HC Deb 30 June 1966 vol 730 cc2225-41

(1) The provisions of this section shall have effect for the purpose of affording relief in respect of duties of customs and excise chargeable on hydrocarbon oils, vehicle excise duty (including such duty chargeable in Northern Ireland) and purchase tax incurred in connection with the construction and fitting out of certain vessels and other floating structures.

(2) If, on an application made in accordance with directions from time to time given by the Commissioners for the purposes of this section, it is shown to the satisfaction of the Commissioners that a vessel or other structure to which this section applies, having been constructed in the United Kingdom by the applicant pursuant to a contract (whenever made) under which it was to become the property of some other person, was delivered by him pursuant to that contract after the coming into force of this section, the applicant shall, subject to subsections (7) to (9) below, be entitled to receive from the Commissioners a payment of an amount determined in accordance with the two next following subsections.

(3) Subject to the next following subsection, the said amount shall be such percentage as the Treasury may by order prescribe of the price payable under the contract in question for the said vessel or structure and all fittings and other equipment supplied by the applicant therewith, or, if that price appears to the Commissioners to be greater than the open market value of the vessel or structure and its said fittings and equipment as determined in accordance with Part I of Schedule (Reliefs for shipbuilders) to this Act and the Commissioners so decide, the prescribed percentage of that value; and an order under this subsection may prescribe different percentages in relation to different descriptions of vessels or structures.

Any price which is expressed in a foreign currency shall be treated for the purposes of this subsection as equivalent to a sum calculated in such manner as the Commissioners may direct.

(4) The price or value referred to in the last foregoing subsection shall, in the circumstances specified in Part II of the said Schedule (Reliefs for shipbuilders), be treated for the purposes of that subsection as reduced as mentioned in that Part.

(5) The vessels and other structures to which this section applies are as follows—

  1. (a) any ship, within the meaning of the Merchant Shipping Acts 1894 to 1965, the gross tonnage of which, ascertained in accordance with those Acts, is not less than eighty tons; and
  2. (b) any other vessel, or other structure capable of flating on the sea, which is of a description specified in that behalf by an order of the Treasury, and in respect of which any conditions so specified are satisfied:

Provided that the Treasury may by order exclude from the operation of this section any ship, or any ship of a specified description, in the case of which less than a specified percentage of the cost of its construction, calculated in accordance with the order, was attributable to the United Kingdom expenditure as defined in the order.

(6) References in this section to the construction of vessels and other structures do not include references to their reconstruction, refitting or repair.

(7) If, within one month of the coming into force of this section, any person shows to the satisfaction of the Commissioners—

  1. (a) that a vessel or other structure has been, or is to be, delivered to him pursuant to a contract made before 23rd June 1966, and has been, or is to be, exported by him pursuant to another such contract, and
  2. (b) that, by reason of its exportation pursuant to the last-mentioned contract, he is or may become entitled to payment of a rebate under section 7 of the Finance (No. 2) Act 1964 (export rebates),

no payment shall be made under this section in respect of the said vessel or structure unless that person either by notice in writing to the Commissioners waives any right to the rebate in question or fails for any reason to become entitled thereto.

(8) No person shall be entitled to a rebate under the said section 7 in respect of any vessel or other structure in respect of which a payment under this section is, or could if applied for have been, made to any other person; and a person who, but for this subsection, would be entitled as respects any vessel or other structure to both such a rebate and such a payment may receive either, as he elects, but not both.

(9) Where in the case of any vessel or structure the whole or any part of the price payable as mentioned in subsection (3) above is not received in accordance with the contract in question by the applicant for a payment under this section, the Commissioners if they think fit may require the applicant to repay the whole or any part of any payment made to him on the application or, as the case may be, may withhold from him the whole or any part of any payment which would otherwise fall to be so made.

(10) It shall be the duty of any person to or by whom a payment under this section has been made or applied for to inform the Commissioners of any event which would entitle them to exercise the powers conferred by the last foregoing subsection, and any person who fails to comply with this subsection shall be liable to a penalty of one hundred pounds.

