true of all Americans. I am told, for example, that Senator Douglas used these words:I don't want to compare the European nations to a child or to juvenile delinquents, because I don't wish to insult our honourable friends. I simply say that so far as child psychology is concerned, sometimes behaviour is improved by the knowledge that there is a woodshed and a switch therein.1218 This does not sound like a very accommodating attitude by the Americans.
§ Mr. Marples
As my hon. Friend suggests, there are many people in the United States; some say one thing, some say another. It is true that Senator Douglas said something on the lines which my hon. Friend has indicated, but his countrymen throughout the world must judge whether his utterances are calculated to do what Dale Carnegie, in his great book, set out to do, "to win friends and to influence people". But whatever anybody in the United States, whether a Senator or a Congressman, chooses to say does not give me a reason for being offensive. I refuse to utter offensive words on this occasion, because I want to refrain from utterances which would make it more difficult ultimately to reach a settlement round the conference table. Our object is to be reasonable. Our aim is to negotiate, to get round the table, and not to be rude or offensive, whatever anybody else may say.
There are several matters over which the question of preserving our jurisdiction against encroachment through American shipping legislation arises. I have mentioned the dual freight rates. Let me make it plain. Many of the contracts the form of which the Federal Maritime Commission is attempting to dictate are between British customers and shipowners based in this country. Can it then be wondered if we object? Moreover, what would the Americans say if we in this country attempted such action in the United States?
It ought not to be necessary to ask Parliament to legislate so as to place beyond dispute our rights in matters of this kind. Some American lawyers have argued, I understand, that British law is defective inasmuch as it contains no provision for regulating the contracts and freight rates which ship owners negotiate with their customers. Their argument runs that there is thus a vacuum into which the American Government are entitled to move. I know that many hon. and learned Gentlemen will take part in this debate and I would like their views as lawyers.
Her Majesty's Government do not for a moment accept the view expressed by these American lawyers and the Bill may be said in a sense to protect the alleged 1219 vacuum while taking care not to regulate shipping ourselves. The American claim is, in my view, clearly untenable, because it depends on the assumption that America somehow has unique rights.
It would make nonsense for countries generally to make such claims. Despite arguments raised by Her Majesty's Government and by other Governments, the Americans have not, however, abated their claims and we therefore reached the conclusion that, without legislation of this kind, we should be conducting discussions on this and similar points under a handicap.
The Federal Maritime Commission has more than once pointed to the United States law as justification for its attempt to assert its authority over foreign commerce. The Bill will help to make it absolutely clear that the United States Congress can legislate effectively only so far as its writ runs.
Again, I want to make it clear that the Bill is not—I repeat, not—a retaliatory measure. Its sole purpose is to give the Government permissive powers to prevent encroachment on United Kingdom jurisdiction and to protect our interests. I hope that it will not be necessary to use these powers and that our difficulties can be settled by understanding and friendly negotiations. I would like to emphasise that. I am sure that this is also the desire of the American Government.
What alternatives are there to negotiation other than arbitration or a first-class row? We believe that the whole question of jurisdiction which has been raised by American shipping legislation will have to be thrashed out sooner or later, and, as I have said, discussions to this end are at present proceeding between the Governments concerned.
I want to say something about the relationship of the Bill to our general policy on shipping. Our shipping policy has the over-riding aim that world shipping should provide its customers with what they want from shipping. We believe in competition and the freedom of the seas, not primarily because they suit Britain as a shipping country but because cheap and efficient sea transport makes for the expansion of world trade. There is a very real threat to world trade in the temptation, to which many Governments 1220 are exposed, to interfere with international shipping in pursuit of national interests.
At a time when most Governments leave international shipping alone, a few Governments can gain some short-term national advantage by directing cargoes to ships of their own lines or by putting pressure on ship owners to lower some freight rates and increase others. If those practices became general, no country would be able to get special advantages by them, and, meanwhile, great damage would be done to world trade.
Ships would seldom sail fully loaded because Governments would be preventing foreign ships from picking up cargoes. Traders and shipping agents would be put to great expense in money and time in complying with Government quota systems and other regulations. The main objective of British shipping policy, as exemplified in the Bill, is to strive against such a situation coming about.
In the nature of things, much of what I have had to say from this Box about shipping has been about the protection of our shipping from the actions of foreign Governments. That is why I want to emphasise the positive nature of our policy. Our aim, as I have said, is that the user of shipping should get the service he wants. We believe that the conference system should be allowed to function not because it favours the shipowners of any country, but because no other system of shipping service has been developed which can offer such cheap, efficient and convenient services to traders. Conferences have not always handled their customer relations well.
§ Mr. Marples
I am glad to have the agreement of the hon. Member.
That is why my European colleagues and I were very glad, last December, when the Committee of European Shipowners was able to report to us the agreement it had reached with organisations representing its customers about machinery for dealing with complaints. Fundamentally, the trader's protection lies in the fact that, if the conference does not give him the treatment he wants, he can take his business elsewhere. Nevertheless, things should not reach that point and the European Ministers had been anxious that 1221 regular consultative machinery should exist and be widely known to exist.
We were satisfied that it would not be in the interests either of shipowners or traders to have Governments coming between them. We think that the efforts of the American Government in this direction not only involve interference with other countries' interests, but are largely ill-conceived and unsuited to their objectives. It is our firm belief that Government regulation of commercial shipping forces up rates and costs and is no substitute for competition and free negotiation between traders and shipowners.
Our aim must be to create conditions under which international shipping is able to fulfil its potential as the cheapest means of transport in the interests of international trade, of the British consumer and producer and of the consumer and producer throughout the world.
The Bill is designed to contribute to these objectives and as such I commend it to the House.
§ 4.18 p.m.
§ Mr. R. J. Mellish (Bermondsey)
The House will echo the Minister's sentiments in saying how regrettable it is that the Bill has had to come before us, because it will, I am sure to our regret, give ammunition to that minority of people in the country who, by the nature of things, are anti-American anyhow. No doubt they will use some of the right hon. Gentleman's own arguments in saying that it is difficult to understand why Britain should be such a close ally of the United States. The vast majority of hon. Members are well disposed to the United States, are anxious to see that friendship continue and endorse the Minister's words that friendship is a two-way affair.
Some of us on this side are, however, bewildered because the Bill has taken so long to come forward. This situation did not arise suddenly. Those of us who take an interest in shipping know that, for some years, our shipowners and masters have been discriminated against by the Americans. It is not enough now for the right hon. Gentleman to produce a Bill which is rather negative in character and which, in the end, will not solve anything. It throws down a challenge to the Americans, saying, "This is what we shall do to protect our people."
1222 That is all very well, but I think that higher and mightier counsel than even the right hon. Gentleman's might have prevailed. My right hon. Friend the Member for Easington (Mr. Shinwell) asked some time ago whether the Prime Minister would raise this matter in discussion with the President of the United States. We were given to understand that he would do so. Did this matter ever reach that level? It should have done. This is a matter for the President and the Prime Minister themselves, because it is by no means a small affair.
Since the Bill was published, I have had discussions with the Minister and have done some overtime on it—as most of us have had to do on this matter. I have talked to a number of people interested. The truth is that the Americans have grave suspicions about what we call the conference system. I understand that they believe that it brings about certain settled freight rates and conditions which are unfriendly—if that is the right word—to American commerce They demanded under the 1916 Act, later amended by an Act of 1961, greater power to look at freight rates, the private documents of shipping companies, and the like. Since 1961, there has been a great deal of activity in the Federal Maritime Commission.
The background is American suspicion of our own shipping companies and shipping companies throughout the world ganging up to apply level freight rates which, in themselves, affect the American economy. The Americans want to protect themselves. That is why they strengthened the 1916 Act by passing, in 1961, the Bonner Act, which gave the Federal Maritime Commission certain powers. We should have their reasons clear in our minds.
I should be the first to oppose any so-called conference system if it was just a question of monopoly and of creating artificially high freight rates for customers here and elsewhere, but when one examines the matter one recognises that the conference system is inevitable. It started about 90 years ago, when sailing ships were going out and steamships were coming in, when there was a great ganging up over rates and deliveries, and such a state of war in the industry that order had to be brought out of chaos.
1223 The conference system has been tried and tested again and again. Ironically enough, I find that some of my trade union colleagues in the industry complain that British shipowners do not play a sufficiently strong part. They say that as a country we do not have sufficient say in what is decided at international level.
There is nothing new about the conference system. It has been inquired into many times. It is not as though this were a gang of people with no one checking on their activities. There was a Royal Commission many years ago, and then a Dominions Royal Commission, which looked at the matter especially from that point of view. The Imperial Shipping Committee in 1920 came down in favour of the principle of this system, and also came down in favour of the individual's right of complaint with regard to certain freight rates, and so on.
I was glad to hear the Minister say that at his conference with our European friends the rights of traders were looked at, and I should like the Attorney-General to tell us rather more about whether there is to be a genuine effort to deal with individual complaints about freight rates.
Britain's record in shipping is a classical example to the rest of the world. When one goes into the question with our trade union friends in the shipping world we find a genuine desire to co-operate with shipowners, particularly in the tremendous fight for world trade. The trade union movement is severely criticised for some of the things that it may have said and done— it may be that its public relations side should be looked at—but there can be no doubt that both shipowners and trade unions have the desire to maintain and continue the conference system as a means of maintaining order. Several people on the trade union side have told me that without the conference system there would be chaos as between shipping companies. Our American friends, there fore, need to be told that we will support the system—
§ Mr. Marples
I am grateful to the hon. Member for what he has said. The conference system is necessary if we are to have a regular service by sea between point A and point B. It is not 1224 necessary, of course, if we are to have an irregular service. There must, therefore, be certain conditions, otherwise those in the industry will not be able to maintain the service and give the quality of service. Every conference we have in relation to the United States trade is open to United States shipping lines. There are American lines in them, and they have their rates settled by unanimous agreement.
There is the further point that we in this country took the initiative in getting the 10 European countries, plus Japan, together, so that in the conference system, which was previously operated solely by the owners, the customer now comes in, and if he has a grievance there is machinery to deal with it. The result is that the conference system as now constituted is fairer than it has ever been before.
§ Mr. Mellish
But, with great respect, there can always be improvement, and I urge all those responsible for this system, especially in this country, to ensure that not only is it fair but that it is seen to be fair.
Since the Americans passed the Bonner Act, three years ago, there has been a tremendous increase in their activities, and I understand that almost every aspect of day-to-day commercial operation of line services in the American trade is being interfered with. I am told that almost every action of a conference is being questioned—rationalisation of sailings, alteration of freight rates, agreements with stevedores, and even conferences with the shippers themselves. The American Act lays down that the sole test that the Federal Maritime Commission will apply in deciding whether to give approval for any action is whether or not it is in the sole interests of the American people.
Let me put the alternative to the Americans. What happens in this country? In the matter of access to shipping, Britain compares favourably with all its competitors. Not only are its ports numerous and well placed in relation to its staple export industries, but the national policy of welcoming all ships alike to our ports, without any kind of flag of discrimination, has the effect of putting at the disposal of those who need them all our resources of easy loading 1225 and unloading, and the traders of Britain have the full benefit of an open freight market. That is an example which the Americans should copy. America is the land of free enterprise and believes in free competition, but it is now a land which is applying restrictions to countries like this which rely on exports to live.
As a very good friend of the Americans, I think that it is a tragedy for both countries that the Bill should be necessary. With respect to the Minister, and there is nothing personal in what I now say, I think that this matter is really above his level. I should like to know what has been done by the Prime Minister, and whether anything else is to be done other than bringing forward the Bill. We support the Bill and, of course, we shall help to get it through all its stages by Friday. The Minister has said that there will be more conferences, and I should expect that to be the case, but the saddest thing to be said this afternoon is that the Bill should be necessary. There has been a failure somewhere down the line, and I should like to know exactly where to pin it down.
Again, without wishing to be personal, I believe that the right hon. Gentleman's Department is so busy looking after roads, traffic, and so many aspects of transport policy and problems that I sometimes wonder whether, in spite of the fact that the right hon. Gentleman has in the hon. and gallant Member a very able Parliamentary Secretary to deal with shipping—though that is a recent appointment—shipping has not not been treated as the poor neighbour in his Department. In future, whatever Government we have, I should like to see shipping made priority No. 1 in the Ministry of Transport, and those who speak for it to speak loudly and well.
Meantime, as I say, we support the Bill in principle, and will do all we can to facilitate its passage.
§ Mr. Marples
The hon. Gentleman was very kind in giving way to me before, and I did not wish to interrupt him again. However, this is important. I can assure him that the fact that the Bill has not come before the House earlier was not because the Department was too busy, because we have a special section dealing with shipping, which 1226 does not deal with roads or railways at all. The reason was that we hoped, possibly against hope, that the Americans would sit at the conference table and that we could do a deal. In fact, we found that we could not. They have now extended the deadline to 1st September of this year, which is when the House will be in recess.
