MARINE SURVEY FEES (Hansard, 8 June 1971)

§ Sir Gerald Nabarro (Worcestershire, South)
I seek to raise a matter that is causing grave concern throughout the coastal areas of Britain and on many inland waterways; namely, the precipitate, extortionate, exorbitant and arbitrary increase of marine survey fees by the Department of Trade and Industry, which inherits the responsibility for this important matter from the previous Board of Trade.
I was assaulting the Prime Minister this afternoon on this matter in a supplementary question. I alluded then to this arbitrary increase in the amount of fees by sums varying from 600 per cent. to 1,000 per cent., whereupon my hon. Friend the Member for Tynemouth (Dame Irene Ward) intervened—I am not sure whether the OFFICIAL REPORT heard her, but in 1001 view of her characteristic tones I hope that it did—to say, "900 per cent.".

§ Dame Irene Ward (Tynemouth)
952 per cent.

§ Sir G. Nabarro
Then, 952 per cent.; I am delighted to have my hon. Friend's correction, presumably from examples culled from the Tyneside or the surrounding area.
This matter came to me in a curious way. I was challenged by a television company, whose representative said, "How is it that the hon. Member for Worcestershire, South has an interest in a marine matter of this sort?". It arises from the fact that there is one passenger-carrying vessel—a pleasure craft—plying on the River Avon, which runs for a considerable part of its course through the Worcestershire, South constituency. This pleasure craft is 22 tons, has accommodation for 144 persons, and plies in smooth waters, except when in flood, on the River Avon from Evesham to Fladbury, an ancient village in my constituency.
Formerly the owners of the vessel paid the sum of £15.40 per annum for the statutorily compulsory marine survey fees. On 2nd May last the surveyor arrived in Evesham to carry out his normal annual inspection and informed my constituent, the owner of the vessel, in Evesham, where the vessel was moored, that the new charge would be £92.40, whereupon my constituent gazed at him in stupefaction and said, "My good man, you have clearly made a mistake. No Government Department exhorting wage-earners in industry to abate their claims for advancing wages to a limit of no more than 5 per cent., or one-twentieth per annum, in the interests of stabilising prices, would have the temerity to multiply charges by six times, or an increase of 500 per cent.". The inspector dithered and replied, "But my instructions are so to advance them", whereupon my constituent said, "I shall go to my Member of Parliament without delay".
To me he came, on the morning of 8th May. I took his note, and I came to the House on 10th May and set down a Parliamentary Question, which appeared on the Order Paper for the first time on the morning of 11th May. It was seen by the Press for the first time at 9 o'clock on the morning of 11th May. At 10 o'clock on the morning of 11th May an 1002 official of the Department of Trade and Industry telephoned my constituent at Evesham and said, "You need not pay this for the time being. The Minister is very concerned about a Parliamentary Question, and he has decided that for the time being you need not pay the increased charges—just pay the £15.40. We will deal with the matter later.
The Parliamentary Question was duly taken, and, because the Question could not be reached, a Written Answer was received. I asked the Secretary of State for Trade and Industry: Why his Department has required payment of £92.40 instead of £15.40 previously per half year for a passenger certificate for 'Gaiety', a craft of 22 tons, and 144 passenger capacity, plying on the River Avon in smooth waters in daylight, except when the river is in flood, from Evesham to Fladbury; whether he is raising charges by 500 per cent. generally in this trade; and whether he will make a statement. The reply appeared: Mr. Anthony Grant: The increase results from a revision of 'he Department's marine survey fees on 1st May. These fees, which previously were intended to recover 50 per cent. of the cost of providing the surveys but were failing to do so, have been increased so as to recover the full cost in accordance with Government policy. On average they have risen by 330 per cent. but the actual increase varies from different classes of survey."—[OFFICIAL REPORT, 17th May, 1971; Vol. 817, c. 204.]

