HC Deb 06 July 1981 vol 8 cc32-71 4.14 pm
Mr. Clinton Davis (Hackney, Central)

I beg to move, That this House deplores the part played by Her Majesty's Government in opposing moves to take action against flags of convenience at the recent meetings of the Shipping Committee of the United Nations Conference on Trade and Development in Geneva and, more particularly, in its decision to vote against the recommendations supported overwhelmingly by the Third World countries on 6th June 1981; and, furthermore, considers that this action reflects the complete failure of Her Majesty's Government to work out a coherent shipping policy for the United Kingdom.

I start with the last part of the motion, which deals with the Government's lack of a coherent shipping policy. Nothing demonstrates that more forcefully than the abdication of responsibility by the Government during the recent shipping dispute, when they permitted a damaging and prolonged dispute to arise which fomented enormous bitterness that may take years to disperse and that was totally avoidable if only the Government had used their good offices to ensure that the reasonable request made by the National Union of Seamen and by my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) and myself that the dispute should be referred to arbitration was met. If only the Government had done that, the dispute would have been avoided—and, ultimately, it was done. It is grotesque that a Government should stand back on the sidelines when a collision of that kind is likely to occur.

I might also say that I am totally sickened by the sort of intervention that we had during our last Question Time on trade matters by the hon. Member for Epsom and Ewell (Mr. Hamilton), who described the wages of our seamen as exorbitant. It may be very nice for an hon. Member coming from the pastures of Epsom so to describe the wages of our seamen, but that is not how the arbitrators decided. What the Government failed to do on this significant occasion is itself sufficient to condemn them in the terms of the motion.

On the morning of Saturday 6 June a monumentally important decision was taken by the shipping committee of UNCTAD, sitting in Geneva. As the culmination of nine days of debate and, unhappily, abortive negotiations to arrive at a compromise solution, which could have been adopted unanimously if only there had been some give on the part of the developed shipping nations to make some progress, a resolution was passed, by 49 votes to 18, calling for effective action to start against the scandal of flags of convenience.

That represented the real beginning of concerted international action, following determined and increasing efforts over more than three decades by shipowners to resort to flags of convenience. Incidentally, they are aptly titled, since they are flags which are far less inconvenient than the traditional flags for those unscrupulous shipowners who wish to avoid the stringent conditions imposed by genuine maritime countries in exchange for the privilege of flying their flags—and it is a privilege.

I had hoped that the response of the British Government would be to associate us with the aspirations of the Third world to obtain a fairer share of world shipping and trade, to seize the opportunity to refute the claim of the Communist nations to exercise a monopoly of concern about the plight of the poor of the world, and to give a decisive lead to the traditional maritime Powers. I am convinced that that would have been the line taken by my right hon. Friend the Member for Lanarkshire, North if we had been in office. It would have made sense morally and in terms of our economic self-interest.

Let us make no mistake about it. There is overwhelming evidence that the growth of flag of convenience shipping has decimated the traditional flags, including our own, as well as playing a leading role in thwarting the legitimate interests of the developing nations. Our Government, not content with voting against what was by any standards a moderate resolution, were instrumental in leading resistance to any action being taken against the open registries. I believe that to have been shortsighted and in conflict with the long-term interests of our own shipping, and that it was motivated, in part at least, by the Government's dogmatic dislike of effective trade unionism even where its absence can be shown demonstrably to lead to the denial of basic human rights, as is clearly the case with many flag of convenience shipping countries.

Mr. Anthony Grant (Harrow, Central)

I have been listening with keen interest to the hon. Gentleman's condemnation of the Government. One question arises immediately, and I think that the House would like him to answer it. When he was in office—and he was there for five years—the Labour Government pursued the same policy as the previous Conservative Government of which I was a member, and the same policy as this Government are now following. The hon. Gentleman was in the Department of Trade for five years, and I understand from a recent speech of his that there was concern about the matter from an early stage. What were he and the previous Government doing?

Mr. Davis

The hon. Gentleman is mistaking the position if he identifies the policy that we pursued with that of the present Government. If, before the UNCTAD meeting, the Government had said "We cannot act unilaterally", we should have understood the position, but surely it would be appropriate when, for the first time, an international debate is going on, with a resolution before UNCTAD, for the Government to associate themselves with it.

I made no bones about my attitude to flags of convenience during my time at the Department. What is more, the hon. Gentleman is wrong to say that we did nothing about it. We introduced a policy which, happily, received the support of both sides of the industry to do something which our own industry regarded as an abuse. That was a gross disparity between the non-domiciled seafarers' rates and the rates of those who were United Kingdom registered seafarers. That would have been eliminated. That was the result of a patient and exhaustive inquiry. What has happened to that under the Government? As in so many other respects, the Government remain inert.

I reject the allegation that the hon. Member for Harrow, Central (Mr. Grant) made. Time and time again, both nationally and internationally, the Labour Government stated their detestation of flags of convenience. I repeat that if my right hon. Friend and I had been in office there would have been no question of where we stood.

Indeed, the Government are out of step with previous Conservative Governments and with British shipowners. They took a diametrically opposing view in the 1950s and 1960s, and in those days flag of convenience shipping was less of a problem. When Sir Robert Ropner was president of the Chamber of Shipping he called flag of convenience shipping "Public enemy No. 1". Mr. Hugh Hogarth, a well-known tramp-ship owner—not a ship-owning tramp—spoke of The evil of the principle behind the flag of convenience". The concept was evil and there was serious and unfair competition from those untaxed fleets.

A director of the Shipping Federation, Sir Richard Sneddon, said that the flag of convenience was the greatest menace by which British shipping is threatened today, threatening the livelihoods of shipowners and seafarers, and in some cases the very economy of the truly maritime countries". That was how he described the flag of convenience in those days.

So seriously was the threat viewed by the Macmillan Government in 1959 that they tried, unsuccessfully, to keep flags of convenience out of the maritime safety committee of the Inter-Governmental Maritime Consultative Organisation. No words could have been more disparaging to flags of convenience than those uttered by British shipowners and Ministers in those days, but since then flags of convenience have gone from strength to strength and now control about one-third of the world's shipping. The menace, referred to by Sir Richard Sneddon, has grown proportionately.

With the growth in flags of convenience, the casualty rate has reached unprecedented and horrifying proportions. In terms of gross tonnes, 71 per cent. of the losses at sea sustained in 1978 and 1979 were of flag of convenience and Greek ships. The argument cannot be that that is because they have older ships, because while the Liberian flag is much younger than the world average, its casualty rate is above that of virtually every European country except Greece.

What has caused this dyspeptic wind of change or political burp of the British Government? Let us examine some of the reasons that have been advanced, including those in the briefing of the General Council of British Shipping, which, no doubt, all hon. Members have had. It says: There is no convincing evidence to the effect that open registry vessels are prejudicial to developing countries, to world trade or shipping in general". It takes a bit of nerve to advance that argument , because if one rips away the tinsel one can see the gaping holes revealed below.

I believe that the Third world rejects the patronising sermons that are advanced from time to time by the OECD countries, that to phase out the flags of convenience would be inimical to the interests of the Third world. I think that the Government should remember the old quatrain: A little murder now and then, A little burglarising, Won't earn the hate of fellow men, As much as patronising". It is the patronising argument that is advanced time and time again by the Government, by the Minister, by the General Council of British Shipping and by the OECD. The Third world countries reject it because they know that the argument is not only about substandard shipping. That is important, but it is also important that the Government should use more resources—far more than they are prepared to use as a result of their cutbacks—to ensure that port control becomes effective and that they do not just pay lip-service to it. The Third world and every critic of Government policy recognise that that is an excuse for not tackling the problem at its source. They reject the argument because they know what it is all about. They regard the flag of convenience as a mechanism to ensure that developed nations, through multinational corporations, keep control over world shipping, even when they consider that operations under their own flags are becoming increasingly uneconomic.

The Third world knows that the considerable rewards that are gained by flag of convenience vessels are not rewards for ordinary people in their country. Even the countries of registry of flag of convenience ships derive little or no advantage. They know that the bulk of registration fees and tonnage duties ends up in other pockets. They know that there is no thought of putting those moneys into hospitals and welfare services, or into improving the living standards in areas of desperate poverty. They know that most flag of convenience operators are more concerned with cutting labour costs and exploiting seafarers than in providing genuine employment opportunities. They know that there is no genuine link with their own economies and that they are excluded from effective decision-making which affects such operations.

That is illustrated by asking: where does power lie with a flag of convenience? One will find the administrative headquarters of the Somali fleet not in Mogadishu but in an office on the Place Vendome in Paris. One will not go to Monrovia expecting to register a ship under the Liberian flag, but to 103 Park Avenue, New York City, where the Liberian fleet is administered not by Liberians but by Americans.

The latest ludicrous suggestion—perhaps it is even sinister—is the one to which I referred in a debate at an ungodly hour on 21 May—perhaps it was 22 May by that time. Mr Richard Dresner, a London lawyer, announced that he was trying to flog off flag of convenience registrations over the counter in London by using some sort of legal device. He was reported in Lloyd's List as saying that recognised flag of convenience countries, such as Liberia and Panama, are now becoming much more particular about their requirements and are trying to go up-market and become respectable. He says that that is leaving room in the market for a wider and more streamlined service to owners. That is the gap that he is aiming for. He is planning to sell flag of convenience registrations over the counter—a sort of flag of convenience supermarket. One wonders what is next in line—Tesco's or Sainsburys? I am glad to inform the House that a colleague of the Minister informed me that Mr. Dresner has not yet had a customer. I am not against small businesses—I am all for them—but I hope that business stays that way for him.

At Question Time on 1 June the second line of defence was advanced—as it had been several times before by Ministers—by the Secretary of State. He said: We wish to see the preservation of competitive international conditions for shipping in which each nation is free to set its own conditions for admission to its register, subject to the full observation of internationally agreed safety standards".— [Offical Report; 1 June 1981, Vol. 5, c. 628.] I found that difficult to take, too, because one knows that the vast majority of flag of convenience countries do not fully observe internationally agreed safety standards.

I pose a question to which I hope that the Minister will reply at the end of the debate. When there has been talk about the Soviet threat, how is it that this and successive Governments have responded to requests for intervention from shipowners who complain that the Soviet Union undertakes unfair competition? They are right. It does. It has its internal pricing policies, and it has imposed abnormally low rates to undercut our cargo ships.

The Government in which I served knew, and the present Government know, that retaliation has been suggested as a way of fighting that threat. However, when it comes to flags of convenience they seem to apply to the doctrine of militant inertia. Is not the challenge posed by open registries at least equally based on unfair practices? I cite some examples: freedom from taxation; freedom from applying mandatory international obligations; freedom not to reveal the identities of shipowners when a vessel is in trouble; and freedom from having to recognise trade unions and decent hard-won standards. Here I pay tribute to the work of the ITF and the seafaring unions the world over, which have struggled so hard under the most difficult conditions to achieve those standards.

Further examples of unfair practices are: freedom from national manning scales, wage scales and social security requirements; freedom to recruit crews of any nationality and in the cheapest markets; freedom from restrictions on raising or transferring capital; freedom from obligations to train crews, which all traditional maritime countries willingly accept; and freedom from competent judicial State investigations when casualties occur. I readily admit that not every flag of convenience operator functions in those ways, but the majority do, and their predatory activities threaten seafarers' jobs here, in Europe and elsewhere.

A distinguished Swedish professor said that vessels flying flags of convenience represent a form of capital that is not subject to social control. That is right. Indeed, that is the name of the game. It is about cutting costs regardless of risk, which is why unscrupulous owners do it. That is the case against the flag of convenience.

It is all the more sad that potential refugees from our own flag have had their task made much easier by one of the Government's first acts—the abolition of exchange control regulations. How easy it becomes for the shipowner to resist every reasonable demand for a wage increase with the blackmailing threat of "Well, we will have to move to a flag of convenience if you go ahead with this claim". That is an echo of words which are now notorious, which were used at the bank rate tribunal nearly 25 years ago: It may not be patriotic but it makes sense to me".

It is equally reprehensible—if not more so—when the game is played by publicly owned enterprises. Last week I wrote to Lord Trefgarne and to British Underwater Engineering Ltd, in which the National Enterprise Board owns a 70 per cent. interest. I learnt that it was operating eight submersible support ships, five of them under the Bermudan flag and three under the British flag, each vessel owned by a separate subsidiary company of BUE Ltd.

Those five ships flying the Bermudan flag employ Spanish crews, with British masters, and certain other certificated British officers when the vessels are operating in British waters. It is extremely reprehensible and provocative for the NEB to be party to the use of flags of convenience vessels. I received a reply from BUE Ltd., and the first point that it made was extremely important. It said: British operators receive no protection on the United Kingdom Continental Shelf where marine operations are foreign dominated. BUE's present marine operations are marginal in the extreme and without the ability to operate commercially might well have to be terminated, the conseqent loss of employment falling mainly in the Leith area".