If we did not have this power, and if the Americans applied those sanctions on 1st September, we should be in a mess. Therefore, it would be wrong to let it go at that. I can assure the hon. Gentleman that the Shipping Advisory Panel, which has trade unionists, shipowners and representatives of the British Shippers' Council on it, is wholeheartedly behind me in this effort. They are reluctant to do this. I am reluctant to do it. I would rather do without it. The point is that, having gone so far, I feel that we cannot let our shipowners down. Late though it is, it is necessary.
§ Mr. Mellish
I will content myself with saying that the fact that we have the Bill today, and that it has come about after there has been a great deal of discrimination against our people, shows that there has been some negligence somewhere in the Minister of Transport's Department. With great respect to the right hon. Gentleman, I think that there has. I end on this note: the Bill is now before us. We shall support it in principle and we shall facilitate its passing by Friday.
§ 4.32 p.m.
§ Colonel Sir Leonard Ropner (Barkston Ash)
I suppose that all right hon. and hon. Members are fully aware that, although the immediate need for the legislation under discussion arises only from difficulties which have arisen between the United States of America, on the one hand, and other maritime nations, on the other, and only in respect of regular line shipping services, nevertheless, when once any Government start legislating in a way which infringes on the jurisdiction of other nations, no one can say where action of this sort will stop.
There is no doubt at all that the rules which the United States Federal Maritime Commission is threatening to enforce constitute an infringement of the 1227 jurisdiction of the United Kingdom and other maritime nations. As my right hon. Friend the Minister himself has already pointed out, the Commission, even today, rules that contracts entered into between British shippers and British shipowners in the United Kingdom are illegal. The Commission lays down that British shipowners, in their business agreements with British shippers, must use a form of contract drawn up by the Commission itself. Could anything be more preposterous?
The American Bonner Act of 1961 conferred greatly increased powers on the F.M.C., and at the same time the Commission was told to act more vigorously and with more toughness. I am told that the Commission now employs a staff of about 300, all of whom are feverishly engaged in devising methods of interfering with the business affairs of the shippers and shipowners of other nations. At present, the Commission is devoting its energies to liners. How long will it be, we may ask, before it gets round to tankers and tramps? In parenthesis, I may remark that no nation has done more to upset the traditional freedom of trade among the shipowners and shippers of the world than has America herself, by subsidies, by flag discrimination, by trade reservation, and by the use of flags of convenience.
There is another consideration which emphasises the importance of the Bill. If the Federal Maritime Commission were to be allowed to get away with it, how many other countries might be tempted to follow its lead? More than one developing country is anxious to discuss such questions as the stabilisation of freight rates and participation in liner conferences. Well—perhaps. But it would seem a bit hard if the financial aid which we are all so ready to give, and are giving, to new nations should be used not only to build ships to run in competition with out own, but that, at the same time, these countries should follow the ill practices which America proposes to enforce.
American legislation of the sort we have in mind this afternoon dates back to 1916 and culminated in the Bonner Act of 1961. It is extremely involved. That is perhaps why my right hon. and learned Friend 1228 the Attorney-General is to wind up the debate. Some time ago the F.M.C. demanded that all member-lines of conferences should produce all sorts of documents relating to business transactions which had been conducted not only in America, but in other countries also. There were to be penalties for noncompliance with this demand. My right hon. Friend the Minister is to be congratulated on forbidding British lines to comply. The edicts of the F.M.C. have not always been enforced, but technical infringements of U.S.A. legislation have been mounting up over the years and I am informed that British and foreign lines are already technically liable to fines amounting perhaps to millions of pounds.
As the F.M.C. is attempting to exercise world jurisdiction over liner conferences, I should like to add something to what has already been said about the conference system. The House has already been reminded that from time to time the recognised machinery of the conference system has been very closely examined, not only in this country but in other countries. All concerned, including Governments, have, I believe, invariably concluded that the system is one which serves the best interests not only of shippers and shipowners, but, indeed, of world trade.
The House should also remember that in the North Atlantic trade there is no quarrel of any moment between British shippers and British owners. The shippers—that is to say, the exporters—have their Shippers' Council, which maintains a very close and friendly relationship with the conferences. Perhaps it is a pity that across the Atlantic there is, as far as I know, no such comparable liaison between the two interested parties.
The Bill, of itself, will not resolve the current difficulties. It is, however, a brave Measure and one which must be recognised in America as a clear assertion by Her Majesty's Government of our determination to defend our judicial rights. Unhappily, five inbound conferences and about the same number of outbound conferences to and from the United States have decided to conform with the demands of the F.M.C. in some respects, particularly in connection with dual rate contracts. I am glad to say, however, that with possibly 1229 one exception the British participants in these conferences, usually heavily outvoted, have voted against compliance with the F.M.C.'s demands.
It is greatly to the credit of the Minister of Transport that in this tussle with the F.M.C. he has done everything possible to encourage the willing cooperation of 10 other European nations and Japan. The Governments of these countries, which, in terms of shipping, represent well over a half of world tonnage, are as determined as we are that there shall be no encroachment of their national jurisdiction.
On the industrial level, as opposed to Government level, international cooperation has been achieved among shipowners, and British owners have played a prominent part in international discussions, including talks conducted in America. The Shippers' Council is as determined as are the conferences to fully support the Government in defending British judicial rights.
I have got to the end of what I wanted to say except that before I sit down I am bound, by an honourable custom, to acknowledge a personal interest in shipping. I have done so on many previous occasions. For many years I have been the only shipowner in this House and I have thought it right that sometimes, and to the best of my ability, the voice of the British Merchant Navy should be heard in this Chamber. I have been fearful that, being personally interested, my remarks might be discounted. I have been fortified by the belief that hon. Members have appreciated that at least T knew what I was talking about. The House has been very kind. This is the last time that I shall trespass on its generosity.
§ 4.44 p.m.
§ Mr. E. Shinwell (Easington)
The hon. and gallant Member for Barkston Ash (Sir L. Ropner) intimated his intention to retire at the next General Election. That is in many ways regrettable, although, naturally, I have political reservations.
It is true, as the hon. and gallant Member remarked, that for some years he has been the sole shipowner in the House and has frequently represented the views of the shipping industry. I can assure him that his departure will 1230 not mean that the views of that industry will not be represented here after the election. Among others, I intend, all being well, to return after the election, and although that might cause some trouble for some hon. Members—although probably not for the Government; we expect a quite different Government next time—from time to time, when matters affecting the shipping industry arise, as undoubtedly they will, I hope to have the opportunity of expressing some constructive opinions.
I invite the few hon. Members who are present this afternoon to contrast the attendance in the Chamber today with the attendance on Monday. Then, the House was congested. At the beginning of the debate there was hardly any superfluous room to be found. On that occasion hon. Members were discussing accommodation; the need for individual rooms, separate secretarial assistance, and similar kinds of amenities. This afternoon we are discussing the future of the British shipping industry. Note the contrast. If the response from hon. Members opposite is to the effect that I should note the paucity of attendance on this side of the House, I can assure them that I am as deeply shocked by that as I am by the scarcity of hon. Members on the benches opposite.
For many years the shipping industry has been under a cloud. It remains under one and will probably continue to remain under a cloud unless we make a determined effort to help to solve its problems. Only this afternoon, in the financial notes in the Evening News, we are warned by Sir Nicholas Cayzer, chairman of British and Commonwealth Shipping Co. Ltd., one of the most important services in the United Kingdom, of the dangers which confront the shipping industry of this country. He says, in effect—and I will not weary the House with his exact words—that unless freight rates are substantially increased or the Government provide subsidies, there is very little future for the British shipping industry.
True, at the end of his remarks, the hon. and gallant Member comments that he expects that his shipping company will, unless there are unforeseen circumstances, do very well next year.
§ Mr. Shinwell
Nevertheless, this situation is far from satisfactory. What are the contributing factors? The lessening of international trade is perhaps the most important factor in the decline in British shipping. I have referred to this before in previous debates and I have said that unless we increase the volume of international trade, particularly in regard to assisting commerce in the developing countries—increasing consumer demand, which would enhance our productive effort—there can be little doubt that our shipbuilding industry and shipping services will suffer and decline. I would regard that as very regrettable.
We are a great maritime nation, much greater than the United States. Indeed, America has never really been a maritime nation. That country has been confronted with great difficulties, particularly about the selection of crews, both officers and men. I am satisfied that if an analysis were made of the nationalities of crews on American vessels it would be discovered that a very small minority of them are American citizens. They are mainly Scandinavians, Italians, Greeks, and the like; although I make no complaint about that.
In addition, the Americans have been faced for many years with difficulties caused by demands for high rates of pay. The rates of pay on American vessels are far in excess of the rates paid on British vessels. Indeed, some difficulties have emerged in connection with the mixed-manned missile vessel. The differentiation in the rates of pay have caused some resentment among British personnel. But that is another matter which I must not discuss this afternoon.
There is another contrast this afternoon to which I draw attention—the contrast between the speech of the Minister and that of the hon. and gallant Member for Barkston Ash. The Minister was apologetic; in fact, his speech was one long apology. He expressed reluctance to introduce the Bill, and he informed us that the last thing that he wanted to do was to be offensive. That surprised me, because we have some experience of the right hon. Gentleman. I have never observed any reluctance on his part to be offensive to hon. Members on this side of the House, even to a right hon. Gentleman 1232 like myself; but occasionally we can indulge in the riposte, as he well knows.
The right hon. Gentleman is a bit of a rascal.[HON. MEMBERS: "Oh."] That is quite Parliamentary, I assure the House. In fact, sometimes, he is as tricky as a bag of monkeys; full of all sorts of tricks, and this Bill is one of them. The right hon. Gentleman has come along almost at the last minute with it, in a kind of death-bed repentance before the election, as a political manœuvre. I shall tell him all about it. I know that he wants straight talk, because he has told us that he likes to indulge in straight talk with the Americans.
My hon. Friend the Member for Bermondsey (Mr. Mellish) said—many thanks to him for the reference—that some considerable time ago I raised this question, not with the present Prime Minister but with the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan), the previous Prime Minister—it was 18 months or two years ago. I said, "You are going to meet President Kennedy"—the late-lamented President whose passing we all deplore—"and when you are having discussions will you talk to him about the position of British shipping in the context of the action of the United States Federal Maritime Commission in its endeavour to restrict the operations of British shipping?".
The right hon. Member for Bromley—I must say, with courtesy—assured me that, although the discussions would be confidential, he would take note of what had been said. In fact, the right hon. Member for Bromley—I say this in parenthesis—displayed much more courtesy than the present Prime Minister, who seems to treat hon. Members with contempt, at any rate Members on this side of the House. When the right hon. Member for Bromley returned after his discussions with President Kennedy, I asked him whether he had raised the question of British shipping interests with his opposite number, and he assured me again that, although the discussions were confidential, the point had been noted.
Thereafter, the right hon. Gentleman the Minister of Transport informed the House that he had been engaged in discussions all along the line. If he 1233 was as apologetic in his confrontation with his American opposite number as he has been this afternoon in this House, I am not surprised that we have not made very much progress.
I have been engaged in discussions with Americans. I have been in Washington and New York. When I was Minister of Defence I had to undertake the task of discussing with the Americans the subject of weapons; but I would not yield to the Americans, although they would not give way. I came to the conclusion at the time that the British weapon that we had under discussion was the best in the world, and I told the Americans this to their faces—there was straight talk. I returned, without success, because we had reached no agreement.
Some time afterwards the Labour Government went out of office and a Conservative Government came into power with the right hon. Member for Woodford (Sir W. Churchill) as Prime Minister. What did the right hon. Gentleman do? I regret to say anything derogatory of the right hon. Gentleman—that is the last thing that any of us would wish to do—but what did he do? He had to yield to the Americans. That was not a veary patriotic act. Therefore, I understand what it means to have negotiations with the Americans.
I am bound to say that the Minister of Transport should have stood up to them much more manfully and forth-rightly than he has done. Now he comes along with the Bill. What is the Bill? The hon. and gallant Member for Barkston Ash was right—it will resolve nothing and that, I believe, is the opinion of the Chamber of Shipping. It is a gesture and it is innocuous. I shall tell the right hon. Gentleman about it.
Let us assume that a British vessel reaches an American port—New York, Philadelphia, Norfolk, Virginia, or any other—and that the master of the vessel refuses to disclose documents. I come to the point with which, no doubt, the Attorney-General will deal later: who is responsible for the disclosure of documents? Let us assume that the vessel arrives at an American port and the master of the vessel is asked by a representative of the Federal Maritime Commission to disclose a document relating to the transaction of some conference line or some arrangement between some 1234 shipping line and some shippers in this country who wish their goods to be conveyed to the United States of America. Suppose he declines? I hope that the Attorney-General will take note of this, because I believe it to be a point of substance.
Suppose the master of the vessel says, "I am empowered by British legislation, introduced by the Minister of Transport, to refuse to disclose the document. I am under penalty of £1,000." What happens? Will the dock authority of the port when this vessel arrives give instructions that the cargo is not to be discharged? Suppose it did? What recourse would the master of the vessel have?
I know that there is a Treaty of Commerce which was agreed a way back in 1815 or 1816 and that Treaty provides for reciprocal arrangements between the United Kingdom and the United States of America, but that may have gone by the board because of what happened in 1916, and, as my hon. Friend the Member for Bermondsey remarked, in 1961 through the Bonner Act. That Act may have superseded the agreement of the Treaty of Commerce in 1815. I want to know what would happen to the master of the vessel. Will he be ordered to take his vessel back to the United Kingdom port?