(11) The provisions of Part III of Schedule (Relief for shipbuilders) to this Act shall have effect for the purposes of this section.

(12) For the avoidance of doubt it is hereby declared that the allowances referred to in section 9 of the Finance Act 1961 do not include payments under this section.

(13) Payments by the Commissioners under this section shall be made out of the sums received by them on account of duties of customs and excise and purchase tax; and—

  1. (a) notwithstanding anything in section 5 (4) of the Vehicles (Excise) Act 1962 (which requires duties levied under that Act to be paid into the Exchequer) or in any Order in Council under that section, the Treasury may give directions for the payment to the Commissioners, at such times and in such manner as the Treasury may determine, out of the duties levied under that Act of such sums as the Treasury think fit having regard to the extent to which payments under this section are designed to afford relief in respect of such duties;
  2. (b) any sums so paid shall be treated for the purposes of section 11 of the Act of 1952 (disposal of duties of customs and excise) as money received by the Commissioners on account of duties of customs and excise.

(14) Any order under the foregoing provisions of this section may be varied or revoked by a subsequent order, and shall be made by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.

(15) This section shall come into force on such day as may be appointed by the Treasury by an order under this subsection made by statutory instrument and laid before Parliament after being made, but shall, in its application to any vessel or other structure by virtue of an order under subsection (5) above, have effect as if it had not come into force until such later day, if any, as may be specified in that order.—[Mr. MacDermot.]

Brought up, and read the First time.

Mr. MacDermot

I beg to move, That the Clause be read a Second time.

This is a new Clause to empower the Treasury to authorise the Commissioners of Customs and Excise to pay to shipbuilders sums broadly equivalent to certain indirect taxes which enter into the cost of construction, fitting out and delivery of ships which are not repayable or not drawn back under existing provisions. This provision arises from the recommendations of the Geddes Committee. As hon. Members will remember, that Report proposed that if the ship- building industry were prepared to make a fresh start on the lines that the Committee proposed, the Government, in turn, should take a number of measures to assist the industry to become more competitive in world markets.

My right hon. Friend the President of the Board of Trade, on behalf of the Government, welcomed the Report in general terms and discussions have been going on with the industry. Those discussions have been making good progress and the Government hope to be able before long to report results together with their decisions on the recommendations for Government action. Meanwhile, we have acted on the suggestion of the Geddes Committee, in view of the time factor, that we should legislate in this Finance Bill to take power to introduce this scheme assuming that agreement is reached; and it may be introduced as part of a package covering action by the industry as well as the Government.

I make clear that this Clause itself does not introduce this new form of rebate; it gives power to the Government to introduce it. The rebate that is proposed covers a similar field to the export rebate and the taxes for which relief is to be afforded are the Hydrocarbon Oil Duty, the Vehicle Excise Duty and Purchase Tax in respect of goods, mainly stationary, which are purchased for the shipbuilders' use other than taxes on goods bought on capital account, for example, business motor cars.

This relief and the export rebate will not, of course, both be payable in respect of the same vessel, but if a vessel is being sold abroad so that the shipbuilder could qualify for either, he will have an election. He can opt for which payment he wishes. Owing to slight differences in the scheme, one may be more to his advantage than the other.

The scope of the scheme is that it will cover all vessels in excess of 80 gross tons. This is normally the dividing line between boats and ships. It will, in effect, include normal merchant ships, tugs, warships, dumb barges and large pleasure yachts. This relief will be available regardless of the purchaser, be the purchaser the Government, a private individual or a foreign shipowner. The Clause provides that the Treasury should, in addition, have power to extend the relief to prescribed floating structures. This, for example, would include power to provide for payments to be made for the oil and gas rigs which are now being constructed in British yards.

The Clause, as hon. Members will see, is somewhat lengthy and complex. This is due to the fact that the complexities of shipbuilding itself require a rather prolonged Clause. The contract for the building and supply of a ship is itself a complex document. In order that there should be certainty about the scope of the rebate, provision has to be made to specify the exact method by which the relief is to be computed and also to safeguard against inflated claims.