§ Lieut.Colonel Colin Mitchell (Aberdeenshire, West)
Is my hon. Friend aware that this increase is also hotly resented by the Scottish Trawlers' Federation and its English counterpart and that what he is raising in principle is a matter of great detail to the trawler men, who have the support of hon. Members opposite, too?

§ Sir G. Nabarro
I am delighted to have the support of my hon. and gallant Friend the Member for Aberdeenshire, West (Lt.-Col. Colin Mitchell). This is a matter of great moment in Aberdeen, Peterhead and Stonehaven.

§ Mr. R. J. Maxwell-Hyslop (Tiverton)
And to fishermen in Tiverton.

§ Sir G. Nabarro
And to fishermen in Tiverton.

§ Dame Irene Ward
Is my hon. Friend aware that I, too, asked a Question at about the same time? The answer showed an increase of 952 per cent. for some Tyneside firms which manufacture 1003 lifebuoys and lifebelts and so on. My hon. Friend will be interested to know that I got the same reply, in writing, too.

§ Sir G. Nabarro
I am grateful to my hon. Friend. We have support from Aberdeen, Stonehaven, Peterhead, Tyne-mouth, Tiverton, Evesham and North-East Essex, which brings in Felixstowe and Harwich. We are taking a trip around the United Kingdom. I hope that I am impressing on my hon. Friend the Minister for Industry that this is not a parochial matter for County Worcestershire, or a matter relating only to the ancient Borough of Evesham, where all this parliamentary nonsense began in 1265, but a matter which affects the whole country.

§ Mr. Ronald King Murray (Edinburgh, Leith)
I am grateful to the hon. Gentleman for giving way. It is also of concern to trawler men working out of Leith and Granton. Will the hon. Gentleman bear in mind that it is not only charges which are germane to this matter but the somewhat dictatorial attitude on the part of the inspectors who seem to choose a place and time, even though they may be inconvenient to the trawler owner or the trawler skipper and may cost them a great deal of money because they have to remain in port when they could be at sea fishing?

§ Sir G. Nabarro
I am getting support from all quarters, which is most acceptable on this important occasion.
I said that this increase in charges was arbitrary. We are a seafaring nation. We depend on lifeboats voluntarily manned at all our ports. I was appalled to read a report in the Daily Mail, which I have since learnt to be strictly accurate, to the effect that this arbitrary decision by the Ministry would mean raising lifeboat charges by 1,000 per cent., or 11 times the former charge. I quote the Daily Mail of 25th May: Charges may 'sink' lifeboats. Britain's two biggest lifeboat makers are threatening to stop production. They say they cannot carry on because of a 1,000 p.c. increase in the Government charge for compulsory marine surveys on the boats. Viking Marine, of Gosport, Hampshire, and Watercraft, of East Molesey, Surrey, produce 80 p.c. of ships' lifeboats made in this country. 1004 The annual marine survey bills will go up to about £45,000 from £4,000 for Viking and £20,000 from £2,000 for Watercraft.

§ Mr. Eric S. Heffer (Liverpool, Walton)
Scandalous!

§ Sir G. Nabarro
I agree—scandalous. The report goes on: Mr. Derek Gill, managing director of Watercraft, said yesterday: 'For our £20,000 we will get one man, usually the same chap, who works about two-and-a-half days a week carrying out tests on our boats.' Both firms have protested to the Department of Trade and Industry. The Parliamentary Under-Secretary of State at the Department, Mr. Anthony Grant, has promised an inquiry. Last night a Department spokesman explained: 'The costs were increased with Treasury backing in order to recover 100 p.c. of the full cost of a marine survey. Surveyors' salaries, travelling costs and expenses have to be met. And the surveys on lifeboats are very strict.' I agree with all those platitudes. The Under-Secretary of State loves teaching his colleagues to suck eggs. I am not impressed. If it is the fact that the Department recovered only 50 per cent. of the true economic cost before these increases, and if it had decided, very properly, to recover the full economic cost, it would have led to a doubling of the charges. But, even allowing for increases in overhead expenses, increases in office accommodation and all the other inflationary tendencies of the last 12 months, it would not have been possible to raise the true economic cost of this operation by more than two and a half times. This is a manifestation of the position comparing the pre-increases with the post-increase charges, the post-increases applicable from 1st May.
But it is not two and a half times. It is 10 times. Therefore, it seems evident to me that no proper accounting or financial homework has been done in the Department. This has been some sloppy bureaucratic operation without due regard to the true circumstances, and I propose now to lead a deputation to the Minister, who will receive me, on behalf of all coastal and inland craft subjected to this exorbitant and extortionate increase in these legislatively compulsory charges from which a craft owner has no escape.