The right hon. Gentleman is smiling, as if this could never happen. It never occurred to him, because he does not know anything about shipping. He may know something about roads, although we are not getting on too well with them, and he knows something about railways, particularly about closing them.
§ Mr. Mellish
My right hon. Friend gave the example of the master of a ship refusing to disclose documents. Could the master still be prosecuted by the American authorities, and, if so, what would happen if he were?
§ Mr. Shinwell
I am obliged to my hon. Friend for making that point. We have to protect not only our shipowners and shipping companies, but also those who are employed by them. The master of the vessel and all his crew may be arrested at the behest of the Federal Maritime Commission. What would happen then? It would cause a proper row.
1235 In the Explanatory Memorandum to the Bill reference is made to the fact that under Clause 3 a fine could be imposed on an individual whichis not to exceed £1,000".What does that mean? How is an individual defined in the Bill? Is it the master of the vessel? Is it the shipowner? Is it the chairman of the board of directors? Is it the shipping company? We ought to know. We must be clear about this, because our crews must be protected against any untoward act on the part of the American authorities.
Let us assume that, as a result of their Bill, these difficulties occur. I support the Bill. Any port in a storm, if I may use a nautical expression. Any kind of small mercy thankfully received. Any contribution gratefully received. Better than nothing. Anything to show that, at last, we are standing up to the United States.
That is straight talk, is it not? I am as anxious as is my hon. Friend the Member for Bermondsey or any other hon. Member to retain all the benefits of Anglo-American co-operation. I believe that in existing circumstances and in the foreseeable future, perhaps for many years to come, Anglo-American co-operation is desirable. Indeed, I believe it to be inevitable if we are to retain any semblance of liberty. There are certain reservations in the United States in that context, but if we are to maintain what is described as the free world Anglo-American co-operation must be retained.
The hon. and gallant Member for Barkston Ash referred to one point which ought to be emphasised. Let us consider what has happened during the last 15 or 20 years. We have seen the advent of the Panama-Liberia consortium for the purpose of using flags of convenience. That has not been too disadvantageous, and I believe that some British shipowners have to some extent adopted that device, but not to the extent to which it has been adopted in the United States. Next, we have flags of discrimination. Could anything be more obnoxious than that device and anything more dangerous to British shipping?
We also have the system whereby, when aid is to be provided, to a developing or a foreign country outside the United States, 1236 or trade is to be developed, a large part of the cargoes have to be carried in United States tonnage, with no possibility of competition in the international shipping world. We have complained about it many times. My hon. Friend the Member for Bermondsey and others present who represent the shipping constituencies, and who are deeply interested in the future of British shipping, have often referred to this matter and have made adverse comments about the attitude of the Federal Maritime Commission. With what results? Practically none.
Much more than that has happened. It is about time that some information was furnished by the right hon. Gentleman about the subsidies provided by the United States Government for American ships. I have some experience of this matter for I was associated with the seafaring community back in 1911, which is a long time ago, and I learned something about shipping. Even in those days, before the First World War, I heard about American Government subsidies to the Matson line, which was one of their principal shipping companies. They were giving subsidies even then. We have refrained from this, although shipping companies are inclined to flirt with the idea because of the adverse circumstances which have developed in recent years. But we gave no subsidies then although subsidies were granted by the Americans.
Not content with that, they seek to weaken British shipping and they adopt restrictive practices, using the excuse that they are opposed to monopolies. Let us examine the facts. Are the conference lines monopolistic undertakings? There is nothing monopolistic about them. There is keen competition among British shipping companies. But if a shipper decides to send a cargo to the United States and feels that it is much better, from his point of view, that the cargo should be conveyed in a vessel or through a shipping company accustomed to dealing with such a cargo, and perhaps knowing the best way of handling it, what is wrong with that?
There is any amount of competition among British shipowners. There is nothing monopolistic in the conference line method, or in a contract about freight rates. I want to tell the right hon. Gentleman quite frankly that I have come to the conclusion that the American 1237 Federal Maritime Commission has no case at all on this ground. All that it is trying to do is to weaken British shipping. I do not like it, and it is about time that the House, also, said that it did not like it.
§ Mr. Marples
I did not want to interrupt the right hon. Gentleman, for he is very knowledgeable on shipping matters, but he said that I had not given the House a great deal of information about American subsidies. This is largely because it is not my responsibility. The subsidy from the American taxpayer in 1964–65 to the American shipping industry amounts to 190 million dollars. In this country, we have no subsidy at all. If one considers who would win the day, it is clear that the American shipowners could not compete at all. The same situation arises in shipbuilding, where they have a subsidy of 125 million dollars in the same year. I wanted to give the right hon. Gentleman that information to show the scale of the subsidies which they give to their shipowners. We give none to ours.
§ Mr. Shinwell
I am grateful to the right hon. Gentleman for giving hon. Members that information. We shall know exactly where we stand.
I am not advocating subsidies for British shipping, although it may be necessary to provide some measure of financial assistance—as we have done—shipbuilding. Much more may be required for us to get on to an even keel. That is not a subject which we need to discuss at great length this afternoon.
I want to put one further point to the Attorney-General. What is the position of other countries? In previous debates and answers to Questions the right hon. Gentleman told us that he was having discussions with the other maritime countries. He said very little about that this afternoon. What has transpired? Will they work with us in promoting the ideas contained in the Bill? We ought to know. What has been the result of those discussions? It is obviously very much better for us and all to the advantage of our shipping lines and the shipping lines of other maritime countries if we work together and if we put up a fight against the United States on this issue.
1238 There is much to be said on this issue. I could speak for a long time about it, and I make no apology for having made what may be described as a lengthy speech, although I am coming to my conclusion. I took this matter up with the right hon. Member for Bromley when he was Prime Minister. Is there any reason why, in the next couple of months before the election, the present Prime Minister, in spite of his many preoccupations, should not address himself to this subject? I do not think that we shall get a settlement except on a summit basis. I mean no disrespect to the Minister of Transport—not that I do not want to be disrespectful to him occasionally, but I do not mean that he is incapable of engaging in a discussion; but these matters ought to be settled at a very high level.
If it cannot be settled by the present Government before the next election, I hope—and I believe that my hopes will have some measure of fulfilment—that the next Government will try to deal with this very important subject, which affects the future of British shipping, at a high level, by the next Prime Minister going to meet the President, who, I believe, will be President Johnson, to try to reach a conclusion.
Meanwhile, I beg the right hon. Gentleman and hon. Members who are interested in the future of British shipping to stand firm. We want the Anglo-American Alliance. We are not abandoning that very important concept, but let us tell the United States that if there is to be co-operation and partnership, if there is to be an alliance, there must be a fair deal for our shipping industry.
§ 5.11 p.m.
§ Mr. Humphrey Atkins (Merton and Morden)
The right hon. Member for Easington (Mr. Shinwell) started by saying that he confidently expected that after the next election he would be back in his place, unlike my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner). We always enjoy listening to the right hon. Gentleman. I, too, hope that he will be back, but I hope very much that he is still in that exact place on the opposite side of the House after the next General Election.
We always enjoy listening to the right hon. Gentleman because, as usual in his 1239 speeches, he asks a great many pertinent questions about the content of the Bill. I have not the slightest intention of attempting to answer him, because my right hon. and learned Friend the Attorney-General will do it very much better and also because the right hon. Gentleman covered a wider range of subjects than might have appeared possible on the Bill, but he has great skill in this matter and we always enjoy listening to him at it.
Although the right hon. Gentleman supports the Bill—and we are in agreement there—he was less than fair to my right hon. Friend the Minister of Transport in indicating that my right hon. Friend had not stood up to the Americans and had not achieved anything in this field so far. It is less than fair because my right hon. Friend has been negotiating with the Americans for a long period of time. Furthermore, as the House knows, he has gathered together the support of every ship-owning country in the world. It seems to me a considerable achievement for my right hon. Friend to have been able to approach the Americans, knowing that he had the support of countries owning more than half the world's shipping, in an endeavour to persuade the Americans to reconsider some of the demands which the Federal Maritime Commission is making on us and on other nations.
The right hon. Gentleman has said, as every speaker has and as I shall now say, that the Bill does not solve the problem at all. Of course it does not. It cannot be expected to, because we cannot make the Americans or anyone else do what we want by passing laws in this country. The only possible solution to this difficult problem, which has occupied the attention of Governments for some time now, is that a solution shall be negotiated. I think that the entire House realises this, and I welcome the Bill because it will strengthen the hand of my right hon. Friend and of the shipowners in this country in their dealings with the Americans, but to pretend that by waving a wand or passing a law here we can solve the problem is totally unrealistic.
I have no doubt whatever that when the Bill becomes an Act there will be a resumption of the negotiations which 1240 have been going on for several years, and which resulted in the Federal Maritime Commission postponing the date of operation of its particular and to our minds most objectionable demands until 1st September. I do not know at what level they will be resumed, but I am certain that the answer is any level that is necessary.
Here now comes a certain difficulty, because my right hon. Friend in introducing the Bill referred, as have other hon. Members, to the "action of the United States Government". As I understand the position, this is not technically so. I think that I am right in saying that the Federal Maritime Commission is not part of the Government of the United States in the way that we understand it. In other words, although it is part of the system by which the United States is governed, it is not part of the Administration. It does not accept orders from the Administration and it is bound solely by the Act which created it and is responsible solely to Congress.
This seems to me to make the negotiations which have taken place, and which will continue, very much more difficult, because I understand that neither the Chairman of the Commission nor any other member of it has very much leeway. The Commission is bound simply by the terms of the Act which absolutely clearly lays down that its only consideration must be the sole interest of the United States. To discuss and come to a compromise and agreement with Administrations is difficult enough, but to have to try to come to a compromise or agreement with a body which has no latitude and no room for manoeuvre seems to me a great deal more difficult.
I hope that my right hon. and learned Friend the Attorney-General in winding up the debate will tell me whether I am correct in this supposition and will indicate, if he can, whether he believes that we are able to come to a satisfactory outcome to the negotiations without recourse to the International Court or some such body, or without an alteration of the laws of the United States which, of course, we cannot do here.
There is a remarkable degree of unanimity about the desirability of the Bill, although some speakers have said that they feel that it is rather late. I do 1241 not think that it is late. I think that it has only been introduced now that the negotiations have come to somewhat of a halt in order to strengthen our negotiators' hand. All the speakers so far have welcomed the Bill, and the fact that there are no large numbers of hon. Members in the House, also referred to by the right hon. Member for Easington, cannot possibly be thought to indicate anything other than that as this is not a controversial matter people are not flocking here. The right hon. Gentleman knows better than I do. Compared with him I am a newcomer. He knows that the House is fullest when there is controversy about the matter before it. There is clearly none about the matter which is before us now in its essence. We all agree that it is highly desirable. I shall say no more about it but to wish it well.
§ Mr. Shinwell
I have frequently commented on the fact that when we have shipping debates the attendance has been far too small. One tries to provoke hon. Members into taking part in discussion of what I regard as an important matter.
§ Mr. Atkins
The right hon. Gentleman is better at provoking hon. Members than is anybody else, and he has managed to have quite a little debate on his own on shipping matters in general although I understood that the Bill is much more restricted than that. As I said earlier, we all enjoyed his contribution but it is not fair to assume that because the House is not full to the doors there is no great unanimity about the necessary for the Bill and about support for the Minister in the efforts which he is making.
§ 5.18 p.m.
§ Mr. Stan Awbery (Bristol, Central)
A few months ago a controversy arose over the decision of the Federal Martime Commission of the United States which disturbed the cordial relationship between America and ourselves. I do not know whether the Bill will solve the problem which arose at that time. I want to ask the Attorney-General whether he thinks that the Bill is satisfactory in the protection which it provides for British shipowners, and I want to deal only with that one aspect.
It will be recalled that a few months ago Leyland Motors was sending its 1242 buses to Cuba. Ships were chartered for this class of work but the Americans said that if British ships took the Leyland buses to Cuba they would be boycotted or black-balled afterwards. That, in my opinion, is interfering in the internal arrangements of this country, and I should like to know whether the Minister is satisfied that the powers he takes under this Bill are sufficient to protect shipowners in such circumstances.
All I can see in the Bill is a provision that, if a shipowner is proscribed or has to accept conditions for the carrying of a cargo, he must report the matter to the Minister. Reporting to the Minister is nothing unless the Minister is determined to take some action to protect a shipowner who is prevented from carrying a cargo.
At the same time as the Leyland business to which I have referred, the Americans were selling wheat to Russia, but they stipulated in their agreement that 50 per cent. of the cargo must be carried in American ships. Is the Minister satisfied that the Bill will give the protection necessary in circumstances such as those which arose a few months ago? If it should come again, the problem might be more serious and create delicate relationships between America and ourselves. I hope that the Minister will give us definite assurances on the points which I have raised.
§ 5.21 p.m.