I shall not seek to go through the whole of these provisions, but I shall try, with the assistance of my right hon. Friend the Minister of State, Board of Trade, to answer any particular points which may be raised. Broadly speaking, two basic facts will have to be proved to the satisfaction of the Commissioners of Customs and Excise for the relief to be payable, first, that the vessel was a structure constructed in the United Kingdom by the applicant under contract with another person, and, secondly, that the delivery under the contract to that person took place after the date on which the relief scheme came into force.

The percentage of the relief, like that in the export rebate scheme, is one which will be prescribed by Order made by the Treasury. It will be a percentage of the price payable under the contract for the vessel and all fittings and equipment supplied with it by the applicant, subject to certain deductions mentioned in subsection (4) and cases where there is an unusual amount of fittings and equipment referred to in paragraph (2) of the Schedule.

Mr. Simon Wingfield Digby (Dorset, West)

I am sure that the Committee will be grateful to the hon. and learned Gentleman for his explanation of this Clause of 96 lines, with 105 lines added in the Schedule, which pay tribute rather to the ingenuity of the draftsmen than to the clarity of the law we are seeking to pass. I do not think that should deter us from saying that this is something to be welcomed. I think that I shall be roughly right in paraphrasing it as meaning that home orders will get the same tax concessions as foreign orders.

In the past, there has been some controversy as to the relative advantage to the country of home and foreign orders. Any controversy there was has been more or less settled for the time being by the Geddes Committee's Report, which has said quite clearly that the advantage is equal and that there is no reason for tax concessions against the home orders for the benefits received as they will go on either saving or earning foreign currency for a number of years, rather than the earning of foreign currency being ended in one quick transaction.

I welcome the Clause on the ground that it shows that the Government are setting about quickly to implement the recommendations of the Geddes Report, which has been so well received. At the same time, on this side of the Committee there was some anxiety to learn that the Prime Minister intends to shift responsibility for the shipbuilding and ship-repairing industry yet again from one Department to another. Soon it will have been under no fewer than four Departments in nine years, three Departments under a Labour Government. We hope that they have got the matter right on this occasion. The fear is that this might lead to some reappraisal of the Geddes Committee's Report and the holding up of the implementation of those recommendations so well received on both sides of the industry.

I therefore welcome the new Clause both on its merits, because I am quite sure that it is the right kind of encouragement to give to this very important industry which can do so much for the economic position of the country, and, secondly, because it shows the earnest of the Government's intention to press on with the implementation of the Geddes recommendations. I trust that this will not be halted when responsibility for this industry moves to the Ministry of Technology.

5.0 p.m.

Dr. Reginald Bennett (Gosport and Fareham)

May I express a few words of welcome for this new Clause. As one who has spent much of his life in and among ships, I consider that this is a very admirable and reasonably swift response to the Geddes Report on the part of the Government. It is a good thing to see this first action being taken, and I am sure that the pleasure will be widely felt. I am happy that, for once, I am in a position to congratulate the Government upon their action.

I am pleased to see that, as ships generally ply at sea and among different countries, no matter what country has actually bought the vessel, there is no longer to be any distinction between ships bought for home or overseas ownership. The Financial Secretary mentioned the lower limit of 80 gross tons, a limit which, I seem to remember, cropped up in the learned discussions which we had on a Bill upstairs about anchors and chain cables. Is it not relevant today that the larger, private yachts, which are intended to be covered by this Measure are very much smaller than they used to be, while still being highly seaworthy? Would it not be wise to consider lowering that limit to something like 30 gross registered tons?

As we are now developing large hovercraft, and as we have discovered from discussions upstairs, that a hovercraft is at present classified as a ship, will this rebate be applied to the manufacturers of hovercraft also? I hope that the Government will find it possible to issue the appropriate Orders before very long.