§ Mr. James Hill (Southampton, Test)
Is my hon. Friend aware that even for a simple thing like an inflatable life raft 1005 the charge is doubled for weekend work? It seems that on a Saturday it is only £20 per hour to inspect an inflatable life raft plus £10 per hour for travelling, which in an area like Southampton is a minimal amount. On Sunday, however, when a vessel may want a quick turn-round at the weekend, the charge is doubled to £40 per hour for inspection and £20 per hour for travelling.

§ Sir G. Nabarro
I am grateful for that ample confirmation from the Port of Southampton. We have gone round all the principal ports.

§ Mr. Heffer
Including Liverpool.

§ Sir G. Nabarro
I had the hon. Gentleman's intervention earlier carefully recorded in HANSARD. I repeated it because he speaks for Liverpool. He uttered the single word "scandalous" and has given me the ample support which I sought.
I want to quote now from that representative journal, the Western Morning News of 19th May. It said: Angry South Devon boatmen met at Teignmouth last night and decided to fight the new Government survey fees for pleasure boats. Increases of over 600 per cent. were suddenly announced by the Department of Trade and Industry last week, and many boatmen fear their livelihoods are now in jeopardy. Some charges have risen from about £20 to over £130. Their spokesman, Mr. Stan Hook, of Teignmouth, concluded his statement by saying: 'I would like Edward Heath to know that if he got into trouble on Teignmouth Bar it would more than likely be one of the boats that is paying this exorbitant fee that would rescue him'. I pray, for the sanctity and security of the Conservative Party, that "Morning Cloud" does not get into trouble near Teignmouth.
These charges are a direct threat to the lifeboat service. They are a direct threat to many classes of coastal craft essential to our livelihood. They are a direct threat to innumerable pleasure craft on inland waterways, notably where, for example, the teeming millions of industrial workers in the Midlands seek their recreation at weekends, at Stour-port-on-Severn, in Worcestershire, at Evesham, in Worcestershire, at Stratford-on-Avon, in Warwickshire, where many boats in this class are moored.
1006 We have learned to our discredit that the index of retail prices has risen by 8.8 per cent. in the 12 months since June, 1970. I was informed at Question time today that food prices had risen in the same period by 8.5 per cent. as well. These are grave and anxious figures. But, as I told the Prime Minister today, the Government should set an example. The Government should not lecture the workers that they cannot have more than 5 per cent. per annum increase in their wages; the Government should not lecture motor manufacturers that they may not give 10 or 15 or 20 per cent. increases; the Treasury should not be lecturing firms as to the level of their dividend distribution in relation to their profits. Governments should practice what they preach. Governments have no right whatever to demand 600, 800, 900, 1,000 per cent. increases in fees overnight.
I thoroughly resent this. The whole House resents it. The people of this country, when they learn about it, will resent it. It is not going to rest on the outcome of this short debate. I will harry the Government with these simple words: they will as long as I sit behind them practice what they preach and demonstrate to the people that they are intent on stopping inflation and not stoking the fires of inflation as this disgraceful increase of marine survey charges so amply demonstrates.