§ Mr. Charles Fletcher-Cooke (Darwen)
This is a brave Bill, but, as the right hon. Member for Easington (Mr. Shinwell) reminded us, it is also a penal Bill. It must be unique in that the potential victims are rather welcoming the chains, but it is none the less, a Bill which imposes penalties and, therefore, it ought, under our rules, to be absolutely clear. I have some questions to put which suggest that it is not absolutely crystal clear.
The crux of the matter comes in Clauses 1 and 2, under which the Minister may make orders forbidding individuals or companies to obey orders of a foreign Power whichconstitute an infringement of the jurisdiction which, under international law, belongs to the United Kingdom.Those are brave words, but it is the first time, to my knowledge, that our 1243 Statute Book has appealed to the standards of international law, by which. presumably, is meant public international law.
The first difficulty is that public international law is so notoriously ambiguous that to appeal to it as a standard in a penal statute is to ask for trouble. Anyone on trial under it can always appeal, if that be the standard, to a textbook which almost invariably will conflict with previous textbooks or decision. However, that is the way the Bill has been drafted. It seems to me to make it open to anyone prosecuted under it to plead that the order made was ultra vires because either the jurisdiction does not belong to the United Kingdom, or, if it does, it belongs also to the other country, that is to say, there is a concurrent jurisdiction.
Do the wordsconstitute an infringement of the jurisdiction which, under international law, belongs to the United Kingdommean belonging exclusively to the United Kingdom or do they mean belonging to the United Kingdom among others? Hon. Members will know that there are many cases in international law where there is concurrent jurisdiction, where one can sue in more than one court or more than one country. For instance, unless there are special conventions or specific exceptions, seamen can sue for their wages in a foreign court. Even though they are sailing under the British flag, if they put into a foreign port and have not been paid their wages, they can sue for them in the courts of the foreign country, although there would equally be concurrent jurisdiction in the courts here. This does not often happen nowadays because there are special conventions limiting it, but it is the basic rule.
The same thing happens as regards murder or crime. If a ship puts into a foreign port and on board that ship a member of the crew assaults one of the officers, for instance, even though they are both foreigners to that country, the law of the port, in our view of international law, can deal with the matter; and so can the courts of the flag country in a case of murder, for example. There is a concurrent jurisdiction. It is very important, therefore, when we talk about an infringement of the jurisdiction which, 1244 under international law, belongs to the United Kingdom, to be perfectly clear whether we mean belonging exclusively to the United Kingdom or merely concurrently belonging.
In this country we have always held the view that under public international law the law of the port is given very full power. We had a long battle with the French on this very point throughout the nineteenth century. The French always emphasised the law of the flag of the ship, saying that in many cases the law of the port should give way to the law of the flag. We held the contrary view, that the law of the port, however vexatious or however silly it might seem to the visting ship, prevailed.
I wish to quote from an opinion given by the Law Officers, including the Queen's Advocate, in 1879 on this very point. A British ship had put into a Spanish port—a dangerous place, as we know—and we thought in this country that the Spanish authorities were behaving very vexatiously in that they were visiting various claims and penalties on the ship because, quite accidentally and without doing any harm to anyone, a quite unimportant matter had been omitted from the manifest of the cargo. Yet the Law Officers of the time reported to the Foreign Secretary in these terms:By the Law of Nations every independent Government is the sole judge of the measures which may best suit, promote, or insure its own people their interests and safety; may open or close its territory, waters, and harbours; and altogether refuse to admit, or impose what conditions it may deem fit, upon the admission of foreigners and foreign vessels. These conditions may be absurd, vexatious, inconsistent with and contrary to the usage of all other civilised nations; still the Government has the right to impose them, and a foreign Government can only protest against their being imposed.If that is the view of the Law Officers then about what a foreign country can do to our ships when they put into its ports—it can impose what conditions it likes—it seems to me that anyone prosecuted under this Bill will have an easy defence if he is able to say that, for many centuries, and in face of a good deal of contrary opinion, the British Government have always held the view that a foreign port can impose what conditions it likes, however vexatious they may be.
It is not a view which I like, but it is the view which the British Government 1245 have maintained throughout the nineteenth century against the strong opposition of the French, and it is the view which won, which we have succeeded, on the whole, in persuading other nations to accept. It is a little ironic that we should at this time say that foreign ports have no such jurisdiction and they cannot impose these vexatious requirements, that it is legal imperialism, and so on.
It is idle to say that these are documents made abroad, made here, that is to say between British shippers and shipowners, foreigners to America. Of course they are. But if they go to America, or copies of them go to America, or if secondary evidence must be given by oral examination of witnesses or however it may be, the Americans take the attitude: "If you want to come to our ports, you must observe our rules. We are entitled to compel you to disclose your evidence, oral or documentary, to make sure that you are obeying our rules."
I am not acting as devil's advocate. All that I am saying is that since we have to make our penal statutes clear beyond a peradventure there is an argument which any defendant could make. This is an ambiguous phrase—"which, according to international law, belongs to the British". It may belong to us in the sense that our courts can also demand to see these documents. But it is very arguable that it also belongs to the Americans and that we have always hitherto held that view of international law. It makes no difference in those circumstances whether the contracts are made outside the United States because the Americans say, "You foreign shippers and shipowners, in your Conference system, are indulging in restrictive trade practices".
The Maritime Commission is saying—and it is important to get this clear because we must come to an agreement with the Americans about this and therefore we had better understand their view, even if we oppose it—"We will allow you to use our ports only if you observe what we regard as correct methods of competitive trading". We do not regard them as correct methods of competitive trading, but they do. They say that in our domestic legislation we are very fierce against such things as loyalty rebates, double pricing and exclusive 1246 trading. Our Monopolies Commission issues reports—one was issued only recently—condemning exclusive trading, loyalty rebates and things of that sort. Therefore, our philosophy, they say, is that these restrictive trade practices of double pricing for loyalty are wrong. Yet, they say, when it comes to foreign commerce we adopt a different philosophy. We allow these practices freely. We commend them. In the case of foreign commerce these things may be perfectly justifiable. But it is understandable and cannot merely be attributed to wickedness of heart that the Americans think that there is something hypocritical in our "double standard".
The deadlock is complete. I think that it is unwise for the United States Congress to adopt this attitude, although, as I say, I think it arguable under international law that it is entitled to do so. If the American Congress is entitled to do so, this Bill is a brutum fulmen, because any defendant can show that this jurisdiction does not belong exclusively to the British Government.
But, as we know, this Bill is only a shot across the bows. It is designed to give our shipowners and shippers the opportunity to plead in the American courts, quite rightly, that they may be subjected, albeit perhaps unfairly, to pains and penalties at home if they observe the requirements of the American Federal Maritime Commission. It is right to give them that protection.
The ultimate solution must surely be an agreement, and I hope that the Bill will make an agreement more rather than less likely. It behoves us, in the glow of satisfaction which we are having this afternoon at fighting back, not to make the rift any wider. We must come to an agreement. There are enough people on both sides of the Atlantic, as both our elections grow nearer, who will try to make the rift wider. Everybody is under a bounden duty to restrain whatever feelings they may have and to try to make the rift narrower.
It seems to me that there are five possible outcomes. First, I suppose it possible that the Americans may win, in the sense that we and the other European and, indeed, Asiatic nations—because this is not only an Atlantic question but a Pacific question; we sometimes forget that—may give in and may 1247 have to submit our documents and contracts to the Federal Maritime Commission if we wish to continue to use American ports. The second possibility is that we should win and the Americans would lose and that the Federal Maritime Commission would, either in dereliction of its duty to Congress or because of an amendment by Congress to the 1916 and 1961 Acts, simply back down. I do not think that either of those outcomes is likely.
The third possibility—and this is a nasty one—is that both countries will relapse into a form of eighteenth century mercantilism by which we should close our ports to their ships and they would close their ports to ours, that we should insist on our trade being carried in our bottoms and the same with the other countries of the world. That would be even worse.
Almost as bad would be the fourth possible outcome, which would be a sort of international price ring on the lines of what has happened in the air. It seems to me that the I.A.T.A. agreements in the air are a warning of what might be a possible outcome, because I am sure that price fixing on an international scale for freight rates, with all the Governmental sanctions behind it, would in the end be a disaster to shipping and to world trade because I am sure that those rates would go up rather than down.
The fifth and, I think, only tolerable solution and the one which I am sure in the end we shall adopt is this. We think that our conference system is a perfectly justifiable method of trading; the Americans, under their extreme anti-trust philosophy, do not. We in this country have a domestic method of justifying things like loyalty rebates and double pricing and exclusive trading arrangements by which we go before a tribunal and have to prove the point. What seems to be happening at the moment is that we are going before an American tribunal. We are going before the Federal Maritime Commission, acting under a very narrow terms of reference, whose freedom of manœuvre is very small. But that is not tolerable. I think that the conference arrangements should be justified to an independent body. I believe that they are 1248 justifiable and that eventually the Americans will come to realise that the body to which they have to be justified is not an American court, a British commission or British court, or a European or Asiatic one, but some sort of international restrictive practices court.
In the end, the fifth solution by which such price-fixing arrangements were permitted by an international restrictive practices court somewhat on the lines of our own would mean that honour was satisfied on all sides, and if, as I believe, our conference arrangements are in the best interests of the shippers and shipowners, we would not fear the outcome of any such recourse. If that be the case, it seems to me that in this matter, where national honour has become so sensitive and prickly and where we are getting into a fighting mood, sooner or later that outcome, which is the only tolerable one of the five which I have suggested, will inevitably have to be accepted.
§ 5.39 p.m.
§ Mr. A. J. Irvine (Liverpool, Edge Hill)
I shall listen with deep interest to the reply which the right hon. and learned Gentleman the Attorney-General gives to questions put to him by his hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) about the penal provisions in this Bill in the context to which his hon. and learned Friend referred, and I shall have something to say about that a little later.
It seems to me that the proceedings of the United States Federal Maritime Commission made some form of action by the British Government entirely necessary. It called for legislation, and although I agree with what my hon. Friend the Member for Bermondsey (Mr. Mellish) had to say about the earlier delays, I am glad that now in the treatment of time in relation to this Measure a degree of urgency and speed is attaching to it. However, though it is right to act urgently I think we must be vigilant about provisions of this kind, and there are some questions I want to ask the Attorney-General to deal with, if he is good enough, in his reply—questions about a Measure like this which is really, to a quite unusual degree, Palmerstonian in character and very unlike the type of legislation in this 1249 field to which we are accustomed, and I think there are matters which need watching about it.
The first point I would raise is that under the Bill the Minister may give directions to a person prohibiting compliance with the requirement of a foreign Power. As my right hon. Friend the Member for Easington (Mr. Shinwell) said in the speech which I think everybody in the House enjoyed to hear, this may have very serious consequences. He asked the question, what is going to occur if non-compliance is the course of action pursued by a British ship's captain? It is quite clear that however basically friendly—there is no need to emphasise this; it stands clearly in the minds of all of us—our relations are with the United States one might have arising a difficult matter of this kind, a situation of considerable delicacy and difficulty. As a consequence of putting into operation the machinery of this Bill, of what is proposed by this Bill, and when a direction has been given by the Minister, a very ticklish and awkward situation might arise which all, on both sides of the Atlantic, would probably regret. So I would emphasise in this connection the seriousness of the matter.
One has to bear in mind that the foreign authority, in pursuing the course it did pursue in this kind of event, would only be making the requirement it was making because it thought it could lawfully do so on its interpretation of the law. This being so I ask the question, which I know the right hon. Gentleman the Minister of Transport will at once accept from me is without the faintest trace of disrespect, whether it is appropriate to confer this power, designed to maintain the jurisdiction of the United Kingdom in circumstances which could have such important repercussions affecting relations with foreign Powers, upon the Minister of Transport.
We know very well his responsibilities for shipping and that it is even common form under the Merchant Shipping Acts and other legislation for powers to be conferred upon him relative to our country's maritime and shipping rights and properties, but I think it must be recognised that these existing powers generally relate to matters of pilotage, harbours, and so forth. When one is concerned to the extent that one is here 1250 in this Bill with matters affecting relations with foreign Powers, and with a great ally, one asks the question, specially in the context of conflicting opinions being held as to that power to act properly being a matter of law, whether it would not have been more appropriate for the Board of Trade, or for the Foreign Office perhaps, to be the Department of State concerned.
Apart from other factors arising from the scale and status of importance of the dispute, there is the point that those Departments have officers on shore, commissioners and consuls, people of that kind, who could play a useful part in the development of matters arising under this Bill. It may be that any criticism of the kind I am suggesting in this part of my speech is somewhat late; I acknowledge that it is done in a rather hurried fashion, possibly too late to put into effect, but I venture to think it would be of service to the House if the right hon. and learned Gentleman in his reply would be good enough to indicate the Government's view on this point and perhaps let us know whether there is really any precedent for giving to the Minister of Transport responsibilities in this kind of field which may have consequences of such very great importance in international relations.
I turn to the matter which was touched upon by the hon. and learned Member for Darwen. I, like him, was greatly concerned at the fact that British shipping companies and British ships, captains might render themselves liable to severe penalties under the Bill, penalties to be imposed if there were a failure to give proper notice of requirement of prohibition given to them, and I felt doubt, as I think he did, as to the propriety of severe penal provisions upon a failure to give notice, if the question whether or not such a notice should be given might raise complex and difficult issues to determine. If we are going to have severe penalties for failure in a statutory duty it is desirable that that duty should be crystal clear and I felt concern and I think that that concern was shared by the hon. and learned Gentleman.