Mr. John Peyton (Yeovil)

I should like to reinforce the question asked by my hon. Friend the Member for Gosport and Fareham (Dr. Bennett). Previously one would have thought that it was not necessary to do so, but in view of the fact that at an earlier stage in the Bill, we had a rather unsatisfactory reply from the Government on the subject of whether hovercraft should be entitled to the same fuel concessions as are given to coastal shipping, one is more than justified in raising this point and hammering it home. I very much hope that the Financial Secretary will be able to assure the Committee, without any shadow of a doubt, that this new Clause covers hovercraft which are in direct competition with shipping.

There can be no possible justification for discriminating against this new and highly promising development. I hope that, if the Financial Secretary cannot give a direct and favourable answer now, he will produce one on Report. While, generally I welcome this new Clause, I cannot help but regret that it has proved impossible to put it in very simple terms. The Financial Secretary, using all that anticipation at which he must be getting pretty good, laid the blame fairly and squarely on the complexity of a shipbuilding contract. I am the last person to challenge that, but I feel that it is only fair to divide the blame between the complexity of a shipbuilding contract on the one hand and the source from which all of these things originate on the other.

Particularly after nights of going through this sort of a Bill, one feels that, where simplicity is available, the rule is that it should be avoided at all costs as a very major danger, and that, whatever else may be said of successive Treasury Benches, in collusion with the draftsmen, it will always be possible to say that they managed to avoid anything so banal and terrible as producing a Clause which could be readily understood. It must be part of the trade that it should be incomprehensible, and on those grounds one must congratulate those responsible for this new Clause for having been thoroughly consistent.

I, too, should like to express anxiety about the transfer of responsibility for the industry to the Ministry of Technology. I hope that the Government's good intentions will not be frustrated by this transfer. At the same time, I fear that this Department, born so recently, has had thrown upon it a mixture of responsibilities against which its inexperience is becoming so palpably obvious. I hope that the Government will be alerted to this danger, and will not have too much hesitation, in the event of the Department's experience proving insufficient, in going back on their tracks and even transferring the industry back to the Board of Trade.

Mr. Stanley R. McMaster (Belfast, East)

I am grateful to have the opportunity to say a few words and I am glad to see that the hon. and learned Gentleman the Financial Secretary is here. He had a long "trick", if I may use that term, last night—20 hours or more, and it is less than 12 hours since he was answering another Amendment of ours before this Committee.

I speak on behalf of a constituency containing the largest shipbuilding yard in the country, perhaps in Europe, and people there will be very pleased to see this new Clause. We have been pressing for this new Clause for a great number of years from this side of the Committee and we welcome it particularly in view of the news of the lessening of tension with Japan, and the conversations taking place between the shipbuilders of Britain and Japan. Our shipyards have come through a very difficult period since the war, particularly in the last 10 years. I have seen my own yard, since I came into this House six or seven years ago, lose about half of its employees, dropping from 24,000 to 12,000. This is a very substantial reduction in employment in a depressed area and this Clause is bound to give heart to the people there.

It has been news within the past week that the boilermakers and shipwrights have got together and reduced their demarcation boundaries. This sign of implementation of the Geddes Report by the workers as well as management will lead to a more enlightened view of labour relations within the yards and to a reduction in the number of trade unions. Everyone including the Government must play his part in this so that the country can retain its position in Europe and the world as the leading shipbuilding country, and as a maritime nation. This is essential. For these reasons I should like to welcome this new Clause.

Mr. Higgins

Like my hon. Friends I too congratulate the Government and welcome this new Clause. Like them too, I share a particular concern for the shipping industry, having spent some seven years in it. I must admit that my early apprenticeship in studying the words on the bills of lading brought me to this particular new Clause with a sense of dé jà vu. There are one or two points which I should like to make. First of all, we welcome the fact that the Government are introducing a Measure which will put British owners on the same terms as foreign owners with regard to the tax rebate when buying ships from British yards.

We welcome this particularly because it has shown that the Government are proposing to make progress with the Geddes Report. Those of us who, earlier this afternoon, had been very worried by the fact that the implementation of the Devlin Report is likely to be frustrated by measures now being advocated with regard to the public ownership of the docks, are nonetheless glad to see that the shipping industry will be helped in the way set out in this Clause.