§ The Minister for Industry (Sir John Eden)
My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) has spoken strongly on a subject about which many other hon. Members also feel strongly. I hope that in the short time available to me I shall be able to do justice to the arguments he has put forward.
I must first try to give some idea of the background to this proposition. To do that it is necessary to go back to 1923. The Fees (Increase) Act then laid down that the fees charged for marine surveys should recover not more than 50 per cent. of the cost of providing the services. This continued to be a statutory requirement by virtue of the Economy (Miscellaneous Provisions) Act, 1926, until it was repealed in 1935. The fees, however, continued to be fixed at levels which were intended to recover only 50 per cent. of the cost of providing the fee-earning services.
1007 The previous Administration looked at this and towards the end of 1968 decided that from a date to be announced the fees should be increased so as to recover the full cost of the fee-earning services. The then Government notified the shipping industry in April 1969 and consultations have since taken place.

§ Mr. Maxwell-Hyslop
Not true. Will my hon. Friend allow me?

§ Sir J. Eden
When we came into office and had the chance to study what was being proposed, it was clear that the objective was in line with our own general policy that services should be paid for by the industries which made use of them. This is very much in keeping with the general intentions behind the reference in Command Paper 4515, the White Paper describing the new policy for public spending published in October of last year, in which it was said that the scope of charges in the public services generally ought to be in line with costs where appropriate.
We had to set about revising the fee. This was a difficult operation and I would like to try to explain how this has taken place, since it may show why such large increases were necessary and why they have had to affect small boat operators as well as the large ocean-going passenger liners in the way that they have.

§ Sir J. Eden
I am sorry, I cannot give way. I beg the House to allow me to proceed because I have a lot to say and I must try to get through it. In the first place, although the fees in force before 1st May had nominally been intended to recover 50 per cent. of the cost of providing the fee-earning services they were failing to do so by a very substantial margin. This was because of cost increases since they were last generally revised in 1967. Together with other factors this meant that for 100 per cent. recovery we had not merely to double the fees in force before 1st May but to increase them on average by a factor of 4.3. The difference between the cost of the services and the revenue we were recovering was running at a rate of more than £100,000 a month.
Apart from that the fee structure had become distorted over the years so as 1008 to produce variations in the proportions of their costs recovered by different surveys. Ideally what was needed was a complete recosting of the service in detail so as to ensure that every separate function recovered its proper costs.

§ Mr. Ronald King Murray
Would the hon. Gentleman give way on this point which I think would assist him?

§ Sir J. Eden
This would have been a massive task and to have carried out a survey of that detail would have involved quite a disproportionate amount of time and effort, and even if that had been done we could not have guaranteed that the charge in an individual case would have matched the costs actually incurred because the amount of work can vary from ship to ship. We then considered charging for every job according to the time spent on it by the surveyor. This was the point implied by my hon. Friend in one of his observations. This certainly had attractions but it also had disadvantages particularly in the scope it offered for endless argument about what is a proper charge in particular circumstances. The disadvantages seemed to be more substantial than the attractions. The only other possibility was a limited costing, designed to remove major anomalies between the various broad classes of survey. This is the one we chose.
This exercise produced the range of multipliers to which my hon. Friend has referred, from 2 for tonnage measure-meant to 9.6 for safety equipment certificates. The increase in the fees for passenger certificates was of the order of 6.1. This applied to the smaller craft as well as to the larger ones. I am sure that it is right to insist, in the case of small craft, that they should be surveyed. Although most of them to do not go far out to sea, and in the case of those belonging to my hon. Friend's constituents probably not at all, many are capable of carrying substantial numbers of passengers who may be at least as much at risk as on board an ocean liner.
It is for this reason that there is the statutory requirement that every vessel carrying more than 12 passengers for hire or reward should be issued with a passenger certificate and undergo the necessary survey. This may not be a very complicated matter for a small vessel but 1009 it does take up a certain amount of the surveyors' time, it involves travel and it does mean having qualified staff available. There are costs which have to be recovered. Because of the way in which the costing was carried out I would not claim that any particular fee represented the exact cost of performing a particular survey on a particular vessel.
My hon. Friend has spoken about two cases especially: the small passenger craft and the manufacturers of lifeboats. I have had a very close look at these matters. As the House knows, my hon. Friend is away, or he would have been at the Dispatch Box instead of me. I have had a very close look at these matters, and I am doing my best to try to find a way of meeting cases of particular hardship.
I believe that the case of the small passenger boat operators is one such, both because of the size of the fees themselves and because, in the absence of any national organisation specifically representing them, they did not receive the same notice of our intentions to increase the fees by this amount, or to increase them at all, as did the larger boat operators.