That situation is arising time and again. I believe that, the Government should now take action to protect our own shipping, because other nations are doing precisely the same and taking advantage of the opportunities available in the North Sea and elsewhere. I repeat that it is appalling for a subsidiary of the NEB to use flags of convenience vessels.

Just as there is a gap in confidence between the advanced and the developing shipping nations, so a major gap in confidence has been revealed by the recent shipping dispute to which I referred earlier. That gap impairs our ability to deal with major issues, both national and international, affecting the future of our industry. How we deal with the Soviet threat, the liner code, a possible bulk code and flags of convenience all beg the question "How do we see the shape of the industry in the decade ahead?"

Let me state three propositions which, on the face of them, are, I think, uncontroversial. First, the merchant fleet is an integral part of our industrial and defence strategic effort. Secondly, we must always strive to maintain the highest standards of shipping and seafaring. Thirdly, we must continually seek to enhance the reputation of IMCO, to implement and adhere to its decisions with the utmost rapidity and care, and continually seek to introduce new initiatives to strengthen shipping safety and standards.

In 1977 we did just that by suggesting the idea of a marine safety corps to be applied internationally, so that IMCO could go to the help of developing shipping nations and assist in their safety standards. That, incidentally, may be part of the answer to the hon. Member for Harrow, Central.

In that connection I beg the Government not to treat IMCO expenditure like any other of their capricious cost-cutting exercises. Its work is invaluable in terms of saving lives. The Government must do nothing on the altar of economy to damage the superb co-operation that has been built up at IMCO, most notably under the present Secretary-General, Mr. Srivastava.

Uncontentious though my propositions are, they can all be impaled on the doctrine that market forces must prevail in shipping. However, in my view those propositions are not negotiable, and I conclude, therefore, that market forces have only a limited relevance to shipping.

If the Merchant Navy is vital to our industry and our defence efforts—the General Council of British Shipping was at pains to brief Members for the debate on the defence White Paper and point out that the merchant shipping effort was vital—can we really go on accepting a continuing reduction in the size of our fleet, with the ultimate logic that we shall become dependent upon other flags for the transport of materials essential to our economy and defence effort?

Whatever arrangements one may make with flag of convenience countries to repatriate ships in an emergency—there is always some doubt about the efficacy of such arrangements—the fact is that skilled seafarers cannot be produced at a stroke. High standards of safety, manning and adherence to international codes can be expensive, particularly if viewed in the light of the permissive approach of some of our competitors. Yet to forsake them is, I hope, unthinkable if we are to seek to provide an example to others and to maintain a position of primacy in such matters.

Our own seafarers also expect, and are entitled to, increasing standards of pay and working conditions. Over the years they have secured massive improvements in productivity. Effective and expert crews can be sustained only if the conditions are right. It is surely common ground that we cannot compare our standards with those applied by the majority of flag of convenience countries, or even by some developing countries.

It is asserted by the owners that we are not competitive with other Western European Nations. Of course that sort of proposition has to be looked at with care—as, indeed, it was during the recent arbitration—but how do we compete if some shipowners see more and more advantage in paying lower wages, in applying worse conditions, and in resorting to a movement away from the traditional flags to the more dubious ones? Yet that is the obvious logic of market forces. Is it thinkable that we might accept the lowest common denominators in terms of safety and conditions of working, all to save money?

We must not only appreciate the profound threat that exists; we have to recognise that hitherto unconventional methods may be required to cope with it. The time has come for us to recognise the growing threat of protectionism. However undesirable this may have appeared in the past, we need to retaliate where protectionism is practised against us, as is the case with the United States.

There is a strong case for reviving a provision in the Labour Government's Merchant Shipping Bill—a provision that we were forced to discard as the price of getting the Bill, following the lost vote of confidence in March 1979. It was designed to prohibit undesirable foreign take-overs of British shipping. That was another case of lack of consistency on the part of the shipowners. First they wanted it, then they did not. Now they might be having second thoughts again.

The nation should have a stake in our shipping industry. I do not accept the operation of an unrestricted free market economy in shipping, as I have said before. I hope that before the next general election we shall devise a practical policy designed to meet our essential interests where they are under threat.

I advance this argument not from any ideological or doctrinaire stance but for purely pragmatic reasons. It is part of mobilising a defence strategy to retain a powerful and competitive shipping industry, which is vital to our national interest. I advance it because the Government have failed on so many counts, nationally and internationally. They have failed to intervene to prevent a wholly avoidable, damaging and long dispute, by insisting on arbitration, as they could have done. Instead, they have sat back and idled their time away. They have failed to put forward a cohesive policy in international terms. They have failed to bring forward at any time over the years any sort of material statement on shipping policy.

For all these reasons the Government stand condemned, and I invite the House to support the motion in the Division Lobby this evening.

4.43 pm
The Under-Secretary of State for Trade (Mr. Reginald Eyre)

I welcome this opportunity to set out the Government's position on shipping debates in UNCTAD and to place this in the context of our general shipping policy. The economic health of our shipping industry is most important to this Government—and in the shipping industry we include the shipowners, the seafarers and the shippers, for only through the contributions of all these interested parties can the industry benefit the nation as a whole.

It is well known that one-third of the United Kingdom's national income consists of international trade, and that the vast majority of this moves by sea. It is no exaggeration to say that we live by our seaborne trade. We therefore have the strongest interest in maintaining free access to efficient and economic shipping services.

We also have, and want to maintain, a strong merchant fleet of our own, which is an important invisible earner and an important employer. In 1980 the gross overseas earnings of the United Kingdom's shipping industry were over £3 billion. We need to bear in mind also that more than half of its earnings are made in the cross-trades—that is, British ships carrying cargoes neither to nor from the United Kingdom. Therefore we, perhaps more than many other nations, have a strong interest in preserving, as far as we can, an open world market in shipping services. Our shipping industry's earnings depend on this and our seafarers' livelihoods depend on it.

Because shipping moves world-wide it is exposed to protectionism and the restrictionist measures which countries may place on the freedom of shipping. These measures are equally damaging to our interests, whether they are designed to reserve or share cargo for a country's own shipping lines or whether they are simply designed to prevent access to its ports by the shipping of a third country. Our stake in the freedom of the world shipping market is such that we must resist restrictions on free access to shipping wherever they are proposed. They threaten our shipping earnings; they threaten our seafarers' jobs; they raise the cost of international trade on which as a nation we depend. It is within this context that we must consider the question that is before us today.

The Hon. Member for Hackney, Central (Mr. Davis) urged the Government to support proposals which in our view would do much more harm than good to our shipping industry and to the jobs that depend on it. The background is a proposal by the UNCTAD secretariat—for which it has so far obtained support from the developing country and Communist blocs—that what are called "flags of convenience" should be, in the rather slippery jargon, "phased out". What they mean in practice is that an international convention should be concluded whose signatories should pledge themselves to shut their ports to the shipping of non-signatories for nothing worse than the wrong of keeping their shipping registers too open to international investment—in effect, United Nations economic sanctions invoked on a few small countries for purely economic reasons.

What a dangerous precedent that would set—dangerous, above all, for the British shipping industry, with its dependence on the ports of the world remaining open to it, and with all the jobs that depend on it. But the hon. Member—contrary to policy interests which he supported as a Minister—has recommended that the British Government should support that proposal.

Mr. Clinton Davis

Would the hon. Gentleman give further and better particulars of that allegation? When did UNCTAD consider this matter previously? When did I give support such as he is giving to flag of convenience countries, thereby aiding and abetting the worst possible abuses?

Mr. Eyre

The hon. Gentleman was, of course, in office in the Department of Trade, with the responsibility for shipping, for a long time. He was, therefore, responsible for the attitude of the Government towards shipping during that period in a way that justifies me in saying that the policy he has developed this afternoon is substantially different from that which he pursued as a Minister.

Mr. Davis

The hon. Gentleman must provide evidence. It is no good making bare assertions and then running away.

Mr. Eyre

I put the matter to the hon. Gentleman in these terms. The Department of Trade policy on flags of convenience is the same now as it was during the five years when he was a Minister. Our policy with regard to flags of convenience, which we shall discuss in detail, is unchanged from that pursued during the period when the hon. Gentleman was in office.

Mr. Davis

I promise not to keep on intervening. I think that the easiest way to deal with the matter is simply to put on record that the hon. Gentleman is not right.

Mr. Eyre

If I am not right, I accept it from the hon. Gentleman. I should like him to allow us to proceed through the consideration of this matter. He knows that I have no desire to mislead the House. I think, however, that I am justified in saying that his attitude towards flags of convenience in the speech that he has made today is substantially different from that which would have flowed from his previous position. We can perhaps come back to this point during the debate. I have no desire to mislead the House about the hon. Gentleman's position. I seek merely to debate his policy as he has advocated it.

We have to be very critical in our examination of the hon. Gentleman's reasons for developing the proposal that he has put forward this afternoon. He has said many things against flags of convenience. What he has not done is to tell us exactly what they are. This is not surprising because the truth is that the flag of convenience is little more than a term of abuse. It certainly has no internationally agreed meaning. If it has a meaning at all, it refers to national shipping registers which are open to ships beneficially owned in another country. But we should never forget that, although this is the only definition on hand, it includes the British register, as over 40 per cent. of United Kingdom tonnage is beneficially owned abroad.

I shall briefly explain what the Government believe would be the consequences of an indiscriminate assault on certain shipping nations that I believe the hon. Member is endorsing, and why the United Kingdom, like other industrialised democracies, has opposed it.

The proposal would do nothing to improve safety at sea; do nothing to control maritime pollution; threaten directly over 40 per cent. of the British fleet; and threaten indirectly the trading opportunities of much of the rest of our fleet.

For both the last two reasons it would put British seafarers' jobs at hazard. It would raise the cost of world shipping, damaging the trade of both developed and developing countries, abridge the rights of certain other countries to self-determination in an aspect of their economic policy, and repudiate our obligation under the ports convention to avoid discrimination against other countries' shipping.

One of the most important questions affected by that list is safety. The hon. Gentleman has, in effect, asked us to believe that shipping would be safer if only all ships had to be owned by nationals of the countries in which they were registered. In the light of our experience of accidents at sea it is hard to see why that should be so.

Hon. Members on both sides of the House have frequently raised questions of safety and of the pollution of the maritime environment, and I believe they are quite right to do so. I am sure that there is no question concerning the United Kingdom's record, as it is second to none, both on the implementation of internationally agreed safety and social standards and on their enforcement. We have implemented more IMCO conventions relating to maritime safety and marine pollution than any other maritime nation. I am happy to join the hon. Gentleman in paying tribute to the work of the Inter-Governmental Maritime Consultative Organisation, which is proving very beneficial.

We must implement conventions only when we are sure that we can enforce them properly. Our ability to maintain this record would, of course, be in no way enhanced if we banned foreign-owned ships from our register.

We are anxious to see maritime safety standards improved world-wide. We are always seeking ways to improve our enforcement of the agreed standards and the level of international agreement in bodies such as IMCO and the ILO. The United Kingdom has worked and continues to work for the maximum development and observance of internationally agreed safety, social and environmental standards. Before 1979 we averaged between 500 and 600 unscheduled inspections of foreign registered ships calling at British ports a year. In 1980, I am pleased to inform the House, we increased inspection to 1,300, and this year we intend to' increase them even more.

I emphasise that the Government have no desire to soften the attack upon substandard shipping in any respect—quite the contrary. Just as we urge that States have the right to fix their own conditions of registry, we also urge that they accept the obligation to implement and enforce internationally agreed safety standards. It is certainly true that successive British Governments have been concerned about the safety of open registry vessels, although—this is an important fact of life—not of open registry vessels alone. I emphasise that point. Clearly, however, this could never justify an indiscriminate attack on all vessels of a certain country whether its register was open or closed.

The Labour Government recognised this, whatever they say now. This comes back to the point of dispute between us. The Labour Government rightly saw the solution in terms of a campaign against substandard ships regardless of registry. The present Government agree with the approach and sustain it. Indeed, we can take heart from two developments in recent years. First, we have seen the open registry countries themselves improving their maritime administrations and acceding to IMCO safety conventions. Indeed, to take an example, Liberia has now acceded to more of the relevant IMCO conventions than many other countries. We hope to see them being enforced with increasing effectiveness. Secondly, and perhaps even more important in the context of enforcement, has been the international acceptance of the need for a strong port State enforcement system.

Mr. Clinton Davis

How will Liberia enforce the international obligations that it seems to have accepted when most Liberian ships never call at Liberian ports?

Mr. Eyre

The purpose of the international enforcement of port State inspection is that ships which move about the world will enter ports in countries accepting the agreement and will be inspected. That helps to enforce higher standards. The development of conventions and their international acceptance is an important step along the road to developing the international enforcement of higher standards. I am sure that the hon. Gentleman agrees that that is desirable.

Mr. James Johnson (Kingston upon Hull, West)

The lowest common denominator operates. When Liberia attempted to stiffen its own conditions for vessels under the Liberian flag the vessels went to another State with lower standards. That means that we are sinking into the mud. Glib and facile statements about inspecting vessels are not enough when vessels then move to places with lower standards.