I should refer back to the earlier parts of the Bill and, in particular, to Clause 8 concerning the "Restriction on export rebates for goods consigned to Convention area." The Minister will be aware that this country's shipyards are in keen competition with those in Scandinavia. Therefore, inasmuch as this new Clause is concerned effectively with export rebates, there should be some integration between the Clause as it stands and Clause 8 of the Bill. Perhaps the Minister would tell us something about the position concerning ships constructed in this country and then sold to Scandinavian owners and what the reactions of our E.F.T.A. partners have been to the proposal we are considering.

We should bear in mind the point about hovercraft which my hon. Friends have raised. There seems to be some inconsistency in the definition of what is a ship and what is a boat. The Minister, in spelling out the details of the Clause, said that the line which had been drawn in the Clause was the normal line. But I understand that in the Industrial Development Bill the tonnage limit is 100, and I gather that an Amendment to reduce this has not been accepted. Indeed, it was refused completely, I think. Therefore, if we are to have a multitude of Bills and Clauses, we should, if possible, arrive at a consistent definition. Otherwise, there will be grave confusion between one Government Department and another.

Would the Financial Secretary say whether hovercraft will be covered by the Clause? Clearly, this may have important implications in the way that it has important implications for shipping generally regarding the position of British owners of ships or hovercraft. It is very important that British owners should be placed on the same terms as foreign owners when buying from British yards. When I read paragraphs 533, 534 and 535 of the Geddes Report, I could not but help reflect on the trouble which I had had in a former occupation in getting businessmen to regard the terms on which they could purchase ships on a comparable basis. It was true that at one time British owners had a real and justifiable preference for British yards. At the same time, it is important that they should not be at a disadvantage as compared with foreign owners. This should be extended not only to ships but to hovercraft.

I should be grateful if we could have an answer to the detailed points raised by my hon. Friends from their great experience of the industry and to the points which I have raised.

5.15 p.m.

Mr. MacDermot

I thank the Committee for the general welcome which it has given to the new Clause.

The hon. Member for Dorset, West (Mr. Wingfield Digby), whose interest in this subject is well known to hon. Members, asked whether, broadly, the proposition was correct that the effect of the Clause is that home orders will enjoy the same tax concessions as foreign orders. Broadly, it is, subject only to the sort of modifications which I indicated, for example, about an unusual quantity of fittings on a ship. Something which would qualify for the export rebate would not qualify for this relief on a home sale. Subject to a few exceptions like that, the broad proposition is correct.

The hon. Gentleman invited me to enlarge on the reasons for this relief from indirect taxation. As hon. Members interested in shipping know, the building of ships is not comparable with other manufactures. As the Geddes Report suggests, a ship is a product built to international specifications for sale to an international market to operate on international seaways, whether the order is placed by a home or an overseas buyer. The special character of this market is widely recognised. It will be equally widely realised that this relief cannot be regarded as a precedent for proposals for similar relief in other industries. It is a unique relief for an industry in a special and unique position.

For tax purposes, most other countries make no distinction between ships sold to domestic owners and ships sold to overseas owners. Therefore, I do not think that we are creating a precedent in the international field. This Measure will be fully accepted and understood internationally.

Like the hon. Member for Yeovil (Mr. Peyton), the hon. Gentleman asked for an assurance that there would be no question of holding up the implementation of the Geddes Report consequent on the transfer of responsibility to the Ministry of Technology. I can certainly give that assurance. I indicated that the Government expect to make an announcement as a result of the talks which have been taking place on an agreed drive for implementation of this Report. We expect to be able to make that announcement before we rise for the Recess.

The hon. Member for Gosport and Fareham (Dr. Bennett) raised the question of the 80-ton dividing line between ships and boats. I have heard the hon. Gentleman speak on this subject before. I do not pretend to know all the arguments involved, but as long as that remains the general dividing line it is right that we should take it for this purpose as well. We do not want confusion caused by different dividing lines for different purposes. There is nothing necessarily sacrosanct about the figure. It can be reconsidered, perhaps, in a future Merchant Shipping Act.