§ Sir G. Nabarro
May I ask my hon. Friend one quick question? Will he please concentrate on the lifeboat position, which is of critical importance?

§ Mr. Ronald King Murray
Will the Minister also deal with the cost——

§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
Order.

§ Sir J. Eden
I have therefore decided——

§ Mr. Murray
On a point of order——

An Hon. Member
Do not be silly.

§ Mr. Murray
Is it in order for the Minister to give way to an hon. Member from his side and not to give way to an hon. Member from this side?

§ Mr. Deputy Speaker
Order. The Minister gives way to whomsoever he chooses, as the hon. and learned Gentleman knows.

§ Sir J. Eden
I have therefore decided to introduce a new step in the scale of 1010 fees for passenger certificates applying to vessels not exceeding 25 tons. The fee for a full passenger certificate for vessels in this category will be £67 instead of the present £134, and there will be corresponding reductions in certain related certificates of limited validity. As these are statutory fees, it will be necessary to amend the Merchant Shipping (Fees) Regulations, 1971, now before the House, and I will arrange for the introduction of amending regulations as quickly as possible.
Another point which has been specifically raised which needs to be looked at very closely indeed concerns the inspection and certification by the Department's surveyors at manufacturers' works of lifeboats and lifejackets forming part of a production run. This is a service which I am sure the industry value because it enables manufacturers to market their products with the benefit of the Department's certificate of approval, with considerable benefit to their export business. The service is in the class which has attracted the highest increase, and, like the small boat operators, they had virtually no notice of it. Because much of their business is on the basis of fixed price contracts they are thus faced with substantially increased costs which for some time to come they will be unable to recover.
This is not a statutory service, but one which the Department provides contractually. Even so, there seems to be a case for finding some means of mitigating the impact of the new fees. I propose to do this by reducing the amount of inspection undertaken by the Department's surveyors where production items form part of a run conforming to an approved prototype and relying more on inspection arrangements operated by the firms themselves with the Department's approval. These will have to be so organised that there is no diminution in safety. The details have yet to be worked out, but it has been estimated that it will be possible on this basis to reduce the amount of inspection by the Department to about one-quarter of its present level, and I propose to reduce the fees to the same extent. The fees for inspection and certification of a prototype would, however, have to remain at the levels effective from 1st May.
1011 These changes are being made to meet the special cases of hardship highlighted by my hon. Friend and by the observations which have been made both through Parliamentary Questions and in correspondence with the Department. I know that they do not go as far as hon. Members would wish. I should say to those who have mentioned the trawlermen that, in general, fishing vessels are not required by Statute to be surveyed. This is a voluntarily operation on their part. However, representatives of the two trawler federations have been having further discussions at the Department today and we shall be pursuing this matter with them. I hope that, limited though 1012 they are—which I recognise—these reductions will be of some help to those whose interests my hon. Friend and others who have interjected have so effectively represented tonight.

§ Sir G. Nabarro
Before my hon. Friend sits down, I should like to express my gratitude for this crumb of comfort. I shall certainly examine his revised regulations with much avidity and great care, as will all my hon. Friends interested in this critically important matter. I am grateful for the crumb of comfort which he has given this evening.