Mr. Eyre

I am not saying that the British Government support the continuance of substandard ships, whether they are open registry or not. Substandard ships exist with open registry flags and with other national flags which are not open registry. The point made by the hon. Member for Kingston upon Hull, West (Mr. Johnson) is interesting and relevant, but it is not the complete answer to the abolition of substandard ships which exist in open registers and in other national lines. The development of international conventions and the steady application of measures to increase standards by way of port enforcement will lead to a reduction in the number of substandard ships in the world.

Mr. Austin Mitchell (Grimsby)

Why are the Government cutting expenditure on coastguards and their contribution to IMCO? Why do they not take the type of powers that the Americans have and exercise an annual inspection of vessels?

Mr. Eyre

The hon. Gentleman is wrong about a reduction in expenditure. I have just given the House figures for the number of inspections during the last year in which the hon. Member for Hackney, Central was responsible for shipping matters. They show that there has been a considerable increase in the number of ship inspections on the basis of port enforcement. The hon. Gentleman should take account of that improvement.

Mr. John Prescott (Kingston upon Hull, East)

I appreciate the Minister's argument about Liberia. However, many ships which are not substandard are involved in accidents. Why was Liberia unable to complete the investigation called for by UNCTAD into conditions on board ship? The answer apparently was that such ships did not return and could not give the information.

Mr. Eyre

I am not trying to champion the Liberian shipping registry. Liberia has begun to accept more international conventions and, consequently, is under greater pressure to raise standards. The intervention by the hon. Member for Kingston upon Hull, East (Mr. Prescott) is evidence that Liberia is coming under more effective pressure to raise standards. The British Government are in favour of international agreements and enforcement measures based upon raising shipping standards.

International conventions have now been negotiated which, when they come into force, will enable signatories to take action against substandard shipping entering their ports, including that of non-signatories. I emphasise that because it answers hon. Members' questions. This puts us and other countries which share our concern for safety and the marine environment in a far stronger position to tackle head-on the problem of substandard ships, and the dangers of lax maritime administration in other countries. We no longer need approach them sideways through open registries. Nor should we imagine that open registries have the worst safety record. Many vessels sailing under open registries maintain high safety standards. Many ships sailing under closed registries do not.

The statistics of maritime accidents reveal a situation about which no one should be complacent. But they certainly would not justify us in limiting our concern to open registry vessels, or in believing that all open registries were dangerous. So an assault on an other countries' registry conditions, even if we thought it right on other grounds, is neither necessary nor sufficient to enable us to enforce internationally agreed safety standards.

It is worth mentioning that during the recent discussions in the UNCTAD committee on shipping in Geneva the developed countries supported proposals by France aimed at improving the safety of all ships irrespective of register. We in Britain had some reservations on the detail of the proposals, but if they had provided the basis of a compromise in UNCTAD this would have been worth having.

It was particularly disturbing that the countries leading the UNCTAD campaign made it clear that they were not interested in improving safety and social standards, as higher standards would also apply to their own fleets. They claimed that the existing standards were already higher than they were able to meet.

We cannot accept a system of double standards for safety—one for the developed world and one for the developing world. Such an approach would endanger the basis of internationally agreed standards. At best we must be grateful for their candour. They have acknowledged that safer shipping is not the aim of their campaign.

It is the economic consequences of the hon. Member's proposal that would be so damaging to British shipping and British seafarers. We of course wish to see a healthy British shipping industry, with good job prospects. I realise that this concern is shared by the National Union of Seamen, and my noble Friend Lord Trefgarne looks forward to discussing this with the NUS representatives when he sees them later this week.

I must spell out the consequences of the hon. Gentleman's proposals. First, the proposal attacks the principle that international investment in shipping should be allowed world-wide. This strikes particularly at the British flag, because over 40 per cent. of the tonnage registered under the British flag is foreign-owned and could be driven away. I cannot think that this is what the hon. Member for Hackney, Central really wants, with its damaging effect on job prospects.

Secondly, if high-cost countries such as the United States were forced to repatriate the ships owned by their citizens to their own flags, the pressures on them to apply protectionist measures to overcome their lack of competitiveness would be enormous. Such a trend would be bound to damage the British fleet, because, as I have said, about half our business is in the cross-trades. I cannot emphasise too strongly the importance of that aspect of the British fleet. That must be borne in mind when the desire is expressed for the British fleet to remain big enough for defence purposes. In addition, few British owners have so far resorted to registering their ships abroad, so there would be few ships to be forced back to the British flag. That is a material point, which those supporting the hon. Gentleman should consider carefully.

Both those last two economic consequences would have one effect in common. They would markedly reduce the size of the British flag fleet, and the reduction in job opportunities for British seafarers could be dramatic. I cannot believe that that is what Opposition Members wish to see.

Let us consider some of the background to the current campaign within UNCTAD against open registries. As I have explained, the countries leading the campaign in UNCTAD have made it clear that their concern is not to improve safety, social and environmental standards. They are opposed to open registries because they believe that their existence is an inhibiting factor in the development of their own merchant marines. They believe that if open registries were phased out much of open registry tonnage would find its way to developing country registers. If that came about by damaging the efficient international use of shipping resources the process would benefit the trade of neither the developed nor the developing countries.

Although it is impossible to predict what would happen to open registry tonnage in such circumstances, it would be wrong to see the UNCTAD campaign as mere wishful thinking on the part of the UNCTAD secretariat. The current campaign is part of a wider campaign profoundly to change the present structure of international shipping. Other elements in the campaign include the United Nations liner code, whose authors meant to introduce the principle of world-wide cargo sharing into the liner trades but which is being disapplied within the Community and the OECD countries. The recent campaign to bilateralise the bulk trades follows that trend.

In particular, the phasing out of open registries and the bilateralisation of the bulk trades are inextricably linked. Most ships on open registries are bulk ships. If open registries were eliminated the world's bulk shipping trades would be disrupted. Such a crisis might indeed be seized as the opportunity to bilateralise the bulk trades, so that every country controlled 50 per cent. of all the bulk shipping in its direct trades. We could expect that to have two effects. First, it would cut right into the markets in which our own bulk fleet competes. Secondly, by removing competition from the trades it would lead to a much less efficient use of resources and an increase in freight costs and, therefore, in the costs of raw material imports. So it would hit both the jobs of our seafarers, our costs of industrial production and the cost of living here at home. Opposition Members should bear those facts in mind when they press the Government to support current UNCTAD proposals.

Mr. Clinton Davis

The Minister referred to the pressures being brought from time to time upon the open registries. Will he take this opportunity to pay tribute to the International Transport Workers Federation for contributing in a substantial way to those pressures? Its low-pay campaign has forced Panama to take some long overdue action. Is it not right that the Government should pay that tribute when it is so richly deserved?

Mr. Eyre

I know that the hon. Gentleman has had considerable experience in this subject. He is no doubt familiar with the day-to-day working of the ITWF. I do not have that advantage. I repeat that, as a principle, the Government are not in any way seeking to perpetuate the operation of substandard ships. Therefore, the factors that lead to the advancement of good standards in the operation of ships—social, environmental and safety—are to be welcomed as contributing to increased standards of performance throughout the world.

Opposition Members' support for the proposals means that they support the concept that States should be coerced into accepting the abridgement of their sovereign right to determine their own ship registration requirements, and rights entrenched in the 1958 high seas convention and included in the most recent text of the United Nations Conference on the Law of the Sea. To do so would be to jeopardise our rights to determine our own economic policy in the important shipping area.

We must be clear that the proposals could be enforced against non-complying States only by the closing of ports to the ships of those States.

Mr. Austin Mitchell

Is it not simply a straightforward question of insisting that if standards are to be enforced on vessels with flags of convenience the sovereign right to fly which the Minister is defending, there should be an economic connection between the ship and the country concerned? It is as simple as that.

Mr. Eyre

I am seeking to spell out the economic consequences of the proposal and also certain of the dangers that would develop from the operation of the pressures that would be applied to countries internationally if the aim of UNCTAD were successful, namely, to eliminate the operation of open registry shipping. I emphasise that we would have to comply with the closing of ports to the ships of States that did not comply.

If we failed to comply—and for all we can see, under our present registration requirements we ourselves would be labelled an open registry—our ships would be refused entry to the ports of those countries that were applying the new convention. I ask the hon. Member for Grimsby (Mr. Mitchell) to recognise that. If, on the other hand, we followed the direction suggested by Opposition Members and complied by tightening our registration requirements to exclude foreign-owned ships—which, as I have said, constitute more than 40 per cent. of our tonnage—we would be obliged to close our ports to non-complying States even if those States were parties to the 1923 ports convention, through which we are obliged to offer them the same treatment in our ports as we do to our own shipping.

It must now be clear that the path down which the hon. Member for Hackney, Central proposes that we should go is a highly dangerous one for British interests. It could lead to the loss of much of the British fleet, a reduction in trading opportunities for the remainder of the fleet, many British seafarers' jobs being put at risk, increased costs to developing and developed countries alike, an unwarranted interference in the sovereign rights of certain countries over the economic requirements of ship registration and the closing of ports to ships for economic reasons. I ask the hon. Gentleman to think again about the terms of the proposal. I cannot believe that Opposition Members would wish these consequences, which would be so damaging, to come about.

5.30 pm
Mr. John Prescott (Kingston upon Hull, East)

I congratulate my hon. Friend the Member for Hackney, Central (Mr. Davis) on giving the House the opportunity to discuss the question of flags of convenience and the Government's attitude to the recent UNCTAD conference.

I have been a Member of the House for 10 years and as a member of the National Union of Seamen I have a vested interest in shipping. Part of that interest is to retain jobs for British seafarers. There has been a decline by thousands of jobs available to British seafarers notwithstanding the Government's policy, which seems to amount to an empty promise.

My union has declared its view in a report entitled "Flags of Convenience: The Unacceptable Face of Shipping". The general secretary of my union, Mr. Jim Slater, was an adviser to the Government's UNCTAD delegation. The union has made it clear that British seafarers are concerned about the maintenance of their jobs. It is also aware of its social responsibility to seafarers of other countries, especially those from the Third world. We recognise that we have a responsibility to give the Third world a chance to share in shipping. That is a responsibility that the United Nations has asked all member countries to consider.

The reality of implementing such a policy can be difficult. However, my union has laid its policy on the line. It believes that there is a proper role for British shipping, British interests and British seafarers that will not run contrary to the legitimate demands of other countries that desire to increase their share of shipping.

We have witnessed a decline in the British merchant fleet and a consequent reduction in the number of British seafarers. Government policy has been inadequate. The time has come to reconsider our position in international trading. We have been given that opportunity by UNCTAD. Government policy is an important factor in international relations, and trade matters are being determined increasingly in an international forum. That is a fact which the Brandt commission has brought to our attention. The world will have to come to an agreement on such issues as the UNCTAD liner code, the open registry and the development of the Third world's involvement.

During my 10 years in this place I have spent considerable time campaigning with my union and the International Transport Workers Federation and other unions against flags of convenience and bringing to the attention of the House the terrible deaths that are the consequence of open registry fleets. A few years ago in the Channel there were a number of collisions of vessels operating under flags of convenience. Dozens of seamen died. There seemed to be more concern about pollution problems arising from the collisions than about the deaths of seafarers.

An interesting example is that when the Liberians carried out an inquiry they had to "rent" a judge from Britain to head the inquiry. They did not have the necessary facilities in Liberia to conduct the inquiries that are associated with maritime incidents. The problem presented by flag of convenience countries is not confined to substandard ships. It is one that extends to substandard administration and management. These are contributory factors.

When a vessel sinks and seamen die, it is not necessarily an old rust bucket that has gone down. It may well be a ship that was built only a few years ago and equipped with the most modern aids. An investigaton will probably reveal that the equipment was not working properly. Alternatively, if it is found that it was working properly, it is likely that the men did not have the competence to operate it. These are some of the realities that lie behind the loss of vessels that are operated under a flag of convenience.

I was a seaman for 10 years, and I want all ships to meet a proper standard. However, the fault lies not only with substandard vessels; it extends to substandard administration and the substandard management of the companies involved, which are motivated by the desire to make a few bob. At the end of the day the issue is whether someone can make money for doing nothing and ignoring the consequences. That is the issue to which the UNCTAD conference is addressing itself.

I have been criticised for saying in the House that if Governments ignore their responsibilities to deal with the flag of convenience problem the unions will take action themselves. The unions have conducted a campaign against the practice for 30 years. There have been occasions when they have acted in defiance of the courts. In some instances their actions have been upheld by the courts. A relevant example is a recent judgment of Lord Denning. He supported union activities to try to prevent the exploitation of seamen. I note that the Government are preparing to change trade union legislation. Their purpose is to cripple the trade unions. They will do so in the name of correcting a problem that has been ignored for years.