I am bound to say from inquiries I have made that my understanding is that this anxiety is not shared by shipping companies in this country, and I 1251 do not think it is shared by the Chamber of Shipping, because the view they take, as I understand it, is that an order to be made by the Minister under Clause 1(1) will identify the relative measures taken under the law of the foreign country. That is where the crux of the matter, in their view, will be, and they think that it will be clear enough that the requirements of prohibition which are directed to a ship's captain or to the company derive from and are consequences of the measures set out and defined in the Minister's Order. They think that shipping companies and ships' officers will in this way not be confronted by any complicated question as to whether they should give notice because, they say, the Minister's Order will have sufficiently identified the measure and it will be easy enough to judge whether the duty to give notice arises, and they seem to be satisfied upon that point, I think it fair to say.
I confess I am not entirely convinced myself. I think that if I were them I should feel some anxiety under this head. In saying that I have in mind the circumstance that I have the honour to represent a constituency in a city of great shipping interests and tradition.
Two points arise in this connection, and I should be grateful to hear the right hon. and learned Gentleman's view about it. First, even accepting the view which I have expressed as being the view of the Chamber of Shipping in this matter, the issue whether the duty imposed by Clause 1(2) is sufficiently clear to justify the severe penalties in Clause 3 depends upon the content of the Minister's Order and whether that Order is compendious and clear. Is it right for Parliament to legislate for a severe penal provision whose appropriateness or fairness depends on the character and content of the Minister's Order which at present we cannot see and whose contents we do not know?
Of course, it has often occurred that there are penal provisions in a Statute for contravention of requirements in a regulation whose content is not spelled out in the Bill in which only the character of the regulations is adumbrated, but I doubt whether there is readily to be found a precedent for a penal Clause of this degree of severity 1252 whose fairness can be judged only when one sees the degree of clarity and definition achieved by the Minister's Order.
§ Mr. Fletcher-Cooke
There is another difficulty. Even if the Order is crystal clear, it will still be open to anybody upon whom it is served and who has to obey it to plead that it is ultra vires on the ground that it does not deal with a measure under international law which is within the exclusive jurisdiction of the British Government.
§ Mr. Irvine
I would have thought that the answer to that was that that issue arises under the separate question of the effect of the measure introduced by the foreign Power. The Minister takes upon himself the responsibility of deciding with what measures ships' captains and ships' companies need not comply. This is his responsibility as distinct from that of the captain or the company. That is at any rate the line of answer to that question.
The second point is that if novel steps are taken by the foreign authority, novel and unexpected steps which have not been taken before or which were not contemplated, in other words, if the action of the foreign Power were to be stepped up, so to speak, as it is not far fetched to suppose might be a consequence of this kind of action being taken on this side, it will not be easy to see whether novel steps are taken pursuant to the measures referred to in the Minister's Order. There may be a clear answer to this difficulty and if there is I shall be most grateful to the Attorney-General if he gives it to me.
My right hon. Friend the Member for Easington has very helpfully and hypothetically suggested the possibility of the imprisonment of the whole crew. Such wholly unanticipated and unforeseen requirements made by the foreign authority might, for all the ship's captain knew, be pursuant to emergency measures which he knew nothing about. In such circumstances, he would be in difficulty, for he would not know whether the requirements or prohibitions with which he was confronted and which were novel in character were pursuant to the measures referred to in the Minister's Order, or were emergency measures passed and made since the Minister' Order was made.
§ Mr. Shinwell
This is a very abstruse legal argument which no doubt has a great deal of substance but which I do not follow very well. It occurs to me that if a ship arrives in some American port and the question of the disclosure or production of documents emerges, the authority acting on behalf of the Federal Maritime Commission may demand the production of documents. To whom does it make its demand? Obviously, it can make its demand only to the master of the vessel. Unless some arrangement precedes the sailing of the vessel or its arrival in a American port, an arrangement between the shipowner and the shipper in the United Kingdom which satisfies the Federal Maritime Commission, who is to be responsible? Is it to be a matter to be settled in advance before the ship leaves the United Kingdom and arrives in an American port, or will it be left to the captain?
§ Mr. Irvine
If I do not make a point clear to my right hon. Friend in the course of my argument, I know perfectly well that it is my failure.
§ Mr. Irvine
I am perfectly sure that it is. Knowing my right hon. Friend as well as I do, I know that the failure is mine. He and I at this stage are on rather different points and I am very glad that he has got his over to the Attorney-General in that interjection.
What I am concerned with is that a ship's captain might be confronted by a requirement or prohibition by a foreign authority which was made as the result of a recently made or passed emergency regulation. If it was not a measure referred to in the Minister's Order, there is no duty to give any notice; nor would the machinery be available for the Minister to make any direction in that event. I was seeking to clarify what in that set of circumstances would be likely to occur, and I wanted confirmation that the position of the British ship's captain under the Bill in the circumstances would not be affected.
The final issue which I wish to put before the House is related to that. We want to be quite sure that the Bill does not in any way, by implication or otherwise, derogate from the rights of British 1254 shippers and ships' officers under the existing law.
If as things are without the Bill a British ship is required to do something, and the requirement is an encroachment of the United Kingdom jurisdiction, and the ship's captain refuses to comply with the requirement, I would have thought that in that event the British Government would come to the aid of the ship's captain, or the shipping company, and would adopt his noncompliance with such an Order or requirement as an act of State making the matter thereby justiciable, if so much were needed by the International Court.
Is it really necessary to have the Bill and the machinery proposed by it to make certain issues justiciable before the International Court which are not at present justiciable? I would have doubted it and I would be interested to have that matter dealt with and the Government's view expressed.
It would be very undesirable if, a British ship having refused to comply with a requirement of a foreign authority which the British Government thought was unlawful, received any less support or less backing because it failed to give the Clause 1(2) notice. I suggest that it would never do for the British Government to take the line, "No, we are not going to do anything to help you because you never gave us notice of the requirement." The proposed machinery of notices and directions, however desirable it may be on other grounds, is not necessary to identify the British Government with the ship's noncompliance so as to make the matter justiciable before the International Court.
The procedure proposed by the Bill—and I do not think that the House should be in any doubt about this—will not in the event operate by rule of thumb without difficulty. I think that difficulties and unexpected situations will arise out of this, if the proposals take effect at all. It may work smoothly enough where requirements or prohibitions are threatened to be imposed, which is one of the contingencies explicitly dealt with in Clause 1(2), but where the requirements or prohibitions are imposed suddenly or unexpectedly, 1255 it seems that difficulties may arise of a kind to which I have referred in another connection.
Moreover, as I have indicated, if requirements are made pursuant to a new emergency measure not comprised in the Minister's Order, there will be nothing in the Bill which will immediately affect the matter. We therefore want to be reassured that in the event of circumstances arising which will render the provisions of the Bill not immediately applicable, British ships will receive no less support vis-à-vis a foreign Power or authority than they would have received and would receive under the existing law.
§ 6.4 p.m.
§ Mr. Cyril Bence (Dunbartonshire, East)
When the Bill was first printed, and I read it, I had difficulty in finding out how it would help to protect British shippers on the American routes. I read it many times and wondered how in the name of fortune it would do it.
During the course of my speech I shall give my interpretation of the Bill, and at the same time point out why I fail to grasp how it will be an effective instrument against the actions of the United States Government, and, indeed, of many other Governments to protect themselves against the high efficiency and high competitive power of British shipbuilding and British merchant fleets.
Like my right hon. Friend the Member for Easington (Mr. Shinwell) I, too, am shocked that not more Members are taking part in the Second Reading of this important Measure. We are debating the actions of our competitors, not in the normal field of competition, but in cargo and passenger-carrying across the seas. We are debating action to combat the measures taken by other Powers to sustain their own economic activities because they have failed efficiently to compete with our merchant fleet.
I agree with my hon. Friend the Member for Bermondsey (Mr. Mellish). I regret the reason for the Bill, because I consider that a close relationship and cooperation between the United States and Great Britain are essential in the present decade. It is unfortunate that two maritime Powers, the United States, and this country, with its great traditions, should 1256 reach a situation when we have to introduce niggling Measures like this to protect ourselves against the assumed unfair competition of the other.
I must, in all humility, admit that I fail to grasp the full meaning of the Bill. I have listened to the debate and I have read a good deal of professional material which has been handed to me. I am a professional in one field, but an amateur in all others. Knowing the mystiques which surround the professional, I am suspicious of the professional advice that I get. I examine it and apply my amateur instincts to interpreting it.
The Minister is laying on the shipping companies in this country a responsibility to provide information to the President of the Board of Trade, to a Secretary of State, and to the Minister of Transport. Such information is to be provided to all three, or to any one of them. The shipping company is to provide information of prohibitions or restrictions which its ships will encounter when they put into a particular port. It may be any port in the world, but as we are thinking particularly in terms of the United States because of the action which has been taken by the Federal Maritime Commission, perhaps I had better stick to the United States.
If a shipping company charters a ship to carry cargo from a shipper in this country to Newport, or Philadelphia, or New Orleans, or New York, and it is aware that certain documents will be demanded, it must provide the Government with information that it is aware that such a demand will be made. If it fails to provide that information to the Minister, it will be liable to a penalty of £1,000. My hon. Friend made the point that there may be a change of requirement from the time when the information is demanded and the ship arrives at the port. Such a change could be made in an order issued by the American Federal Maritime Commission.
The Bill says that if a shipping company fails to provide such information, and if one of its ships arrives in a foreign port and is asked for documents of the kind to which reference has been made, it will be liable to a fine of £1,000. That interpretation may be wrong, but that is how I see it. The shipping company can get the required information from reading American documents or by getting the information from the American 1257 consul. Such information would, therefore, be available to the Minister without him asking the shipper for it. Surely the Board of Trade, the Minister of Transport and the Secretary of State know what demands have been made by foreign Governments on British shippers without asking shipping companies here what they are.
When a British ship arrives in a foreign country a demand may be made for certain commercial documents, as set out in the Bill. I presume that this would be listed in an Order laid before this House. The documents having been demanded, the master may refuse to supply them on the ground that his information is that his company, under British legislation, has provided the appropriate Department of State with the appropriate information respecting these types of document. The master says that he has complied with British legislation.
I presume that the corresponding Departments of State in the United States, with their agencies over here, could get in touch with British Departments and could inquire, "Has this company given you appropriate information regarding the demands made by the Maritime Commission?"' and the Department here could say, "Yes". Who are the people now in conflict—the merchant shippers and the Maritime Commission in the United States, or the Maritime Commission and the British Government, who have provided that the shipper shall hand in certain information to Government Departments, although those Departments probably already have all the information and all the knowledge? Where does the conflict arise then? In case of difficulties the Maritime Commission might impose a fine.
§ Mr. Awbery
The Maritime Commission of America would do something more than fine the man. They could put an interdict on his ship and refuse to allow it to trade into America after such an offence. If they did that our Government could provide no protection at all.
§ Mr. Bence
That is the point that I am making. The Bill transfers the conflict from the shipping companies to the Minister of Transport here, or the Secretary of State or the President of the Board of Trade. These are the people who have to have the information under 1258 Clause 1(2). Shipping companies are under a penalty of £1,000 if they do not provide the information. They know what demands will be made upon them. The Minister is now in a position to know what demands will be made.
When the Maritime Commission reads the provisions of the Bill, will it say, "The people that we must get at now are not the merchant shippers but the British Government, because they have taken over responsibility"? We understand that the Maritime Commission is not a Government agency, but it is responsible to Congress. In my view, it is a semi-Government agency.
§ Mr. Bence
It is a public body, responsible to Congress. It seems to me that the Bill is providing that this information shall be demanded not from shipping companies but from Her Majesty's Government, who have imposed legislation on shippers which they must obey as subjects of this country.
What action can the Minister of Transport take if the Americans demand these documents? It is an extraordinary situation. I suppose that an order could be made compelling our shipping companies not merely to give information about documents that will be demanded but also commercial information to the Minister of Transport, so that if he chooses, by the form of the Order that he brings in, he can provide that a merchant shipper shall give that information. The Bill gives him power. It uses the word "may" on several occasions. He may decide to authorise the company, or he may himself give the appropriate information concerning documents that are demanded—or he may refuse them.
§ The question of the protection of British shipping and shipbuilding is a very important one for the people of the Clyde. No fewer than 20,000 workers are directly employed in the shipping and shipbuilding industries on the Clyde, and there are probably another 20,000 to 30,000 employed in all sorts of industrial enterprises serving the shipping and shipbuilding industries. A big yard in my constituency is dependent upon a prosperous British mercantile marine. Many people have the idea that this Measure 1259 will protect us from discrimination by one of our principal competitors—the United States. I cannot see that that protection will be given to British shipping by the Bill.