Like the hon. Members for Yeovil, and Worthing (Mr. Higgins), the hon. Gentleman asked me to confirm that hovercraft are within the new Clause. The answer is "Yes", in the sense that when any order is made pursuant to the Clause there will be power to make it wide enough to include hovercraft. I am not now giving an indication, because no decision has been taken, as to whether, in the event of such an order being made, as we anticipate, hovercraft would be included.

The hon. Member for Yeovil commented, as I have done, on the complexity of the Clause. My reaction was the same as his when I first saw the draft of the Clause. I assure him that the Treasury Ministers would have been happy if it had been shorter and simpler. But we were satisfied, when we went into the matter, that the price of doing that would have been ambiguity, and that though complex Clauses like this are indigestible to the hon. Gentleman—and I sympathise with him—they help, when analysed, to avoid disputes later about the proper scope of the relief.

The hon. Member for Worthing also asked me whether we expected any difficulties in connection with the provisions in Clause 8 in relation to this relief. The answer is that we do not, for the reasons I gave. Other countries, including the E.F.T.A, countries, have similar provisions in their tax law and we do not think, therefore, that they will raise any difficulties. We think that they will be content with the provision and that it will not give rise to any of the difficulties Clause 8 deals with.

I thank the hon. Member for Belfast, East (Mr. McMaster) for his kindly words both about myself and, more important, about the Clause. It is certainly encouraging to hear the report he makes about the improvement in the industry in his constituency, and we certainly hope that this provision will lay the basis for one of the steps in what we hope will be a new deal for the industry.

Mr. Peyton

Would the hon. and learned Gentleman be good enough to go a little further on the question of hovercraft? I understood him to say that, so far, the Government's intentions are pure and good and that they have not excluded hovercraft from the operation of the Clause. I hope that he may be able to say that it is their intention that hovercraft shall positively have the benefit of the Clause.

Mr. MacDermot

The Government's intentions are always pure and always good and Treasury Ministers are always pure and always good ard never go beyond that which they are authorised to do. What I am seeking to do is to justify the introduction of the Clause, which is an enabling Clause. I have also made it clear that it is drawn in wide enough terms to enable an order subsequently to include hovercraft. The hon. Gentleman invites me to do that which I said I could not do, which is to give any indication whether, in such an order, hovercraft would or would not be included.

Mr. Edward M. Taylor (Glasgow, Cathcart)

I apologise to the Financial Secretary for not being here for his opening statement and I hope that I shall not cover points which he has already dealt with. There are, however, two points of detail on which I should appreciate his answer. Subsection (2) of the Clause refers to a vessel being sold from one person to another. In other words, it is on the same basis of getting the rebate as is the transfer of ownership from the builder to the shipowner.

In the Clyde area, part of which I represent, we have several shipyards which, when there was a gap in orders, made financial arrangements whereby a yard would build a ship on its own speculation and operate it under a shipping company in which it had an interest. The vessel was on lease and remained the property of the yard. I am not sure whether such a vessel will qualify for the rebate. If there is no purchase of the vessel, if it is not becoming the property of some other person, does it still qualify for rebate? I think the intention of the Clause is that the rebate should be paid in such cases but it would be helpful to know for certain.

This problem does not arise at present but it did arise three or four years ago when there was shortage of work in certain intervals for two Clyde yards in particular. I very much welcome this Clause in so far as it makes clear that the Government accept that there should be no difference financially between orders for export and orders for the home market.

Another point of relevance is the difference in financial arrangements for supplying credit for the purchase of ships abroad and at home. The present arrangements for providing credit for export orders are extremely favourable, but the removal of the shipbuilding credit scheme removed the same valuation or equal preference for ships built here for home owners.

Even if not in the short term, do the Government accept as a principle that an equal position should apply to home orders for home shipowning firms as to ships built for foreign lines in our yards? It would be helpful to have an indication that the Government accept this principle. I appreciate that we could not properly expect an exact indication that this is what may happen immediately, because in our yards the problem is not one of orders but of costs.