My hon. Friend the Member for Hackney, Central spelt out in an excellent speech the issues that are raised by the operation of open registries. In 1954 the flag of convenience countries represented about one-quarter of 1 per cent. of world shipping tonnage. That was equivalent to about 7 million tonnes of shipping. By 1964 their share had grown to 13 per cent. In 1974 it had increased to 25 per cent. and represented 81 million tonnes. I understand that by 1979 it was 28 per cent. The size of the flag of convenience fleets has doubled in a decade. We may see by 1984 a trebling of the 1964 percentage of ownership of flag of convenience fleets. It is clear that the flag of convenience system continues to offer considerable attractions.

It is often said that opposition to the growth of flags of convenience amounts to a threat to traditional jobs. The unions are concerned about the decline in jobs. They are also concerned about humanitarian conditions on flag of convenience ships. Ships have come to Humberside with two crews. The crews have been picked up in Africa. One crew has been working on the deck and another crew has been in the hold in the event of the first crew leaving the ship. On one occasion the British Government had to send a naval vessel to Humberside to prevent a mutiny. The captain of the ship concerned had two crews and he was not paying them. The crew that was in the hold broke out and went on the drink. The Liberian authorities could not send a Liberian naval ship to the vessel. It fell to the British Government to do so. Why was there nearly a mutiny? The situation got out of hand because there was no real regulatory control. There was no control of wages and no provision for sending crew members home.

We hear of workers being paid £10 a month when the ILO's recommendation is $110 a month. The shipping industry is the only industry which lays down what a minimum wage should be. It is recognised throughout the world that it is difficult to enforce the wages and conditions that trade unions negotiate. Many workers are intimidated. The intimidators are sometimes assisted by British immigration officers. If a captain finds that a man has been complaining, he may say "I am sending you off the ship." When the immigration officer arrives he is told "I want this man off. He is from Bangladesh. Get him back home." Our authorities strive to get the man on the first plane that will take him to his home country. When the trade unions have intervened there have been occasions when the immigration officers have realised that the circumstances amounted to an industrial dispute.

The majority of the Third world countries do not enjoy any real benefit from selling their flags. Liberia received about 10 cents a tonne in 1930. The same rate applied until 1979. I think that it was increased to 30 cents in 1980. Third world countries may have considered that the income from selling the flag was better than nothing, but it has not been a positive benefit in providing jobs for their seafarers or securing the normal associated economic activity that accompanies maritime fleets. There are one or two exceptions. It is evident that Singapore and Hong Kong have benefited, but countries such as Liberia have not.

One matter to which a great deal of attention has been paid is the safety record on those vessels, which is appalling. My hon. Friend the Member for Hackney, Central said that 70 per cent. of the losses this year were on flag of convenience fleets. Those included the Greek fleet, which is very much a flag of convenience fleet. There are a number of arguments to justify that.

Mr. Kenneth Carlisle (Lincoln)

Does not the hon. Member agree that the Greek fleet has been not a flag of convenience fleet but a competitive and effectively-run fleet?

Mr. Prescott

There are times when the House openly shows its ignorance. I invite the hon. Member to read a report which I shall give him. Time does not allow me to go into all the arguments. Recently there has been an agreement by the Greeks to have Bangladesh and Asian labour on its fleet at about 50 per cent. of the going world rate. The argument of competitiveness was not involved in that. If the hon. Gentleman looks at the financial advantages offered by the Greek colonels for the Greek fleet he will find that that was nothing to do with wage conditions and competitiveness. I shall give the hon. Gentleman statistical data. He should take not necessarily my data but the UNCTAD data, which will lead him to a different conclusion from the one which he has now posed. I shall now address my remarks to safety and the loss of vessels.

Mr. Austin Mitchell (Grimsby)

The point about the Greek fleet is interesting. I remind my hon. Friend of the incident in which the "Atlantic Express" collided with the Greek-manned "Aegean Captain" off Tobago in July 1979? Both ships had unqualified, inadequately trained watchkeeping officers and the former ship had not carried out lifeboat drills for at least eight months. Twenty-four seamen lost their lives in the collision with a ship of the vaunted Greek fleet.

Mr. Prescott

That is a powerful intervention. We could give many more examples. There was one at Humberside last week when a vessel with a Greek skipper called, and there were the same problems with an Asian crew. Those people do everything they can to keep the unions off the ships if they believe that their conditions are being observed, as they did with Mr. Ken Turner last week. The unions have attempted to do all they can to intervene on behalf of the members on the vessels and to improve their conditions. Such conditions usually lead to a telephone call from someone on the ship, and to the unions to intervening and keeping a check on the matter. We demand not that the men are taken off the ships and that others are put on, but that they be paid a fair wage, which is lower than in some countries and higher than in others, but agreed internationally. We attempt to impose it on those ships.

It is interesting that the UNCTAD report given to the conference in Geneva uses the Lloyd's Register figures in reference to the loss of vessels. All of us in the House accept that that is a fair source of reference for the loss of vessels. The Liberian loss of vessels in 1970 was about 0.29 on the world average scale of loss of tonnage. In 1979 it had gone up to 0.85, which is almost three times the rate of the world loss. In 1970 it was double the rate of the average world loss. Therefore, we find Liberia's losses increasing even with all the Liberian inspectors who are talked about so much.

From the Lloyd's figures we find that, in open registry countries in general, in 1969, whilst they had 17 per cent. of the world tonnage, they lost 22 per cent. By 1978 they were responsible for 28 per cent. of the tonnage and had lost 49 per cent. Therefore, we find that the problem is becoming increasingly worse.

Mr. Kenneth Carlisle

Does the hon. Member agree that it is interesting that those figures change from year to year? He quoted Liberia in 1979. In the previous year Liberia's loss was half that of the world's average. Therefore, it depends on particular losses and years. It is not always the case that those countries have worse losses than the world average.

Mr. Prescott

I do not know the hon. Gentleman's experience with figures, but if he takes it in three-year periods and compares the figures for the earlier three years with the last three years, he should find the slumps even out. He will find the same trend. I do not have the mental agility to make the necessary calculations, hut, looking at the figures, I can see that one could substantiate some of the arguments. I am sure that the hon. Member will have a chance to make his case later.

With the introduction of inspections and attempts to do something about the matter, there has been a small improvement in Liberia with regard to flags of convenience. I could show that with the statistics. Inspections make improvements. We know that too often in Liberia, when an inspector goes on board, that does not guarantee that a change in conditions will be imposed by the owners. There are many pressures in Liberia which mean that even if someone is disobeying the law the penalties are not so great. For example, a ship was lost in the Channel and 17 men were lost. A judge in Britain carried out an inquiry on behalf of Liberia and he imposed the maximum penalty against the officers involved, who did not have certification. The fine was about $700 and the captain was allowed to continue to sail. That is nothing like the consequences that a British seafarer or officer would face in such circumstances. Therefore, the deterrents under maritime law are not so great although inspectors may help to improve the situation.

My hon. Friend the Member for Kingston-upon-Hull, West (Mr. Johnson) said that a number of the rust buckets moved from Liberia to Panama and other countries. There were pressures from owners under Liberian flags who were trying to maintain good standards and who were against many of those rust-bucket companies. Those ships went to Panama and to other countries which were prepared to be less fussy about the obligations involved.

Sir Paul Bryan (Howden)

Should not one compare losses of ships rather than gross registered tonnage, because the open registered vessels are nearly all bulk ships, which give them a greater tonnage? In the same document that the hon. Member quoted, I see that in 1980 40 per cent. of the 215 ships lost were FOC. Therefore, that seems to be a lower percentage.

Mr. Prescott

To which document is the hon. Member referring?

Sir Paul Bryan

The NUS report on flags of convenience.

Mr. Prescott

I was referring to the UNCTAD document.

I have looked at the figures for the numbers of ships and the percentage of tonnage. I am concerned to obtain a proper statistical analysis. For a flag of convenience vessel, the same analysis appears and it loses more, whether on numbers or tonnage. I am going back to five years ago. Liberia always argued at the time that it should be borne in mind that it had big ships, not small ships, and that, the analysis on a percentage was not fair. That argument is rather academic to a seaman on a coaster or a tanker who dies when it collides. I believe that that is a reasonable point in the argument. On my evidence, the same trend is shown. Lack of regulation means that more vessels are lost and more people die. There is a great argument for having a proper regulative force.

My argument about substandard management and administration has been used by the UNCTAD conference. It is a good argument, because it shows that many differences in the figures can be reflected not only in the standards of the vessels but in the quality of administration and management in the country concerned.

We in the unions are extremely pleased that we are not alone in our fight. Many countries are joining in. The report on the UNCTAD conference was a grave indictment against flags of convenience countries. It was not acceptable to Britain or to a number of group B countries—the Western developed countries—but in the main I believe that it was a powerful indictment. The report states that: due to the lack of accountability of owners and the difficulty of identification, open registries create very favourable conditions for negligent, irresponsible and even criminal conduct by owners and key shipboard labour who all live outside the jurisdiction of the flag state and can thus avoid inquiry and prosecution.

Those few words sum up quite a comprehensive report, which is one of the many that the Minister referred to. It completely vindicates the action taken by the unions. The fleets' actions have been reviewed, as requested by the UNCTAD members ready for the Geneva conference. It was found extremely difficult to identify owners and to deal with the accountability and transparency of companies. It is said that that is also true in this country, but it is extremely difficult to identify the people responsible in flags of convenience countries.

The fiscal benefits shown in the report are not as great as many of us believed. I believed that it was solely a fiscal benefit, but the UNCTAD report shows an interesting fact, not from figures produced in Britain but from investigations by the American maritime administration. One cannot readily get such information. It appears that between 1971 and 1975 the scale of indirect subsidies through grants or fiscal benefits to the developed traditional marine countries has increased considerably. It is suggested that in 1971 the United Kingdom received 234 million, which was two-and-one-third times the average for other traditional maritime countries. In 1975 the figure was $386 million, which was only 50 per cent. more than the average.

Therefore, it is suggested that the fiscal advantages for Third world countries are not so great. I suspect that the traditional maritime countries have put pressure on their Governments, and said "If we are to compete against Third world countries and you want the red duster, you must help us with investment and shipbuilding grants." I am bound to say that the Labour Government went overboard, particularly with shipbuilding grants, without getting a great deal back, but that is another controversial argument.

The UNCTAD conference also looked at maritime social benefits and found considerable reluctance in the observance of the conventions on wages and social conditions. Ratification is all very well, but implementation is another matter. Countries can ratify details and undertake to carry them out, but if the ships do not come to the country the situation never arises.

I recall the controversy started by my union over the Cunard vessel that was going Third world and getting out of the British flag. I was attacked in my local paper by an officer of the ship from Hull. He stated that not allowing ships to sail under flags of convenience was against the interest of the officers. My argument was that if they encountered a problem they would find that sailing under a flag of convenience was against their interests.

This very week my hon. Friend the Member for Kingston upon Hull, West has taken the problem of a British officer to the Foreign Office. He was on a Panamanian ship in New Guinea, and is accused of being connected with a collision. He has no money, and is threatened with gaol. He is in an extremely difficult position, and has no guarantee of any rights, such as being flown home, that he would have as a British seafarer.

Mr. James Johnson

May I intervene to thank the consular section of the Foreign Office for its magnificent work? It at once got in touch with Port Moresby. It has done a first-class job and allayed the fears of the officer's wife in Hull about his being in hospital and having no money.

Mr. Prescott

That is a classic example of the need for a proper Government maritime administration to intervene if a seafarer is in a difficult situation. The man is British, and Panama has done nothing. That is an important example.

We are concerned about the Government's attitude at the UNCTAD conference. It is said that the Government must reflect the industrial position. However, all too often industry feels that its position should be interpreted as being in the national interest, and that happens with a number of countries. When my hon. Friend the Member for Hackney, Central was in office he at least challenged certain of those traditional attitudes and asked whether we should automatically support a proposal just because the industry said that it was right. He waged a strong battle against entrenched thinking in the Department. Attitudes in the Department are all too often identical to those in industry.

There is considerable evidence that civil servants advising Ministers may the next day become officials advising shipowners. Government Departments are a nursery for people who then become advisers to the industry. Civil servants sit across the table, negotiating policy, from people who were their bosses, so it is easy to understand how industry's policies become identified as those of the Government, although that is often not in the best interests of the country.

No one can doubt that my hon. Friend did all that he possibly could in the infamous case of the "Gloptic Venus". He set up an inquiry. The shipowner hired a gang to charge on board and kick off men who were trying to get reasonable wages and conditions. It was a controversial matter in the House. Conservative Members condemned us for our policy. Some were members of the "Gloptic Venus" board, although they did not say so, so they undoubtedly supported its policy.

The owners' attitudes have been shown to be wrong in fundamental ways. It was hoped that IMCO would deal internationally with the social aspect of shipping policy, but the owners opposed that policy. The matter went to UNCTAD and backfired on it, as countries not necessarily concerned with maritime administration are now involved.

Britain refused to have any truck with controlling world-wide liner conferences. We took a hard line, and were dragged in by other European countries through an OECD formula, when the matter could have been worked out in the UNCTAD conference. We adopted a hard line because the shipowners told us to do so.