§ We know the nature of the Maritime Commission, and its powers. I can see perpetual niggling and many difficulties in making contracts. We do not know what action will result from the passing of the Bill. Some shippers want to make long-term contracts with fixed long-term rates. Some have regular cargoes passing back and forth, and they do not want a ship to go into an American harbour with a cargo and get the cargo unloaded and then, because of some argument about documents, have that ship come out in ballast and not come back here with a return cargo.
§ All sorts of difficulties will have to be met by British shippers. Those difficulties exist now, and they will remain when the Bill is passed. What sanction can we use to enforce the Americans to accept a ship when our legislation provides that its master shall not disclose certain documents? Are we thinking in terms of the sanction that the British shipper shall not give the information? The Order in Council which will come before the House will have to be accepted in its entirety. It will provide that the Minister and the British Government shall be able to give the information when it is demanded by the Maritime Commission.
§ The whole thing savours of tremendous powers of manœuvre by powerful State Departments, both in the United States and here. If these provisions were applied all over the world our mercantile fleet would be subject to a vast superstructure of national fences, and in effect national rings would bind our mercantile fleets, doing a lot of damage to world trade, interfering with the free flow of merchant shipping and with the competition which everyone says is essential to maintain efficiency in the carrying trades of the world. It is a great pity that we have introduced this sort of legislation.
§ It would be much better if the Government made stronger efforts, in negotiations with the United States and all the other maritime nations, to reduce the barriers and discriminations which 1260 exist between the nations. We have a maritime fleet which has tremendous prestige. We are a great trading nation and our merchant fleet is vital to us. It is as important as our agricultural industry. We are entitled to preserve it against unfair competition.
§ We are prepared to face fair competition. We have fought every sort of discrimination by other maritime powers without the aid of subsidies and with very little help from any Government. I am sure that hon. Members regret that it has been thought necessary to pass this legislation at the end of the life of this Parliament in order to cope with a tremendous international problem.
§ I hope that this problem will not be forgotten when the Bill becomes an Act and that any British Government will push as hard as possible to break down these frightful nationalistic barriers which have been thrown up by maritime nations and which curb competitive power and frustrate world trade. They prevent the design of new and fast liners and do great harm to world relationships.
§ I hope that those hon. Members who come back in the next Parliament—some will not come back, we are sorry to know that the hon. and gallant Member for Barkston Ash (Sir L. Ropner) is retiring, because we shall miss his contributions to shipping debates—will not expect that the Bill will do the job which we as a great maritime nation should be doing to get other nations to give up these discriminatory actions and open their ports as Britain does to the ships of the world.
§ I hope that the United States will realise that if she wants to make a great contribution to the development of the under-developed countries and unite the Western civilisation into a great, prosperous and advanced community, she must do the same as Britain, and stop discriminating against British shipping.
§ 6.23 p.m.
§ Mr. E. Fernyhough (Jarrow)
It would be true to say that the Bill is merely a demonstration. I do not believe that it will have any practical effect at this stage unless the course on which the American Government—who must be backing their Federal Maritime Commission—are proceeding 1261 is changed. I have been amazed at the restraint shown by hon. Members on both sides of the House. If any other nation in the world acted in this manner, opinion would be much stronger and much harder. Her Majesty's Government would have attempted to do something in a much more determined way than they have approached this problem.
This is not a problem which has sprung up overnight. It did not start last month. It has been developing over the years. It has become more and more obvious that whatever we may say about our military ties, and unity with the Americans, economically we are divided. They want to carry out certain practices. They insist on doing certain things which will damage our economy both now and in the long term.
British shipping was one of our greatest earners. The receipts from our ships, carrying goods all over the world, have made a great contribution to solving our balance of payments problems. Over the years we have seen that contribution declining. It has declined substantially because of the restrictive practices adopted by other maritime nations; and no nation is more guilty of these restrictive practices than the United States of America.
Let us remember the wheat which was going to India. Because 50 per cent. of it had to be carried in American ships the Indians either paid the American freight rate, which was twice as high as world rates, or they did not get the wheat. What the Americans gave with one hand, substantially they took away with the other. They insist that this shall be part and parcel of every agreement they make with respect to aid for the backward and developing countries. Other countries are inhibited from taking their share of what, in the past, has been their historic trading.
For instance, Leyland's secured a valuable contract for British engineering and motor industries which was, I believe, valued at about £11 million. Cuba is a country with which we have traded for many years and Leyland's felt justified in maintaining its contacts with that country. But it was made perfectly clear to British shipowners and shipping lines that the Americans were bitterly opposed to this contract.
1262 Because of the threat by America, Leyland's had to go to a Communist country to get its exports carried to an old customer. Several hundred thousand tons of our 22 million tons of merchant shipping were idle, waiting for cargoes, but the company could not find a British ship to take this valuable export order to Cuba and had to go to Eastern Germany. Did ever anyone know anything so fantastic, so ridiculous and indefensible as that a British manufacturer, who ought to have at his disposal the largest merchant navy in the world to carry his goods, could not get: a British ship to carry that valuable contract and had to go, instead, to a Communist country for that purpose?
The reason was that it had been made perfectly clear that if the company traded with Cuba it would not be allowed to trade in any American port. The Americans ought to realise that this is not a one-sided argument. We give them very generous facilities. Many people in this country are deeply resentful about the facilities which the Americans are given at the Holy Loch. No one has suggested that the facilities that they enjoy there should be withdrawn, but that would be a legitimate argument in these circumstances.
I should be prepared to say, "If you intend to pursue these policies which are so inimical to one of our oldest established industries, we shall have to look at some of the arrangements that we have made with you." I would rather that did not happen. I feel sure that it would not be necessary if the Minister had pursued this matter as vigorously as he should have done with the representatives of other countries with whom he is supposed to have been in conference.
Although the negotiations are supposed to be very secret, I should like the Minister to tell us what is happening in relation to other maritime nations and whether they are introducing similar legislation. Will they give to their shipping lines the same kind of instructions? If their shipping lines do not observe those instructions, will they be subject to the same kind of penalties as those to which our people are subjected? I should like the Attorney-General to make clear what is to happen. The points made by my right hon. Friend the Member for Easington (Mr. Shinwell) and my 1263 hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine) were very pertinent.
Will the captain be expected to deliver the documents? If he refuses, will he be subject only to a fine? Since the captain will be carrying out the instructions of Her Majesty's Government, will he pay the fine, or will the Government pay it? Will the captain be free, rather than to deliver the papers, to bring the ship out of the port? If the captain is fined, and the Government do not pay the fine, who will pay it—the shipping line by which he is employed? To these very pertinent questions we should have answers. In the long term the only answer is a sensible international agreement.
The attitude of the Americans towards British shipping and the shipping of other maritime nations arises from the fact that, no matter how competitive they may be in other fields of industry, they are not competitive in this. They cannot build and man ships as cheaply as we can. The actions they take are to protect themselves because of their un-competitiveness. We should make it clear that in those fields in which they are more competitive than we are we do not attempt to impose barriers and restrictions which would be crippling to them.
If the Americans are our friends and allies, if they have the future well-being of Britain and the rest of the Western world at heart, they should reconsider our position, because when they have killed off this basic industry in Britain and other European nations the day may come when they will very much regret their attitude and actions.
§ 6.36 p.m.
§ Sir Frank Soskice (Newport)
My hon. Friend the Member for Jarrow (Mr. Fernyhough) indicated that in his view this Bill was a demonstration, and little more. If it is a demonstration it is a very striking demonstration because it underlines, unfortunately underlines, what is a sharp point of conflict with the American Administration. The Commission is a public body. It is the expression of the will of the American Government and the American Administration and it seeks to carry out the purpose of that Administration that there should be control in the terms of the 1264 1916 Act of Congress and the 1961 Act of Congress over all foreign shipping. I shall come back to the point my hon. Friend made about this Measure being merely a demonstration because possibly there is a great deal to be said in support of that view. When I say "possibly" it sounds rather complacent and I withdraw the word "possibly"—there is.
The debate which has been full and, I think everyone would agree, thoroughly well-informed, has ranged over a wide variety of what I might describe as background topics. We have discussed the shipping conference system, we have discussed British shipping policy, American shipping policy and cognate matters such as flags of convenience and a great variety of other similar subjects. A debate of this sort was obviously bound to range wide, but in the ultimate analysis what the Bill raises as the central and focal question upon which I should like to address the House is, in the first place, have circumstances arisen which justify and make necessary the introduction of a Measure of this sort? In the second place, is the Measure so constructed and framed as to be likely to compass the purpose which the Government have in mind?
Dealing with those two subjects separately, I should have thought that everyone who has spoken in this debate would think it beyond argument that it was necessary to introduce a Bill of this nature. The two United States Acts of Congress are far from being pellucid and in the scope they embrace seem to cover all ships and shipping companies of which it could be predicated that they run on regular routes engaged in the transportation by water of passengers or property between the United States and a foreign country. The crucial word is "engaged". I suppose it means all lines are brought in which as part of their undertaking carry American goods or American passengers.
If that really is the right interpretation of the definition, the Acts of Congress of 1916 and 1961 are extremely wide—I should have thought quite unjustifiably wide. I should have thought that it would be difficult to conceive any doctrine of international law, uncertain as it may be, as the hon. and learned 1265 Member for Darwen (Mr. Fletcher-Cooke) reminded us, that could possibly authorise the American Administation to legislate in the sense, in which they have legislated as affecting British internal domestic matters.
After all, what have they done? Let us take a British shipping company, registered in London, owning vessels registered on Lloyds' Register, and trading throughout the world. I agree that the definition does not include tramp vessels, if I may say that to the hon. and gallant Member for Barkston Ash (Sir L. Ropner) from whom I am very sorry to learn that I am saying goodbye across the Floor of the House. He asked whether tramp vessels were included, but the definition, in terms, excludes trampers.
But beyond that, liners, both cargo and passenger, that are British in origin, registered on the British register and owned by a company which, amongst other of its activities, plies to American ports, even if they are plying to New Zealand, Australia or anywhere else are, if the American Acts to which I have referred are interpreted according to their language, apparently brought within their scope.
I should have thought that quite unjustifiable on any view. How could it be reasonably said in international law that because a British ship-owning company which quotes conference rates to New Zealand for a commodity, and carries to New Zealand cargo or passengers—going through the Panama Canal or somewhere like that—how could it reasonably be said in international law that because the company which owns the liner as part of its activities, sometimes plies to American ports, it should be subject to American jurisdiction?
I would therefore answer the first question as every hon. and right hon. Member has so far answered it unhesitatingly, by saying that it is utterly unjustifiable for the United States Administration to seek to control matters of internal domestic British shipping in the way they propose to control them in terms of these two Measures. I venture to reiterate what several right hon. and hon. Members have said. I greatly regret that this clash should have arisen. I greatly hope that it will not be made an occasion for anti-American ebullitions.
1266 After all, the United States is a very great and very generous country with whom we have lived in terms of closest friendship for many decades, and it is regrettable, whether we talk of Cuba or of any other matters, that we should find ourselves in terms of direct conflict with the express and definite will of the United States. However, it is necessary, as hon. and right hon. Members have repeated, for us to take steps to prevent what is a very real and extensive infringement of the British jurisdiction to legislate for British shipping.
That is how I would answer the first question. I think, however, that it is very difficult to decide whether the Minister of Transport and the right hon. and learned Gentleman the Attorney-General have chosen the right language in framing their Measure. My right hon. Friend the Member for Easington (Mr. Shinwell) took a point that I should like to press upon the Attorney-General. My right hon. Friend asked: what happens if a British ship sails the Atlantic and docks in New York Harbour, or any other American dock; it goes inside American territorial waters; it ties up alongside the quayside; the gangway is put down; the master of the vessel, and others, land on American soil? What is there to prevent an American Court saying, "You, the British Government, have no more right to legislate inside United States territorial waters, or on American soil, than you say we have to legislate on yours"?
Suppose the master is called on to produce documents, or suppose the vessel is sailing under the terms of a conference contract which, in point of fact, infringes what is provided for and prohibited by these two American Acts—when the vessel enters United States territorial waters, when those in charge of it embark on to the quayside in New York, or anywhere else on American soil, are they not directly subject to United States jurisdiction?
Suppose the master is prosecuted in an American court for refusing to disclose documents that he carries with him off his vessel, or suppose that he has them in a portfolio or briefcase on going ashore to visit shipping agents on behalf of his employers—what conceivable defence would he have in the American court? I can quite understand that the right hon. and learned Gentleman the 1267 Attorney-General might say that the man would have no defence; that there is no mechanism by which international law could be used to prevent him being liable to penalties on American soil.
No doubt we can prevent the United States legislating for our soil, but we cannot prevent the United States Administration from legislating that for persons on American soil certain things are obligatory, and that failure to com ply with their requirements must involve them in penalties—
§ Mr. Fletcher-Cooke
I suppose that one of the clever answers to that, as a matter of practice, would be to keep the documents off American soil; that is to say, that none of the contracts or rules would be allowed on to American soil. But I do not think that that would be an answer, because I imagine that in those circumstances the American courts would insist on secondary evidence of those documents being given by the master or by the shipping agent in New York, or elsewhere, and that if no such information or answer was forthcoming the ship would be denied the privileges of the port.