There are many orders. Most yards have enough work to keep them going for two, three or four years in some cases. The problem is that many of these contracts were taken on at an un-remunerative price and that there has been substantial escalation of charges and material costs since then. To that extent, the problem is one of cost. The Clause is doubly welcome because it goes some way to relieve the costs of vessels and this is a great help. I recognise that the hon. and learned Gentleman cannot say that the Government will do so at once, but it would be helpful if the Government introduced something on the lines of the shipbuilding credit scheme to provide financial arrangements that would be the same for both home owners and foreign owners.

Mr. MacDermot

I congratulate the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) on not getting pipped at the post. He will find the answer to his first question in my opening remarks. Quite specifically, the answer is, "No". The kind of circumstance he envisages would not qualify for the relief, because the essential conditions for the rebate to be payable are that the vessel must have been constructed in the United Kingdom under a contract with another person and delivered under that contract to that person if this takes place after the date when the relevant scheme comes into force.

The hon. Gentleman's second point was not really relevant to the Clause. He asked whether I could give any indication that the Government would extend the shipbuilding credit terms available to overseas owners to British owners as well. The Geddes Committee considered this argument and rejected it as far as shipbuilding considerations were concerned. Representations have been made. I had a meeting with the Chamber of Shipping and these proposals are under discussion by my right hon. Friend with the Chamber of Shipping.

Mr. Higgins

I apologise for delaying the Committee but I want to take up one point. I stated that the definition dividing ships and boats in this Clause referred to less than 80 tons, whereas, I understand, the Industrial Development Bill upstairs refers to 100 tons and Amendments to that Bill to reduce the figure have not been accepted. Surely, as both these Measures are concerned with tax reliefs and investment incentives, it is desirable that the figure should be the same in both cases.

Mr. MacDermot

I must have notice of that question and, of course, I cannot comment on the other Bill. So far as we are concerned I believe it to be the case that 80 gross tons is the normal dividing line. It is my recollection that it is the line we adopted in the export rebate scheme. But I do not think it profitable for us to go into that matter here and now.

Dame Irene Ward (Tynemouth)

I, too, apologise for not being here when the Financial Secretary opened this discussion. I am glad that the Clause is being put into the Bill. I have not quite grasped what the hon. and learned Gentleman meant when he said that matters were under discussion with the Chamber of Shipping. I presume that the Clause anticipates full discussion with the appropriate bodies covering shipbuilding and shipping. I think that the hon. and learned Gentleman has probably seen the Question that has been put on the Notice Paper by my hon. Friend the Member for Dorset, South (Mr. Evelyn King). Some difficulty arose because it appeared that there had not been consultations before responsibility for shipbuilding was transferred from the Board of Trade to the Ministry of Technology.

When proposals affecting great industries are put forward by the Government, whatever their complexion, I firmly believe that the industries concerned ought to be able to expect to be put into the picture before final decisions are taken. I did not quite follow, therefore, what the hon. and learned Gentleman meant when he said that these matters were under discussion with the Chamber of Shipping. Are those discussions now going on, and is the Chamber of Shipping getting its way? I suppose that the hon. and learned Gentleman could not tell us when we shall be able to debate the Geddes Report, although that would be very helpful when we are adding a provision like this to the Finance Bill.

5.30 p.m.

Mr. Patrick Jenkin (Wanstead and Woodford)

I apologise for intervening, although briefly, but I want to discuss this matter of the 80 tons' and 100 tons' limits for vessels. The Financial Secretary clearly said that 80 tons would be the boundary line. In Committee upstairs on the Industrial Development Bill we argued against the 100-ton limit provided in that Bill. My recollection is that the right hon. Gentleman the Minister of State, Board of Trade, said that he would reconsider the matter. All I am asking now is that his colleague, the hon. Member the Minister of State to the Board of Trade, should draw the right hon. Gentleman's attention to what has just been said by the Financial Secretary, because, clearly, there are obvious advantages in drawing the same lines in both pieces of legislation.

Question put and agreed to.

Clause read a Second time and added to the Bill.