It now appears that we are taking the lead in adopting a hard line once more over the open registry, although I do not know how it is in our interests to do so. However, I have not noticed the shipowners being slow to take on Russia when it comes to a free market and interfering with our interests. They then say that competitive conditions are being undermined. They call on the Government to interfere in the world market because they say that they are threatened by unfair competition. It is only when it comes to wages that the shipowners say that the world should decide fair competition.

Our view was not an easy one to take, but we believe in the Brandt report. The Third world should have its proper share, so we should legitimately give up part of that share. We cannot dominate shipping and expect other countries not to want a say in running it.

Group 77 was right to demand a share at the UNCTAD conference. It lined up with the Socialist group of countries against the hard-line attitude of developed Western nations. Even within the hard-line group of the Western nations, we begin to see that over the UNCTAD liner code Germany, Belgium and France could not defend the British position and wish to do a deal with the Third world. I know that there are selfish reasons involved concerning the size of the fleets, but the same is also happening about the open registry. France and others are not prepared to support the British position, and Britain is becoming the hard-line country in fighting against flags of convenience.

A few years ago, I should have wondered why. Indeed, I even wonder now why the Government take that attitude. In a previous debate the Minister suggested that the Government's policy was influenced by safety and national interests. The safety of flags of convenience shipping is bad, but I am not so sure about our national interest.

Our fleet comprised 25 per cent. of world shipping in 1950, and the figure had dropped to 6 per cent. in 1980. The size of the fleet has had greater consequences for seafarers than it has necessarily had for owners, and the reduction was not brought about simply by wages. The fleet's contribution to the balance of payments has declined. Shipowners have not done enough to help British shipbuilding. The number of seafarers' jobs declined from 133,000 in 1950 to 68,000 in 1980. That does not reflect the decline in our fleet, as there has been a greater decline in jobs than in tonnage.

The reason for this is not hard to find. Here we shall discover the essence of why the Government are leading the attack at the UNCTAD conference. There are the examples of Hong Kong and Bermuda, with exemptions to use our flag and at the same time employ cheap labour. Then there is the example of the Cayman Islands. I wrote to the Minister in April when a ship flying the British flag, registered in the Cayman Islands, went down with the loss of 17 men. I asked the Minister to give details of the certificate of competency, the crew involved and the inquiries taking place. Three months later, I am still waiting. Nobody has produced any answers. If a British ship had been lost with 17 men the House would be rightly indignant and would wish to know why there had been no inquiry. Indeed, I have reason to suspect that that ship may have gone down for good insurance reasons.

Such events did not occur only in the nineteenth century. Ships are still being sunk today, with their crews on board for the insurance money. There is no doubt about that. Indeed, there is a great deal of evidence to support that view. What is the House doing about a ship flying a British flag which went down with the loss of 17 lives? Those men may not have been British, but they were seamen. They were people, and their case is entitled to a hearing. Yet after three months we still have no answer.

The accountability of the flag is the main argument against flags of convenience. In that sense, however, the British flag is increasingly becoming a flag of convenience. We are making it easier to employ Asian labour at cheap rates. The Government have refused to implement the wage agreement agreed between the industry and the union, as my hon. Friend the Member for Hackney, Central said. There are therefore different wage rates on British ships. A black foreign seaman gets half the rate, a white seaman twice the rate. We hear much talk about race relations in the House, but the Government will not implement that agreement. Why not?

Mr. Eyre

Did that state of affairs apply before the general election in May 1979?

Mr. Prescott

A committee set up by my hon. Freind recommended that the wages should be paid. The Labour Government accepted that. The owners were reluctant to pay. Negotiations took place and the Government adopted the recommendation. We then asked for implementation. I have asked the Government whether they will implement it, but they are not prepared to interfere.

All these factors add up to the fact that the British flag has become a flag of convenience. We are now not so fussy about inquiries for some of our ships. Inspections are being cut, as the Minister knows, and the amount of money available to the Department for inspections has been cut. Our procedures are becoming slack. This reflects considerably upon the Government's position at the UNCTAD conference. Unfortunately, we are becoming just that kind of country.

The Minister said that there was no evidence to prove that regulation and genuine links with the flag lead to a reduction in accidents and loss of vessels. The Minister has only just taken up his post, so I am prepared to be charitable, as it is a complex matter, but I must tell him that he is wrong.

I take the example of Singapore. Once again, I refer to the figures from Lloyd's. In 1970, Singapore's loss of vessels was about five times greater than the world average. Singapore then decided to demand that there be an economic link between the flag and the country involved. It is no longer associated with flags of convenience in the same way and has made a statement to that effect. Its figures for loss of vessels are now 20 per cent. below the world average. Those figures speak for themselves. A genuine link with the country involved, with the responsibility to enforce internationally agreed standards, has an effect upon the loss of vessels and seamen. The Minister is therefore incorrect in what he says.

The reality is that the world market has failed to enforce proper standards. The insurance companies have gone for benefits and money rather than the enforcement of safety standards. The classification societies have become almost the handmaidens of some Third world countries without proper enforcement procedures, while the flag of convenience countries cynically take their money without any enforcement.

To that extent, therefore, if the Minister is embarking on strengthening flags of convenience countries and crippling the trade union movement which has the power to influence these matters—and has done so over the past 30 years—whether he changes the law or not we shall continue to pursue these matters because we believe that it is morally right to do so. We shall still have the power to do this and we intend to do so. I put this to the Minister in all seriouness. If the Government are considering embarking upon such a course, I hope that they will take seriously what I have said. I hope that world relations will not have to be determined by strength, as all too often has been the case.

As seamen, we shall negotiate through UNCTAD. We know that there may be consequences for jobs—we are experiencing job losses now—but the Third world is entitled to its share. We shall play our part in that. I hope that the Government, who on this occasion took the unions with them at UNCTAD, for which I congratulate them, will rethink their policy and recognise what will happen, so that the Third world and British flag interests have their proper role in world trading relations.

Several Hon. Members


Mr. Speaker

Order. The debate has been proceeding since about 4.15. Three hon. Members only have spoken. A further eight hon. Members have a right to speak and are seeking to catch my eye. I remind the House that the debate will finish at 7 o'clock.

5.56 pm
Mr. R. A. McCrindle (Brentwood and Ongar)

We have just listened to a passionate and rumbustious speech from the hon. Member for Kingston upon Hull, East (Mr. Prescott), which I at once concede reflected deeply held feelings on the part of the hon. Gentleman. I hope that he will not find it insulting if I say that I hope to approach the debate from a rather broader base than the interests of one section of the problem, which he rightly made the centre of most of his speech.

I congratulate the hon. Member for Hackney, Central (Mr. Davis) on giving us the opportunity to examine the matter of flags of convenience, not least because it is not quite the simple matter that it sometimes appears. The term "flag of convenience" is easily made the subject of vilification. There is often an assumption that it is somehow a simplistic matter and that by a stroke of the pen the Government could solve it. I hope to prove that that is a less than accurate assumption.

The burden of the hon. Gentleman's motion is threefold: first, that the Government opposed moves by UNCTAD to act against flags of convenience and are therefore to be criticised; secondly, that they voted against recommendations supported by the Third world and are therefore guilty of something approaching treachery against the less developed countries; thirdly, that they have no coherent shipping policy.

On the last point, the only evidence that the hon. Member for Kingston upon Hull, East adduced was that the National Union of Seamen wanted arbitration in the recent dispute and the Government had delayed it. With respect, I doubt whether that amounts to a condemnation of the Government's whole shipping policy. I feel that in many ways the motion is in itself far too sweeping and that the hon. Gentleman was guilty of selective quotation in putting his case to the House. He tended to overlook our own shipping interests.

It is incumbent upon the House to consider the whole matter rather more even-handedly and to try to assess just what are the interests of our shipping industry. In my view, they are, first, to enable goods to be conveyed by sea with safety, speed and economy; secondly, to protect the economic interests of our shipping companies; and, thirdly, to maintain our own merchant marine without overlooking the economic constraints.

If I correctly analyse this country's shipping interests, and therefore imply the policy that the Government should pursue, our approach and that of UNCTAD are almost bound to be at variance. If we had totally accepted the UNCTAD approach it could only have increased the cost to shippers, by increasing the bargaining power of our seamen. It would not in the process have made safety at sea, which must be a concern of every hon. Member, more certain. On the contrary, had we transferred some of these responsibilities to Third world countries, with their manifest poverty, safety would have been affected adversely rather than favourably.

Few of us would deny that it should be an aspiration of any Government to be of assistance to the Third world. If that is our aim, shipping policy is not necessarily the best instrument. If safety is our goal, flags of convenience are arguably a better means of securing it than transferring the control of shipping to Third world countries. If we are afraid of British seamen's jobs disappearing, dealing with the flags of convenience issue is not the right way—it is certainly not the only way—to protect them.

Three other points can fairly be made at this stage in defence of the Government's approach, and they are germane. UNCTAD claims that owners of open registry ships are less accountable than the owners of other ships. There is no argument about that as regards registration in our own country, but there is a big question mark over Third world countries without the resources to maintain the necessary machinery of supervision.

Secondly, it has been overlooked that the Government support more rigorous enforcement, but not the abolition of the flags of convenience. By all means let us raise the standards under which flags of convenience operate, but that is very different from saying "Let us progressively phase out flags of convenience".

There has been no reference to the EEC, which has stated that open registry shipping appears to be beneficial to the economy of the Community and should not be phased out. Not every hon. Member accepts everything emanating from Brussels as the gospel truth, but we should not ignore the effect that the EEC considers the phasing out of flags of convenience would have on the economies of Western Europe.

I come now to the view of the International Chamber of Commerce. It is correct to quote the approach of international business men, just as the hon. Member for Kingston upon Hull, East was correct to put forward the point of view of the National Union of Seamen. The ICC is also opposed to the elimination of flags of convenience. It has argued that their abolition would harm Third world countries, just as UNCTAD and the hon. Member for Hackney, Central are combining to say the opposite. The ICC says that sharply raising freight costs would damage exporting Third world countries.

In other words, this is not a simple matter in which there is one argument. Other factors must be taken into account, and the hon. Member for Hackney, Central did not sufficiently take them into account. The ICC also says that abolishing flags of convenience would slow the growth of independent merchant fleets.

Additionally, on the question of safety, it has been pointed out that about 10 years ago one in 20 flags of convenience ships were unsafe or substandard. That is not a negligible figure. However, it is also contended, with figures issued by various bodies to prove it, that the number in that category is now negligible. Whereas in the past the safety standards of ships flying flags of convenience were a matter of extreme concern, and while they remain a matter for some concern, the tendency has been for matters to improve.

There are soon to be ratified international agreements on safety, which will bring added protection on flags of convenience ships. It is arguable that that is a better and more practical way of achieving the objective of the motion than moving towards the abolition of flags of convenience.

The House will know that I have some involvement in the world of insurance. I am tempted to pick up some of the points provocatively thrown across the Floor by the hon. Member for Kingston upon Hull, East. Like him in another context, I shall resist the temptation. Perhaps we can have a discussion later.

If I apply to Lloyd's or an insurance company in the City of London to insure a ship that sails under British standards the premium will probably be the lowest that I can obtain. I must confess that if the ship flies a Greek or Liberian flag the premium will be substantially higher. However, if it flies the flag of a Third world country that has just moved into the control of its own merchant marine the premium required will be—I am reliably informed—substantially higher than if it flew the flag of Greece or Liberia. Therefore, one must take a more balanced view than has so far been taken.

I can best summarise my view by simply sayng that I do riot believe that trade manipulation is the right way in which to help the Third world. Safety is best achieved by international conventions applying to all countries, including those flying flags of convenience.

I do not wish to ignore seamen. They live, and know that they live, in a highly competitive environment. They know that they are better served by increased productivity and efficiency than by old-fashioned protectionism, which appears to be the appeal of Labour Members.

I leave the last word to Mr. Michael Baily, in an article in The Times on 26 May this year, headed: An attempt to scuttle the flags of convenience fleet". Mr. Baily put it remarkably succinctly when he said: Unctad, in applying its pressure, seems to be motivated not by the pursuit of the common good but by naked self-interest: the interest of its faithful supporters at the International Transport Workers Federation (ITF) which, if open registries were phased out, could get better wages and conditions under other flags; and the interest of developing countries in acquiring shipping rights and revenue by political means. But there is no assurance at all that transfer of shipping to developing countries would make it safer, though cargo sharing would almost certainly make it costlier, to the detriment among others of the developing economies. Desirable—indeed essential—as it may be to redistribute the world's wealth from rich countries to poor, this particular cure could turn out to be worse than the disease.

I believe that Mr. Baily correctly summarises the need for going very slowly before moving in the direction that the hon. Member for Hackney, Central would have us move, to the progressive abolition of flags of convenience.

Several Hon. Members


Mr. Speaker

Order. The Minister and the hon. Member for Hackney, Central (Mr. Davis), whose motion is being discussed, have generously agreed that there should be no winding-up speeches. That means that there are 50 minutes left for the five hon. Members who remain in the Chamber to catch my eye. If they each take 10 minutes, each will be called.