§ Sir F. Soskice
I have to thank the hon. and learned Member for that inter vention, and I entirely agree with what he says. He suggests that a possible remedy might be to keep the documents outside American jurisdiction, but it would be virtually impossible to do that in practice. The ship is tied up along side in the New York docks, and the documents are in the ship—
§ Sir F. Soskice
However, whether or not the documents are there, I should have thought that there was the further difficulty that the ship itself is sailing under the terms of what is, in effect, on American soil, a prohibited contract. I do not see how that situation can be avoided. The right hon. and learned Gentleman says, "No", and I shall be glad to hear that I am wrong, but I should like to put this question now because we should all like to hear the answer. I dare say that I have made a mistake, but I shall be glad to hear of it.
If British owners cause a vessel to sail under the terms of what I might 1268 loosely call a prohibited contract, could they in any American court recover the amount of any freight charge from the American shipper? Would not the contract be unlawful according to American law, and if the American shipper was resident in the United States and subject to United States jurisdiction, would he not have the answer that the contract was unlawful and that he was not bound to pay any freight charges? I know that no reputable shipper would rely on such a defence, but what is the legal position?
The hon. and gallant Member for Barkston Ash asked about existing penalties to which British shipowners companies have already rendered themselves liable, and he mentioned a figure of about £1 million in penalties that have already been incurred. It may be that the right answer is to let sleeping dogs lie, but they do not always lie down for as long as all that, and I should very much like to hear what the right hon. and learned Gentleman the Attorney-General has to say on that. It may be, again, that his answer must be, "We can only do the best we can with our own internal legislation. We cannot, unfortunately, relieve British shipowners from penalties already incurred in respect of matters with regard to which they are liable to prosecution in the United States courts, and which may be exacted from them by the judgment of the United States courts". If so, it is perfectly understandable that no more can be done and they stand at risk, and one greatly sympathises with them in the position in which they find themselves.
Those questions—I here revert to what my hon. Friend the Member for Jarrow said—are directly relevant to the question whether this is simply a Bill put forward—I do not say this with any disrespect to Ministers—as a demonstration. As I said before, it is certainly a very striking demonstration. It certainly will have some effect. However, I believe that it is arguable, unless I have misapprehended the position, that in a very vital sphere inside United States territorial waters and when it is made fast alongside American ports and quaysides a British ship owned by a British shipowning company is, perhaps of necessity, left virtually unprotected.
1269 Those are the main points I want to put to the Attorney-General. I want to ask him one more question which arises out of the observations made by my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine). My hon. and learned Friend criticised the language in Clause 1. In particular, he wondered whether the penal provisions were too stringent and whether there was uncertainty, which might be hardly fair to the person who risked prosecutions under the Clause. I should have thought that there was a great deal to be said for the view that the captain or members of the company may well not know and have no means of knowing of prohibitions or requirements which have been imposed. They may have been at sea. Equally, they may not know what prohibitions or requirements have been threatened to be imposed.
I should have thought, merely as a matter of drafting, that one could deal with this difficulty quite easily, as my hon. and learned Friend suggested, by inserting words such as "to his knowledge". There is perhaps a danger that the wording is too drastic in its effect and that persons may be put at risk who in a moral sense are completely innocent and should not be subjected to the possibility of criminal penalties.
The hon. and learned Member for Darwen posed what he described as five possible solutions. I will not go through them again. One of them, I confess, attracts me and I hope and think that it may well attract the right hon. and learned Gentleman. It is that ultimately this may find its way to the International Court at The Hague. I say that for broader underlying reasons. All of us in the House rejoice when the Court, as the organ of the United Nations, is promoted and raised in status. I do not mean because possibly some people may be instructed to appear before the Court. I speak perfectly seriously when I say that it is in the general world interest that organs of the United Nations should be entrusted with more and more important functions. This, after all, is a great conflict between two great countries—or, rather, to be more accurate, between one great country, the United States, and most of the other countries in the world.
§ Mr. Shinwell
If there may be an attempt to reach a solution to promote agreement between the United States and ourselves on this very important matter, is it necessary to have the Bill? Could not the dispute, without the aid of the Bill, be referred to the International Court?
§ Sir F. Soskice
Answering off the cuff and with great respect in the presence of the Attorney-General, I should have thought that the answer to that question was, "Yes". There is a conflict of jurisdiction here. It would be argued on behalf of the United Kingdom that the United States Administration has purported to legislate in a manner which in fact infringes what is the proper province and sphere of British legal jurisdiction. I should have thought, as my right hon. Friend suggests, that that might well be a problem which could be adjudicated upon by the International Court at The Hague. Once we have the Bill and once we have a Measure which is likely to precipitate a hearing before the Court, or which at any rate might precipitate it at some time or other, I rejoice—I think that other Members of the House will rejoice—at what I hope will be the calling in aid of the International Court to resolve what is a matter of great importance between sovereign States. I thought it right just to call attention to that, because I think that it is a matter which we should not overlook.
As my right hon. and hon. Friends have said, we certainly support the Bill in principle. I know that the Government want the Bill as soon as they can. It may be necessary to amend it not inconsiderably in the light of the questions which have been posed and which appear to be primarily of a legal character. If so, we will do our best to cooperate, because the Bill is a necessary one, and I should be glad to hear what the answers of the Attorney-General are to the many questions which have been put to him.
§ 6.55 p.m.
§ The Attorney-General (Sir John Hobson)
This has been a very useful and interesting debate, not only on the nature of the problems which have arisen between the Federal Maritime Commission and British shipowners. The debate 1271 has also ranged over many of the problems of our shipping industry. It has also had the fascination of raising difficult and interesting questions of international law, questions of American law, and questions of British law.
I am very grateful to the right hon. Member for Easington (Mr. Shinwell) for applying his practical knowledge of what happens to ships in harbour to the question of what impact the Bill will have and what problems will arise. During the course of my reply I will try to deal with all the problems which have been raised.
No hon. Member has opposed the Second Reading of the Bill, though some speakers have inferentially done so by damning it with a certain amount of faint praise. On the whole, when explanations have been given, I hope that the House will think that this is a necessary Measure.
I am grateful to the right hon. and learned Member for Newport (Sir F. Soskice) for saying that he is satisfied that a situation has arisen in which this country ought to do something and in which we ought to legislate. I observed that, although the right hon. and learned Gentleman was perhaps dubious about the Bill itself, he certainly had no alternative proposals or methods by which this problem should be dealt with. Indeed, throughout the whole of the debate nobody has suggested a different form of legislation. I recognise that this is a very difficult problem. It has caused a great deal of thought to be devoted to it, and I hope that, on the whole, we have found the best possible solution to what is a very difficult and awkward situation.
I am grateful for the expressions of affirmation which there have been of the friendship of this country for our allies in America. I am also grateful that the debate has not turned out in any sense to be an anti-American demonstration. It is obvious that one can always have a dispute with one's best friend, particularly on commercial matters; but, provided that one treats it sensibly and rationally and asserts one's respective rights, no harm can come to the general relationship of people who approach these problems in a civilised and sensible manner.
1272 What I think the Bill ought not to do, and what it certainly does not do, is to say that, because the Americans claim an extensive jurisdiction which, in our view, is much wider than anything they are entitled to, we should claim an equally extensive jurisdiction and try to control things that are not within the province of this Parliament. This is certainly not what the Bill does. There is no attempt to say, "If you do this, we shall do the same". We must assert firmly and plainly that there are certain matters which, in international law, are for the British Government and for the British courts and which should be dealt with within British jurisdiction.
We must make it plain that when these matters come to be considered we claim the right, through the Minister of Transport, to give directions as to what should be done and, if we are right in saying that they are matters which the British Government should control, a foreign court will deal with them at the peril of being accused of having infringed our jurisdiction and of having broken international law, and at the peril, in the ultimate analysis, as the right hon. and learned Gentleman said, of being taken, if it should become necessary, to the International Court.
It is not only the immediate problems of shipowners with which we are concerned, along with their position in the American courts, but also the possibility that, either by international arbitration or by a decision of the International Court itself, this may become an issue between the two countries which will have to be decided by the ordinary processes of law and by a decision of international law.
§ The hon. Member for Bermondsey (Mr. Mellish) asked a number of questions, one being why the Bill had taken so long to come forward. It is true that there have been a long series of negotiations and that there is a long history to this matter. It goes back even before the 1961 Act was passed in America. It was and always has been hoped that this could have been dealt with satisfactorily by negotiation. We have not until now come to the point at which it looked as though there would be real difficulties because, so far, they have been avoided either by the F.M.C. withdrawing or postponing measures which it had proposed 1273 or, on occasions, by British shipowners complying to the extent they thought reasonable, although they did not particularly want to do so.
§ However, we have arrived at the situation when there is a dateline set for 1st September and, as has been pointed out, it is essential that if 1st September came, and no agreement had been reached between either this country and America or between the shipowners and the F.M.C., these powers should be available to the Minister of Transport.
§ The hon. Member for Bermondsey also asked whether the matter had been—or, if it had not, whether it could be—taken up at a high level. I can assure him that this has already been done. My right hon. Friend the Member for Bromley (Mr. H. Macmillan) took it up with the former President of the United States and discussed it with him. I can also assure the hon. Member that my right hon. Friend the present Prime Minister has also been in touch with the present President of the United States about these problems. It would be wrong for me to give details of exchanges between heads of State, but I can assure him that this has not been treated merely as a departmental matter but has been dealt with at the very highest level.
§ Mr. Fernyhough
Are we not right to infer from that, since the Attorney-General cannot give us an idea of the outcome of those confidential talks, that they have not been fruitful, hence the necessity for the Bill?
§ The Attorney-General
It is right to infer that a solution may not have been achieved by 1st September. This is the matter which is in suspense and in doubt and it was thought necessary that, should they turn out not to be fruitful, then, in that unhappy event, these powers should be available, and that is why the Bill is being introduced. There have been continuous discussions—and they are being continued—at every level, both directly between shipowners and the F.M.C. and at the departmental level. Several different Governments are involved in these discussions.
I am grateful for the support given to the Bill by my hon. and gallant Friend the Member for Barkston Ash (Sir L. Ropner). In his agreeable and eloquent swan song, which was in keeping with all 1274 the speeches that he makes in the House on this subject, all hon. Members again realised—and this has been said by others much better than I am able to say it—that no hon. Member can speak with more authority on this subject than my hon. and gallant Friend. I am indeed grateful to him for his support.
I am glad that my hon. and gallant Friend emphasised the fact that Clause 1 can be applied to many other countries. This is not solely legislation directed against the F.M.C. As he said, it can be used in other circumstances and in relation to other countries if they should endeavour to try to deal with shipping matters which are properly within the jurisdiction of this country. The Clause is directed only at what are called "foreign countries" in the Bill. Certainly, the other possessions and dominions of Her Majesty are not foreign countries, in my view, and it is not intended or expected that it would be necessary—indeed, it would be unthinkable—that the provisions of Clause 1 should need to be used against another country of the Commonwealth.
I turn to the real problem which was raised by the right hon. Member for Easington and the right hon. and learned Member for Newport: how the Bill will affect the master of a ship who finds himself in an American port. What the F.M.C. is trying to do is not to get at bills of lading. There is no doubt at all that a British ship in a United States port, in accordance with the principles which my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) mentioned, would be liable to produce any documents on board her, particularly if they related to her own cargoes; and no one would dispute that it would be well within the jurisdiction of the United States courts, Government and legislation to demand the production of a bill of lading of a boat which was actually in American territorial waters.
What the F.M.C. has been trying to do is not only to obtain information. It has actually probed contracts and arrangements made between British shipowners in conferences which operated within the United Kingdom, subject to United Kingdom law. An extreme example one gets is that the F.M.C. is going so far as to try to control a contract for the shipment of British goods by a British manufacturer 1275 which that British manufacturer has made with a British shipowner for the shipment of those British goods in a British ship sailing under the British flag on a contract made according to British law with the freight payable in the United Kingdom.
According to international law it cannot be right in those circumstances that the F.M.C. should endeavour to say what should be put into such a contract, or that the F.M.C. should go so far as to endeavour to obtain, as it has, not only the details of the freight charge, but any report, account, record, rate or charge of any memorandum of any owner of any ship which enters the United States in the course of trading. This is the extent to which the F.M.C's claims are going and it is largely in relation to arrangements of British shipping conferences and contracts made in Britain, which are probably in the offices of the British shipping conference and not even in the offices of the British shipper, that the claim of the F.M.C. is made.
Until now it has, sensibly, never made a claim against the master of a vessel to the effect that he should produce such documents. However, the Americans are entitled under their law—and this shows the width of their law—to call on the agent of any common carrier by water to produce any of the documents they require. As I say, fortunately, they have not charged the master of a British vessel for failing to produce documents which he has probably never had in his possession and which he is not entitled to have.
§ The Attorney-General
That is precisely the position. He may not even know of the existence of the document. This clearly shows the width of claims the American legislation is making. I hope that the Americans would never charge in the American courts the master of a vessel on that basis because they would know that it would not be his responsibility.
Despite this, suppose that that were to happen. The difference between the situation without the Bill and the situation with it is this; the master of a British vessel as the law now stands may say, ''I do not see why you should legislate 1276 like that because I do not know anything about this document", and he would have only that defence against American legislation.