6.9 pm

Mr. James Johnson (Kingston upon Hull, West)

I heard your comment earlier about short speeches, Mr. Speaker, so I began to decapitate mine. I shall make it mainly on the basis of two letters.

One of the letters was sent to me after an exchange in the Chamber with the Secretary of State for Trade on June. Because of the hubbub, the right hon. Gentleman did not quite hear all that was said, but he had the courtesy—he is a very courteous man—to send me a long letter, to which he added the following postscript I don't think I would have dared a supplementary answer this long.

I regard what the right hon. Gentleman said as amazing, in view of what the Under-Secretary said at the beginning of this debate: The future size of our fleet and its employment opportunities depend on its international competitiveness, including its labour cost competitiveness. I want to see a strong and competitive United Kingdom registry. But wage and manning negotiations are matters between the shipowners and the maritime unions, and it is for the shipping companies to take a commercial judgment on whether they can operate a ship profitably under the British flag. No one can be forced to operate a ship at a loss under the British flag. In these circumstances, the choice may he between an operator retaining a commercial interest in the ship under another flag, or the ship being sold with the loss of all connection with the United Kingdom. It is not for me to…pass judgment upon them. My Department makes strenuous efforts, in international fora and elsewhere, to defend the kind of free competitive market most conducive to the United Kingdom shipping and its job opportunities.

The inference that I draw from that is that in the view of the Secretary of State shipowners can and should make more money. But not only if losing a little or even a lot but perhaps even making ends meet, the Secretary of State then says that they should gain very much more. My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) put it in even more picturesque terms when he said that they were motivated by a few bob".

Earlier the Under-Secretary of State said that 40 per cent. of our open register was due to flags of convenience. Perhaps he will say what percentage of our fleet is the other way about. Will he tell us, in other words, how many of our owners are deserting our flag and going over to the flags of convenience of such countries as Liberia? This is very important.

Mr. Eyre

I am not able to give the hon. Gentleman a precise answer now. I shall write to him about it. However, I remind him that I said earlier that the transfer of British registered ships to other flags was very rare. If British owners cannot operate their ships profitably, sometimes they sell them, but they have not transferred them to other registries. I shall write to the hon. Gentleman with pleasure.

Mr. Johnson

In the past, our shipowners—and our politicians, with names such as Macmillan—had a different policy about flags of convenience. There must be some missing factors here which account for this rather dubious theory which is now holding the stage.

My second letter was sent to me by a gentleman named Harold Lewis, who is secretary of the ITF—the international transport workers. He wrote: The debate provides one of the few opportunities in the House of Commons to debate shipping matters and, above all, to focus attention on the flags of convenience device which has led to appalling exploitation, especially of Third World seafarers, and has had a disastrous effect on safety standards. I do not imagine that any Minister will deny that.

I go to two Third world nations for the rest of my speech, and what better than Liberia, which casts a long shadow on any debate of this nature?

The National Union of Seamen has sent us all a magnificent document "Flags of Convenience: The Unacceptable Face of Shipping". It emphasises the part that Liberia plays. Over the years I have known the Liberian Government and people very well, since the days of my first meeting with President Shad Tubman, and I well remember conversations with Ambassador Dudley Lawrence, who for many years was a distinguished diplomat in Paris and later came to us in London. This was some years after the ILO campaign in the late 1950s, when Costa Rica withdrew from the flag of convenience business because of the efforts of the ILO.

I was discussing shipping with Ambassador Lawrence, and he said "But we are making efforts in Liberia to enforce standards. It is not quite fair to be labour my Government in this way." He was quite correct. The Liberian Government initiated a system of part-time inspectors in the early 1970s following much public dismay over tanker incidents in their own fleet, and the Liberian Bureau of Maritime Affairs was stirred up. Certain measures were passed. They were quite inadequate, of course. But there is no doubt that even if Third world nations enhance their standards and endeavour to lift themselves up to the levels about which we in the United Kingdom boast, they find that certain ships are taken away by their companies. That is what happened to Liberia.

That is why, earlier I put to the Minister the question that I did. If he persists in his views, does he not think that we shall sink deeper into the mud? Those nations which enforce standards will find their clients leaving them and going to other flags. I am afraid that I must concur with Professor Schmidt, of the University of Stockholm, who said, after a long, involved and detailed examination, that vessels flying flags of convenience represent a form of capital which is not subject to social control". That is one of the basic arguments put forward by all seafarers who go on deck on the seven seas. These people do not observe the rules of the game.

My last quotation is from Kenya. A year or two ago in Nairobi I was talking to the Minister of Finance. It was soon after independence. I have found that Third world nations are just as cynical as others, such as the United Kingdom and the United States, in their attitudes to commerce and finance. The Minister was musing quite seriously about Kenya becoming a flag of convenience State, like Panama and Liberia.

I understand the urgent need of these nations for aid and to get cash wherever they can. In a way, however, it is the same sort of ethic that Third world nations have when they issue new series of postage stamps. They wish to get money from any quarter that they can, because they are so poor. But that is not for me to judge, or even for the Minister to judge.

There are many other so-called advantages to owners who fly flags of convenience. Wages can be lower, as the Minister knows. Hence they continue to have the flags of convenience, because they know that they are less likely to have to fight battles for better wages. The unions are less inclined to back up these men on the deck to get more money and better conditions.

All in all, it seems to me that the flag of convenience countries do not understand their national obligations to control the working conditions on vessels flying their flags. I hope that we are not being too smug, in the sense that what we do in the United Kingdom, Norway and other Scandinavian States is right. I understand why countries such as Liberia sell their flag to anyone on the high seas who wishes to avoid his financial obligations. It is because these countries are poor. If any of our people are taking advantage, shame upon us, because we do not need to do it. When, as my hon. Friend said, they are "motivated by a few bob" people of that sort should not be living in Yorkshire, Hull or London, because ultimately they will get themselves into all sorts of tangles.

For all those reasons I solemnly ask the Minister to change the Government's cold-blooded accountants' attitude in this matter, which I feel is somewhat patronising to us and to the Third world.

6.21 pm
Mr. Neil Thorne (Ilford, South)

I listened with interest and respect to the speech by the hon. Member for Kingston upon Hull, East (Mr. Prescott). As an underwriting name at Lloyds, I must declare an interest in supporting his demands for safety at sea for men, cargoes and ships. However, we have alreadly been told that Liberia and Panama account for no less than 30 per cent. of world trade in shipping, having increased from virtually nothing to that figure in 30 years. During the same time, I understand that the United Kingdom's share has slumped from 24 per cent. to less than 7 per cent. Some of that decline must be attributable to inflexibility by the unions, the Government and management. Pious motions at Geneva will not reverse that decline.

The awful problem of domestic inflation in recent years has exposed us to world-wide competition in shipping, as it has in so many other industries, and we are now reaping the unpleasant fruit of unemployment. That can be seen in some measure from the wage rounds of the past five years. Since 1976 the increase on wages in United Kingdom ships has approached 100 per cent., which compares unfavourably with the remainder of the world.

The crisis which has affected United Kingdom shipping this year has been that increases of more than 12 per cent. have had to be conceded after millions of pounds were lost through the seamen's dispute. Management cannot, therefore, be blamed for seeking other ways of keeping together the expertise of those ashore and afloat. New ships cannot be built when insufficient revenue is earned to cover the enormous cost of replacement tonnage.

Countries with new-found wealth have the finance to build up sophisticated fleets. Such countries are selective in choosing managers for new ships, and manning costs under United Kingdom conditions are much higher than in other countries. Management knows that others do not have sufficient expertise in the long run and that Third world countries consider that their nationals should have the opportunity to provide crews.

The Officers Association, which knows the job potential in ships which are not registered in the United Kingdom and that United Kingdom ships are built to the stringent requirements of Lloyds and the standards institutions, has decided to apply to the Secretary of State to be licensed under section 6 of the Merchant Shipping Act to recruit seafarers on behalf of United Kingdom companies and those managing offshore tonnage.

Some ships, no doubt, will be classified as sailing under flags of convenience, but they provide jobs at a difficult time. Many ships can be run within present management structures which are highly professional and ensure that the ships will be maintained to proper safety standards. Those serving in such ships are not misled by the propaganda of those who see something wrong with making a profit, which is the only way to protect jobs. They know that when costs are out of line, the remedy is always to sell. They realise that shipping is a tough industry facing fierce competition which the arch enemies of capitalism exploit to the full.

The need to retain a toehold and not to abandon an interest in the trade is paramount. One alternative is to transfer ships to a cheaper flag and to continue to operate them in the trade, but at a smaller cost. The benefit is twofold. Jobs and teams can be kept, and the prospect of replacement tonnage is more likely when profits are being made.

The present damage is great. I understand that 26 container ships can replace no fewer than 160 conventional ships. The problem can be solved only if those concerned accept the need for real productivity and achieve a more prosperous future in successful competition with the rest of the world.

6.26 pm
Mr. Bruce George (Walsall, South)

No ocean or sea washes against my Walsall, South constituency; nor, I suspect, does it go anywhere near Ilford, Brentwood, Hackney or Birmingham, Hall Green. As an honorary grand admiral in the Nebraskan Navy, I feel a competence to speak and have as spurious and tenuous link with the sea as many owners of flags of convenience have with the nations with whom they are ostensibly registered.

My interests are in security and combating fraud. As a preliminary to my remarks, let me say that I support my hon. Friend the Member for Hackney, Central (Mr. Davis) in his attack on the Government. The extension of flags of convenience is jeopardising British jobs and is hampering Third world countries in the development of their fleets.

Despite the Minister's protestations, the safety factor cannot be ignored. In 1979, 48 per cent. of shipping casualties involved ships flying flags of convenience. When one takes it into account the fact that flags of convenience ships comprise 33 per cent. of the world's fleet one realises the enormity of the problem. As that excellent publication of the National Union of Seamen, "Flags of Convenience", says, the FOC record was three times worse than the record of the traditional fleets in the period 1975–79. If Greece is excluded from the traditional fleet figures for this period, the loss rate for the traditional fleets is halved … with the FOC fleets becoming six times worse.

I am appalled at the exclusion of flags of convenience ships from many of the safety measures. So many of the major environmental catastrophes have involved ships flying flags of convenience, such as the Liberian "Amoco Cadiz", and the Liberian "Energy Concentration", which broke its back in July 1980, when all its cargo was discharged into the sea. There have been other disasters such as that involving the "Torrey Canyon"—a ship built in the United States, lengthened in Japan, nominally owned by a company in Liberia and registered in Bermuda. Great environmental disasters have been caused by ships flying what would be classed as flags of convenience.

I focus my short speech on one aspect— the incidence of maritime fraud. I am not arguing that ships registered with countries such as Liberia have a monopoly of criminals associated with them, but statistically the incidence of crime is higher with FOC ships. Maritime fraud is as old as the history of maritime commerce. One can go back to Roman times to see the skullduggery that was replicated by our Blackbeards, Captain Kidds and Henry Morgans.

The tradition of piracy has been changed by modern technology. The pirate has abandoned his skull and crossbones and his cutlass and traded them for a pinstripe suit and a telex machine. If he originates in the Middle East he will wear a lightweight summer suit. Many well-recorded incidents are just the tip of the iceberg involving companies registered in Liberia and Panama. The Hobbesian state of nature may not exist in ordinary society but it exists in the maritime world, where there is little regulation and the life of many seafarers is solitary, poor, nasty, brutish, and, in some cases, exceedingly short.

No country or ocean is immune from the problem of maritime fraud. However, it appears that one area is particularly susceptible—the Piraeus-Limassol-Beirut triangle. From some of the instances that I have come across, it seems to me that it would be better named "Pirateus". Cargoes disappear from those regions. Indeed, ships mysteriously disappear and, unfortunately, members of the crew, too. There are incidents where the ships go down and the crews miraculously survive. It seems that they are sometimes involved directly in the fraud that is perpetrated by some highly skilled people. Such people are not necessarily skilled in maritime matters. They are people like myself, whose knowledge of the sea is confined to watching "The Onedin Line" or to taking weekend boat trips in my youth from Cardiff to Ilfracombe. One does not need to be an expert on the sea to be able to mastermind some sophisticated frauds.

The annual loss to the insurance companies, and indirectly to honest shippers and consumers, is more than $1 billion a year—enough to make the Captain Kidds of the old world almost blush with embarrassment at the small pickings with which they were involved. The profits for the pirates are obvious. Either the buyer does not get his cargo, or he pays twice for it. That increases the cost to the honest company. The insurers pay out. The shipping industry is forced to pay a higher premium. It is a disaster that the insurance industry recognises the problem but does little about it. Indeed, Governments have not considered the problem to the extent that they should.

There are many types of fraud, but documentary fraud is the simplest of all and can be carried out with an office and a telex machine. When we have a shipping industry, such as in Britain, that is still dedicated to the principle of "My word is my bond", some unscrupulous people are able to capitalise on that honest and traditional approach and rip off others.

There is the charter party fraud, along the lines of documentary fraud, in that a charterer hires a small, aged vessel, pays a minimum hire charge, sells the cargo space, collects the freight charges, ensures that the vessel is ostensibly loaded, tells the person dealing with the ship that it is on the way, draws another payment, and then disappears.

Owners can arrange for their cargoes to be stolen from the docks. There is an Indian port where gangs offer themselves almost as legitimate agents and indulge in thieving from the harbour.

The worst kind of fraud is scuttling. There have been more than 50 such instances off the coast of Lebanon in the last few years. That fraud usually involves aged, over-insured rust-buckets that are deliberately sunk or blown up in order to collect the insurance money. It is an appalling practice. It is a fraud in which many shipping companies flying flags of convenience have been involved. In some cases the cargo is sold many times over. The practice is growing, and the situation is especially serious off Lebanon or in any war zone.

Such fraud can also be dangerous, not only for the people who perpetrate it. I know of one villain in respect of whom a Middle Eastern Government have put out a contract. If they catch him they certainly will not take him to court. A lot of blood has been lost as a result of frauds that have gone wrong. Many sailors have died.

A number of these frauds emanate from Liberia and, unfortunately, from Greece, which one might call a quasi-flag of convenience nation. One of the worst cases of piracy to come to light was the scuttling of the ship "Salem", which was registered in Liberia. The Solicitor-General for Liberia said that one of the captured men involved, "Captain" Georgeoulos—who has no maritime qualifications whatever—would be behind bars for 25 years. However, that man is now living in luxury in Greece. It is alleged that a large bribe was paid to a certain senior Government official in order to get him released. So much for improved standards in Liberia.

There are numerous instances of that kind. The problems are almost insuperable. It is difficult for prosecutions to prove their case. Corruption and bribery certainly keep a number of people out of court and goal. There is the problem of confused jurisdictions. There is also the problem of some countries not having the will to arrest this serious increase in fraud.

The insurance industry has a lot to answer for. We have listened to two hon. Members speaking on behalf of the insurance industry. I wonder whether they have spoken to the journalists who have spoken to me and said that in a way British insurance companies are assisting in crime by refusing fully to investigate frauds and cough up. It is much easier for insurance companies to pay out a small percentage of frauds than to cause any hassle, because if one does that one is likely to lose a contract.

I can give instances of where that has happened, and where companies that have investigated frauds have lost substantially as a result of their enthusiasm to investigate. That is the nature of the problem. The insurance companies should do more to stop such fraud.

I commend the IMCO report on preventive measures that Governments might adopt against maritime fraud. It says that Governments can do a great deal, such as adopting an unequivocal national and international stand against maritime fraud; more rigorous procedures for transferring ownership and transferring flags;… support for the standardisation of maritime trading documents;… a greater degree of co-ordination with other national Governments in pursuing the common goal of prevention;… the ratification of the 1958 High Seas Convention … the harmonisation of internal legislation with existing international legislation;… the improvement of internal law enforcement resources and capabilities to prevent, detect and investigate incidents of maritime fraud.

I commend a new organisation, the International Maritime Bureau, based outside London, which I believe will do a great deal to cut down on seaborne fraud. However, this will involve co-ordinated action between Governments. It will also involve the shipper and the consumer of shipping services, who must be more discreet when hiring. Publicity is the answer. Some criminals operate with ships that are protected by flags that are supposedly legitimate, and there is certainly no monopoly of fraud among countries that sail flags of convenience fleets.

The statistics brought to my attention indicate that shippers from flags of convenience countries such as Liberia and Panama have a greater propensity to maritime fraud. I hope that the Government will do more than they have done to remedy this problem. It will never be eliminated—it is endemic in the system—but perhaps it can be reduced in terms of human justice, human lives, economy and efficiency.

6.38 pm
Mr. Kenneth Carlisle (Lincoln)

It is a pleasure to follow the hon. Member for Walsall, South (Mr. George), not least because he represents a constituency that is one of the furthest from the United Kingdom coastline. I assure him that his bluff and honest approach would make him suited to a seafaring life.

Mr. Prescott

But not to the wages.

Mr. Carlisle

There have been many attacks on flags of convenience. I should like to say why I believe that flags of convenience have a role to play, and why, if we were to abolish them without due consideration, we would do so at our own risk.

There would be various predictable effects. First, and perhaps most important, the main beneficiaries of abolition would be not the developing countries, which we wish to help, but the low-cost developed countries. One can argue that developing countries have neither the resources nor the skills to build up their own fleets.

Indeed, the example of Guinea is quite revealing. Guinea recently acquired two bauxite carriers, which have since been registered in Liberia. One can argue that flags of convenience provide a form of nursery for the developing countries which wish to build up their own fleets and that without such a relief they would not be able to do so.

Mr. James Johnson

Surely the hon. Gentleman should also include in that category nations such as Nigeria and Kenya?

Mr. Carlisle

One could include many developing countries in this category. I was merely taking Guinea as an example. I was arguing that a developing country does not necessarily have the resources or skills to build up its own fleet. Indeed, as I said, the low-cost developed countries would benefit most, and the United Kingdom is a reasonably low-cost developed country in shipping. Greece is especially so, and Greek costs are about 60 per cent. less than ours. Countries such as Greece would be the main beneficiaries of doing away with flags of convenience. The United Kingdom would not benefit. Thirty per cent. of our fleet is now foreign-owned and would have to leave the registry. Therefore, there would be an effect on us, and especially on jobs, which are particularly important at the moment. If our aim is to help developing countries and also to benefit ourselves, the right solution is not to abolish flags of convenience.

The second main reason why we should hold on to flags of convenience is that to abolish them would have a serious effect on trade. Flags of convenience provide a flexible and cheap means of shipping. They are a spur to an efficient and competitive shipping service. They maximise competition. They lead to lower freight rates. The developing countries need lower freight rates so that they can get their commodities to the West cheaply and efficiently.

Mr. Prescott

They do not say that.

Mr. Carlisle

It is often argued—especially by Labour Members—that the Brandt report's recommendation should be followed, but it is absolutely clear that the imposition of import controls—for which Labour Members also argue—is the one thing that would affect developing countries adversely and restrict their growth more than anything else. They want markets in the developed counties. Similarly, the abolition of flags of convenience would lead to much more expensive exports from the developing countries to the developed countries and would be of no long-term benefit to the very countries which Labour Members claim that they wish to support.

The third argument for flags of convenience is based on safety. We all recognise that this is a supremely important matter. The evidence shows that both Conservative and Labour Governments know that this is vital. This is shown by our record. The figues have been mentioned by the Minister, but they are worth reiterating. The United Kingdom's percentage losses over the past nine years have been one-quarter of the world average. The Government would not stomach flags of convenience if the safety record were much worse. The evidence shows that, although the record is worse, it is not much, worse. We have had an argument over Liberia, but the facts show that Liberia's record is not significantly worse than that of other countries—

Mr. Prescott

At least three or four times.

Mr. Carlisle

—in the West, especially Greece. The best and most effective way to improve safety is by State control at the ports. Here, again, the United Kingdom's record is worth repeating. The number of foreign vessels inspected has increased. In 1979, we inspected 615. In 1980, the figure more than doubled to 1,300. Therefore, the degree of control which flag States choose to exercise depends very much on the country's willingness to do so.

The Opposition are seeking to impose restrictions on shipping without thinking through the effects of such restrictions. If flags of convenience were abolished, without doubt the cost of world shipping would go up and, therefore, the costs of exports and imports. This would particularly impede developing countries. It would not help developing countries to build up their merchant fleets. As I have said, the main beneficiary has been Greece. Nothing significant would be done to improve safety.

The motion, like so many motions tabled by the Opposition, has very good intentions, but it is ill-founded. It has not been properly thought through, and it will not help those people for whom, quite rightly, both Opposition and Conservative Members care. Hon. Members on each side of the House have an interest in helping and nurturing developing countries. Therefore, no case has been made out for the thoughtless action that is proposed.

One of the lessons that all Governments can learn is that it is wrong to disrupt something for dogmatic or intellectual reasons if it is working well. We often end up with something much worse. The current system although it could be improved in many ways, is working reasonably well. The Government would be foolish to interfere drastically with it.

6.45 pm
Mr. Austin Mitchell (Grimsby)

I shall not try to follow the hon. Member for Lincoln (Mr. Carlisle), whose logic seemed to be as landlocked as his constituency.

Mr. Kenneth Carlisle

The city of Lincoln has long been an important port and is still connected with the sea.

Mr. Mitchell

The connections between Lincoln and the sea, and between the hon. Gentleman's speech and logic, are tenuous. His argument was that flags of convenience helped Third world countries. That assertion contradicts the report of the UNCTAD secretariat, which argues that there is no profit to Third world countries in selling their flags in this kind of fashion.

The hon. Gentleman argued that the safety record of the countries concerned is good. I have the figures for 1975 to 1979 of the percentage of ships lost each year. For Cyprus, the figure is 2.7 per cent., for Liberia it is 0.54 per cent., for Panama it is 1.8 per cent., and for Greece it is 1.3 per cent. Those figures have to be compared with the figure of 0.4 per cent. for Western Europe. The rates of losses of those countries are substantially higher.

Most Conservative speakers in the debate have come from landlocked constituencies. Grimsby, on the other hand, has a close and real interest in the subject. As a major port it has a great interest in shipping and in the effective control of pollution. Indeed, it has a direct interest in the debate, in view of the transfer, four weeks ago, of the "Cicero", a Wilson line ship. I understand that Government grants had been made available for the building of that new ship, which was transferred to a flag of convenience company in the Cayman Islands. That move put the merchant seamen on the "Cicero'. out of work. The debate is concerned with the loss of jobs that follows that kind of transfer.

It is a distressing spectacle to see British shipping companies effectively becoming management companies—almost multinationals—by putting their own ships under flags of convenience and concentrating on management. It is equally distressing to see the British Government leading the defence of that kind of process and defending flags of convenience, which clearly work against British national interests. Flags of convenience, and the massive transfer to them, gnaw away at the national interest, at British fleets and at British jobs. The Government are effectively acting as the spokesmen of financial interests and are leading the defence of this kind of process.

We have the equally distressing spectacle of a Government who have destroyed so many jobs in the last two years now accusing the unions of destroying jobs by their attack on flags of convenience. This is a monstrous piece of "doublespeak" for a Government such as this one.

The flags of convenience issue is important because of the problems that we shall face as a country over the next few years. The problems are essentially those of national regeneration and national rebuilding. That means not only rebuilding British industry and the capacity to produce, but rebuilding the British shipping fleet, with industry and the fleet taking the power to control their own destiny, instead of seeing it steadily handed over as it has been in the last few years, particularly by the massive transfer of vessels to flags of. convenience. We have seen British tonnage decline by one-third since 1975. That is a process that must be stopped as part of the national process of rebuilding, which it now seems will fall to the Labour Party when it comes into office after the next general election.

The reason for the transfer to flags of convenience is the simple one of penny pinching, cheap-jacking, labour exploiting, cost cutting and duty dodging to save money. It is simply a financial argument by British companies transferring vessels as has been the case over the years when vessels have been registered under flags of convenience. It is distressing to see the British Government backing that kind of process. The Minister was reduced today to becoming an apologist for Liberia, instead of being a defender of British interests. If he sees himself as defending British interests, I must tell him that what he is defending are financial interests and not the interests of British jobs, British ships and the British shipping industry. He is defending the manipulation under which vessels are transferred to flags of convenience.

To compensate for failures of management and to keep up with modern trends and to innovate, British owners have been trying to recoup profits by switching to flags of convenience. From 1978 to 1980 the United Kingdom fleet declined by 13 per cent., while the United Kingdom-owned flag of convenience fleet increased by 52 per cent. The basic motive is greed and financial opportunism. Like all operators of flags of convenience, they are gaining from short-cuts on safety standards.

Contrary to the figures produced by the hon. Member for Lincoln, 70 per cent. of the tonnage lost from 1975 to 1979 was flag of convenience or Greek registered. The loss amounts to one ship in 75 each year. In the case of Cyprus-registered vessels, it was one ship in 36, as opposed to one ship in 229 for the rest of the world. That represents a three-times-worse loss record than traditional fleets. If one excludes Greece from traditional fleets, the loss record is six times worse. The record is compounded by unqualified crews and inadequate officers, due to the fact that there are no facilities for training. These vessels are essentially parasitic on nations such as Britain and the British shipping industry for the training that is provided. Crews are recruited to provide cheap labour for these vessels.

I should like to refer to the revelations in the study by the German journalist Christian Jungblut, whose researches show clearly the extent of bribery, corruption and forgery in obtaining Panamanian certificates. The study shows how he himself got a certificate for a first mate's licence by those means. He describes how he was able to get aboard a ship, "Aladdin B", where the lifeboats were rusted fast, where the course was altered, where oil sludge was pumped over the side off South Carolina, and where a duplicate log was prepared for the United States coastguard and the original log kept in pencil. That is the kind of practice that takes place under flags of convenience.