After the Bill has been passed, if the Minister has given a direction to the shipping company which employs that master to the effect that it should not supply documents or comply with any request for documents which the F.M.C. may make against the master, in such circumstances the master is entitled to say to the American courts not only that they have no jurisdiction, but that it is a matter entirely within the British jurisdiction—a matter in which he is liable to be fined by the British courts—and the American courts would then be trying to enforce, through their courts, a matter which, in international law, is for the British courts. In such circumstances the master would be liable to a penalty in the British courts, which might fine him for doing something which is essentially a British matter and for which he is subject to the British courts.
The right hon. Gentleman will remember that there was a case not dissimilar; of British Nylon Spinners and I.C.I. when the question of the use of a British patent and the relationship between du Pont and I.C.I. came up for consideration. While the American courts had made an order on the assumption that they were entitled to because British law did not operate, the Court of Appeal in England said that because I.C.I. in this country had assigned a British patent under a British contract to British Nylon Spinners, which was an entirely British company, this was a matter which the English courts would deal with and they would order I.C.I. not to comply with the directions that had been given. I think that the judgment in the American courts had proceeded upon the basis that there was no reason in British law why an American court should not make an order.
§ Mr. Shinwell
It seems that there is a gap here that must be filled. My right hon. and learned Friend the Member for Newport (Sir F. Soskice) and I raised the question of the possibility of the master being asked to disclose or produce documents. He may know nothing about them, but surely the gap seems to be this: the Federal Maritime Commission 1277 demands that certain documents should be produced which indicate that there is no monopolistic tendency on the part of either British shipowners or British shippers or of collusion.
What are the means of communication? Does it mean that the Federal Maritime Commission approaches a ship-owning firm in Great Britain and asks whether it will produce documents which indicate that it is not violating United States law? Is that how it is done? If not, what are the means of communication?
§ The Attorney-General
The usual course in present circumstances is that the Federal Maritime Commission makes a demand on either members of the conference or shipowners individually to produce not only the individual contracts but a great number of details and even all their books. Suppose the master or the ship came within American jurisdiction and the Federal Maritime Commission charged them before an American court for failure to comply with the direction, with the possibility of a penalty of 1,000 dollars a day.
The impact of the Bill will enable such a person, when brought before the American court, to say that this is a matter subject to British law, to British jurisdiction, and that it would be contrary to international law for an American court to deal with a matter which is entirely for a British court. The person charged would say "I have an express direction, subject to a criminal penalty, from the Minister of Transport in the United Kingdom which prevents me from obeying you and, therefore, you ought not to enforce this law."
It is still possible that the American court would do so, and then one would have the only remedy open in a situation where the view is taken that there has been a breach of international law. The first step is diplomatic representation. This is not dissimilar from the sort of situation where an ambassador is arrested and put in prison. One may say that there is nothing that one can do about it. What one does, of course, is to make diplomatic representations first and then try to see whether, in international law, one can agree that the one country or the other is correct, and finally, if one cannot come to an agreement as to the true 1278 situation on that basis, one must have by agreement an arbitration or perhaps go to the International Court and have the matter litigated.
The Bill has two purposes. In the first place, to provide the shipowner who is charged in America with an offence to say that this is British law and he is subject to British penalties and the American court ought not in those circumstances to impose a fine. In the second place, in case, in the ultimate analysis, there is an argument of international law as to which law ought to control it being settled between the two countries by negotiations or by the International Court or by international arbitration. The Bill will in the view of the Government assist on both those aspects and it is for this purpose that the Government have brought the Bill before the House.
It is perfectly true that we cannot as a Parliament legislate for the courts of America any more than their Congress can legislate for our courts; nor can we as a Parliament make a law which is effective in international law any more than the American Congress can pass legislation which is effective to alter international law. All one can do is to make it quite plain that in certain circumstances there are situations which ought to be dealt with by our Government, our legislation and our courts.
This gives the Minister of Transport the power to say that certain measures taken by any foreign country seem to go far too wide, are likely to impinge on matters that are within our jurisdiction and ought 1:0 be dealt with by our legislation and our courts, and to make an order against our citizens; and then to hope that the foreign country will see that this is a matter which they should not deal with, but if they do, the Government will be in a stronger position to claim that there has been an infringement of its jurisdiction.
The right hon. Gentleman also asked what was the position about other countries. We have been acting in conjunction with nine European countries and with Japan which represent together 50 per cent. of the world's shipping. I can assure the right hon. Gentleman that we have informed them of what we are doing and we have in the recent past presented a joint note protesting about 1279 American practices, especially the Federal Maritime Commission's activities. Her Majesty's Government will continue to act together with the other Governments, because we shall certainly, as he suggested, negotiate from greater strength if we keep together and all act together in this matter.
§ Mr. A. J. Irvine
It would be interesting to know whether, to the right hon. and learned Gentleman's knowledge, these other countries are introducing legislation in their Parliaments to deal with this matter.
§ The Attorney-General
I have not at the moment information that new legislation is being introduced, but some have it already. Germany has legislation, not in exactly the same form but to deal with the same problem. I believe that the Netherlands also have legislation of this nature. I hope that some of the other countries will act in conformity with us if they think it convenient and suitable.
My hon. Friend the Member for Merton and Morden (Mr. Atkins) was quite right when he pointed out that the Federal Maritime Commission is the creature of Congress and is not part of the American Government. Nevertheless, every country is under an obligation to make its laws conform to international law, and, as I have said, if the enforcement and practice of the American legislation is such that it is an infringement of international law and is seen to be so by the judgment of an international body, then there would be an obligation upon the United States to amend that legislation to conform with international law.
The hon. Member for Bristol, Central (Mr. Awbery) raised the question whether the Bill would assist in the problem of the threat to exclude ships which had, for instance, carried Leyland buses to Cuba. The answer is, "No, it would not". It must always be within the jurisdiction of any country to say which ships it will permit within its ports and which ships it will not permit within its ports.
The distinction between the two cases is this: had the American legislation endeavoured to impose penalities upon somebody for carrying buses to Cuba, 1280 from this country, that would have been an infringement of our jurisdiction and would have been comparable with the present situation. The Americans have not intended to do that. They have merely said that as an act of policy they would exclude certain ships from their ports. This country and any other maritime country claims the right, if it so desires, to exclude any ship from its ports for any reason that it cares to exercise.
My hon. and learned Friend the Member for Darwen raised what is fundamental to the Bill—what are the basic principles upon which the jurisdictions of the two countries ought to be divided in international law? In our view, a country such as America acts in excess of its own jurisdiction when its measures purport to regulate acts which are done outside its territorial jurisdiction by persons who are not its own nationals and which have no, or no substantial, effect within its territorial jurisdiction.
If the Americans attempt to do that—and in our view that is what they have been doing—then we consider that they are exceeding their own jurisdiction. We consider that in so far as they endeavour to control the making of contracts or the carrying on of business by persons in this country, that is an infringement of our jurisdiction. If they attempt to control what is done within our jurisdiction or what our nationals do outside the United States, that is an infringement of our jurisdiction.
The case on which my predecessor gave an opinion in 1879, of the vessel entering a Spanish port, was very different indeed. There it was a question whether that vessel ought to have documents in a certain form relating to the cargo on board. Here we are concerned with something quite different—with what British business people do in the United Kingdom, which may be quite unrelated to what happens within American territorial waters. This is the distinction between the two cases.
The hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) asked why we are conferring these powers on the Minister of Transport. This is certainly an interesting question. The answer is that he is principally concerned with the subject, but he acts 1281 on behalf of Her Majesty and on behalf of Her Majesty's Government. It is not to be supposed that the Government are so departmentalised that he would act without the knowledge and consultation of both the Foreign Office and the Law Officers. In those circumstances it is only a question of whose hand should actually make the Order, and since shipping and shipping problems are the responsibility of the Minister of Transport, and since one or other of Her Majesty's Ministers has to act on behalf of Her Majesty, the Minister of Transport is obviously the appropriate person to make these Orders. But, naturally, he will act in conjunction with Her Majesty's other Ministers who have responsibility in these matters.
The hon. and learned Gentleman also raised the question of penal provisions for failure to give information, and the right hon. and learned Member for Newport also raised the question whether there ought not to be some provision such as "a failure to provide information which is within one's knowledge". I will certainly consider that, and it may be that we ought to amend the Bill in that respect. I will consider, before the Committee stage, whether such an Amendment should be made.
The hon. and learned Member was quite right in saying that whether a criminal offence has been committed or has not been committed, and its nature, would depend upon the clarity of the Minister's Order. But this is nothing unusual. Under the Agricultural Holdings Act the Labour Government provided penalties as to failure to comply with directions given on behalf of the Minister, and the Exchange Control Act, also passed in the years of the Labour Government, in 1947, provides a penalty for failure to obey directions given. These are quite usual provisions, but I hope and expect that the directions which will be given will be of sufficient clarity to be easily comprehensible.
Another point raised is whether the Order applying the Bill to particular foreign measures will have sufficient clarity to make shipowners in this country aware of the particular circumstances which they have to report to the Minister. The hon. and learned Gentleman was good enough to point 1282 out that shipowners have no anxieties on this head. I think that that is right. In any event, the Order made by the Minister applying the Bill to those foreign measures will be prayable against in the House and will be subject to the control of the House. If it is thought to be insufficiently clear, or if there are fears that it may create diffities, the House will have it within their power by negative Resolution to rescind the Order.
The difficulty was raised that there may be novel and unexpected steps taken by a foreign authority so that a master of a British vessel or shipowner may be left in a situation in which no directions have been given by the Minister. The effect of the Bill, in the Government's view, does not derogate at all from the present law, and the shipowner or other person affected against whom an Order is made by the foreign authority will be no worse off by reason of the passing of the Bill. It will still be competent for him to argue, and for this; country to argue as against the foreign country, that it is a matter entirely within the jurisdiction of this country and not of that foreign country, and that, therefore, the legislation of that foreign country ought not to have dealt with it.
A different view on the question has been put forward, particularly by some American lawyers. They have taken the view that if the law of either country could have dealt with a particular problem, and if British law does not deal with it, then American law is entitled to do so. The advantage which will be given by the Bill is that both in the American court and in the International Court no one will be able to say, once the Minister has made a direction, that there is, as it were, a vacuum in British law and therefore American law is entitled to operate.
The view of the British Government is that there could be three possible situations, as for instance where freight is payable in the United Kingdom under the terms of a contract which is partly to be carried out in America: it may be exclusively a matter for British law, it may be exclusively a matter for American law or it may be a matter of concurrent jurisdiction. Our view is that where it is a matter for concurrent jurisdiction the 1283 ordinary rules of international law will look at the substance of the matter and will see which of the two laws ought to be paramount. Then, applying the rules of international law, one can see that it is a matter which our courts or the American courts ought to deal with.
But lest it be argued anywhere that in the absence of British law the American law can operate in the circumstances in which directions have been made under the Bill, we feel that there should be no doubts left in anybody's mind that there is a direct conflict of jurisdiction, and then the International Court or the international body discussing the matter will have to resolve that conflict, and one will not be left in a position in which it may be said that there is no conflict at all because British law does not deal with the matter.
§ Mr. A. J. Irvine
I am grateful to the right hon. and learned Gentleman for the full way in which he has been good enough to deal with the points which I raised, among other matters. Would he care to say something on a point which I brought forward—that we should welcome an assurance that there was nothing in the Measure which could possibly be derogatory of the existing powers and rights of shipping companies and ships' captains under existing law?
The right hon. and learned Gentleman will recollect the case of the ship's master who perhaps refuses to comply with the prohibition or the requirement but wrongly fails to give the appropriate notice to the Minister. Will the right hon. and learned Gentleman assure the House that in such a case the Government would still back such a shipping company and such a British ship's master vis-à-vis the foreign authority?
§ The Attorney-General
Yes, I assure the hon. and learned Gentleman that the British Government certainly would do so. The requirement to give information 1284 to the British Government is, of course, an internal one for administrative purposes only within this country, simply so that the Minister of Transport may know what requirements are being placed by foreign authorities on British shippers. The fact that a British shipowner can, either accidentally or even intentionally, fail to communicate such information to the British Government would not alter in any way the status of the British shipowner and the views of the British Government about the necessity of maintaining British jurisdiction if that British owner or British ship were in an American port.
Finally, the right hon. and learned Member for Newport said that he thought that perhaps these matters could best be settled by the International Court of Justice at The Hague. I hope that it will never be necessary for any such reference to be made. Despite the fact that I am a lawyer, I have never believed in litigation. It is a disaster for those who get involved, though not perhaps for the lawyers, and I hope that our two countries which have a very ancient alliance will be able sensibly to settle these difficult questions without any resort to litigation of an international nature.
I hope that it will be possible to settle these difficult problems without having to operate the Bill at all. I know that this would be the wish of the House as a whole. I know, also, that the House would like to know that in the event of the worst happening we are in as strong a position as can be, and it is on that basis that I commend the Bill to the House.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Committee of the whole House.—[Mr. Ian Fraser.]
§ Committee Tomorrow.