Mr. George

Is my hon. Friend aware that in Piraeus, in Greece one can hire lifeboats before an inspection takes place and then send them back? It is a pretty rampant practice.

Mr. Mitchell

I am appalled to hear what my hon. Friend says. If it indicates what is happening, it is truly appalling.

An interesting document, "Flags of Convenience", issued by the National Union of Seamen, describes the experience of one vessel, the "Argo Merchant" which was built in 1953 and seems to have had an uneventful career until 1967 when the ship took eight months to sail from Japan to America. It collided with a Japanese ship, caught. fire three times and had to stop for repairs five times. In 1968 there was a mutiny and in 1969 it went aground off Borneo for thirty-four hours. In the next five years it was laid up in Curacao, grounded off Sicily and towed to New York. In 1976 the boilers broke down six times and it once travelled showing two red lights, indicating that the crew could no longer control the ship's movements because steering and engine had failed. The ship was banned from Philadelphia, Boston and the Panama Canal. Later in 1976 it ran aground and sank off Cape Cod, depositing the USA's largest oil slick. Prior to grounding the ship had been `lost' for fifteen hours, the crew was eighteen miles off course and navigating by the stars, because modern equipment had broken down. In addition, the West Indian helmsman could not read the Greek handwriting showing the course to be steered. A naval expert afterwards described the ship as 'a disaster looking for somewhere to happen'.

That is the kind of practice that we are asked to condone in condoning flags of convenience. Vessels are registered under these flags because they can get away with practices such as I have read to the House, through inadequate inspection, lower crewing and staffing levels and inadequate controls.

The escape from the present situation is difficult to foresee. It cannot be achieved by persuasion. The Minister gave examples of improved inspection of Liberian vessels. What happens is that Liberian registered vessels transfer to Panamanian registrations. There is a massive increase in Panamanian registrations as a result of improved inspection in Liberia. The process cannot be achieved on a one-by-one basis as the Minister indicated. Nor will inspection by the port State prove the answer.

In that situation, the Government are attempting to cut down the amount of money given to the Department of Trade marine services budget. I see that the Estimates show a reduction from £25 million in 1980–81 to £10 million in 1984. Out of that amounts come funds for inspection and surveying and the grant to IMCO. If that is how this country is cutting down expenditure, port State inspection will not help. The only answer is for the Government to support proposals to phase out flags of convenience by insisting on a requirement that ships registered in national registers should have a genuine economic link with the country in which they are registered. For the British Government to take up any other position is derogatory to national interest, to Britain's future and to our ability to control our destiny.

6.57 pm
Mr. Clinton Davis

Hon. Members have heard the indictment of the "Argo Merchant". For the hon. Member for Lincoln (Mr. Carlisle) to argue that the situation is working reasonably well suggests that the hon. Gentleman is generous to a fault, particularly if it is his own. The debate has made it patently obvious that the Government's defence of their position has been ragged, tacky and disreputable. The debate has established that what really talks is money. That is the prime thing. In speech after speech by my hon. Friends the flag of convenience has stood condemned as a concept, and condemned in the same way as presidents of the Chamber of Shipping and Governments of the same persuasion as that of the Minister sought to condemn the flag of convenience not long ago.

Mr. Eyre

The hon. Member for Grimsby (Mr. Mitchell) did not come to the point that I should like to mention. If it is said that the British flag is a flag of convenience, does the hon. Gentleman contemplate that the 40 per cent. of the shipping tonnage that is foreign-owned will be compelled to leave the British flag? Has he realised the consequences for jobs in British ships?

Mr. Davis

That is an extremist point of view, adopted by the Government for their own convenience in seeking to decry the UNCTAD resolution. It is a shabby excuse, which does not wash. The Government should apply their mind to a consideration of the realities. They should say that they respect the views of the Third world and that they understand the dissatisfaction that exists with the present position. They should say that they believe that they should align themselves with that thinking and the entitlement of the Third world to a more equitable share of world trade. This relates to the whole argument about Brandt, in respect of which the Government stand starkly condemned. I have no hesitation in asking the House to support the motion.

Question put:

The House divided: Ayes 132, Noes 170.

Division No. 246] [7 pm
Allaun, Frank Craigen, J. M.
Anderson, Donald Cryer, Bob
Ashton, Joe Cunliffe, Lawrence
Atkinson, N.(H'gey,) Cunningham, Dr J. (W'h'n)
Barnett, Guy (Greenwich) Davidson, Arthur
Beith, A. J. Davies, Rt Hon Denzil (L'lli)
Bidwell, Sydney Davis, Clinton (Hackney C)
Booth, Rt Hon Albert Dean, Joseph (Leeds West)
Boothroyd, Miss Betty Dixon, Donald
Bradley, Tom Dobson, Frank
Bray, Dr Jeremy Douglas, Dick
Brown, Ronald W. (H'ckn'y S) Dubs, Alfred
Buchan, Norman Dunn, James A.
Callaghan, Jim (Midd't'n & P) Dunwoody, Hon Mrs G.
Campbell-Savours, Dale East ham, Ken
Canavan, Dennis Edwards, R. (W'hampt'n S E)
Clark, Dr David (S Shields) Ellis, R. (NE D'bysh're)
Cocks, Rt Hon M. (B'stol S) English, Michael
Coleman, Donald Evans, John (Newton)
Concannon, Rt Hon J. D. Faulds, Andrew
Conlan, Bernard Flannery, Martin
Cook, Robin F. Ford, Ben
Cowans, Harry Foulkes, George
Cox, T. (W'dsw'th, Toot'g) Fraser, J. (Lamb'th, N'w'd)
Garrett, John (Norwich S) Mulley, Rt Hon Frederick
Garrett, W. E. (Wallsend) O'Neill, Martin
George, Bruce Orme, Rt Hon Stanley
Ginsburg, David Palmer, Arthur
Golding, John Park, George
Gourlay, Harry Parker, John
Graham, Ted Penhaligon, David
Grant, John (Islington C) Powell, Raymond (Ogmore)
Hamilton, James (Bothwell) Prescott, John
Hamilton, W. W. (C'tral Fife) Radice, Giles
Harrison, Rt Hon Walter Richardson, Jo
Hattersley, Rt Hon Roy Robertson, George
Haynes, Frank Ross, Ernest (Dundee West)
Healey, Rt Hon Denis Rowlands, Ted
Heffer, Eric S. Sheldon, Rt Hon R.
Hogg, N. (E Dunb't'nshire) Shore, Rt Hon Peter
Holland, S. (L'b'th, Vauxh'll) Silkin, Rt Hon J. (Deptford)
Hooley, Frank Silverman, Julius
Hughes, Robert (Aberdeen N) Skinner, Dennis
Hughes, Roy (Newport) Smith, Rt Hon J. (N Lanark)
Jay, Rt Hon Douglas Snape, Peter
Johnson, Walter (Derby S) Soley, Clive
Jones, Rt Hon Alec (Rh'dda) Spearing, Nigel
Kaufman, Rt Hon Gerald Spriggs, Leslie
Kerr, Russell Steel, Rt Hon David
Leighton, Ronald Stoddart, David
Lewis, Ron (Carlisle) Straw, Jack
McDonald, Dr Oonagh Summerskill, Hon Dr Shirley
McGuire, Michaeiy (Ince) Thomas, Dafydd (Merioneth)
McKay, Allen (Penistone) Tinn, James
McKelvey, William Urwin, Rt Hon Tom
McWilliam, John Varley, Rt Hon Eric G.
Marks, Kenneth Wainwright, R.(Colne V)
Marshall, Dr Edmund (Goole) Watkins, David
Martin, M(G'gow S'burn) Welsh, Michael
Maynard, Miss Joan Whitehead, Phillip
Meacher, Michael Wilson, Gordon (Dundee E)
Mikardo, Ian Wilson, William (C'try SE)
Miller, Dr M. S. (E Kilbride) Winnick, David
Mitchell, R. C. (Soton Itchen) Woolmer, Kenneth
Morris, Rt Hon A. (W'shawe)
Morris, Rt Hon C. (O'shaw) Tellers for the Ayes:
Morton, George Mr. Robert C. Brown and
Moyle, Rt Hon Roland Mr. James Johnson.
Alexander, Richard Clark, Hon A. (Plym'th, S'n)
Ancram, Michael Clark, Sir W. (Croydon S)
Baker, Nicholas (N Dorset) Clarke, Kenneth (Rushcliffe)
Beaumont-Dark, Anthony Clegg, Sir Walter
Bendall, Vivian Cockeram, Eric
Benyon, Thomas (A'don) Colvin, Michael
Benyon, W. (Buckingham) Cope, John
Berry, Hon Anthony Costain, Sir Albert
Best, Keith Cranborne, Viscount
Biffen, Rt Hon John Dean, Paul (North Somerset)
Biggs-Davison, John Dover, Denshore
Blackburn, John du Cann, Rt Hon Edward
Body, Richard Dunn, Robert (Dartford)
Bottomley, Peter (W'wich W) Dykes, Hugh
Boyson, Dr Rhodes Eggar, Tim
Braine, Sir Bernard Emery, Peter
Bright, Graham Eyre, Reginald
Brinton, Tim Fairgrieve, Russell
Brittan, Leon Faith, Mrs Sheila
Brooke, Hon Peter Farr, John
Brown, Michael(Brigg & Sc'n) Fell, Anthony
Bruce-Gardyne, John Fenner, Mrs Peggy
Buchanan-Smith, Alick Finsberg, Geoffrey
Buck, Antony Fisher, Sir Nigel
Budgen, Nick Fletcher-Cooke, Sir Charles
Bulmer, Esmond Fookes, Miss Janet
Burden, Sir Frederick Fraser, Peter (South Angus)
Butcher, John Gardiner, George (Reigate)
Cadbury, Jocelyn Garel-Jones, Tristan
Carlisle, John (Luton West) Goodhew, Victor
Carlisle, Kenneth (Lincoln) Goodlad, Alastair
Carlisle, Rt Hon M. (R'c'n) Grant, Anthony (Harrow C)
Chalker, Mrs. Lynda Gray, Hamish
Chapman, Sydney Greenway, Harry
Griffiths, E.(B'y St. Edm'ds) Neubert, Michael
Griffiths, Peter (Portsm'th N) Newton, Tony
Grist, Ian Osborn, John
Gummer, John Selwyn Page, John (Harrow, West)
Hamilton, Hon A. Page, Rt Hon Sir G. (Crosby)
Hannam, John Page, Richard (SW Herts)
Hawkins, Paul Pattie, Geoffrey
Hawksley, Warren Percival, Sir Ian
Hayhoe, Barney Prior, Rt Hon James
Heddle, John Proctor, K. Harvey
Henderson, Barry Rees, Peter (Dover and Deal)
Higgins, Rt Hon Terence L. Rees-Davies, W. R.
Hill, James Rhodes James, Robert
Hogg, Hon Douglas (Gr'th'm) Roberts, M. (Cardiff NW)
Howell, Rt Hon D. (G'ldf'd) Roberts, Wyn (Conway)
Hurd, Hon Douglas Rost, Peter
Jenkin, Rt Hon Patrick Silvester, Fred
Jessel, Toby Skeet, T. H. H.
Jopling, Rt Hon Michael Speed, Keith
Joseph, Rt Hon Sir Keith Speller, Tony
King, Rt Hon Tom Spicer, Jim (West Dorset)
Lang, Ian Spicer, Michael (S Worcs)
Langford-Holt, Sir John Sproat, Iain
Lawrence, Ivan Squire, Robin
Le Marchant, Spencer Stainton, Keith
Lennox-Boyd, Hon Mark Stanbrook, Ivor
Lester, Jim (Beeston) Steen, Anthony
Lewis, Kenneth (Rutland) Stevens, Martin
Lloyd, Peter (Fareham) Stewart, Ian (Hitchin)
Loveridge, John Stewart, A.(E Renfrewshire)
Luce, Richard Stradling Thomas, J.
Lyell, Nicholas Taylor, Teddy (S'end E)
MacGregor, John Temple-Morris, Peter
McNair-Wilson, P. (New F'st) Thomas, Rt Hon Peter
Madel, David Thorne, Neil (Ilford South)
Major, John Townend, John (Bridlington)
Marland, Paul Trippier, David
Marlow, Tony Viggers, Peter
Marshall, Michael (Arundel) Waddington, David
Mates, Michael Wakeham, John
Maude, Rt Hon Sir Angus Walker, B. (Perth)
Mawby, Ray Waller, Gary
Mawhinney, Dr Brian Warren, Kenneth
Maxwell-Hyslop, Robin Watson, John
Meyer, Sir Anthony Wells, Bowen
Miller, Hal (B'grove) Wheeler, John
Mills, Iain (Meriden) Wickenden, Keith
Mills, Peter (West Devon) Winterton, Nicholas
Moate, Roger Wolfson, Mark
Morgan, Geraint
Morrison, Hon P. (Chester) Tellers for the Noes:
Murphy, Christopher Mr. Robert Boscawen and
Neale, Gerrard Mr. Donald Thompson.

Questions accordingly negatived